Store Network Expansion - Saint Anna Bakery's total number of stores in Hong Kong increased to 120 in 2023 from 115 in 2022, while in Macau, it increased to 14 from 12[1] - Mon cher cake shop in Hong Kong decreased to 6 stores in 2023 from 7 in 2022[1] - Zoff eyewear stores in Hong Kong increased to 15 in 2023 from 14 in 2022[1] - Total number of stores under Lianhua Retail increased to 176 in 2023 from 174 in 2022[1] - The group plans to expand Zoff store network and enhance brand awareness through marketing activities in 2024[37] - The company acquired Zoff Singapore in January 2024, which operates 5 stores in Singapore[115] - The company holds the franchise rights for Zoff in Hong Kong, Macau, and South China, operating 15 stores in Hong Kong[115] Financial Performance - Sales in the bread, pastry, candy, and biscuit categories (including Saint Anna and Mon cher) decreased by 2.9% in 2023[4] - Zoff eyewear sales showed healthy growth compared to 2022[4] - Group revenue increased by 1.7% to HKD 1,487,000,000 in 2023, with bakery business revenue rising by 1.5% to HKD 1,345,000,000[23] - Guangzhou bakery business revenue decreased by 10.7% due to weak economic sentiment in mainland China[23] - Zoff eyewear business revenue increased by 2.7% to HKD 142,000,000, driven by store network expansion[23] - Operating expenses as a percentage of revenue increased from 45.5% to 49.1%, primarily due to rising labor costs[24] - Basic earnings per share decreased by 14.9% from 8.7 HK cents to 7.4 HK cents[25] - Gross profit margin increased by 2.8 percentage points to 53.4%, benefiting from effective pricing strategies and improved production efficiency[39] - Core operating profit before lease liability interest expenses decreased by 12.9% to HKD 73,000,000[40] - Net profit decreased by 14.9% from HKD 68,000,000 to HKD 58,000,000[40] - The group's revenue grew from 647 million HKD in 2019 to 803 million HKD in 2023, with a CAGR of 5.5%[54] - The group's profit increased from 94 million HKD in 2019 to 129 million HKD in 2023, with a CAGR of 6.8%[54] - The company declared a final dividend of 4 HK cents per share[104] Strategic Initiatives and Investments - The company completed the acquisition of Zoff Singapore, expanding its presence into Southeast Asia[6] - The company plans to increase capital expenditure in Hong Kong and Shenzhen production facilities to enhance capacity and introduce new product lines[20] - The company will continue to invest in upgrading the "Saint Anna Cake Online" O2O app to provide more attractive offers to consumers[21] - The company aims to expand its B2B business in the Greater Bay Area, positioning itself as a solution provider for bakery business customers[8] - Group completed the acquisition of Zoff Singapore in January 2024, marking a strategic move into the Southeast Asian market[34] - The group's strategy includes innovation, extensive physical store networks, online shopping experiences, and investment in brand awareness and R&D[67] - The group aims to enhance operational efficiency through new equipment and technology, and synchronize supply chain management[67] - The company is exploring new sustainable business opportunities in Hong Kong, the Greater Bay Area, and Singapore as part of its long-term strategy[83] Corporate Governance and Board Activities - The company's board of directors consists of a non-executive chairman, one executive director, three independent non-executive directors, and four non-executive directors, ensuring diverse skills and perspectives[88] - The company's independent non-executive directors have confirmed their independence, and the company believes they remain independent as of December 31, 2023[91] - The company's board currently includes 3 female members, representing 33% of the board, aligning with its diversity policy[110] - Female employees, including senior management, accounted for 63% of the total workforce as of December 31, 2023[110] - The board aims to maintain a gender ratio of at least 20% female representation[97] - The board held 4 meetings in 2023 with an average attendance rate of 92%[116] - The board conducted an annual performance evaluation using a questionnaire to assess overall performance and effectiveness[113] - The board's nomination committee reviews board composition and considers factors such as skills, regional and industry experience, and background[97] - The average attendance rate for board meetings in 2023 was 92%, with specific committee attendance rates at 88%, 100%, 93%, and 100% respectively[122] - The audit committee held four meetings in 2023 with an average attendance rate of 88%, focusing on financial reporting, risk management, and internal controls[143] - The company's independent auditor, PwC, attended all audit committee meetings and held two independent meetings with committee members to discuss audit-related matters[134] - The audit committee approved fees paid or payable to PwC for the fiscal year ending December 31, 2023, and recommended reappointing PwC as the independent auditor for the fiscal year ending December 31, 2024[146] - The board's performance evaluation in 2023 indicated satisfactory operations of the board and its committees, with all committees fulfilling their duties as outlined in their terms of reference[130] - The company's whistleblowing policy allows employees, shareholders, and stakeholders to report misconduct, including financial reporting and internal control issues, confidentially and anonymously[128] - The board and its committees scheduled meetings in advance to promote high attendance rates, with notices sent at least 14 days before the meeting date[136] - The audit committee reviewed the independence, objectivity, and effectiveness of PwC's audit procedures and expressed satisfaction with their performance[146] - The company's corporate governance practices were strengthened based on recommendations from the board's performance evaluation and feedback from directors[130] - The audit committee includes members with appropriate professional qualifications and expertise in accounting or financial management, as required by the Hong Kong Stock Exchange listing rules[133] - The company's audit services cost HKD 1,354 thousand, while non-audit services (including agreed-upon procedures for interim financial information and tax services) cost HKD 674 thousand, totaling HKD 2,028 thousand[154] - The company has a policy to limit the hiring of current or former employees of the independent auditor for senior executive or financial positions within the group[153] - The company prohibits the independent auditor from providing certain specified non-audit services and requires prior approval from the audit committee for other non-audit services exceeding a certain fee limit[153] - The Remuneration Committee held three meetings in 2023 with a 100% attendance rate to review proposals for granting share options and the remuneration of senior management[159] - The company has adopted a Securities Trading Code to regulate securities transactions by directors and relevant employees, with no violations reported in 2023[168][173] Risk Management and Internal Controls - The company's risk management and internal control system is designed to manage risks and provide reasonable assurance against material misstatements, losses, or fraud[177] - The company's internal control framework aligns with the principles outlined in the Hong Kong Institute of Certified Public Accountants' "Internal Control and Risk Management Basic Framework"[178] - The company's governance structure includes a clear division of responsibilities and an appropriate authorization system, with risk identification, assessment, reporting, and mitigation measures in place[180] - The company's risk management and internal control systems are integrated into strategy formulation, business planning, investment decisions, and daily operations[190] - The company has established and implemented corporate policies and procedures covering major risks and control standards, which are regularly reviewed for effectiveness[186] - The company's financial risk management principles aim to minimize risks, including foreign exchange, credit, liquidity, and interest rate risks[192] - The company's reputation is built on ethical standards, with a Code of Conduct and Business Ethics that includes anti-bribery and