Zall Smart Commerce Group (2098) H1 2024 earnings summary

Executive summary

• Achieved steady growth in the first half of 2024, with revenue rising 24.3% year-over-year to RMB68.3 billion, driven by digital integration and supply chain management and trading business growth, despite a challenging global environment.

• Net profit increased 9.7% to RMB40.8 million compared to the same period last year.

• Focused on building a modern supply chain system, expanding market share in commodities, and integrating digital trade.

• Received multiple ESG and quality awards, improved Fortune China 500 ranking by 13 places, and continued internationalization with North Hankou's export turnover exceeding $18 billion since 2016 and CIC platform turnover surpassing $20.6 billion.

• No interim dividend was declared for the period.

Financial highlights

• Revenue increased by 24.3% year-over-year to RMB68,276.4 million for the six months ended 30 June 2024.

• Net profit rose 9.7% year-over-year to RMB40.8 million.

• Gross profit decreased by 8.9% to RMB363.8 million, with gross margin declining from 0.7% to 0.5%.

• Net gearing ratio increased to 51.9% from 28.1% at year-end 2023.

• Cash and cash equivalents stood at RMB2,024.8 million as of 30 June 2024; interest-bearing borrowings decreased by 5% to RMB14,508.9 million.

Outlook and guidance

• Plans to further strengthen digital technology R&D and apply big data, AI, and blockchain to enhance B2B trading, supply chain, and IT cloud services.

• Will continue to focus on cost reduction, efficiency improvement, and expanding synergies in trading, warehousing, logistics, and capital efficiency.

• Intends to pursue organic growth and M&A opportunities to enrich its intelligent ecosystem.

• Strategies in place to improve liquidity, including asset disposals and refinancing.