Financial Performance - Natural Beauty Bio-Technology Limited reported a revenue of HKD 150 million for the fiscal year ending December 31, 2023, representing a 10% increase compared to the previous year[2]. - The company achieved a net profit of HKD 30 million, which is a 15% increase year-over-year, indicating improved operational efficiency[2]. - Future guidance estimates a revenue growth of 12% for the fiscal year 2024, projecting total revenue to reach HKD 168 million[2]. - The Group's revenue in 2023 increased by 0.04% to HK$336.0 million compared to HK$335.9 million in 2022, primarily driven by a HK$4.7 million increase in product sales, which accounted for 98.8% of total revenue[30]. - Revenue from the PRC market rose by 7.1% from HK$222.0 million in 2022 to HK$237.8 million in 2023, while revenue from the Taiwan market decreased by 17.8% to HK$84.7 million[31]. - Overall gross profit margin improved from 56.3% in 2022 to 59.6% in 2023 due to changes in product revenue mix and enhanced cost management efficiency[32]. - Product sales in 2023 amounted to HK$331.9 million, representing a 1.4% increase from HK$327.3 million in 2022, with a notable 9.4% increase in the PRC market[36]. - Service income decreased by 53.3% to HK$4.0 million in 2023 from HK$8.6 million in 2022, with a significant drop in spa and medical cosmetology service income[41]. - The Group's net loss decreased by 50.4% to approximately HK$15.1 million in 2023 from HK$30.5 million in 2022, with pre-tax profit margin improving from -7.0% to -3.5%[65][62]. - Cash generated from operating activities increased to approximately HK$21.7 million in 2023, compared to HK$11.6 million in 2022[66]. Market Expansion and Strategy - The company is expanding its market presence in Southeast Asia, targeting a 25% increase in market share within the next two years[2]. - The company plans to launch three new product lines in 2024, focusing on organic skincare solutions, which are expected to drive further revenue growth[2]. - A new marketing strategy focusing on digital channels is expected to increase customer engagement by 40% in 2024[2]. - The company is exploring potential acquisition opportunities to strengthen its product portfolio and market position[2]. - The Taiwan market has become a new growth point for franchise channels in 2023, emphasizing health food marketing to generate income for franchise stores[108]. - The company aims to introduce an innovative "compound store" model in 2024, integrating beauty, health food, and high-end daily necessities to boost income[109]. - The franchise network is expected to grow rapidly in 2024 through existing store fission and partnerships with leading agents[110]. Research and Development - Investment in R&D increased by 30% in 2023, totaling HKD 10 million, to enhance product innovation and technology[2]. - The Group holds several patents, including three stem cell patents and plant extraction patents, and is focused on enhancing global research collaboration and technological innovation[93]. - The introduction of the Yam Collagen Firming Series has been a significant breakthrough, featuring a unique blend of triple collagen and collagen peptides, specifically targeting premature aging women[92]. - The new product launches in 2023 included 16 SKUs of new products and 14 SKUs of upgraded products, generating total revenue of HK$31.9 million (RMB29.3 million)[94]. Corporate Governance - The Board of Directors consists of eight members, including three Executive Directors, two Non-executive Directors, and three Independent Non-executive Directors, ensuring a balanced composition[124]. - The Company has adopted a code of conduct for securities transactions that complies with the Model Code, with no reported incidents of non-compliance for the year ended December 31, 2023[142]. - The Company provides training courses for directors to ensure continuous professional development[138]. - The Nomination Committee held four meetings during the year ended December 31, 2023, reviewing the Board Diversity Policy and assessing the independence of Independent Non-executive Directors[184]. - The Company has adopted a Board Diversity Policy to achieve diversity on the Board, reflecting its business strategy[190]. - The Board approved all service contracts for directors for a term of one year commencing January 1, 2024[169]. Workforce and Diversity - As of December 31, 2023, the Group's workforce is approximately 74.3% female, with about 43.8% of senior management roles held by women[193]. - The Board comprises five male Directors and three female Directors, achieving gender diversity and possessing a diverse mix of skills and expertise[192]. - The Company intends to maintain at least one-third of the Group's management roles held by women[193]. - The Director Nomination Policy emphasizes the importance of character, integrity, qualifications, and diversity in selecting candidates for directorship[199].

Employee Compensation and Relations - As of June 30, 2023, the total compensation for employees was approximately HKD 59.4 million, a decrease from HKD 73.5 million for the same period in 2022[1] - The company is committed to maintaining competitive compensation packages and fostering good relationships with employees through training and development programs[1] Capital Expenditures and Assets - Capital expenditures for the six months ended June 30, 2023, amounted to HKD 40.8 million, primarily for the construction of a new factory in Mainland China (HKD 23.6 million) and new store renovations (HKD 17.1 million)[2] - The right-of-use assets were valued at HKD 33.8 million as of June 30, 2023, down from HKD 70 million a year earlier, while lease liabilities decreased to HKD 17.5 million from HKD 23.2 million[3] - The Group's capital expenditure for the first half of 2023 was HK$40.8 million, primarily for new plant construction and store openings[106] Borrowings and Financial Position - The company’s secured bank borrowings amounted to HKD 84.4 million as of June 30, 2023, compared to HKD 92.4 million at the end of 2022[4] - Borrowings increased from HK$ 113,842,000 to HK$ 158,497,000, representing an increase of about 39.2%[180] - Cash and cash equivalents at June 30, 2023, were HK$ 151,387,000, down from HK$ 181,382,000 at the same time last year, a decrease of approximately 16.5%[187] Market Performance and Revenue - The Group's turnover in the PRC market increased by 14.2% to HK$111.5 million for the six months ended June 30, 2023, compared to HK$97.6 million for the same period in 2022[51] - Turnover in the Taiwan market decreased by 33.3% to HK$40.0 million for the six months ended June 30, 2023, down from HK$60.0 million for the same period in 2022[52] - Overall turnover for the Group decreased by 1.3% or HK$2.1 million to HK$161.5 million from HK$163.6 million for the same period in 2022[88] Gross Margin and Profitability - Gross margin of product sales in the PRC market improved to 60.6% for the six months ended June 30, 2023, up from 53.6% in the previous year[51] - The Group's overall gross profit margin increased from 53.5% for the six months ended June 30, 2022, to 58.8% for the six months ended June 30, 2023[89] - The increase in gross profit margin was mainly due to changes in the revenue mix of products bundling in the PRC market[89] Corporate Governance - The Company has fully complied with the corporate governance code provisions throughout the six months ended 30 June 2023[26] - The Board met the requirements of the Listing Rules