When facing thousands of listed company announcements every day, which ones should you read? What are the key points to take away from the dozens or hundreds of pages of material announcements? Are the many professional terms in the announcements bullish or bearish? Check out Caixin's "Quick Read Announcement" column, where our reporters across the country will provide you with accurate, fast and professional interpretations on the night of the announcement.

According to Caixin, on August 21st, due to new products and expansion into emerging platforms, Zhio Technology (301376.SZ) achieved income growth in the first half of the year. However, impacted by factors such as the decline in average product price and the increase in marine transportation fees, the company's net income decreased year-on-year. In response to fluctuations in marine transportation fees, Zhio Technology stated that it has reduced the impact on profits through long-term agreements and other means.

Tonight, Zhio Technology released its semi-annual report. In the first half of the year, the company achieved revenue of 3.721 billion yuan, a year-on-year increase of 40.74%; net income attributable to shareholders was 0.172 billion yuan, a year-on-year decrease of 7.73%; non-GAAP net income was 0.16 billion yuan, a year-on-year decrease of 24.97%.

In terms of revenue by region, Europe, North America, Japan, and other regions saw year-on-year growth rates of 41.22%, 41.12%, 30.56%, and 39.35% respectively. Among them, Europe remains the main market, accounting for 62.06% of revenue.

Zhio Technology stated that the North American market is the company's strategic focus. In the first half of the year, a large number of new products were launched, and at the same time, new platforms such as Temu and Tiktok shop were actively developed, contributing new growth points to the region's performance. The year-on-year growth in the European market is mainly due to the company's traditional competitive advantages and the expansion of platforms such as OTTO and Shein.

In terms of channels, Amazon remains the company's main platform, accounting for 69.1% of revenue, a growth of 42.68% compared to the same period last year. In addition, OTTO and independent station channels achieved year-on-year growth rates of 97.11% and 91.29% respectively.

Regarding the year-on-year decline in net income, Zhio Technology explained that on one hand, the company has implemented market share enhancement strategies, leading to a decrease in the average selling price of products and an increase in marketing expenses for new product promotion. On the other hand, impacted by the red sea incident, marine transportation fees increased year-on-year. At the same time, the company's business development has expanded into self-operated and third-party overseas warehouse services, resulting in increased warehousing costs. In addition, the hedging losses after hedging foreign exchange exposure and the share-based payment expenses generated by the 2024 stock-based incentive program also had an impact on current net income.

Specifically, in the first half of the year, the company incurred sales expenses of 0.918 billion yuan, a year-on-year increase of 51.94%; as for maritime transportation costs, data released by the Ningbo Shipping Exchange showed that the average value of the Ningbo Container Freight Index (NCFI) comprehensive index was 1745.8 points in the first half of the year, a year-on-year increase of 152.9%. By route, the freight rates for the European route and the US West Coast route increased by 257.5% and 257.4% respectively in the first half of the year.

Entering July, the prices of maritime transportation fees on multiple routes continued to increase year-on-year. Data from the Ningbo Shipping Exchange showed that the average NCFI value in July was 2732.5 points, a month-on-month increase of 0.5% and a year-on-year increase of 301.9%; the average freight rate index for the European route was 3632.2 points, a year-on-year increase of 589.6%; the average freight rate indexes for the US East Coast and US West Coast routes increased by 280.9% and 328.6% respectively.

The Ningbo Shipping Exchange also mentioned that in the second half of July, influenced by Mediterranean Shipping Company (MSC) maintaining its unchanged pricing strategy for the US West Coast route, many shipping companies successively reduced the freight rates for the Europe-Mediterranean route; as for the North American route, the mid-month market volume for the US East Coast route decreased, prompting shipping companies to weekly decrease the freight rates until the end of the month; the freight rates for the US West Coast route fell for 4 consecutive weeks due to the continuous introduction of new shipping capacity.

Faced with the fluctuation of maritime transportation fees, the European technology company expressed that it has adopted long-term agreement methods to suppress the risk of price increases eroding net income. The company's home furniture products have large volumes and use a large number of containers for shipment, giving it a scale advantage. At the same time, the company has a good foundation of cooperation with shipping agents. Therefore, compared to current market prices, the company obtains relatively low maritime transportation prices through long-term agreements, mitigating the impact of short-term high freight rates on the company's profits.