Gelonghui March 28 | Aidi Palace (00286.HK) announced its annual results. For the year ended December 31, 2023, the Group achieved revenue of HK$555 million, gross profit of HK$121 million, an increase of 22.6% over the same period last year. The gross margin rose to 21.8% from 14.5% in the same period last year; adjusted profit was HK$15.727 million, an increase of HK$71.828 million over the same period last year, successfully turning a loss into a profit.
According to the announcement, the annual increase in gross profit is due to the opening of new stores using an extremely asset-light operating model, which further reduces the upfront investment of newly opened stores and optimizes the financial model of mature stores, and a sharp increase in gross profit.
In 2023, the net profit of the confinement service business was HK$116.55 million (2022: net loss of about HK$63.569 million). The main reason for the sharp increase in net profit was (1) the confinement service business was gradually recovering from the impact of the epidemic and was in the recovery phase; (2) the introduction of an extremely light asset model of newly opened stores further reduced the upfront investment of new stores and optimized the financial model of mature stores, resulting in a year-on-year increase in gross profit of 27.2% to about HK$121 million; and (3) improving marketing efficiency, sales and marketing expenses decreased year-on-year 21.7% to approximately HK$116 million.
In 2023, the Group gradually escaped the impact of the COVID-19 pandemic, and the confinement service business showed a steady recovery trend. It was launched in 2023 and the implementation of the upgrade strategy “Five-Year Fifty Cities Plan” was implemented, and coverage of the first year of ten cities was completed at the end of 2023. As of December 31, 2023, the Group has completed market coverage in ten cities of Shenzhen, Beijing, Chengdu, Zhuhai, Xiamen, Dongguan, Wuxi, Quanzhou, Guangzhou and Fuzhou, with a total of 18 stores (centers) opened and operated.