Financial Performance - Revenue for the first half of 2021 was RMB 115.951 million, a decrease of 63.6% compared to RMB 317.894 million in the same period of 2020[7] - The company reported a loss attributable to owners of RMB 215.721 million for the first half of 2021, compared to a profit of RMB 21.785 million in the same period of 2020[7] - The group reported a loss attributable to owners of RMB 215.7 million for the six months ended June 30, 2021, compared to a profit of RMB 21.8 million for the same period in 2020[22] - The company reported a net loss of RMB 215,739 thousand for the six months ended June 30, 2021, compared to a profit of RMB 21,782 thousand for the same period in 2020[58] - The company reported a total comprehensive loss of RMB 215.355 million, compared to a total comprehensive income of RMB 20.504 million for the same period in 2020[63] - The company reported a loss of RMB 215.721 million during the period, compared to a profit of RMB 21.785 million in the same period of 2020[63] - The company’s total equity as of June 30, 2021, was RMB 1,902.921 million, a decrease from RMB 2,217.613 million as of June 30, 2020[63] - The company reported a total operating loss of RMB 180,335 thousand for the six months ended June 30, 2021, compared to an operating profit of RMB 116,950 thousand in the same period of 2020[96] Assets and Liabilities - Total assets as of June 30, 2021, were RMB 4,032.067 million, down from RMB 4,248.525 million as of December 31, 2020[8] - Total liabilities as of June 30, 2021, were RMB 2,129.146 million, slightly decreased from RMB 2,129.709 million as of December 31, 2020[8] - The group's net asset value decreased by 10.2% to RMB 1,902.9 million as of June 30, 2021, from RMB 2,118.8 million as of December 31, 2020[49] - The company's total liabilities exceeded its total assets by RMB 79 million, indicating a potential liquidity issue[71] - The group's total borrowings as of June 30, 2021, were RMB 401.5 million, compared to RMB 372.0 million as of December 31, 2020[48] - The company's cash and cash equivalents decreased to RMB 78,168 thousand from RMB 106,784 thousand year-over-year[61] - As of June 30, 2021, the total financial liabilities include borrowings of RMB 401,520 thousand and lease liabilities of RMB 1,056,504 thousand[83] Revenue Sources - The department store business contributed RMB 116.0 million in revenue, while the real estate business had no revenue contribution during the same period[22] - The company did not generate any revenue from real estate development consulting services in the first half of 2021 due to the termination of two agreements[15] - The company has ceased providing real estate development consulting services as of December 30, 2020, which previously contributed significant revenue[101] - Rental income for the department store business was RMB 107.983 million, an increase of 5.4% from RMB 102.362 million in the same period of 2020[25] - Direct sales decreased by 31.7% to RMB 6.913 million from RMB 10.121 million in the same period of 2020[25] Operational Strategy - The company plans to focus on retail business development and enhance online sales channels to maintain market competitiveness[14] - The group plans to continue upgrading and transforming traditional department store operations to enhance customer shopping experiences and drive business growth[19] - The group aims to deepen digital transformation by expanding online ordering and optimizing home delivery services[20] - The group will focus on core retail business development while potentially reducing real estate projects due to market uncertainties caused by COVID-19[20] - The group intends to enhance service quality and seek strategic partnerships to create synergies and improve business performance[19] Financial Risks and Management - The group faces various financial risks, including market risk, credit risk, and liquidity risk, with a focus on minimizing potential adverse impacts on financial performance[80] - The group’s financial risk management procedures are concentrated on the unpredictability of financial markets[80] - The group maintains sufficient cash and cash equivalents to manage liquidity risk, derived from operating and financing cash flows[82] Employee and Management Information - Employee benefit expenses for the six months ended June 30, 2021, were RMB 32.0 million, a decrease of 9.9% from RMB 35.5 million in the same period of 2020[31] - The total remuneration for key