Zhengwei Group Holdings Company (2147) H2 2024 earnings summary

Executive summary

• Revenue increased 34.3% YoY to RMB598.1m, but higher direct material costs drove a sharp gross profit decline and a RMB53.6m net loss versus RMB67.5m net profit in 2023.

• Cash and cash equivalents were RMB150.5m at 31 December 2024, down 24.4% YoY; no borrowings were reported at year-end.

Financial highlights

• Revenue rose to RMB598.1m from RMB445.2m, mainly from higher sales of dried delicacies and seasonings and others.

• Cost of sales increased 97.5% to RMB588.6m, primarily due to higher direct material costs.

• Gross profit fell 93.6% to RMB9.4m; gross margin declined 31.5 percentage points to 1.6%.

• Net loss was RMB53.6m, versus net profit of RMB67.5m; basic and diluted EPS was a loss of RMB0.06 versus earnings of RMB0.09.

Outlook and guidance

• Plans include developing new vegetable and meat snacks, including mushrooms, boneless chicken feet, beef jerky, pork trotters, quail eggs and quail meat snacks.

• Intended growth initiatives include expanding supermarket concessionary counters in Southwestern China, especially Sichuan, and increasing promotions through traditional media, high-traffic locations and WeChat.