anti-corruption guidelines[193] - The company's internal audit team independently reviews the risk management and internal control systems, ensuring they are effective, adequate, and properly followed[195] - The company's independent auditor, PwC, found no significant internal control weaknesses during the fiscal year ending December 31, 2023[196] - The company has procedures in place for handling and disclosing insider information, prohibiting securities trading based on insider knowledge[197] - The company's risk management and internal control systems, including accounting systems, are established, adequate, and effectively operating to provide reasonable assurance[200] - The company regularly reviews contingency and business continuity plans to ensure their effectiveness[191] - The company's governance department conducts annual reviews of risk management and internal control systems, reporting findings to the audit committee[199] Employee and Sustainability Initiatives - The group employed 3,209 employees as of December 31, 2023, with 49% based in Hong Kong and 51% in Guangzhou, Shenzhen, and Macau[69] - Employee benefits expenses for 2023 were 492 million HKD, compared to 446 million HKD in 2022[69] - The group provides competitive compensation plans, performance-based bonuses, and career advancement opportunities for employees[69] - The company has been awarded the "10-Year Plus Caring Company" and "Caring Company" labels by the Hong Kong Council of Social Service for its commitment to community, employees, and the environment[71] - The company focuses on sustainability through the "3R" approach (Reduce, Reuse, Recycle) and uses energy-efficient equipment and low-carbon fuels to reduce carbon emissions[71] - The company's factories in Hong Kong and Shenzhen are ISO 9001 certified, with the Shenzhen factory also holding HACCP food safety certification and CNAS accreditation for its microbiology lab[77] - The company emphasizes workplace satisfaction and employee engagement through initiatives like the "Heart-to-Heart" program, which includes career development, work-life balance, and community activities[76] Corporate Vision and Values - The company's core values include product quality, operational efficiency, customer experience, and a strong "Heart-to-Heart" culture, aiming to provide world-class products and services[82] - The company is committed to high standards of corporate governance, transparency, accountability, and independence to enhance shareholder value[80] - The company's vision is to become a leading premium retailer in Hong Kong, focusing on bakery and eyewear businesses, with expansion plans in the Greater Bay Area and Southeast Asia[82] - The group focuses on customer-centricity, innovation, efficient production, and maintaining a strong partnership with quality suppliers[67] - The board and management actively participate in developing new business models to ensure competitiveness and sustainable growth[67]

Financial Performance - The total revenue for the group reached HKD 1,487,090,000, an increase from HKD 1,462,864,000 in the previous year, representing a growth of approximately 1.66%[46] - Core operating profit decreased to HKD 72,973,000 from HKD 83,758,000, reflecting a decline of about 12.5%[46] - Basic earnings per share fell by 14.9% to HKD 7.4 from HKD 8.7[40] - The group recorded a net profit attributable to shareholders of HKD 57,709,000 in 2023, a decrease from HKD 67,785,000 in 2022[84] - Other income decreased to HKD 8,529,000 from HKD 9,877,000, a decline of approximately 13.6%[46] - Total expenses for sales, store operations, distribution, and administrative costs increased to HKD 1,422,646,000 in 2023 from HKD 1,388,983,000 in 2022[79] - The income tax expense for the year 2023 was HKD 13,417,000, an increase from HKD 11,255,000 in 2022, representing a rise of approximately 19.3%[194] Store Expansion and Operations - The group opened 10 new Saint Anna stores in Hong Kong and Macau, ending the year with a total of 134 stores, an increase of 7 stores from 2022[10] - The group operates a total of 155 stores under the Saint Anna brand across Hong Kong, Macau, and Guangzhou as of December 31, 2023[41] - The number of Mon cher cake shop locations increased to 6, while Zoff eyewear stores rose to 15, reflecting a focus on retail expansion[116][130] - The company aims to expand the Zoff store network and enhance brand awareness through marketing activities to maintain its leading position in the fast-fashion eyewear retail sector in Hong Kong[168] Financial Position and Cash Flow - The group maintained a strong financial position with net cash of HKD 222 million and no bank borrowings, positioning itself favorably for business development or acquisitions[1] - Total liabilities for the group amounted to HKD 613,623,000[34] - Total liabilities on the consolidated balance sheet were HKD 625,898,000 in 2023, down from HKD 668,023,000 in 2022[60] - The net cash balance as of December 31, 2023, was HKD 222,000,000, with no bank borrowings, indicating strong operational cash generation[172] - The company has a backup bank financing capacity of HKD 148,000,000 to assist in capital planning and management[172] Marketing and Customer Engagement - The online-to-offline customer relationship management program "Saint Anna Cake Online" now serves over 1.3 million members in Hong Kong and Macau, enhancing marketing and sales efforts[5] - The group’s marketing initiatives and new product launches contributed to sales growth in festive products[67] - The group has partnered with WeChat and PayMe to enhance marketing efforts and leverage government consumption voucher schemes[141] Dividends and Shareholder Returns - The board declared a final dividend of HKD 0.04 per share[18] - The group proposed a final dividend of HKD 0.04 per share, totaling HKD 31,097,000, compared to HKD 0.05 per share in 2022[69] - Basic earnings per share for 2023 were HKD 0.074, down from HKD 0.087 in 2022, based on a weighted average of 777,001,040 shares[84] Strategic Initiatives and Acquisitions - The group achieved a successful acquisition, expanding its geographical presence from the Greater Bay Area to Southeast Asia[3] - The company completed the acquisition of Zoff Singapore, aiming to strengthen its position in the Southeast Asian market[122] - The company completed the acquisition of Zoff Singapore in January 2024, which operates five stores in key areas, marking a significant milestone in its expansion strategy into Southeast Asia[167] Economic Outlook and Market Conditions - The group maintains a cautiously optimistic outlook for its core business in the medium to long term, despite concerns about local and global economic conditions affecting consumer confidence and spending recovery[86] - The company adopts a cautious approach for 2024, prioritizing growth while strategically allocating resources to higher-return areas[131] - The group anticipates that shopping behavior will normalize, and inflation and interest rates will decline, positively impacting the retail sector in Hong Kong and the Greater Bay Area[86] Operational Efficiency and Cost Management - Operating expenses as a percentage of revenue increased from 45.5% to 49.1%, primarily due to rising employee-related costs in a tight labor market[17] - Employee benefits expenses increased to HKD 492,000,000 in 2023 from HKD 446,000,000 in 2022, with total employees numbering 3,209[149] - The gross profit margin improved due to effective category management, streamlined production processes, and favorable foreign exchange rates[1] - The gross profit margin increased by 2.8 percentage points to 53.4%, attributed to effective pricing strategies and improved production efficiency[170] Customer Behavior and Sales Trends - The number of Hong Kong residents traveling abroad increased, while the growth of mainland Chinese tourists visiting Hong Kong was slower than expected, impacting local consumption[1] - Sales in the bakery segment, including Saint Anna and Mon cher, decreased by 2.9% due to changing consumer behavior post-pandemic[118] - Revenue from bakery products increased due to the resumption of business operations, offsetting declines in cake sales[67] - The "business-to-business" bakery sales recorded double-digit growth, expanding the customer base despite a 10.7% decline in Guangzhou bakery revenue due to weak economic conditions[134] Compliance and Governance - The company has adopted a securities trading code for directors and relevant employees, ensuring compliance with regulations without any reported violations in 2023[96] - The board confirmed compliance with all provisions of the Corporate Governance Code for the year ending December 31, 2023[100] - The company has adopted revised Hong Kong Financial Reporting Standards effective from January 1, 2023, to ensure compliance with operational requirements[160] Asset Management - Total segment assets amounted to HKD 1,234,320,000, with non-current assets additions of HKD 235,661,000[59] - Total assets decreased to HKD 1,286,088,000 in 2023 from HKD 1,323,846,000 in 2022[154] - Non-current assets in Hong Kong totaled HKD 821,436,000, an increase from HKD 780,017,000 in 2022[78]

