[Company Overview](index=1&type=section&id=Company%20Profile) Ajisen (China) is a leading quick-service restaurant chain operating 569 restaurants in China, 22 in Hong Kong, and 2 in Europe as of June 30, 2023 [Company Profile](index=1&type=section&id=Company%20Profile) Ajisen (China) is a leading quick-service restaurant chain operating 569 restaurants in China, 22 in Hong Kong, and 2 in Europe as of June 30, 2023, listed on HKEX in 2007 - As of June 30, 2023, the Group operated **569 restaurants** across **134 cities in China**, with **100 in Shanghai** being the highest concentration[4](index=4&type=chunk) - The Group operates **22 restaurants in Hong Kong** and **2 in Europe**, supported by five production bases in major Chinese cities[4](index=4&type=chunk) - The company was listed on the Main Board of the Hong Kong Stock Exchange on **March 30, 2007**, as the first Chinese restaurant chain listed overseas[4](index=4&type=chunk) [Corporate Information](index=2&type=section&id=Corporate%20Information) This section provides details on the company's governance structure, including the Board of Directors and key committee members [Board of Directors and Committee Members](index=3&type=section&id=Corporate%20Information) The report details the Board and key committee members, with Ms. Pan Wei serving as Chairperson and CEO, and independent non-executive directors chairing various committees to ensure governance independence - The Chairperson and Chief Executive Officer is **Ms. Pan Wei**[14](index=14&type=chunk) - The Audit Committee is chaired by **Mr. Ren Xiwen**, the Remuneration Committee by **Mr. Lu Jiaxing**, and the Nomination Committee by **Mr. Wang Jincheng**, all independent non-executive directors[7](index=7&type=chunk)[14](index=14&type=chunk) [Financial Highlights](index=4&type=section&id=Financial%20Highlights) This section presents a concise overview of the Group's key financial performance indicators for the reporting period [Key Financial Indicators for H1 2023](index=5&type=section&id=Financial%20Highlights) In H1 2023, the company's performance significantly improved, with turnover increasing by 30.6% to RMB 885 million and a turnaround to pre-tax profit of RMB 181 million and profit attributable to shareholders of RMB 133 million H1 2023 Financial Summary (Year-on-Year Comparison) | Metric | H1 2023 (RMB million) | H1 2022 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Turnover | 884.8 | 677.5 | +30.6% | | Gross Profit | 665.0 | 496.3 | +34.0% | | Profit (Loss) Before Tax | 181.3 | (136.1) | Not Applicable | | Profit (Loss) Attributable to Company Shareholders | 133.1 | (106.5) | Not Applicable | | Basic Earnings (Loss) Per Share (RMB) | 0.12 | (0.10) | Not Applicable | [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the Group's operational and financial performance, along with industry trends and future outlook [Industry Review and Outlook](index=6&type=section&id=Industry%20Review%20and%20Outlook) In H1 2023, China's catering market saw a 21.4% revenue increase due to economic recovery, with digitalization becoming a key strategy, while the Group plans continued refined management and digital upgrades despite global uncertainties - In H1 2023, national catering revenue reached **RMB 2,432.9 billion**, a **21.4% year-on-year increase**, indicating significant consumer spending release in the catering market[29](index=29&type=chunk) - Digital transformation is a crucial trend in the catering industry, enhancing supply, fostering innovation, and improving operational efficiency and standardization[20](index=20&type=chunk) - For H2, the Group will continue refined management, stringent food safety control, and accelerated digital upgrades to enhance operational efficiency and turnover[300](index=300&type=chunk) [Business Review](index=7&type=section&id=Business%20Review) During the period, retail chain restaurants remained the core business, contributing 95.2% of total revenue, with the Group implementing strategies like supply chain optimization and cost control, leading to a reduction in restaurant count from 669 to 569 by June 30, 2023 - Revenue from retail chain restaurant operations was approximately **RMB 843 million**, accounting for **95.2% of total Group revenue**, a **34.1% year-on-year increase**[47](index=47&type=chunk) - The Group implemented various cost control measures, including optimizing global supply chains, leveraging five production bases for stable supply, and streamlining operations to reduce labor requirements[31](index=31&type=chunk) Restaurant Count Changes (by Region) | Region | June 30, 2023 | June 30, 2022 | Change | | :--- | :--- | :--- | :--- | | North China | 105 | 136 | -31 | | East China | 242 | 286 | -44 | | South China | 141 | 151 | -10 | | Central China | 79 | 94 | -15 | | Europe | 2 | 2 | 0 | | **Total** | **569** | **669** | **-100** | [Financial Review](index=9&type=section&id=Financial%20Review) In H1 2023, the Group's financial performance rebounded strongly with turnover up 30.6% to RMB 885 million, gross margin improving to 75.1%, and a successful turnaround to a profit attributable to shareholders of RMB 133 million due to revenue growth, cost control, and fair value gains [Turnover](index=9&type=section&id=Turnover) For the six months ended June 30, 2023, Group turnover was approximately RMB 885 million, a 30.6% increase year-on-year, primarily due to unrestricted full-capacity restaurant operations post-pandemic Turnover Performance | Item | H1 2023 | H1 2022 | Change | | :--- | :--- | :--- | :--- | | Turnover (RMB thousand) | 884,847 | 677,469 | +30.6% | [Gross Profit & Gross Margin](index=9&type=section&id=Gross%20Profit%20%26%20Gross%20Margin) During the period, Group gross profit increased by 34.0% to approximately RMB 665 million, with gross margin rising from 73.3% to 75.1%, driven by lower raw material costs and reduced waste due to increased revenue Gross Profit and Gross Margin Performance | Metric | H1 2023 | H1 2022 | Change | | :--- | :--- | :--- | :--- | | Gross Profit (RMB thousand) | 664,952 | 496,329 | +34.0% | | Gross Margin | 75.1% | 73.3% | +1.8pp | - The ratio of inventory consumption cost to turnover decreased from **26.7% to 24.9%**, primarily due to lower pork prices and reduced waste from increased revenue[49](index=49&type=chunk) [Operating Expenses](index=10&type=section&id=Operating%20Expenses) During the period, staff costs and depreciation were well-controlled, with staff costs as a percentage of turnover decreasing from 31.1% to 25.7%, while other operating expenses generally increased by 7.4% due to revenue recovery, notably delivery platform fees - Staff costs were approximately **RMB 228 million**, a **7.9% year-on-year increase**, but their proportion of turnover decreased from **31.1% to 25.7%**[52](index=52&type=chunk) - Depreciation expenses were approximately **RMB 160 million**, a **14.7% year-on-year decrease**, mainly due to a reduction in restaurant count[53](index=53&type=chunk) - Other operating expenses were approximately **RMB 212 million**, a **7.4% year-on-year increase**, with delivery platform service fees growing by **20.2%** and variable lease payments by **56.0%**[36](index=36&type=chunk)[37](index=37&type=chunk) [Other Income, Gains and Losses](index=11&type=section&id=Other%20Income%2C%20Gains%20and%20Losses) During the period, other income and other gains/losses significantly boosted profitability, with other income up 54.6% due to increased interest and waived franchise fees, and other gains/losses turning to a net gain of RMB 70.08 million from a net loss, driven by fair value increases in financial investments and investment properties - Other income was approximately **RMB 54.92 million**, a **54.6% year-on-year increase**, mainly due to higher deposit interest rates and waived franchise commissions[55](index=55&type=chunk) - Other gains and losses recorded a net gain of approximately **RMB 70.08 million** (compared to a net loss of RMB 56.30 million in the prior period), primarily due to fair value gains of **RMB 26.47 million** from financial investments and **RMB 37.07 million** from investment properties[56](index=56&type=chunk) [Finance Costs](index=11&type=section&id=Finance%20Costs) For the six months ended June 30, 2023, Group finance costs decreased by approximately 24.7% to RMB 9.57 million, primarily due to reduced bank loans and lower interest on lease liabilities from fewer stores Finance Costs Breakdown | Item | H1 2023 (RMB thousand) | H1 2022 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Interest on bank loans | 523 | 634 | -17.5% | | Interest on lease liabilities | 9,047 | 12,081 | -25.1% | | **Total** | **9,570** | **12,715** | **-24.7%** | [Profit/Loss](index=12&type=section&id=Profit%2FLoss) Combining these factors, the Group achieved a significant performance turnaround in H1 2023, reporting a pre-tax profit of approximately RMB 181 million (compared to a loss of RMB 136 million last year) and a profit attributable to shareholders of RMB 133 million (compared to a loss of RMB 107 million) Profit/Loss Performance | Metric | H1 2023 (RMB thousand) | H1 2022 (RMB thousand) | | :--- | :--- | :--- | | Profit (Loss) Before Tax | 181,256 | (136,066) | | Profit (Loss) Attributable to Company Shareholders | 133,095 | (106,513) | [Liquidity and Financial Resources](index=12&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2023, the Group maintained a robust liquidity and financial position with cash and cash equivalents of approximately RMB 1.578 billion, a current ratio of 3.3, and a low debt-to-asset ratio of 1.0%, indicating a healthy financial structure - Cash and cash equivalents increased to approximately **RMB 1.578 billion** from RMB 1.465 billion at the end of 2022[60](index=60&type=chunk) - The current ratio improved to **3.3** from 3.2 at the end of 2022[60](index=60&type=chunk) - The debt-to-asset ratio (total loans/total assets) remained at a low level of **1.0%**[73](index=73&type=chunk) [Risk Management](index=12&type=section&id=Risk%20Management) The Group faces low financial risk, with minimal currency risk due to RMB-denominated transactions, limited interest rate risk from no significant interest-bearing assets, and low credit risk concentration as most sales are cash/credit card based and bank deposits are with reputable institutions - Currency Risk: Most operations are denominated in RMB, resulting in minimal currency risk, with no currency hedging policy in place[42](index=42&type=chunk) - Interest Rate Risk: The Group has