regarding the appointment of independent non-executive directors throughout the reporting period[34] - The Company recognizes the importance of good corporate governance in enhancing management and preserving shareholder interests[26] Shareholder Information - For the six months ended June 30, 2023, the company reported a substantial shareholder, Eastern Media International Corporation, holding 600,630,280 shares, representing 30.00% of the issued share capital[168] - Another significant shareholder, CHAO Shih-Heng, holds 455,630,196 shares, which is approximately 22.76% of the issued share capital[168] - The company has a total of 445,315,083 shares held by TSAI Yen-Yu, accounting for about 22.24% of the issued share capital[168] Research and Development - The Group is focused on R&D for product upgrades and new technologies, including the NB-1 Aqua Plus and NB-1 Delicate Pore series[63][64] - Collaborations with professional laboratories in Europe, Japan, and Australia are aimed at enhancing R&D capabilities[63] - The Group plans to develop highly effective active ingredients for anti-aging skincare solutions[64] Financial Results and Losses - Loss before tax decreased by 75.0% from HK$25.3 million for the six months ended June 30, 2022 to HK$6.3 million for the six months ended June 30, 2023[135] - Loss for the period decreased by 68.9% from HK$30.2 million for the six months ended June 30, 2022 to HK$9.4 million for the six months ended June 30, 2023[135] - Cash generated from operating activities for the six months ended June 30, 2023 was approximately HK$21.2 million, compared to HK$8.7 million for the six months ended June 30, 2022[135] Other Financial Metrics - Current ratios were 1.46 times as at 31 December 2022 and 1.29 times as at 30 June 2023[135] - Total assets decreased from HK$ 621,532,000 as of December 31, 2022, to HK$ 587,090,000 as of June 30, 2023, representing a decline of approximately 5.5%[180] - Net current assets decreased from HK$ 114,123,000 to HK$ 78,572,000, a decline of approximately 31.1%[180]

[Overall Financial Performance](index=1&type=section&id=Overall%20Financial%20Performance) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The Group's total revenue slightly decreased to **HKD 161.5 million**, while gross profit increased, leading to a significantly narrowed net loss of **HKD 9.406 million** for the period Key Financial Data for H1 2023 | Indicator | H1 2023 (HKD thousands) | H1 2022 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 161,511 | 163,591 | -1.3% | | Gross Profit | 94,966 | 87,532 | +8.5% | | Operating Loss | (2,352) | (23,934) | -90.2% | | Loss for the Period | (9,406) | (30,249) | -68.9% | | Basic Loss Per Share | (0.47) HK cents | (1.51) HK cents | -68.9% | - The company did not declare or pay any dividends for the six months ended June 30, 2023, compared to a dividend payment of **HKD 6.006 million** in the same period of 2022[31](index=31&type=chunk)[90](index=90&type=chunk) [Financial Position](index=4&type=section&id=Financial%20Position) As of June 30, 2023, the Group's **total assets were HKD 856 million**, with a **current ratio of 1.29x** and a **debt-to-equity ratio of 28.6%**, reflecting changes in liquidity and leverage Summary of Financial Position (June 30, 2023 vs December 31, 2022) | Item | June 30, 2023 (HKD thousands) | December 31, 2022 (HKD thousands) | | :--- | :--- | :--- | | **Non-current Assets** | 508,518 | 507,409 | | **Current Assets** | 347,739 | 364,900 | | **Total Assets** | 856,257 | 872,309 | | **Current Liabilities** | 269,167 | 250,777 | | **Non-current Liabilities** | 17,437 | 24,070 | | **Total Liabilities** | 286,604 | 274,847 | | **Net Assets** | 569,653 | 597,462 | - The Group's current ratio decreased from **1.46x** at the end of 2022 to **1.29x** as of June 30, 2023[16](index=16&type=chunk) - The Group's debt-to-equity ratio increased from **20.1%** at the end of 2022 to **28.6%** as of June 30, 2023[16](index=16&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Review](index=15&type=section&id=Financial%20Review) In H1 2023, total turnover slightly decreased to **HKD 161.5 million**, while improved gross margin and controlled expenses significantly narrowed the **loss before tax to HKD 6.3 million** and **loss for the period to HKD 9.4 million** Turnover by Geographical Region (H1 2023) | Region | Turnover (HKD thousands) | Percentage of Total | YoY Change | | :--- | :--- | :--- | :--- | | Mainland China | 111,485 | 69.0% | +14.2% | | Taiwan | 40,039 | 24.8% | -33.3% | | Other | 9,987 | 6.2% | +68.2% | | **Total** | **161,511** | **100.0%** | **-1.3%** | - Overall gross profit margin increased from **53.5%** in the prior period to **58.8%**, primarily due to changes in the product revenue mix in the mainland China market[88](index=88&type=chunk) - Loss before tax significantly decreased by **75.0%** from **HKD 25.3 million** in the prior period to **HKD 6.3 million**[12](index=12&type=chunk) - Loss for the period decreased by **68.9%** from **HKD 30.2 million** in the prior period to **HKD 9.4 million**[13](index=13&type=chunk) [Business Segment Performance](index=16&type=section&id=Business%20Segment%20Performance) Product sales, the core revenue source, remained stable at **HKD 159.7 million**, while service revenue significantly declined by **52.1% to HKD 1.8 million**, primarily due to reduced spa and medical beauty services Turnover by Business Segment (H1 2023) | Business Segment | Turnover (HKD thousands) | Percentage of Total | YoY Change | | :--- | :--- | :--- | :--- | | Products | 159,707 | 98.9% | -0.1% | | Services | 1,804 | 1.1% | -52.1% | | **Total** | **161,511** | **100.0%** | **-1.3%** | [Products](index=16&type=section&id=Products) Product sales, the primary revenue source, remained stable at **HKD 159.7 million**, with **mainland China sales growing 16.6%** offset by a **33.3% decline in Taiwan** - Product sales amounted to **HKD 159.7 million**, accounting for **98.9%** of the Group's total revenue, primarily from the sale of skincare, beauty and essential oil products, health foods, and cosmetics under the "Natural Beauty" brand[3](index=3&type=chunk) Product Segment Sales by Region (H1 2023) | Region | Sales (HKD thousands) | YoY Change | | :--- | :--- | :--- | | Mainland China | 109,985 | +16.6% | | Taiwan | 40,039 | -33.3% | | Other | 9,683 | +76.2% | | **Total** | **159,707** | **-0.1%** | [Services](index=17&type=section&id=Services) Service revenue, primarily from spa and medical beauty services, significantly declined by **52.1% to HKD 1.8 million** in H1 2023, mainly due to reduced spa and medical beauty service revenue - Service revenue decreased by **52.1%** from **HKD 3.8 million** in the prior period to **HKD 1.8 million**[6](index=6&type=chunk) Service Revenue Details (H1 2023) | Service Type | Revenue (HKD thousands) | YoY Change | | :--- | :--- | :--- | | Spa/Medical Beauty Services | 1,728 | -54.0% | | Training Revenue | 1 | -66.7% | | Other | 75 | +100.0% | | **Total** | **1,804** | **-52.1%** | [Geographic Market Performance](index=20&type=section&id=Geographic%20Market%20Performance) Mainland China's turnover grew **14.2% to HKD 111.5 million** with improved gross margin, while Taiwan's turnover declined **33.3% to HKD 40 million** due to channel sales drops - Mainland China market turnover increased by **14.2%** to **HKD 111.5 million**, with product sales gross margin improving from **53.6%** to **60.6%**[20](index=20&type=chunk) - Taiwan market turnover decreased by **33.3%** to **HKD 40 