Financial Performance - Revenue from external customers in Hong Kong for the six months ended June 30, 2023, was HKD 598,999,000, an increase of 5.5% compared to HKD 565,083,000 in the same period of 2022[1] - The company's revenue for the six months ended June 30, 2023, was HKD 701,832,000, an increase of 4% compared to HKD 674,211,000 in the same period of 2022[133] - Gross profit for the same period was HKD 365,867,000, up from HKD 327,342,000, reflecting a positive trend in profitability[133] - Core operating profit decreased slightly to HKD 21,632,000 from HKD 22,417,000 year-on-year[133] - The group reported stable sales for bakery products, while demand for celebratory products remains sluggish[60] - The group’s earnings per share for the period were HKD 2.0, down from HKD 2.2 in the previous year[132] - For the six months ended June 30, 2023, the company's profit attributable to shareholders was HKD 15,199,000, a decrease from HKD 16,690,000 in the same period of 2022, representing a decline of approximately 8.93%[120] - The total comprehensive income attributable to shareholders for the same period was HKD 15,315,000, compared to HKD 16,368,000 in 2022, indicating a decrease of about 6.43%[120] Assets and Liabilities - Total liabilities as of June 30, 2023, decreased to HKD 603,034,000 from HKD 668,023,000 as of December 31, 2022, representing a reduction of approximately 9.7%[1] - As of June 30, 2023, the total assets reported were HKD 1,236,194,000, down from HKD 1,323,846,000 as of December 31, 2022, reflecting a reduction of approximately 6.59%[109] - Non-current assets in Hong Kong increased to HKD 818,869,000 as of June 30, 2023, from HKD 780,017,000 as of December 31, 2022, reflecting a growth of approximately 5.0%[2] - Non-current assets in other regions decreased to HKD 98,093,000 as of June 30, 2023, from HKD 139,880,000 as of December 31, 2022, indicating a decline of approximately 29.8%[2] - The total equity as of June 30, 2023, was HKD 633,160,000, a decrease from HKD 644,348,000 as of January 1, 2023[124] - Total segment assets amounted to HKD 1,057,027,000, with total liabilities at HKD 491,747,000[163] Cash Flow and Financial Position - As of June 30, 2023, the group maintained a strong financial position with net cash of HKD 178 million and no bank borrowings[40] - The net cash generated from operating activities was HKD 55,372,000, significantly higher than HKD 25,939,000 in the previous year[125] - The company reported a cash and cash equivalents balance of HKD 177,069,000, down from HKD 256,125,000, a decrease of 30.9%[doc id='136'] - The company had bank deposits of HKD 55,855,000 as of June 30, 2023, a decrease from HKD 82,501,000 at the end of 2022, representing a decline of approximately 32.36%[109] Employee and Operational Costs - Employee benefit expenses rose to HKD 239,137,000 for the six months ended June 30, 2023, compared to HKD 205,299,000 in the previous year, marking an increase of approximately 16.5%[4] - Total employee costs for the first half of 2023 amounted to HKD 239 million, up from HKD 205 million in the same period last year[52] - The group employed a total of 3,212 staff, with 50% based in Hong Kong and 50% in Guangzhou, Shenzhen, and Macau[52] Market Outlook and Strategy - The company maintains a cautious outlook for the remainder of 2023, reflecting the slower-than-expected economic recovery in Hong Kong post-pandemic[28] - The group anticipates that consumer demand will remain weak in the second half of the year due to ongoing economic challenges[50] - The group is focusing on enhancing its "online-to-offline" digital marketing strategy to meet customer expectations and strengthen its market position in Hong Kong and the Greater Bay Area[32] - The group plans to expand the Zoff brand into other Asian cities, leveraging its success in Hong Kong[48] - The company continues to focus on expanding its bakery and eyewear businesses in Hong Kong and mainland China, leveraging brand recognition and market demand[144] Corporate Governance and Risk Management - The board has established three committees: Audit Committee, Nomination Committee, and Remuneration Committee, each with clear terms of reference[70] - The group’s risk management and internal control systems are deemed adequate and effective, ensuring the protection of significant assets and the management of business risks[75] - The group emphasizes corporate social responsibility and sustainability, practicing the "Three Rs" (Reduce, Reuse, Recycle) and adopting low-carbon fuels[67] Dividends and Share Options - The proposed interim dividend per share remains at HKD 0.02, with total proposed dividends amounting to HKD 15,545,000, slightly up from HKD 15,525,000 in 2022[15] - The company declared an interim dividend of HKD 0.02 per share for the six months ended June 30, 2023, consistent with the dividend declared in 2022[119] - The number of share options granted under the 2020 share option scheme was 11,166,000, with 1,000,000 options exercised during the period[116] - The company did not grant any new share options to directors, senior management, or major shareholders during the reporting period[108]

Corporate Governance - The board of directors held five meetings in 2022 with an average attendance rate of 93%[3] - The audit committee and remuneration committee are chaired by independent non-executive directors to ensure independent perspectives[8] - The board is responsible for monitoring and implementing effective risk management and internal control systems[1] - The board has reviewed corporate governance practices and confirmed compliance with the Corporate Governance Code during the year ended December 31, 2022[48] - The company has implemented the Corporate Governance Code within its governance framework, delegating responsibilities to the audit committee[70] - Independent non-executive directors confirmed their independence in accordance with the listing rules, and the company considers them independent as of December 31, 2022[76] - The board is responsible for selecting, appointing, and reappointing directors, with the nomination committee tasked with reviewing board composition[69] - The chairman and CEO positions are held by separate individuals to enhance independence and accountability[83] - The company has established a shareholder communication policy to ensure shareholders receive relevant information to exercise their rights[74] - The board consists of two female members, representing 22% of the total board members, aligning with the company's diversity policy[63] - The company aims to maintain a gender diversity ratio of at least 20% on the board and is committed to gradually increasing the proportion of female members[78] - The board has adopted a revised diversity policy, considering various factors such as skills, industry experience, and gender in its composition[78] Financial Performance - Revenue increased by 7% to HKD 1,462,864,000 compared to HKD 1,361,840,000 in the previous year[99] - Core operating profit decreased by 4% to HKD 83,758,000 from HKD 87,663,000 year-on-year[99] - The company reported a 9% decline in profit attributable to shareholders from continuing operations, totaling HKD 67,785,000 compared to HKD 74,399,000 in the previous year[99] - The company maintains a strong financial position with net cash of HKD 257,000,000 and no bank borrowings[100] - The company aims for double-digit stable growth in revenue and profit over the next three years, focusing on expanding its store network in Hong Kong and the