no significant interest-bearing assets, so income and operating cash flows are largely unaffected by market interest rate changes[43](index=43&type=chunk) - Credit Risk: The Group has no highly concentrated credit risk, as retail customers primarily settle with cash or credit cards, and bank balances are held with reputable institutions[62](index=62&type=chunk) [Other Matters](index=13&type=section&id=Other%20Matters) During the period, Group capital expenditure remained low at approximately RMB 28.03 million, with no significant contingent liabilities, major investments, or disposals, and new Articles of Association were approved at the AGM on June 7, 2023 - Capital expenditure was approximately **RMB 28.03 million**, maintained at a low level due to uncertain economic prospects[64](index=64&type=chunk) - As of June 30, 2023, the Group had no significant contingent liabilities[63](index=63&type=chunk) - There were no significant investments, acquisitions, or disposals during or after the reporting period[65](index=65&type=chunk)[79](index=79&type=chunk) [Condensed Consolidated Financial Statements](index=13&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Review Report](index=13&type=section&id=Review%20Report) Deloitte Touche Tohmatsu, the auditor, reviewed the interim financial statements in accordance with HKSRS 2410, concluding that nothing came to their attention suggesting the statements were not prepared in all material respects according to HKAS 34 - Deloitte Touche Tohmatsu, the auditor, issued a review conclusion on the interim financial statements[67](index=67&type=chunk)[81](index=81&type=chunk) - The review concluded that nothing came to their attention suggesting the condensed consolidated financial statements were not prepared in all material respects in accordance with HKAS 34[82](index=82&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=14&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement details the Group's profit composition, showing H1 2023 turnover of RMB 885 million, operating profit of RMB 65.25 million, pre-tax profit of RMB 181 million, and profit for the period of RMB 140 million, a significant turnaround from a loss of RMB 120 million in the prior period H1 2023 Statement of Profit or Loss Summary | Item (RMB thousand) | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Revenue | 884,847 | 677,469 | | Operating Profit (Loss) | 65,251 | (99,587) | | Profit (Loss) Before Tax | 181,256 | (136,066) | | Profit (Loss) for the Period | 139,596 | (120,361) | | Profit (Loss) Attributable to Company Shareholders | 133,095 | (106,513) | [Condensed Consolidated Statement of Financial Position](index=16&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets were approximately RMB 3.97 billion, total liabilities RMB 949 million, and net assets RMB 3.022 billion, with investment properties (RMB 1.049 billion) and cash and cash equivalents (RMB 1.578 billion) being the largest components of non-current and current assets respectively Statement of Financial Position Summary (as of June 30, 2023) | Item (RMB thousand) | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **3,970,878** | **3,868,584** | | Non-current Assets | 2,148,656 | 2,146,242 | | Current Assets | 1,822,222 | 1,722,342 | | **Total Liabilities** | **948,548** | **947,272** | | Non-current Liabilities | 400,544 | 411,051 | | Current Liabilities | 548,004 | 536,221 | | **Net Assets** | **3,022,330** | **2,921,312** | | **Total Equity** | **3,022,330** | **2,921,312** | [Condensed Consolidated Statement of Changes in Equity](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) The statement shows that as of June 30, 2023, total equity attributable to company shareholders increased to RMB 2.966 billion, primarily driven by RMB 133 million profit for the period and RMB 23.06 million in other comprehensive income, partially offset by RMB 65.49 million in declared dividends - Equity attributable to company shareholders increased from **RMB 2.875 billion** at the beginning of the period to **RMB 2.966 billion** at the end[88](index=88&type=chunk)[86](index=86&type=chunk) - Key changes in equity include a **RMB 133 million** increase from profit for the period, a **RMB 23.06 million** increase from other comprehensive income, and a **RMB 65.49 million** decrease from dividends paid[88](index=88&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2023, the Group generated a net cash inflow of RMB 277 million from operating activities, a significant improvement from RMB 100 million in the prior period, with net cash outflows of RMB 33.03 million from investing and RMB 145 million from financing activities, leading to a period-end cash and cash equivalents total of RMB 1.578 billion Cash Flow Statement Summary | Item (RMB thousand) | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Net cash generated from operating activities | 276,892 | 99,978 | | Net cash used in investing activities | (33,029) | (23,196) | | Net cash used in financing activities | (145,100) | (88,619) | | Net increase (decrease) in cash and cash equivalents | 98,763 | (11,837) | | Total cash and cash equivalents at end of period | 1,578,250 | 1,528,194 | [Notes to the Condensed Consolidated Financial Statements](index=20&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and breakdowns of the figures presented in the condensed consolidated financial statements [Basis of Preparation and Principal Accounting Policies](index=20&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) These condensed consolidated financial statements are prepared under HKAS 34 "Interim Financial Reporting," with the Group adopting several newly revised HKFRS standards for the first time during the period, though accounting policies remain consistent with the prior annual report except for these new applications - The financial statements are prepared in accordance with **HKAS 34 "Interim Financial Reporting"** and the HKEX Listing Rules[106](index=106&type=chunk) - The Group adopted several newly revised Hong Kong Financial Reporting Standards for the first time during this period, with no significant impact on financial position or performance[92](index=92&type=chunk)[93](index=93&type=chunk) - Following the application of HKAS 12 (Amendments), the Group recognized related deferred tax assets and liabilities on a gross basis, with no impact on retained earnings[96](index=96&type=chunk) [Revenue from Contracts with Customers and Segment Information](index=23&type=section&id=Revenue%20from%20Contracts%20with%20Customers%20and%20Segment%20Information) The Group's revenue primarily derives from restaurant operations, accounting for 95.2% of total revenue and contributing most external sales and operating profit, with Mainland China being the main geographical revenue source at 88.3% Revenue Breakdown (by Business Segment) | Business Segment | H1 2023 (RMB thousand) | H1 2022 (RMB thousand) | | :--- | :--- | :--- | | Restaurant operations | 842,594 | 628,250 | | Production and sale of ramen and related products | 42,253 | 49,219 | | **Total** | **884,847** | **677,469** | Segment Results Summary (H1 2023) | Segment | External Sales (RMB thousand) | Segment Profit (RMB thousand) | | :--- | :--- | :--- | | Restaurant operations | 842,594 | 97,032 | | Production and sale of ramen and related products | 42,253 | 419 | | Investment holding | - | 86,950 | | **Total Segments** | **884,847** | **184,401** | Revenue and Non-current Assets (by Geographical Location) | Region | Revenue from External Customers (RMB thousand) | Non-current Assets (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 781,701 | 1,445,320 | | Hong Kong | 103,146 | 501,184 | | **Total** | **884,847** | **1,946,504** | [Analysis of Operating Items](index=26&type=section&id=Analysis%20of%20Operating%20Items) This section analyzes key income statement items, showing other income significantly increased to RMB 54.92 million from property rentals, bank interest, and waived franchise fees, while other gains and losses recorded a net gain of RMB 70.08 million due to fair value gains on investment properties and financial assets, with current income tax expense at RMB 41.66 million due to improved profitability Other Income Breakdown | Item (RMB thousand) | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Property rental income | 15,743 | 12,307 | | Bank interest income | 15,019 | 6,807 | | Franchise commission payable to related parties waived | 12,049 | - | | Government grants | 4,466 | 11,216 | | **Total** | **54,915** | **35,522** | Other Gains and Losses Breakdown | Item (RMB thousand) | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Fair value gain on investment properties | 37,070 | 5,630 | | Fair value gain (loss) on financial assets at fair value through profit or loss | 26,471 | (33,587) | | Fair value gain on financial liabilities at fair value through profit or loss | 6,567 | 11,874 | | Impairment losses recognized | (1,174) | (36,873) | | **Total** | **70,077** | **(56,301)** | - Current income tax expense was **RMB 41.66 million**, compared to an income tax credit of RMB 15.71 million in the prior period, with Hong Kong profits tax at an estimated **16.5%** and Mainland China corporate income tax at **25%**[127](index=127&type=chunk)[158](index=158&type=chunk) [Dividends and Earnings Per Share](index=29&type=section&id=Dividends%20and%20Earnings%20Per%20Share) The Board resolved not to declare an interim dividend for H1 2023, with basic earnings per share at RMB 0.12 (compared to a loss of RMB 0.10 last year), and no dilutive effect due to option exercise prices exceeding average market prices - The Board resolved not to declare an interim dividend for the six months ended June 30, 2023[268](index=268&type=chunk) Earnings (Loss) Per Share Calculation | Metric | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Profit (Loss) Attributable to Company Shareholders (RMB thousand) | 133,095 | (106,513) | | Number of ordinary shares | 1,091,538,820 | 1,091,538,820 | | Basic earnings (loss) per share (RMB) | 0.12 | (0.10) | [Key Assets Analysis](index=30&type=section&id=Key%20Assets%20Analysis) At period-end, key Group assets included investment properties, property, plant and equipment, right-of-use assets, and financial assets, with investment properties recording a fair value gain of RMB 37.07 million, only minor asset impairment recognized for one Hong Kong restaurant due to improved performance, and financial assets at fair value through profit or loss increasing to RMB 172 million - Fair value gain on investment properties was approximately **RMB 37.07 million**[165](index=165&type=chunk) - Due to significant performance improvement, no material impairment was recognized for property, plant and equipment or right-of-use assets this period, with only **RMB 0.187 million** impairment recognized for one loss-making restaurant in Hong Kong[148](index=148&type=chunk) - Financial assets at fair value through profit or loss (unlisted equity investments and fund investments) increased from **RMB 125 million to RMB 172 million**[188](index=188&type=chunk) - Trade receivables increased from **RMB 18.47 million to RMB 23.81 million**, with most balances aged within **30 days**[172](index=172&type=chunk)[154](index=154&type=chunk) [Key Liabilities and Equity Analysis](index=34&type=section&id=Key%20Liabilities%20and%20Equity%20Analysis) The Group's liability structure remained stable, with trade payables of approximately RMB 95.52 million (average credit period 60 days), total bank loans of RMB 39.93 million (weighted average effective interest rate 1.46%), unchanged share capital of 1.092 billion ordinary shares, and share option scheme expenses of RMB 0.95 million recognized during the period - Total trade payables were **RMB 95.52 million**, with most balances aged within **60 days**[194](index=194&type=chunk)[195](index=195&type=chunk) - Total bank loans were **RMB 39.93 million**, all denominated in HKD, with a weighted average effective interest rate of **1.46%**[196](index=196&type=chunk)[181](index=181&type=chunk) - Share capital remained unchanged, with **1,091,538,820** issued and fully paid ordinary shares[182](index=182&type=chunk) - As of June 30, 2023, the Group recognized expenses of approximately **RMB 0.95 million** for the share option scheme[216](index=216&type=chunk) [Financial Instruments and Fair Value](index=39&type=section&id=Financial%20Instruments%20and%20Fair%20Value) This note details financial instrument fair value measurement, categorizing assets and liabilities into three levels, with most unlisted investments valued using Level 2 (discounted cash flow) and Level 3 (market and income approaches), and total fair value changes for Level 3 financial instruments amounting to a gain of RMB 32.21 million during the period - The Group uses a three-level fair value hierarchy for financial instruments, with Level 1 for quoted prices, Level 2 for observable inputs, and Level 3 for unobservable inputs[204](index=204&type=chunk)[218](index=218&type=chunk) - Unlisted equity investments and fund investments are primarily valued using Level 2 (discounted cash flow) and Level 3 (market approach, income approach) valuation techniques[205](index=205&type=chunk) - Total fair value changes for Level 3 financial assets and liabilities held at the end of the reporting period amounted to a gain of **RMB 32.21 million**, recognized under "Other gains and losses"[221](index=221&type=chunk)[207](index=207&type=chunk) [Related Party Transactions](index=42&type=section&id=Related%20Party%20Transactions) During the period, the Group engaged in related party transactions, primarily involving procurement of food supplies, payment of franchise commissions and technical fees, and receipt of renovation services, all conducted in the ordinary course of business, with significant transactions involving Shigamitsu Sangyo Co., Ltd. for procurement, sales, and franchise fees Summary of Major Related Party Transactions (H1 2023) | Related Party | Nature of Transaction | Amount (RMB thousand) | | :--- | :--- | :--- | | Shigamitsu Sangyo Co., Ltd. | Purchase of food, raw materials and supplies | (14,418) | | Shigamitsu Sangyo Co., Ltd. | Franchise commission (Mainland China and Hong Kong) | (9,825) | | Guangzhou Yunyi Information Technology Co., Ltd. | Purchase of services | - (Prior period: 5,530) | | Hubei Jupeng Kitchen Equipment Co., Ltd. | Purchase of property, plant and equipment | (319) | - Remuneration for directors and key management personnel is determined by the Remuneration Committee based on individual performance and market trends[242](index=242&type=chunk) [Other Information](index=44&type=section&id=Other%20Information) This section covers additional disclosures, including corporate governance practices, directors' and shareholders' interests, share option schemes, and employee and dividend information [Corporate Governance](index=44&type=section&id=Corporate%20Governance) The Group complied with all applicable Corporate Governance Code provisions during the period, with the only deviation being Ms. Pan Wei holding both Chairperson and CEO roles, which the Board believes provides strong, consistent leadership, and the Audit Committee has reviewed the interim results - The Group complied with the Corporate Governance Code, with one deviation: Ms. Pan Wei holds both Chairperson and Chief Executive Officer roles, which the Board believes provides strong and consistent leadership at this stage[211](index=211&type=chunk) - The Audit Committee, comprising three independent non-executive directors, has reviewed the company's unaudited interim results[213](index=213&type=chunk) - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[228](index=228&type=chunk) [Directors' and Shareholders' Interests](index=45&type=section&id=Directors'%20and%20Shareholders'%20Interests) This section discloses directors' and major shareholders' interests in company shares, with Chairperson Ms. Pan Wei holding approximately 47.55% through a discretionary trust and beneficial ownership, and Invesco Asset Management Ltd. among other institutional investors - Chairperson **Ms. Pan Wei** holds approximately **47.55%** of the company's shares through a discretionary trust and personal beneficial ownership[230](index=230&type=chunk) - Non-executive Director **Mr. Katsuaki Shigamitsu** holds approximately **2.97%** of the company's shares through beneficial ownership and controlled corporate interests[230](index=230&type=chunk) - Major shareholder **Favor Choice** (controlled by Ms. Pan's trust) holds **43.99%** of shares, and **Invesco Asset Management Ltd.** holds **7.90%**[252](index=252&type=chunk) [Share Option Scheme](index=48&type=section&id=Share%20Option%20Scheme) The company has share option schemes to incentivize contributors, detailing the 2007 (expired) and 2017 plans' objectives, eligibility, total shares issuable, and exercise price determination, with 32.171 million outstanding options as of June 30, 2023, representing approximately 2.94% of issued shares - The company has a **2017 Share Option Scheme** to grant options to eligible directors, employees, and consultants who contribute to the Group[237](index=237&type=chunk)[270](index=270&type=chunk) - The total number of shares available for issue under the **2017 Share Option Scheme** is **79,982,882 shares**, representing **7.33%** of issued shares as of the reporting date[272](index=272&type=chunk) - As of June 30, 2023, a total of **32,171,000 share options** granted and outstanding under both schemes represented approximately **2.94%** of the issued shares[263](index=263&type=chunk)[265](index=265&type=chunk) [Employees and Dividends](index=53&type=section&id=Employees%20and%20Dividends) As of June 30, 2023, the Group had 7,746 employees with total remuneration of approximately RMB 228 million, regularly reviewing compensation policies and providing discretionary bonuses or share options based on performance, while the Board resolved not to declare an interim dividend for 2023 - As of June 30, 2023, the Group had **7,746 employees**, a decrease from **7,982** in the prior period[267](index=267&type=chunk) - Total remuneration for the six months ended June 30, 2023, was approximately **RMB 228 million**[281](index=281&type=chunk) - The Board resolved not to declare an interim dividend for the six months ended June 30, 2023[268](index=268&type=chunk)[288](index=288&type=chunk)

Financial Performance - The group recorded a profit before tax of approximately RMB 181,256,000 for the six months ended June 30, 2023, compared to a loss of approximately RMB 136,066,000 for the same period in 2022[3]. - The profit attributable to shareholders for the six months ended June 30, 2023, was approximately RMB 133,095,000, compared to a loss of approximately RMB 106,513,000 for the same period in 2022[4]. - Operating profit improved to RMB 65,251,000, compared to an operating loss of RMB 99,587,000 in the prior year[46]. - The company reported a net profit attributable to shareholders of RMB 133,095,000, a significant recovery from a loss of RMB 106,513,000 in the same period last year[46]. - The company reported a profit of RMB 139,596,000 for the period, compared to a loss in the previous year, indicating a strong performance[90]. - The company experienced a pre-tax loss of RMB 136,066,000 for the current period, compared to a pre-tax loss of RMB 114,352,000 in the same period last year, indicating a deterioration in financial performance[115]. - The company's net loss for the period was RMB 120,361,000, compared to a net loss of RMB 106,513,000 in the previous year, reflecting a worsening trend in profitability[127]. - The company reported a fair value gain on investment properties of RMB 37,070,000 for the current period, a substantial increase from RMB 5,630,000 in the previous year, highlighting improved asset performance[122]. - The company reported interest income of RMB 15,019,000 for the current period, up from RMB 6,807,000 in the previous period, reflecting an increase of approximately 120%[95]. Revenue and Sales - The group's revenue for the six months ended June 30, 2023, was approximately RMB 884,847,000, an increase of about 30.6% from RMB 677,469,000 in the same period of 2022[19]. - Restaurant business sales reached RMB 842,594,000, up 34.1% from RMB 628,250,000 year-over-year[46]. - Total revenue for the six months ended June 30, 2023, was RMB 884,847,000, an increase from RMB 677,469,000 in the same period of 2022, representing a growth of approximately 30.6%[94]. - The restaurant business generated approximately RMB 842,594,000 in revenue during the period, representing a 34.1% increase compared to RMB 628,250,000 in the same period last year, and accounted for about 95.2% of total revenue[156]. Costs and Expenses - For the six months ended June 30, 2023, the financing cost was approximately RMB 9,570,000, a decrease of about 24.7% compared to RMB 12,715,000 for the same period in 2022[1][2]. - The cost of inventory for the six months ended June 