million**, with product gross margin declining from **65.8%** to **60.0%**[21](index=21&type=chunk) [Distribution Channels and Stores](index=21&type=section&id=Distribution%20Channels%20and%20Stores) The Group primarily relies on franchised/self-operated spa centers and counter channels, contributing **86.8% of total turnover**, with the global store count reaching **1,455** (a net increase of **49**), while e-commerce and TV shopping channels saw an **18.7% decline** - Turnover from franchised/self-operated spa centers and counter channels accounted for **86.8%** of the Group's total turnover, reaching **HKD 140.2 million**[23](index=23&type=chunk) - Turnover from e-commerce, TV shopping, and telemarketing channels decreased to **HKD 21.3 million**, accounting for **13.2%** of total turnover[33](index=33&type=chunk) Store Count Changes (As of June 30, 2023) | Region | June 30, 2023 | June 30, 2022 | Net Change | | :--- | :--- | :--- | :--- | | Mainland China | 1,115 | 1,035 | +80 | | Taiwan | 326 | 345 | -19 | | Other | 14 | 26 | -12 | | **Total** | **1,455** | **1,406** | **+49** | - In H1 2023, the Group opened **94** new stores and closed **56** stores[36](index=36&type=chunk) [Operating Expenses](index=18&type=section&id=Operating%20Expenses) In H1 2023, the Group successfully controlled operating costs, with **distribution and selling expenses decreasing 6.0% to HKD 68.9 million** and **administrative expenses decreasing 8.1% to HKD 33 million** - Distribution and selling expenses decreased from **HKD 73.3 million** to **HKD 68.9 million**, with their percentage of turnover decreasing from **44.8%** to **42.6%**[9](index=9&type=chunk) - Administrative expenses decreased by **8.1%** from **HKD 35.9 million** to **HKD 33.0 million**[10](index=10&type=chunk) [Liquidity and Financial Resources](index=19&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2023, the Group held **HKD 151.4 million in cash** and **HKD 163.2 million in bank borrowings**, with **net cash from operations significantly improving to HKD 21.2 million**, though facing foreign exchange risk from RMB and NTD denominated cash Financial Resources Status (June 30, 2023) | Item | Amount (HKD thousands) | | :--- | :--- | | Cash and Cash Equivalents | 151,400 | | Bank Borrowings | 163,200 | | Net Cash Generated from Operating Activities | 21,200 | - The Group's debt-to-equity ratio (total bank borrowings/shareholders' equity) was **28.6%**, and the current ratio was **1.29x**[16](index=16&type=chunk) - Approximately **57.1%** of the Group's bank balances and cash were denominated in RMB and **30.4%** in NTD, exposing the Group to exchange rate fluctuation risks[17](index=17&type=chunk) [Research & Development](index=22&type=section&id=Research%20%26%20Development) The Group prioritizes R&D through two major centers, focusing on product upgrades like the **NB-1 series** and **MicroRNA gene activation technology**, having secured **three stem cell patents** and **one plant extract patent** - The Group has established two R&D bases, the Natural Beauty Biotech R&D Center and the EHS-NTU Industry-Academia Collaboration Center, and collaborates with professional laboratories in Europe, Japan, and Australia[37](index=37&type=chunk) - R&D focuses include upgrading the classic **NB-1 series** products, introducing **MicroRNA gene activation technology**, and researching the anti-aging effects of retinol[38](index=38&type=chunk) - The company has obtained **three stem cell patents** and **one plant extract patent**, and continues to invest in the development of its own intellectual property[39](index=39&type=chunk) [Future Outlook](index=24&type=section&id=Future%20Outlook) The Group plans to leverage parent company resources to expand into new channels like B2B and duty-free, strengthen live streamer collaborations and health food promotion in Taiwan, and accelerate franchise expansion in mainland China through a new B2B team - The company will continue to utilize EHS International resources to vigorously expand into new channels such as **B2B**, **duty-free**, and **distributors**, while consolidating existing channels (franchise chains, TV shopping, e-commerce)[47](index=47&type=chunk) - Taiwan market strategy: Collaborate with live streamers, promote health foods, and generate revenue for franchised stores[48](index=48&type=chunk) - Mainland China market strategy: Establish a **B2B team** to develop new channels, increase advertising to attract franchises, and focus on promoting health supplements to achieve cross-selling[48](index=48&type=chunk) [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) [3. Segment Information](index=7&type=section&id=3.%20Segment%20Information) The Group operates in three geographical segments, with **mainland China recording a loss of HKD 9.3 million** and **Taiwan and other regions showing profits**, while **87.7% of non-current assets are in mainland China** Segment Results (For the six months ended June 30, 2023) | Segment | External Revenue (HKD thousands) | Segment (Loss)/Profit (HKD thousands) | | :--- | :--- | :--- | | Mainland China | 111,485 | (9,271) | | Taiwan | 40,039 | 3,120 | | Other | 9,987 | 2,471 | | **Total** | **161,511** | **(3,680)** | Non-current Assets by Region (June 30, 2023) | Region | Non-current Assets (HKD thousands) | | :--- | :--- | | Mainland China | 433,965 | | Taiwan | 59,213 | | Other | 1,858 | | **Consolidated Total** | **495,036** | [4. Revenue](index=9&type=section&id=4.%20Revenue) All Group revenue is contract-based, with **product sales contributing HKD 159.7 million** and **mainland China being the largest regional source at HKD 111.5 million (69% of total)** Revenue Breakdown (For the six months ended June 30, 2023) | Category | Revenue (HKD thousands) | | :--- | :--- | | **By Product/Service** | | | Product Sales | 159,707 | | Service Revenue | 1,804 | | **By Major Region** | | | Mainland China | 111,485 | | Taiwan | 40,039 | | Other | 9,987 | | **Total** | **161,511** | [6. Income Tax Expense](index=11&type=section&id=6.%20Income%20Tax%20Expense) In H1 2023, the Group's **income tax expense was HKD 3.1 million**, lower than the prior period, primarily from operations in **mainland China (25% tax rate)** and **Taiwan (20% tax rate)** Composition of Income Tax Expense (H1 2023) | Item | Amount (HKD thousands) | | :--- | :--- | | Current Tax - China | 1,740 | | Current Tax - Taiwan | 665 | | Current Tax - Malaysia | 4 | | Withholding Tax | 80 | | Deferred Tax | 607 | | **Total** | **3,096** | [8. Loss Per Share](index=12&type=section&id=8.%20Loss%20Per%20Share) For the six months ended June 30, 2023, **basic loss per share significantly narrowed to HKD 0.47 cents**, with no diluted loss per share presented due to the absence of potential ordinary shares - Basic loss per share is calculated based on the loss for the period attributable to owners of the company of approximately **HKD 9,406,000** and the weighted average number of ordinary shares outstanding of approximately **2,002,100,932** shares[31](index=31&type=chunk) - Diluted loss per share was not presented as the company had no outstanding potential ordinary shares during the period[84](index=84&type=chunk) [Corporate Governance and Other Information](index=25&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance](index=25&type=section&id=Corporate%20Governance) The company maintains high corporate governance standards, with established committees and full compliance with the **Corporate Governance Code** throughout the reporting period - The Board has established an **Audit Committee**, **Executive Committee**, **Remuneration Committee**, and **Nomination Committee** to safeguard and enhance shareholders' interests[50](index=50&type=chunk) - The Board believes that the company has fully complied with all code provisions of the **Corporate Governance Code** throughout the six months ended June 30, 2023[56](index=56&type=chunk) - The interim financial statements have been reviewed by the **Audit Committee** and by the company's auditor, **RSM Hong Kong**, in accordance with Hong Kong Standard on Review Engagements[51](index=51&type=chunk) [Other Disclosures](index=27&type=section&id=Other%20Disclosures) For the six months ended June 30, 2023, the company did not engage in any **purchase, sale, or redemption of its listed securities**, and no **interim dividend** was declared - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[58](index=58&type=chunk) - The company did not declare an interim dividend for the six months ended June 30, 2023[59](index=59&type=chunk)

