On March 28, Gelonghui | Reading Lang (02385.HK) announced annual results. The Group's revenue decreased by about 40.6% from RMB 605.2 million in 2022 to RMB 359.4 million in 2023. The decline was mainly due to (i) the domestic economy being affected by the international environment, which had a negative impact on product sales; and (ii) the “double reduction policy” and the fact that consumers were still more cautious about consumption in the post-pandemic era, leading to a decline in market demand and a trend towards homogenization of products provided by various suppliers.
In 2023 and 2022, the Group confirmed net loss of RMB 72.5 million and net profit of RMB 4.9 million respectively. The decrease in profit was mainly due to a decrease of approximately RMB41.8 million in gross profit, a decrease of approximately RMB24.9 million in other revenue and revenue, a change in the fair value of financial assets/liabilities recorded at fair value of approximately RMB39.2 million, and an increase in R&D expenditure of approximately RMB5.1 million. These expenses were partially offset by a reduction of approximately RMB 15.6 million in sales and distribution expenses, a reduction of approximately RMB 15.1 million in administrative expenses, and a reduction of approximately RMB 11.3 million in other expenses.
As of December 2023, the Group has accumulated more than 8.8 million registered users and 750,000 daily active users. The Group has an average of more than 1.4 million monthly active users over the past 12 months.
Furthermore, the group has established a nationwide offline distribution network and has strong penetration. On December 31, 2023, the Group signed contracts with 80 offline dealers. They control a total of 3,497 sales points spread across 528 cities in 31 provinces and autonomous administrative regions (including municipalities directly under the Central Government) in China.