Shenzhen Pagoda Industrial (Group) (2411) H1 2023 earnings summary

Executive summary

• H1 2023 revenue rose 6.4% YoY to RMB6.294bn; profit for the period increased 35.0% to RMB250.5m, while gross margin eased to 11.3%.

• Store network reached 5,958, up 507 YoY, with 79.3m members and 1.141m paying members at June 30, 2023.

• Strategic priorities include OMO and 2B expansion, proprietary brands, upstream supply-chain investment and digitalization.

Financial highlights

• Revenue was RMB6,294.3m, up 6.4% YoY; fruit and other food sales contributed RMB6,117.2m, or 97.2% of revenue.

• Gross profit rose 5.2% to RMB712.5m; gross margin was 11.3% versus 11.5% a year earlier.

• Operating profit increased to RMB282.9m from RMB225.7m; profit before tax rose 31.6% to RMB272.5m.

• Profit attributable to owners was RMB260.8m, up 34.1%; basic and diluted EPS was RMB0.1651 versus RMB0.1296.

• Adjusted net profit, excluding listing expenses, was RMB252.7m versus RMB204.6m; adjusted margin was 4.0% versus 3.5%.

Outlook and guidance

• H2 plans include broader OMO and 2B distribution, deeper lower-tier-city penetration, more regional channel brands and stronger online content marketing, particularly on Douyin.

• Priorities include upstream agricultural technology, proprietary products, origin-based processing facilities, expanded distribution centers, logistics automation and IT investment in AI and deep learning.

• Longer-term outlook remains positive, while near-term performance depends on economic recovery, consumer confidence and changing consumption patterns.