Financial Performance - In the first half of fiscal year 2022/23, total revenue decreased by 24.5% year-on-year to RMB211,100,000, compared to RMB279,500,000 in 2021/22[21] - Consolidated gross profit decreased by 18.5% year-on-year to RMB137,000,000, down from RMB168,000,000 in the previous year[21] - The consolidated loss attributable to owners of the Company was RMB23,400,000, compared to a loss of RMB2,200,000 in 2021/22[21] - Basic loss per share was RMB(3.31) cents, compared to RMB(0.32) cents in the previous year[24] - Total revenue decreased by 24.5% year-on-year to RMB 211,100,000 (2021/22: RMB 279,500,000) due to the impact of COVID-19 lockdown measures[30] - Consolidated gross profit decreased by 18.5% to RMB 137,000,000 (2021/22: RMB 168,000,000), with a gross profit margin increase of 4.8 percentage points to 64.9%[30] - The consolidated loss attributable to owners of the Company was RMB 23,400,000 (2021/22: loss of RMB 2,200,000), with a basic loss per share of RMB 3.31 cents (2021/22: loss of RMB 0.32 cent)[34] - Operating loss increased to RMB 25,228,000 from RMB 1,192,000, indicating a significant deterioration in operational performance[102] - Loss for the period attributable to owners of the Company was RMB 23,357,000, compared to RMB 2,230,000 in the previous year, marking an increase of over 950%[102] - Total comprehensive loss for the period was RMB 10,921,000, compared to RMB 2,730,000 in 2021, representing a substantial increase[109] Expenses and Cost Management - Selling and distribution expenses decreased by 6.3% year-on-year to RMB 115,800,000 (2021/22: RMB 123,600,000), but the ratio to total revenue increased by 10.7 percentage points to 54.9%[30] - General and administrative expenses decreased by 11.9% to RMB 41,900,000 (2021/22: RMB 47,600,000), with the ratio to total revenue increasing by 2.9 percentage points to 19.9%[34] - Total employee benefit expenses for the six months ended August 31, 2022, amounted to RMB 67,900,000, a decrease from RMB 72,300,000 in the previous year[95] - Selling and distribution expenses were RMB 115,849,000, slightly reduced from RMB 123,637,000, indicating cost management efforts[102] Inventory and Cash Management - As of 31 August 2022, the Group's inventory balance was RMB 191,900,000, an increase of 7.6% compared to RMB 178,400,000 from the previous year[36] - Inventory turnover of finished goods increased by 101 days to 389 days (31 August 2021: 288 days) due to significant revenue decline[38] - Cash and bank balance amounted to RMB 421,700,000 as of 31 August 2022 (28 February 2022: RMB 442,600,000), with a quick ratio of 3.4 times[42] - The Group had no outstanding bank loan as of the end of the financial period, having repaid a bank loan of RMB 20,200,000 during the period[42] - Cash and cash equivalents at 31 August 2022 stood at RMB 401,153,000, down from RMB 434,156,000 in 2021, representing a decrease of approximately 7.6%[143] - The total net decrease in cash and cash equivalents was RMB (25,092,000), a substantial improvement from RMB (307,998,000) in the previous year, indicating better cash management[143] Market and Operational Impact - Operations were significantly impacted by strict COVID-19 precautionary measures, leading to temporary store closures in some areas[28] - The Group's retail revenue decreased by 24.5% year-on-year to RMB 211,100,000, while same-store sales declined by 26.5%[50] - The total number of physical stores in Mainland China and Hong Kong was 381, representing a net reduction of 8 stores compared to the previous year[51] - The Group's sales in Mainland China dropped by 23.6% year-on-year to RMB 210,400,000, with same-store sales also declining by 26.5%[63] - The Group organized promotional events featuring celebrities to boost sales as lockdown measures were gradually lifted[63] Strategic Initiatives - The Group aims to enhance its market presence through new product lines and expansion strategies[20] - The Group plans to launch the "Omni-Channel Middle Platform Project" to enhance the integration of online and offline channels[80] - The Group will continue to focus on the development of the e-commerce market, particularly on high-traffic platforms like T-Mall, Douyin, Weibo, and Xiaohongshu, to enhance its social e-commerce business[84] - The Group aims to enhance brand value and provide a unique consumption experience amid the evolving digital landscape[80] - The Group is preparing for market recovery with the resumption of normal traveler clearance between China, Hong Kong, and Macau[86] Financial Position - Total assets decreased to RMB 882,883,000 from RMB 888,086,000, indicating a slight decline in asset base[112] - Total equity as of 31 August 2022 was RMB 694,197,000, down from RMB 705,339,000, reflecting a decrease in shareholder equity[115] - The company had retained earnings of RMB 526,633,000, reflecting the accumulated profits over time[118] - The company maintained a liquidity risk management strategy by ensuring sufficient cash flow generated from operations and maintaining available credit facilities[165] Employee and Workforce Changes - The Group's workforce decreased to 1,296 employees as of August 31, 2022, from 1,342 employees as of February 28, 2022[100] - The number of self-owned stores decreased by 6, while franchised stores decreased by 2 during the review period[51]

