Hangzhou SF Intra-city Industrial (9699) H1 2023 earnings summary

Executive summary

• H1 2023 continuing-operations revenue rose 28.8% YoY to RMB5,749.2m; gross profit reached RMB383.4m, and continuing operations returned to net profit of RMB44.6m.

• Including a RMB14.3m discontinued-operations loss, period net profit was RMB30.3m, versus a RMB143.9m net loss in H1 2022; no interim dividend was recommended.

Financial highlights

• Revenue rose 28.8% to RMB5,749.2m from RMB4,464.0m; cost of revenue increased 25.3% to RMB5,365.8m.

• Gross profit increased to RMB383.4m from RMB180.6m; gross margin improved to 6.7% from 4.0%.

• Operating profit was RMB28.6m versus an operating loss of RMB136.0m; continuing-operations net profit was RMB44.6m versus a net loss of RMB114.2m.

• Total net profit was RMB30.3m versus a net loss of RMB143.9m; total net margin was 0.5%.

• Net cash from operating activities was RMB34.3m versus cash used of RMB251.3m in H1 2022; cash and cash equivalents were RMB1,501.1m at June 30.

Outlook and guidance

• Priorities include pursuing opportunities in diversified traffic, local retail and wider third-party on-demand delivery adoption, while targeting high-quality growth and sustainable profit improvement.

• Robust local-lifestyle demand supported H1 growth; plans include leveraging delivery and local-lifestyle capabilities beyond delivery services.