Store Operations and Expansion - The company upgraded nearly 6,000 franchised stores to enhance brand awareness[3][5] - The Group's offline store network expanded to 6,025 stores across 190 cities in 22 provinces and municipalities in China as of June 30, 2024[66] - The Group recorded a net increase of 67 retail stores in H1 2024 compared to June 30, 2023[66] - Total retail stores increased by 1.1% from 5,958 in June 2023 to 6,025 in June 2024, driven by franchisee confidence in China's fruit retail industry[67][68] - Total retail stores decreased by 1.1% from 6,093 in December 2023 to 6,025 in June 2024 due to reduced consumer spending and increased rent[67][68] - Revenue from franchised stores supervised by the Group was RMB 4,004,869 thousand in 2024, accounting for 99.3% of total revenue[70] - The company upgraded nearly 6,000 franchised stores in H1 2024 to enhance brand awareness, including standardizing store decorations and optimizing product displays[70][72] - Two large-scale innovative stores exceeding 150 square meters were operational in Yueyang City, Hunan Province as of June 30, 2024[72] - The number of franchised stores decreased by 1.9% from 4,795 in 2023 to 4,707 in 2024[111] - Average half-year revenue per franchised store decreased by 13.7% from RMB1.0 million in 2023 to RMB0.9 million in 2024[111] - Number of franchised stores supervised decreased by 1.9% from 4,795 in June 2023 to 4,707 in June 2024, with average semi-annual revenue per store dropping 13.7% from RMB1.0 million to RMB0.9 million[113] Sales and Revenue Performance - The sales of fruit gift boxes accounted for 13.0% of total store sales in the first half of 2024[3][5] - The 2B business unit grew by approximately 30.0% year-on-year in the first half of 2024[6][8] - Shenzhen Banguo achieved a gross merchandise value (GMV) of RMB1,469.7 million in the first half of 2024[6][8] - The company introduced 42 category brands, accounting for 16.0% of total store sales as of June 30, 2024[6][9] - The Group's revenue decreased by 11.1% from RMB6,294.3 million in H1 2023 to RMB5,594.1 million in H1 2024[63] - The Group's gross profit decreased by 13.2% from RMB712.5 million in H1 2023 to RMB618.5 million in H1 2024[63] - The Group's profit attributable to owners decreased by 66.1% from RMB260.8 million in H1 2023 to RMB88.5 million in H1 2024[63] - Revenue from direct sales of fruits and other food products increased by 30.0% to RMB712.8 million in the first half of 2024 compared to the same period in 2023[79][81] - Overseas market direct sales of fruits increased by 29.4% year-on-year in the first half of 2024[79][81] - Shenzhen Banguo's GMV reached RMB1,469.7 million in the first half of 2024, with the addition of 1 main warehouse and 138 city warehouses[79][82] - Excellent and Grade A fruits accounted for 64.0% of the company's gross store retail sales in the first half of 2024[83][85] - Self-branded fruits accounted for 16.0% of the company's gross store retail sales in the first half of 2024[83][85] - The company launched 5 new Excellent fruit brands in the first half of 2024, bringing the total to 42[83][85] - Total revenue decreased by 11.1% from RMB6,294.3 million in 2023 to RMB5,594.1 million in 2024[104] - Revenue from sales of fruits and other food products accounted for 97.2% of total revenue in both 2023 and 2024[104] - Direct sales revenue increased by 30.0% from RMB548.3 million in 2023 to RMB712.8 million in 2024[107] - Revenue from franchised stores decreased by 15.2% from RMB4,732.1 million in 2023 to RMB4,011.8 million in 2024[107] - Overseas market sales increased by 29.4% from RMB109.0 million in 2023 to RMB141.0 million in 2024[108] - Domestic market sales to 2B customers increased by 30.2% from RMB439.3 million in 2023 to RMB571.8 million in 2024[109] - Cost of sales decreased by 10.9% from RMB5,581.8 million in H1 2023 to RMB4,975.6 million in H1 2024, in line with reduced revenue from fruit and other food sales[112][114] - Gross profit decreased by 13.2% from RMB712.5 million in H1 2023 to RMB618.5 million in H1 2024, with gross profit margin slightly declining from 11.3% to 11.1%[113][115] - Other income increased by 27.7% from RMB21.5 million in H1 2023 to RMB27.4 million in H1 2024, primarily due to increased government grants[117][121] - Selling expenses increased by 22.6% from RMB242.0 million in H1 2023 to RMB296.6 million in H1 2024, driven by brand renewal campaign costs[119][123] - Administrative expenses increased by 14.9% from RMB146.9 million in H1 2023 to RMB168.7 million in H1 2024, due to higher staff costs and legal fees[120][124] - Research and development expenses decreased by 10.5% from RMB74.1 million in H1 2023 to RMB66.3 million in H1 2024, primarily due to reduced R&D headcount[127][130] - Finance income increased by 35.8% from RMB20.5 million in H1 2023 to RMB27.9 million in H1 2024, while finance costs rose 36.7% from RMB38.4 million to RMB52.5 million due to increased bank borrowings[128][131] - Profit