The company announced the FY24H1 semi-annual report, and operations gradually improved: revenue of HK$8.938 billion, -3.8% year-on-year, net profit of HK$1,136 million, +4.0%, net profit after deducting non-return net profit of HK$1,288 million, +9.7% year-on-year (FY24H1 company's non-recurring losses of HK$150 million, including fluctuations in fair value of bonds of HK$98 million, processing of fixed assets and one-time accounts receivable and investment losses of HK$54 million).
Dividend: FY24H1 dividends of 15 HK cents per share.
Domestic sales: FY24H1 was repaired upward, sales of functional sofas grew rapidly, market share continued to rise, and channels sank and opened stores. FY24H1 achieved revenue from domestic sales of HK$6.05 billion, +5.1% year-on-year (HK$5.383 billion excluding iron frames, +3.0% year-on-year). By category, the focus is still on the two major categories of functional sofas and mattresses. Sofas achieved revenue of HK$3,881 billion, +1.5% year-on-year, sales volume of 534,900 units, +27.6% year-on-year. The high sales volume reflects the company's outstanding brand capabilities and supply chain competitiveness. Affected by dealer rebates and declining store openings, the unit price has declined. Mattresses achieved revenue of HK$1,491 million, +7.3% over the same period last year, which is still driving strong growth in domestic sales. Looking at each channel, offline revenue was HK$4,098 billion, +0.7% year-on-year. At the end of the reporting period, there were 6,888 stores, a net increase of 417 stores in FY24H1, and the coverage of low-tier cities was encrypted, maintaining steady growth. Online HK$1,285 million, +11.3% year-on-year, was an impressive increase, and the advantages of e-commerce and live streaming continued. Looking ahead to FY24H2, continuing channel encryption, and stabilizing same-store growth: 1) Internal segmented store opening groups and growth groups, using the 1031 project to strengthen dealer support and empowerment and stabilize same-store sales; 2) Channel sinking: new stores gradually penetrate low-tier cities and strengthen empty market coverage; 3) Expand other categories horizontally, develop independent mattress divisions, and upgrade product and terminal store displays; 4) Actively adapt to changing trends in portal flow, channel diversification and fragmentation, actively expand carry-in, full-service e-commerce, and live streaming Other channels are used to hedge against the downward impact of real estate by deepening the demand for new exchanges.
Export sales: With the removal of inventory, FY24H1 export sales gradually resumed, and the product and organizational structure were optimized, further driving growth. FY24H1 North America achieved revenue of HK$2,037 million (including iron frames), -20.5% year-on-year (excluding the impact of shipping surcharges, actual revenue in the North American market was -5.4%); Europe and other regions achieved revenue of HK$532 million, -20.6% yoy; and Home Group achieved revenue of HK$298 million, +6.7% yoy.
The 2023H2 inventory removal cycle has basically ended, the decline in export revenue has narrowed, and orders have improved ahead of the curve. At the same time, the company's own optimization and adjustments have been made, and the company has increased the prices of its exported products, further increased its share in overseas markets with the advantage of high cost performance; increased sales staff in overseas markets, refined the division of labor among markets, customers and categories to enhance the competitiveness of products and services in overseas markets; and developed markets outside the US, such as Europe and Southeast Asia, to continue to expand new growth points.