Financial Services Association, January 29 (Reporter Chen Kang) Semma Apparel (002563.SZ) had a lackluster performance during last year's Q4 sales season. According to the full-year performance forecast released by the company this evening, net profit for 2023 is expected to be 1,060 million to 1,160 million yuan, and Q4 net profit is 228 million, down 10.28%-37.63% year on year, which is also lower than the data for the fourth quarter of 2020-2022.

According to forecasts, Semma's net profit in 2023 increased 66.41% year-on-year to 82.10%. However, 2022 was the year with the lowest net profit returned to the mother in 12 years. In this report card handed over by Qiu Jianqiang three months after succeeding his father Qiu Guang and taking office as chairman, the net profit reached only 637 million yuan.

Leaving aside the low base in 2022, with regard to the 2023 performance changes, Semma Apparel said that during the reporting period, operational quality and efficiency improved, gross sales margin increased year on year, and gross profit increased year on year; the company's inventory operation efficiency increased year on year, inventory turnover days decreased year on year, inventory balance at the end of the period decreased year on year, and asset impairment losses decreased year on year.

Judging from the performance of the first three quarters of 2023, there are signs of a recovery in gross margin and a decrease in inventory value: gross margin for the first three quarters increased by 3.71 percentage points year on year to 44.13%: as of Q3, Semma's inventory amount decreased 21.78% year on year to 3.653 billion yuan. At that time, some industry figures predicted that the company is expected to increase inventory clean-up efforts and optimize the structure of new and old products during the peak sales season and promotion holidays. At the end of Q3, the company's inventory turnover was 204 days, 19 days higher than at the end of 2022.

Offline channels are the main source of revenue for Semma, but e-commerce's share of revenue is increasing. In the fourth quarter of 2023, Semma clearly increased live e-commerce and announced the official opening of the Semma Live Wenzhou base at the company's 27th anniversary. The base covers an area of 16,000 square meters and has a live broadcast room, product selection center, and filming base.

The company stated on the interactive platform, “As of the 2023 interim report, e-commerce revenue accounts for about 47% of the company's overall revenue. The e-commerce business is all directly managed by the company. This change in the business structure will have an impact on the corresponding fee rate.” During this period, the gross margin of Semma's online channel was 41.68%, higher than the gross margin of franchise sales of 39.54%, and lower than the gross profit margin of the direct sales channel of 70.39%; the return rate on Douyin and Tmall platforms was 38.2% and 42.4%.

At the beginning of 2023, Semma set a net increase of 200-300 stores for the whole year. As of Q3 2023, the total number of stores was 8,274, a net increase of 134 stores compared to the beginning of the year.