Financial Performance - Revenue for the year ended February 28, 2022, was RMB 594.2 million, a decrease of 4.2% compared to RMB 569.0 million for the previous year[9]. - Consolidated profit attributable to owners of the company dropped to RMB 3.0 million, a significant decline of 97.2% from RMB 106.2 million in the prior year[9]. - Basic earnings per share fell to RMB 0.42, down 97.2% from RMB 15.04 in the previous year[9]. - Total equity decreased to RMB 705.3 million, representing a 30.0% decline from RMB 1,007.9 million[10]. - Net cash balances were reported at RMB 442.6 million, a decrease of 41.4% from RMB 754.9 million[10]. - Net assets value per share dropped to RMB 1.00, down 30.1% from RMB 1.43[10]. - Net cash per share decreased to RMB 0.60, a decline of 43.9% from RMB 1.07[10]. - For the financial year 2021/22, the total revenue decreased by 4.2% year-on-year to RMB 569,000,000[49]. - The consolidated gross profit increased by 0.7% year-on-year to RMB 357,900,000, with a gross profit margin of 62.9%, up 3.1 percentage points from the previous year[49][52]. - Selling and distribution expenses increased by 8.1% year-on-year to RMB 259,200,000, with the ratio to total revenue rising to 45.6%[54]. - General and administrative expenses decreased by 36.6% to RMB 93,300,000, resulting in a reduction of 8.4 percentage points in the expense ratio to 16.4%[58]. - Other income decreased by 47.6% year-on-year to RMB 4,600,000, primarily due to the absence of one-off incentives from local governments[60]. - Income tax expense decreased by 66.2% year-on-year to approximately RMB 20,900,000, attributed to provisions related to relocation compensation[65][68]. Inventory and Cash Management - As of February 28, 2022, the Group's inventory balance was RMB 186,300,000, representing an increase of 22.1% compared to the previous year[66][69]. - As of February 28, 2022, the finished goods inventory amounted to RMB 186.3 million, representing a year-on-year increase of 22.1% from RMB 152.6 million[71]. - The proportion of inventory aged one year or less increased to 71.4% as of February 28, 2022, compared to 47.2% on February 28, 2021[74]. - The inventory turnover for finished goods decreased by 24 days to 293 days for the year ended February 28, 2022, down from 317 days in 2021[74]. - The Group's cash and bank balances decreased by 41.4% year-on-year to RMB 442.6 million as of February 28, 2022, down from RMB 754.9 million[75]. - The quick ratio at the end of the financial year was 3.8 times, a decrease from 7.2 times on February 28, 2021[75]. - The Group borrowed a bank loan of RMB 40.4 million during the year, with a remaining balance of RMB 20.2 million as of February 28, 2022[75]. - The Group maintains sufficient cash flow despite the retail market not returning to pre-pandemic levels, with adequate financial resources for future development needs[79]. - The Group has adopted a prudent inventory management strategy, actively clearing off-season items to reduce their proportion in ending inventory[74]. - The Group's financial position remains strong, with access to banking facilities for working capital if necessary[75]. Retail Performance and Strategy - Annual retail revenue decreased by 4.2% year-on-year to RMB 569,000,000, compared to RMB 594,200,000 in the previous year[86]. - Same store sales declined by 0.2%, an improvement from the previous year's decline of 10.5%[86]. - Retail sales in Mainland China decreased by 3.9% to RMB 560,700,000, down from RMB 583,600,000 in the previous year[94]. - The Group maintained a retail network of 389 stores in Mainland China, with a net increase of 6 self-owned stores and a net decrease of 6 franchise stores[89]. - As of February 28, 2022, there were 297 core brand le saunda stores, unchanged from the previous year, while LINEA ROSA stores decreased by 6 to 34[89]. - The retail environment remains challenging due to pandemic-related restrictions, impacting consumer spending and store performance[94]. - The Group is enhancing online sales and customer interaction while reviewing the physical store network to improve efficiency and same-store sales growth[95]. - The Group's proactive measures included expanding online sales channels through livestream shopping and upgrading the membership system to WeChat Mini Program[86]. - Revenue from the e-commerce business decreased by 4.8% year-on-year due to the impact of new infections and natural disasters[101]. - Sales in Hong Kong and Macau decreased by 21.8% year-on-year to RMB 8,300,000, down from RMB 10,600,000 in the previous year[106]. Marketing and Brand Development - The Group strategically expanded its store network in promising areas while closing inefficient ones to enhance efficiency and focus on brand management and product development[36]. - The Group adopted a live-streaming sales model as part of its marketing strategy to enhance brand influence and encourage offline consumption[38]. - The Group aims to maintain its leading position in mid-to-high-end women's footwear by capitalizing on market rebounds as retail activities in Mainland China pick up[37]. - The Group is focused on integrating online and offline operations to adapt to the evolving retail landscape shaped by the pandemic[38]. - The Group continues to explore new online channels to meet the shopping habits of the new generation[38]. - The Group emphasizes the importance of high-quality services in its physical stores to enhance customer experience[42]. - The Group is committed to optimizing operational efficiency to meet consumer needs and improve shopping experiences[44]. - The Group aims to enhance its online and offline channel integration and optimize the supply chain to ensure stable online supply[105]. - The Group plans to focus on social e-commerce and collaborate with internet celebrities to promote