27 Nov 2024
Man Wah reported its Sept-ended 1HFY25 results with top line decreased by 7.1% YoY to HK$8.31bn. GPM slightly increased by 0.4ppt YoY to 39.5%. NP increased by 0.3% YoY to HK$1.14bn with NPM improved by 1.0ppt YoY to 13.7%, mainly driven by the improved GPM and YoY drop in SG&A ratio from 22.4% in 1HFY24 to 21.5% in 1HFY25. The company declared its interim DPS at HK$0.15. (1HFY24: HK$0.15). Revenue from China was down by 17.2% YoY to HK$4.98bn with 7,516 retail stores by end of the period (end-Mar 2024: 7,236), accounting for 60% of total revenue. Consumer confidence tumbled significantly during the last 6 months, and the company found difficulty improving purchasing sentiment from both the price and product sides. With the government stepping up its policy support by providing subsidy policies for the furniture policy, and also the real estate industry rebounding from the bottom, mgmt. expects the demand in the furniture market will gradually pick up and recover. Revenue from Sofas /mattresses was down 15.6%/18.9% YoY to HK$3.29bn/HK$1.21bn, with number of sofas sold down by 9.9% YoY to 481.9k sets and sofas ASP down by 4.0% YoY. Offline/online revenue from China was down by 14.9%/21.7% YoY to HK$3.49bn/HK$1.01bn, respectively.