MODERN AVENUE(SZ:002656) Zheng Quan Zhi Xing·2025-07-02 16:27Core Viewpoint - The financial report of Modern Avenue Fashion Group Co., Ltd. shows a significant increase in net profit and non-recurring net profit for 2024 despite a decline in revenue and gross margin, primarily due to the recovery of litigation funds and adjustments in bad debt provisions [1][2][3]. Financial Performance Summary - In 2024, the company achieved operating revenue of 216.49 million yuan, with overseas business revenue of 125 million yuan, accounting for 57.60% of total revenue [1]. - The net profit for 2024 was -62.10 million yuan, a year-on-year increase of 30.27%, while the non-recurring net profit was -57.99 million yuan, up 45.80% [1]. - The gross margin for the main business was 68.58%, down 2.37 percentage points from the previous year [1][2]. Revenue and Cost Analysis - The company's operating income decreased by 25.23% compared to 2023, while operating costs fell by 21.04%, leading to a gross profit decline of 27% [2][3]. - The increase in net profit was attributed to the recovery of approximately 89 million yuan from the Macau International Bank litigation and a reduction in bad debt provisions [2][3]. Quarterly Performance Insights - The quarterly net profit figures showed significant fluctuations: Q1 -53.72 million yuan, Q2 -8.20 million yuan, Q3 48.86 million yuan, and Q4 -49.03 million yuan [2][3]. - The substantial increase in Q3 net profit was primarily due to the recovery of litigation funds and adjustments in bad debt provisions [2][3]. Overseas Revenue Breakdown - The main components of overseas revenue included significant contributions from various stores, with the highest sales from the Parisian store at approximately 75.61 million yuan [5]. - The overseas revenue for 2024 was 124.71 million yuan, with Macau accounting for 82.94% of this total [5][6]. Client Concentration and Sales - The top five clients accounted for 13.84% of total sales, with the largest client contributing 3.83% [9][11]. - The sales to the top five clients showed minimal change compared to 2023, indicating stable client relationships despite market fluctuations [11][12]. Inventory and Impairment Provisions - The company reported inventory of 150 million yuan, with a provision for inventory impairment of 85.90 million yuan [13][14]. - The impairment provision was based on the aging of inventory, with higher provisions for older stock due to declining market values [15][16]. Audit and Verification Procedures - The audit procedures included testing internal controls related to inventory and verifying the accuracy of sales revenue from major clients [19][20]. - The audit concluded that the overseas sales revenue and inventory provisions were accurate and in compliance with accounting standards [8][20].