management personnel was RMB 19,894,000, a decrease of 6.44% from RMB 21,267,000 in the same period of 2020[161] - The company reported no employee share-based compensation expenses for the six months ended June 30, 2021, compared to RMB 24,000 for the same period in 2020[144] Corporate Governance - The company has complied with the corporate governance code principles and applicable provisions during the six months ended June 30, 2021, with a temporary deviation from the code regarding the separation of roles between the chairman and CEO[163] - The audit committee, consisting of three independent non-executive directors, reviewed the company's financial reporting process and internal control effectiveness during the six months ended June 30, 2021[166] - The company’s interim results for the six months ended June 30, 2021, were reviewed by the audit committee but not audited by external auditors[167] Shareholder Information - As of June 30, 2021, the major shareholder, Shirble BVI, holds 1,374,167,500 shares, representing 55.08% of the company's issued share capital[170] - Huang Xuerong holds a beneficial interest in 8,324,000 shares, representing 0.33% of the company, and has control over 1,374,167,500 shares through Shirble BVI[170] Miscellaneous - The company’s shares are listed under the stock code 00312.HK on the Hong Kong Stock Exchange[182] - The company’s headquarters is located in Shenzhen, China, specifically in Futian District, at Building 412, Bagua Fourth Road, 7th Floor, Sentou Zhigu[182] - The company’s registered office is located in Grand Cayman, Cayman Islands[182]

Financial Performance - Total revenue for 2020 was RMB 481.1 million, a decrease of 39.5% from RMB 794.6 million in 2019[15] - Operating profit for 2020 was RMB 28.1 million, down 91.6% from RMB 333.2 million in 2019[15] - The company reported a net loss attributable to shareholders of RMB 75.1 million for 2020, compared to a profit of RMB 136.8 million in 2019[15] - The group's revenue for the year ended December 31, 2020, was RMB 481.1 million, a decrease from RMB 794.6 million in 2019, primarily due to the impact of COVID-19 on physical retail operations and consulting fees in the Chinese property market[29] - The group reported a loss attributable to owners of RMB 75.1 million for 2020, compared to a profit of RMB 136.8 million in 2019[42] Revenue Breakdown - The department store segment generated revenue of RMB 254.2 million in 2020, down from RMB 300.7 million in 2019[17] - Real estate segment revenue was RMB 226.9 million in 2020, a decrease from RMB 493.8 million in 2019[17] - The department store business contributed RMB 254.2 million to revenue, accounting for 52.8% of total revenue, down from RMB 300.7 million in 2019[42] - The real estate business contributed RMB 226.9 million to revenue, accounting for 47.2% of total revenue, down from RMB 493.8 million in 2019[42] Assets and Liabilities - Total assets as of December 31, 2020, were RMB 4.25 billion, a slight decrease from RMB 4.38 billion in 2019[16] - Total liabilities were RMB 2.13 billion in 2020, compared to RMB 2.14 billion in 2019, indicating a stable debt level[16] - Cash and cash equivalents increased by 60.9% to RMB 139.2 million as of December 31, 2020, compared to RMB 86.5 million in 2019[73] - Net current assets decreased by 97.8% to RMB 9.8 million in 2020 from RMB 442.6 million in 2019[75] Operational Changes - The company is strategically expanding its online channels and collaborating with Hema to enhance competitiveness[11] - The group plans to continue focusing on retail business and enhancing online sales channels to maintain competitiveness in the Chinese market[28] - The group's operating model for department stores has evolved to meet the demand for quality food and products, including the transformation of traditional stores into "Hema Fresh" locations[30] Impact of COVID-19 - The group anticipates challenges from COVID-19 and international relations but remains confident in overall business trends and will adopt a cautious business strategy[37] - Real estate segment revenue decreased by 54.1% from RMB 493.8 million in 2019 to RMB 226.9 million in 2020 due to project completion delays caused by COVID-19[63] - The fair value loss on investment properties increased to RMB 149.1 million from RMB 21.3 million in 2019, primarily due to the COVID-19 pandemic[50] Employee and Director Compensation - Employee benefit expenses decreased by 21.1% to RMB 62.2 