Greater Bay Area[100] - The company declared a final dividend of HKD 0.05 per share[107] - The dividend payout ratio was reported at 169.1%, indicating a strong return to shareholders[194] - Basic earnings per share from continuing operations decreased by 9.4% to HKD 0.087[176] - In 2022, the company achieved earnings per share (EPS) of 450 HKD cents, representing a year-on-year increase of 600%[194] - The total equity return was reported at 542.5% for the year, indicating strong financial performance[194] Risk Management and Compliance - The company has established a risk management and internal control framework with three levels of oversight[23] - The audit committee conducted an annual review of the effectiveness of the group's risk management and internal control systems, confirming they are established, sufficient, and effective[46] - The company has implemented measures to manage financial risks, including foreign exchange, credit, liquidity, and interest rate risks[40] - The company has adopted a policy to handle and disclose inside information, ensuring confidentiality until timely disclosure is made[45] - The company maintains a zero-tolerance approach towards bribery and emphasizes ethical standards across all operational areas[41] - The internal audit function is overseen by the governance department, ensuring compliance with established policies and procedures[42] - There were no significant breaches of the Code of Conduct and Business Ethics reported in 2022 that could impact the company's operations[26] Operational Performance - The total number of stores increased to 174, up from 153, with 19 new stores opened in Hong Kong and Macau during the year[100][106] - The company achieved high single-digit sales growth due to store network expansion, despite a slight decline in comparable same-store sales[127] - The company has opened three new Mon cher stores in Japan, enhancing its presence in the premium cake market[130] - The "corporate-to-corporate" business segment has shown satisfactory growth, supplying products to two major retail chains[127] - The company has implemented measures to ensure a safe working environment amid the COVID-19 pandemic, including employee training and regular disinfection of facilities[190] - The company is focused on sustainable business practices and corporate social responsibility, aligning its values with its operational culture[199] - The company plans to explore new sustainable long-term business opportunities in the Greater Bay Area[200] Strategic Initiatives - The company has implemented a three-year business plan and annual budget, with quarterly reviews of operational and financial performance[25] - The company plans to continue expanding its store network and enhance its digital marketing efforts on platforms like Douyin and WeChat to boost sales[122] - The group is actively seeking surrounding business and acquisition opportunities to increase revenue sources and expand its footprint[115] - The company is actively exploring acquisition targets to enhance brand value and achieve synergies[147] - The company has implemented energy-saving measures, including installing LED lights and energy-efficient glass, as part of its commitment to corporate responsibility[1] - The company plans to enhance its "online-to-offline" customer relationship management platform to improve digital experience[173] Employee and Community Engagement - The company has been recognized with the "10-year Plus Caring Company" logo by the Hong Kong Council of Social Service, reflecting its commitment to community and employee care[191] - Female employees, including senior management, accounted for 63% of the total workforce as of December 31, 2022, reflecting the nature of the retail and bakery industry[64] - The company is focused on maintaining a strong employer brand and supporting employee development amid rising operational costs[115] - The company provides regular training for directors to ensure compliance with new regulations and to promote ongoing professional development[35]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不負責，對其準確性或完整 性亦不發表任何聲明，並明確表示概不就因本公佈全部或任何部分內容而產生或因倚賴該等內容而引 致之任何損失承擔任何責任。 CONVENIENCE RETAIL ASIA LIMITED 利亞零售有限公司 （於開曼群島註冊成立之有限公司） （股份代號：00831） 業績公佈 截至二零二二年十二月三十一日止年度 財務摘要 二零二二年 二零二一年 變動 千港元 千港元 • 收益 +7% 1,462,864 1,361,840 • 核心經營溢利 -4% 83,758 87,663 • 核心經營溢利 (包括租賃負債利息開支) -6% 76,843 81,627 • 公司股東應佔溢利 ...

Revenue and Profit Performance - Revenue for the first half of 2022 increased by 11.1% to HKD 674,211,000 compared to HKD 606,945,000 in 2021[33] - Core operating profit rose by 10.7% to HKD 22,417,000 from HKD 20,251,000 year-on-year[33] - The company reported a decrease of 27.2% in profit from discontinued operations, down to HKD 16,690,000 from HKD 22,912,000[33] - The company experienced a 1.5% decline in profit from continuing operations, which was HKD 16,690,000 compared to HKD 16,941,000 in the previous year[33] - Gross profit for the same period was HKD 327,342 thousand, up from HKD 301,616 thousand, indicating an increase of 8.5%[108] - The net profit attributable to shareholders decreased to HKD 16,690 thousand from HKD 22,912 thousand, a decline of 27.2%[114] - Basic earnings per share for continuing operations remained stable at 2.2 HKD cents, while total earnings per share dropped from 3.0 HKD cents to 2.2 HKD cents[108] Cash Position and Dividends - The company maintained a net cash position of HKD 181,000,000 with no bank borrowings[34] - The company declared an interim dividend of HKD 0.02 per share, consistent with the previous year[34] - Cash and cash equivalents decreased to HKD 180,382 thousand from HKD 290,285 thousand, a decline of 37.9%[123] - The proposed interim dividend per share remains at HKD 0.02, consistent with the previous year, amounting to HKD 15,525,000[164] Store Network and Expansion - The number of stores under the group increased to 164 as of June 30, 2022, compared to 153 on December 31, 2021[41] - The group operates 119 Saint Anna stores in Hong Kong and Macau as of June 30, 2022, up from 95 stores at the end of the first half of 2021[52] - The company remains cautiously optimistic about the second half of the year, focusing on expanding its store network in Hong Kong and the Greater Bay Area[34] - The group plans to explore development opportunities in the Greater Bay Area through network expansion and potential franchising arrangements[48] - The company plans to continue expanding the store network for Saint Anna, Zoff, and Mon cher in Hong Kong and Macau, exploring franchising opportunities in the Greater Bay Area[63] Operational Challenges and Cost Management - Despite challenges from the COVID-19 pandemic, the company achieved double-digit revenue growth due to store network expansion and successful sales promotions[34] - The company faced significant risks from the pandemic, inflation, and supply chain disruptions, prompting measures to control costs and streamline operations[34] - The group has implemented cost control measures and is reviewing retail pricing to maintain competitiveness amid rising operational costs[48] - Gross profit margin decreased by 1.1 percentage points to 48.6% due to rising food and production costs, prompting the company to implement productivity enhancements and price adjustments[65] Marketing and Customer Engagement - The group has successfully recruited over 100,000 members for the "Saint Anna Cake Online" app, enhancing customer experience and driving foot traffic to physical stores[55] - The group has launched innovative marketing campaigns that contributed to sales growth for the Saint Anna and Zoff brands in the latter half of the review period[51] - The company successfully utilized the government's consumption voucher scheme, with approximately 70% of Zoff's sales during the promotional period attributed to new customer acquisition[59] - The group has partnered with major online food ordering platforms in Guangzhou, increasing brand exposure to nearly 10,000 people weekly[56] Corporate Governance and Shareholder Information - The company has adhered to the corporate governance principles, ensuring transparency, accountability, and independence during the six months ending June 30, 2022[73] - The audit committee is responsible for reviewing the group's financial reporting, risk management, and internal controls, ensuring compliance with the