Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 167,086 thousand, a decrease of 1.5% compared to RMB 169,565 thousand in the same period of 2021[12]. - Gross profit for the same period was RMB 100,196 thousand, down 4.2% from RMB 104,617 thousand year-on-year[12]. - The net profit attributable to the owners of the company was RMB 55,028 thousand, representing a decrease of 3.2% from RMB 56,867 thousand in the previous year[12]. - The basic earnings per share for the period was RMB 22.1, down 3.2% from RMB 22.9 in the same period last year[12]. - Operating profit for the six months ended June 30, 2022, was approximately RMB 70,715,000, a decrease of about RMB 2,492,000 or 3.4% from RMB 73,207,000 in the same period of 2021[90]. - Profit before tax for the six months ended June 30, 2022, was approximately RMB 70,387,000, a decrease of about RMB 2,656,000 or 3.6% from RMB 73,043,000 in the same period of 2021[92]. - Net profit for the six months ended June 30, 2022, was approximately RMB 55,047,000, a decrease of about RMB 2,565,000 or 4.5% from RMB 57,612,000 in the same period of 2021[96]. - The group's gross profit for the six months ended June 30, 2022, was approximately RMB 100,196,000, a decrease of about RMB 4,421,000 or 4.2% compared to RMB 104,617,000 for the same period in 2021, with a gross margin decline from 61.7% to 60.0%[83]. Operational Challenges - The company faced challenges due to COVID-19 restrictions in major markets like Shanghai and Beijing, impacting regional market expansion and store operations[24]. - The management remains committed to addressing operational challenges and improving performance amidst ongoing market uncertainties[24]. - Despite the challenges, the company maintained a positive outlook and continued to progress in areas such as raw material reserves, production, new product development, and brand building[24]. Store and Sales Performance - As of June 30, 2022, the offline business achieved 40.2% of its POS sales target, a year-on-year decline of 8.4%, but a growth of 51.4% compared to the same period in 2020[29]. - The total number of stores as of June 30, 2022, was 1,096, a decrease of 1 store from December 31, 2021[30]. - The number of franchise stores in mainland China was 1,088, with shopping center stores accounting for 59.8% of the total[33]. - E-commerce sales reached RMB 88.39 million, achieving 93.5% of the semi-annual target, with a year-on-year growth of 8.06%[48]. - Group purchasing sales increased by 188% year-on-year, with significant contributions during the International Women's Day in March[36]. Product Development and Marketing - The company launched 12 new types of combs and upgraded packaging for existing products during the reporting period[39]. - New product development focused on optimizing product structure and design, with 7 new product projects completed and 4 new packaging designs introduced[59]. - The company is exploring new marketing strategies, including emotional marketing and leveraging social media platforms like Douyin for brand promotion[52]. Financial Position and Cash Flow - The group had cash and bank balances of RMB 41,322,000 as of June 30, 2022, compared to RMB 35,795,000 as of December 31, 2021, primarily sourced from operating income[97]. - For the six months ended June 30, 2022, the operating cash flow was RMB 48,578,000, an increase of 47.8% compared to RMB 32,893,000 in the same period of 2021[183]. - The net cash generated from operating activities was RMB 38,572,000, up from RMB 18,585,000 in the previous year, reflecting a growth of 107.5%[183]. Human Resources and Governance - The total employee compensation paid by the group for the six months ended June 30, 2022, was approximately RMB 34,622,000, with a workforce of 986 employees across various regions[119]. - The company maintains a strong commitment to providing employment opportunities for people with disabilities and emphasizes employee self-improvement through various training programs[119]. - The management has implemented measures to optimize human resources and prevent complacency, including appointing younger employees to key positions[70]. Shareholder and Dividend Information - The company declared a final dividend of HKD 0.2715 per share, totaling approximately HKD 67,526,000 (equivalent to about RMB 55,215,000) for the year ended December 31, 2021[159]. - The interim dividend for the six months ended June 30, 2022, is set at HKD 0.1296 per share, amounting to approximately HKD 32,233,000 (equivalent to about RMB 27,508,000) to be paid on or before October 31, 2022[159]. Compliance and Corporate Governance - The company has maintained compliance with the corporate governance code, except for a deviation regarding the separation of the roles of Chairman and CEO, which is currently held by Mr. Tan[149]. - The Audit Committee, consisting of three independent non-executive directors, has reviewed the unaudited interim financial information for the six months ended June 30, 2022[153].

Financial Performance - Revenue for the year ended December 31, 2021, was RMB 330,910,000, representing a 19.3% increase from RMB 277,261,000 in 2020[14] - Gross profit increased by 26.7% to RMB 199,790,000 from RMB 157,627,000 in the previous year[14] - Profit attributable to owners of the company rose by 36.2% to RMB 107,663,000 compared to RMB 79,060,000 in 2020[14] - Basic earnings per share increased by 36.2% to RMB 43.29 from RMB 31.79 in the prior year[14] - Annual profit for the year was approximately RMB 108,348,000, an increase of 33.7% from RMB 81,008,000 in 2020[142] - The company's attributable profit for the year was approximately RMB 107,663,000, reflecting a 36.2% increase from RMB 79,060,000 in the previous year[143] - Total revenue for the year ended December 31, 2021, was approximately RMB 330,910,000, an increase of 19.4% from RMB 277,261,000 in 2020[129] - Gross profit for the year was approximately RMB 199,790,000, representing a 26.7% increase from RMB 157,627,000 in the previous year, with a gross margin improvement from 56.9% to 60.4%[131] Store Operations and Expansion - The company opened 115 new franchise stores in 2021, with average monthly sales exceeding the same period in 2019[28] - Shopping mall stores accounted for 59.0% of total stores, with new store expansion reaching 71.9% of annual target[29] - Monthly average sales for new stores exceeded RMB 70,200, with significant sales increases noted in several locations[37] - A total of 174 stores were renovated in 2021, including 120 new stores and 37 relocations, improving store image and sales performance[46] - The group had 1,094 franchised stores and 3 directly operated stores as of December 31, 2021, compared to 1,155 franchised stores and 4 directly operated stores as of December 31, 2020[127] Financial Ratios and Cash Flow - The current ratio improved to 7.42 from 6.16, reflecting a 20.5% increase[13] - The quick ratio also increased by 11.3% to 4.82 from 4.33[13] - The group's cash and cash equivalents decreased by approximately RMB 59,982,000 during the year, with net cash inflow from operating activities of approximately RMB 66,149,000 and net cash outflow from investing activities of approximately RMB 66,778,000[153] - The group had cash and bank balances of approximately RMB 35,795,000 as of December 31, 2021, down from approximately RMB 95,777,000 as of December 31, 2020[159] Marketing and Sales Performance - The marketing team implemented various promotional activities, resulting in annual online sales of approximately RMB 10.6 million, with 5.5 million views and 450,000 visitors[42] - E-commerce net sales for the year ended December 31, 2021, reached approximately RMB 169.3 million, exceeding the sales target of RMB 165 million by 2.6%, with a year-on-year growth of 17.3%[55] - Tmall platform sales amounted to approximately RMB 107.1 million, accounting for 63.3% of total e-commerce net sales, with a year-on-year increase of 14.9%[55] - Offline POS sales achieved 93.2% of target, growing 19.3% year-on-year, but down 16.7% compared to 2019[29] Product Development and Innovation - The company launched 22 new customized products in 2021, continuing to expand its product line and enhance product offerings[43] - A total of 69 new products were launched across 16 series, with significant packaging upgrades completed, including 29 new packaging boxes and 12 new fabric bags[70] - The company aims to enhance its product innovation, focusing on craftsmanship, design, and materials, with a goal to achieve product iteration within three years[79] - The company is actively working on the production technology for its Chinese red lacquer comb series, achieving preliminary progress but requiring further development for mass production[83] Customer Satisfaction and Service Quality - Customer satisfaction rate reached 99.1% based on 5,459 valid survey responses, surpassing the group's ISO quality standard target of no less than 90%[52] - The company has committed to providing lifetime repair services, successfully fulfilling this promise during the review year[94] - A total of 96,821 repair cases were handled across 28 repair stations, with continuous upgrades to the repair system to enhance service quality[52] Corporate Governance and Compliance - The company has maintained compliance with corporate governance standards, ensuring transparency and accountability in its operations[184] - The board consists of six directors, including three executive directors and three independent non-executive directors, ensuring a diverse range of expertise[191] - The audit committee is responsible for reviewing the independence of external auditors and the effectiveness of audit procedures[197] - The audit committee held two meetings during the review year, focusing on the effectiveness of financial reporting and internal controls[200] Challenges and Market Conditions - The company faced increased operational pressures from rising rental and labor costs, alongside reduced foot traffic in tourist areas due to sporadic COVID-19 outbreaks[28] - The overall market conditions showed signs of recovery, with retail orders stabilizing and improving compared to the previous year[26] - The company plans to adjust its strategies based on consumer feedback regarding product development, market expansion, and specialized store services in 2022[52]

[Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section details the company's fundamental registration, board composition, key operational locations, and professional advisory services - Comprehensive details regarding the company's registration, board and committee members, principal business locations, legal counsel, auditors, and share registrars are provided[5](index=5&type=chunk)[8](index=8&type=chunk) [Financial Highlights](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The group achieved strong financial recovery for the six months ended June 30, 2021, with significant growth in revenue, profit, and improved liquidity - For the six months ended June 30, 2021, the group achieved strong performance recovery, with **revenue increasing by 56.9%**, **gross profit by 70.4%**, **profit for the period by 106.7%**, and **basic earnings per share by 112.0%** year-on-year[13](index=13&type=chunk) Financial Highlights for H1 2021 (Compared to H1 2020) | Indicator | For the six months ended June 30 (RMB '000) | | Percentage Change | | :--- | :--- | :--- | :--- | | | **2021 (Unaudited)** | **2020 (Unaudited)** | **Increase / (Decrease)** | | **Revenue** | 169,565 | 108,069 | 56.9% | | **Gross Profit** | 104,617 | 61,405 | 70.4% | | **Profit Before Tax** | 73,043 | 35,760 | 104.3% | | **Profit for the Period** | 57,612 | 27,878 | 106.7% | | **Profit Attributable to Owners of the Company** | 56,867 | 26,808 | 112.1% | | **Basic EPS (RMB cents)** | 22.9 | 10.8 | 112.0% | - The group's liquidity improved, with the **current ratio increasing from 6.16 to 7.10**, and no interest-bearing bank borrowings at period-end, rendering the gearing ratio inapplicable[13](index=13&type=chunk)[16](index=16&type=chunk) [Chairman's Statement](index=9&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A%E6%9B%B8) The Chairman's statement highlights the group's proactive brand promotion and market expansion in H1 2021, focusing on strengthening fundamentals amidst ongoing market challenges - Chairman Mr. Tan Chuan Hua noted that despite market recovery in H1 2021, COVID-19 impacts persist, presenting both challenges and opportunities, leading the group to actively engage in brand promotion and market expansion, including offline pop-up events and university design collaborations[21](index=21&type=chunk) - The group emphasizes strengthening its core capabilities, seizing opportunities, and responding to market changes with optimism and confidence[22](index=22&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Management Review](index=11&type=section&id=%E7%AE%A1%E7%90%86%E5%9B%9E%E9%A1%A7) In H1 2021, with effective COVID-19 control in China, the group maintained stable operations and market conditions, with specialty store orders and retail sales entering a positive development trajectory - With effective COVID-19 control in China, market conditions significantly recovered and stabilized compared to last year, with company operations largely meeting planned objectives[26](index=26&type=chunk) [Business Review](index=12&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The group's business review covers offline store optimization and sales growth, significant online business expansion, and progress in R&D, production, and human resources, while addressing cost and talent challenges [Offline Business](index=12&type=section&id=%E7%B7%9A%E4%B8%8B%E6%A5%AD%E5%8B%99) As of June 30, 2021, total stores