MemeStrategy (2440) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 36.0% to RMB440.6m, while net profit fell 10.6% to RMB25.5m; adjusted net profit declined 29.4% to RMB36.0m.

• Growth was led by IoT data transmission and processing services, while non-5G business expanded as customers deferred private 5G deployments amid economic uncertainty.

Financial highlights

• Revenue increased to RMB440.6m from RMB324.0m; cost of sales rose to RMB356.7m from RMB228.4m, reducing gross profit to RMB83.8m from RMB95.6m.

• Profit before tax was RMB34.5m versus RMB33.2m; net profit was RMB25.5m versus RMB28.5m, and total comprehensive income was RMB25.6m versus RMB29.5m.

• Adjusted net profit, excluding listing expenses and equity-settled share option expenses, was RMB36.0m versus RMB51.0m.

• Administrative expenses fell to RMB38.1m from RMB48.0m, largely as listing expenses fell from RMB22.5m to nil; higher staff and professional costs partly offset the decline.

Outlook and guidance

• 2024 priorities include broadening private 5G customers in manufacturing, transportation, environmental protection and energy, and expanding industrial IoT marketing reach.

• Plans include upgrading the Universal IoT Platform for AI, big data and industrial IoT applications, alongside tighter receivables collection, credit-risk controls and cost management.