relevant regulations[77] - The board of directors is composed of one non-executive chairman, four non-executive directors, three independent non-executive directors, and one executive director, promoting independence and accountability[74] - The company has established a risk management and internal control system that is deemed adequate and effective, providing reasonable assurance regarding the safeguarding of assets and reliability of financial reporting[83] - The company has a dedicated investor relations policy to enhance communication transparency with investors and the public[84] Shareholder Structure and Equity - As of June 30, 2022, the total number of shares held by Dr. Feng Guo Lun is 340,292,000, representing approximately 43.84% of the total equity[86] - HSBC Trustee (C.I.) Limited holds 311,792,000 shares, accounting for about 40.17% of the equity[90] - Standard Life Aberdeen plc holds 93,020,000 shares, which is approximately 11.98% of the equity[90] - FIL Limited and its affiliates each hold 71,204,000 shares, representing about 9.17% of the equity[90] - The company’s major shareholders include Dr. Feng Guo Lun and his family, who collectively control 50% of King Lun Holdings Limited[88] Employee Costs and Compensation - Employee costs for the first half of 2022 totaled HKD 205 million, down from HKD 234 million in the same period last year[69] - Total management compensation increased to HKD 9,511,000 in the first half of 2022, up from HKD 8,340,000 in 2021, reflecting a 14% increase[183] - The total remuneration for bonuses rose significantly to HKD 3,263,000 in 2022 from HKD 2,484,000 in 2021, marking a 31% increase[183] - Employee stock option benefits were recorded at HKD 168,000 in 2022, a new addition compared to zero in 2021[183] - The retirement cost under the defined contribution plan decreased slightly to HKD 27,000 in 2022 from HKD 36,000 in 2021[183]

Financial Performance - Revenue increased by 14% to HKD 1,361,840,000 compared to HKD 1,191,701,000 in the previous year[6] - Core operating profit rose by 30% to HKD 87,663,000 from HKD 67,456,000 year-on-year[6] - The company achieved a net cash position of HKD 290,000,000 with no bank borrowings[7] - The gross profit margin decreased by 3.5 percentage points to 50.1%, primarily due to the appreciation of the RMB affecting manufacturing costs[44] - Basic earnings per share from continuing operations increased by 20% to HKD 0.096, while earnings including discontinued operations decreased by 97% to HKD 0.104[45] - The company's net profit reached HKD 80 million, with a compound annual growth rate (CAGR) of 36.0%[52] - EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was HKD 140 million, reflecting a CAGR of 13.9%[54] - Gross profit and other income amounted to HKD 800 million, with a CAGR of 6.6%[56] - Earnings per share (EPS) increased significantly, with a total equity return of 600%[59] Store Expansion and Network - The number of "Saint Anna" stores reached 100 in Hong Kong, marking a significant milestone[7] - The company plans to continue expanding its store network in Hong Kong and Macau in the short to medium term[15] - In 2021, the group opened 19 new Saint Anna stores in Hong Kong and Macau, ending the year with a total of 110 stores, an increase of 17 stores compared to the previous year[24] - The group plans to continue expanding its store network in Hong Kong and Macau, targeting double-digit growth in sales revenue[41] - The company operates 136 stores under the Saint Anna brand across Hong Kong, Macau, and Guangzhou[62] Customer Engagement and Membership - Membership for the "Saint Anna Cake Online" program exceeded 1,000,000, reflecting strong customer engagement[15] - The online-to-offline customer relationship management platform "Saint Anna Cake Online" reached a milestone of 1,000,000 members by the end of the year[24][32] - Saint Anna recorded double-digit sales growth in 2021, driven by improved consumer sentiment and increased foot traffic, with comparable same-store sales achieving single-digit growth[24] Product Development and Innovation - The group successfully launched several new products in 2021, including the "Knock Cake" and "Crown Cake" series, which were well received by customers[27] - New product launches are anticipated to contribute an additional C million in revenue, with a focus on expanding the product line in the D market[192] Strategic Partnerships and B2B Development - The company is developing its B2B business and has established a partnership with a major supermarket chain for quality product supply[15] - The group established a strategic partnership with a major supermarket in Hong Kong, resulting in significant growth in the "business-to-business" segment in terms of production and sales[27] - The group aims to enhance its "business-to-business" operations to diversify revenue sources and reduce seasonal dependency[41] Corporate Governance and Board Structure - The board of directors consists of a non-executive chairman, one executive director, three independent non-executive directors, and four non-executive directors, ensuring a diverse range of skills and experiences[76] - The board has adopted a diversity policy, considering various factors such as skills, industry experience, and gender to maintain a balanced composition[83] - The board conducted an annual performance evaluation through a survey, indicating satisfactory operations and effective governance practices[86] - The board is responsible for the risk management and internal control systems, which are reviewed for effectiveness by the audit committee[147] Sustainability and Social Responsibility - The company emphasizes a customer-centric business model and continuous investment in brand development and supply chain management[62] - The group follows the UN Global Compact principles on human rights, labor, anti-corruption, and environmental protection, focusing on sustainable operations through the "Three Rs" (Reduce, Reuse, Recycle)[71] - The group received the "10 Years Plus Caring Company" logo from the Hong Kong Council of Social Service, recognizing its commitment to community, employees, and the environment[71] - The management team emphasized a commitment to sustainability, with plans to reduce carbon emissions by L% over the next five years[192] Future Outlook and Guidance - The company provided guidance for the next fiscal year, projecting revenue growth of A% and an expected EBITDA margin of B%[192] - Market expansion plans include entering F new regions, with an estimated investment of G million to establish a presence in these markets[192] - The company is considering strategic acquisitions to bolster its market position, with potential targets identified in the H sector[192] Dividend and Shareholder Communication - The board declared a final dividend of HKD 0.05 per share[7] - The company promotes transparency in investor relations through regular communication activities, including meetings and presentations to analysts[181] - Voting results from the annual general meeting are published on the stock exchange and the company's website on the same day[183]