decreased to 1,146, with domestic sales growing through store upgrades and marketing, though still below 2019 levels, while international operations largely paused due to the pandemic Store Count Changes | Region | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Mainland China** | 1,139 | 1,149 | | **Hong Kong** | 2 | 2 | | **Other Countries and Regions** | 5 | 6 | | **Total** | 1,146 | 1,159 | - Offline sales significantly increased compared to H1 2020, but the sales growth rate was **negative 12.8%** compared to pre-pandemic H1 2019[38](index=38&type=chunk) - Overseas offline business was severely impacted by the pandemic, with outbound sales of **RMB 690,000**, a **1.3% year-on-year decrease**[44](index=44&type=chunk)[47](index=47&type=chunk) [Online Business](index=16&type=section&id=%E7%B7%9A%E4%B8%8A%E6%A5%AD%E5%8B%99) Online business showed strong performance, with domestic e-commerce sales reaching **RMB 81.8 million** in H1, growing **32.0%** year-on-year, while international online sales increased **11.0%** through self-operated Amazon platforms H1 2021 Domestic Online Monthly Sales (RMB '000) | Month | 2021 Actual Sales | 2020 Actual Sales | YoY 2020 Growth Rate | 2019 Actual Sales | YoY 2019 Growth Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | **January** | 12,527 | 7,318 | 71.2% | 10,121 | 23.8% | | **February** | 12,627 | 8,043 | 57.0% | 9,868 | 28.0% | | **March** | 15,558 | 11,597 | 34.2% | 12,192 | 27.6% | | **April** | 12,166 | 8,923 | 36.3% | 8,416 | 44.6% | | **May** | 18,643 | 17,362 | 7.4% | 14,682 | 27.0% | | **June** | 10,277 | 8,719 | 17.9% | 8,662 | 18.6% | | **Total** | **81,798** | **61,962** | **32.0%** | **63,941** | **27.9%** | - Total sales from overseas online platforms (primarily US and Japan Amazon) amounted to **RMB 162,893**, representing an **11.0% year-on-year increase**[60](index=60&type=chunk) [Creative R&D](index=18&type=section&id=%E5%89%B5%E6%84%8F%E7%A0%94%E7%99%BC) The Creative Design Center continuously innovated products, launching **7 series and 37 new products** in the reporting period, including high-end hairbrushes and infant combs, to expand product lines and consumer reach - During the reporting period, **7 series and 37 new products** were launched, including high-end hairbrushes and infant combs, expanding product categories and consumer demographics[61](index=61&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk) [Production Technology](index=20&type=section&id=%E7%94%A2%E7%94%9F%E6%8A%80%E8%A1%93) The Wanzhou factory produced **2.38 million products** in H1, a **62.3% year-on-year increase**, while advancing processing technologies, prioritizing pandemic control, and implementing environmental upgrades - In H1, **2,381,927 products** were manufactured, representing a **62.3% year-on-year increase**[73](index=73&type=chunk) [Logistics and Distribution](index=20&type=section&id=%E7%89%A9%E6%B5%81%E9%85%8D%E9%80%81) The logistics center dispatched over **2.1 million products** in H1, meeting order demands, enhancing quality control, resolving metal comb pin oxidation, and implementing strict pandemic prevention measures - Over **2.1 million products** were dispatched in H1, and the quality issue of metal comb pin oxidation was effectively resolved[74](index=74&type=chunk) [Corporate Culture](index=21&type=section&id=%E4%BC%81%E6%A5%AD%E6%96%87%E5%8C%96) Centered on the 'Crafting Oriental Beauty' brand strategy, the group promoted comb culture and brand philosophy through collaborations with universities, publications, and heritage exhibitions - The group continuously built and disseminated its 'Crafting Oriental Beauty' brand culture through collaborations with universities, publications, and exhibitions[78](index=78&type=chunk) [Human Resources and Comprehensive Governance](index=21&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E5%8F%8A%E7%B6%9C%E5%90%88%E6%B2%BB%E7%90%86) The group maintained compliance with labor, safety, and environmental regulations, focusing HR efforts on marketing, product design, and R&D, filing **9 new patents** and managing operational risks, while addressing challenges like rising costs and talent shortages - In H1, **9 patents** were filed, bringing the total number of effective patents to **61**, an increase of **12** year-on-year[83](index=83&type=chunk) - The group enhanced operational risk control by strengthening identification and tracking of counterfeit products and non-compliant online sales, and revising relevant internal control systems[87](index=87&type=chunk) - Key challenges include the conflict between rising costs and market positioning, difficulties in training new craftspeople, and the aging of existing management personnel[88](index=88&type=chunk) [Financial Review](index=24&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) In H1 2021, the group reported strong financial performance, with **revenue up 56.9% to RMB 170 million**, **gross margin improving to 61.7%**, and **profit for the period increasing 106.7% to RMB 57.61 million**, maintaining a healthy cash flow with no bank loans H1 2021 Key Financial Indicators (RMB '000) | Indicator | 2021 H1 | 2020 H1 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 169,565 | 108,069 | +61,496 | +56.9% | | **Cost of Sales** | 64,948 | 46,664 | +18,284 | +39.2% | | **Gross Profit** | 104,617 | 61,405 | +43,212 | +70.4% | | **Gross Margin** | 61.7% | 56.8% | +4.9pp | - | | **Operating Profit** | 73,207 | 36,001 | +37,206 | +103.3% | | **Profit Before Tax** | 73,043 | 35,760 | +37,283 | +104.3% | | **Profit for the Period** | 57,612 | 27,878 | +29,734 | +106.7% | - Revenue growth was primarily driven by market demand recovery as the pandemic came under control, while the increase in gross margin was due to a higher proportion of revenue from products with better margins[91](index=91&type=chunk)[95](index=95&type=chunk) - At the end of the reporting period, the group had **no bank loans**, with cash and bank balances totaling **RMB 60.28 million**[109](index=109&type=chunk)[111](index=111&type=chunk) [Future Outlook](index=27&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) Looking ahead, the group will focus on six key areas: continuous pandemic control, strategic raw material reserves, intensified anti-counterfeiting efforts, strengthened cost management, production technology innovation, and comprehensive governance to enhance brand value - The group's future focus areas include pandemic control, raw material reserves, combating counterfeits, cost management, technological innovation, and comprehensive governance[122](index=122&type=chunk)[123](index=123&type=chunk)[126](index=126&type=chunk) [Human Resources and Training](index=28&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E5%8F%8A%E5%9F%B9%E8%A8%93) As of June 30, 2021, the group employed **965 staff**, emphasizing employee development through diverse training programs covering teamwork, professional etiquette, and production management to foster corporate culture - As of June 30, 2021, the group employed **965 staff** and provided diverse on-the-job training[127](index=127&type=chunk) [Other Information](index=29&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Principal Activities](index=29&type=section&id=%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99) The group, an investment holding company, primarily designs, manufactures, and distributes small wooden ornaments under the 'Tan Mujiang' brand, including combs, mirrors, and gift sets, operating through franchised and self-operated retail stores in China and Hong Kong - The group's core business involves designing, manufacturing, and distributing small wooden ornaments under the 'Tan Mujiang' brand, primarily combs, mirrors, accessories, and gift sets[131](index=131&type=chunk) [Directors' and Chief Executives' Interests in Securities](index=29&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E4%B9%8B%E8%AD%89%E5%88%B8%E6%AC%8A%E7%9B%8A) This section discloses the shareholdings of directors and major shareholders, with Chairman Mr. Tan Chuan Hua holding **67.43%** through Linker Investment Limited as the controlling shareholder, and Executive Director Mr. Tan Lizi beneficially owning **300,000 shares** - Chairman Mr. Tan Chuan Hua holds **167,700,000 shares**, representing **67.43%** of the total share capital, through his controlled entity, Linker Investment Limited[133](index=133&type=chunk)[138](index=138&type=chunk) [Share Option Scheme](index=30&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) This section details the 2009 Share Option Scheme, including its terms, eligible participants, share limits, and exercise price rules, noting **700,000 outstanding options** at period-end, granted to three executives including Executive Director Mr. Tan Lizi, with an exercise price of **HKD 4.896** Outstanding Share Options as of June 30, 2021 | Grantee | Position | Grant Date | Exercise Price (HKD) | Number of Outstanding Options | | :--- | :--- | :--- | :--- | :--- | | **Mr. Tan Lizi** | Executive Director | August 31, 2018 | 4.896 | 300,000 | | **Ms. Liu Kejia** | Marketing Director | August 31, 2018 | 4.896 | 200,000 | | **Mr. Luo Hongping** | Administrative Director | August 31, 2018 | 4.896 | 200,000 | | **Total** | | | | **700,000** | [Dividends](index=33&type=section&id=%E8%82%A1%E6%81%AF) The company paid a final dividend of **HKD 19.58 cents per share** for FY2020, totaling approximately **HKD 48.7 million**, but the Board resolved not to declare any interim dividend for the six months ended June 30, 2021 - A final dividend of **HKD 19.58 cents per share** for 2020, totaling approximately **HKD 48.7 million**, was paid[159](index=159&type=chunk) - The Board resolved not to declare an interim dividend for 2021[160](index=160&type=chunk) [Use of Net Proceeds from Initial Public Offering](index=33&type=section&id=%E9%A6%96%E6%AC%A1%E5%85%AC%E9%96%8B%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%8D%E6%B7%A8%E9%A1%8D%E7%9A%84%E7%94%A8%E9%80%94) Of the approximately **RMB 117 million** net proceeds from the 2009 IPO, about **RMB 64.09 million** had been utilized by June 30, 2021, primarily for enhancing design, sales network, logistics, and working capital, with remaining funds held in banks for future business development - As of June 30, 2021, approximately **RMB 64.09 million** of the approximately **RMB 117 million** net IPO proceeds had been utilized[162](index=162&type=chunk) [Corporate Governance Practices](index=33&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Board is committed to corporate governance, implementing measures to strengthen internal controls, and confirming compliance with all applicable code provisions during the reporting period, with the Audit Committee reviewing the interim financial report - During the reporting period, the company consistently complied with all applicable code provisions of the Corporate Governance Code[164](index=164&type=chunk) - The Audit Committee reviewed this interim financial report and concurred with the accounting policies adopted by the company[168](index=168&type=chunk) [Condensed Consolidated Financial Statements](index=36&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss](index=36&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) This statement presents the income, costs, expenses, and profit for the six months ended June 30, 2021, with profit for the period at **RMB 57.612 million** and profit attributable to owners of the company at **RMB 56.867 million** Condensed Consolidated Statement of Profit or Loss Summary (For the six months ended June 30) | Item (RMB '000) | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | **Revenue** | 169,565 | 108,069 | | **Gross Profit** | 104,617 | 61,405 | | **Operating Profit** | 73,207 | 36,001 | | **Profit Before Tax** | 73,043 | 35,760 | | **Profit for the Period** | 57,612 | 27,878 | | **Profit Attributable to Owners of the Company** | 56,867 | 26,808 | | **Basic and Diluted EPS** | RMB 22.9 cents | RMB 10.8 cents | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=37&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This statement includes other comprehensive income items, such as exchange differences, in addition to profit for the period, resulting in a total comprehensive income of **RMB 57.875 million** for the period - After accounting for exchange differences, total comprehensive income for the six months ended June 30, 2021, was **RMB 57.875 million**, with **RMB 57.130 million** attributable to owners of the company[185](index=185&type=chunk) [Condensed Consolidated Statement of Financial Position](index=38&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This statement presents the assets, liabilities, and equity as of June 30, 2021, with total assets at **RMB 724 million** and net assets at **RMB 621 million** at period-end Condensed Consolidated Statement of Financial Position Summary | Item (RMB '000) | As of June 30, 2021 (Unaudited) | As of December 31, 2020 (Audited) | | :--- | :--- | :--- | | **Non-current Assets** | 202,695 | 198,947 | | **Current Assets** | 521,046 | 535,468 | | **Current Liabilities** | (73,361) | (86,914) | | **Non-current Liabilities** | (29,779) | (28,362) | | **Net Assets** | 620,601 | 619,139 | | **Total Equity** | 620,601 | 619,139 | [Condensed Consolidated Statement of Changes in Equity](index=39&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) This statement illustrates changes in equity items, including share capital, reserves, and retained profits, during the reporting period, encompassing profit for the period, dividends paid, and equity transactions with non-controlling interests - As of June 30, 2021, total equity increased from **RMB 619 million** at the beginning of the year to **RMB 621 million**, primarily due to a **RMB 57.61 million** increase in profit for the period, a **RMB 40.54 million** decrease from dividends paid, and equity transactions with non-controlling interests[194](index=194&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=40&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) This statement reflects cash inflows and outflows from operating, investing, and financing activities during the reporting period, showing a net decrease in cash and cash equivalents of **RMB 35.75 million** Condensed Consolidated Statement of Cash Flows Summary (For the six months ended June 30) | Item (RMB '000) | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | 18,585 | (11,822) | | **Net Cash from Investing Activities** | 3,836 | 215,300 | | **Net Cash Used in Financing Activities** | (58,171) | (213,411) | | **Net Decrease in Cash and Cash Equivalents** | (35,750) | (9,933) | | **Cash and Cash Equivalents at Period-End** | 60,280 | 24,429 | [Notes to the Unaudited Interim Financial Report](index=41&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E9%99%84%E8%A8%BB) [Segment Reporting](index=42&type=section&id=4.