Youzan Technology (8083) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 was RMB686.3 million, down 5.2% year-over-year, mainly due to a decline in subscription solutions revenue, partially offset by growth in merchant solutions revenue.

• Gross profit decreased by 6.4% to RMB469.1 million, with gross profit margin dropping to 68.4% from 69.2% year-over-year.

• Adjusted EBITDA rose to RMB51.2 million from RMB6.3 million year-over-year.

• Profit from operations reached RMB2.6 million, a turnaround from a RMB11.3 million operating loss in the prior year period.

• Net loss attributable to equity holders was RMB17.2 million, compared to a profit of RMB18.1 million in the same period last year.

Financial highlights

• Subscription solutions revenue fell 10.6% to RMB377.5 million; merchant solutions revenue grew 2.2% to RMB306.6 million.

• Gross profit from subscription solutions dropped 14.2% to RMB295.6 million; merchant solutions gross profit increased 10.1% to RMB172.3 million.

• Selling and distribution expenses decreased 19.7% to RMB265.8 million, mainly due to lower sales staff costs and channel commissions.

• Administrative expenses remained stable at RMB70.0 million.

• Adjusted EBITDA margin improved to 7.5% from 0.9% in 2023H1.

Outlook and guidance

• Focus remains on AGI-driven intelligent consumer operation systems to help merchants drive profit growth.

• Targeting sustained and stable profit growth through digital and AI-driven solutions and product innovation.

• Continued optimization of cost structure and organizational efficiency.

• No interim dividend declared for the period.