[Performance Highlights](index=5&type=section&id=Performance%20Highlights) The company's continuing operations saw revenue grow 12.7% to HKD 607 million and core operating profit increase 120.4%, though total profit attributable to shareholders declined 72.1% due to the prior period's divested business [Financial Summary](index=5&type=section&id=Financial%20Summary) The company's continuing operations saw revenue grow 12.7% to HKD 607 million and core operating profit increase 120.4%, though total profit attributable to shareholders declined 72.1% due to the prior period's divested business Key Financial Indicators for H1 2021 | Indicator | H1 2021 (Thousand HKD) | H1 2020 (Thousand HKD, Restated) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | 606,945 | 538,595 | +12.7% | | **Core Operating Profit** | 20,251 | 9,190 | +120.4% | | **Profit Attributable to Company Shareholders (Continuing Operations)** | 16,941 | 6,474 | +161.7% | | **Profit Attributable to Company Shareholders (Including Discontinued Operations)** | 22,912 | 82,051 | -72.1% | | **Basic Earnings Per Share (Continuing Operations, HK cents)** | 2.2 | 0.8 | +175.0% | | **Interim Dividend Per Share (HK cents)** | 2.0 | 6.0 | -66.7% | [Operational Highlights](index=5&type=section&id=Operational%20Highlights) The company's businesses performed well amid economic recovery, with Saint Honore achieving double-digit sales growth and Mon cher expanding, supported by a strong financial position and a strategic focus on Greater Bay Area brand development - Saint Honore Cake Shop achieved **double-digit sales growth** due to eased pandemic measures, with robust growth in corporate client sales[36](index=36&type=chunk) - The Group maintains a **robust financial position** with **HKD 251 million in net cash** and no bank borrowings[36](index=36&type=chunk) - Future strategic focus is to accelerate the development of Saint Honore, Mon cher, and Zoff brands in the Greater Bay Area[36](index=36&type=chunk) Number of Stores as of June 30, 2021 | Brand | Region | Count | | :--- | :--- | :--- | | **Saint Honore Cake Shop** | Hong Kong | 86 | | | Macau | 9 | | | Guangzhou | 26 | | | **Subtotal** | **121** | | **Mon cher Cake Shop** | Hong Kong | 4 | | **Zoff Eyewear** | Hong Kong | 11 | | **Total Group Stores** | | **136** | [Chairman's Statement](index=7&type=section&id=Chairman's%20Statement) Chairman Fung Kwok Lun noted the Group's successful repositioning as a premium brand retailer in the Greater Bay Area after divesting its convenience store business, achieving significant growth in existing operations amid market recovery - Following the divestment of OK Convenience Store, the Group repositioned as a premium specialized brand retailer in the Greater Bay Area, focusing on brands like Saint Honore, Mon cher, and Zoff[39](index=39&type=chunk)[41](index=41&type=chunk) - Benefiting from the recovery of the local retail market, the Group's existing businesses achieved **considerable growth in sales and operating profit**[40](index=40&type=chunk)[43](index=43&type=chunk) - Future plans include expanding the brand portfolio and geographical coverage in the Greater Bay Area through licensing, franchising, joint ventures, and acquisitions[44](index=44&type=chunk) [CEO's Report](index=9&type=section&id=CEO's%20Report) The CEO's report details the strong performance of Saint Honore Cake Shop, the rapid expansion of Mon cher, and Zoff's continued market leadership, alongside the Group's cautious optimism for future growth and strategic expansion plans [Business Review - Saint Honore Cake Shop](index=9&type=section&id=Business%20Review%20-%20Saint%20Honore%20Cake%20Shop) Saint Honore Cake Shop achieved strong double-digit sales growth and high single-digit same-store sales, driven by rebounding traffic, a robust O2O platform with over 860,000 members, and expanded B2B agreements - Despite a slight reduction in store count from 98 to 95 (Hong Kong and Macau), sales achieved **double-digit growth**, and same-store sales recorded **high single-digit growth**[47](index=47&type=chunk) - The "Saint Honore Cake Online" O2O platform has **over 860,000 members**, effectively driving online orders and offline foot traffic[50](index=50&type=chunk) - Actively expanded B2B business, signing an agreement with a major Hong Kong supermarket chain to become its strategic system supplier for bakery products[51](index=51&type=chunk) [Business Review - Mon cher](index=11&type=section&id=Business%20Review%20-%20Mon%20cher) Mon cher, the Group's premium Japanese cake brand, rapidly expanded in Hong Kong, adding three new stores in prime locations for a total of four, showing strong market performance - The Group obtained the franchise rights for Japanese premium cake shop Mon cher in Hong Kong and Macau in 2020, renowned for its signature "Dôjima Roll"[53](index=53&type=chunk) - In the first half of 2021, three new stores were added in prime locations: Langham Place (Mong Kok), Harbour City (Tsim Sha Tsui), and New Town Plaza (Sha Tin), bringing the total to four stores[53](index=53&type=chunk) [Business Review - Zoff](index=11&type=section&id=Business%20Review%20-%20Zoff) Japanese fast-fashion eyewear brand Zoff maintained its leadership in Hong Kong with 11 branches, seeing sales rebound due to eased restrictions and product innovation - Zoff operates **11 branches in Hong Kong**, maintaining its leading position among fast-fashion eyewear brands[54](index=54&type=chunk) - Continuously updates products to attract customers by launching "Made in Japan" series, collaborations with "Wind & Sea," and "Disney Happiness" collections[55](index=55&type=chunk) [Outlook](index=12&type=section&id=Outlook) The Group holds cautious optimism for moderate growth, planning further Saint Honore expansion in Hong Kong and Greater Bay Area franchising, accelerating Mon cher's growth, and exploring Zoff's entry into mainland China - Expected to record **moderate growth** in the second half and full year, partly due to the low base in the prior year's first half[57](index=57&type=chunk) - Plans to open new Saint Honore branches in Hong Kong and grant franchise rights in the Greater Bay Area market beyond Guangzhou[57](index=57&type=chunk) - Discussions are underway with Zoff Japan to expand the brand into the mainland China market[57](index=57&type=chunk) [Discussion and Analysis](index=13&type=section&id=Discussion%20and%20Analysis) This section provides a detailed financial review, highlighting revenue growth in continuing operations, changes in gross margin, and the Group's healthy financial position, along with an overview of employee statistics and related costs [Financial Review](index=13&type=section&id=Financial%20Review) Revenue from continuing operations grew 12.7% to HKD 607 million, driven by the cake shop business, while gross margin declined due to lower-margin corporate sales, yet core operating profit increased 171.8% to HKD 17 million, supported by a strong net cash position - Revenue from continuing operations increased by **12.7%**, with the cake shop business growing by **14.0%** and Zoff eyewear business by **2.0%**[60](index=60&type=chunk) - Gross margin decreased by **2.5 percentage points to 49.7%**, primarily due to an increased proportion of lower-margin corporate client sales[60](index=60&type=chunk) - Profit from continuing operations increased by **161.7% to HKD 17 million**[61](index=61&type=chunk) - As of June 30, 2021, the Group held **net cash balances of HKD 251 million** with no bank borrowings[61](index=61&type=chunk) - The Board resolved to declare an interim dividend of **2 HK cents per share**, compared to 6 HK cents in the prior period[62](index=62&type=chunk) [Employees](index=14&type=section&id=Employees) As of June 30, 2021, the Group employed 3,019 individuals, with total staff costs of HKD 234 million for the first half, significantly reduced due to the convenience store divestment Employee Statistics | Item | Data | | :--- | :--- | | **Total Employees (2021/6/30)** | 3,019 persons | | Hong Kong Employees | 1,465 persons (49%) | | Guangzhou, Shenzhen, Macau Employees | 1,554 persons (51%) | | **Total Staff Costs (2021 H1)** | HKD 234 million | | **Total Staff Costs (2020 H1)** | HKD 474 million | [Corporate Governance](index=15&type=section&id=Corporate%20Governance) The company adhered to the HKEX Corporate Governance Code, ensuring transparency, accountability, and independence through a well-structured Board, distinct Chairman and CEO roles, and specialized committees with independent non-executive director majorities [Board Committees](index=15&type=section&id=Board%20Committees) The Board established Audit, Remuneration, and Nomination Committees, each with clear terms of reference and predominantly led by independent non-executive directors to ensure independent oversight of key governance areas - The Board established an Audit Committee, a Nomination Committee, and a Remuneration Committee, each with clearly defined terms of reference[71](index=71&type=chunk) - The Audit Committee and Remuneration Committee are chaired by independent non-executive directors, while the Nomination Committee is chaired by the non-executive Chairman, ensuring independent operation of the committees[71](index=71&type=chunk) [Risk Management and Internal Control](index=18&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board, with Audit Committee assistance, is ultimately responsible for the Group's risk management and internal control systems, which were deemed adequate and effective for the six months ended June 30, 2021 - The Board and Audit Committee