Pu'er Lancang Ancient Tea (6911) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 13.9% YoY to RMB527.3m; profit for the year increased 11.4% to RMB78.5m, supported by stronger 1966-series sales.

• Gross profit grew 15.8% to RMB353.1m, with gross margin at 67.0%, up from 65.9% in FY2022.

Financial highlights

• Revenue was RMB527.3m versus RMB462.9m; operating profit was RMB104.9m versus RMB95.5m, and profit before tax was RMB92.3m versus RMB85.4m.

• Profit attributable to owners rose 10.9% to RMB80.1m; basic and diluted EPS increased 9.6% to RMB1.26.

• Selling and marketing expenses increased to RMB162.3m from RMB136.4m; administrative expenses rose to RMB88.9m from RMB78.2m.

• Net impairment losses on financial assets increased to RMB2.3m from RMB0.7m, mainly reflecting higher distributor receivables and weaker-than-expected distributor recovery.

Outlook and guidance

• 2024 prospects remain subject to a slow economic recovery and geopolitical uncertainty; strategy focuses on brand visibility, channel expansion, product development and supply-chain efficiency.

• Plans include expanding offline presence for 1966, growing online and key-account sales for Tea Mama and Iland Tea, and enhancing production, inventory and logistics capabilities.

• Future plans include using listing proceeds to strengthen the brand, optimize the marketing network and support sustainable development.