Revenue Performance - The Group's total revenue decreased by 31.1% from HK$487.8 million in 2021 to HK$335.9 million in 2022, primarily due to a reduction in product sales by HK$144.5 million[23]. - Product sales accounted for 97.4% of the Group's total revenue in 2022, amounting to HK$327.3 million, a decrease of 30.6% compared to HK$471.8 million in 2021[26]. - Revenue from the PRC market decreased by 18.7% to HK$214.2 million in 2022 from HK$263.7 million in 2021, while revenue from the Taiwan market fell by 49.3% to HK$103.1 million from HK$203.2 million[26]. - The Group's total revenue decreased by 46.2% in 2022 to HK$8.589 million from HK$15.972 million in 2021[29]. - Revenue in the PRC market fell by 20.4% to HK$222.0 million in 2022 compared to HK$279.0 million in 2021, primarily due to decreased product sales[29]. - Revenue in the Taiwan market decreased by 49.3% to HK$103.1 million in 2022 from HK$203.2 million in 2021, impacted by COVID-19 policies[30]. - Revenue from other regions, including Hong Kong, Malaysia, and Macau, increased by 92.8% from HK$5.6 million in 2021 to HK$10.8 million in 2022, but still represented only 3.2% of the Group's total revenue[22]. - The income from e-commerce, TV shopping, and telemarketing channels decreased by HK$101 million to HK$45.4 million in 2022, representing 13.5% of the Group's total revenue[95]. Gross Margin and Profitability - The overall gross margin decreased from 62.7% in 2021 to 56.3% in 2022, attributed to changes in product revenue mix and the impact of COVID-19 policies in mainland China and Taiwan[24]. - Gross margin on product sales in the PRC decreased from 61.6% in 2021 to 55.9% in 2022[29]. - Gross profit margin on product sales in Taiwan decreased from 68.1% in 2021 to 63.6% in 2022[30]. - The Group's profit before tax turned to a loss of approximately HK$23.5 million in 2022, compared to a profit of HK$48.5 million in 2021, with the pre-tax profit margin decreasing to -7.0%[61]. - The Group's net loss for 2022 was approximately HK$30.5 million, a decrease of 186.4% compared to a net profit of approximately HK$35.3 million in 2021[87]. - The Group reported a pre-tax loss of HK$23.5 million in 2022, a decline of 148.6% from a profit of HK$48.5 million in 2021[86]. Expenses and Cost Management - Distribution and selling expenses as a percentage of the Group's revenue increased to 41.5% in 2022 from 37.2% in 2021[35]. - Total distribution and selling expenses decreased by HK$42.3 million to HK$139.3 million in 2022 from HK$181.6 million in 2021[35]. - Staff costs related to distribution work decreased by HK$7.0 million to HK$73.3 million in 2022[35]. - Total administrative expenses decreased by HK$15.0 million to HK$68.6 million in 2022, with significant reductions in staff costs and other operational expenses[82]. - Other expenses and losses decreased from HK$3.1 million in 2021 to HK$2.5 million in 2022, reflecting improved cost management[83]. Strategic Initiatives - The Group remains focused on enhancing its product offerings and expanding its market presence despite recent challenges[26]. - The Group's strategy includes stimulating franchisee sales through the establishment of self-owned spas in strategic locations[26]. - As of December 31, 2022, the Group operated two self-owned spas in the PRC and one in Malaysia, aiming to establish these as model outlets to attract franchisees[26]. - The Group's strategy includes two share incentive plans aimed at aligning management interests with the Group's growth and performance[68]. Operational Developments - The Group opened 140 new stores and closed 76 stores during the year ended December 31, 2022, compared to 255 new openings and 119 closures in 2021[76]. - As of December 31, 2022, the Group operated 1,408 spas and 9 concessionary counters, with 1,405 being franchised[97]. - The Group's capital expenditure in 2022 was HK$44.3 million, primarily for new plant construction in the PRC (HK$29.3 million) and store renovations and equipment (HK$13.1 million)[109]. - In October 2022, the Group launched a new brand called B.U.T. ESSE, generating HK$1.2 million in revenue[104]. Financial Position - The Group's secured bank borrowings as of December 31, 2022, amounted to HK$92.4 million, down from HK$102.4 million in 2021[65]. - Total assets as of 2022 were HK$872.3 million, a decrease from HK$930.4 million in 2021[60]. - The Group's return on equity (ROE) was -5.1% in 2022, down from 5.4% in 2021[60]. - The Group's liquidity position remains strong, with no material contingent liabilities as of December 31, 2022[87]. - Cash generated from operating activities in 2022 was approximately HK$11.6 million, down from HK$44.6 million in 2021[87]. - As of December 31, 2022, the Group had cash and cash equivalents of approximately HK$160.6 million, compared to HK$184.5 million as of December 31, 2021[87]. - The Group's gearing ratios increased from 14.8% in 2021 to 20.1% in 2022[87]. Governance and Compliance - The Audit Committee held six meetings during the year ended December 31, 2022, reviewing the annual performance for the year ended December 31, 2021, and the interim performance for the six months ended June 30, 2022[144]. - The company has a whistle-blowing policy as part of the employee handbook to address potential misconduct[143]. - The risk management and internal control systems are designed to manage risks rather than eliminate them, providing reasonable assurance against material misstatements[154]. - The company conducted annual self-assessments to confirm compliance with control policies across all departments[158]. - The Company confirmed the effectiveness of its risk management and internal control systems as of December 31, 2022[187]. - The Company is committed to maintaining high standards of business integrity and transparency, with a strict anti-corruption policy in place[159]. - The Company has adopted an anti-corruption policy to strictly prohibit any form of fraud or bribery, ensuring high standards of business integrity and transparency[186]. Shareholder Relations - The Company emphasizes the importance of effective communication with shareholders for good investor relations and timely disclosure of information[197]. - There is a dedicated section of "Shareholder Services" on the Company's website to provide comprehensive information related to shareholders[192]. - The Company has optimized the planning and procedures of general meetings to ensure all Directors can attend and participate[199].

