Shenzhen Pagoda Industrial (Group) (2411) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 0.7% YoY to RMB11,390.6m; profit attributable to owners increased 11.9% to RMB361.7m, while gross profit was broadly flat at RMB1,314.8m.

• Net profit increased 11.1% to RMB340.0m; reported net margin rose to 2.98% from 2.71%.

• Retail store count reached 6,093, up 7.8%; growth in direct sales and Shenzhen Banguo expanded the 2B channel.

Financial highlights

• Revenue increased 0.7% to RMB11,390.6m; sales of fruits and other food products contributed RMB11,073.1m, or 97.2% of total revenue.

• Operating profit rose to RMB416.6m from RMB385.0m; profit before tax increased 10.0% to RMB381.0m.

• Profit for the year was RMB340.0m; profit attributable to owners was RMB361.7m, reflecting RMB21.7m attributable loss to non-controlling interests.

• Basic and diluted EPS increased 6.6% to RMB0.2297; gross profit was RMB1,314.8m versus RMB1,314.3m.

• Adjusted net profit, excluding listing expenses, was RMB342.2m versus RMB338.4m; adjusted net margin was 3.00% versus 2.99%.

Outlook and guidance

• 2024 priorities include high-quality growth, stronger retail-store profitability, more Excellent fruit offerings, improved customer experience and further OMO network expansion.

• Plans include expanding 2B channels and lower-tier city coverage through Shenzhen Banguo, plus developing customized fruit gift boxes and global trade channels.

• Continued investment in warehouses, transportation systems, automation and IT—including AI and deep learning—is intended to improve efficiency and lower costs.

• Outlook acknowledges a tepid economic recovery and low inflation in China; optimism rests on policy support and consumer spending power.