Jiumaojiu International (9922) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 rose 6.4% year-over-year to RMB 3,064.2 million, but net profit dropped 71.5% to RMB 68 million due to higher costs and impairments.

• Store network expanded to 771 restaurants, with 59 new openings and 14 closures, focusing on prudent expansion and brand optimization.

• New brands and business models were introduced, including Shanwaimian and franchise/cooperative models for regional and international growth.

• Over 16 million registered members and partnerships with 100+ shopping malls as of June 30, 2024.

• Continued focus on multi-brand strategy, innovation, and reducing internal competition between brands.

Financial highlights

• Adjusted net profit for H1 2024 was RMB 77.2 million, with an adjusted net profit margin of 2.5%, down from 8.6%.

• Store level operating profit fell 31.7% to RMB 392.9 million; margin declined to 13.0%.

• Staff costs rose 24.6% to RMB 894.1 million, and impairment losses on assets surged to RMB 39.4 million.

• Cash and cash equivalents decreased 32.4% to RMB 897.2 million; gearing ratio increased to 9.2%.

• No interim dividend declared for H1 2024; final dividend of HKD0.15 per share for the previous year was approved.

Outlook and guidance

• Expansion target for 2024 adjusted to 25 new Song Hot Pot and 93 new Tai Er restaurants (80 in mainland China, 13 overseas).

• Continued focus on multi-brand, multi-concept strategy, international expansion, and supply chain strengthening.

• Franchise and cooperative models to accelerate regional and global growth, with full franchise rollout for Shanwaimian planned for February 2025.

• Ongoing investment in supply chain centers and central kitchens to support growth.

• Emphasizes prudent expansion, cost reduction, and efficiency improvements.