慕尚集团控股(01817) - 2023 - 中期业绩

Financial Highlights Performance Overview For the six months ended June 30, 2023, the Group achieved double-digit growth in total revenue and net profit, driven by offline consumption recovery, improved retail channel efficiency, successful brand promotion, and effective control over retail discounts and product costs Key Financial Indicators | Indicator | H1 2023 (RMB Million) | H1 2022 (RMB Million) | Growth | | :--- | :--- | :--- | :--- | | Total Revenue | 1,085.3 | 1,048.6 | +3.5% | | Net Profit | 27.7 | 4.2 | +559.5% | - Key drivers for performance growth include (i) offline consumption recovery and improved retail channel efficiency, (ii) successful brand promotion initiatives, and (iii) effective control over retail discount rates and product costs[7] Interim Condensed Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income The company achieved significant net profit growth from RMB 4.2 million to RMB 27.7 million, driven by increased gross profit and effective cost control, despite higher selling and administrative expenses, with basic earnings per share rising from RMB 0.63 cents to RMB 3.28 cents Key Figures from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item (RMB Thousand) | H1 2023 (Unaudited) | H1 2022 (Unaudited) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,085,343 | 1,048,628 | +3.5% | | Gross Profit | 577,711 | 536,486 | +7.7% | | Profit Before Tax | 30,569 | 16,844 | +81.5% | | Profit for the Period | 27,665 | 4,208 | +557.4% | | Profit Attributable to Owners of the Parent | 29,899 | 5,754 | +419.6% | - Basic earnings per share significantly increased to RMB 3.28 cents from RMB 0.63 cents in the prior period[76] Consolidated Statement of Financial Position As of June 30, 2023, the Group's total assets were RMB 3.02 billion, slightly down from year-end 2022, while net assets remained stable at RMB 691 million, and net current assets significantly increased from RMB 84.2 million to RMB 188 million, indicating improved short-term solvency Key Figures from Consolidated Statement of Financial Position | Item (RMB Thousand) | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | | :--- | :--- | :--- | | Total Non-current Assets | 1,288,904 | 1,320,467 | | Total Current Assets | 1,731,563 | 2,199,693 | | Total Current Liabilities | 1,543,831 | 2,115,487 | | Net Assets | 691,302 | 688,478 | | Total Equity | 691,302 | 688,478 | Consolidated Statement of Cash Flows Net cash used in operating activities significantly improved to RMB 33.3 million from a net outflow of RMB 347 million in the prior period, primarily due to effective inventory reduction, while net cash used in investing activities decreased and net cash from financing activities declined Key Figures from Consolidated Statement of Cash Flows | Item (RMB Thousand) | H1 2023 (Unaudited) | H1 2022 (Unaudited) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (33,282) | (347,176) | | Net Cash Used in Investing Activities | (58,209) | (95,482) | | Net Cash From Financing Activities | 59,909 | 298,278 | | Net Decrease in Cash and Cash Equivalents | (31,582) | (144,380) | Management Discussion and Analysis Business Overview and Outlook In H1 2023, the Group's business, particularly offline retail channels, recovered from the pandemic and is expected to continue improving in H2, with confidence in its prospects as a leading fashion company in China and commitment to implementing growth strategies to strengthen market position - The Group remains confident in the prospects of increased consumer spending driven by China's domestic economic development and its omnichannel strategy[25] - Future growth strategies include reforming organizational structure to deepen online-offline channel integration and improve operational efficiency, adopting innovative marketing initiatives to tap into potential consumer groups and enhance member experience, and optimizing self-operated store management to control discount rates and costs for increased gross margins[25][68] Financial Analysis This section details the Group's financial performance, with total revenue growing 3.5% driven by the offline recovery of the GXG brand, gross margin improving to 53.2% due to discount and cost control, and significant increases in both profit before tax and profit for the period despite some expense increases Revenue Analysis Total revenue increased by 3.5% year-on-year to RMB 1.085 billion, primarily driven by a 10.6% growth in the GXG brand, while gxg.kids declined due to business scale reduction, and offline self-operated and dealer stores grew, but online channels decreased by 10.2% due to non-core brand business reduction Revenue by Brand (RMB Thousand) | Brand | H1 2023 | Share | H1 2022 | Share | Y-o-Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | | GXG | 921,898 | 84.9% | 833,834 | 79.6% | +10.6% | | gxg jeans | 86,532 | 8.0% | 99,728 | 9.5% | -13.2% | | gxg.kids | 56,343 | 5.2% | 88,474 | 8.4% | -36.4% | | Mode Commuter | 18,526 | 1.7% | 15,070 | 1.4% | +22.5% | | Other | 2,044 | 0.2% | 11,522 | 1.1% | -82.3% | | Total | 1,085,343 | 100.0% | 1,048,628 | 100.0% | +3.5% | Revenue by Sales Channel (RMB Thousand) | Channel | H1 2023 | Share | H1 2022 | Share | Y-o-Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Offline - Self-operated Stores | 443,558 | 40.8% | 363,688 | 34.7% | +22.0% | | Offline - Partner Stores | 79,918 | 7.4% | 83,857 | 8.0% | -4.8% | | Offline - Dealer Stores | 131,650 | 12.1% | 119,391 | 11.4% | +10.3% | | Online