%20%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) Management views the business as a single operating segment—manufacturing and distribution of wooden crafts and ornaments—contributing over **90%** of the group's revenue, results, and assets, with no segment or geographical information provided as operations are primarily in China - The group considers its business as a single operating segment, the manufacturing and distribution of wooden crafts and ornaments, with primary assets and activities in China, thus no segment information is presented[211](index=211&type=chunk) [Revenue and Other Income](index=43&type=section&id=6.%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) This note details the composition of revenue and other income, with total revenue of **RMB 169.6 million** primarily from goods sales, and other income of **RMB 18.49 million**, including **RMB 12.23 million** in VAT refunds and **RMB 3.15 million** in investment property rental income Revenue and Other Income Details (For the six months ended June 30, RMB '000) | Item | 2021 | 2020 | | :--- | :--- | :--- | | **Revenue** | **169,565** | **108,069** | | Of which: Sales of goods | 169,518 | 107,975 | | **Other Income** | **18,489** | **25,672** | | Of which: China VAT refund for preferential policies | 12,230 | 5,085 | | Of which: Rental income from investment properties | 3,147 | 2,716 | | Of which: Fair value changes of financial assets | 1,646 | 11,838 | [Income Tax](index=45&type=section&id=8.%20%E6%89%80%E5%BE%97%E7%A8%85) This note explains income tax expense calculation, totaling **RMB 15.43 million** for the period at an effective tax rate of **21.1%**, primarily comprising China corporate income tax and withholding tax on dividends, with the group benefiting from VAT refunds for employing disabled staff - Income tax expense for the reporting period was **RMB 15.431 million**, with an effective tax rate of **21.1%**, a decrease from **22.0%** in the prior period[105](index=105&type=chunk)[227](index=227&type=chunk) - The group benefits from social welfare enterprise tax incentives for employing disabled staff, including income tax deductions and VAT refunds[233](index=233&type=chunk) [Earnings Per Share](index=46&type=section&id=9.%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) This note details the calculation of basic earnings per share, which is **RMB 22.9 cents**, based on **RMB 56.867 million** profit attributable to owners and **248.7 million** weighted average ordinary shares, with no dilutive effect from share options - Basic earnings per share is **RMB 22.9 cents**, calculated based on **RMB 56.867 million** profit and **248,714 thousand** weighted average shares[235](index=235&type=chunk) - Diluted earnings per share is the same as basic earnings per share, as share options have no dilutive effect[236](index=236&type=chunk) [Dividends](index=49&type=section&id=15.%20%E8%82%A1%E6%81%AF) This note reiterates dividend distribution, confirming the Board's decision not to declare a 2021 interim dividend, and the payment of a 2020 final dividend of **HKD 19.58 cents per share**, totaling approximately **RMB 40.54 million** Dividend Payments for Past Financial Years (For the six months ended June 30) | Dividend Type | 2021 Paid (RMB '000) | 2020 Paid (RMB '000) | | :--- | :--- | :--- | | **Final Dividend** | 40,540 | 62,502 | | **Special Dividend** | – | 148,006 | [Equity Transactions with Non-Controlling Shareholders](index=52&type=section&id=19.%20%E8%88%87%E9%9D%9E%E6%8E%A7%E8%82%A1%E8%82%A1%E6%9D%B1%E7%9A%84%E6%AC%8A%E7%9B%8A%E4%BA%A4%E6%98%93) In January 2021, the group acquired the remaining **9.09%** equity in Jiangsu Tan Mujiang for **RMB 15.873 million**, making it a wholly-owned subsidiary, which reduced non-controlling interests by **RMB 10.557 million** and equity attributable to owners by **RMB 5.316 million** - The group acquired a **9.09%** equity interest in Jiangsu Tan Mujiang for **RMB 15.873 million**, achieving full ownership of the subsidiary[272](index=272&type=chunk) [Events After the Reporting Period](index=52&type=section&id=20.%20%E6%9C%AC%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) This note indicates that the ongoing COVID-19 pandemic creates uncertainties for the group's operating environment, which is being closely monitored, and directors confirm no significant adverse changes to the group's financial or trading position as of the report date - As of the report date, despite ongoing COVID-19 uncertainties, there have been no significant adverse changes to the group's financial or trading position[273](index=273&type=chunk)

譚 木 匠 控 股 有 限 公 司 CARPENTER TAN HOLDINGS LIMITED (於開曼群島註冊成立的有限公司) 股份代號: 837 A ( u -C A - C B (C A 日 B 米 ( T K "值供識別 D and the production and and Dames of hogoomoogoo (CC 目錄 B c 1 目錄 2 公司資料 4 財務摘要 5 主席報告書 7 管理層討論與分析 29 董事及高級管理人員簡介 32 企業管治報告 44 董事會報告 59 獨立核數師報告 65 67 63 綜合損益表 64 綜合損益及其他全面收益表 綜合財務狀況表 綜合權益變動表 68 綜合現金流量表 70 財務報表附註 139 持作投資用途之主要物業 140 財務概要 公司資料 | --- | --- | |-----------------------|--------------------------| | | | | | | | 執行董事 | 提名委員會成員 | | 譚傳華先生 （主席） | 周錦榮先生 （主席） | | 譚棣夫先生 | 楊揚先生 | | 譚力子先生 | 劉 ...

[Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Company Information Overview](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99%E6%A6%82%E8%A6%BD) This section provides basic corporate information for Tan Mujiang Holdings Limited, including board members, committee compositions, company secretary, authorized representatives, registered office, headquarters and Hong Kong office addresses, principal share registrar, legal counsel, stock code, company website, and principal bankers - The Board of Directors comprises executive, non-executive, and independent non-executive directors, with Audit, Remuneration, and Nomination Committees[6](index=6&type=chunk) - The company is registered in the Cayman Islands, headquartered in Jurong City, Jiangsu Province, China, with a Hong Kong office[6](index=6&type=chunk)[10](index=10&type=chunk) - The stock code is **837**, and the company website is www.ctans.com[10](index=10&type=chunk) [Financial Highlights](index=6&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Overview of Financial Performance and Liquidity](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E8%88%87%E6%B5%81%E5%8B%95%E6%80%A7%E6%A6%82%E8%A6%BD) This section summarizes key financial indicators for the six months ended June 30, 2020, showing significant declines in revenue and profit due to the pandemic, but marked improvements in liquidity and no interest-bearing bank borrowings 2020 H1 Key Financial Data (Unaudited) | Indicator | 2020 H1 (RMB thousand) | 2019 H1 (RMB thousand) | Increase/(Decrease) | | :--- | :--- | :--- | :--- | | Revenue | 108,069 | 170,355 | (36.6)% | | Cost of Sales | (46,664) | (63,923) | (27.0)% | | Gross Profit | 61,405 | 106,432 | (42.3)% | | Gross Profit Margin | 56.8% | 62.5% | (5.7) percentage points | | Profit Before Tax | 35,760 | 87,392 | (59.1)% | | Profit for the Period | 27,878 | 73,046 | (61.8)% | | Profit Attributable to Owners of the Company | 26,808 | 73,046 | (63.3)% | | Basic Earnings Per Share (RMB cents) | 10.8 | 29.4 | (63.3)% | Liquidity and Gearing (Unaudited) | Indicator | June 30, 2020 | December 31, 2019 | Percentage Change | | :--- | :--- | :--- | :--- | | Current Ratio | 6.80 | 2.78 | 144.6% | | Quick Ratio | 4.32 | 2.14 | 101.9% | | Gearing Ratio | Not Applicable (4) | Not Applicable (4) | Not Applicable (4) | - The Group had no interest-bearing bank borrowings as of June 30, 2020, and December 31, 2019, hence the gearing ratio is not applicable[18](index=18&type=chunk) [Chairman's Report](index=8&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A%E6%9B%B8) [Challenges and Response Strategies Amidst the Pandemic](index=9&type=section&id=%E7%96%AB%E6%83%85%E4%B8%8B%E7%9A%84%E6%8C%91%E6%88%B0%E8%88%87%E6%87%89%E5%B0%8D%E7%AD%96%E7%95%A5) The Chairman's Report highlights the severe challenges posed by the COVID-19 pandemic, disrupting market and production order, but the company actively responded by supporting franchisees, launching incentive programs, and exploring new channels like IP collaborations and live streaming to expand market reach and brand influence, while remaining committed to core values and seeking breakthroughs in the second half - The COVID-19 pandemic posed severe challenges to the company, disrupting market and production order[23](index=23&type=chunk) - The company maintained close contact with franchisees, launched an incentive program for franchised stores, and actively explored new channels such as IP collaborations and live streaming to expand the market and enhance brand influence[23](index=23&type=chunk) - The company will continue to strive for breakthroughs and innovations in stable development in the second half of the year, ensuring the brand remains relevant and forward-looking, while thanking shareholders and investors for their understanding and support[24](index=24&type=chunk) [Management Discussion and Analysis](index=10&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Management Review](index=11&type=section&id=%E7%AE%A1%E7%90%86%E5%9B%9E%E9%A1%A7) During the pandemic, the Group prioritized employee safety, provided protective supplies to staff and stores, and committed to no salary reductions and timely payments, gradually resuming full operations by early May, while also formulating plans for market expansion, product upgrades, and brand promotion to seize new opportunities - At the onset of the pandemic, the Group prioritized the safety of employees, their families, and franchised stores, providing medical masks and alcohol, and committed to no salary reductions and timely payments[28](index=28&type=chunk)[29](index=29&type=chunk) - The Group actively responded to government requirements for work resumption, gradually restoring normal production and operations from partial resumption in early March to full resumption by early May[29](index=29&type=chunk) - Future work plans focus on expanding new market channels, upgrading product after-sales service, developing new craft products, quality control, improving production efficiency, brand communication, establishing a social responsibility system, and new factory planning[29](index=29&type=chunk) [Business Review](index=12&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) This section details the performance and response strategies for offline and online businesses during the pandemic, showing severe challenges for offline operations mitigated by franchisee support and service upgrades, while online business achieved growth through new models like live streaming despite logistics issues, alongside active IP collaborations and overseas market expansion - The pandemic caused a severe downturn in offline business, but the marketing team and franchisees jointly responded through aid with protective materials and private domain traffic marketing via WeChat Moments[33](index=33&type=chunk)[37](index=37&type=chunk) - Online e-commerce business initially suffered from logistics disruptions but achieved counter-trend growth through the "online stay-at-home economy" and live streaming (e.g., "Xiao Zhu Pei Qi"), with Mother's Day sales increasing by **22.5% year-on-year** and significantly enhancing new customer acquisition[54](index=54&type=chunk) - The company actively engaged in IP/cross-industry collaborations (e.g., Mulan series, Xiaomi Youpin, Lin Qingxuan) and continuously upgraded brand image and store design[44](index=44&type=chunk)[47](index=47&type=chunk) [Offline Business](index=12&type=section&id=%E7%B7%9A%E4%B8%8B%E6%A5%AD%E5%8B%99) Offline business faced severe challenges due to the pandemic, with a reduction in domestic franchised stores, but the company actively responded through multi-channel promotion, upgraded after-sales services, IP collaborations, and brand image enhancements; performance recovery showed faster recovery for shopping mall and street-front stores, slower for transport hub and scenic area stores, stable growth in group purchases, but severe disruption to overseas business Store Count Comparison (December 31, 2019 vs June 30, 2020) | Region | December 31, 2019 | June 30, 2020 | | :--- | :--- | :--- | | Mainland China Franchised Stores | 1,242 | 1,187 | | Mainland China Directly Operated Stores | 3 | 3 | | Hong Kong Directly Operated Stores | 3 | 3 | | Other Countries & Regions Franchised Stores/Counters | 7 | 7 | | Total | 1,249 (Franchised Stores) + 6 (Directly Operated Stores) | 1,194 (Franchised Stores) + 6 (Directly Operated Stores) | - The company launched a WeChat Moments private domain traffic marketing strategy, with **831 specialty stores** participating in social retail activities from February 10 to March 10, resulting in **21,138 products sold** and a cumulative transaction amount of approximately **RMB 3.99 million**[37](index=37&type=chunk) - The Group firmly implemented "lifetime free repair service," upgraded its repair system, and established **32 authorized repair stations** nationwide (**15 online**), handling **1,954 orders** since its launch on May 18[38](index=38&type=chunk) - As of June 30, 2020, POS sales completed **51.92% of the first-half target**, reaching **53.27% of the same period last year**, with shopping mall and street-front stores recovering faster, while transport hub and scenic area stores recovered slower[45](index=45&type=chunk) - Group purchase business showed stable growth, with group purchase amount increasing by **17.29%** compared to the same period last year[48](index=48&type=chunk) - The global pandemic led to the shelving of new overseas store projects, temporary closure of most overseas stores, and some shifting to online sales[49](index=49&type=chunk) [Online Business](index=16&type=section&id=%E7%B7%9A%E4%B8%8A%E6%A5%AD%E5%8B%99) Online business initially saw sales decline due to logistics disruptions during the pandemic, but successfully stimulated consumption by actively developing the "online stay-at-home economy" and new retail models, such as participating in "Xiao Zhu Pei Qi" live streaming, achieving a **22.5% year-on-year sales increase** during Mother's Day and significantly boosting new customer acquisition, with overseas online business also expanding well, particularly on Amazon Japan - Online e-commerce business lost **1.5 months of sales time** due to the pandemic, with February sales decreasing by **31% year-on-year**[54](index=54&type=chunk) - Through efforts, domestic online platforms completed **48.98% of the annual total target**, with sales only decreasing by **2.84%** compared to the same period in 2019[54](index=54&type=chunk) - Participating in the "Xiao Zhu Pei Qi" live streaming during Mother's Day resulted in a **22.5% year-on-year sales increase**, with **340,000 visitors** and **19,000 orders** placed on the night of the live stream, totaling nearly **RMB 1.4 million** in payments, significantly enhancing new customer acquisition[54](index=54&type=chunk) - Tan Mujiang's online e-commerce has launched on numerous overseas platforms including Amazon US, eBay Australia, and Amazon Japan, with Amazon Japan showing an upward trend in both order volume and average order value (from **JPY 2,000 to JPY 4,000**), indicating market development potential[62](index=62&type=chunk) [Creative R&D](index=18&type=section&id=%E5%89%B5%E6%84%8F%E7%A0%94%E7%99%BC) The Creative Design Center, guided by the "Crafting Oriental Beauty" brand positioning, delves into traditional Chinese culture to create a fashionable and youthful brand image; despite pandemic impacts, the department focused on product use and comb function R&D, successfully developing 8 new products, prototyping 36, launching 9, with Disney IP products accounting for **6.1% of total retail sales**, and securing 3 design patents - Creative R&D focuses on the "Crafting Oriental Beauty" brand positioning, deeply exploring traditional Chinese culture to create a fashionable and youthful brand image[65](index=65&type=chunk) - In the first half, **8 new product development tasks** were undertaken, **36 prototypes** made, and **9 products** launched after review, including flat combs, inlaid tooth combs, hairpins, and gift sets[65](index=65&type=chunk) - Retail sales of launched Disney IP products accounted for **6.1% of total retail sales**[65](index=65&type=chunk) - The Creative Design Center obtained **3 design patent certificates**[65](index=65&type=chunk) [Production Technology](index=19&type=section&id=%E7%94%A2%E5%93%81%E6%8A%80%E8%A1%93) The Wanzhou factory fully resumed operations from March to late April, but product output in the first half decreased by **37.8% year-on-year**; technologically, the inlaid tooth comb milling machine was developed, and innovations in manual profiling, automatic profiling, and fuzzy polishing techniques were achieved to optimize production, enhance efficiency, and save costs, while securing 2 utility model patents and 3 design patents, with multiple new patent applications - The Wanzhou factory resumed work on March 3 and fully resumed by the end of April, producing approximately **1,468,000 units** in the first half, a **37.8% year-on-year decrease**[72](index=72&type=chunk) - Technologically, the inlaid tooth comb milling machine equipment development was completed, and innovations in manual profiling, automatic profiling processes, and fuzzy polishing techniques were developed to optimize production processes, shorten cycles, improve efficiency, and save costs[69](index=69&type=chunk)[74](index=74&type=chunk) - During the reporting period, the company obtained **2 utility model patents** and **3 design patent authorizations**, and applied for **1 invention patent**, **11 utility model patents**, and **3 design patents**[74](index=74&type=chunk) [Logistics and Distribution](index=20&type=section&id=%E7%89%A9%E6%B5%81%E9%85%8D%E9%80%81) Amidst the severe pandemic, the logistics center began processing orders on February 13 and was approved to resume work on February 26, ensuring no employee infections; the Group promptly organized product processing and timely distribution, especially for live streaming events, saving logistics costs through full-truck transportation and monthly express billing, while adjusting quality control to include on-site final inspection and pre-assembly inspection, though the issue of metal comb pin oxidation remains unresolved - The logistics center began processing orders on February 13 during the pandemic and was approved to resume work on February 26, ensuring no employee infections[77](index=77&type=chunk) - The Group promptly organized product processing and timely distribution, especially for the "Xiao Zhu Pei Qi" live streaming event and collaboration with Yizhen[77](index=77&type=chunk) - Logistics costs and workload were saved by arranging full-truck transportation and changing express delivery from cash-on-delivery to monthly billing[77](index=77&type=chunk) - Quality control processes were adjusted to include final inspection of products at the Wanzhou factory and pre-assembly inspection at the logistics center, but the issue of metal comb pin oxidation in hair care combs remains to be resolved[77](index=77&type=chunk) [Brand Promotion](index=20&type=section&id=%E5%93%81%E7%89%8C%E6%8E%A8%E5%BB%A3) During the reporting period, many offline brand promotion plans were postponed, prompting the company to adjust its strategy by strengthening online promotion, delving into brand essence, and emphasizing internal-to-external communication; specific measures included organizing a brand culture knowledge base, multi-dimensional showcasing of "the beauty of combs," and creating "Ode to Labor" posters, with plans for a franchisee story documentary in the second half to boost morale - Brand promotion strategy shifted to strengthening online promotion, delving into brand essence, and emphasizing internal-to-external communication[78](index=78&type=chunk) - Organized Tan Mujiang's brand culture knowledge base, presented in "text + audio" format, and multi-dimensionally showcased "the beauty of combs" covering its history, craftsmanship, stories, and culture[78](index=78&type=chunk) - During the May Day holiday, a series of posters titled "Ode to Labor" were created and disseminated, featuring frontline factory employees to express respect[83](index=83&type=chunk) - Plans for the second half of 2020 include filming a brand promotional video about franchisee stories to showcase their spirit and boost morale[83](index=83&type=chunk) [Social Responsibility](index=22&type=section&id=%E7%A4%BE%E6%9C%83%E8%B2%AC%E4%BB%BB) During the pandemic, the Group strictly adhered to national prevention measures, ensured employee well-being, paid salaries on time and in full, and delivered protective supplies to staff, while also providing support policies to franchised stores and donating medical protective materials to Wuhan Central Hospital, demonstrating social responsibility; despite the challenges of resuming work, the company successfully managed self-rescue in production, committing that "no employee would be left behind" - During the pandemic, the Group ensured employee well-being, paid salaries on time and in full, and delivered protective supplies to employees[87](index=87&type=chunk) - The company provided support policies to franchised stores to overcome the pandemic and organized donations of medical protective materials to Wuhan Central Hospital, fulfilling its social responsibility[87](index=87&type=chunk) - Despite the significant challenges in resuming work at the Wanzhou factory, the Group established a high-standard and strict prevention and control system, successfully managed self-rescue in production, and ensured "no employee was left behind"[87](index=87&type=chunk) [Financial Review](index=23&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section provides a detailed financial review for the six months ended June 30, 2020, showing significant declines in revenue, gross profit, and operating profit due to the pandemic, with increased selling and distribution expenses but reduced administrative expenses, leading to substantial drops in profit for the period and profit attributable to owners, yet the Group maintains ample liquidity, no bank borrowings, and confirmed going concern ability - For the six months ended June 30, 2020, revenue was approximately **RMB 108.069 million**, a **36.6% decrease** year-on-year, primarily due to the pandemic[91](index=91&type=chunk) - Gross profit was approximately **RMB 61.405 million**, a **42.3% decrease**; gross profit margin declined from **62.5% in 2019 to 56.8% in 2020**, mainly due to changes in sales mix[94](index=94&type=chunk) - Operating profit was approximately **RMB 36.001 million**, a **59.0% decrease**, primarily attributable to reduced gross profit, lower other income, and increased selling and distribution expenses, partially offset by reduced administrative expenses[99](index=99&type=chunk) - Profit for the period was approximately **RMB 27.878 million**, a **61.8% decrease**; profit attributable to owners of the company was approximately **RMB 26.808 million**, a **63.3% decrease**[107](index=107&type=chunk)[108](index=108&type=chunk) - The Group has ample liquidity, no bank borrowings, cash and bank balances of **RMB 24.429 million**, and confirmed sufficient working capital for at least the next twelve months[109](index=109&type=chunk) [Revenue](index=23&type=section&id=%E6%94%B6%E7%9B%8A) For the six months ended June 30, 2020, the Group's revenue was approximately **RMB 108.069 million**, a **36.6% decrease** year-on-year, primarily due to the negative impact of the pandemic on foot traffic, logistics, market demand, and the suspension of production after the Lunar New Year - Revenue decreased by **36.6% year-on-year** to **RMB 108.069 million**[91](index=91&type=chunk) - Main reasons were the negative impact of the pandemic on foot traffic, logistics, market demand, and production suspension[91](index=91&type=chunk) Revenue Composition (2020 H1) | Sales | 2020 (RMB thousand) | Percentage (%) | | :--- | :--- | :--- | | －Combs | 21,867 | 20.2 | | －Mirrors | 115 | 0.1 | | －Gift Sets | 83,594 | 77.4 | | －Other Accessories | 2,399 | 2.2 | | Franchise Fee Income | 94 | 0.1 | | Total | 108,069 | 100.0 | [Cost of Sales](index=23&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) For the six months ended June 30, 2020, cost of sales was approximately **RMB 46.664 million**, a **27.0% decrease** year-on-year, primarily due to the reduction in revenue - Cost of sales decreased by **27.0% year-on-year** to **RMB 46.664 million**[93](index=93&type=chunk) - The decrease in cost of sales was primarily attributable to the decline in revenue[93](index=93&type=chunk) [Gross Profit and Gross Profit Margin](index=23&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) For the six months ended June 30, 2020, gross profit was approximately **RMB 61.405 million**, a **42.3% decrease**; gross profit margin declined from **62.5% in 2019 to 56.8% in 2020**, mainly due to a shift in sales mix with a reduced proportion of higher-margin products - Gross profit decreased by **42.3% year-on-year** to **RMB 61.405 million**[94](index=94&type=chunk) - Gross profit margin decreased from **62.5% to 56.8%** (a **5.7 percentage point decrease**)[94](index=94&type=chunk) - The decline in gross profit margin was primarily due to a change in sales mix, with a reduced proportion of higher-margin products[94](index=94&type=chunk) [Other Income](index=24&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) For the six months ended June 30, 2020, net other income was approximately **RMB 25.672 million**, an **11.9% decrease** year-on-year, primarily due to a reduction of approximately **RMB 6.974 million** in China VAT preferential refunds, partially offset by an increase of approximately **RMB 3.987 million** in government subsidies - Net other income decreased by **11.9% year-on-year** to **RMB 25.672 million**[96](index=96&type=chunk) - Primarily due to a **RMB 6.974 million decrease** in China VAT preferential refunds, partially offset by a **RMB 3.987 million increase** in government subsidies[96](index=96&type=chunk) [Selling and Distribution Expenses](index=24&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) For the six months ended June 30, 2020, selling and distribution expenses were approximately **RMB 29.764 