China Foods (506) H2 2024 earnings summary

Executive summary

• FY2024 revenue reached RMB 21,492 million, a 0.2% year-over-year increase, with gross profit margin rising 2.6ppt to 37.8%.

• Gross profit rose to RMB 8,121 million, and adjusted EBIT grew 6.2% to RMB 1,865.9 million; adjusted EBITDA increased 4.4% to RMB 2,722.4 million.

• Net profit attributable to owners was RMB 860.5 million, with EPS at 30.76 RMB cents.

• Innovation business segments, including Smart Retail and Yuexiang Club, delivered strong double-digit revenue growth.

• Final dividend proposed at RMB0.153 per share, subject to shareholder approval.

Financial highlights

• Gross profit improved to RMB8,120.8 million from RMB7,543.8 million year-over-year.

• Adjusted EBIT margin improved by 0.5ppt to 8.7% year-over-year.

• Adjusted EBITDA margin rose by 0.5ppt to 12.7% year-over-year.

• Distribution and selling expenses increased due to higher marketing spend; administrative expenses remained stable.

• Other income, gains and losses, net, dropped 51% to RMB161.9 million, mainly due to a one-off gain in 2023 and lower government grants.

Outlook and guidance

• Continued focus on innovation and high-potential product launches, including new energy drinks and RTD coffee.

• Management expects stable economic fundamentals in China for 2025, with potential cost increases in aluminum but stable prices for other raw materials.

• Focus remains on product structure upgrades, business portfolio optimization, and improving gross profit margin.

• The company aims to enhance profitability and adapt to a volatile market through restructuring and innovation.