Folangsi (2499) H2 2023 earnings summary

Executive summary

• Revenue rose 14.9% to RMB1,371.8m in 2023; reported net profit fell 11.9% to RMB31.2m, while adjusted net profit rose 98.9% to RMB70.4m excluding RMB39.2m of listing expenses.

• Operations covered 67 service outlets in 47 cities and more than 45,000 equipment units at year-end; the H-share listing took place on November 10, 2023.

Financial highlights

• Gross profit rose 15.4% to RMB417.4m; gross margin edged up to 30.4% from 30.3%.

• Profit before tax was RMB30.6m versus RMB35.4m; net profit was RMB31.2m versus RMB35.4m, and basic and diluted EPS was RMB0.09 versus restated RMB0.11.

• Other expenses increased to RMB45.2m from RMB2.8m, mainly reflecting listing expenses; finance costs rose 1.8% to RMB85.1m.

Outlook and guidance

• 2024 priorities include expanding equipment subscription services, improving operating performance and market share, and strengthening online and offline service capabilities and remanufacturing.

• The plan is to expand offline outlets toward 1,000 through organic growth, M&A, park business and partnerships; diversify equipment subscriptions and build overseas outlet networks.