million**, a **15.6% increase** year-on-year, primarily due to an increase of approximately **RMB 2.599 million** in advertising and promotion expenses - Selling and distribution expenses increased by **15.6% year-on-year** to **RMB 29.764 million**[97](index=97&type=chunk) - Primarily due to a **RMB 2.599 million increase** in advertising and promotion expenses[97](index=97&type=chunk) [Administrative Expenses](index=24&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) For the six months ended June 30, 2020, administrative expenses were approximately **RMB 12.601 million**, a **22.4% decrease** year-on-year, primarily due to a reduction of approximately **RMB 2.563 million** in depreciation of right-of-use assets - Administrative expenses decreased by **22.4% year-on-year** to **RMB 12.601 million**[98](index=98&type=chunk) - Primarily due to a **RMB 2.563 million decrease** in depreciation of right-of-use assets[98](index=98&type=chunk) [Operating Profit](index=24&type=section&id=%E7%B6%93%E7%87%9F%E6%BA%A2%E5%88%A9) For the six months ended June 30, 2020, operating profit was approximately **RMB 36.001 million**, a **59.0% decrease** year-on-year, primarily attributable to reduced gross profit, lower other income, and increased selling and distribution expenses, partially offset by reduced administrative expenses - Operating profit decreased by **59.0% year-on-year** to **RMB 36.001 million**[99](index=99&type=chunk) - Primarily impacted by a **RMB 45.027 million decrease** in gross profit, a **RMB 3.475 million decrease** in other income, and a **RMB 4.027 million increase** in selling and distribution expenses, partially offset by a **RMB 3.647 million decrease** in administrative expenses[99](index=99&type=chunk) [Finance Costs](index=24&type=section&id=%E8%9E%8D%E8%B3%87%E9%96%8B%E6%94%AF) For the six months ended June 30, 2020, finance costs were approximately **RMB 241,000**, primarily arising from the adoption of HKFRS 16, with no interest expenses on bank borrowings during this period - Finance costs were approximately **RMB 241,000**, primarily arising from the adoption of HKFRS 16[100](index=100&type=chunk) - The Group had no interest expenses on bank borrowings during this period[100](index=100&type=chunk) [Profit Before Tax](index=25&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) For the six months ended June 30, 2020, profit before tax was approximately **RMB 35.760 million**, a **59.1% decrease** year-on-year, primarily attributable to the reduction in operating profit - Profit before tax decreased by **59.1% year-on-year** to **RMB 35.760 million**[105](index=105&type=chunk) - Primarily attributable to a **RMB 51.719 million decrease** in operating profit[105](index=105&type=chunk) [Income Tax Expense](index=25&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) For the six months ended June 30, 2020, income tax expense was approximately **RMB 7.882 million**, a **45.1% decrease** year-on-year, primarily due to reduced profit before tax; the effective tax rate increased from **16.4% in 2019 to 22.0% in 2020** - Income tax expense decreased by **45.1% year-on-year** to **RMB 7.882 million**[106](index=106&type=chunk) - The effective tax rate increased from **16.4% in 2019 to 22.0% in 2020** (a **5.6 percentage point increase**)[106](index=106&type=chunk) [Profit for the Period](index=25&type=section&id=%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9) For the six months ended June 30, 2020, profit for the period was approximately **RMB 27.878 million**, a **61.8% decrease** year-on-year, primarily impacted by the aforementioned financial factors - Profit for the period decreased by **61.8% year-on-year** to **RMB 27.878 million**[107](index=107&type=chunk) [Profit Attributable to Owners of the Company](index=25&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%E6%BA%A2%E5%88%A9) For the six months ended June 30, 2020, profit attributable to owners of the company was approximately **RMB 26.808 million**, a **63.3% decrease** year-on-year, primarily due to the reduction in profit for the period - Profit attributable to owners of the company decreased by **63.3% year-on-year** to **RMB 26.808 million**[108](index=108&type=chunk) - The primary reason was a **RMB 45.168 million decrease** in profit for the period[108](index=108&type=chunk) [Liquidity and Sources of Funds](index=25&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E9%87%91%E4%BE%86%E6%BA%90) The Group primarily relies on cash generated from operations and long-term and short-term bank borrowings to meet its funding needs; there were no bank loans during the reporting period, and the Board believes the Group has sufficient working capital for at least the next twelve months, with cash and bank balances of **RMB 24.429 million** as of June 30, 2020 - The Group primarily relies on cash generated from operations and long-term and short-term bank borrowings to meet its funding needs, with no bank loans during the reporting period[109](index=109&type=chunk) - The Board believes the Group has sufficient working capital to meet its funding needs for at least the next twelve months[109](index=109&type=chunk) - As of June 30, 2020, cash and bank balances were **RMB 24.429 million**[109](index=109&type=chunk) [Cash Flow](index=26&type=section&id=%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F) During the reporting period, the Group's cash and cash equivalents decreased by approximately **RMB 14.951 million**, with net cash outflow from operating activities, net cash inflow from investing activities, net cash outflow from financing activities, and a negative impact from exchange rate changes - During the reporting period, cash and cash equivalents decreased by approximately **RMB 14.951 million**[113](index=113&type=chunk) - Net cash outflow from operating activities was approximately **RMB 11.822 million**[113](index=113&type=chunk) - Net cash inflow from investing activities was approximately **RMB 215.300 million**[113](index=113&type=chunk) - Net cash outflow from financing activities was approximately **RMB 213.411 million**[113](index=113&type=chunk) - Net negative impact from exchange rate changes was approximately **RMB 5.018 million**[113](index=113&type=chunk) [Capital Structure, Gearing Ratio and Charges on Assets](index=26&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B%E3%80%81%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E7%8E%87%E5%8F%8A%E8%B3%87%E7%94%A2%E6%8A%BC%E8%A8%98) As of June 30, 2020, the Group had no bank loans, thus the gearing ratio was not applicable, and no assets were pledged - The Group had no bank loans as of June 30, 2020, and December 31, 2019[114](index=114&type=chunk) - Due to the absence of bank borrowings, the gearing ratio is not applicable[114](index=114&type=chunk) - As of June 30, 2020, the Group had no assets pledged to banks[115](index=115&type=chunk) [Capital Expenditure](index=26&type=section&id=%E8%B3%87%E6%9C%AC%E6%94%AF%E5%87%BA) During the reporting period, the Group's capital expenditure was **RMB 2.034 million**, primarily for the purchase of property, plant and equipment, renovation of leased properties, and vehicles - Capital expenditure during the reporting period was **RMB 2.034 million**[116](index=116&type=chunk) - Primarily used for the purchase of property, plant and equipment, renovation of leased properties, and vehicles[116](index=116&type=chunk) [Exchange Rate Risk](index=26&type=section&id=%E5%BD%99%E7%8E%87%E9%A2%A8%E9%9A%AA) The Group's principal operations use RMB and HKD as functional and operating currencies, thus it has no significant risk from other exchange rate fluctuations - The Group's principal operations use RMB and HKD as functional and operating currencies[117](index=117&type=chunk) - There is no significant risk from other exchange rate fluctuations[117](index=117&type=chunk) [Contingent Liabilities, Legal and Potential Proceedings](index=26&type=section&id=%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5%E3%80%81%E6%B3%95%E5%BE%8B%E8%A8%B4%E8%A8%9F%E5%8F%8A%E6%BD%9B%E5%9C%A8%E8%A8%B4%E8%A8%9F) As of June 30, 2020, the Group had no significant contingent liabilities, legal proceedings, or potential proceedings - As of June 30, 2020, the Group had no significant contingent liabilities, legal proceedings, or potential proceedings[118](index=118&type=chunk) [Material Acquisitions and Disposals](index=26&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%92%8C%E5%87%BA%E5%94%AE) For the six months ended June 30, 2020, the Group had no material acquisitions or disposals - For the six months ended June 30, 2020, the Group had no material acquisitions or disposals[119](index=119&type=chunk) [Going Concern](index=26&type=section&id=%E6%8C%81%E7%BA%8C%E7%B6%93%E7%87%9F) Based on its current financial position and available financing, the Group has sufficient financial resources to continue operations for the foreseeable future, and thus the financial statements are prepared on a going concern basis - The Group has sufficient financial resources to continue operations for the foreseeable future[120](index=120&type=chunk) - The financial statements have been prepared on a going concern basis[120](index=120&type=chunk) [Future Outlook](index=27&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The Group views the pandemic as both a challenge and an opportunity, having demonstrated its resilience; future plans include adjusting marketing and communication strategies, achieving modular interaction in marketing and services, enhancing store marketing capabilities, and promoting digital transformation of specialty stores, while integrating communication and sales channels, planning promotions with a user-centric approach, deeply exploring the beauty of traditional Chinese culture, elucidating the "Oriental Wooden Comb" concept, and implementing online-offline联动 to gain broader consumer recognition - The Group views the pandemic as both a change and an opportunity, having demonstrated its strong risk resistance capability[124](index=124&type=chunk) - Marketing and communication strategies will be adjusted to achieve modular interaction in marketing and services, enhance store marketing capabilities, and promote digital transformation and upgrading of specialty stores[124](index=124&type=chunk) - Communication and sales channels will be integrated, promotions planned with a user-centric approach, the beauty of traditional Chinese culture deeply explored, and the "Oriental Wooden Comb" concept elucidated[124](index=124&type=chunk) - Future plans include implementing online-offline integration to introduce Tan Mujiang to more consumers, emphasizing patriotism and industrial revitalization[124](index=124&type=chunk) [Human Resources and Training](index=27&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E5%8F%8A%E5%9F%B9%E8%A8%93) As of June 30, 2020, the Group employed **958 staff** and is committed to providing employment opportunities for people with disabilities; the company values employee self-improvement, offering various themed exhibitions, workshops, lectures, and on-the-job training to enhance skills in work, marketing, teamwork, professional etiquette, production management, and accounting practices, thereby consolidating and practicing corporate culture - As of June 30, 2020, the Group employed **958 staff** and is committed to providing employment opportunities for people with disabilities[125](index=125&type=chunk) - The Group values employee self-improvement, offering themed exhibitions, workshops, lectures, and on-the-job training to enhance skills in work, marketing strategies, teamwork, professional etiquette, production management, and accounting practices[125](index=125&type=chunk) - Training formats include in-person instruction and examinations, aiming to consolidate and practice Tan Mujiang's corporate culture[125](index=125&type=chunk) [Other Information](index=28&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Principal Business](index=28&type=section&id=%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99) The company is an investment holding company, with its group primarily engaged in designing, manufacturing, and distributing creative small wooden ornaments made from natural wood with traditional Chinese cultural characteristics; its business model includes operating franchised stores and distribution networks in China, and directly selling products through retail stores in Hong Kong and China, with products mainly categorized as wooden/horn combs, pocket wooden mirrors, other wooden ornaments and decorations, and themed gift sets, mostly sold under the "Tan Mujiang" brand - The company is an investment holding company; the Group primarily designs, manufactures, and distributes creative small wooden ornaments made from natural wood with traditional Chinese cultural characteristics[127](index=127&type=chunk) - The business model includes operating franchised stores and distribution networks in China, and directly selling products through retail stores in Hong Kong and China[127](index=127&type=chunk) - Products are mainly categorized as wooden/horn combs, pocket wooden mirrors, other wooden ornaments and decorations, and themed gift sets for gifting purposes, mostly sold under the "Tan Mujiang" brand[127](index=127&type=chunk) [Directors' Interests in Competing Businesses](index=28&type=section&id=%E8%91%A3%E4%BA%8B%E6%96%BC%E7%AB%B6%E7%88%AD%E6%80%A7%E6%A5%AD%E5%8B%99%E7%9A%84%E6%AC%8A%E7%9B%8A) For the six months ended June 30, 2020, none of the company's directors had any interests in businesses that directly or indirectly compete or may compete with the Group's business - For the six months ended June 30, 2020, none of the company's directors had any interests in any business