CROSBY Research – SunArt Retail (6808 HK): Net loss in FY24

24 May 2024

SunArt’s FY24 (Mar-end) revenue was down by 13.3% YoY to Rmb72.6bn, mainly due to i) the contraction of supply chain business and store closures which accounted for 8.4% decline in sales; and ii) lower ticket size. Meanwhile, gross profit reduced by 12.7% YoY to Rmb18.0bn due to i) decline in offline sales; and ii) additional expenses to maintain the price competitiveness of products despite the GPM slightly enhanced by 0.1ppt YoY to 24.7%. The company’s SSSG recorded a decline for the third consecutive year by 6.6% YoY in FY24. Mgmt. expects the SSSG to turn positive for FY25 on better operating environment.