30, 2023, was approximately RMB 219,895,000, an increase of about 21.4% from RMB 181,140,000 in the same period of 2022[20]. - Employee costs for the six months ended June 30, 2023, were approximately RMB 227,664,000, an increase of about 7.9% from RMB 211,016,000 in the same period of 2022[23]. - Cost of goods sold was RMB 219,895,000, up from RMB 181,140,000, reflecting a 21.4% increase year-over-year[166]. - The total depreciation expense for the period was RMB 160,333,000, down from RMB 187,855,000 in the previous year, indicating a reduction in asset-related costs[122]. Assets and Liabilities - The company's current assets net amount was approximately RMB 1,274,218,000, with a current ratio of 3.3, slightly up from 3.2 at the end of 2022[41]. - Total assets minus current liabilities increased to RMB 3,422,874 thousand as of June 30, 2023, compared to RMB 3,332,363 thousand as of December 31, 2022, reflecting a growth of approximately 2.7%[57]. - Cash and cash equivalents rose to RMB 1,578,250 thousand as of June 30, 2023, up from RMB 1,465,111 thousand as of December 31, 2022, indicating an increase of about 7.7%[56]. - The total equity attributable to shareholders reached RMB 2,966,327 thousand as of June 30, 2023, compared to RMB 2,874,715 thousand as of December 31, 2022, marking an increase of approximately 3.2%[78]. - The total liabilities decreased to RMB 548,004 thousand as of June 30, 2023, from RMB 536,221 thousand as of December 31, 2022, indicating a reduction of about 2.0%[56]. - The company's total liabilities decreased to RMB 154,372,000 as of June 30, 2023, compared to RMB 154,599,000 as of December 31, 2022[106]. Operational Insights - The group had no significant contingent liabilities as of June 30, 2023[9]. - The total number of restaurants as of June 30, 2023, was 569, down from 669 in the previous year[46]. - The group employed 7,746 staff as of June 30, 2023, a decrease from 7,982 staff a year earlier, indicating ongoing optimization of operational processes[141]. - The group is focused on cost control amid rising inflation pressures on food and labor, with efforts to stabilize supply chain and optimize supplier relationships[135]. - The group continues to adopt a prudent operational and store opening strategy to improve overall profitability post-pandemic[153]. - The group is committed to maintaining food quality and safety standards while adjusting operational strategies to enhance competitiveness[136]. - The group has established five production bases in mainland China to ensure food quality, safety, and stable supply for its restaurants[135]. Future Outlook - The company plans to accelerate digital transformation of its stores to enhance customer experience and operational efficiency in the second half of 2023[152]. - The economic recovery in China is reflected in a GDP growth of 5.5% for the period, compared to 2.5% in the previous year, which may positively impact the company's performance[132]. - The estimated annual tax rates for Hong Kong and mainland China remain at 16.5% and 25%, respectively, consistent with the previous year, which may affect future profitability[124]. Other Information - The company did not declare an interim dividend for the six months ended June 30, 2023, compared to zero dividend in the same period of 2022[163]. - The company has not engaged in any purchase, sale, or redemption of its listed securities during the six months ended June 30, 2023[167]. - The company plans to distribute its interim report to all shareholders and publish it on its website and the Hong Kong Stock Exchange[164].

Financial Performance - The company's revenue for 2022 was RMB 1,429.8 million, a decrease of 28.4% compared to RMB 2,000.2 million in 2021[13] - Restaurant business sales dropped to RMB 1,339.6 million, down 28.8% from RMB 1,880.9 million in the previous year[13] - The company reported a net loss attributable to shareholders of RMB 143.9 million, compared to a profit of RMB 20.9 million in 2021[13] - The group's revenue for the period was approximately RMB 1,430 million, a decline of about 28.4% compared to RMB 1,996 million in the same period last year, primarily due to COVID-19 restrictions[24] - The group recorded a pre-tax loss of approximately RMB 176,765,000 for the year, compared to a profit of RMB 52,440,000 in 2021[44] - The attributable loss to shareholders was approximately RMB 143,906,000, compared to a profit of RMB 20,940,000 in 2021[47] - The cost of goods sold for the year was approximately RMB 374,833,000, down about 30.2% from RMB 537,336,000 in 2021, with the cost as a percentage of revenue at 26.2%, a slight decrease from 26.9% in the previous year[32] - Gross profit for the year was approximately RMB 1,054,959,000, a decrease of about 27.7% from RMB 1,458,873,000 in 2021, while the gross margin increased to 73.8% from 73.1%[33] Operational Metrics - The total number of restaurants decreased to 597, representing a 19.0% decline from 737 in 2021[13] - As of December 31, 2022, the group operated 597 restaurants, a decrease of 140 from 737 in 2021, with 161 closures due to various reasons including poor performance and contract expirations[17] - The average consumption per customer in the Hong Kong market reached a new high, while the cost of inventory consumption as a percentage of revenue was approximately 26.2%, a decrease of 0.7 percentage points year-on-year[24] - The group achieved a gross margin of 73.8%, up from 73.1% in the previous year, despite a revenue decline[24] - The proportion of labor costs to revenue was approximately 29.8%, an increase of 2.6 percentage points from 27.2% in the previous year, mainly due to underutilization of labor resources[24] Membership and Customer Engagement - Membership numbers reached 24.63 million, with total member spending amounting to RMB 735 million[16] - The company plans to enhance customer engagement through a new membership strategy that includes scenario-based, product-oriented, and social elements[16] Strategic Initiatives - The group aims to optimize its supply chain for international meat procurement in 2023, maintaining partnerships with large meat suppliers to control procurement costs[17] - The group has increased its direct procurement ratio to 72.42%, enhancing the quality and quantity of domestic and international suppliers[17] - The group plans to accelerate its restaurant expansion and optimize its network layout in 2023 as the restaurant industry continues to recover[18] - The group is focusing on digital transformation, enhancing its membership system and supply chain management to better capture market opportunities[22] Governance and Compliance - The company has adopted a code of conduct for securities trading by directors, ensuring compliance with the standards set forth in the Listing Rules Appendix 10[68] - The board consists of seven members, including three independent non-executive directors, ensuring a strong level of independence[74] - The company has implemented a fair disclosure policy to broadly disseminate information to the public through various channels[72] - The board reviews its governance framework annually to ensure its effectiveness[80] - The company has not been involved in any legal cases related to corruption during the reporting period[71] Risk Management and Internal Controls - The company is committed to maintaining a robust risk management and internal control system to manage inherent business risks[122] - The board has delegated the Audit Committee to continuously monitor the effectiveness of the risk management and internal control systems, which include financial, operational, and compliance controls[122] - Management is responsible for identifying and mitigating risks that may impact the company's performance, with regular reviews and updates to the risk management system[128] Environmental, Social, and Governance (ESG) Initiatives - The company operates leading fast-casual restaurant chains in mainland China and Hong Kong, focusing on environmental, social, and governance (ESG) initiatives[151] - The group is committed to continuously improving its ESG performance and governance structure[160] - The company emitted 7,968.90 tons of CO2 equivalent greenhouse gases during the reporting period, with a greenhouse gas emission density of 10.28 tons per employee[171] - The total energy consumption of the company was 15,469.51 MWh, with an energy consumption density of 19.96 MWh per employee[177] - The company plans to regularly measure and disclose environmental performance to identify opportunities for improvement and gradually set environmental goals[168] Employee Management and Development - The company employs 6,542 staff members across its restaurant operations and related product sales, with a focus on fair employment practices[189] - The company emphasizes the importance of employee training and development to enhance skills and improve work efficiency, aligning training plans with business development needs[193] - The company has established a comprehensive compensation system to motivate employees, adjusting salaries and bonuses based on performance evaluations[185] - The company actively promotes equal opportunities and diversity in the workplace, opposing any form of discrimination[188]

