Zhou Hei Ya International (1458) H1 2024 earnings summary

Executive summary

• Operated 3,456 retail stores as of June 30, 2024, with 1,735 self-operated and 1,721 franchised stores across 323 cities in 28 provinces in China.

• Revenue for the first half of 2024 was RMB1,259.5 million, down 11.0% year-over-year due to weak consumer demand and external environment.

• Net profit for the period was RMB32.9 million, a 67.7% decrease year-over-year, with net profit margin dropping from 7.2% to 2.6%.

• Gross profit margin improved to 55.4% from 52.5% due to cost reductions, despite lower sales.

• No interim dividend declared for the period (previous year: HK$0.12 per share).

Financial highlights

• Revenue: RMB1,259.5 million (down 11.0% year-over-year); gross profit: RMB697.7 million (down 6.1% year-over-year).

• Net profit: RMB32.9 million (down 67.7% year-over-year); net profit margin: 2.6% (down from 7.2%).

• Basic and diluted EPS: RMB0.01 (down from RMB0.04 year-over-year).

• Other income and gains, net: RMB23.6 million (down 55.7% year-over-year).

• Selling and distribution expenses rose 6.5% to RMB505.0 million; administrative expenses fell 25.1% to RMB119.9 million.

Outlook and guidance

• Management will continue to focus on strategic changes in retail store products, user engagement, and brand strengthening in the second half of 2024.

• Further organizational and strategic changes are planned to strengthen competitiveness and drive steady growth.