XXF Group (2473) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 increased by 9.6% year-over-year to RMB658.7 million, driven by higher automobile sales and expanded marketing efforts.

• Adjusted net profit (non-IFRS) rose 7.8% to RMB23.9 million, reflecting solid business development and network expansion.

• Profit attributable to owners was RMB19.7 million, with a net profit margin of 3.0%, down from 10.4% in the prior year due to the absence of fair value gains and higher share-based compensation.

• Profit for the period declined 68.7% year-over-year to RMB19.5 million, mainly due to the absence of fair value gains on ordinary shares with redemption rights and higher share-based compensation expenses.

• No interim dividend was declared for the period.

Financial highlights

• Gross profit increased 6.1% to RMB209.3 million, while gross profit margin slightly decreased to 31.8% from 32.8% year-over-year.

• Cost of sales rose 11.3% to RMB449.4 million, mainly due to higher automobile sales volume.

• Selling and marketing expenses grew 13.1% to RMB49.9 million, reflecting increased employee benefits and network expansion.

• Administrative expenses decreased by 1.8% to RMB55.9 million.

• Net finance cost decreased by 1.7% to RMB80.6 million.

Outlook and guidance

• Plans to expand into automobile export and finance lease export businesses, leveraging PRC's position as the world’s largest automobile exporter.

• Continued focus on green, low-carbon production, sustainable development, and social responsibility initiatives.

• No change anticipated in the use of proceeds from the recent listing.