Financial Performance - Total revenue for the year ended December 31, 2022, was RMB 1,429,792 thousand, a decrease of 28.4% compared to RMB 1,996,209 thousand in 2021[2]. - Restaurant business sales decreased by 28.8% to RMB 1,339,611 thousand from RMB 1,880,923 thousand in the previous year[2]. - The company reported a gross profit of RMB 1,054,959 thousand, down 27.7% from RMB 1,458,873 thousand in 2021[2]. - Operating loss for the year was RMB 114,084 thousand, compared to an operating profit of RMB 24,030 thousand in 2021[2]. - The company incurred a loss attributable to shareholders of RMB 143,906 thousand, compared to a profit of RMB 20,940 thousand in the previous year[2]. - Basic loss per share was RMB (0.13), a decline from earnings of RMB 0.02 per share in 2021[2]. - Revenue from external customers in mainland China for the year ended December 31, 2022, was RMB 1,270,628, a decrease of 30.6% from RMB 1,831,816 in 2021[47]. - Revenue from external customers in Hong Kong for the year ended December 31, 2022, was RMB 159,164, a decrease of 3.8% from RMB 164,393 in 2021[47]. - The group reported a loss attributable to shareholders of approximately RMB 143,906,000 for the year ended December 31, 2022, compared to a profit of approximately RMB 20,940,000 in 2021[147]. - The group recorded a pre-tax loss of approximately RMB 176,765,000 for the year ended December 31, 2022, compared to a profit of RMB 52,440,000 in the previous year[171]. Dividends and Shareholder Returns - The company proposed a final dividend of RMB 0.06 per share, down from RMB 0.08 per share in 2021[2]. - The company declared dividends of RMB 91,480 thousand for 2022, an increase from RMB 87,323 thousand in 2021[86]. - Share transfer registration will be suspended from June 14 to June 16, 2023, to determine the list of shareholders entitled to the final dividend[194]. Assets and Liabilities - Non-current assets totaled RMB 2,146,242 thousand, a decrease from RMB 2,492,104 thousand in 2021[8]. - Total equity attributable to shareholders decreased to RMB 2,874,715 thousand from RMB 3,060,105 thousand in the previous year[9]. - The carrying amounts of right-of-use assets and lease liabilities as of December 31, 2022, were RMB 369,970,000 and RMB 412,478,000, respectively[29]. - The group has not reported total assets and total liabilities as they were not reviewed by the main operating decision-makers[36]. - The group’s bank borrowings were approximately RMB 40,417,000 as of December 31, 2022, down from RMB 77,003,000 a year earlier, resulting in a debt-to-asset ratio of 1.0[177]. - The net current assets of the group were approximately RMB 1,186,121,000, with a current ratio of 3.2 as of December 31, 2022[182]. Operational Metrics - The total number of restaurants as of December 31, 2022, decreased to 597 from 737 in the previous year[2]. - The group had a total of 597 chain restaurants as of December 31, 2022, a decrease of 140 from 737 restaurants in the previous year[135]. - The proportion of labor costs to revenue increased to approximately 29.8%, up 2.6 percentage points from 27.2% in 2021, primarily due to the pandemic affecting operational hours[102]. - Comparable store sales growth in Hong Kong decreased by 12.3% and in mainland China by 20.5% for the year 2022[158]. - Average spending per customer in Hong Kong was HKD 105.5, while in mainland China it was RMB 43.0 for the year 2022[158]. - Daily table turnover in Hong Kong was 3.7, compared to 2.5 in mainland China for the year 2022[158]. Costs and Expenses - The total employee costs for the year ended December 31, 2022, were RMB 425,410, a decrease of 21.6% from RMB 542,546 in 2021[54]. - The group’s inventory cost was approximately RMB 374,833,000, a reduction of about 30.2% from RMB 537,336,000 in the previous year[138]. - The cost of goods sold as a percentage of revenue was approximately 26.2%, a decrease of about 0.7 percentage points from the previous year[137]. - Financing costs decreased by approximately 13.2% to RMB 26.02 million, down from RMB 29.96 million in 2021[119]. - The company recognized a total impairment loss of RMB 16,953,000 for the year ended December 31, 2022, compared to a reversal of impairment loss of RMB 1,348,000 in 2021[62]. Future Outlook and Strategic Initiatives - The company will continue to optimize its member system and accelerate digital transformation to capture development opportunities in the industry[100]. - The group will closely monitor market conditions and respond swiftly to changes to enhance competitiveness[103]. - The company expects that the application of new accounting standards will not have a significant impact on the consolidated financial statements in the foreseeable future[20]. - The group has not adopted new Hong Kong Financial Reporting Standards that are effective from January 1, 2023, which may impact the financial statements in the future[19]. Miscellaneous - The group maintained a strong financial position with bank balances of approximately RMB 1,465,111,000 as of December 31, 2022, compared to RMB 1,527,538,000 in the previous year[152]. - The group maintained a diversified investment portfolio, with significant investments in Guangzhou Cloud System valued at RMB 17,274,000 as of December 31, 2022, down from RMB 47,675,000 in the previous year[173]. - The group did not engage in any significant acquisitions or disposals of subsidiaries during the review period[180]. - The group has no significant contingent liabilities as of December 31, 2022[181]. - The company will hold its annual general meeting on June 7, 2023, with relevant notices to be published on its website[196].

Financial Performance - For the six months ended June 30, 2022, the revenue was RMB 677.5 million, a decrease of 33.1% compared to RMB 1,012.5 million in the same period of 2021[12]. - Gross profit for the same period was RMB 496.3 million, down 32.7% from RMB 738.0 million year-on-year[12]. - The company reported a loss before tax of RMB 136.1 million, compared to a profit of RMB 86.2 million in the previous year[12]. - The loss attributable to shareholders was RMB 106.5 million, compared to a profit of RMB 49.7 million in the prior year[12]. - For the six months ended June 30, 2022, the group's restaurant business revenue was approximately RMB 628,250,000, a decrease of about 33.9% compared to RMB 951,011,000 in the same period last year, accounting for 92.7% of total revenue[23]. - The group's total revenue for the six months ended June 30, 2022, was approximately RMB 677,469,000, down about 33.1% from RMB 1,012,542,000 in the same period last year due to COVID-19 restrictions[27]. - The group recorded a pre-tax loss of approximately RMB 136,066,000 for the six months ended June 30, 2022, compared to a profit of RMB 86,228,000 for the same period in 2021[44]. - The loss attributable to shareholders was approximately RMB 106,513,000 for the six months ended June 30, 2022, compared to a profit of approximately RMB 49,658,000 in the same period of 2021[45]. - The total loss for the period was RMB 120,361,000, significantly higher than the profit of RMB 51,072,000 reported in the previous year[101]. - The company experienced a significant decline in segment profit, with a loss of RMB 129,018,000 for the first half of 2022 compared to a profit of RMB 78,227,000 in the same period of 2021[101]. Operational Metrics - The number of restaurants operated by the company reached 669, covering over 153 cities and 26 provinces in China as of June 30, 2022[4]. - The group operated a total of 669 restaurants as of June 30, 2022, a decrease of 38 from 707 restaurants in the same period last year[22]. - Comparable store sales growth was -23.6% for the first half of 2022, compared to 13.7% in the same period of 2021[60]. - The company plans to enhance its membership system to improve repurchase rates and accelerate digital transformation[15]. - The company is focusing on a new retail model combining offline dining, online delivery, and new retail strategies[15]. Cost Management - The group's inventory cost for the six months ended June 30, 2022, was approximately RMB 181,140,000, a decrease of about 34.0% from RMB 274,547,000 in the same period last year, with inventory cost accounting for 26.7% of revenue[28]. - Employee costs for the six months ended June 30, 2022, were approximately RMB 211,016,000, a decrease of about 20.4% from RMB 265,160,000 in the same period last year, with employee costs accounting for 31.1% of revenue[33]. - The group will strategically reduce the number of underperforming restaurants to mitigate cash flow and profit burdens during the pandemic[19]. - The group will closely monitor market conditions and actively control operating costs to minimize the impact of negative factors[19]. Cash Flow and Liquidity - As of June 30, 2022, the group maintained a strong liquidity position with cash reserves of approximately RMB 1,528,194,000 and a current ratio of 2.8[46]. - The group generated a net cash inflow from operating activities of approximately RMB 99,978,000, despite recording a pre-tax loss of RMB 136,066,000[54]. - The net cash generated from operating activities for the six months ended June 30, 2022, was RMB 99,978 thousand, down 53.0% from RMB 212,225 thousand in the same period of 2021[85]. - The company reported a net cash outflow from investing activities of RMB 23,196 thousand for the six months ended June 30, 2022, compared to RMB 41,775 thousand in the prior year, indicating an improvement in cash flow management[85]. - The net cash used in financing activities was RMB 88,619 thousand for the first half of 2022, a decrease from RMB 174,940 thousand in the same period of 2021, showing a reduction in financing costs[85]. Market Conditions - The overall restaurant industry in China saw a revenue decline of 7.7% year-on-year, with total dining revenue at RMB 20,040 billion[14]. - The gross domestic product (GDP) of China grew by 2.5% during the same period, indicating economic recovery amidst challenges[14]. - In the first half of 2022, the company's restaurant operations in China were severely impacted by COVID-19, leading to a revenue decrease of 28.5% from RMB 1,012,542 thousand in 2021 to RMB 677,469 thousand in 2022[95]. Asset and Liability Management - Cash and cash equivalents as of June 30, 2022, were RMB 1,528,194 thousand, slightly increased from RMB 1,527,538 thousand as of December 31, 2021[75]. - Total liabilities as of June 30, 2022, were RMB 652,742 thousand, compared to RMB 575,138 thousand as of December 31, 2021[75]. - The company’s total liabilities decreased to RMB 548,909 thousand from RMB 611,930 thousand, indicating a reduction of approximately 10.3%[78]. - The company’s net assets decreased to RMB 2,927,090 thousand from RMB 3,114,149 thousand as of December 31, 2021, representing a decline of approximately 6.0%[78]. - The total equity attributable to shareholders decreased to RMB 2,885,848 thousand from RMB 3,060,105 thousand, reflecting a decrease of about 5.7% year-over-year[78]. Related Party Transactions - Related party transactions included sales of ramen and related products amounting to RMB 514 thousand for the six months ended June 30, 2022, up from RMB 396 thousand in the previous year, reflecting a growth of approximately 29.6%[196]. - The company incurred procurement costs for food, raw materials, and supplies from related parties totaling RMB (7,089) thousand for the six months ended June 30, 2022, a decrease from RMB (16,550) thousand in the prior year, showing a reduction of about 57.3%[196]. - The total compensation for directors and key management personnel was RMB 2,954 thousand for the six months ended June 30, 2022, compared to RMB 2,251 thousand in the previous year, representing an increase of approximately 31.1%[199].

