Zhongmin Baihui Retail Group (5SR) H1 2024 earnings summary

Executive summary

• HY2024 revenue was RMB 489.1m, up 0.1% YoY; profit after tax was RMB 1.6m versus a loss of RMB 8.8m in HY2023.

• Gross profit rose 5.3% to RMB 113.1m as gross margin improved to 23.1%, helped by higher-margin gold-related sales.

Financial highlights

• Cost of sales declined 1.3% to RMB 376.0m; selling and distribution expenses fell 2.7% to RMB 103.5m, while administrative expenses increased 2.3% to RMB 55.1m.

• Finance costs fell 22.3% to RMB 9.7m; other income declined 7.7% to RMB 43.3m, mainly reflecting lower gains from lease derecognition.

• Profit before tax was RMB 1.6m versus a loss of RMB 8.8m in HY2023; income tax credit was RMB 0.4m, including RMB 1.7m deferred tax income offset by RMB 1.3m current tax.

Outlook and guidance

• A new 4,000 sqm supermarket in Citi-Base Commercial Complex, Xiamen, was expected to be ready in early 2024; new tenants in the retail complex had begun operating.

• After Luncang's November 2023 closure and the planned Maluanwan closure by February 2024, the store network is expected to comprise 15 stores: 12 self-owned and 3 managed.

• Outlet mall opportunities, including locations in Fujian, remain under exploration; preliminary work is underway on possible Changsha outlet mall expansion.