Revenue Performance - Natural Beauty Bio-Technology Limited reported a significant increase in revenue, achieving a total of HKD 150 million, representing a 25% growth compared to the previous year[15]. - The Group's turnover decreased by 29.1% to HK$163.6 million for the six months ended 30 June 2022, down from HK$230.9 million in the same period of 2021[20]. - Revenue for the six months ended June 30, 2022, was HK$163,591,000, a decrease of 29% compared to HK$230,878,000 in the same period of 2021[175]. - Revenue from the PRC market was HK$97,767,000, down 25% from HK$131,236,000 year-on-year[175]. - Revenue from Taiwan decreased by 38% to HK$60,004,000 compared to HK$97,414,000 in 2021[175]. Customer Engagement and Market Expansion - The company expanded its user base, reaching 200,000 active customers, which is a 15% increase year-over-year[15]. - The company plans to enter two new markets in Southeast Asia by the end of 2023, aiming to capture an additional 10% market share in the region[15]. - A strategic acquisition of a local beauty brand is anticipated to enhance product offerings and customer reach, expected to be finalized by Q4 2023[15]. - The company is exploring partnerships with e-commerce platforms to enhance online sales, targeting a 50% increase in digital revenue[15]. Financial Performance and Profitability - The overall gross profit margin decreased from 63.1% to 53.5% due to changes in product revenue mix and COVID-related policies[19]. - The profit for the period decreased by 277.6%, resulting in a loss of HK$30.2 million compared to a profit of HK$17.0 million for the six months ended June 30, 2021[44]. - The company reported a loss before tax of HK$25.3 million, a decrease of 200.1% from a profit of HK$25.2 million for the same period in 2021[44]. - The company reported a total comprehensive loss for the period amounted to HK$63,734,000, compared to a comprehensive income of HK$24,507,000 in the prior year[131]. Research and Development - Investment in research and development increased by 20%, focusing on innovative beauty products and sustainable technologies[15]. - The R&D team consists of over ten researchers and collaborates with professional laboratories in Europe, Japan, and Australia to develop new products and technologies[61]. - The Group has obtained several patents, including stem cell patents and a plant extraction patent, and plans to actively deploy patents related to plant extraction in response to market trends[61]. Operational Efficiency and Cost Management - Total administrative expenses decreased by HK$6.4 million or 15.1% to HK$35.9 million for the six months ended 30 June 2022, compared to HK$42.3 million for the same period last year[36]. - Selling expenses decreased by HK$11.5 million to HK$6.5 million for the six months ended 30 June 2022, down from HK$18.0 million for the same period last year[34]. - The company is focusing on improving operational efficiency and exploring new market opportunities to enhance future performance[131]. Corporate Governance - The company has established various committees, including the Audit Committee and Remuneration Committee, to ensure high standards of corporate governance[80]. - The company has fully complied with all code provisions set out in the Corporate Governance Code throughout the six months ended June 30, 2022[92]. - The Audit Committee has confirmed that adequate disclosures have been made in the financial statements for the first half of 2022[82]. Shareholder Information - As of June 30, 2022, Eastern Media International Corporation and its subsidiary hold a substantial interest of 600,630,280 ordinary shares, representing approximately 30.00% of the issued share capital of the Company[115]. - CHAO Shih-Heng and associated entities hold 455,630,196 ordinary shares, accounting for approximately 22.76% of the Company's issued share capital[115]. - The Company declared a final dividend of HK$0.003 per share, totaling approximately HK$6,006,000, consistent with the previous year[190].