that competes or may compete with the Group's business[128](index=128&type=chunk) [Directors' Securities Interests](index=28&type=section&id=%E8%91%A3%E4%BA%8B%E4%B9%8B%E8%AD%89%E5%88%B8%E6%AC%8A%E7%9B%8A) As of June 30, 2020, the company's directors and chief executive held interests in the shares of the company and its associated corporations, with Mr. Tan Chuanhua holding **67.43%** through a controlled company and Mr. Tan Lizi holding **0.12%** as a beneficial owner Directors' Interests in Company Shares (June 30, 2020) | Director Name | Capacity/Nature of Interest | Number of Securities | Approximate Percentage of Holding | | :--- | :--- | :--- | :--- | | Mr. Tan Chuanhua | Interest in controlled corporation | 167,700,000 | 67.43% | | Mr. Tan Lizi | Beneficial owner | 300,000 | 0.12% | Directors' Interests in Associated Corporation Shares (June 30, 2020) | Director Name | Associated Corporation | Capacity/Nature of Interest | Approximate Percentage of Interest in Associated Corporation | | :--- | :--- | :--- | :--- | | Mr. Tan Chuanhua | Lingchang | Beneficial owner | 51% | [Major Shareholders' Securities Interests](index=29&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E4%B9%8B%E8%AD%89%E5%88%B8%E6%AC%8A%E7%9B%8A) As of June 30, 2020, major shareholders holding **5% or more** of the company's issued share capital included Mr. Tan Chuanhua, Ms. Fan Chengqin, and Lingchang, all holding **167,700,000 shares** through controlled companies, representing **67.43%** of the issued share capital Major Shareholders' Interests in Company Shares (June 30, 2020) | Name | Capacity/Nature of Interest | Number of Shares | Type | Approximate Percentage | | :--- | :--- | :--- | :--- | :--- | | Mr. Tan Chuanhua | Interest in controlled corporation | 167,700,000 | Long Position | 67.43% | | Ms. Fan Chengqin | Interest in controlled corporation | 167,700,000 | Long Position | 67.43% | | Lingchang | Beneficial owner | 167,700,000 | Long Position | 67.43% | - Mr. Tan Chuanhua holds a **51% interest** in Lingchang, Ms. Fan Chengqin holds a **49% interest** in Lingchang, and Lingchang is a controlling shareholder as defined by the Listing Rules[134](index=134&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) [Share Option Scheme](index=29&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The company adopted a share option scheme on November 17, 2009, to recognize and incentivize eligible individuals' contributions, stipulating that the total shares issued upon exercise of options shall not exceed **10% of issued shares**, and for any single eligible person, not more than **1%** in any twelve-month period, with an exercise period of up to ten years; as of June 30, 2020, **700,000 share options** remained unexercised - The share option scheme was adopted on November 17, 2009, to recognize and incentivize eligible individuals' contributions to the Group[139](index=139&type=chunk)[140](index=140&type=chunk) - The total number of shares that may be issued upon exercise of options under this scheme and other share option schemes shall not exceed **10% of the total issued shares** (i.e., **25,000,000 shares**)[143](index=143&type=chunk) - The maximum number of shares issued upon exercise of options by any one eligible person in any twelve-month period shall not exceed **1% of the issued shares**[144](index=144&type=chunk) - The exercise period for share options is determined by the Board, not exceeding ten years from the grant date[145](index=145&type=chunk) Share Option Overview (June 30, 2020) | Grantee | Position | Grant Date | Option Period | Exercise Price Per Share (HKD) | Unexercised as of Jan 1, 2020 | Unexercised as of June 30, 2020 | Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Tan Lizi | Executive Director | August 31, 2018 | August 31, 2018 to August 30, 2023 | 4.896 | 300,000 | 300,000 | 0.12% | | Ms. Jian Kejia | Marketing Director | August 31, 2018 | August 31, 2018 to August 30, 2023 | 4.896 | 200,000 | 200,000 | 0.08% | | Mr. An Hongping | Administrative Director | August 31, 2018 | August 31, 2018 to August 30, 2023 | 4.896 | 200,000 | 200,000 | 0.08% | | Total | | | | | 900,000 | 700,000 | 0.28% | [Capital Commitments](index=31&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of June 30, 2020, the Group had capital commitments contracted but not provided for, amounting to approximately **RMB 1.087 million** for the acquisition of property, plant, and equipment - As of June 30, 2020, the Group had capital commitments contracted but not provided for, amounting to approximately **RMB 1.087 million** for the acquisition of property, plant, and equipment[155](index=155&type=chunk) [Public Float](index=31&type=section&id=%E5%85%AC%E7%9C%BE%E6%8C%81%E8%82%A1%E9%87%8F) From the reporting period to the date of this report, at least **25%** of the company's issued share capital was held by public shareholders, complying with Listing Rules requirements - From the reporting period to the date of this report, at least **25% of the company's issued share capital** was held by public shareholders[156](index=156&type=chunk) [Dividends](index=32&type=section&id=%E8%82%A1%E6%81%AF) The company paid a final dividend of **HKD 28.04 cents per share** for the year ended December 31, 2019, totaling approximately **RMB 62.502 million**, on June 29, 2020; the Board resolved not to declare any interim dividend for the six months ended June 30, 2020 - The company declared and paid a final dividend of **HKD 28.04 cents per share** for the year ended December 31, 2019, totaling approximately **RMB 62.502 million** to all shareholders[160](index=160&type=chunk) - The Board resolved not to declare any interim dividend for the six months ended June 30, 2020[161](index=161&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=32&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[162](index=162&type=chunk) [Use of Net Proceeds from the Company's Initial Public Offering](index=32&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E9%A6%96%E6%AC%A1%E5%85%AC%E9%96%8B%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E6%B7%A8%E9%A1%8D%E7%9A%84%E7%94%A8%E9%80%94) The net proceeds from the company's initial public offering were approximately **RMB 116.8 million**; as of June 30, 2020, approximately **RMB 64.09 million** had been utilized, primarily for enhancing design and product development capabilities, improving operational efficiency, sales network and support services, constructing logistics centers and production facilities, and working capital, while business development plans for high-end home furnishing stores and fashion craft stores have been discontinued - The net proceeds from the company's initial public offering were approximately **RMB 116.8 million**[163](index=163&type=chunk) - As of June 30, 2020, approximately **RMB 64.09 million** had been utilized for design and product development, operational efficiency enhancement, sales network, logistics center and production facility construction, and working capital[163](index=163&type=chunk) - Business development plans for high-end home furnishing stores and fashion craft stores have been discontinued[163](index=163&type=chunk) [Corporate Governance Practices](index=32&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Board is committed to adhering to the Corporate Governance Code outlined in the Listing Rules, adopting measures to strengthen internal control systems, continuous professional training for directors, and other standard practices; the company complied with all applicable code provisions of the Corporate Governance Code throughout the reporting period - The Board is committed to adhering to the Corporate Governance Code outlined in Appendix 14 of the Listing Rules, adopting measures to strengthen internal control systems and continuous professional training for directors[164](index=164&type=chunk) - The company complied with all applicable code provisions of the Corporate Governance Code throughout the reporting period[164](index=164&type=chunk) [Standard Code for Securities Transactions](index=33&type=section&id=%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules, and also adopted written guidelines for relevant employees no less stringent than the Standard Code; all directors confirmed compliance with the Standard Code during the reporting period, with no instances of employee violations of the written guidelines - The company adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules[168](index=168&type=chunk) - Each director confirmed compliance with the Standard Code throughout the reporting period[168](index=168&type=chunk) - The company also adopted written guidelines for relevant employees no less stringent than the Standard Code, with no violations reported during the period[168](index=168&type=chunk) [Audit Committee](index=33&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, established on November 17, 2009, comprises three independent non-executive directors, chaired by Mr. Zhou Jinrong, and is primarily responsible for independently reviewing and overseeing financial reporting, internal control effectiveness, and the independence of external auditors; the committee reviewed the financial information in this interim report and confirmed that the adopted accounting treatments comply with current accounting standards and Listing Rules - The Audit Committee comprises three independent non-executive directors, chaired by Mr. Zhou Jinrong, who possesses recognized accounting professional qualifications[169](index=169&type=chunk) - The committee's primary responsibilities include independently reviewing and overseeing financial reporting, the effectiveness of internal controls, and the independence of external auditors[169](index=169&type=chunk) - The Audit Committee reviewed the company's unaudited condensed consolidated interim financial information for the six months ended June 30, 2020, and agreed with the adopted accounting treatments[169](index=169&type=chunk) [Events After Reporting Period](index=34&type=section&id=%E6%9C%AC%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) The COVID-19 pandemic, which erupted in January 2020, continues to impact the global business environment and has affected the Group; further changes in the Group's economic conditions due to the pandemic's development and spread may impact financial performance, but the extent of such impact remains unquantifiable as of the report date, and the Group will continue to monitor and actively respond - The COVID-19 pandemic, which erupted in January 2020, has impacted the global business environment and the Group[173](index=173&type=chunk) - Further changes in the Group's economic conditions due to the pandemic's development and spread may impact financial performance, but the extent of such impact remains unquantifiable as of the report date[173](index=173&type=chunk) - The Group will continue to monitor the pandemic's development and actively respond to its impact on financial position and operating results[173](index=173&type=chunk) [Information Disclosure](index=34&type=section&id=%E4%BF%A1%E6%81%AF%E6%8A%AB%E9%9C%B2) The company will dispatch the interim report for the six months ended June 30, 2020, to its shareholders in due course and will publish it on the HKEXnews website and the company's website - This interim report will be dispatched to the company's shareholders and published on the HKEXnews website (http://www.hkexnews.hk) and the company's website (http://www.ctans.com)[175](index=175&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=35&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) [Overview of Condensed Consolidated Statement of Profit or Loss](index=35&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8%E6%A6%82%E8%A6%BD) This condensed consolidated statement of profit or loss presents the unaudited financial performance for the six months ended June 30, 2020, showing significant year-on-year declines in revenue, gross profit, operating profit, and profit for the period, reflecting the substantial impact of the pandemic on the company's profitability Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30, 2020) | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 108,069 | 170,355 | | Cost of Sales | (46,664) | (63,923) | | Gross Profit | 61,405 | 106,432 | | Other Income | 25,672 | 29,147 | | Selling and Distribution Expenses | (29,764) | (25,737) | | Administrative Expenses | (12,601) | (16,248) | | Other Operating Expenses | (8,711) | (5,874) | | Operating Profit | 36,001 | 87,720 | | Finance Costs | (241) | (328) | | Profit Before Tax | 35,760 | 87,392 | | Income Tax | (7,882) | (14,346) | | Profit for the Period | 27,878 | 73,046 | | Profit Attributable to Owners of the Company | 26,808 | 73,046 | | Non-controlling Interests | 1,070 | – | | Basic and Diluted Earnings Per Share | RMB 10.8 cents | RMB 29.4 cents | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=36&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) [Overview of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=36&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8%E6%A6%82%E8%A6%BD) This condensed consolidated statement of profit or loss and other comprehensive income shows that for the six months ended June 30, 2020, profit for the period was **RMB 27.878 million**, while other comprehensive income was primarily affected by exchange differences arising from the translation of functional currency to presentation currency, resulting in a total comprehensive income of **RMB 27.844 million** for the period, a significant year-on-year decrease Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, 2020) | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period | 27,878 | 73,046 | | Other comprehensive income for the period: | | | | Exchange differences arising from translation of functional currency to presentation currency | (34) | 3,284 | | Total comprehensive income for the period | 27,844 | 76,330 | | Attributable to owners of the company | 26,774 | 76,330 | | Non-controlling Interests | 1,070 | – | [Condensed Consolidated Statement of Financial Position](index=37&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) [Overview of Condensed Consolidated Statement of Financial Position](index=37&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8%E6%A6%82%E8%A6%BD) This condensed consolidated statement of financial position shows that as of June 30, 2020, the Group's total assets less current liabilities were **RMB 591.213 million**, and net assets were **RMB 561.946 million**; compared to December 31, 2019, financial assets at fair value through profit or loss and cash and bank balances within current assets significantly decreased, leading to a decline in net current assets Condensed Consolidated Statement of Financial Position (As of June 30, 2020) | Indicator | June 30, 2020 (RMB thousand) | December 31, 2019 (RMB thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 60,364 | 60,539 | | Investment properties | 101,240 | 101,240 | | Right-of-use assets | 38,340 | 42,019 | | **Current assets** | | | | Inventories | 167,470 | 153,072 | | Trade receivables | 5,417 | 4,799 | | Financial assets at fair value through profit or loss | 242,145 | 447,584 | | Other receivables, deposits and prepayments | 19,225 | 18,892 | | Cash and bank balances | 24,429 | 39,380 | | **Current liabilities** | | | | Trade payables | 3,009 | 3,098 | | Other payables and accrued expenses | 36,137 | 196,288 | | Lease liabilities | 4,179 | 4,977 | | Income tax payable | 24,092 | 34,428 | | **Net assets** | 561,946 | 596,604 | | Equity attributable to owners of the company | 553,076 | 588,804 | | Non-controlling Interests | 8,870 | 7,800 | - Net current assets decreased from **RMB 424.936 million** as of December 31, 2019, to **RMB 391.269 million** as of June 30, 2020[189](index=189&type=chunk) - Financial assets at fair value through profit or loss significantly decreased from **RMB 447.584 million to RMB 242.145 million**[189](index=189&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=38&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) [Overview of Condensed Consolidated Statement of Changes in Equity](index=38&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8%E6%A6%82%E8%A6%BD) This condensed consolidated statement of changes in equity shows that for the six months ended June 30, 2020, equity attributable to owners of the company decreased from **RMB 588.804 million** at the beginning of the period to **RMB 553.076 million** at the end of the period, primarily reflecting the impact of profit for the period, exchange differences, and dividends paid Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, 2020) | Indicator | Share Capital (RMB thousand) | Share Premium (RMB thousand) | Capital Reserve (RMB thousand) | Other Reserves (RMB thousand) | Revaluation Reserve (RMB thousand) | Share-based Payment Reserve (RMB thousand) | Exchange Fluctuation Reserve (RMB thousand) | Retained Profits (RMB thousand) | Non-controlling Interests (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | As of January 1, 2020 (audited) | 2,189 | 110,503 | 10,005 | 57,947 | 17,542 | 12,245 | 192 | (16,788) | 394,969 | 7,800 | 596,604 | | Profit for the Period | - | - | - | - | - | - | - | 26,808 | 1,070 | 27,878 | | Exchange differences arising from translation of functional currency to presentation currency | - | - | - | - | - | - | (34) | - | - | (34) | | Total comprehensive income for the period | - | - | - | - | - | - | (34) | 26,808 | 1,070 | 27,844 | | Dividends | - | - | - | - | - | - | - | (62,502) | - | (62,502) | | As of June 30, 2020 (unaudited) | 2,189 | 110,503 | 10,005 | 57,947 | 17,542 | 12,245 | 192 | (16,822) | 359,275 | 8,870 | 561,946 | - Equity attributable to owners of the company decreased from **RMB 588.804 million** as of January 1, 2020, to **RMB 553.076 million** as of June 30, 2020[191](index=191&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=39&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) [Overview of Condensed Consolidated Statement of Cash Flows](index=39&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8%E6%A6%82%E8%A6%BD) This condensed consolidated statement of cash flows shows that for the six months ended June 30, 2020, the Group's cash and cash equivalents net decreased by **RMB 9.933 million**, with net cash outflow from operating activities, net cash inflow from investing activities, net cash outflow from financing activities, and a negative impact from foreign exchange rate changes Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, 2020) | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | | :--- | :--- | :--- | | Net cash (used in)/generated from operating activities | (11,822) | 39,745 | | Net cash generated from investing activities | 215,300 | 65,268 | | Net cash used in financing activities | (213,411) | (116,412) | | Net decrease in cash and cash equivalents | (9,933) | (11,399) | | Cash and cash equivalents at January 1 | 39,380 | 46,203 | | Net effect of foreign exchange rate changes | (5,018) | 4,655 | | Cash and cash equivalents at June 30 | 24,429 | 39,459 | - Net cash used in operating activities was **RMB (11.822) million**, a significant shift from a net inflow in the same period last year[196](index=196&type=chunk) - Net cash generated from investing activities was **RMB 215.300 million**, primarily from the maturity proceeds of financial assets at fair value through profit or loss[196](index=196&type=chunk) [Notes to the Unaudited Interim Financial Report](index=40&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E9%99%84%E8%A8%BB) [General Information](index=40&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) This section provides basic information about Tan Mujiang Holdings Limited, including its incorporation as an exempted company in the Cayman Islands, its listing on the Main Board of The Stock Exchange of Hong Kong Limited, and its principal place of business in Jurong City, Jiangsu Province, China - Tan Mujiang Holdings Limited was incorporated as an exempted company in the Cayman Islands on June 20, 2006[197](index=197&type=chunk) - Its shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[197](index=197&type=chunk) - The principal place of business is located in Jurong City, Jiangsu Province, People's Republic of China[197](index=197&type=chunk) [Basis of Preparation](index=40&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) This unaudited interim financial report is prepared in accordance with the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants; it involves management's judgments, estimates, and assumptions, and has been reviewed by the company's Audit Committee - This unaudited interim financial report is prepared in accordance with the Listing Rules of The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34[198](index=198&type=chunk) - In preparing the report, management is required to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of financial statements[198](index=198&type=chunk) - The interim financial report is unaudited but has been reviewed by the company's Audit Committee[199](index=199&type=chunk) [Principal Accounting Policies](index=41&type=section&id=%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared on a historical cost basis, except for investment properties and financial assets at fair value through profit or loss, which are stated at fair value; amendments to Hong Kong Financial Reporting Standards were first adopted and applied during this interim period, but they did not have a significant impact on the amounts presented or disclosures in the financial statements - The condensed consolidated financial statements are prepared on a historical cost basis, except for investment properties and financial assets at fair value through profit or loss[203](index=203&type=chunk) - Amendments to HKFRS 3, 9, 39, 7, 1, and 8 were first adopted and applied during this interim period[204](index=204&type=chunk) - The application of these amendments did not have a significant impact on the amounts presented or disclosures in the condensed consolidated financial statements[204](index=204&type=chunk) [Segment Reporting](index=42&type=section&id=%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) The Group's operating segments are identified based on internal reporting, with management assessing business performance from a product perspective; as over **90%** of revenue, results, and assets are derived from a single segment of manufacturing and distribution of wooden crafts and ornaments, and principal business activities are conducted in China, no segment and geographical information is presented, and no single external customer's transactions accounted for **10% or more** of total revenue - Over **90% of the Group's revenue, results, and assets** are derived from a single segment of manufacturing and distribution of wooden crafts and ornaments, thus no segment information is presented[209](index=209&type=chunk) - The Group's revenue and results are primarily derived from business activities conducted in the People's Republic of China, thus no geographical information is provided[209](index=209&type=chunk) - No transactions with a single external customer accounted for **10% or more** of the Group's total revenue[210](index=210&type=chunk) [Operating Seasonal Factors](index=42&type=section&id=%E7%B6%93%E7%87%9F%E5%AD%A3%E7%AF%80%E5%9B%A0%E7%B4%A0) The Group's sales generally fluctuate due to seasonal factors, with higher sales in March to April and September to December, and lower sales in July, primarily because franchised stores increase procurement in preparation for retail peaks during holidays such as Labor Day, National Day, Christmas, New Year, and Lunar New Year - The Group's sales are generally affected by seasonality, with higher sales in March to April and September to December, and lower sales in July[211](index=211&type=chunk) - Seasonal impact is attributed to franchised stores increasing procurement in preparation for retail peaks during holidays (e.g., Labor Day, National Day, Christmas, New Year, and Lunar New Year)[211](index=211&type=chunk) [Revenue and Other Income](index=43&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) This section provides a detailed analysis of the composition of revenue and other income for the six months ended June 30, 2020; revenue primarily came from goods sales, with a smaller proportion from franchise fees, while other income sources included government subsidies, interest income from financial assets, fair value changes, China VAT preferential refunds, and investment property rental income Revenue and Other Income Analysis (For the six months ended June 30, 2020) | Item | 2020 (RMB thousand) | 2019 (RMB thousand) | | :--- | :--- | :--- | | **Revenue** | | | | Sales of goods | 107,975 | 170,034 | | Franchise fee income | 94 | 321 | | **Other Income** | | | | Government subsidies | 4,582 | 595 | | Interest income from financial assets | 39 | 117 | | Fair value changes of financial assets at fair value through profit or loss | 11,838 | 11,454 | | China VAT preferential refunds | 5,085 | 12,059 | | Rental income from investment properties | 2,716 | 3,849 | | Others | 1,409 | 996 | | **Total** | 133,741 | 199,502 | - Government subsidies significantly increased from **RMB 595 thousand in 2019 to RMB 4,582 thousand in 2020**[214](index=214&type=chunk) - China VAT preferential refunds decreased from **RMB 12,059 thousand in 2019 to RMB 5,085 thousand in 2020**[214](index=214&type=chunk) [Profit Before Tax](index=44&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) This section lists the components of profit before tax for the six months ended June 30, 2020, including cost of inventories, depreciation, staff costs, reversal of provision for sales returns, and net rental income; cost of inventories and staff costs decreased year-on-year, while depreciation expenses increased Components of Profit Before Tax (For the six months ended June 30, 2020) | Item | 2020 (RMB thousand) | 2019 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories | 46,664 | 63,923 | | Impairment loss on inventories | 1,255 | 1,349 | | Reversal of impairment loss on inventories | (3) | – | | Depreciation－property, plant and equipment | 2,152 | 1,517 | | Depreciation－right-of-use assets | 3,768 | 2,606 | | Loss allowance for trade and other receivables | 323 | 26 | | Staff costs (including directors' emoluments) | 29,334 | 32,487 | | Reversal of provision for sales returns | (1,104) | (829) | | Net rental income | (2,424) | (3,381) | - Cost of inventories (including staff costs and depreciation) of approximately **RMB 16.512 million** has been included in individual totals[217](index=217&type=chunk)[222](index=222&type=chunk) [Income Tax](index=45&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) This section details the income tax expense for the six months ended June 30, 2020, including China corporate income tax, dividend withholding tax, and deferred tax; the company's subsidiary, Tan

譚木匠控股有限公司 CARPENTER TAN HOLDINGS LIMITED ( 於開曼群島註冊成立的有限公司 ) 股份代號 : 837 部示范 年報 2019 僅供識別 ( I TOK Noter - 3 1 and 192 uly 2 目錄 苗 蕉 惹 同 | --- | |------------------------| | | | 目錄 公司資料 | | 財務摘要 | | 主席報告書 | | 管理層討論與分析 | | 董事及高級管理人員簡介 | | 企業管治報告 | | 董事會報告 | | 獨立核數師報告 | | --- | --- | |-------|--------------------------| | | | | 64 | 綜合損益表 | | 65 | 綜合損益及其他全面收益表 | | 66 | 綜合財務狀況表 | | 68 | 綜合權益變動表 | | 69 | 綜合現金流量表 | | 71 | 財務報表附註 | | 145 | 持作投資用途之主要物業 | | 146 | 財務概要 | 公司資料 | --- | --- | |---------------------|------- ...

