Want Want China (151) H1 2024 earnings summary

Executive summary

• Revenue for 1H FY24 was RMB 10,877mn, down 3.5% year-over-year, mainly due to weaker popsicle sales impacted by weather and sales rhythm.

• Gross margin improved by 210bps to 47.3% due to lower key raw material costs.

• Profit attributable to equity holders rose 7.6% year-over-year to RMB 1,863mn, with margin up 170bps to 17.1%.

• Channel diversification and strong overseas market growth contributed positively, especially in rice crackers and snack foods.

Financial highlights

• Operating profit increased 2.6% year-over-year to RMB 2,541mn, with margin up 140bps to 23.4%.

• Net cash position improved to RMB 6,331mn as of September 30, 2024.

• Cash conversion cycle shortened from 65 to 59 days compared to March 2024.

• CAPEX for 1H FY24 was RMB 220mn.

Outlook and guidance

• Focus on leveraging the Chinese New Year peak sales season.

• Continued brand differentiation, product diversification, and digital marketing to enhance consumer engagement.

• Ongoing exploration of diversified and emerging channels, including OEM and e-commerce.