Zhou Hei Ya International (1458) H2 2024 earnings summary

Executive summary

• Revenue declined 10.7% year-over-year to RMB2,451.0 million, with net profit down 15.0% to RMB98.2 million amid weak demand and strategic store closures.

• Gross profit margin improved by 4.4 percentage points to 56.8% due to cost controls and lower raw material prices.

• Store count reduced from 3,816 to 3,031, focusing on quality over scale and closing underperforming locations.

• Strategic transformation led by the founder emphasized operational efficiency, product innovation, and brand repositioning.

Financial highlights

• Revenue: RMB2,451.0 million (down 10.7% year-over-year); net profit: RMB98.2 million (down 15.0%).

• Gross profit: RMB1,391.9 million (down 3.2%); gross margin: 56.8% (up from 52.4%).

• Profit before tax: RMB149.1 million (down 30.4%); EPS: RMB0.04 (down 20%).

• Final dividend proposed at HK$0.05 per share, totaling RMB102.4 million, representing 104.2% of net profit.

• Net cash from operating activities increased to RMB416.4 million; cash and bank balances at RMB1,254.2 million.

Outlook and guidance

• 2025 focus on improving single-store performance, restoring growth, and expanding distribution and overseas channels.

• Continued emphasis on cost optimization, management efficiency, and brand upgrades to drive sustainable development.