慕尚集团控股(01817) - 2024 - 中期财报

Corporate Introduction MuShang Group Holding Co., Ltd. is a leading Chinese fashion menswear company, also covering unisex fashion, with brands like GXG, gxg jeans, and MODE COMMUTER - MuShang Group Holding Co., Ltd. is a leading fashion menswear company based in China, also covering unisex fashion, with distinct design images for its brands including GXG, gxg jeans, and MODE COMMUTER[2][4] - The company adopts an integrated omni-channel business model, combining online and offline advantages to offer unified products, prices, and shared inventory, and optimizes inventory and supply chain management through big data analysis, positioning itself as a leader in China's new retail integration[3][4] Corporate Information This section provides core corporate information including board members, committee structures, principal offices, share registrars, and main banks - The report lists core company information such as board members, committee composition, principal office addresses, share registrars, principal banks, and the company website[5][6] Key Corporate Personnel | Role | Name/Institution | | :--- | :--- | | Chairman | Mr. Deng Shunlin | | Chief Executive Officer | Mr. Yu Yong | | Auditor | Ernst & Young | | Stock Code | 1817 | Management Discussion and Analysis This section provides a detailed analysis of the group's financial performance, operational highlights, and strategic outlook for the reporting period BUSINESS OVERVIEW AND OUTLOOK During the reporting period, the group's total revenue was RMB 1.088 billion, a slight increase of 0.3% year-on-year, primarily driven by the successful promotion of its main brand GXG Total Sales Revenue | Indicator | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Total Sales Revenue | 1,088.4 RMB million | 1,085.3 RMB million | +0.3% | - The group plans to focus on three key strategies: 1) leading brand positioning to explore potential consumer groups; 2) reforming organizational structure and deepening omni-channel integration to enhance operational efficiency; and 3) continuous investment in R&D to improve products and consumer experience[8] REVENUE The group's total revenue slightly increased by 0.3% year-on-year, primarily driven by a 6.2% revenue growth from its main brand GXG, while gxg jeans and gxg.kids saw declines due to strategic adjustments and business termination Revenue by brand The main brand GXG's revenue grew by 6.2% to RMB 979 million, becoming the core driver of growth, while gxg jeans revenue decreased by 8.7% and gxg.kids revenue sharply declined by 86.9% due to business termination Revenue by Brand | Brand | H1 2024 Revenue (RMB thousand) | H1 2023 Revenue (RMB thousand) | YoY Change | | :--- | :--- | :--- | :--- | | GXG | 978,670 | 921,898 | +6.2% | | gxg jeans | 79,025 | 86,532 | -8.7% | | gxg.kids | 7,414 | 56,343 | -86.9% | | Mode Commuter | 20,479 | 18,526 | +10.8% | | Total | 1,088,424 | 1,085,343 | +0.3% | - gxg.kids business was strategically terminated, with its significant revenue decline attributed to brand positioning adjustments and clearance of old inventory[10][11] Revenue by sales channel Offline channels, specifically self-operated and distribution stores, saw revenue growth of 2.9% and 11.2% respectively, while partner stores experienced a significant 40.1% decline due to the termination of the gxg.kids business Revenue by Sales Channel | Sales Channel | H1 2024 Revenue (RMB thousand) | H1 2023 Revenue (RMB thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Self-operated Stores | 456,549 | 443,558 | +2.9% | | Partner Stores | 47,929 | 79,918 | -40.1% | | Distribution Stores | 146,393 | 131,650 | +11.2% | | Online Channels | 434,004 | 426,767 | +1.7% | Number of stores The group adjusted its store network to enhance efficiency, reducing the total number of offline stores from 1,022 at the end of 2023 to 958, with all gxg.kids stores closed and their business authorized to third parties Number of Stores | Sales Channel | Number of Stores as of June 30, 2024 | Number of Stores as of Dec 31, 2023 | Change in Number | | :--- | :--- | :--- | :--- | | Self-operated Stores | 373 | 380 | -7 | | Partner Stores | 61 | 139 | -78 | | Distribution Stores | 524 | 503 | +21 | | Total | 958 | 1,022 | -64 | - The group terminated the gxg.kids business and licensed it to an independent third party, leading to the closure of all its offline stores[15][16] GROSS PROFIT AND GROSS PROFIT MARGIN The group's overall gross profit slightly increased by 1.0% to RMB 583 million, with the gross profit margin improving from 53.2% to 53.6%, primarily due to controlled product retail discounts Gross profit and gross profit margin by brand GXG brand's gross profit increased by 2.4%, but its gross profit margin slightly decreased by 2.0 percentage points due to clearing old inventory for new warehouse relocation, while gxg jeans and Mode Commuter saw margin improvements Gross Profit and Gross Profit Margin by Brand | Brand | H1 2024 Gross Profit (RMB thousand) | H1 2024 Gross Profit Margin | H1 2023 Gross Profit (RMB thousand) | H1 2023 Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | GXG | 533,557 | 54.5% | 520,955 | 56.5% | | gxg jeans | 37,179 | 47.0% | 40,177 | 46.4% | | gxg.kids | 787 | 10.6% | 6,132 | 10.9% | | Mode Commuter | 11,460 | 56.0% | 9,963 | 53.8% | | Total | 583,317 | 53.6% | 577,711 | 53.2% | Gross profit and gross profit margin by sales channel Self-operated and online channels maintained stable gross profit margins, while partner stores' gross profit margin significantly increased from 29.8% to 43.0% due to the termination of the low-margin gxg.kids business Gross Profit and Gross Profit Margin by Sales Channel | Sales Channel | H1 2024 Gross Profit (RMB thousand) | H1 2024 Gross Profit Margin | H1 2023 Gross Profit (RMB thousand) | H1 2023 Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | Self-operated Stores | 329,061 | 72.1% | 325,478 | 73.4% | | Partner Stores | 20,611 | 43.0% | 23,781 | 29.8% | | Distribution Stores | 74,610 | 51.0% | 70,938 | 53.9% | | Online Channels | 158,383 | 36.5% | 156,670 | 36.7% | Operating Expenses and Profitability During the period, selling and distribution expenses increased by 2.7% due to higher advertising investment, and administrative expenses rose by 5.3% due to increased depreciation of the headquarters building, leading to a significant 75.2% drop in profit before tax Financial Performance Indicators | Financial Indicator | H1 2024 (RMB million) | H1 2023 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Other Income and Gains | 19.9 | 41.3 | -51.8% | | Selling and Distribution Expenses | 451.2 | 439.3 | +2.7% | | Administrative Expenses | 112.0 | 106.4 | +5.3% | | Other Expenses | 1.7 | 6.1 | -72.1% | | Finance Costs | 29.8 | 31.7 | -6.0% | | Profit Before Tax | 7.6 | 30.6 | -75.2% | | Profit for the Period | 6.8 | 27.7 | -75.5% | - The significant decrease in profit before tax was primarily due to reduced foreign exchange gains and increased depreciation of the group's headquarters office building[32][34] Cash Flows and Capital Expenditures Net cash outflow from operating activities increased to RMB 60.4 million, primarily due to higher advertising expenses and rental payments, while capital expenditures rose by 18.0% to RMB 69.6 million, mainly for the headquarters building construction Cash Flow and Capital Expenditure Summary | Indicator | H1 2024 (RMB million) | H1 2023 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | (60.4) | (33.3) | Outflow increased by 27.1 | | Capital Expenditures | 69.6 | 59.0 | +18.0% | FINANCIAL POSITION As of June 30, 2024, the group's gearing ratio increased to 54.7% from 44.1% at the beginning of the year, mainly due to increased seasonal borrowings for winter goods procurement, with total borrowings at RMB 1.698 billion and cash and equivalents at RMB 1.297 billion Financial Position Summary | Indicator | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Bank and Other Borrowings | 1,697.7 RMB million | 827.8 RMB million | | Cash and Cash Equivalents and Pledged Deposits | 1,297.4 RMB million | 1,035.4 RMB million | | Gearing Ratio | 54.7% | 44.1% | - The increase in the gearing ratio was primarily due to increased seasonal borrowings for prepayment of winter goods procurement[38] - As of June 30, 2024, the group's pledged deposits secured bank loans of RMB 624 million, discounted letters of credit of RMB 33 million, and discounted notes receivable of RMB 472 million[41][46] HUMAN RESOURCES As of June 30, 2024, the group's employee count was 500, a slight decrease from the beginning of the year, with total staff costs decreasing by 19.3% to RMB 49.6 million due to strategic personnel restructuring Employee Count | Indicator | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Number of Employees | 500 | 508 | Staff Costs | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Total Staff Costs | 49.6 RMB million | 61.5 RMB million | | Staff Costs as % of Revenue | 4.6% | 5.7% | Other Information This section covers additional disclosures including directors' and substantial shareholders' interests, restricted share unit schemes, and global offering proceeds utilization DIRECTORS'%20AND%20CHIEF%20EXECUTIVE'S%20INTERESTS The report discloses the interests of the company's directors and chief executive in the company's shares as of June 30, 2024, with Executive Director and CEO Mr. Yu Yong holding 215,750,000 shares (22.71%) and Non-executive Director Mr. Yang Herong holding 213,750,000 shares (22.50%) Directors' and Chief Executive's Interests | Director Name | Nature of Interest | Number of Shares | Approximate % of Interest | | :--- | :--- | :--- | :--- | | Mr. Yu Yong | Controlled Corporation Interest & Beneficial Owner | 215,750,000 (L) | 22.71% | | Mr. Yang Herong | Controlled Corporation Interest | 213,750,000 (L) | 22.50% | SUBSTANTIAL%20SHAREHOLDERS'%20INTERESTS As of June 30, 2024, major shareholders include Great World Glory Pte. Ltd. holding 363,579,785 shares (38.27%), Crescent Glory Singapore Pte. Ltd. holding 134,474,715 shares (14.15%), and GXG Trading Limited holding 213,750,000 shares (22.50%) Substantial Shareholders' Interests | Shareholder Name | Number of Shares | Approximate % of Interest | | :--- | :--- | :--- | | Great World Glory Pte. Ltd. | 363,579,785 (L) | 38.27% | | Crescent Glory Singapore Pte. Ltd. | 134,474,715 (L) | 14.15% | | GXG Trading Limited | 213,750,000 (L) | 22.50% | RESTRICTED%20SHARE%20UNIT%20SCHEME The company adopted an RSU scheme in 2019 with a ten-year validity, under which 26,100,000 shares are held by the trustee for granting, and 10,500,000 RSUs have been granted to 10 participants, representing 1.1% of issued shares as of the reporting date - As of June 30, 2024, a total of 10,500,000 RSUs had been granted but not yet exercised, including 2,000,000 shares granted to Executive Director Mr. Yu Yong[66] - There were no changes (no new grants, exercises, cancellations, or forfeitures) in the RSU scheme during the reporting period[66] USE%20OF%20PROCEEDS%20FROM%20THE%20GLOBAL%20OFFERING The company's net proceeds of approximately RMB 705 million from its 2019 listing have been fully utilized as of June 30, 2024, for debt repayment, brand expansion, smart store upgrades, warehouse upgrades, and working capital - As of June 30, 2024, the net proceeds of approximately RMB 705 million from the global offering have been fully utilized[69][71][73] INTERIM%20DIVIDEND The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for 2024[74][76] Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the group's financial performance, including revenue, gross profit, and net profit, for the interim period Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator (RMB thousand) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,088,424 | 1,085,343 | +0.3% | | Gross Profit | 583,317 | 577,711 | +1.0% | | Profit Before Tax | 7,575 | 30,569 | -75.2% | | Profit for the Period | 6,791 | 27,665 | -75.5% | | Profit Attributable to Owners of the Parent | 6,820 | 29,899 | -77.2% | | Basic EPS | RMB 0.75 cents | RMB 3.28 cents | -77.1% | | Total Comprehensive Income for the Period | 4,206 | 2,824 | +49.0% | Interim