Financial Services Association, January 8 (Reporter Chen Kang) Peacebird (603877.SH), which has paid close attention to “cost reduction and savings,” finally ended two consecutive years of net profit lubrication in 2023. This evening, the company announced a pre-increase in performance. Net profit for 2023 is expected to reach about 415 million yuan, an increase of 230 million yuan over the same period last year, and an increase of about 125% over the previous year.

According to the announcement, the key to profit growth is “the company's operating expenses decreased by about 9% year on year”, while gross sales margin increased by 6 percentage points year on year, mainly through “strict control of retail discounts on products and speeding up the closure of inefficient stores.” Meanwhile, the company's revenue in 2023 fell about 9% year over year.

In the first half of 2023, Peacebird was in a “no increase in profit” situation (net profit increased by 88.1% year on year, revenue decreased by 14.19% year on year). By increasing the retail discount rate, the company's gross sales margin increased 6 percentage points over the same period last year, and the company's operating expenses decreased 15% year on year.

The market was less likely to pay for the “pre-increase due to reduced operating expenses”. After the announcement of the pre-increase in results for the first half of 2023, Peacebird's stock price continued to fall.

Growth in 2023 was based on an ultra-low base. 2022 is considered to be the worst year since Peacebird went public. Net profit fell 72.73% year over year, and net profit after deducting non-net profit was -26.84 million yuan. At a time when store traffic and revenue declined, Peacebird instead “tightened its belt” to control costs. In 2022, 1,619 stores were closed. Sales expenses, management expenses, and R&D expenses for the whole year decreased by 19.81%, 11.68%, and 22.29%, respectively.

Earlier, the relevant person in charge of Peacebird told the Financial Federation reporter, “In 2023, the company will focus on improving brand image and store efficiency, and strictly control retail discounts across all channels.” The industry believes that the downward trend in revenue may continue, and the company is facing a seesaw formed by putting pressure on performance and controlling operating expenses.

Peacebird's 2023 performance forecast is the first forecast for the apparel industry. Judging from the performance of listed companies in the first three quarters of 2023, some companies are hopeful that net profit will increase throughout the year. News Bird (002154.SZ), Heilan House (600398.SH), Biyin Levin (002832.SZ), and Seven Wolves (002029.SZ) all achieved more than double digit net profit growth in the first three quarters; Hailan Family, Semma Apparel (002563.SZ), and Announce Bird's net profit for the first three quarters has surpassed the full year of 2022. Furthermore, companies such as Meibang Apparel (002269.SZ) and Jiumuwang (601566.SH) are expected to reverse losses in 2023.