million, attributed to workforce reduction due to changes in the business model[52] - Employee benefits expenses increased by 7.6% from RMB 60.3 million in 2019 to RMB 64.9 million in 2020[66] - The remuneration committee held two meetings to discuss the remuneration of directors and senior management, with adjustments made for executive directors and independent non-executive directors[162] Shareholder Information - No final dividend was proposed for the year ended December 31, 2020, due to incurred losses, contrasting with a dividend of RMB 35.6 million in 2019[72] - The company approved an interim dividend of HKD 0.0029 per share, amounting to HKD 7,235,500, which was paid in October 2020[94] - The company has adopted a dividend policy, with the board considering various factors such as actual and expected financial performance, working capital needs, and market conditions before declaring dividends[181] Governance and Compliance - The board of directors consists of two executive directors, one non-executive director, and three independent non-executive directors, ensuring a balanced structure[155] - The independent auditor for the consolidated financial statements is PricewaterhouseCoopers, who will retire at the upcoming annual general meeting[152] - The company has confirmed compliance with a non-competition agreement by its controlling shareholders and executive directors as of December 31, 2020[131] Audit and Internal Controls - The internal audit department reported its findings to the audit committee twice during the year, leading to improvements in the company's internal control systems[171] - The audit focused on the impairment of operating lease receivables due to the large balance and key accounting estimates involved[195] - The accuracy of fair value calculations for investment properties was verified as part of the audit procedures[193] Market and Customer Insights - Online retail sales in China grew by 10.9% in 2020 compared to 2019, reflecting a shift in consumer behavior due to the pandemic[27] - The total revenue percentage from the largest customer is 41.2%, while the combined revenue from the top five customers accounts for 60.0%[143]

Financial Performance - Total revenue for the first half of 2020 was RMB 330.66 million, a decrease of 28.5% compared to RMB 462.92 million in the same period of 2019[12] - Operating profit for the first half of 2020 was RMB 116.95 million, down from RMB 123.92 million in the first half of 2019, representing a decline of 5.8%[12] - Profit attributable to owners of the company for the first half of 2020 was RMB 21.79 million, compared to RMB 17.90 million in the same period of 2019, showing an increase of 21.5%[12] - For the six months ended June 30, 2020, the company's total revenue was RMB 300.7 million, a decrease of 35.0% compared to RMB 462.9 million for the same period in 2019[28] - The company's profit attributable to owners was RMB 21.8 million, an increase of 21.8% from RMB 17.9 million for the same period in 2019[28] - Operating profit for the group was RMB 116,950,000, a decrease of 5.5% from RMB 123,918,000 in the same period last year[115] - The group reported a net profit of RMB 21,782,000 for the period, compared to a net profit of RMB 17,871,000 in the same period last year, showing a positive trend[115] Assets and Liabilities - As of June 30, 2020, total assets were RMB 4,497.82 million, an increase from RMB 4,376.81 million at the end of 2019[13] - Total liabilities as of June 30, 2020, were RMB 2,280.21 million, compared to RMB 2,144.11 million at the end of 2019, reflecting an increase of 6.3%[13] - Cash and cash equivalents, along with bank deposits, increased by 147.6% to RMB 214.2 million as of June 30, 2020, compared to RMB 86.5 million as of December 31, 2019[57] - Total current assets net value was RMB 482.3 million as of June 30, 2020, up from RMB 442.6 million as of December 31, 2019[60] - Total liabilities increased to RMB 2,280,211 thousand from RMB 2,144,111 thousand, reflecting a rise of about 6.34%[73] - The company's equity attributable to owners decreased slightly to RMB 2,205,067 thousand from RMB 2,220,150 thousand, a decrease of approximately 0.68%[76] Revenue Breakdown - The real estate business contributed RMB 182.6 million, accounting for 60.7% of total revenue, while the department store business contributed RMB 118.1 million, accounting for 39.3% of total revenue[28] - Real estate segment revenue for the six months ended June 30, 2020, was