Gelonghui March 26 | Beautiful Garden Healthcare (02373.HK) announced its annual results for the year ended December 31, 2023. The total annual revenue of the Group in 2023 reached RMB 2.15 billion, an increase of 31.2% over the previous year. Among them, the cornerstone business beauty and health services grew steadily, with annual revenue reaching RMB 1.19 billion, an increase of 26.1% over the previous year. The growth of value-added services accelerated, and the revenue from medical and aesthetic services reached RMB 850 million, an increase of 37.1% over the previous year. Asia Health Services revenue was RMB 101 million, up 47.6% year on year. The scale effect brought about by the increase in revenue and the continuous optimization of the business structure boosted the company's overall profit level, and the Group's gross margin increased to 45.6% from 43.9% in 2022. Net profit reached RMB 230 million, up 108.2% year on year, and net profit margin increased to 10.7%, up 4.0 percentage points from 2022. The Board has decided to recommend a final dividend of HK$0.47 per share for the year ended 31 December 2023.

The strong performance of financial data is mainly due to the continuous improvement of the Group's brand influence, product and service competitiveness, and customer management capabilities. Together, these factors have contributed to a steady increase in the number of members. In 2023, Meilitianyuan Direct Store received 1.26 million visitors, an increase of 33.1% over the previous year. With the improvement of the Group's service quality and continuous product innovation, more and more customers are turning into active members. In 2023, the number of direct active members reached 94,000, an increase of 19.6% over the previous year. What is more noteworthy is that the quality of active members continues to be optimized, as reflected in the increasing level of customer spending power and brand loyalty. In 2023, each direct-run store member spent an average of RMB 20,695 per year, a net increase of RMB 2,109 compared to 2022. Active members visited the store an average of 10.6 times a year, an increase of 1.1 times over the previous year. The repurchase rate of active members reached 84.3% in the last 12 months, an increase of 1.1 percentage points over the previous year. Under the unique Shuangmei business model, the Group continues to turn beauty and wellness members into high-margin value-added business customers. In 2023, 25.0% of beauty and health members purchased or consumed medical beauty or sub-health services, an increase of 1.3 percentage points over the previous year.

The rapid growth in business scale is mainly due to the Group's firm implementation of a development strategy combining endogenous growth and epitaxial expansion. In terms of endogenous growth, the company actively expanded its store network, with remarkable results. As of December 31, 2023, the number of Group stores has exceeded 400, including 201 direct-run stores and 199 franchised stores; 50 new stores were opened and acquired throughout the year, including 19 new or acquired directly-managed stores, and 31 newly opened franchised stores.