concluded that the Group's risk management and internal control systems were **adequate and effectively operated** during the reporting period[79](index=79&type=chunk) [Other Information](index=19&type=section&id=Other%20Information) This section details directors' and major shareholders' interests, including Dr. Fung Kwok Lun's family (40.17%), Standard Life Aberdeen plc (11.98%), and FIL Limited (9.17%), alongside information on share option schemes and the declared interim dividend of 2 HK cents per share [Directors' and Shareholders' Interests](index=19&type=section&id=Directors'%20and%20Shareholders'%20Interests) As of June 30, 2021, Dr. Fung Kwok Lun and Ms. Fung Wing Yee collectively held approximately 40.17% of shares, with Standard Life Aberdeen plc (11.98%) and FIL Limited (9.17%) as other major shareholders Major Shareholders' Interests (as of June 30, 2021) | Shareholder Name | Number of Shares | Percentage of Interest (Approximate) | | :--- | :--- | :--- | | HSBC Trustee (C.I.) Limited (as trustee of the Fung Family Trust) | 311,792,000 | 40.17% | | King Lun Holdings Limited | 311,792,000 | 40.17% | | Standard Life Aberdeen plc's investment management entities | 93,020,000 | 11.98% | | FIL Limited | 71,204,000 | 9.17% | [Interim Dividend](index=24&type=section&id=Interim%20Dividend) The Board declared an interim dividend of 2 HK cents per share for the six months ended June 30, 2021, a decrease from 6 HK cents in the prior period - The Board resolved to declare an interim dividend of **2 HK cents per share** (H1 2020: 6 HK cents)[97](index=97&type=chunk) [Condensed Consolidated Interim Financial Statements](index=25&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) This section presents the condensed consolidated interim financial statements, including the statement of profit or loss, statement of financial position, statement of cash flows, and detailed notes, providing a comprehensive overview of the Group's financial performance and position [Condensed Consolidated Statement of Profit or Loss](index=25&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2021, revenue from continuing operations was HKD 607 million, with total profit attributable to shareholders, including discontinued operations, at HKD 22.91 million Profit or Loss Statement Summary (For the six months ended June 30, 2021) | Item (Thousand HKD) | 2021 (Unaudited) | 2020 (Restated) | | :--- | :--- | :--- | | **Continuing Operations** | | | | Revenue | 606,945 | 538,595 | | Core Operating Profit | 20,251 | 9,190 | | Profit for the Period | 16,941 | 6,474 | | **Discontinued Operations** | | | | Profit for the Period | 5,971 | 75,577 | | **Profit Attributable to Company Shareholders** | **22,912** | **82,051** | [Condensed Consolidated Statement of Financial Position](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2021, the Group reported total assets of HKD 1.219 billion, total liabilities of HKD 617 million, and total equity of HKD 602 million, with HKD 251 million in cash and cash equivalents Statement of Financial Position Summary (As of June 30, 2021) | Item (Thousand HKD) | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | **Total Assets** | **1,219,231** | **1,344,166** | | Non-current Assets | 825,907 | 842,727 | | Current Assets | 393,324 | 501,439 | | **Total Liabilities** | **617,124** | **765,312** | | Non-current Liabilities | 98,574 | 107,825 | | Current Liabilities | 518,550 | 657,487 | | **Total Equity** | **602,107** | **578,854** | [Condensed Consolidated Statement of Cash Flows](index=29&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2021, net cash from operating activities was HKD 33.21 million, while investing and financing activities resulted in net outflows, leading to a HKD 123 million decrease in cash and cash equivalents, ending at HKD 251 million Cash Flow Statement Summary (For the six months ended June 30, 2021) | Item (Thousand HKD) | 2021 (Unaudited) | 2020 (Restated) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 33,214 | 98,104 | | Net Cash (Used in)/Generated from Investing Activities | (88,337) | 224,718 | | Net Cash Used in Financing Activities | (67,698) | (378,146) | | **Decrease in Cash and Cash Equivalents** | **(122,821)** | **(55,324)** | | Cash and Cash Equivalents at Beginning of Period | 373,143 | 642,639 | | **Cash and Cash Equivalents at End of Period** | **250,522** | **412,993** | [Notes to the Condensed Consolidated Interim Financial Information](index=30&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) The notes to the financial statements provide detailed explanations for various items, including accounting policies, segment information, and discontinued operations, highlighting the cake shop business as the Group's primary revenue and profit source - Note 19 details the discontinued operations (OK Convenience Store), whose sale was completed on December 21, 2020, with the HKD 5.97 million profit recorded in H1 2021 representing a net reversal of provisions for the sale[166](index=166&type=chunk) Segment Core Operating Profit (H1 2021, Thousand HKD) | Business Segment | Region | Core Operating Profit | | :--- | :--- | :--- | | **Cake Shop Business** | Hong Kong and Other | 17,933 | | | Mainland China | (851) | | **Eyewear Business** | Hong Kong | 3,169 | | **Group Total** | | **20,251** |

Financial Performance - Revenue decreased by 0.5% to HKD 1,191,701,000 compared to HKD 1,197,453,000 in 2019[8] - Core operating profit increased by 50.6% to HKD 67,456,000 from HKD 44,785,000[8] - Net profit from continuing operations rose by 84.1% to HKD 61,150,000, up from HKD 33,213,000[8] - The company achieved a one-time gain of HKD 2,878,972,000 from the sale of OK Convenience Store's Hong Kong business, leading to a total profit increase of 1,412.9%[10] - The group's revenue for the year 2020 decreased by 0.5% to HKD 1,191,701,000, with bakery business revenue declining by 1.4% to HKD 1,077,163,000 due to a low single-digit drop in comparable store sales in Hong Kong[50] - Zoff eyewear business revenue increased by 10.7% to HKD 114,538,000, driven by store expansion despite the impact of COVID-19 on foot traffic in commercial and tourist areas[50] - Gross profit margin and other income as a percentage of revenue increased by 1.6% to 55.6%, attributed to the depreciation of the RMB and government subsidies from Hong Kong's anti-epidemic fund[50] - Total net profit (including discontinued operations) surged by 1,412.9% to HKD 3,140,446,000 due to the sale of the OK convenience store business[51] - Basic earnings per share from continuing operations rose by 81.8% to HKD 0.08, and basic earnings per share including discontinued operations increased by 1,409.9% to HKD 4.107[51] Business Strategy and Development - The company plans to reposition itself as a multi-brand professional retailer in the Greater Bay Area following the sale of its convenience store business[20] - The company intends to develop its brands, including Saint Anna, Mon cher, and Zoff, into significant businesses over the coming years[20] - The company will continue to seek new opportunities for expansion through licensing, franchising, joint ventures, or acquisitions[20] - The group plans to expand its store network across all brands and enhance sales through the "online to offline" platform in the coming year[23] - The group aims to optimize production processes and mitigate the impact of currency fluctuations and rental costs to create shareholder value[48] - The company is focusing on three main business developments: Saint Anna Bakery, Mon cher premium cake shop, and Zoff eyewear[48] - The group plans to expand its Mon cher store presence in Hong Kong and Macau, currently operating one store[65] - The company is actively involved in new business development, aiming to expand its market presence and product offerings[183] - Market expansion plans include entering the Southeast Asian market, targeting a 10% market share within the first two years[198] Operational Efficiency and Innovation - The group continues to implement "lean production" projects to enhance operational efficiency and productivity[30] - The group aims to enhance operational efficiency through the latest information technology and continuous investment in brand building and supply chain management[65] - The management team has extensive experience in supply chain management and food