14 Mar 2024
FY23 revenue was up 21.0% YoY to Rmb8.4bn, with core brand retail value up by low-teens/low-teens/15%/>20% YoY and that of 361º Kids up by 20-25%/low-teens/25-30%/40% YoY in 1Q/2Q/3Q/4Q. GPM was up by 0.6ppt YoY to 41.1%, with footwear/apparel/accessories/kids GPM recorded a change of +1.2/-1.1/-1.3/+0.9ppt YoY to 42.4%/40.5%/34.7%/41.8%. The increase in GPM of footwear and kids segments were mainly driven by the rise in AWP and the higher proportion of higher margin E-commerce sales. The decline in GPM of apparel and accessories was mainly caused by the changes in the product mix to cope with the market demand. S&D expense surged by 30% YoY to Rmb1,863m (S&D cost ratio – FY23: 22.1%, FY22: 20.6%) as A&P and E-commerce related charges were up by 35%/34% YoY with more aggressive A&P approach after the pandemic and more online activities held to promote the brand and increase in charges related to logistic, service fees and trade fairs in online biz, while admin expense was up by 16.4% YoY to Rm630m mainly due to the YoY increase in the R&D expenses by 17.9% to Rmb314m in FY23 and the rise in office expenses.As a result, NP was up by 28.7% YoY to Rmb961m.