18 Aug 2023

The company reported a 6.7% YoY increase in topline to Rmb1,491m in 1H23, with i) core collection slightly increased by 3.2% YoY amid higher sales throughout rate and ASP hike in 2H22, partially offset by orders reduction from certain distributors as they clear their channel inventory, while ii) smart casual collection recorded a 21.5% YoY increase with full recovery of stores operation and a higher sales throughout rate. Tops remained as the largest revenue contributor, which accounted for 58.8% (1H22: 58.6%) of revenue with a 6.2% YoY increase. GPM was up by 3.1ppt YoY to 51.8% on the back of i) relaxation of pandemic containment measures and the resumption of social activities; ii) larger contribution of the higher-margin smart casual collection; iii) a write-back for part of the inventory provision due to the decrease in off-season inventory.

CROSBY Research – China Lilang (1234 HK): Single digit growth in 1H23