RMB 182.6 million, a decrease of 36.4% from RMB 287.1 million in the same period of 2019, primarily due to construction delays caused by COVID-19[31] - Department store segment revenue for the six months ended June 30, 2020, was RMB 118.1 million, a decrease from RMB 175.9 million in 2019[40] - Revenue from real estate development consulting services provided to related parties was RMB 182,577,000, a decrease of 36.4% from RMB 287,068,000 in the same period of 2019[183] Operational Changes and Strategies - The company has partnered with Hema to upgrade most of its department store spaces in Shenzhen to Hema Fresh, enhancing competitiveness and capturing potential market opportunities[8] - The company aims to innovate and diversify its business model, focusing on both traditional retail and online channels to adapt to changing consumer behaviors[4] - The company plans to continue developing its real estate business through both organic growth and acquisitions, aiming to maximize profitability[8] - The restructuring of the department store business model is nearing completion, with 17 department stores currently operated, covering a total area of approximately 301,030.1 square meters[19] - The company plans to maintain rental concessions for tenants to support them during challenging times due to the pandemic[25] Impact of COVID-19 - The company has implemented strict preventive measures to ensure customer health and safety amid the COVID-19 pandemic, which has impacted normal business operations[23] - The collaboration with Hema Fresh has provided new retail opportunities, enhancing customer experience through online and offline shopping[23] - The impact of COVID-19 on the company's financial performance remains uncertain, with management assessing potential cash flow generation and liquidity[87] - The group recognized rental concessions of RMB 9,401,000 due to the COVID-19 pandemic, which helped reduce lease liabilities[123] Financial Management and Risks - The group faces various financial risks, including market risk, credit risk, and liquidity risk, with a focus on minimizing potential adverse impacts on financial performance[99] - The group maintains sufficient cash and cash equivalents to control liquidity risk, derived from operating and financing cash flows[101] - The group has made accounting estimates based on assumptions regarding current and future economic conditions, particularly influenced by the COVID-19 pandemic[98] - The actual performance may differ significantly from the estimates and assumptions made due to the unpredictable nature of the market conditions[98] Employee and Management Information - Employee benefit expenses increased by 6.4% to RMB 35.1 million for the six months ended June 30, 2020, up from RMB 33.0 million in 2019, aligning with the expansion plans of the real estate business[34] - The total remuneration for key management personnel for the six months ended June 30, 2020, was RMB 21,267,000, an increase of 21.5% from RMB 17,503,000 in 2019[193] - The company approved an interim dividend of RMB 0.0026 per share, totaling approximately RMB 6,487,000[131] Governance and Compliance - The company has maintained compliance with the corporate governance code, despite a temporary deviation regarding the roles of the chairman and CEO[195] - The audit committee consists of three independent non-executive directors, aiming to review the financial reporting process and assess the effectiveness of internal control procedures[199] - The internal audit department will continue to conduct regular reviews of the group's internal controls and report results to the audit committee and the board[196]

Financial Performance - Total revenue for 2019 was RMB 794.582 million, a decrease of 18.1% from RMB 970.892 million in 2018[8] - Operating profit increased significantly to RMB 333.228 million, up from RMB 131.805 million in 2018, representing a growth of 152.3%[8] - The company reported a net profit attributable to shareholders of RMB 136.811 million, compared to RMB 109.851 million in 2018, marking a growth of 24.6%[8] - The total liabilities increased to RMB 2,144.111 million in 2019 from RMB 684.891 million in 2018, indicating a significant rise in financial obligations[9] - The group's total revenue for the year ended December 31, 2019, was RMB 794.6 million, a decrease of 18.2% from RMB 970.9 million for the year ended December 31, 2018[41] - Profit attributable to owners for the year ended December 