Financial Performance - The company's revenue for 2021 was RMB 1,996,209 thousand, representing a 9.6% increase from RMB 1,820,588 thousand in 2020[20] - Restaurant business sales reached RMB 1,880,923 thousand, up 10.5% from RMB 1,702,117 thousand in the previous year[20] - Gross profit increased by 11.8% to RMB 1,458,873 thousand compared to RMB 1,305,027 thousand in 2020[20] - The company reported a net profit attributable to shareholders of RMB 20,940 thousand, a significant recovery from a loss of RMB 77,868 thousand in 2020[20] - The net profit margin improved to 0.9% from -4.3% in the previous year, reflecting a positive trend in profitability[20] - The group's revenue for the year ended December 31, 2021, increased by 9.6% to approximately RMB 1,996 million compared to RMB 1,820 million in the same period last year[32] - The group's restaurant business revenue for the year was approximately RMB 1,880,923,000, an increase of about 10.5% from RMB 1,702,117,000 in the previous year, accounting for 94.2% of total revenue[34] - The gross profit reached approximately RMB 1,458,873,000, an increase of about 11.8% from RMB 1,305,027,000 in the previous year, with a gross margin rising from 71.7% to 73.1%[45] - The group recorded a profit before tax of approximately RMB 52,440,000 for the year ended December 31, 2021, compared to a loss of approximately RMB 97,999,000 for the same period in 2020[55] Operational Metrics - The total number of restaurants as of December 31, 2021, was 737, a 2.1% increase from 722 in 2020[20] - The group opened 98 new restaurants while closing 83, resulting in a total of 737 operational restaurants as of December 31, 2021[23] - Active member repurchase rate increased from 2.83 times to 3.54 times, with total membership reaching 19.72 million by the end of 2021[22] - Comparable store sales growth was 13.7% for the year ended December 31, 2021, compared to a decline of 0.9% for the same period in 2020[78] Cost and Expenses - Employee costs amounted to approximately RMB 542,546,000, a 13.6% increase from RMB 477,510,000 the previous year, with employee costs accounting for 27.2% of revenue, up 1.0 percentage point[46] - Inventory costs were approximately RMB 537,336,000, an increase of about 4.2% from RMB 515,561,000, with inventory costs as a percentage of revenue decreasing to 26.9% from 28.3%[44] - Other operating expenses increased by approximately 21.5% to about RMB 512,572,000, primarily due to increased restaurant operating days[48] Cash Flow and Assets - The company's total assets decreased by 6.7% to RMB 4,301.2 million from RMB 4,610.4 million in the previous year[20] - Cash and cash equivalents decreased by 12.1% to RMB 1,527.5 million compared to RMB 1,738.4 million in 2020[20] - As of December 31, 2021, the group's cash generated from operations was approximately RMB 417,717,000, with a profit before tax of approximately RMB 52,440,000 for the same period[75] Corporate Governance - The company has adopted the corporate governance code and complied with all applicable provisions, except for a deviation regarding the separation of the roles of Chairman and CEO[81] - The board consists of seven members, with more than one-third being independent non-executive directors, ensuring a strong level of independence[85] - The company emphasizes transparency, accountability, and independence to enhance long-term shareholder returns[80] - The independent non-executive directors possess extensive professional experience and contribute meaningfully to the board's decisions[85] - The company has established a whistleblowing policy to provide employees with a channel for reporting concerns and to protect them from retaliation for making fair reports[135] Risk Management and Internal Control - The company has established a strong internal control and risk management culture, with the Audit Committee conducting at least two meetings annually to optimize the control environment[127] - The management is responsible for designing, implementing, and maintaining the risk management and internal control systems[138] - The board has delegated the audit committee to continuously monitor the risk management and internal control systems and review their effectiveness annually[138] Environmental and Social Responsibility - The company emphasizes green and low-carbon practices, regularly updating technology and equipment to reduce environmental impact[161] - The company actively participates in social responsibility initiatives, including hiring 49 individuals with disabilities in Shanghai and Beijing[158] - The company has implemented a comprehensive food safety management system, integrating its ERP system with the Shanghai Food and Drug Administration's traceability system to ensure ingredient safety[158] Awards and Recognition - In 2021, the company was awarded the "Top 10 Fast Food Enterprises in China" by the China Hotel Association and recognized as one of the "Top 100 Catering Enterprises in China" by the China Cuisine Association[158] - The company has been recognized for its contributions to the restaurant industry, with awards highlighting its influential entrepreneurs[182]

Financial Performance - For the six months ended June 30, 2021, the company's revenue was RMB 1,012.5 million, representing a 46.4% increase compared to RMB 691.8 million in the same period of 2020[15] - Gross profit for the same period was RMB 738.0 million, up 51.0% from RMB 488.6 million year-on-year[15] - The company reported a profit before tax of RMB 86.2 million, a significant recovery from a loss of RMB 149.8 million in the previous year[15] - Net profit attributable to shareholders was RMB 49.7 million, compared to a loss of RMB 109.4 million in the prior year[15] - The group's revenue for the six months ended June 30, 2021, was approximately RMB 1,013 million, an increase of about 46.4% compared to RMB 692 million in the same period of 2020[21] - The gross profit for the same period was approximately RMB 738 million, representing a year-on-year increase of about 51.0%[21] - The group recorded a profit attributable to shareholders of approximately RMB 49.7 million, compared to a loss of RMB 109.4 million in the same period of 2020[21] - The operating profit for the six months ended June 30, 2021, was RMB 40,180,000, a significant improvement from a loss of RMB 123,421,000 in the same period of 2020[69] - The total comprehensive income for the six months ended June 30, 2021, was RMB 40,339,000, recovering from a loss of RMB 109,653,000 in the same period of 2020[72] Restaurant Operations - The company operated 707 restaurants as of June 30, 2021, with a presence in over 167 cities across 30 provinces and municipalities in China[4] - The restaurant business revenue was approximately RMB 951 million, accounting for about 93.9% of the total revenue, an increase of approximately 49.1% year-on-year[27] - Comparable store sales growth for the first half of 2021 was +30.7%, a recovery from -29.7% in the first half of 2020[62] - The company reported a daily table turnover of 3.87 in Hong Kong and 3.2 in Mainland China for the first half of 2021[62] - The segment profit for restaurant operations in mainland China was RMB 39,724,000, while the total segment profit across all divisions was RMB 78,227,000[104] Economic Environment - The overall economic environment in China showed a GDP growth of 12.7% for the first half of 2021, recovering from a decline of 1.6% in the same period of 2020[17] - The average disposable income of residents in China increased by 12.0% year-on-year to RMB 17,642 during the reporting period[17] Strategic Initiatives - The company aims to become the leading fast-casual restaurant chain in China[6] - The company is focused on developing new products and enhancing its menu to cater to local tastes[4] - The group plans to continue optimizing its membership system to enhance repurchase rates and accelerate digital transformation[19] - The group aims to strategically expand its restaurant network while closely monitoring market conditions and controlling operational costs[23] - The company plans to continue expanding its restaurant operations and product offerings in both mainland China and Hong Kong to drive future growth[104] Financial Position - As of June 30, 2021, the group maintained a strong liquidity position with a bank balance of RMB 1,724,963,000 and a current ratio of 2.7[49] - The company's cash and cash equivalents stood at RMB 1,724,963 thousand, down from RMB 1,738,380 thousand, indicating a decrease of approximately 0.8%[74] - Total liabilities decreased to RMB 743,905 thousand from RMB 739,575 thousand, showing a slight increase of about 0.3%[78] - The net assets of the company were reported at RMB 3,174,201 thousand, down from RMB 3,228,854 thousand, reflecting a decrease of approximately 1.7%[78] - The total equity attributable to shareholders was RMB 3,111,139 thousand, down from RMB 3,157,768 thousand, indicating a decrease of approximately 1.5%[78] Cost Management - The inventory consumption cost accounted for approximately 27.1% of revenue, a decrease of about 2.3 percentage points from 29.4% in the same period of 2020[32] - Employee costs for the six months ended June 30, 2021, were approximately RMB 265,160,000, up