Zhengwei Group Holdings Company (2147) H1 23/24 earnings summary

Executive summary

• For the six months ended 30 June 2023, revenue rose 14.8% YoY to RMB191.7 million and profit increased 42.1% to RMB29.7 million.

• Gross profit grew 19.6% to RMB64.6 million, with gross margin up 1.4 percentage points to 33.7%.

Financial highlights

• Revenue was RMB191.722 million versus RMB166.956 million in 6MFY2022; cost of sales increased 12.5% to RMB127.160 million.

• Profit before tax rose to RMB35.562 million from RMB22.722 million; income tax expense increased to RMB5.900 million from RMB1.853 million.

• Net profit was RMB29.662 million versus RMB20.869 million; basic and diluted EPS were RMB0.04 versus RMB0.03.

• Administrative expenses fell to RMB14.753 million from RMB16.706 million; selling expenses increased to RMB14.513 million from RMB13.281 million.

Outlook and guidance

• Product development priorities include new vegetable snacks such as mushrooms and meat snacks such as boneless chicken feet, beef jerky, pork trotters, quail eggs and quail meat snacks.

• H2 2023 priorities include expanding supermarket and concessionary-counter networks in Southwestern China, particularly Sichuan, and increasing promotions with supermarket chains and through traditional and social media.