before tax decreased by 63.6% from RMB272.5 million in H1 2023 to RMB99.3 million in H1 2024, mainly due to reduced retail sales and increased brand renewal expenses[134] - Income tax expense decreased by 30.2% from RMB21.9 million in H1 2023 to RMB15.3 million in H1 2024, primarily due to reduced operating profit and taxable income[135][139] - Net profit decreased by 66.5% from RMB250.5 million in H1 2023 to RMB84.0 million in H1 2024, with net profit margin dropping from 4.0% to 1.5%[136][140] - Profit before tax decreased by 63.6% from RMB272.5 million in H1 2023 to RMB99.3 million in H1 2024, mainly due to reduced retail sales and increased brand renewal expenses[138] - Share of losses from associates and joint ventures was RMB4.0 million in H1 2024, compared to a profit of RMB7.5 million in H1 2023[137] - Adjusted net profit for H1 2024 was RMB88.9 million, with an adjusted net profit margin of 1.6%, after adding back share-based payment expenses of RMB4.96 million[147] Marketing and Brand Awareness - The company held two Excellent fruits press conferences in April and July 2024 to enhance consumer awareness[6][9] - The company implemented a new strategy of "expert and leader in high-quality fruit industry" at the beginning of 2024[4][10] - The company aims to become a world-leading fruit eco-technology company[11] - The company's mission is to offer delicious fruits and enjoyable lifestyle to people[12] - The company's core values include conscience, trust, altruism, innovation, and results[13] - Douyin live broadcast views reached 70.93 million in H1 2024, a 218.5% increase compared to the same period in 2023[74][75] - The company achieved over 100 million exposures in a single month and daily single product sales exceeding RMB 500,000 on Douyin instant retail in H1 2024[75] - Fruit gift box sales increased from 10.6% of total store sales in 2023 to 13.0% in H1 2024[76] - The company had over 84 million members across all distribution channels and 1,071 thousand paying members as of June 30, 2024[77] - WeChat mini-program users reached 69.39 million, an 11.9% increase compared to the same period in 2023[77] - Online orders accounted for 26.1% of the company's total orders in the first half of 2024[78][80] - The number of WeChat community followers increased by 5.2% year-on-year to over 17.3 million as of June 30, 2024[78][80] - The company's new strategy of "expert and leader in high-quality fruit industry" aims to strengthen distribution channels and products, enhancing consumer brand awareness and market leadership[100] Financial and Operational Metrics - The company's H Shares were listed on the Hong Kong Stock Exchange on January 16, 2023[45] - The 2023 Share Award Scheme was approved by shareholders at the first extraordinary general meeting on September 28, 2023[31] - The company's registered office is located at No. 3018 Shayan Road, Tianxin Community, Shatoujiao Street, Yantian District, Shenzhen, Guangdong Province, China[26] - The company's principal place of business in Hong Kong is at the 40th Floor, Dah Sing Financial Centre, No. 248 Queen's Road East, Wanchai, Hong Kong[26] - The company's H Share registrar is Computershare Hong Kong Investor Services Limited, located at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong[27] - The company's principal banks include China Merchants Bank, Longhua Branch, Bank of Communications, Xiangzhou Branch, and Shanghai Pudong Development Bank, Shenzhen Fuqiang Branch[27] - The company's overseas auditor is PricewaterhouseCoopers, located at 22/F, Prince's Building, Central, Hong Kong[23] - The company's domestic auditor is ShineWing Certified Public Accountants LLP Shenzhen Branch, located at 19-20/F, MFC, No. 9, Pengcheng 1st Road, Futian District, Shenzhen, China[24] - The company's compliance adviser is Somerley Capital Limited, located at 20th Floor, China Building, 29 Queen's Road Central, Hong Kong[26] - The company's website is www.pagoda.com.cn[27] - China's fruit imports reached US$11.23 billion in H1 2024, a 3.8% increase compared to the same period in 2023[58] - The consumer price index (CPI) for fresh fruits in China decreased by 7.8% in H1 2024 compared to H1 2023[58] - Shenzhen Banguo Technology Co., Ltd. is owned 51.00% by Pagoda Investment, 15.00% by Mr. XU Yusheng, 23.93% by Mr. LI Jiang, and 10.07% by Beijing Banguo Yuhuoban Technology Development Center[49] - The upgraded smart ordering 3.0 system improved sales forecast accuracy by 10% in the first half of 2024[87][90] - The company's wholly-owned subsidiary, Good Fruit Inspection and Testing (Guangdong) Co., Ltd., obtained the Qualification Certificate from the Inspection and Testing Agency in February 2024, allowing the use of the CMA mark in fruit test reports[92] - In July 2024, the company collaborated with Jinan Fruit Research Institute to issue the industry's first Raw Materials for Fresh-cut Fruits enterprise standard, categorizing fruits into five main categories and setting