Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 6,692.1 million, a decrease of 4.1% compared to RMB 6,980.8 million in the same period of 2023[6]. - Gross profit for the same period was RMB 4,072.3 million, down 4.5% from RMB 4,262.4 million year-on-year[6]. - Adjusted comparable EBITDA was RMB 1,139.8 million, reflecting a decline of 13.0% from RMB 1,309.5 million in the previous year[6]. - Net profit decreased by 49.7% to RMB 305.8 million, compared to RMB 608.0 million in the prior year[6]. - The adjusted comparable net profit margin was 5.2%, down 2.2 percentage points from 7.4% in the same period last year[6]. - The group recorded a decline in revenue due to a drop in the infant formula segment, leading to a decrease in net profit[10]. - The company reported a total comprehensive income of RMB 265,231,000 for the period, down from RMB 724,175,000 in the previous year[91]. - The company reported a net profit before tax of RMB 433,251 thousand for the six months ended June 30, 2024, compared to RMB 357,996 thousand for the same period in 2023, marking an increase of about 21.0%[124][125]. Revenue Breakdown - Revenue breakdown by product for the six months ended June 30, 2024: 66.1% from nutritional supplements, 26.9% from other products, and 7.0% from infant formula[7]. - Revenue by business segment: 49.0% from adult nutrition and care products, 36.3% from infant nutrition and care products, and 14.7% from pet nutrition and care products[7]. - Revenue from the nutrition supplement segment increased by 5.6% year-on-year to RMB 4,425.2 million, accounting for 66.1% of total revenue[23]. - The infant formula segment saw a significant decline of 18.8% year-on-year, with revenue dropping to RMB 1,798.4 million, representing 26.9% of total revenue[23]. - Revenue from the adult nutrition and care products segment grew by 11.5% year-on-year to RMB 3,275.6 million, making up 49.0% of total revenue[23]. - Revenue from the mainland China market was RMB 4,541.4 million, down 10.5% year-on-year, with a 67.9% contribution to total revenue[25]. Market and Product Insights - The infant formula segment experienced a double-digit decline due to intensified competition and unexpected promotional activities in the market[10]. - The adult nutrition and care products segment achieved low double-digit growth, maintaining a strong position in mainland China and Australia/New Zealand[12]. - The company maintains a strong market position in emerging markets such as Thailand, India, and the Middle East, with significant growth contributions from Hong Kong and Italy[14]. - The high-end Swisse Plus+ series contributed significantly to the adult nutrition segment, with a double-digit percentage of revenue in the mainland market[25]. - The infant nutrition segment in mainland China experienced a revenue decline of 23.2% to RMB 2,240.2 million, driven by ongoing industry challenges and intense competition[25]. Cost and Expenses - Sales and distribution costs increased by 1.0% to RMB 2,564.7 million, with the percentage of sales and distribution costs (excluding depreciation and amortization) rising from 36.4% to 38.3%[29]. - Research and development expenses increased by 22.5% to RMB 104.0 million, representing 1.6% of total revenue, up from 1.2% in the previous year[32]. - Financing costs rose by 21.0% to RMB 433.3 million, primarily due to interest rate increases following the U.S. Federal Reserve's rate hikes[35]. - The effective tax rate increased to 41.6% from 32.7% in the previous year, attributed to non-deductible interest expenses and profits from high-tax jurisdictions[37]. Cash Flow and Financing - Net cash generated from operating activities was RMB 1,052.5 million, benefiting from a reduction in inventory by RMB 487.0 million[39]. - The company recorded a net cash flow from investing activities of RMB 8.4 million, primarily from receivables and interest received[40]. - As of June 30, 2024, the cash balance was RMB 2.4 billion, reflecting a strong cash conversion level across all businesses[19]. - The company successfully issued RMB 500 million and USD 120 million in bonds, and voluntarily repaid USD 235 million in existing loans, optimizing its capital structure[19]. - The total debt as of June 30, 2024, was RMB 9,304.2 million, an increase from RMB 8,933.7 million as of December 31, 2023[42]. Shareholder and Governance - The company announced an interim dividend of HKD 0.30 per share, consistent with previous years[10]. - The interim dividend declared was HKD 0.30 per share, representing approximately 50% of the adjusted comparable net profit for the six months ended June 30, 2024[45]. - The company emphasizes effective communication with shareholders to enhance investor relations and understanding of business performance and strategy[53]. - The company established an Environmental, Social, and Governance (ESG) Committee on August 29, 2022, to improve the management of sustainability matters and enhance disclosure quality[51]. Financial Instruments and Valuation - The fair value of financial assets as of June 30, 2024, was RMB 315,514 million, an increase from RMB 251,342 million at the end of 2023[172]. - The fair value of financial liabilities increased to RMB (2,195,037) million from RMB (1,815,170) million, reflecting a rise of approximately 21%[172]. - The group’s financial reporting includes detailed disclosures on the fair value of financial instruments, ensuring transparency and compliance with financial reporting standards[179]. - The total fair value of financial assets measured at level three is RMB 252,796 thousand, an increase from RMB 237,168 thousand as of December 31, 2023[181]. Strategic Initiatives - The company is focusing on new product development and market expansion strategies to enhance future growth prospects[6]. - The company is actively refinancing its debts, with commitments totaling approximately RMB 3,991.0 million from various financial institutions[103]. - The company plans to adopt a new share option plan after the termination of the 2020 plan, which will not affect previously granted options[70].
H&H国际控股(01112) - 2024 - 中期财报