products and increase brand awareness[112]. - The Group will enhance membership services through the VIP Mini Program to increase customer loyalty and improve interaction[112]. - The Group expects profitability to improve in the coming year due to a gradually improving marketing environment and accelerated turnover of goods[120]. Corporate Governance and Management - The Company has established three board committees: Audit Committee, Remuneration Committee, and Nomination Committee to oversee various affairs[160]. - The Chief Executive Officer position has been vacant since October 2019, with responsibilities currently handled by other Executive Directors[153]. - The Company has complied with the Corporate Governance Code, except for the separation of the roles of Chairman and Chief Executive Officer[153]. - The Group is committed to enhancing corporate governance practices to align with statutory and professional standards[154]. - The Board comprises independent non-executive directors with extensive backgrounds in finance and management, enhancing corporate governance[144][145]. - The Board will continue to review and enhance governance practices in line with business growth[157]. - Independent Non-Executive Directors represent not less than one-third of the Board, ensuring checks and balances for safeguarding shareholder interests[170]. - The Company ensures that all Directors have the required character, integrity, and familiarity with the Group's business and culture[169]. - The Board is responsible for overall strategies, policies, and monitoring the Group's financial and operational performance[176]. - Each Director is entitled to seek independent professional advice at the Company's expense under appropriate circumstances[175]. - The Company has arranged directors' and officers' liability insurance to cover costs and liabilities arising from corporate activities[194].

Revenue and Profitability - In the first half of fiscal year 2021/22, total revenue increased by 7.2% year-on-year to RMB 279.5 million (2020/21: RMB 260.7 million) [18] - Consolidated gross profit rose by 2.6% year-on-year to RMB 168 million (2020/21: RMB 163.8 million) [18] - The overall gross profit margin was 60.1%, a decrease of 2.7 percentage points compared to the same period last year [18] - The consolidated loss attributable to owners of the Company was RMB 2.2 million, significantly improved from a loss of RMB 29.8 million in the previous year [18] - Basic loss per share improved to RMB (0.32) from RMB (4.22) year-on-year [21] - The Group's total revenue increased by 7.2% year-on-year to RMB 279,500,000 (2020/21: RMB 260,700,000) due to gradual improvement in retail sales per store in China [28] - Consolidated gross profit rose by 2.6% to RMB 168,000,000 (2020/21: RMB 163,800,000), with a gross margin decrease of 2.7 percentage points to 60.1% [28] - The Group's retail revenue increased by 7.2% year-on-year to RMB 279,500,000 for the period, compared to RMB 260,700,000 in the previous year [51] - Same-store sales rose by 14.2%, recovering from a decline of 24.2% in the previous year [51] Expenses and Cost Management - Selling and distribution expenses increased by 8.0% year-on-year to RMB 123,600,000 (2020/21: RMB 114,400,000), with the ratio to total revenue rising by 0.3 percentage points to 44.2% [28] - General and administrative expenses decreased by 43.5% to RMB 47,600,000 (2020/21: RMB 84,300,000), representing a reduction in percentage of total revenue by 15.3 percentage points to 17.0% [30] - Total employee benefit expenses decreased to RMB 72,300,000 from RMB 107,100,000, reflecting a reduction in operational costs [95] Inventory and Cash Management - As of August 31, 2021, the Group's inventory balance was RMB 178,400,000, a decrease of 20.1% from RMB 223,200,000 the previous year, with finished goods inventory turnover decreasing by 108 days to 288 days [40] - 65% of the Group's finished goods inventory aged less than one year as of August 31, 2021, compared to 54% the previous year [43] - As of August 31, 2021, the Group's cash and bank balance amounted to RMB 504,900,000, down from RMB 754,900,000 as of February 28, 2021 [47] - Current assets decreased to RMB 769,859,000 from RMB 1,005,755,000, representing a decline of approximately 23.4% [110] - Cash and bank balances significantly decreased to RMB 504,920,000 from RMB 754,882,000, a reduction of about 33.0% [110] Market and Operational Strategy - The Group maintained a substantially similar year-on-year store number, contributing to improved single retail store sales in the PRC [26] - The Group's major proprietary brands include le saunda, le saunda MEN, LINEA ROSA, PITTI DONNA, and CNE, targeting diverse customer groups [17] - The management remains focused on enhancing retail performance and expanding brand presence in the market [26] - The Group plans to consider further downsizing its operations in Hong Kong and Macau due to the lack of recovery signs in the retail market [76] - The Group aims to enhance customer experience by strengthening membership services through VIP mini-programs [82] - The Group will focus on social commerce platforms like Douyin, Taobao Live, Xiaohongshu, and Weibo to promote and sell products [83] - The Group is accelerating the integration of online and offline channels to improve customer access to products [82] - The Group's strategy includes repositioning as a solely brand operator, focusing on product design and brand management [78] Financial Position and Liabilities - The Group had a gearing ratio of 5.8% as of August 31, 2021, compared