On the evening of May 21stUfogamingcryptocomGao Xin Retail (06808UfogamingcryptocomHK) released as of March 31UfogamingcryptocomThe annual revenue for the 2024 fiscal year was 72.5 billion yuan, down 13% from the same period last year.Ufogamingcryptocom.3%, the net profit returned to the mother was-1.668 billion yuan, from profit to loss, a decrease of 228.5% compared with the same period last year. When it comes to the causes of losses, Gao Xin Retail boils down to the closure of loss-making stores, the contraction of guaranteed supply business and the decline in average passenger orders.

Gao Xin Retail is a retailer with high-end stores and multi-channel e-commerce business. it operates big stores, medium-sized supermarkets and member stores under the brands of Runfa, Zhong Yun Fat and M member stores. So far, the company has 507 offline stores, including 472 big run fat, 32 medium run fat and 3 M member stores.

The person in charge of Gao Xin Retail is Alibaba Group, which was rumored to be "Da Yun Fat, which Ali intends to sell", which was later confirmed to be false news. At the 2024 results presentation held today, Gao Xin retail management mentioned the relationship between the company and Alibaba. "the communication between the company and Alibaba is very smooth, among all Alibaba's resources, if Gao Xin retail is in need, Ali will fully support it," Guanjuan.com reported. "

It is worth mentioning that Gao Xin Retail announced on May 21 that Qin Yuehong had been appointed as a non-executive director of the company. According to public data, Qin Yuehong is now in charge of the corporate financing department of Alibaba Group holding Co., Ltd., and has participated in various capital operation projects of Alibaba Group.

Change from profit to loss

Gao Xin Retail's main income comes from three aspects, namely, sales of goods, membership fees and rental of premises in hypermarkets.

As of March 31, 2023, Gao Xin's annual retail revenue from selling goods was 69.4 billion yuan, a decrease of 11.1 billion yuan and 13.8 percent compared with the previous year. Gao Xin Retail mentioned at today's performance meeting that the decline in revenue in the past was mainly due to the lack of goods in the low and middle price segments and the price gap caused by the decline in attention to the same products of the same peers, according to Guanhuan.com. It is worth mentioning that Gao Xin retail's same-store sales decreased by 6.6%.

The financial report shows that during the reporting period, the total number of members is close to 240000, of which about 140000 are paying members, and the income from membership fees is 16 million yuan. In addition, rental income is basically the same as last year, with annual rental income of 3.1 billion yuan, a decrease of 7 million yuan and 0.2% over the same period last year. Overall, the net cash inflow generated by Gaoxin Retail's operating activities during the reporting period was 926 million yuan, a decrease of 78.5% compared with the same period last year.

Over the past year, Gao Xin's offline retail business has been blocked, but online business has made some progress. According to the financial report, online business accounts for about 29% of total revenue, of which B2C sales account for about 22%.

It should be pointed out that Gao Xin's retail current debt is growing rapidly, from 900 million yuan last year to 3.14 billion yuan this year. The reason given by the company is that current assets have decreased by 2.721 billion yuan and current liabilities by 481 million yuan. During the reporting period, the interest expense of the company's financial expenses reached 425 million yuan, including interest expenses on lease liabilities, loans and other financial liabilities.

When it comes to future business goals, the goal of management is to turn losses into profits. Specifically, the measures to be taken by the company in the future include reducing costs and increasing efficiency, and streamlining the organization. This means that the income and benefits of employees in the future will continue to decrease on the basis of a reduction of 450 million yuan compared with the same period last year.

Store expansion focuses on second-and third-tier cities

From the layout of Gao Xin retail stores, the company will focus on second-and third-tier cities in the future store expansion. Industry insiders believe that this move can not only avoid competition with member stores such as Sam and Kaishi, but also reduce competition with online retail stores such as Meituan and Box Horse.

During the reporting period, Gaoxin Retail closed 20 hypermarkets. At present, there are 472 hypermarkets, 32 medium-sized supermarkets and 3 M member stores. In terms of store layout, only 6.5% of hypermarkets and medium-sized supermarkets are located in first-tier cities, 68% are located in second-and third-tier cities, and the rest are fourth-and fifth-tier cities.

In addition, the three M member stores that have already opened are located in Yangzhou, Nanjing and Changzhou, and the four stores that will be opened in the future are located in Changshu, Jiaxing, Wuxi and Jiangyin. From this point of view, most of the planned M member stores focus on second-and third-tier cities. So far, the total number of M member stores has exceeded 110000.

Gao Xin Retail mentioned in the financial report that it plans to expand its stores in the future, continue to polish and optimize the profit model of member stores and medium-sized supermarkets, speed up the regional layout and improve tail stores, and plan to open four more M member stores in the new fiscal year. From a product point of view, we will strengthen our own goods and provide quality and inexpensive products in the future.

Gaoxin retail shares fell 0.61 per cent to HK $1.62 at the close of trading on may 22nd, with a total market capitalization of HK $15.454 billion.

(article source: blue Whale Finance)