Shanghai Conant Optical (2276) H1 2024 earnings summary

Executive summary

• Revenue rose 17.5% year-over-year to RMB976.4 million for the six months ended 30 June 2024, driven by both domestic and international sales growth and a higher proportion of high-value products.

• Net profit increased 31.6% year-over-year to RMB208.7 million, supported by improved productivity, cost efficiency, and gains from foreign exchange differences.

• Production volume reached 104.3 million pieces, up 21.4% compared to the same period in 2023.

• Gross profit increased 23.5% to RMB382.4 million; gross margin improved from 37.3% to 39.2% year-over-year, driven by a higher proportion of high-end lenses.

• Earnings per share increased to RMB0.50 from RMB0.37 year-over-year.

Financial highlights

• Standardised lens revenue and margin increased, with high refractive index lenses (1.67 and 1.74) up 15.4% and 31.1%, respectively; customised lens revenue rose 13.7%.

• Customised lens margin slightly decreased to 59.5%.

• Administrative expenses rose 29.6% to RMB94.9 million due to increased R&D investment.

• Finance costs decreased 36.0% to RMB4.8 million, reflecting reduced interest payments.

• Selling and distribution expenses rose 20.4% to RMB53.6 million.

Outlook and guidance

• Focus on automation, high-value manufacturing, and expanding domestic and international market presence.

• Plans to establish new production lines for high refractive index lenses abroad and invest in a new plant in Thailand.

• Continued investment in marketing, both online and offline, and collaboration with healthcare providers.

• Remaining IPO proceeds to be used for sales and marketing by end of 2024, with a one-year delay due to strategic adjustments.