Hla Group (600398) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was RMB 3.89 billion, down 11.01% year-over-year; net profit attributable to shareholders fell 64.88% to RMB 271 million.

• For the first nine months, revenue reached RMB 15.26 billion, down 1.99% year-over-year; net profit attributable to shareholders was RMB 1.91 billion, down 22.19%.

• Decline in profit mainly due to lower sales and reduced gross margin.

Financial highlights

• Gross margin for the first nine months was 46.48%, up 0.64 percentage points year-over-year.

• Basic EPS for Q3 was RMB 0.06, down 66.67% year-over-year; for the nine months, RMB 0.41, down 28.07%.

• Net cash flow from operating activities for the nine months was RMB 26.89 million, a 98.9% decrease year-over-year.

• Total assets at quarter-end were RMB 32.45 billion, down 3.73% from year-end 2023.

Outlook and guidance

• Management highlights increased store openings and expansion of new brands, with a net increase of 252 stores in the first nine months.

• Emphasis on integrating newly acquired brands and optimizing channel structure.