to nil as of February 28, 2021 [47] - The company’s total liabilities as of August 31, 2021, included trade and other payables of RMB 100,334,000 and lease liabilities of RMB 37,821,000 [163] - The company’s financial liabilities due within one year totaled RMB 161,281,000 as of August 31, 2021 [163] - Total liabilities as of August 31, 2021, amounted to RMB 218,861,000, compared to RMB 147,131,000 as of February 28, 2021, indicating an increase of approximately 49% [184][193] Loss and Comprehensive Loss - The company reported a loss for the period of RMB (2,482,000), a significant improvement compared to a loss of RMB (29,890,000) in the same period last year, reflecting a reduction of approximately 91.7% [106] - Total comprehensive loss for the period was RMB (2,730,000), down from RMB (37,783,000) year-over-year, indicating a decrease of about 92.8% [106] - The total comprehensive loss for the period ended 31 August 2021 was RMB (2,730,000) [116] Economic and Market Conditions - Retail sales of consumer goods in China grew by 23% year-on-year for the first six months of 2021, with a two-year average growth rate of 4.4% [65] - Hong Kong's real GDP growth was 8.0% and 7.6% in the first and second quarters of 2021, but the retail market remains under pressure due to reduced visitor numbers [76] - The Group anticipates that the pandemic will be under control with the popularization of vaccination, allowing for improved market conditions [82]

Financial Performance - Revenue for the year ended 28 February 2021 was RMB 594.2 million, a decrease of 19.3% compared to RMB 736.4 million for the year ended 29 February 2020[10] - Consolidated profit attributable to owners of the company was RMB 106.2 million, down from a profit of RMB 30.5 million in the previous year[10] - Basic earnings per share decreased to RMB 15.04 cents, a decline of RMB 4.32 cents compared to the previous year[10] - Gross profit fell by 22.2% to RMB 355.3 million, with a gross profit margin of 59.8%, a decrease of 2.2 percentage points compared to the prior year[85] - The Group's total revenue for the financial year 2020/21 decreased by 19.3% year-on-year to RMB594,200,000, down from RMB736,400,000 in 2019/20[77] - The profit attributable to owners of the Company for the year amounted to RMB106,200,000, a significant recovery from a loss of RMB30,500,000 in the previous year[70] Cash and Equity - Total equity increased to RMB 1,007.9 million, reflecting a growth of 4.8% from RMB 961.7 million[10] - Net cash balances rose significantly to RMB 754.9 million, an increase of 48.4% from RMB 508.6 million[10] - Net cash per share increased to RMB 1.07, representing a 48.6% rise from RMB 0.72[10] - Cash and bank balances increased by 48.4% year-on-year to RMB 754,900,000, with a quick ratio of 7.2 times[108] Operational Efficiency - Stock turnover days improved to 317 days, down from 369 days[10] - Quick ratio increased to 7.2 times, compared to 5.4 times in the previous year[10] - Selling and distribution expenses were reduced by 28.5% year-on-year to RMB 239.8 million, improving the ratio of these expenses to total revenue by 5.1 percentage points to 40.4%[86] - General and administrative expenses decreased by 3.9% to RMB 147.3 million, despite a one-off employee compensation expense of approximately RMB 37.4 million due to factory closure[91] - The Group's operational efficiency has significantly improved due to the integration and optimization of its physical store network and operational structure[63] Impact of COVID-19 - The financial year ended on February 28, 2021, was significantly impacted by the COVID-19 pandemic, leading to a recession in the global economy[56] - The Group implemented strategic adjustments, including ceasing production in its Shunde factory and shifting to external procurement, to mitigate the pandemic's impact[57] - The Group maintained its market share in the mid-to-high-end women's footwear segment through effective marketing strategies as economic activities began to recover in China[57] Product and Market Strategy - The company is focused on expanding its retail business and enhancing product offerings to drive future growth[10] - The Group has actively expanded e-commerce channels to social platforms to attract a younger customer base, launching the le saunda Y collection featuring trendy styles[62] - The Group plans to open new physical stores in various locations as the domestic economy recovers and consumption-stimulating measures are anticipated[63] - The Group's strategy includes focusing on product quality and leveraging its market knowledge to provide fashionable products to a diverse customer base[71] - The Group is focusing on enhancing customer engagement through a balanced development of online and offline channels[136] Corporate Social Responsibility - The Group was recognized as a "Top 100 Guangdong E-commerce Enterprises" at the 2021 New Year Meeting, highlighting its social influence and growth potential[43] - The Group was awarded the "15 Years Plus Caring Company Logo" for its commitment to corporate social responsibility through charity and environmental activities[43] - The Group continued to participate in the "No Fakes Pledge" Scheme, ensuring the sale of genuine goods and protecting intellectual property rights[46] - Le Saunda was recognized as a "Happy Company" for the fifth consecutive year, reflecting its commitment to employee satisfaction and a positive work environment[50] Dividends - The final dividend declared was HK 15.0 per ordinary share and a special dividend of HK 35.0 per ordinary share, marking