According to the Zhitong Finance App, China Lilang (01234) announced results for the six months ended June 30, 2024. The group achieved revenue of 1.6 billion yuan (RMB, same below) during the period, up 7.3% year on year; profit for the period was 0.28 billion yuan, up 3.6% year on year; basic profit per share was 23.4 points; it is proposed to pay an interim dividend of 13 HK cents per share and a special interim dividend of HK5 cents per share.

According to the announcement, revenue growth was mainly due to the fact that young businesses in the first half of the year continued their growth momentum in the fourth quarter of last year and achieved 17.3% growth, driven by store operations and new retail. In terms of the main series, sales channels in Heilongjiang Province declined due to the adjustment of the DTC model, and repurchasing inventory from the original distributor required deducting sales revenue and compensation paid to distributors due to termination of cooperation. Despite this, the main series revenue grew by 4.5%.

The main series currently has a total of 2,412 stores, of which 38.5%, or 959, operate on behalf of others. With the shift from distribution to the DTC model in Northeast China, the number of directly-managed stores increased to 15. The Group will also continue to consolidate and establish a nationwide sales network to provide services to Chinese consumers through long-term cooperation with distributors across the country.

During the period, the Group continued to pragmatically optimize the distributor retail network, insisted on opening superior stores in high-quality shopping malls, and attracted customers and increased sales through the most unique brand decoration.

In terms of light business, there are 292 direct-run stores, and 5 others operate through a distribution model. Light Commerce continued to optimize store locations and improve the use of store space during the period.

At the end of June 2024, the Group had 2,709 retail stores nationwide, a net increase of 14 during the period. The total store area was about 0.4424 million square meters (December 31, 2023:0.4295 million square meters), an increase of 3.0% over the end of last year.

On June 30, 2024, there were 885 shopping malls (December 31, 2023:879), accounting for about 32.7% of the total number of stores and 35.5% of the total store area; in addition, there were 81 outlet stores (December 31, 2023:77).

Looking ahead to the second half of 2024, the international environment continues to be complex. Although mainland China is affected by multiple factors such as weakening export demand, weak economic data, and a decline in the real estate market, the mainland China market is huge and there is still demand for cost-effective products. As a result, the Group maintains a cautious and optimistic attitude towards the medium to long term. The weak retail market will push the menswear industry to enter market integration, and brands with homogenized products, single sales channels, and poor cash flow will be eliminated. China's Lilang will seize this opportunity, actively expand its market share, further strengthen its position, and strive to become a leading enterprise in the industry. The Group will strive to make full use of the advantages of sales channel reform, continue to optimize the store network, accelerate the development of new retail businesses, and continuously launch innovative and differentiated new products to meet consumer needs.