Yihai International (1579) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 increased by 11.9% year-over-year to RMB2,926.9 million, driven by product innovation, channel expansion, and overseas growth.

• Net profit declined 11.4% year-over-year to RMB334.1 million, mainly due to higher distribution expenses and lower other income.

• Gross profit rose 9.9% to RMB877.5 million, but gross margin declined to 30.0% from 30.5% due to price adjustments for related party sales.

• The company maintained a multi-brand strategy, expanded product offerings, and enhanced supply chain capabilities, including new production facilities in Hebei and Anhui.

Financial highlights

• Revenue: RMB2,926.9 million (+11.9% YoY); Net profit: RMB334.1 million (–11.4% YoY); Basic EPS: RMB31.78 cents (–13.1% YoY).

• Gross profit: RMB877.5 million (+9.9% YoY); Gross margin: 30.0% (down from 30.5%).

• Distribution expenses increased 46.9% to RMB352.3 million, mainly due to higher online marketing and transportation costs.

• Cash and cash equivalents at period end: RMB1,864.6 million.

• Interim dividend declared: RMB0.2825 per share (HK$0.3088), totaling RMB292.9 million.

Outlook and guidance

• The company expects continued expansion of domestic consumption and economic recovery in the second half of 2024, supported by macro policies.

• Strategic focus remains on product R&D, overseas expansion, brand promotion, and channel development.

• Plans to further penetrate the Halal and Middle East markets, enhance overseas supply chain, and increase market share in e-commerce and business-end channels.

• Will pursue potential strategic investments to support product and channel synergies.