a return to dividend payments after the previous year had none[97] - The board has recommended a final dividend of HK 15.0 cents and a final special dividend of HK 35.0 cents per ordinary share for the year ended February 28, 2021[172] - The interim special dividend declared for the six months ended August 31, 2020, was HK 5.0 cents per ordinary share[173] Workforce and Management - The total employee benefit expenses for the twelve months ended February 28, 2021, amounted to RMB 196,700,000, a decrease from RMB 247,500,000 in the previous year[174] - The group had a workforce of 1,403 employees as of February 28, 2021, down from 2,394 employees a year earlier[174] - The company emphasizes leadership and management strategies through its board structure, which includes various committees for remuneration and nominations[187] - The independent non-executive directors bring a wealth of knowledge from various industries, which can facilitate strategic partnerships and market opportunities[199]

Financial Performance - In the first half of fiscal year 2020/21, total revenue decreased by 30.8% year-on-year to RMB 260.7 million (2019/20: RMB 376.7 million) [15] - Consolidated gross profit dropped by 32.1% year-on-year to RMB 163.8 million (2019/20: RMB 241.2 million) [15] - The overall gross profit margin decreased by 1.2 percentage points to 62.8% compared to the same period last year [15] - The Group transitioned from a profit of RMB 2.4 million in 2019/20 to a loss of RMB 29.8 million in 2020/21 [15] - Basic loss per share was RMB (4.22) cents, compared to earnings of RMB 0.34 cents per share in the previous year [17] - The consolidated loss attributable to owners of the Company was RMB 29.8 million [15] - The Group reported a consolidated loss attributable to owners of RMB 29,800,000, compared to a profit of RMB 2,400,000 in the previous year, with a basic loss per share of RMB 4.22 cents [29] - The group reported revenue of RMB 260,713,000 for the six months ended August 31, 2020, a decrease of 30.8% compared to RMB 376,724,000 in the same period of 2019 [92] - Gross profit for the same period was RMB 163,787,000, down 32.1% from RMB 241,191,000 in 2019 [92] - The group incurred a loss of RMB 29,890,000 for the period, compared to a profit of RMB 2,363,000 in the previous year [92] - Total comprehensive loss for the period amounted to RMB 37,783,000, a stark contrast to the total comprehensive income of RMB 22,599,000 in the previous year [100] Impact of COVID-19 - The retail markets in Mainland China and Hong Kong and Macau were severely impacted by the COVID-19 pandemic [21] - The Group's total revenue decreased by 30.8% year-on-year to RMB260,700,000 (2019/20: RMB376,700,000) due to the impact of the COVID-19 pandemic [23] - Same-store sales declined by 24.2% during the review period, a significant drop from a 3.7% increase in the previous year [49] - Sales in Hong Kong and Macau dropped by 74.6% year-on-year to RMB 5.1 million, down from RMB 20 million in the previous year [65] - The unemployment rate in Hong Kong reached 6.2% in Q2 2020, the highest level in over 15 years [65] Cost Management - Selling and distribution expenses decreased by 32.2% to RMB114,400,000, resulting in a ratio of selling and distribution expenses to total revenue of 43.9%, down 0.9 percentage points [22] - General and administrative expenses increased by 21.8% to RMB84,300,000, with these expenses representing 32.3% of total revenue, up 13.9 percentage points [27] - The Group implemented a 25% pay cut for all directors for six months starting from March 2020 to reduce daily expenses [47] Inventory and Cash Management - The Group's inventory balance decreased by 32.4% to RMB223,200,000, with finished goods inventory turnover increasing by 18 days to 396 days [35] - As of 31 August 2020, the Group's cash and bank balance was RMB563,900,000, up from RMB508,600,000 as of 29 February 2020, maintaining a quick ratio of 5.4 times [41] - The company’s cash and bank balances at 31 August 2020 totaled RMB 563,909,000, up from RMB 418,042,000 in 2019, showing a strong liquidity position [124] Strategic Focus - The Group aims to appeal to diversified target customer groups with distinctive product lines [14] - The Group plans to focus on developing certain own brands and invest more in athleisure footwear markets due to increasing consumer health consciousness [76] - The Group will enhance its online presence by investing more in social media marketing and emerging social e-commerce platforms [77] - The Group aims to open new stores in appropriate community malls to attract consumers back to offline shopping [77] - The Group believes that optimizing operational structures and enhancing brand value will help respond to future market changes [78] Workforce and Operations - The group has reduced its workforce to 1,541 employees as of August 31, 2020, down from 2,394 employees in February 2020 [86] - The production in the Shunde factory has halted and has been entirely outsourced, allowing the Group to focus on product development and design [76] Financial Position - The company's total assets decreased to RMB 1,079,091,000 as of August 31, 2020, down from RMB 1,105,663,000 as of February 29, 2020, reflecting a reduction of approximately 2.4% [103] - Current liabilities increased to RMB 155,170,000, compared to RMB 143,959,000 in the previous audited period, representing an increase of about 7.9% [107] - The company's inventories decreased to RMB 223,214,000 from RMB 273,093,000, showing a decline of approximately 18.3% [103] - The equity attributable to owners of the company decreased to RMB 923,921,000 from RMB 961,704,000, indicating a decline of about 3.9% [107] - The company reported a total equity of RMB 923,921,000 as of August 31, 2020 [110] Risk Management - The Group's liquidity risk management strategy includes maintaining sufficient cash generated from operating cash flow and having access to committed credit facilities [147] - The Group's financial risk exposure includes market risk (foreign currency and interest rate risk), liquidity risk, and credit risk, with no changes in risk management policies since February 29, 2020 [142][143]

