Guoquan Food (Shanghai) (2517) H2 2024 earnings summary

Executive summary

• FY2024 revenue rose 6.2% to RMB6,469.8m; net profit fell 8.4% to RMB241.2m, while core operating profit increased 3.1% to RMB310.8m.

• Store count was 10,150 at year-end, across 31 provinces, autonomous regions and municipalities; registered members reached 41.3m, up 48.2% YoY.

• Proposed final dividend was RMB0.0746 per share, versus RMB0.0521 for 2023.

Financial highlights

• Revenue rose 6.2% to RMB6,469.8m; gross profit increased 4.9% to RMB1,416.8m, while gross margin eased to 21.9% from 22.2%.

• Net profit declined 8.4% to RMB241.2m; profit before tax fell 12.1% to RMB319.5m. Basic and diluted EPS was RMB0.0841, down 5.9%.

• Selling and distribution expenses rose 14.8% to RMB664.2m, reflecting higher brand-building, Douyin, livestream e-commerce and new-store investment.

• Administrative expenses fell 8.6% to RMB454.3m, mainly as 2023 listing expenses did not recur.

• Adjusted net profit was RMB241.2m in 2024 versus RMB318.0m in 2023; adjusted net margin was 3.7% versus 5.2%.

Outlook and guidance

• Plans include further expansion in town- and county-level markets, more value-oriented products, stronger franchisee training and development of online sales channels.

• Strategy targets an integrated online/offline “one shop, one store and one warehouse” model, with IoT, big data and AI supporting intelligent, unmanned retail.

• Plans to expand upstream supply-chain partnerships and R&D, and prudently explore overseas markets including Hong Kong and Southeast Asia.