Want Want China (151) H2 2024 earnings summary

Executive summary

• FY24 revenue was RMB 23,586.3mn, with year-over-year growth ranging from a slight decrease to a 2.9% increase, driven by strong dairy, beverage, and overseas market performance, but offset by lower popsicle and gift pack sales due to weather and market environment.

• Gross profit margin improved, with reported increases of 100bps to 47.6% and 2.7 percentage points to 46.6%, mainly due to lower raw material and packaging costs and improved production efficiency.

• Profit attributable to equity holders increased, with figures reported at RMB 4,336mn (+8.6%) and RMB 3,990.5mn (+18.4%), with margin up 2.2 percentage points to 16.9%.

• Cash generated from operations and net cash position increased, reflecting improved working capital efficiency.

Financial highlights

• Operating profit rose, with reported figures of RMB 5,837mn (+4.1%) and RMB 5,609.8mn (+15.7%).

• Net finance costs dropped 52.2% year-over-year, reflecting lower interest expenses on offshore RMB borrowings.

• Inventory turnover days decreased, with reported improvements of 7 days and to 81 days (from 90), indicating enhanced supply chain and working capital efficiencies.

• Net cash position increased to RMB 11,283mn and RMB 10,655.2mn as of March 31, 2025.

• Dividend payout ratio at approximately 70% of profit attributable to equity holders.

Outlook and guidance

• Plans to expand and develop diversified emerging channels and overseas markets, leveraging product diversity, production capacity, and organizational agility.

• Focus on new product launches, digital marketing, OEM, and content e-commerce for growth.

• Gross profit margin for dairy products and beverages expected to improve further in 2024 due to lower milk powder costs and tariff adjustments.