Zibuyu Group (2420) H1 2023 earnings summary

Executive summary

• H1 2023 revenue rose 7.7% YoY to RMB1,375.3m, while attributable profit fell 83.2% to RMB10.3m as operating profit contracted and inventory provisions increased.

• Third-party e-commerce, particularly Amazon, and expanded channels supported growth; plans focus on branding, digital operations and supply-chain investment amid cautious consumer demand.

Financial highlights

• Revenue rose 7.7% to RMB1,375.3m; gross profit increased 3.3% to RMB1,001.3m.

• Operating profit fell to RMB15.8m from RMB79.1m; profit before tax declined 85.1% to RMB10.7m.

• Attributable profit was RMB10.3m versus RMB61.3m; basic and diluted EPS was RMB0.02 versus RMB0.13.

• Cost of sales rose 21.3% to RMB374.0m, while selling and distribution expenses increased 10.2% to RMB923.9m; G&A rose 16.2% to RMB73.1m.

Outlook and guidance

• H2 2023 was expected to remain challenging amid uncertain markets and cautious consumer spending; management expressed confidence in improving performance and gave no numerical guidance.

• Plans include exploring TikTok and overseas physical stores, upgrading product ranges and pursuing a higher-end branding strategy.

• Priorities include digitization, faster inventory turnover and a flexible, digitally enabled global supply chain.