WEIli Holdings (2372) H1 2023 earnings summary

Executive summary

• H1 2023 revenue fell 67.5% YoY to RMB63.6m, mainly as key customers temporarily reduced transfer-paper and composite-paper orders following QR-code packaging revisions.

• The period swung to a net loss attributable to shareholders of RMB3.9m from net profit of RMB20.0m in H1 2022.

Financial highlights

• Gross profit declined 88.2% YoY to RMB5.2m; cost of sales fell 61.5% to RMB58.4m, less than the revenue decline.

• Operating result was a loss of RMB4.8m versus profit of RMB23.6m; net finance income rose to RMB1.0m from RMB0.1m.

• Administrative expenses fell to RMB8.8m from RMB15.3m, excluding H1 2022 listing expenses of RMB6.0m; selling expenses declined to RMB2.2m from RMB4.6m as freight costs fell with volume.

• Income tax expense was RMB0.1m versus RMB3.7m, reflecting the pretax loss in H1 2023.

Outlook and guidance

• Orders were expected to recover in H2 2023 as the adverse impact of QR-code packaging revisions was viewed as temporary.

• The remaining unutilized IPO proceeds were expected to be deployed by Dec. 31, 2025.