Financial Performance - Revenue for the year ended 29 February 2020 was RMB 736.4 million, a decrease of 19.0% compared to RMB 908.8 million for the year ended 28 February 2019[5] - Consolidated loss attributable to owners of the company was RMB (30.5) million, compared to RMB (28.0) million in the previous year[5] - Basic losses per share were RMB (4.32) cents, an increase from RMB (3.97) cents in the prior year[5] - Total equity decreased to RMB 961.7 million, down 18.9% from RMB 1,186.2 million[5] - Net cash balances were RMB 508.6 million, a decline of 13.9% from RMB 590.6 million[5] - Net assets value per share was RMB 1.36, down 19.0% from RMB 1.68[5] - Consolidated gross profits fell by 19.9% year-on-year to RMB 456,500,000, with a slight decrease in overall gross profit margin by 0.7 percentage points to 62.0%[70] - Selling and distribution expenses dropped by 23.3% to RMB 335,200,000, while general and administrative expenses decreased by 4.8% to RMB 153,200,000[70] - Other income fell by 50.2% year-on-year to RMB 7.6 million (2018/19: RMB 15.2 million), primarily due to local government incentives[80] - The income tax expense for the year was approximately RMB 9.0 million (2018/19: RMB 13.9 million), representing a decrease of 34.9% year-on-year[90] - The group did not recommend declaring a final dividend for the year (2018/19: no final dividend per ordinary share and final special dividend of HK 35.0 cents) [90] Market Challenges - The financial year ended 29 February 2020 was challenging due to the Sino-US trade dispute and economic slowdown in Mainland China, leading to weakened consumer and investment sentiments[48] - Hong Kong experienced negative economic growth for the third and fourth quarters of 2019, marking the first annual drop since 2009[48] - The COVID-19 pandemic caused severe impacts on the retail sector in Hong Kong and China, particularly affecting physical store sales due to a drastic drop in customer traffic[48] - The outbreak of COVID-19 led to a significant decline in retail and tourism sectors, marking an extremely challenging period for the company[48] - The group faced challenges due to the Sino-US trade conflicts and the COVID-19 outbreak, leading to negative year-on-year growth in total sales and same-store sales [74] Strategic Initiatives - The company is focusing on market expansion and new product development strategies[5] - Future outlook includes potential mergers and acquisitions to enhance market position[5] - The Group plans to focus on e-commerce development, aiming to make it a major business unit within the next two to three years[52] - The medium-to-long-term goal for e-commerce includes expanding into lower-tier cities in Mainland China, which have a population of approximately 1 billion[53] - The Group aims to utilize digital tools for data collection and analysis to improve management efficiency across various channels[60] - The Group plans to actively develop e-commerce channels to merge with offline operations to reach young customers and explore new markets[146] - The Group will strengthen cooperation with e-commerce platforms and focus on developing low-tier markets as a new growth engine[157] Corporate Social Responsibility - Le Saunda was awarded "2019 Top 100 Guangdong E-commerce Enterprises," recognizing its outstanding social influence and growth potential[32] - The company participated in the "Happiness-at-Work Promotion Scheme 2020" and was recognized as a "Happy Company," reflecting its commitment to employee satisfaction[40] - The company continued to foster corporate social responsibility through various charitable activities and environmental initiatives[35] - The Group received the "10 Years Plus Caring Company Logo" and "Happy Company" award, demonstrating its commitment to corporate social responsibility[154] Operational Adjustments - The Group will cease all production at its Shunde factory and shift to outsourcing production to enhance product development and design[60] - Cost reduction and operational efficiency improvements are planned, including reducing the number of stores in certain regions and not opening new stores in the near future[60] - The Group plans to further reduce the number of physical stores and focus on improving service and operational efficiency[138] - The Group aims to improve sales performance by introducing new experiential shopping services in physical stores[156] Management and Governance - The Company is led by a board of directors with extensive experience in accounting, financial management, and auditing, including members with over 30 years of experience in their respective fields[185][187] - The chairman of the board, James Ngai, is a certified public accountant with over 30 years of experience in accounting, auditing, and taxation matters[185] - The Company aims to enhance corporate governance practices to align with statutory and professional standards[196] - The Board's leadership is focused on acting in good faith in the best interests of the Company and its shareholders[197] - The Company has established three Board committees: Audit Committee, Remuneration Committee, and Nomination Committee to oversee different areas of the Company's affairs[198]

