Zhongmin Baihui Retail Group (5SR) H2 2023 earnings summary

Executive summary

• FY2023 returned to profitability, with profit after tax of RMB20.68m versus a RMB33.04m loss in the prior 18-month period; H2 FY2023 profit after tax was RMB29.47m.

• Three underperforming stores were closed in Aug–Sep 2022; resources were refocused, and overall performance improved versus the preceding financial period.

Financial highlights

• FY2023 revenue was RMB967.56m; gross profit was RMB216.05m and profit before tax was RMB17.61m.

• Gross sales proceeds were RMB1,351.95m; total revenue comprised RMB846.94m direct sales, RMB82.18m concessionaire commissions, RMB29.60m rental income and RMB8.84m managed rental.

• Net operating cash flow was RMB89.17m; cash and cash equivalents were RMB152.24m, with cash at banks and fixed deposits totaling RMB192.24m at year-end.

• Other income was RMB106.27m and finance costs were RMB22.39m; income tax was a RMB3.07m credit.

Outlook and guidance

• Expansion will remain selective amid a challenging economy; one Haicang, Xiamen supermarket was targeted to open by end-2023 or early 2024.

• The Haicang supermarket is planned for a renovated 30,900 sqm commercial complex, alongside 668 apartments expected to be available for rental around the same time.

• Management intends to continue improving profitability and explore retail opportunities while maintaining a cautious approach to new-store plans.