Proya Cosmetics (603605) Q2 2024 earnings summary

Executive summary

• Operating revenue for H1 2024 reached RMB5.00 billion, up 37.90% year-over-year, driven by strong online sales and brand performance.

• Net profit attributable to shareholders was RMB701.67 million, a 40.48% increase year-over-year; net profit excluding non-recurring items rose 41.78%.

• Gross profit margin remained high at 69.82%, with net profit margin improving to 14.47% due to reduced administrative expenses.

• Proya maintained leading market positions in key categories on major e-commerce platforms, with significant growth in hero products and new product launches.

Financial highlights

• Basic EPS for H1 2024 was RMB1.78, up 42.40% year-over-year; diluted EPS was RMB1.72.

• Net cash flows from operating activities decreased 43.95% year-over-year to RMB662.10 million, mainly due to higher payments for goods and image promotion.

• Total assets at June 30, 2024 were RMB7.36 billion, up 0.54% from year-end 2023; net assets attributable to shareholders rose 4.42%.

• Selling expenses increased 48.08% year-over-year, mainly from higher image promotion costs; administrative expenses fell 7.91%.

• Non-recurring gains and losses totaled RMB22.67 million, mainly from government grants and other non-operating items.

Outlook and guidance

• The company continues to focus on R&D, product innovation, and expanding its brand matrix, with ongoing investment in new channels and overseas markets.

• No interim dividend or capital reserve conversion plan was proposed for H1 2024.