Zibuyu Group (2420) H2 2023 earnings summary

Executive summary

• FY2023 revenue remained broadly stable at RMB3,000.3m, while the year shifted to a RMB265.8m attributable loss, mainly reflecting a substantial inventory write-down.

• Inventory clearance reduced stock and improved its structure; operating cash flow remained positive at RMB76.7m despite the net loss.

Financial highlights

• Revenue was RMB3,000.3m vs RMB3,066.3m in 2022; gross profit fell 16.7% YoY to RMB1,955.3m.

• Operating loss was RMB237.7m vs operating profit of RMB142.2m; loss before tax was RMB247.2m vs profit before tax of RMB127.2m.

• Attributable net loss was RMB265.8m vs profit of RMB110.7m; basic and diluted EPS was a loss of RMB0.53 vs earnings of RMB0.24.

• Inventory write-down provision rose to RMB387.8m from RMB54.8m, an increase of RMB333.0m; cost of sales increased 45.4% to RMB1,045.0m.

• Selling and distribution costs fell 1.6% to RMB2,052.3m; G&A rose to RMB157.7m from RMB142.1m, while finance costs declined to RMB9.5m from RMB15.9m.

Outlook and guidance

• 2024 priorities include building a differentiated global brand matrix, expanding non-Amazon and offline channels and growing in Europe and Asia.

• Plans include global supply-chain development to control costs and volatility, continued digital transformation, higher R&D investment and further system upgrades.

• The stated 2024 objective is performance improvement and growth, while recognizing that the year will bring challenges and opportunities.