Financial Performance - Total revenue for the first half of the fiscal year 2019/20 decreased by 18.2% to RMB 376.7 million, compared to RMB 460.4 million in the same period last year[14]. - Gross profit fell by 16.9% to RMB 241.2 million, while the overall gross margin slightly increased by 0.9 percentage points to 64.0%[18]. - The company reported a net profit attributable to equity holders of RMB 2.4 million, a turnaround from a net loss of RMB 9.6 million in the previous year[23]. - Total revenue decreased by 18.2% to RMB 376.7 million compared to RMB 460.4 million in the previous year[30]. - Same-store sales increased by 3.7%, contrasting with a decline of 10.2% in the previous year[30]. - The net profit for the six months was RMB 2,363,000, a significant recovery from a loss of RMB 9,031,000 in the previous year[47]. - The company reported a profit attributable to equity holders of RMB 2,388,000 for the six months ended August 31, 2019, compared to a loss of RMB 9,585,000 in the same period of 2018, resulting in a basic earnings per share of RMB 0.34, up from a loss of RMB 1.36[128]. Expenses and Cost Management - Selling and distribution expenses decreased by 27.0% to RMB 168.7 million, reducing their proportion of total revenue by 5.4 percentage points to 44.8%[22]. - General and administrative expenses fell by 7.7% to RMB 69.2 million, with their proportion of total revenue increasing by 2.1 percentage points to 18.4%[22]. - Employee benefits expenses for the six months totaled RMB 123,700,000, down from RMB 147,600,000 in the previous year[44]. - The group’s advertising and promotional expenses were RMB 11,859,000 for the six months ended August 31, 2019, down from RMB 22,053,000 in the same period of 2018, indicating a reduction of approximately 46.3%[123]. - The total depreciation and amortization expense for the six months ended August 31, 2019, was RMB 17,043,000, a decrease from RMB 16,651,000 in the same period of 2018[123]. Inventory and Assets - Inventory balance as of August 31, 2019, was RMB 330.4 million, a decrease of 7.2% from RMB 355.9 million in the previous year[26]. - Cash and bank balances as of August 31, 2019, were RMB 418 million, down from RMB 590.6 million as of February 28, 2019[28]. - The total assets as of August 31, 2019, were RMB 1,209,426,000, down from RMB 1,326,158,000 as of February 28, 2019[55]. - The total liabilities increased to RMB 218,493 thousand as of August 31, 2019, compared to RMB 139,992 thousand in the previous period, representing a growth of 56.2%[58]. - The total equity attributable to owners of the company was RMB 990,933 thousand as of August 31, 2019, down from RMB 1,186,166 thousand, a decrease of 16.4%[61]. Store Operations - Retail same-store sales showed low growth, but the number of retail stores significantly decreased due to the integration of inefficient outlets[18]. - The group closed 156 stores, reducing the total number of stores to 465, with a net decrease of 150 self-operated stores[31]. - The company plans to optimize underperforming stores and adopt a cautious approach to new store openings due to economic pressures[40]. Cash Flow and Financing - The net cash inflow from operating activities for the six months ended August 31, 2019, was RMB 31,064 thousand, down from RMB 44,062 thousand in the same period last year, a decrease of 29.5%[71]. - The company’s financing activities resulted in a net cash outflow of RMB 167,526 thousand, significantly higher than the RMB 48,250 thousand outflow in the same period last year, indicating increased financing needs[71]. - The company has provided guarantees for bank financing with a maximum limit of RMB 227,800,000 as of August 31, 2019, an increase from RMB 212,900,000 as of February 28, 2019[152]. Taxation and Other Income - The effective tax rate for the group was 28.5%, compared to 27.6% in the previous year[24]. - Other income decreased by 62.1% to RMB 4.1 million, primarily due to reduced government subsidies[23]. - The group’s other income, including rental income and government subsidies, was RMB 4,055,000 for the six months ended August 31, 2019, compared to RMB 10,704,000 in the same period of 2018, a decline of about 62.1%[120]. Shareholder Information - As of August 31, 2019, Mr. Li Zibin holds a total of 371,661,000 shares, representing 52.65% of the company's issued share capital[161]. - Stable Gain Holdings Limited holds 225,500,000 shares, representing approximately 31.94% of the company's issued share capital[178]. - The charity fund established by Mr. Lee holds 55,000,000 shares, accounting for about 7.79% of the company's issued share capital[165]. - The company has a total of 1,625,000 stock options outstanding as of August 31, 2019, with an average exercise price of HKD 2.185[147]. Corporate Governance - The audit committee consists of three independent non-executive directors, ensuring compliance with the relevant professional qualifications and financial management knowledge[198]. - The audit committee's primary responsibilities include overseeing the truthfulness of financial information and the effectiveness of financial controls and risk management systems[200]. - The company has adhered to the corporate governance code as per the Hong Kong Stock Exchange, with a noted deviation regarding the attendance of non-executive directors at the annual general meeting[196].