distribution, with over 30 years in the industry[183] - The company is investing in new technology for supply chain optimization, with an expected cost reduction of 5% in operational expenses[200] - The company has a robust framework for evaluating market trends and making informed investment decisions[184] Market Trends and Customer Engagement - Same-store sales for Saint Anna Bakery experienced a low single-digit decline year-on-year due to the impact of the pandemic, with a total of 93 stores operating as of December 31, 2020[27] - The membership for the "Saint Anna Cake Online" customer relationship management program reached approximately 800,000, significantly driving business development during the pandemic[27] - The "Saint Anna Cake Online" platform saw unprecedented usage rates during the pandemic, with about 80% of members being active[30] - A new marketing strategy was implemented, resulting in a 30% increase in customer engagement[198] - User data showed a 15% increase in active users, reaching 1.2 million by the end of the fiscal year[198] Corporate Governance and Compliance - The group received the "Best Corporate Governance Award 2020" from the Hong Kong Institute of Certified Public Accountants in the small-cap category[74] - The board consists of 7 male and 1 female member, indicating a gender diversity ratio of 87.5% male to 12.5% female[88] - The board has adopted a diversity policy, considering skills, experience, and background in its composition review[85] - The company has established a shareholder communication policy to ensure shareholders receive relevant information to exercise their rights[178] - The company has a robust risk management and internal control system in place, which is regularly reviewed for effectiveness[104] - The company has adopted a securities trading code to regulate transactions by directors and relevant employees, ensuring compliance with the listing rules[140] - The company has established appropriate liability insurance for directors to protect against claims arising from corporate activities[100] Social Responsibility and Community Support - The group donated HKD 2,000,000 in bread vouchers to support vulnerable communities during the pandemic[31] - The group donated HKD 1,000,000 to local NGOs and provided HKD 9,000,000 worth of meals and cash vouchers to those in need during the pandemic[46][47] - The group has established a fund to provide free personal protective equipment for employees affected by the COVID-19 pandemic[71] - The company maintains a zero-tolerance policy towards bribery and emphasizes ethical standards across all operations[156] Future Outlook - The company provided guidance for the next fiscal year, projecting a revenue growth of 25% and aiming to reach $625 million[198] - The company is focusing on sustainability initiatives, aiming for a 50% reduction in carbon footprint by 2025[200]

Revenue and Profitability - Revenue increased by 5.7% to HKD 2,858,813,000 compared to HKD 2,703,757,000 in the same period last year[21] - Core operating profit decreased by 3.2% to HKD 101,432,000 from HKD 104,825,000 year-on-year[21] - Despite the pandemic, the company’s net profit only slightly decreased by 0.5% year-on-year, demonstrating the resilience of its business model[22] - The group reported a net profit decrease of 0.5% to HKD 82,000,000, with basic earnings per share remaining unchanged at HKD 0.108[53] - Total comprehensive income attributable to shareholders was HKD 81,358, compared to HKD 82,485 in the same period last year, reflecting a decrease of about 1.4%[101] Financial Position - The company maintained a strong financial position with net cash of HKD 413,000,000 and no bank borrowings[22] - Total assets decreased from HKD 2,647,519 thousand in December 2019 to HKD 2,326,624 thousand in June 2020, representing a decline of approximately 12.1%[103] - Total equity decreased from HKD 725,794 thousand in December 2019 to HKD 503,033 thousand in June 2020, a decline of approximately 30.6%[105] - The company’s total liabilities decreased from HKD 1,921,725 thousand in December 2019 to HKD 1,823,591 thousand in June 2020, a decline of about 5.1%[103] Store Operations and Expansion - The number of stores as of June 30, 2020, totaled 509, including 373 OK convenience stores and 125 Saint Honore cake shops[23] - OK Convenience Store's comparable same-store sales increased by 8.3%, with total sales reaching HKD 2,359,000,000 compared to HKD 2,185,000,000 in the same period last year[36] - The group opened six new OK Convenience Stores in the first half of 2020, bringing the total to 340 stores, despite two closures[36] - The group opened three new Saint Anna Bakery locations in the first half of 2020, despite closing four stores, resulting in a total of 98 locations in Hong Kong and Macau[42] - Zoff opened two new stores in prime locations in Hong Kong, bringing the total to 11 stores, contributing positively to the group's profits despite a decline in foot traffic[46] Customer Engagement and Online Sales - The "Saint Honore Online" customer relationship management program reached 700,000 members, reflecting increased online orders due to home confinement measures[22] - The "OK Qiqi Print" customer relationship management program had 1,550,000 members by June 30, 2020, providing valuable data for marketing and promotions[37] - The online demand for Saint Anna products surged, with approximately 700,000 members in the "Saint Anna Cake Online" program, over 40% of whom are active members[43] Challenges and Market Conditions - The overall retail sales in Hong Kong dropped by 33.3% in value and 34.9% in volume compared to the first half of 2019[26] - The company anticipates ongoing challenges in the second half of the year due to the pandemic and potential changes in consumer behavior[22] - The group anticipates that current measures related to the pandemic will last at least six months, affecting customer traffic recovery[31] - The group implemented marketing and product category management measures to adapt to the difficult market conditions[25] Employee and Workplace Initiatives - The group aims to maintain a clean and healthy workplace for employees while investing in their development[30] - Employee costs for the first half of 2020 totaled HKD 474,000,000, compared to HKD 455,000,000 in the same period last year[56] - The group emphasizes workplace satisfaction and employee engagement through various initiatives, including community activities related to COVID-19 prevention and resource recycling[56] Corporate Governance and Compliance - The board of directors consists of nine members, including a non-executive chairman, two executive directors, three independent non-executive directors, and three non-executive directors, with an average attendance rate of approximately 97% in meetings since 2020[61] - The audit committee has held three meetings since 2020, with an average attendance rate of about 93%, reviewing financial reporting, risk management, and internal controls[64] - The company has confirmed compliance with the securities trading code, with no violations reported by directors or relevant employees during the review period[70] Dividends and Shareholder Information - The company declared an interim dividend of HKD 0.06 per share, unchanged from the previous year[22] - The proposed interim dividend per share remained at HKD 0.06, totaling HKD 45,756 for 2020, compared to HKD 45,754 in 2019[146] - As of June 30, 2020, the company’s directors and senior executives held a total of 311,792,000 shares, representing approximately 40.89% of the equity[77] Risk Management and Financial Policies - The company’s financial risk management policies have not changed since the end of the previous year, maintaining a consistent approach to managing foreign exchange, credit, liquidity, and interest rate risks[117] - The risk management and internal control systems are deemed established, sufficient, and effective, providing reasonable assurance regarding the safeguarding of assets and the reliability of financial reporting[74] Community Support and Contributions - The group donated 100,000 medical masks to those in need during the pandemic[29] - During the first half of the year, the group distributed 100,000 masks to individuals aged 65 and above across 20 stores, setting an example for the business community[40]