Wangfujing’s 1H Revenue Up 11% YoY: Outlet Sales Soar 42%, First-time Disclosure of Duty-Free Business Data

8月 29, 2023

On August 25th, Wangfujing Group Co., Ltd. (SH:600859) released its performance report for the first half of 2023. During this reporting period, the company achieved a revenue of ¥6.38 billion, representing an 11% year-on-year growth after adjusting for the same period last year. Net profit attributable to the parent company reached ¥518 million, indicating a 36% year-on-year increase after adjusting for the same period last year.

As one of the largest and most comprehensive commercial retail groups in the nation, Wangfujing has established a variety of retail formats, including Wangfujing Department Store, Wangfujing Shopping Center, Wangfujing UP TOWN, Beijing Scitech Premium Outlet Mall, Yansha Mall, Yansha Outlet, Beijing Xidan Market, Guiyou Mansion, Faya Business and Trade, Luxemporium Group, and Wangfujing Duty-Free. These retail formats operate a total of 75 large integrated retail stores, 399 supermarkets, and specialty stores in 35 cities across China.

In terms of business performance, the Outlet format performed the best, with its revenue surging by 42% year-on-year to ¥1.02 billion in the first half of the year (Department Store format: ¥3.12 billion, Shopping Center format: ¥1.16 billion). The gross profit margin reached 68.24% (Department Store format: 36.72%, Shopping Center format: 49.03%).

The data for Wangfujing’s duty-free business was also disclosed: the revenue was ¥136 million, with a gross profit margin of 13.46%. Currently, it accounts for 2.05% of the total revenue, and the operating cost reached ¥118 million, primarily attributed to the cost of purchasing goods.

In January of this year, the company’s first store for the duty-free format, Wan Ning Wangfujing International Duty-Free Port Phase 1, opened for business. WeChat mini programs, “Wangfujing Hainan Duty-Free Online Mall” and “Wangfujing Duty-Free Hainan Member Purchase,” were also officially launched during the reporting period, marking the official entry into the new era of dual-driven main business of “taxable + duty-free.”

Currently, the company is advancing preparations for Phase 2. At the beginning of the year, the company’s first offline experiential store for cross-border e-commerce landed at Sasseur Outlet in Beijing. The WeChat mini program for cross-border e-commerce, “WFJ Wangfujing Global Shopping,” also went live. In March, the second cross-border e-commerce experiential store was established at Yansha Outlet in Beijing, creating a link between taxable and duty-free retail.

Presently, there are eight duty-free licenses nationwide. The first seven belong to China Duty-Free Group, Sunrise (SunriseDuty-Free Shop), HTDF, Zhuhai (Gree Real Estate), Shenzhen Duty-Free Group, ZhongChuFu (China National Service Corporation for Chinese), and ZhongQiao (Jilin ZhongQiao Duty-Free Commodity Co., Ltd.). Wangfujing obtained the duty-free operation qualification from its controlling shareholder, Beijing Capital Tourism Group Co., Ltd., in June 2020, making it the eighth domestic duty-free license holder.

In May 2022, Wangfujing announced its participation in the bidding for the 100% equity of Hainan Outlets Tourism Development Co., Ltd., listed on the Beijing Property Exchange, through Juyuan Xincheng (Tianjin) Investment Management Co., Ltd. The company was confirmed as the transferee of this bid. The equity transfer price was ¥160 million, with an additional responsibility of repaying shareholder loans and interest totaling ¥777 million. Established in 2011, Hainan Tourism holds the operation rights for Hainan Wanning First Creation Outlets. After the acquisition was completed, it was officially renamed Wangfujing Yuewu Town.

In October 2022, the company was granted permission to operate offshore duty-free business in Wanning City, Hainan Province. Wangfujing uses the Yuewu Town property to operate offshore duty-free business. The property is self-owned, with a total building area of 102,500 square meters. The project is planned to open in three phases. The first phase (Wangfujing International Duty-Free Port) will cover categories such as fragrances, gold accessories, digital appliances, alcohol, food, coffee, and sports equipment.

| Source: Company Announcement

| Image Credit: Company Official Website

| Editor: LeZhi