Stock code: 6808
Financial Results Announcement
For the six months ended 30 September 2024
Disclaimer
Potential investors, analysts and shareholders of Sun Art Retail Group Limited (the Company) and other recipients of this document are reminded that this document and any oral discussion made together with this document (the presentation) are provided for your information purposes only and you may not forward, publish, distribute, release or disseminate any part of the presentation directly or indirectly to any other person. This presentation should be read in conjunction with the Results Announcement and is qualified in its entirety by the more detailed information and financial information contained in the Results Announcement.
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Financial Results Announcement | - 2 - |
For the six months ended 30 September 2024 |
Financial Highlights
For the six months ended 30 September
RMB in million | 2022 | 2023 | 2024 |
Number of Stores | 498 | 505 | 502 |
Revenue(1) | 40,611 | 35,768 | 34,708 |
Same Store Sales Growth(2) | -2.3% | -5.9% | 0.3% |
Gross Profit | 10,112 | 8,889 | 8,526 |
Gross Profit Margin | 24.9% | 24.9% | 24.6% |
EBIT | 500 | 19 | 621 |
EBIT Margin | 1.2% | 0.1% | 1.8% |
Profit for the period | -87 | -378 | 186 |
Net Profit Margin | -0.2% | -1.1% | 0.5% |
Profit attributable to equity shareholders | -69 | -359 | 206 |
Earnings per share | -0.01 | -0.04 | 0.02 |
- Basic and diluted (RMB)(3) | |||
Note: The Group has initially applied HKFRS 16 at 1 January 2019.
- In our electronic appliance department, the business model was changed from self-operation to consignment from August 2018. Since then, only consignment fees received have been recognized in revenue instead of gross sales.
- Same Store Sales Growth: for stores that have been open for more than twelve full months as of September 30, 2024. It is calculated by comparing the sales derived from those stores during their operating periods in the twelve months ended 30 September 2024 with sales during the corresponding periods ended September 30 2023.Same Store Sales Growth is calculated based on sales excluding supply chain business (supply chain business includes Taocaicai and Tmall inventory sharing business).
- The calculation of basic and diluted EPS is based on the weighted average number of 9,539,704,700 ordinary shares in issue during the period.
Financial Results Announcement | - 3 - |
For the six months ended 30 September 2024 |
Store Expansion
Focused on sustainable store expansion of multi-format in the regions with brand advantage.
600
500
400
300
200
100
0
No. of stores | GFA (000'sqm) | |||||||||||||||||
505 | 502 | 14,300 | ||||||||||||||||
498 | 650 | |||||||||||||||||
1 | 6 | 13,786 | ||||||||||||||||
10 | 19 | 30 | 550 | 13,800 | 13,608 | 46 | 13,486 | |||||||||||
- | 153 | |||||||||||||||||
87 | 223 | |||||||||||||||||
450 | 13,300 | |||||||||||||||||
219 | ||||||||||||||||||
488 | 485 | 466 | 350 | 12,800 | 13,587 | |||||||||||||
13,521 | ||||||||||||||||||
250 | 12,300 | 13,044 | ||||||||||||||||
150 | 11,800 | |||||||||||||||||
1H FY2023 | 1H FY2024 | 1H FY2025 | 1H FY2023 | 1H FY2024 | 1H FY2025 | |||||||||||||
Membership Store | Superstore | Hypermarket | Membership Store | Superstore | Hypermarket | |||||||||||||
New opening of 1 hypermarket | New opening of 3 membership stores | |||||||||||||||||
Secured 3 hypermarket sites | Secured | 4 superstore sites | Covering | 206 cities |
Financial Results Announcement | - 4 - |
For the six months ended 30 September 2024 |
Total Revenue
In the first half of the fiscal year, ticket size increased and the decline trend in traffic narrowed. Without taking into account the impact of the scaling down of supply chain business and store closures, revenue increased by about 0.6%.
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
RMB (million) | ||
40,611 | ||
1,527 | 35,768 | 34,708 |
14 |
1,543 | 1,508 |
39,084
34,22533,186
1H FY2023 | 1H FY2024 | 1H FY2025 |
- Revenue of the Group amounted to RMB34,708 million, representing a year-on-year decrease of RMB1,060 million, or -3.0%.
- ◎ The scaling down of supply chain business has approximately
- 2.5% impact on revenue.
- ◎ Sales losses from store closures have approximately 1.1% impact
- on revenue.
- The rental income reached RMB1,508 million, representing a year- on-year decrease of RMB35 million, or -2.3%.
- Reduction of gallery areas caused by the store closures.
- Adjustment of tenant mix.
Membership Fee Rental Income Sales of Goods
Financial Results Announcement | - 5 - |
For the six months ended 30 September 2024 |
Gross Profit Margin
Endeavour to invest in low-price strategy, the gross profit was slightly lower than that of the same period of the last fiscal year.
RMB (million)
14,000 | 24.9% | 24.9% | 24.6% | 26.0% |
12,000 | 24.0% |
- Gross profit was RMB8,526 million, representing a year-on-year decrease of RMB363 million, or -4.1%.The decrease in gross
10,000
8,000
6,000
10,11222.0%
8,889 | 8,526 | |
20.0% | ||
18.0% | ||
16.0% |
profit was mainly resulted from:
- ◎ Facilitating the implementation of the low-price strategy,
- reshaping price competitiveness and enhancing user's
- mentality.