Condensed Consolidated Statement of Financial Position This statement provides a snapshot of the group's assets, liabilities, and equity at the end of the reporting period Interim Condensed Consolidated Statement of Financial Position | Assets (RMB thousand) | June 30, 2024 (Unaudited) | Dec 31, 2023 (Audited) | | :--- | :--- | :--- | | Total Non-current Assets | 974,431 | 1,224,634 | | Total Current Assets | 2,129,401 | 1,789,634 | | Total Assets | 3,103,832 | 3,014,268 | | Liabilities and Equity (RMB thousand) | | | | Total Current Liabilities | 2,102,747 | 1,775,864 | | Total Non-current Liabilities | 285,307 | 526,832 | | Total Liabilities | 2,388,054 | 2,302,696 | | Total Equity | 715,778 | 711,572 | | Total Liabilities and Equity | 3,103,832 | 3,014,268 | Interim Condensed Consolidated Statement of Changes in Equity This statement details the changes in the group's equity over the interim period, reflecting profit, other comprehensive income, and transactions with owners - As of June 30, 2024, total equity attributable to owners of the parent was RMB 715 million, a slight increase from RMB 711 million at the end of 2023, primarily due to profit contribution partially offset by losses from exchange rate fluctuations[90] Interim Condensed Consolidated Statement of Cash Flows This statement summarizes the cash inflows and outflows from operating, investing, and financing activities during the interim period Interim Condensed Consolidated Statement of Cash Flows | Cash Flow (RMB thousand) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (60,375) | (33,282) | | Net Cash Used in Investing Activities | (42,373) | (58,209) | | Net Cash From Financing Activities | 109,924 | 59,909 | | Net Increase in Cash and Cash Equivalents | 7,176 | (31,582) | | Cash and Cash Equivalents at End of Period | 196,530 | 220,912 | Notes to Interim Condensed Consolidated Financial Information This section provides detailed explanatory notes to the interim condensed consolidated financial statements, offering further insights into specific accounts and transactions Note%204%20OPERATING%20SEGMENT%20INFORMATION The group's business is divided into two operating segments by sales channel: offline and online, with all revenue in H1 2024 derived from mainland China Operating Segment Information | Operating Segment | H1 2024 Revenue (RMB thousand) | H1 2024 Segment Results (Gross Profit) (RMB thousand) | | :--- | :--- | :--- | | Offline Channels | 650,871 | 424,282 | | Online Channels | 434,004 | 158,383 | | Other | 3,549 | 652 | Note%2014%20TRADE%20AND%20NOTES%20RECEIVABLES As of June 30, 2024, the net book value of trade and notes receivables was RMB 186 million, a significant decrease from RMB 335 million at the end of 2023, with RMB 90.46 million of trade receivables net due within 3 months Trade and Notes Receivables | Indicator (RMB thousand) | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Net Trade and Notes Receivables | 186,063 | 334,525 | Note%2019%20INTEREST-BEARING%20BANK%20AND%20OTHER%20BORROWINGS As of June 30, 2024, the group's total interest-bearing borrowings significantly increased to RMB 1.698 billion from RMB 1.330 billion at the end of 2023, primarily to support operations and inventory procurement Interest-Bearing Bank and Other Borrowings | Borrowing Category (RMB thousand) | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Current Borrowings | 1,496,842 | 887,459 | | Non-current Borrowings | 200,881 | 442,352 | | Total | 1,697,723 | 1,329,811 | Note%2021%20RELATED%20PARTY%20TRANSACTIONS During the reporting period, the group engaged in several related party transactions, including product purchases of RMB 21.72 million from Zhongzhe Apparel and office rental payments of RMB 2.515 million to Songhe Garment, with total remuneration for key management personnel at RMB 6.558 million - Total product purchases from related parties amounted to RMB 21.716 million[163] - Total remuneration paid to key management personnel was RMB 6.558 million, a slight increase from RMB 6.345 million in the prior period[165]