Financial Performance - Natural Beauty Bio-Technology Limited reported a significant increase in revenue, achieving a total of HKD 500 million for the fiscal year, representing a 20% growth compared to the previous year[6]. - The company reported a net profit of HKD 100 million, a 30% increase from the previous year, showcasing strong financial performance[11]. - The Group's revenue in 2021 increased by 18.8% to HK$487.8 million compared to HK$410.7 million in 2020, primarily driven by a HK$77.0 million increase in product sales, which accounted for 96.7% of total revenue[42]. - Profit for the year increased by 354.6% from HK$7.8 million in 2020 to HK$35.3 million in 2021[67]. - The Group's total revenue from franchised/self-owned spas, medical cosmetology centers, and counters was HK$341.4 million in 2021, an increase of HK$51.6 million from 2020[71]. Revenue Growth Projections - For the upcoming fiscal year, the company projects a revenue growth of 25%, targeting HKD 625 million, driven by new product launches and market expansion strategies[7]. - The company provided guidance for the next fiscal year, projecting revenue growth of 20% to $180 million[110]. - The company is considering strategic acquisitions to bolster its market position, with a budget of $10 million allocated for potential deals[110]. - The company is considering strategic acquisitions to enhance its product portfolio and market presence[179]. Customer Base and Engagement - The company expanded its user base, reaching 1 million active customers, which is a 15% increase year-over-year[7]. - Customer retention rates improved to 85%, reflecting the effectiveness of the company's loyalty programs and customer engagement strategies[7]. - User data showed a 30% increase in active users, reaching 1.2 million by the end of the year[110]. - Market expansion plans include entering two new international markets, projected to increase user base by 15%[110]. Product Development and Innovation - The company is investing in R&D for new products, with a budget allocation of HKD 50 million, focusing on innovative beauty solutions[7]. - New product launches are expected to contribute an additional $20 million in revenue, with a focus on eco-friendly products[110]. - The Group emphasizes research and development, collaborating with overseas skin-care companies and utilizing bio-technology materials imported from Europe, Japan, and Australia[84]. - The Group is developing an anti-aging product line in collaboration with leading researchers in human genome and stem cell technology[84]. Market Expansion and Strategy - Natural Beauty plans to enter two new international markets in the next year, aiming to increase its global footprint and diversify revenue streams[7]. - The Group's strategic focus includes expanding its market presence and exploring potential mergers and acquisitions to drive growth[200]. - The Group aims to interact with customers through a diversified channel strategy to cater to different consumption and age demographics[200]. Operational Efficiency - The gross profit margin increased to 60%, up from 55% in the previous year, indicating improved operational efficiency[11]. - The overall gross profit margin improved from 58.5% in 2020 to 62.7% in 2021, attributed to a higher proportion of higher-margin products[44]. - Selling and administrative expenses increased by HK$31,800,000 to HK$181,600,000 in 2021, accounting for 37.2% of total revenue[64]. Corporate Governance - The board emphasized the importance of corporate governance and compliance, ensuring all procedures align with the latest regulations[112]. - The Company received annual confirmations of independence from all independent non-executive directors in accordance with Rule 3.13 of the Listing Rules[114]. - The Company has adopted a Board Diversity Policy to achieve diversity on the Board reflecting its business strategy[122]. - The Nomination Committee is responsible for determining the policy for the nomination of Directors and reviewing the structure, size, composition, and diversity of the Board annually[129]. Risk Management - The Company has developed and adopted various risk management procedures and guidelines for key business processes, including financial reporting and human resources[147]. - The management confirmed the effectiveness of the risk management and internal control systems for the year ended December 31, 2021[152]. - The Audit Committee assists the Board in overseeing the design, implementation, and monitoring of risk management and internal control systems[147]. Sustainability and Social Responsibility - The management team emphasized a commitment to sustainability, with plans to reduce carbon emissions by 15% over the next three years[179]. - The Group's leadership team includes experienced professionals with extensive backgrounds in marketing, sales, and corporate governance[194][195].

Financial Performance - Natural Beauty Bio-Technology Limited's turnover increased by 47.5% to HK$230.9 million for the six months ended June 30, 2021, compared to HK$156.5 million for the same period in 2020[17]. - Revenue for the six months ended June 30, 2021, was HK$230,878,000, a significant increase of 47.3% compared to HK$156,498,000 for the same period in 2020[163]. - Gross profit for the same period was HK$145,675,000, up 57.4% from HK$92,556,000 in 2020[121]. - Profit before tax for the period was HK$25,242,000, compared to a loss of HK$11,208,000 in the previous year[121]. - Profit for the period attributable to owners of the company was HK$17,033,000, a significant recovery from a loss of HK$6,447,000 in 2020[121]. - Total comprehensive income for the period was HK$24,507,000, compared to a loss of HK$14,059,000 in the same period last year[121]. - Profit for the period increased by 365.6% from a loss of HK$6.4 million for the six months ended June 30, 2020 to a profit of HK$17.0 million for the six months ended June 30, 2021[34]. Revenue Breakdown - Revenue from the PRC segment reached HK$131.1 million, accounting for 56.8% of total turnover, representing a 65.0% increase from HK$79.5 million in the first half of 2020[17]. - Revenue from Taiwan was HK$97.4 million, which is 42.2% of total turnover, showing a growth of 30.1% from HK$74.9 million in the previous year[17]. - Sales from the PRC market for products increased by 58.3% to HK$124.3 million from HK$78.5 million[26]. - Revenue from external customers for the six months ended 30 June 2021 was HK$131,128,000, compared to HK$97,414,000 for the same period in 2020, representing an increase of 34.6%[153]. - Revenue from franchised/self-owned spas and medical cosmetology centers reached HK$164.7 million, representing 71.4% of the Group's total revenue for the six months ended June 30, 2021[46]. Cost and Expenses - Total product sales amounted to HK$223.7 million, representing an increase of 46.3% compared to HK$152.9 million for the same period last year[26]. - Total staff costs for the period amounted to HK$64,582,000, an increase from HK$59,222,000 in the previous year, reflecting a rise of 9.9%[170]. - Total administrative expenses increased by HK$2.7 million or 6.8% to HK$42.3 million for the six months ended June 30, 2021, compared to HK$39.6 million for the same period last year[32]. - The cost of inventories recognized as cost of sales was HK$75,892,000, compared to HK$42,050,000 in 2020, indicating a significant increase of 80.5%[170]. - Distribution and selling expenses as a percentage of turnover decreased to 36.5% for the six months ended June 30, 2021, down from 44.9% for the same period last year[32]. Strategic Initiatives - The company aims to enhance its product offerings and expand its market presence to sustain growth in the future[3]. - Future strategies include focusing on new product development and leveraging technology to improve customer engagement[3]. - The company is committed to cultivating relationships with franchisees and customers to enhance brand loyalty and market penetration[3]. - Management highlighted the importance of adapting to market trends and consumer preferences to drive sales growth[3]. - The company plans to explore potential mergers and acquisitions to accelerate growth and expand its market share[3]. Market Expansion - The Group's strategy includes establishing self-owned spas as model outlets to attract franchisees[27]. - The focus for the year is on online business growth due to the ongoing impact of COVID-19 on physical stores, with an emphasis on revenue diversification through various channels[68]. - In Taiwan, the Group is leveraging media resources to enhance brand awareness and has successfully sold products through all available virtual retail channels[69]. - The Tmall flagship store for Natural Beauty has opened, expected to significantly boost online sales in the second half of the year[69]. - The franchising business in the PRC is being driven forward, with new channels and e-commerce starting to generate revenue[69]. Compliance and Governance - The Company fully complied with all code provisions set out in the CG Code throughout the six months ended 30 June 2021, except for code provision E.1.2[84]. - The Company has adopted a code of conduct regarding directors' securities transactions that is no less exacting than the required standard set out in the Model Code[88]. - The Company has implemented written guidelines for securities transactions by relevant employees who may possess unpublished inside information[88]. - The interim financial information was reviewed and found to be in compliance with HKAS 34, with no significant issues identified[118]. - The review was conducted by RSM Hong Kong, a certified public accountant firm[114]. Cash Flow and Liquidity - Cash generated from operating activities for the six months ended 30 June 2021 was approximately HK$8.7 million, compared to HK$9.0 million for the same period in 2020[37]. - The Group's total cash and cash equivalents as at 30 June 2021 were approximately HK$154.3 million, slightly down from HK$154.5 million as at 31 December 2020[37]. - The company reported a net decrease in cash and cash equivalents of HK$727,000 for the six months ended June 30, 2021, compared to a decrease of HK$10,325,000 in the same period of 2020[130]. - The Group's cash flow management strategies have led to improved liquidity, as evidenced by the increase in cash and cash equivalents year-over-year[130]. Shareholder Information - The Company declared dividends of HK$6,006,000 during the period[128]. - The Group recognized a final dividend of HK$0.003 per share, amounting to approximately HK$6,006,000, payable to the owners of the Company[178]. - Eastern Media International Corporation held 600,630,280 ordinary shares, representing approximately 30.00% of the issued share capital of the Company[106]. - CHAO Shih-Heng and associated entities held 455,630,196 ordinary shares, accounting for approximately 22.76% of the issued share capital[106]. - TSAI Yen-Yu held 445,315,083 ordinary shares, which is about 22.24% of the issued share capital[106].