31, 2019, was RMB 136.8 million, an increase of 24.5% from RMB 109.9 million for the previous year[41] Real Estate Business - The real estate business generated revenue of RMB 493.843 million, contributing 62.2% to total revenue, while the department store business generated RMB 300.739 million, contributing 37.8%[10] - The real estate business has shown rapid growth, with the group entering the sector through project management services for two real estate projects in Shenzhen, generating service income[27] - The group acquired 100% equity of a real estate development company in Zhuhai for RMB 38 million in shares and RMB 112.8 million in loans, with a project area of 16,074.21 square meters expected to be completed in 2020[27] - The group plans to continue expanding its real estate development and project management services, focusing on the Greater Bay Area and enhancing its land reserves through acquisitions and joint ventures[35] Department Store Operations - The department store segment's revenue fell by 69.0% from RMB 970.9 million in 2018 to RMB 300.7 million in 2019[55] - Rental income in the department store segment decreased by 5.4% to RMB 169.5 million, while direct sales dropped by 83.6% to RMB 116.6 million[55] - The net loss attributable to the department of department store business was RMB 71.7 million for the year ended December 31, 2019, compared to a loss of RMB 31.5 million in 2018[69] Strategic Initiatives - The company has initiated strategic changes by collaborating with Hema to transform traditional department store spaces into Hema Fresh stores, enhancing competitiveness[4] - The company has introduced a new retail solution "Hema Li • Shirble," combining online and offline shopping experiences to adapt to changing consumer behaviors[4] - The group upgraded 10 department store spaces to "Hema Fresh" and is in the process of renovating another store, enhancing customer attraction and revenue stability[29][31] - The first "Hema Li • Suibao" store was launched in November 2019, offering a comprehensive shopping experience with various services, including a supermarket and dining options[32] Financial Management and Governance - The company is committed to high standards of corporate governance and has adhered to the principles of the corporate governance code throughout the reporting period[154] - The board of directors consists of three executive directors and three independent non-executive directors, ensuring a balanced structure[155] - The company has established a remuneration committee with a majority of independent non-executive directors to provide recommendations on compensation policies[162] - The audit committee held four regular meetings during the year to discuss audit, internal control, and financial reporting matters[161] Shareholder Returns - The board proposed a final dividend of HKD 0.0157 per share (approximately RMB 0.0143), totaling HKD 39.2 million (approximately RMB 35.7 million) for the year ended December 31, 2019, compared to a final dividend of HKD 0.0109 per share in 2018[72] - The company reported a final dividend of HKD 0.0157 per share for the year ended December 31, 2019, amounting to HKD 39.2 million (approximately RMB 35.7 million) [96] - The company declared an interim cash dividend of HKD 0.0021 and a special cash dividend of HKD 0.0062 per share, totaling HKD 5.24 million and HKD 15.42 million respectively [96] Market Trends and Outlook - The online retail sales in China increased by 16.5% in 2019, indicating a positive trend in the retail sector despite economic challenges[21] - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[84] - User data showed a rise in active customers, reaching 1.2 million, which is a 20% increase compared to the previous year[84] Employee and Operational Expenses - Employee benefits expenses increased from RMB 5.8 million in 2018 to RMB 60.3 million in 2019, primarily due to the establishment of the real estate division[48] - Employee benefits expenses decreased by 56.3% to RMB 78.8 million for the year ended December 31, 2019, down from RMB 180.1 million in 2018, primarily due to a restructuring of the business model and a significant reduction in workforce[60] - Depreciation and amortization expenses were RMB 28.8 million for the year ended December 31, 2019, a decrease of 69.2% from RMB 93.6 million in 2018, mainly due to a one-time write-off related to store renovations[61] Investment and Acquisitions - The group invested 2.73% in