about 24.4% from approximately RMB 213,202,000 in the same period of 2020, while the proportion of employee costs to revenue decreased from 30.8% to 26.2%[35] - Other operating expenses amounted to approximately RMB 236,939,000, an increase of about 38.9% from approximately RMB 170,571,000 in the same period of 2020, maintaining a stable proportion of 23.4% of revenue[39] Cash Flow - The net cash inflow from operating activities for the six months ended June 30, 2021, was approximately RMB 212,225,000[57] - The net cash used in investing activities was RMB (41,775,000), a decrease from RMB 44,907,000 in 2020, indicating improved cash flow management[87] - The net cash used in financing activities was RMB (174,940,000), compared to RMB (108,363,000) in the previous year, showing an increase in financing outflows[87] Shareholder Information - The company declared an interim dividend of RMB 0.02 per share, totaling RMB 86,286,000, compared to RMB 53,485,000 for the previous year, representing an increase of about 61%[127] - The total number of issued and fully paid shares as of June 30, 2021, was 1,091,538,820, unchanged from December 31, 2020[163] - The company recognized an expense of approximately RMB 294,000 for stock options granted under the plan for the six months ended June 30, 2021, compared to RMB 498,000 for the same period in 2020[172] Governance and Compliance - The company has complied with all applicable provisions of the Corporate Governance Code, except for a deviation regarding the separation of roles of the Chairman and CEO[190] - As of June 30, 2021, the Chairman and CEO roles are held by the same individual, which the board believes provides stable leadership[190] - The audit committee has reviewed the company's accounting policies and practices for the six months ended June 30, 2021[193]

Financial Performance - The company's revenue for 2020 was RMB 1,820,588 thousand, a decrease of 29.0% compared to RMB 2,565,102 thousand in 2019[16] - Restaurant business sales were RMB 1,702,117 thousand, also down by 29.0% from RMB 2,398,899 thousand in the previous year[16] - The gross profit for 2020 was RMB 1,305,027 thousand, reflecting a decline of 29.6% from RMB 1,854,319 thousand in 2019[16] - The company reported a loss before tax of RMB (97,999) thousand, a significant drop of 142.4% compared to a profit of RMB 231,257 thousand in 2019[16] - The net profit margin for 2020 was -4.3%, a decrease of 10.4 percentage points from 6.1% in 2019[16] - The group's revenue for the year ended December 31, 2020, decreased by 29.0% compared to the same period last year, with an operating profit margin dropping from 4.7% to -2.1% due to the negative impact of the COVID-19 pandemic on its operations in mainland China and Hong Kong[19] - The group's gross profit for the year was approximately RMB 1,305,027,000, a decrease of about 29.6% from RMB 1,854,319,000 in 2019[43] - Employee costs for the year were approximately RMB 477,510,000, a decrease of about 29.8% from RMB 679,858,000 in 2019[45] - Other operating expenses decreased by approximately 34.1% to about RMB 421,778,000 from RMB 639,748,000 in the previous year[47] - Other income for the year ended December 31, 2020, was approximately RMB 96,169,000, a decrease of about 26.0% compared to approximately RMB 129,947,000 for the same period in 2019[52] - Other gains and losses resulted in a loss of approximately RMB 108,327,000 for the year ended December 31, 2020, compared to a gain of approximately RMB 15,239,000 for the same period in 2019[53] Operational Metrics - The total number of restaurants decreased to 722 from 799, representing a decline of 9.6%[16] - As of December 31, 2020, the group operated 722 restaurants, a decrease of 77 from the previous year, with 113 closures attributed to government quarantine measures, lease expirations, and poor operational performance[20] - The group's delivery business accounted for 18.1% of restaurant revenue in 2020, up from 13.6% in 2019, reflecting a growing demand for takeout services[19] - The inventory turnover period increased to 97.1 days, up by 32.0 days from 65.1 days in 2019[16] - Comparable store sales growth for the year ended December 31, 2020, was -21.6%, compared to -29.7% for the same period in 2019[79] - Average spending per customer was HKD 78.0 for the year ended December 31, 2020, up from HKD 66.1 in 2019[79] - Daily table turnover was 4.0 for the year ended December 31, 2020, compared to 5.0 in 2019[79] Cash Flow and Assets - The company's total assets were RMB 4,610.4 million, down 6.4% from RMB 4,927.3 million in the previous year[16] - The cash and cash equivalents stood at RMB 3,228.9 million, a decrease of 5.3% from RMB 3,408.4 million in 2019[16] - The group’s cash and cash equivalents amounted to approximately RMB 1,738,380,000 as of December 31, 2020, compared to RMB 1,705,399,000 as of December 31, 2019[68] - The current ratio was 2.8 as of December 31, 2020, compared to 2.6 as of December 31, 2019[68] - The group’s bank borrowings were approximately RMB 186,044,000 as of December 31, 2020, down from RMB 207,676,000 as of December 31, 2019[68] - The group maintained a relatively high current ratio due to most of its revenue being settled in cash[76] - The group reported a loss before tax of approximately RMB 97,999,000 for the year ended December 31, 2020, compared to a profit of approximately RMB 231,257,000 for the same period in 2019[57] Corporate Governance - The executive committee is responsible for reviewing the company's business strategy and management, implementing investment and financing activities, and ensuring proper internal risk control and management[92] - The board has delegated daily operational management to the executive committee while retaining approval rights for significant matters[92] - The company has established specific terms for the executive committee, which includes the chairman, CEO, executive directors, and COO, to ensure effective daily operations[92] - The board believes that the dual role of the chairman and CEO, currently held by Ms. Pan, provides stable and consistent leadership for the company[96] - The company provides monthly updates to all directors regarding performance, status, and outlook to ensure proper execution of their duties[100] - The executive committee held two meetings during the fiscal year ending December 31, 2020, with attendance rates of 100% for most members[105] - The board conducted four meetings during the same period, with all directors attending the annual general meeting[105] - The company emphasizes continuous professional development for directors to enhance their knowledge and skills[100] - The board has established a clear division of responsibilities between the chairman and CEO roles, despite them being held by the same individual[96] - The company maintains compliance with legal and regulatory requirements through regular reviews and updates of governance policies[95] - The company has established four committees, including the Executive Committee, Compensation Committee, Nomination Committee, and Audit Committee, each with designated authority to oversee specific matters[107] Social Responsibility and Community Engagement - The company provided free nutritious meals to frontline medical staff during the COVID-19 pandemic[165] - The company has created 33 job positions for individuals with disabilities through its "Angel with Broken Wings" recruitment initiative[165] - The company actively participates in corporate social responsibility activities to build a positive corporate image[165] - The company has established a shareholder communication policy to enhance two-way communication with shareholders[158] Environmental Initiatives - The group emphasizes food safety by implementing direct procurement and integrating its ERP system with the Shanghai FDA traceability system, ensuring the traceability of materials from production date to shelf life[168] - In 2020, the central kitchen discharged approximately 84,000 tons of wastewater, with all indicators meeting the required standards[172] - The group trained 670 employees on safety production across 110 types of machinery, enhancing workplace safety measures[171] - The group achieved a total energy consumption of 115,786 tons of water, 10,365,851 kWh of electricity, and 291,881 liters of oil in its central kitchen operations[177] - The group’s restaurant brand "Ajisen Ramen" was awarded the "Green Restaurant" honor, recognizing its commitment to environmental protection and low-carbon initiatives[177] - The group implemented a waste oil recovery program, converting waste into renewable energy, and installed low-noise equipment in its operations[175] - The group’s offices promoted paperless operations, resulting in a total consumption of approximately RMB 73 million in water, electricity, and gas during the reporting period[176] - The group strictly adheres to environmental standards for wastewater, waste gas, and noise emissions, ensuring compliance with relevant regulations[174] Employee Relations - The company has a total of 9,951 employees as of December 31, 2020, with 6,398 female employees and 3,553 male employees[182] - The company adheres to national labor laws, ensuring minimum wage