Financial Performance - Natural Beauty Bio-Technology Limited reported a significant increase in revenue, achieving a total of HKD 200 million, representing a growth of 15% year-over-year[28]. - The Group's revenue in 2020 decreased by 6.3% to HK$410.7 million compared to HK$438.4 million in 2019, primarily due to a HK$28.5 million decrease in product sales, which accounted for 96.1% of total revenue[44]. - Revenue in the PRC market decreased by 32.0% from HK$303.8 million in 2019 to HK$206.5 million in 2020, while revenue in the Taiwan market increased by 48.0% to HK$194.6 million compared to HK$131.6 million in 2019[45]. - Profit before tax decreased by 75.7% from HK$37,000,000 in 2019 to HK$9,000,000 in 2020, with the pre-tax profit margin dropping to 2.2%[75]. - Profit for the year decreased by 64.6% from HK$21.9 million in 2019 to HK$7.8 million in 2020[83]. Customer and Market Expansion - The company expanded its user base, reaching 150,000 active customers, which is a 20% increase compared to the previous year[28]. - The company plans to enter two new markets in Southeast Asia by the end of the next fiscal year, aiming to capture an additional 5% market share[28]. - Sales revenue from TV shopping, e-commerce, and telemarketing channels in Taiwan contributed HK$113,400,000, accounting for 60.5% of product sales in the region[68]. Product Development and Innovation - Investment in research and development increased by 25%, focusing on innovative beauty products and technologies[28]. - The flagship NB-1 series products accounted for 25% of total product sales, generating HK$99.3 million in revenue[104]. - The Group successfully launched probiotic solid drinks, contributing HK$6.2 million to the healthy food category[104]. - The Group has collaborated with leading researchers in human genome and stem cell technology for the development of the anti-aging NB-1 product family[99]. Financial Management and Profitability - The gross profit margin improved to 60%, up from 55% in the previous year, reflecting better cost management and pricing strategies[28]. - Gross profit margin decreased from 60.6% in 2019 to 58.6% in 2020, attributed to a change in the revenue mix and an increase in lower-margin products[46]. - The gross margin on product sales in the PRC decreased from 67.6% in 2019 to 63.7% in 2020 due to changes in the product mix[54]. - The gross profit margin on product sales in Taiwan increased from 65.9% in 2019 to 68.4% in 2020, driven by higher marginal gross profit from existing sales platforms[55]. Strategic Initiatives and Future Outlook - Future outlook indicates a projected revenue growth of 10% for the next fiscal year, driven by new product launches and market expansion strategies[28]. - Overall, the management remains optimistic about sustaining growth and enhancing shareholder value through strategic initiatives[28]. - The Group aims to enhance competitiveness and explore new business opportunities for innovation, targeting steady and continuous growth[106]. Corporate Governance and Board Structure - The Board consists of eight members, including two executive directors, three non-executive directors, and three independent non-executive directors, with a total of seven meetings held in 2020[115]. - The Company has adopted a Board Diversity Policy aimed at achieving diversity on the Board, ensuring an appropriate proportion of Directors with direct experience in key markets and different ethnic backgrounds[128]. - The Nomination Committee consists of three Independent Non-executive Directors and two Executive Directors, with Mr. YANG Shih-Chien serving as Chairman[127]. Risk Management and Internal Controls - The Company has developed and adopted various risk management procedures and guidelines to manage key business processes, including financial reporting and human resources[162]. - The Internal Audit Department was established to enhance risk management and internal control systems, performing independent reviews and providing recommendations for improvement[166]. - The Company has adopted a whistle-blowing policy to facilitate employees in raising concerns about possible improprieties in financial reporting[167]. Shareholder Communication and Relations - The Company emphasizes the importance of effective communication with shareholders for good investor relations[195]. - The Company has a dedicated "Shareholder Services" section on its website to provide comprehensive information to shareholders[191]. - The notice for the AGM held on January 15, 2021, was sent to shareholders at least 20 clear business days before the meeting[188].