Channels | 426,767 | 39.3% | 475,318 | 45.3% | -10.2% | | Total | 1,085,343 | 100.0% | 1,048,628 | 100.0% | +3.5% | Store Network To enhance store efficiency, the Group adjusted its offline store network, reducing the total number of offline stores from 1,122 at year-end 2022 to 1,047 as of June 30, 2023, by closing stores that did not meet sales targets Changes in Number of Stores | Channel/Brand | June 30, 2023 | December 31, 2022 | Net Change | | :--- | :--- | :--- | :--- | | Total | 1,047 | 1,122 | -75 | | Self-operated Stores | 372 | 393 | -21 | | Partner Stores | 158 | 184 | -26 | | Dealer Stores | 517 | 545 | -28 | Gross Profit and Gross Margin The Group's overall gross profit increased by 7.7% year-on-year to RMB 578 million, with gross margin improving from 51.2% to 53.2%, primarily due to effective control over retail discounts and product costs, and an increased sales contribution from higher-margin offline channels - Overall gross margin increased from 51.2% in the prior period to 53.2%[56][57] - Gross margins for GXG, gxg jeans, and Mode Commuter brands all improved due to lower retail discount rates and effective cost control, while gxg.kids saw significant declines in both gross profit and gross margin due to reduced business scale[58] - Gross margins for offline self-operated and dealer stores improved, while those for partner stores and online channels decreased due to increased subsidies and sales of off-season products[60][61] Other Income and Expenses Other income and gains surged by 93.0% year-on-year, primarily from fixed deposit investment income and foreign exchange gains, while selling and distribution expenses rose 5.1% due to increased brand promotion, administrative expenses increased 4.8% due to higher professional service fees, and a net impairment loss of RMB 4.9 million on financial assets was recorded, compared to a reversal in the prior period - Other income and gains amounted to RMB 41.3 million, a 93.0% year-on-year increase, primarily due to higher fixed deposit investment income and foreign exchange gains[63] - Selling and distribution expenses increased by 5.1% year-on-year to RMB 439 million, mainly due to higher advertising expenses[64] - A net impairment loss on financial assets of RMB 4.9 million was recorded, compared to a reversal of RMB 12.6 million in the prior period, primarily due to an increase in aged trade receivables[66] Profit Analysis Profit before tax increased year-on-year to RMB 30.6 million, driven by higher gross profit, while a significant reduction in income tax expense contributed to the profit for the period rising from RMB 4.2 million to RMB 27.7 million in the prior period Profit Analysis (RMB Million) | Item (RMB Million) | H1 2023 | H1 2022 | Change | | :--- | :--- | :--- | :--- | | Profit Before Tax | 30.6 | 16.8 | +82.1% | | Income Tax Expense | 2.9 | 12.6 | -77.0% | | Profit for the Period | 27.7 | 4.2 | +559.5% | Liquidity and Financial Resources The Group's net cash outflow from operating activities significantly decreased year-on-year, capital expenditure reduced due to lower headquarters renovation costs, and the gearing ratio slightly increased from 50.3% to 53.0% mainly due to seasonal borrowings for winter goods, while the Group primarily faces foreign exchange risk from USD-denominated debt - Net cash outflow from operating activities was RMB 33.3 million, a significant reduction from RMB 347 million in the prior period, primarily due to inventory reduction[13] - Capital expenditure was RMB 59 million, a 38.4% year-on-year decrease, mainly due to lower headquarters office renovation costs[14] - As of June 30, 2023, the gearing ratio was 53.0%, a slight increase from 50.3% at year-end 2022, primarily due to seasonal borrowings for prepayment of winter goods[18] - The Group faces foreign exchange risk primarily arising from USD-denominated debt and did not use any financial instruments for hedging during the period[22] Other Information Human Resources To control costs, the Group streamlined its workforce during the period, reducing the number of employees from 603 to 516 as of June 30, 2023, and total staff costs decreased from RMB 68.1 million to RMB 61.5 million in the prior period - Number of employees decreased from 603 at year-end 2022 to 516 as of June 30, 2023[38] - Total staff costs decreased by 9.7% year-on-year to RMB 61.5 million, with its proportion of total revenue decreasing from 6.5% to 5.7%[38] Interim Dividend The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2023 - The Board does not recommend the payment of an interim dividend for the current period[40][119] Use of Proceeds from Global Offering Since its 2019 listing, the company has utilized approximately RMB 685 million of net proceeds, representing 97.2% of the total, with the remaining RMB 19.8 million expected to be fully utilized within the next 18 months as planned Overview of Use of Proceeds (As of June 30, 2023) | Item | Planned Use (RMB Million) | Actual Use (RMB Million) | Unused (RMB Million) | | :--- | :--- | :--- | :--- | | Debt Repayment | 317 | 317 | – | | Brand Acquisitions or Strategic Alliances | 106 | 106 | – | | Upgrading Smart Stores | 70 | 70 | – | | Upgrading Warehouses | 141 | 121 | 20 | | Working Capital and Others | 71 | 71 | – | | Total | 705 | 685 | 20 | - As of June 30, 2023, out of approximately RMB 705 million in net proceeds from the listing, RMB 685 million has been utilized, with approximately RMB 19.8 million remaining unused[44][45]