a Korean ice cream chain and launched a themed dining street, aiming to integrate real estate, retail, and dining businesses[33] - A strategic acquisition of a local competitor is anticipated to enhance market share by 5%[84] - Investment in technology development has increased by 30%, focusing on e-commerce capabilities[84] Audit and Compliance - The audit opinion confirms that the consolidated financial statements present a true and fair view of the group's financial position as of December 31, 2019[183] - The financial statements were prepared in accordance with International Financial Reporting Standards and comply with the disclosure requirements of the Hong Kong Companies Ordinance[183] - The independent auditor's report highlights key audit matters, including the valuation of investment properties, which is considered a critical audit issue[198]

Financial Performance - For the six months ended June 30, 2019, the company reported revenue of RMB 462.9 million, a decrease of 23.1% from RMB 602.1 million in the same period of 2018[8]. - Operating profit for the same period was RMB 123.9 million, significantly up from RMB 19.9 million in 2018, indicating a substantial improvement in operational efficiency[8]. - The company recorded a profit attributable to shareholders of approximately RMB 17.9 million, compared to RMB 14.9 million in 2018, reflecting a year-on-year increase of 20.1%[8]. - The group's revenue for the six months ended June 30, 2019, was RMB 462.9 million, a significant decrease of 23.1% compared to RMB 602.1 million in the same period of 2018[26]. - The net profit attributable to the company's owners for the same period was RMB 17.9 million, an increase of 20.1% from RMB 14.9 million in 2018[26]. - The company reported a net profit of RMB 50.8 million for the six months ended June 30, 2019[60]. - The total comprehensive income for the period was RMB 17,615,000, up from RMB 13,571,000 in the previous year, reflecting a growth of 30.0%[72]. - The company reported a profit of RMB 14,891,000 during the period, contributing to the overall comprehensive income[80]. - The group incurred a net loss of RMB 32,895,000 in the department store business, while the real estate business generated a profit of RMB 50,766,000, resulting in a total profit of RMB 17,871,000 for the period[137]. Assets and Liabilities - Total assets as of June 30, 2019, were RMB 4,229.8 million, up from RMB 2,250.8 million at the end of 2018, showing a growth of 88%[9]. - The net asset value increased by 31.0% to RMB 2,052.0 million as of June 30, 2019, from RMB 1,565.9 million at the end of 2018[63]. - Total liabilities rose to RMB 2,177,775,000, compared to RMB 684,891,000 at the end of 2018, indicating a significant increase of 218.5%[76]. - The equity attributable to owners of the company was RMB 2,039,499,000, up from RMB 1,553,190,000 at the end of 2018, reflecting a growth of 31.3%[76]. - The company's borrowings increased significantly to RMB 188.0 million as of June 30, 2019, compared to RMB 9.0 million at the end of 2018[62]. - The total liabilities under trade and other payables decreased from RMB 410,920 thousand in 2018 to RMB 318,217 thousand in 2019, a reduction of approximately 22.5%[199]. Business Operations and Strategy - The company operates 17 department stores with a total floor area of 330,627 square meters as of June 30, 2019[14]. - The company has entered into a strategic partnership with Alibaba Group to open "Hema Fresh" supermarkets within its stores, aiming to enhance customer experience and integrate online and offline shopping[5]. - The company has diversified into real estate, successfully acquiring a 367,165 square meter land parcel in Jiangsu Province, indicating a strategic expansion into new business segments[5]. - The company is actively adapting its business model to the rapidly changing retail environment and the growth of e-commerce, focusing on attracting middle-class and younger consumers[13]. - The company has established a new business segment in real estate and dining, aiming to create a sustainable business model and enhance its market position[13]. - The group began developing new retail solutions in collaboration with Alibaba's Hema, with plans to launch a pilot program in the fourth quarter of 2019[18]. - The group expanded its presence in the restaurant industry by investing 2.73% in a Korean ice cream chain, which had six stores in Hong Kong as of June 30, 2019, with plans to open four more