standards based on key indicators[93] - The company plans to optimize the franchise model by reducing royalty fees, enhancing brand marketing resources, and providing training support to improve single-store profitability[97] - The company will upgrade its scientific pricing system, improving algorithms and adjusting category structure and pricing strategy based on detailed urban business district data[97] - The company aims to expand domestic and overseas distribution channels, develop new fruit gift boxes for 2B customers, and strengthen product development capabilities through exclusive distribution rights[99] - The company will implement the "Buy Globally, Sell Globally" strategy to promote high-quality fruits from various production areas to be circulated and traded globally[99] - The company will continue to introduce advanced agricultural and seedling technologies to suppliers to improve fruit quality and quantity, aiming to establish a competitive umbrella category brand[100] - Cash and bank balances increased to RMB3,122.9 million as of June 30, 2024, including unrestricted cash and equivalents of RMB2,840.5 million[150] - Net asset value as of June 30, 2024 was RMB3,344.4 million, with current assets of RMB5,778.6 million and current liabilities of RMB4,544.0 million[149] - The company received net proceeds of HK$474.0 million from its Global Offering and Listing in Q1 2023, which it intends to use for expansion and operations[148] - The Group completed its Global Offering and Listing in Q1 2023, raising net proceeds of HK$474.0 million[152][156] - As of June 30, 2024, the Group had net assets of RMB3,344.4 million, with current assets of RMB5,778.6 million and current liabilities of RMB4,544.0 million[153] - The Group's cash and bank deposits increased to RMB3,122.9 million as of June 30, 2024, from RMB2,537.1 million as of December 31, 2023[154] - The Group's gearing ratio increased from 56.8% as of December 31, 2023 to 87.7% as of June 30, 2024, primarily due to increased bank borrowings[160][162] - The Group allocated HK$229.5 million (48.4% of net proceeds) to improve and enhance operation and supply chain systems[158] - The Group allocated HK$127.5 million (26.9% of net proceeds) to upgrade and improve core backbone IT systems and infrastructure[158] - The Group allocated HK$91.5 million (19.3% of net proceeds) to repay part of interest-bearing bank borrowings[158] - The Group had non-current bank borrowings of RMB168.9 million and short-term bank borrowings of RMB2,765.2 million as of June 30, 2024[160][162] - The Group pledged right-of-use assets of RMB47.3 million and buildings of RMB22.6 million as collateral for bank borrowings as of June 30, 2024[161][163] - The Group had RMB272.6 million of unutilized net proceeds as of June 30, 2024, deposited in short-term interest-bearing deposits[158][159] - Net cash generated from operating activities increased to RMB277.7 million in H1 2024 from RMB225.1 million in H1 2023, driven by decreases in deposits, prepayments, and other receivables of RMB81.6 million and inventories of RMB45.4 million[165][167] - Net cash used in investing activities was RMB1,002.7 million in H1 2024, primarily due to net acquisition of financial assets at FVTPL of RMB458.9 million and long-term bank deposits of RMB435.0 million[165][167] - Net cash generated from financing activities was RMB905.8 million in H1 2024, mainly from bank borrowings of RMB1,730.1 million, compared to RMB639.9 million in H1 2023[165][168] - Structured deposits accounted for as financial assets at FVTPL increased to RMB652.1 million as of June 30, 2024, from RMB180.4 million as of December 31, 2023[171][172] - Other financial assets at FVTPL decreased to RMB78.2 million as of June 30, 2024, from RMB86.5 million as of December 31, 2023[171][172] - Financial assets at FVOCI increased to RMB33.8 million as of June 30, 2024, from RMB30.6 million as of December 31, 2023[171][172] - Capital expenditures amounted to RMB86.6 million in H1 2024, primarily for the construction of a new office building in Shenzhen[172][175] - The Group subscribed to structured deposit products from CITIC Bank with total principal amounts of RMB125 million, RMB25 million, RMB50 million, RMB100 million, and RMB125 million, with expected annualized returns ranging from 1.05% to 2.61%[178] - Subscribed to CITIC structured deposit products with principal amounts totaling RMB125 million, RMB25 million, RMB50 million, and RMB100 million, with expected annual return rates ranging from 1.05% to 2.61%[179] - Subscribed to BOB structured deposit products with principal amounts totaling RMB100 million and RMB300 million, with expected annual return rates ranging from 1.30% to 2.88%[180][181] - Average inventory turnover days increased from 9.2 days in H1 2023 to 10.9 days in H1 2024[185][187] - Average trade receivables turnover days increased from 31.7 days in H1 2023 to 34.2 days in H1 2024[185][187] - Average trade payables
百果园集团(02411) - 2024 - 中期财报