4,000
14.0% | ||||||
2,000 | 12.0% | |||||
0 | 10.0% | |||||
1H FY2023 | 1H FY2024 | 1H FY2025 | ||||
Gross Profit | GP Margin | |||||
Financial Results Announcement
For the six months ended 30 September 2024
- The gross profit margin was 24.6%, representing a year-on-year decrease of 0.3 percentage points.
- 6 -
Expenses
By accelerating cost reduction and efficiency improvement, the expenses decreased by RMB1,090 million and the expense rate decreased by 2.3 percentage points year-on-year.
RMB (million)
14,000
12,000
25.6% | 26.9% | 24.6% |
10,414
9,616
20.0%
10.0%
• | Expenses amounted to RMB8,526 million, representing |
a year-on-year decrease of RMB1,090 million, or -11.3%. | |
The decrease in expenses was mainly resulted from: | |
• | ◎ Optimization of the personnel structure and pattern of |
10,000
8,000
6,000
1,036
8988,526
859
0.0%
-10.0%
• | stores and headquarters. |
• | ◎ Improvement of the investment efficiency of |
• | marketing expenses. |
• | ◎ Intensify negotiation efforts for rental cost reduction. |
4,000
2,000
9,378 | 8,718 | 7,667 |
-20.0%
• The expense rate was 24.6%, representing a year-on- |
year decrease of 2.3 percentage points. |
0 | -30.0% | |||||
1H FY2023 | 1H FY2024 | 1H FY2025 | ||||
Administrative Expenses | Selling and marketing Expenses | |||||
Total Opex as % of Revenue | - 7 - | |||||
Financial Results Announcement |
For the six months ended 30 September 2024
EBIT
Operating profit increased by RMB602 million with operating margin increased by 1.7 percentage points year-on-year.
1,000
900
800
700
600
500
400
300
200
100
0
RMB (million)
1.8%
1.2%
621
5000.1%
19
1H FY2023 | 1H FY2024 | 1H FY2025 | |||
EBIT | EBIT Margin | ||||
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
- The operating profit was RMB621 million, representing
- a year-on-year increase of RMB602 million.
- The operating margin was 1.8%, representing a year-
- on-yearincrease of 1.7 percentage points.
Financial Results Announcement | - 8 - |
For the six months ended 30 September 2024 |
Net Profit
The profit after tax during the period was RMB186 million, achieving a turnaround.
300
200
100
0
-100
-200
-300
-400
RMB (million)
2.5%
186 | ||
1.5% | ||
0.5% | ||
(87) | 0.5% | |
-0.2% | -0.5% | |
-1.1% | -1.5% | |
(378) |
- Net profit during the period was RMB186 million, representing a turnaround increase of RMB564 million from a loss of RMB378 million year-on-year.
- The net profit margin was 0.5%, representing an increase of 1.6 percentage points from a net loss margin of 1.1%
- year-on-year.
-500 | -2.5% | |||||
1H FY2023 | 1H FY2024 | 1H FY2025 | ||||
Net Profit/Loss | Net Profit/Loss Margin | |||||
Financial Results Announcement | - 9 - |
For the six months ended 30 September 2024 |
Working Capital Days, CAPEX and Net Cash Position
Continued to optimize working capital, even though net cash decreased due to an increase in restricted deposits, but free cash flow remained healthy and stable.
Working Capital Days(1) | CAPEX | Net Cash Position(2) |
90
80
70
60
50
40
30
20
10
0
80 | 81 | RMB (million) | 30,000 | RMB (million) | |||||
76 | |||||||||
25,000 | |||||||||
57 | 58 | 54 | 500 | 440 | 419 | 20,000 | 2,642 | 2,929 | |
450 | 7,663 | ||||||||
400 | |||||||||
350 | 258 | 15,000 | |||||||
300 | |||||||||
250 | 10,000 | 20,332 | 20,893 | ||||||
200 | |||||||||
14,635 | |||||||||
150 | 5,000 | ||||||||
100 | |||||||||
50 | |||||||||
0 | 0 | ||||||||
1H FY2023 | 1H FY2024 | 1H FY2025 |
Inventory Turnover
Trade Payable Turnover
- Inventory turnover days and trade payable turnover days were 54 days and 76 days
- respectively. Working capital remained stable.
Note:
1H FY2023 | 1H FY2024 | 1H FY2025 |
- CAPEX was RMB419 million. Continued to expand stores with multi-format.
1H FY2023 | 1H FY2024 | 1H FY2025 | |
Restricted deposits | Net Cash | ||
- Net cash position was RMB14,635 million, representing a year-on-year decrease of RMB6,258 million.
- The restricted deposits were approximately RMB7,663 million, representing a year-on- year increase of RMB4,734 million.
(1) | The inventory turnover days and trade payable turnover days are calculated on average balances of inventory and trade payable, together with the cost of inventory during past twelve months. | |
(2) | The balance of net cash position is calculated as the sum of cash and cash equivalents, financial assets measured at FVPL, time deposits and the aforementioned portions in assets of disposal groups classified as held for sale minus maturity | |
amount of bank loans.. | - 10 - | |
Financial Results Announcement |
For the six months ended 30 September 2024