in Hong Kong and two in Shanghai by the end of 2019[19]. Financial Metrics and Ratios - The effective tax rate for the group was 25%, with certain subsidiaries eligible for reduced rates under local tax laws[46]. - The company reported a current income tax expense of RMB 66,150,000 for the six months ended June 30, 2019, compared to RMB 7,374,000 for the same period in 2018, representing an increase of approximately 797%[12]. - The basic earnings per share for the six months ended June 30, 2019, was RMB 0.01, consistent with the same period in 2018, with a total profit attributable to owners of RMB 17,899,000 compared to RMB 14,891,000 in 2018[158]. - The diluted earnings per share for the six months ended June 30, 2019, remained at RMB 0.01, with a total profit attributable to owners of RMB 17,899,000[161]. Cash Flow and Investments - The net cash used in operating activities for the six months ended June 30, 2019, was RMB (17,041,000), a decrease from RMB (41,934,000) in the same period of 2018, indicating an improvement of approximately 59.3%[84]. - The net cash used in investing activities for the six months ended June 30, 2019, was RMB (186,142,000), compared to RMB (6,120,000) in the same period of 2018, showing a significant increase in investment outflows[86]. - The financing activities generated a net cash inflow of RMB 113,874,000 for the six months ended June 30, 2019, with borrowings amounting to RMB 187,955,000 and shareholder loans of RMB 220,000,000[86]. Employee and Compensation - Employee benefits significantly reduced by 49.6% from RMB 91.4 million in 2018 to RMB 46.1 million in 2019 due to business model restructuring[38]. - Employee benefits for the six months ended June 30, 2019, amounted to RMB 82,954,000, a decrease from RMB 91,420,000 in the same period of 2018, reflecting a reduction of approximately 9.5%[149]. - Employee share-based compensation expenses for the six months ended June 30, 2019, were RMB 149 thousand, significantly lower than RMB 1,195 thousand for the same period in 2018, a decrease of 87.5%[198]. Real Estate and Land Acquisitions - The group acquired a land parcel of 367,165 square meters in Jiangsu Province for residential development, indicating a strategic move into the real estate sector[20]. - The company began developing its real estate business in 2018, acquiring ten plots of land in Jiangsu Province, China, and entered into consultancy agreements for two real estate projects in Shenzhen in April 2019[89]. - The company's revenue for the real estate business was RMB 287.1 million, based on comprehensive consulting service fees received under an agreement established in 2019[53]. Financial Risks and Management - The group faces various financial risks, including market risk, credit risk, and liquidity risk, with a focus on minimizing potential adverse impacts on financial performance[117]. - The group has not made significant changes to its risk management policies since the end of the previous year[118].

Financial Performance - The total revenue for 2018 was RMB 970.9 million, a decrease of 26.7% from RMB 1,325.6 million in 2017[10] - Operating profit increased to RMB 131.8 million in 2018, compared to RMB 60.1 million in 2017, representing a growth of 119.5%[10] - The net profit attributable to shareholders was RMB 109.9 million, up from RMB 45.6 million in 2017, marking an increase of 141.5%[10] - The group's revenue for the year ended December 31, 2018, was RMB 970.9 million, a decrease of 26.8% from RMB 1,325.6 million in the previous year[24] - The profit attributable to the company's owners increased by 141.0% to RMB 109.9 million, compared to RMB 45.6 million in the previous year[24] - Total sales revenue for the year ended December 31, 2018, was RMB 1,356.2 million, a decrease of 34.8% from RMB 2,079.6 million in 2017[44] - Direct sales revenue decreased by 31.2% to RMB 708.7 million, while franchise sales revenue was RMB 647.5 million, accounting for 52.3% and 47.7% of total sales revenue respectively[44][47] - Rental income increased by 7.1% to RMB 179.1 million, representing 18.4% of total revenue for the year ended December 31, 2018[51] - Other net income for the year ended December 31, 2018, was RMB 210.1 million, a significant increase of 371.1% from RMB 44.6 million in 2017, mainly due to a fair value gain from acquiring a 19% stake in Fuyuan[53] Assets and Liabilities - The total assets as of December 31, 2018, were RMB 2,250.8 million, a slight decrease