According to the Zhitong Finance App, Gome Retail (00493) announced its 2023 results, achieving sales revenue of approximately RMB 647 million (same unit), gross profit of approximately RMB 174 million, and gross margin of 26.89%, up 16.46 percentage points from 10.43% last year.

According to the announcement, the increase in gross margin was mainly due to different product types during the reporting period.

In 2023, while striving to stabilize its main business, the group stepped up efforts to dispose of and realise non-core assets, actively raised funds, and continued to communicate and negotiate with creditors to promote debt resolution efforts such as debt-for-equity swaps. It always kept the debt problem within a manageable range and gradually digested and resolved it. At the business level, the Group continues to implement strategic focus and slimming transformation, focusing on the home appliance retail business, focusing on retail sales of household appliances and consumer electronics products using a vertical model, while increasing investment in short videos, live streaming and building localized stores, strengthening the transformation of live streaming, quickly establishing a new media account matrix for foreign platforms, and actively cooperating with MCN and influencer experts to continuously improve product quality, expand the influence of the circle and community, accelerate the development of asset-light models such as franchises, and attract more consumers and merchants to participate in the upward and downward sales of Gome and the US chain, in Build an e-commerce and live streaming platform that is closer to young consumers online, and build a local lifestyle center full of local characteristics offline.

During the reporting period, the Group's net cash flow from operating activities was RMB 1,113 million, compared with the net cash flow of RMB 821 million for the same period last year, mainly due (among others) to changes in inventory, accounts receivable, accounts payable and notes payable. Net cash flow from investing activities due to disposal of financial assets was RMB 373 million, compared to consumption of RMB 168 million in 2022. Furthermore, net cash flow from fund-raising activities was RMB1,589 million, compared to RMB4.727 billion spent in 2022. The net cash outflow from financing activities was mainly due to repayment of bank and other loans during the reporting period.

In the future, the group will continue to actively resolve debts and maintain strategic focus. In terms of debt, it plans to divide the electrical appliance business, consolidate and restructure Gome Electric Appliances, which have debt problems, and design and establish a new management system to establish a new Gome Electric. On the strategic side, we will continue to lean towards optimizing and upgrading new business models, accelerate the development of innovative business formats such as home improvement, Gome Auto Experience Center, and leasing business, and jointly lay out and develop a wider market space in the city.

At the beginning of 2024, policies to boost domestic demand began to accelerate. The group will use the policy trend to actively work out of the debt crisis, make every effort to embark on a new journey, focus on adhering to independent innovation, transformation and upgrading, and continue to strive to push Chinese families to make continuous progress from quality of life to a better life.