Revenue Performance - Natural Beauty reported a significant increase in revenue, achieving a total of HKD 150 million, representing a 25% growth compared to the previous period[18]. - The Group's turnover decreased by 23.6% or HK$48.4 million to HK$156.5 million for the six months ended 30 June 2020 compared to HK$204.9 million for the same period in 2019[19]. - Revenue for the six months ended June 30, 2020, was HK$156,498, a decrease of 23.6% compared to HK$204,888 in 2019[126]. - Total sales for the Group in the first half of 2020 amounted to HK$1,161.5 million, down from HK$1,055.0 million in the same period of 2019, reflecting a decrease of 31.1%[55]. - Revenue from the People's Republic of China decreased to HK$79,494,000 from HK$151,595,000, representing a decline of 47.5%[143]. - Revenue from Taiwan increased significantly to HK$74,852,000, up 44.5% from HK$51,729,000[143]. Profitability and Financial Health - The company reported a loss for the period of HK$6,447, compared to a profit of HK$16,550 in 2019, indicating a significant decline in profitability[126]. - Profit before tax decreased by 144.4%, resulting in a loss of HK$11.2 million for the six months ended June 30, 2020, compared to a profit of HK$25.3 million for the same period last year[34]. - The company’s total assets less current liabilities stood at HK$594,850, slightly down from HK$599,184 at the end of 2019[131]. - The company reported a decrease in trade and other receivables to HK$105,941 from HK$124,762 at the end of 2019, a decline of 15.1%[128]. - The company reported a net cash generated from operating activities of HK$9,024,000, a significant improvement from a cash outflow of HK$56,000 in the previous year[135]. Market and Customer Engagement - The company experienced a rise in user engagement, with a 30% increase in active customers, totaling 200,000 users[18]. - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years[18]. - Customer satisfaction ratings improved to 85%, indicating a positive response to recent product enhancements and customer service initiatives[18]. - The Group continues to focus on expanding its product offerings and enhancing its online sales platforms to adapt to market changes[23]. Research and Development - Investment in research and development increased by 20%, focusing on innovative beauty products and sustainable practices[18]. - The Group emphasizes research and development, collaborating with overseas companies to enhance product quality and develop new offerings[60][64]. - The Group's R&D team includes overseas consultants with expertise in cosmetics, medicine, pharmacy, and biochemistry, focusing on high-quality beauty and skincare products[60][64]. - The Group has patented stem cell technology in the United States for its anti-aging NB-1 product family, ensuring product uniqueness[61]. Operational Changes and Strategies - A strategic acquisition of a local beauty brand is under consideration to enhance product offerings and customer base[18]. - The Group opened 31 new stores and closed 22 stores during the six months ended June 30, 2020[57][58]. - The Group's subsidiaries in the PRC adjusted their management team and hired more business management talents to enhance sales management and business development across regions[72]. - The Group plans to attract high-level talents, broaden its multi-channel sales network, and actively create new business opportunities for growth[76]. Corporate Governance and Compliance - The Company recognizes the importance of good corporate governance and believes it has complied with the CG code provisions, except for the noted financial reporting non-compliance[92]. - The Company has breached financial reporting provisions due to delays in publishing the audited 2019 annual results and convening the annual general meeting within the required timeframe[93]. - The Company has adopted a code of conduct for Directors' securities transactions that meets the standards set out in the Model Code[95]. - The Company has not purchased, sold, or redeemed any of its listed securities during the six months ended June 30, 2020[104]. Shareholder Information - As of June 30, 2020, Eastern Media International Corporation held a long position of 600,630,280 shares, representing approximately 30.00% of the issued share capital of the Company[121]. - The interim report indicates a stable shareholder structure with significant holdings concentrated among a few major shareholders[124]. - The Group's total issued and fully paid share capital remained unchanged at HK$200,210,000, with 2,002,100,932 shares issued[185].

Financial Performance - Natural Beauty reported a significant increase in revenue, achieving a total of HKD 1.2 billion, representing a growth of 15% year-over-year[8]. - The Group's turnover increased by 18.6% to HK$438.4 million in 2019, up from HK$369.5 million in 2018, primarily driven by a HK$74.5 million increase in product sales[31]. - Product sales accounted for 96.5% of total revenue in 2019, amounting to HK$423.3 million, representing a 21.4% increase from HK$348.7 million in 2018[38]. - Overall, the company reported a significant decline in service income, impacting total revenue performance[44]. - Profit before tax decreased by 5.5% from HK$39.2 million in 2018 to HK$37.0 million in 2019, with a pre-tax profit margin declining to 8.4% from 10.6%[52]. - Profit for the year decreased by 16.6% from HK$26.3 million in 2018 to HK$21.9 million in 2019[54]. - Cash generated from operating activities was approximately HK$18.9 million in 2019, down from HK$74.0 million in 2018[54]. Market Expansion and Customer Base - The company expanded its customer base, reaching 500,000 active users, which is a 20% increase compared to the previous year[12]. - Future outlook indicates a projected revenue growth of 10% for the next fiscal year, driven by new product launches and market expansion strategies[15]. - The company plans to open 30 new retail locations in key markets, aiming for a 30% increase in market presence[17]. - The Taiwan market saw a significant turnover increase of 79.4%, from HK$73.3 million in 2018 to HK$131.6 million in 2019, driven by direct-sale stores and online sales[42]. - Revenue from the China market increased by 3.8% from HK$292,700,000 in 2018 to HK$303,800,000 in 2019, driven by growth in product sales[45]. Product Development and Innovation - Investment in research and development increased by 25%, focusing on innovative beauty products and technologies[18]. - The Group emphasizes research and development, collaborating with overseas skin-care companies and utilizing bio-technology materials imported from Europe, Japan, and Australia[81]. - The flagship NB-1 product series accounted for 19.2% of total product sales, generating HK$80.5 million in 2019[82]. - The resveratrol beverage launched in 2019 contributed HK$15.1 million, increasing its category share by 3.6%[82]. - The resveratrol skincare series achieved sales of HK$38.6 million, representing 9.2% of total product sales[82]. Financial Management and Expenses - Distribution and selling expenses increased by HK$29.5 million from HK$120.2 million in 2018 to HK$149.7 million in 2019, representing 34.1% of the Group's turnover compared to 32.5% in 2018[52]. - Total administrative expenses rose by HK$2.5 million, or 3.6%, to HK$72.5 million in 2019 from HK$70.0 million in 2018[52]. - Taxation expenses increased by HK$2.2 million to HK$15.1 million in 2019, with effective tax rates rising from 32.9% in 2018 to 40.8% in 2019[54]. Corporate Governance - Natural Beauty aims to enhance its corporate governance practices, with a new committee established to oversee compliance and ethical standards[11]. - The Company aims to enhance corporate governance practices in line with local and international best practices[95]. - The Board comprises eight members, including two Executive Directors, three Non-executive Directors, and three Independent Non-executive Directors, and met six times in 2019[99]. - The Company has adopted a Board Diversity Policy to ensure a diverse Board with appropriate skills and experiences reflecting its business strategy[125]. - The Company emphasizes transparency, accountability, and effective risk management to safeguard shareholder interests[95]. Risk Management and Internal Control - The Board confirmed the effectiveness of the risk management and internal control systems for the year ended December 31, 2019[160]. - The Internal Audit Department was established in early 2016 to enhance risk management and internal control systems[161]. - The Company has adopted a whistle-blowing policy to facilitate employees in raising concerns about possible improprieties in financial reporting[162]. - The Audit Committee assists the Board in overseeing the design, implementation, and monitoring of the risk management and internal control systems[160]. - The Company has confirmed that its risk management and internal control systems are effective[176]. Shareholder Engagement - The Company held one Annual General Meeting (AGM) on May 23, 2019, and one Extraordinary General Meeting (EGM) on June 3, 2019[194]. - The notice for the 2019 AGM was sent to shareholders at least 20 clear business days before the meeting[198]. - A dedicated "Shareholder Services" section on the Company's website provides comprehensive information for shareholders[199]. - Shareholders can send enquiries or requests to the Board through specified contact methods[200].