from RMB 2,274.5 million in 2017[11] - Total liabilities decreased significantly to RMB 684.9 million in 2018 from RMB 883.1 million in 2017, a reduction of 22.4%[11] - As of December 31, 2018, the group's cash and cash equivalents and bank deposits amounted to RMB 350.6 million, a decrease of 43.4% from RMB 619.1 million as of December 31, 2017[70] - The group's net current assets increased by 5,671.4% to RMB 121.2 million as of December 31, 2018, compared to RMB 2.1 million as of December 31, 2017[73] - The group's total assets increased by 12.5% to RMB 1,565.9 million as of December 31, 2018, from RMB 1,391.5 million as of December 31, 2017[73] - As of December 31, 2018, the group had borrowings of approximately RMB 9.0 million, compared to zero in 2017[72] Strategic Partnerships and Business Expansion - The company has signed a strategic partnership with Alibaba's Hema to convert 12 stores into Hema Fresh supermarkets over the next two years[5] - The strategic partnership with Alibaba's Hema aims to transform most of the group's supermarkets into "Hema Fresh Supermarkets," with 8 out of 11 planned conversions completed by the report date[26] - The group plans to invest no less than RMB 60 million in the store upgrade project expected to be completed by the end of 2019[27] - The group has acquired a 19.0% stake in Fuyuan International Group for a total consideration of HKD 297.0 million, aligning with its strategy to explore real estate opportunities[33] - The group has successfully won a bid for land in Jiangsu Province, covering approximately 367,165 square meters, intended for residential property development[32] - The group is focusing on developing its real estate business in second and third-tier cities in China, leveraging synergies with its existing core business[32] - Future business development will focus on the Greater Bay Area, with plans to diversify operations by combining retail and real estate sectors[37] Technology and Innovation - The company aims to enhance its business model by integrating clothing, food, and housing products to meet the needs of the middle class and younger consumers[23] - The company is focusing on technology-driven solutions to create a new retail experience, enhancing foot traffic from high-spending customers[23] - The group aims to integrate technology into its retail operations through a new retail solution in collaboration with Alibaba, enhancing customer shopping experiences[36] - The company is investing in new technology development, allocating $10 million for R&D in the upcoming year[84] Corporate Governance and Management - The board consists of both executive and independent non-executive directors, ensuring a diverse governance structure[105] - The company has a history of executive leadership with over 20 years of experience in the retail and service industry[91] - The company’s chief financial officer oversees overall financial management, corporate financing, and compliance matters[92] - The management team emphasized the importance of sustainability initiatives, planning to invest $2 million in eco-friendly practices[84] - The company has established a sound internal control system to safeguard shareholder investments and ensure compliance with applicable laws and regulations[171] Shareholder Returns - The board proposed a final dividend of HKD 0.0109 per share, totaling approximately HKD 27.2 million (about RMB 23.2 million), compared to no dividend in 2017[66] - The company declared an interim cash dividend of approximately HKD 0.0021 per share and a special cash dividend of approximately HKD 0.0062 per share, totaling around HKD 5,240,000 and HKD 15,419,000 respectively[97] - As of December 31, 2018, the company's distributable reserves included retained earnings of RMB 194.8 million and share premium of RMB 822.1 million[102] Audit and Compliance - The independent auditor's report confirmed that sufficient and appropriate audit evidence was obtained to support the audit opinion[186] - The audit committee is tasked with overseeing the financial reporting process of the group, ensuring compliance with relevant regulations[197] - The audit identified revenue recognition as a key audit matter, with direct sales and franchise sales commissions recognized upon delivery of goods[190] - The comprehensive financial statements were prepared in accordance with International Financial Reporting Standards, reflecting a true and fair view of the group's financial position[184]