LX Technology Group (2436) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 7.8% YoY to RMB1,793.1m, while the year ended in a net loss of RMB131.0m versus net profit of RMB99.9m in 2022.

• Customer counts increased across recycling, device subscription and IT technical subscription services; gross margin contracted as costs rose faster than revenue.

Financial highlights

• Cost of sales increased to RMB1,645.5m from RMB1,464.8m; gross profit fell 25.9% to RMB147.6m from RMB199.3m.

• Operating expenses included selling and distribution RMB128.4m, administration RMB102.5m, and R&D RMB25.5m; finance costs were RMB41.8m.

• Net loss was mainly driven by the absence of the RMB197.7m FVTPL financial-liability fair-value gain recorded in 2022 and higher administrative expenses.

Outlook and guidance

• Plans prioritize expanding device-subscription offerings, strengthening IT technical capabilities, and applying IoT and AI to evolving customer needs.

• Strategy includes deeper penetration in core and high-potential cities, broader services, stronger customer retention, digital transformation, and expanded recycling initiatives.