Redco Healthy Living Company (2370) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 2.8% YoY to RMB449.3m, while net profit fell 97.3% to RMB0.3m as gross profit and margins contracted and impairment charges remained substantial.

• Managed GFA grew 4.6% to 20.5m sq.m.; contracted GFA increased 1.5% to 27.1m sq.m.

Financial highlights

• Revenue was RMB449.273m versus RMB437.113m; gross profit declined 12.0% to RMB125.672m and gross margin fell to 28.0% from 32.7%.

• Operating profit fell to RMB5.969m from RMB16.018m; profit before tax was RMB6.934m versus RMB16.037m.

• Net profit was RMB0.267m versus RMB9.953m; owners attributable loss was RMB9.983m, equivalent to basic and diluted loss per share of RMB4.99 cents versus earnings of RMB1.70 cents.

• Total comprehensive income declined to RMB0.590m from RMB22.892m.

Outlook and guidance

• Priorities include liquidity, profitability and control; improving service quality and customer retention; and digitalizing operations to build a broader business ecosystem and improve efficiency.

• Management cited industry headwinds and lingering uncertainty, while emphasizing continued focus on core operations and resilience; no numerical guidance was stated.