Financial Performance - Revenue for the year ended February 28, 2019, was RMB 908.8 million, a decrease of 19.6% compared to RMB 1,130.6 million for the previous year[7]. - The company reported a loss attributable to equity holders of RMB (28.0) million, compared to a profit of RMB 59.7 million in the previous year[7]. - Basic loss per share was RMB (3.97), down from a profit of RMB 8.45 per share in the previous year[7]. - Total equity as of February 28, 2019, was RMB 1,186.2 million, a decrease of 4.6% from RMB 1,242.8 million in the previous year[7]. - Net cash balance was RMB 590.6 million, down 2.1% from RMB 603.1 million in the previous year[7]. - Gross profit fell by 23.3% to RMB 570.2 million, compared to RMB 743.5 million in the previous year, with a gross margin decline of 3.1 percentage points to 62.7%[41][46]. - Selling and distribution expenses were reduced by 20.4% to RMB 436.7 million, improving the ratio of these expenses to total revenue by 0.4 percentage points to 48.1%[46]. - General and administrative expenses decreased by 9.6% to RMB 161 million, but the ratio to total revenue increased by 1.9 percentage points to 17.7%[46]. - Retail revenue decreased by 19.6% to RMB 908.8 million, compared to RMB 1,130.6 million in the previous year[59]. - Same-store sales recorded a decline of 13.2%, compared to an 11.3% decline in the previous year[59]. - Retail sales in mainland China fell by 20.4% to RMB 850.9 million, down from RMB 1,068.7 million the previous year[65]. - Sales in Hong Kong and Macau decreased by 6.5% to RMB 57.8 million, down from RMB 61.8 million the previous year[68]. Operational Efficiency - Inventory turnover days increased to 326 days from 305 days in the previous year[7]. - The current ratio improved to 5.9 from 5.5 in the previous year[7]. - The company is committed to optimizing its store network and closing unprofitable retail locations to improve overall efficiency[34]. - The company plans to focus on franchise, wholesale, and outlet business models in key regions and high-growth cities[35]. - The group aims to improve single-store sales to enhance overall store performance after a period of store closures, believing the current store structure is healthier[75]. - The group plans to enhance store efficiency and reduce underperforming stores while opening new locations in suitable areas[68]. - The company has reported a 5% reduction in operational costs due to improved efficiency measures implemented in the last quarter[92]. E-commerce and Market Strategy - The company emphasized the importance of e-commerce and plans to expand its customer base through collaborations with video bloggers and social media influencers[35]. - E-commerce revenue increased by 8.1% year-on-year, reflecting stable growth in the online business[69]. - The establishment of the official online store for le saunda in Hong Kong aims to extend the brand's reach in the growing online shopping market[70]. - The company is exploring potential acquisitions to enhance its product portfolio, with a budget of $100 million allocated for this purpose[92]. - The management team has emphasized a strategic shift towards e-commerce, aiming for a 40% increase in online sales[91]. - The e-commerce market still has significant growth potential, and the group will continue to invest in e-commerce, utilizing social media for marketing and collaborating with influencers to attract new customers[78]. Corporate Governance - The board consists of three executive directors, two non-executive directors, and three independent non-executive directors as of February 28, 2019[109]. - The board held a total of eight meetings during the year and passed two written resolutions[118]. - The company has established three board committees: Audit Committee, Remuneration Committee, and Nomination Committee to oversee various aspects of the business[109]. - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange, with one independent non-executive director possessing appropriate professional qualifications[117]. - The board aims to maximize shareholder value as a long-term goal[119]. - The company has implemented measures to ensure compliance with regulatory standards and professional guidelines[107]. - The company has arranged suitable directors and officers liability insurance to cover costs, expenses, losses, and liabilities incurred during business operations[124]. Risk Management - The company has adopted a continuous risk management approach to identify and assess inherent risks affecting its objectives, utilizing a risk model to determine risk ratings (L = low risk; M = medium risk; H = high risk)[179]. - The board has established internal control and risk management systems to ensure adequate and effective risk management, with annual reviews conducted to assess their effectiveness[174]. - The audit committee reviews the company's financial reporting system, internal control system, and risk management system annually for adequacy and effectiveness[181]. - The company has implemented a risk register to track and record identified risks, assess and rate risks, and develop and continuously update risk response procedures[179]. - The audit committee is satisfied with the implementation of internal audit recommendations, indicating no significant deficiencies in risk management and internal control systems during the year[181]. Shareholder Engagement - The company emphasizes fair treatment of all shareholders and provides various means for them to exercise their rights[189]. - The annual general meeting provides a platform for shareholders to engage with the board and raise questions regarding their responsibilities[194]. - The board of directors is committed to maintaining ongoing dialogue with shareholders through various communication methods, including one-on-one meetings and factory visits[194]. - The company aims to enhance transparency by providing accurate and timely information through various reports and media releases[194]. Future Outlook - The company expressed confidence in pursuing stable growth despite uncertainties in the business environment for 2019[35]. - Future outlook remains positive, with expectations of sustained growth driven by new market strategies and product innovations[92]. - The company has set a revenue guidance for the next quarter, projecting an increase of 10% compared to the current quarter[92].