standards and providing statutory holidays, with a standard workweek of five days and eight hours per day[182] - The company has established the "Weichuan Business School" since 2016 to provide employees with growth opportunities and support their career development[183] - The company emphasizes employee work-life balance by organizing cultural activities and events, such as monthly birthday parties and holiday gatherings[183] - The company has not encountered any cases of child labor during the reporting period[182] - The company has a strict anti-corruption policy in place, ensuring compliance with national laws and internal guidelines[184] - The company encourages employees to report any incidents of corruption or fraud, with no legal cases related to corruption reported during the period[187] Risk Management - The company emphasizes the importance of maintaining a robust risk management and internal control system to mitigate inherent business risks and ensure compliance with relevant laws and regulations[138] - The management is responsible for designing and implementing the risk management and internal control systems to protect the company's assets and ensure reliable financial records[139] - The Audit Committee is tasked with continuously monitoring the effectiveness of the risk management and internal control systems, covering financial, operational, and compliance controls[138] - The board recognizes its responsibility to maintain effective risk management and internal control systems, which are reviewed annually for effectiveness[138] - The company has established a policy for hiring external auditors to provide non-audit services, ensuring independence and objectivity[133] Marketing and Brand Development - The company operates a chain of fast-casual restaurants selling Japanese ramen and cuisine in Hong Kong and China[199] - The company regularly updates its menu twice a year to communicate new products and innovative ideas to consumers[182] - The company is focused on expanding its overseas business development and new brand restaurants[198] - The company's marketing and restaurant design efforts are led by experienced executives with extensive backgrounds in the industry[198]

Financial Performance - For the six months ended June 30, 2020, the revenue was RMB 691.8 million, a decrease of 43.5% compared to RMB 1,223.8 million in the same period of 2019[11]. - Gross profit for the same period was RMB 488.6 million, down 45.4% from RMB 895.2 million year-on-year[11]. - The company reported a loss before tax of RMB 149.8 million, compared to a profit of RMB 119.8 million in the previous year[11]. - The loss attributable to shareholders was RMB 109.4 million, compared to a profit of RMB 86.6 million in 2019[11]. - The group recorded a loss attributable to shareholders of approximately RMB 109,393,000, with a basic loss per share of RMB 0.10, compared to a profit of approximately RMB 86,582,000 and a basic earnings per share of RMB 0.08 in the previous year[17]. - The company reported a loss before tax of approximately RMB 149,754,000 for the six months ended June 30, 2020, compared to a profit of RMB 119,809,000 for the same period in 2019[35]. - The net loss for the period was RMB 118,921,000, compared to a profit of RMB 92,748,000 in the same period of 2019[89]. - The total comprehensive loss for the period was RMB 109,653 thousand, compared to a total comprehensive income of RMB 94,565 thousand in the same period last year[59]. Operational Challenges - The company faced significant challenges due to the COVID-19 pandemic, with the overall restaurant industry in China experiencing a revenue decline of 32.8% during the same period[14]. - The company faced significant negative impacts on its operations due to the COVID-19 pandemic, leading to reduced revenues and impairments of assets[76]. - The overall operations of the company's restaurants have been gradually improving since the easing of lockdown measures in mid-March 2020[76]. - The company has benefited from various government support measures to mitigate the negative impacts of the pandemic[76]. Restaurant Network and Strategy - The number of restaurants operated by the company reached 734, covering over 169 cities and 31 provinces and municipalities in China[4]. - The group operated 734 restaurants as of June 30, 2020, a decrease of 36 from 770 restaurants in the same period of 2019[21]. - The group plans to adopt a prudent store opening strategy and focus on optimizing existing stores due to the uncertain global economic outlook[17]. - The company aims to become the leading fast-casual restaurant chain in China[6]. Revenue Sources - The main revenue source, the retail chain restaurant business, generated approximately RMB 637,697,000, accounting for about 92.2% of total revenue, down about 44.3% from RMB 1,144,605,000 in 2019[20]. - Restaurant operations revenue decreased to RMB 637,697,000 from RMB 1,144,605,000, a decline of approximately 44.4% year-over-year[85]. - Revenue from ramen and related products decreased to RMB 54,088,000 from RMB 79,264,000, a decline of approximately 31.7% year-over-year[85]. - Total revenue for the first half of 2020 was RMB 691,785,000, down from RMB 1,223,869,000 in the same period of 2019, representing a decrease of approximately 43.4%[89]. Cost Management - Employee costs for the six months ended June 30, 2020, were approximately RMB 213,202,000, a decrease of about 35.4% compared to RMB 330,252,000 for the same period in 2019[28]. - Other operating expenses for the six months ended June 30, 2020, were approximately RMB 170,571,000, a decrease of about 43.8% from RMB 303,706,000 in the same period of 2019[31]. - The cost of inventory consumed decreased to RMB 203,161,000 for the six months ended June 30, 2020, down from RMB 328,629,000 in 2019, indicating a reduction of approximately 38.2%[105]. - The total advertising and promotional expenses for the six months ended June 30, 2020, were RMB 4,432,000, significantly lower than RMB 17,102,000 in 2019, marking a decrease of about 74%[105]. Cash Flow and Liquidity - Cash inflow from operating activities for the six months ended June 30, 2020, was approximately RMB 54,435,000, despite a loss before tax of RMB 149,754,000[41]. - The company maintained a strong liquidity position with a bank balance of RMB 1,700,896,000 as of June 30, 2020, compared to RMB 1,705,399,000 as of December 31, 2019[38]. - Cash and cash equivalents as of June 30, 2020, were RMB 1,700,896 thousand, slightly down from RMB 1,705,399 thousand as of December 31, 2019[62]. - The net cash generated from operating activities for the six months ended June 30, 2020, was RMB 54,435,000, a decrease of 73% compared to RMB 202,170,000 in 2019[73]. Asset and Liability Management - Total assets as of June 30, 2020, were RMB 4,732,975 thousand, down from RMB 4,927,276 thousand as of December 31, 2019[62]. - Total liabilities as of June 30, 2020, were RMB 809,305 thousand, compared to RMB 817,193 thousand as of December 31, 2019[62]. - The company's net equity attributable to shareholders decreased to RMB 3,175,309,000 from RMB 3,329,074,000, representing a decline of 4.6%[64]. - The provision for expected credit losses for trade and other receivables increased to RMB 12,611,000 from RMB 3,471,000 as of December 31, 2019[134]. Shareholder Information - The company has issued 1,091,538,820 shares with a total capital of RMB 108,404,000 as of June 30, 2020[146]. - The company’s major shareholder, Favor Choice Group Limited, holds 480,123,041 shares, representing 43.99% of the total shares[188]. - The company has a total of 102,340,000 shares held by Invesco Management S.A., accounting for 9.38% of the total shares[188]. - The company’s stock options plan aims to reward contributions to the group’s development and business growth[191]. Fair Value and Financial Instruments - The fair value loss on investment properties for the six months ended June 30, 2020, was approximately RMB 8,499,000, compared to a fair value gain of RMB 2,509,000 in 2019[119]. - The company reported a fair value of RMB 66,191,000 for financial liabilities measured at fair value, an increase from RMB 62,776,000 as of December 31, 2019[159]. - The company reported a loss of RMB 14,205,000 from fair value changes in financial assets and a loss of RMB 3,415,000 from financial liabilities for the six months ended June 30, 2020[162]. Compliance and Governance - The company has complied with all applicable provisions of the Corporate Governance Code during the reporting period, except for a deviation regarding the roles of the Chairman and CEO[173]. - The company maintains transparency in its share option plans, providing detailed disclosures in its interim reports[199].

B AJISEN RAMEN 味手拉麵 味千(中國)控股有限公司 AJISEN (CHINA) HOLDINGS LIMITED (Incorporated in the Cayman Islands with Limited Liability) (於開曼群島註冊成立的有限公司) Stock Code 股份代號 : 538 2019 ANNUAL REPO 九州の味、熊本生まれ、世界の味千ラ 大骨熬湯五十年 全球門店800家 味千（中國）控股有限公司（股份代號：538）（「味千（中國）」或「本公司」，與其附屬公司統稱為「本集團」）為中華人民共和 國（「中國」）和香港特別行政區（「香港」）領先的快速休閒餐廳（「快速休閒餐廳」）連鎖營運商之一 。自一九九六年成立以 來，本集團以味千品牌於中國及香港銷售日式拉麵及菜式，並融合中國人飲食習慣和烹飪精髓，悉心研發出上百種適合 中國人口味的日式拉麵和菜式。本集團餐廳揉合快餐店及傳統點餐餐廳元素，是一家迅速增長的快速休閒餐廳連鎖經營 商 。 本集團於二零零七年三月三十日在香港聯合交易所有限公司（「聯交所」）主板上市，強大的資金支持為本集團的迅速擴張 注入新活力。作為餐飲（ ...