[Company Information](index=4&type=section&id=公司資料) This section provides basic company information for Tanmujiang Holding Co., Ltd., including board members, committee composition, registered office, headquarters, principal place of business in Hong Kong, auditor, legal counsel, share registrar, stock code, and principal bankers, offering essential background for understanding the company's governance structure and operational foundation - Board members include executive, non-executive, and independent non-executive directors, with a Nomination Committee, Audit Committee, and Remuneration Committee[4](index=4&type=chunk)[7](index=7&type=chunk)[10](index=10&type=chunk)[14](index=14&type=chunk)[19](index=19&type=chunk)[24](index=24&type=chunk) - The company's registered office is in the Cayman Islands, headquarters in Jurong City, Jiangsu Province, China, and principal place of business in Mong Kok, Kowloon, Hong Kong[15](index=15&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - The company's stock code is **837**, auditor is Crowe (HK) CPA Limited, and legal counsel is Hastings & Co[25](index=25&type=chunk)[26](index=26&type=chunk) [Financial Highlights](index=6&type=section&id=財務摘要) This section outlines Tanmujiang Holding Co., Ltd.'s key financial performance and liquidity for the six months ended June 30, 2019, showing growth in revenue and profit attributable to owners, a slight decrease in gross profit margin, robust liquidity, and no interest-bearing bank borrowings Financial Highlights for the Six Months Ended June 30 | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | Percentage Change (Increase/Decrease) | | :--- | :------------------ | :------------------ | :---------------------- | | Revenue | 170,355 | 157,578 | 8.1% | | Cost of Sales | (63,923) | (51,114) | 25.1% | | Gross Profit | 106,432 | 106,464 | (0.0)% | | Gross Profit Margin | 62.5% | 67.6% | (5.1) percentage points | | Profit Before Tax | 87,392 | 78,753 | 11.0% | | Profit Attributable to Owners of the Company | 73,046 | 64,481 | 13.3% | | Basic Earnings Per Share (RMB cents) | 29.4 | 25.9 | 13.5% | Liquidity and Gearing Ratio Highlights | Indicator | June 30, 2019 | December 31, 2018 | Percentage Change (Increase/Decrease) | | :--- | :------------ | :------------- | :---------------------- | | Current Ratio (1) | 7.84 | 7.96 | (1.5)% | | Quick Ratio (2) | 5.56 | 5.97 | (6.9)% | | Gearing Ratio (3) | Not Applicable (4) | Not Applicable (4) | Not Applicable (4) | - The Group had no interest-bearing bank borrowings as of June 30, 2019, and December 31, 2018, thus the gearing ratio is not applicable[32](index=32&type=chunk) [Chairman's Report](index=8&type=section&id=主席報告書) The Chairman's Report highlights Tanmujiang Holding Co., Ltd.'s stable development and orderly operations during the reporting period, successful 'Comb Garden' brand promotion, and a commitment to brand rejuvenation and seeking breakthroughs in the second half of the year - The Group maintained stable development and orderly operations during the reporting period, with overall steady progress[37](index=37&type=chunk) - Successfully held the 'Comb Garden' brand promotion event, effectively engaging younger consumers through interactive and immersive experiences, receiving enthusiastic responses[37](index=37&type=chunk) - In the second half of 2019, the Group aims to seek breakthroughs and innovations on a stable foundation to revitalize the brand for the present and future[38](index=38&type=chunk) [Management Discussion and Analysis](index=10&type=section&id=管理層討論及分析) This section details Tanmujiang Holding Co., Ltd.'s operational performance, business strategies, financial position, and future outlook for the first half of 2019, covering brand rejuvenation, channel expansion, product R&D, production, corporate culture, and human resources [Management Review](index=11&type=section&id=管理回顧) Management review indicates overall operations met expectations despite personnel changes, with the company steadily progressing, launching the 'Comb Garden' exhibition, new member system, official website, and sales mini-program, alongside advancements in product R&D, marketing, and overseas expansion - Overall operations for the reporting period were in line with expectations, with the company continuing to make steady progress after personnel changes[42](index=42&type=chunk) - Tanmujiang began exploring new brand directions, hosting the 'Comb Garden' touring exhibition, successfully launching a member system and new official website, with the sales mini-program entering testing[42](index=42&type=chunk) - Brand strategy shifted from conceptual expansion to concrete actions, with refined product R&D, innovative online and offline marketing, and substantial progress in overseas expansion[42](index=42&type=chunk) [Business Review](index=11&type=section&id=業務回顧) Business review covers Tanmujiang's online and offline, domestic and international market operations, creative R&D, production technology, logistics, and corporate culture, emphasizing brand rejuvenation, global expansion, product quality, and employee welfare [Offline Business](index=11&type=section&id=線下業務) Offline domestic market remained stable with 1,223 franchised stores, focusing on premium shopping centers and transport hubs with upgraded store images, while overseas business saw slight progress, stable Hong Kong direct sales, and active expansion into new markets like Canada and Malaysia [Domestic Business](index=11&type=section&id=境內業務) Domestic offline marketing team remained stable after personnel changes, with 1,223 franchised stores in China as of June 30, 2019, focusing on premium shopping centers (80% new stores) and third-generation store images (75%), achieving 1.8% sales growth and enhanced customer loyalty through a new member system and experiential marketing - As of June 30, 2019, Tanmujiang had **1,223** franchised stores in mainland China, maintaining a stable store count[43](index=43&type=chunk)[46](index=46&type=chunk) - New store expansion focused on premium shopping centers and transport hubs, with **80%** of new stores in shopping centers and **75%** featuring the third-generation store image[50](index=50&type=chunk) - First-half sales increased by **1.8% year-on-year**, with a slight increase in average single-store sales performance[72](index=72&type=chunk) - Launched the Tanmujiang member system, opened the first Morandi elegant style concept store, and continued experiential marketing activities like comb painting, enhancing brand awareness and customer loyalty[63](index=63&type=chunk)[64](index=64&type=chunk) [Overseas Business](index=17&type=section&id=海外業務) Overseas business made substantial progress with 4 franchised stores and 3 direct stores in Hong Kong, including the first mall store at Telford Plaza, with new stores in Canada, Malaysia, Singapore, Taichung, and Germany, four of which are operational and showing steady growth, with plans for improved operations and increased brand exposure through exhibitions - Tanmujiang currently has **4** franchised stores in other countries and regions, **3** direct stores in Hong Kong, and opened its first mall store at Telford Plaza in Hong Kong[73](index=73&type=chunk) - Overseas stores have signed agreements in Canada, Malaysia, Singapore, Taichung, and Germany, with four already operational and showing steady growth[76](index=76&type=chunk) - Participated in the Taipei International Chain and Franchise Exhibition twice in the first half of 2019, gathering more potential franchisee information[76](index=76&type=chunk) - In the second half, the company will continue to improve overseas store opening and operation management, provide more suitable support for overseas markets, and enhance brand exposure through exhibitions and promotional platforms[76](index=76&type=chunk) [Online Business](index=18&type=section&id=線上業務) Online business achieved significant growth both domestically and internationally, with domestic e-commerce sales up 18.3% driven by Tmall and JD.com through holiday marketing and live streaming, while international online presence expanded across multiple platforms, promoting brand culture through offline events and social media [Domestic Business](index=18&type=section&id=境內業務) Tanmujiang's e-commerce team successfully met sales targets in the first half of 2019, achieving an **18.3% year-on-year increase**, primarily driven by Tmall (RMB 47.5 million, up 16.1%) and JD.com (RMB 19.5 million, up 18.9%), with notable holiday sales growth (Valentine's Day up 110%, 618 up 84%) and increased fan loyalty through live streaming - In the first half of 2019, the e-commerce team successfully met sales targets, achieving an **18.3% year-on-year sales growth**[77](index=77&type=chunk) 2019 H1 Domestic Online Sales | Platform | 2019 H1 Sales (RMB millions) | Year-on-year Growth Rate | | :--- | :-------------------------------- | :--------- | | Tmall | 47.5 | 16.1% | | JD.com | 19.5 | 18.9% | - Key holiday sales performed exceptionally, with Valentine's Day sales increasing by **110%** compared to 2018, and 618 period sales increasing by **84.0%**[84](index=84&type=chunk) - Monthly live streaming events were planned to coincide with promotional activities, showcasing products in a personalized manner and increasing fan loyalty[84](index=84&type=chunk) [Overseas Business](index=20&type=section&id=境外業務) Tanmujiang's online e-commerce has successfully launched on numerous international platforms including Amazon US, eBay Australia/UK, Amazon Japan, Naver Korea, Lazada Singapore, and Shopee Malaysia, collaborating with North American cross-border e-commerce and promotion teams for content creation on Facebook and Instagram, and expanding local brand influence through offline events like 'Combing for Mom' and Met Gala appearances to promote Chinese culture - Online e-commerce has successfully launched on numerous international platforms including Amazon US, eBay Australia, eBay UK, independent US website, Amazon Japan, and Naver Korea[86](index=86&type=chunk) - Collaborated with North American cross-border e-commerce and US promotion teams to regularly produce content and promote the brand on Facebook and Instagram[86](index=86&type=chunk) - Expanded local brand influence and promoted Chinese culture through activities like 'Combing for Mom,' comb painting DIY, and appearing at the Met Gala with Hollywood actress Gemma Chan[87](index=87&type=chunk) - In the second half, the company will enhance innovation awareness, increase investment in online media promotion, and actively produce supporting content to overcome 'language barriers'[87](index=87&type=chunk) [Creative R&D](index=21&type=section&id=創意研發) The Creative Design Center conducted 12 product designs in the first half of 2019, launching 38 items with 6 becoming regular products, successfully developing Disney IP products (Mickey family, Princess series, Mulan blockbuster), optimizing functional products like boar bristle brushes, and filing 4 new patents, with plans for diversified, personalized, and refined products, new categories, and improved craftsmanship in the second half - In the first half, the Creative Design Center conducted **12** product designs and developments, submitted **65** design proposals, launched **38** products, and incorporated **6** into regular sales[89](index=89&type=chunk) - Developed Mickey family and Princess series under the 'Disney' IP category, and for the first time, a blockbuster Mulan product combining Chinese traditional craftsmanship[89](index=89&type=chunk) - Functionally upgraded and redefined boar bristle brushes, innovatively optimized multi-material comb-pin hairbrushes; the first batch of **5,000** Jade Rabbit Gua Sha boards sold out upon launch[89](index=89&type=chunk) - In the first half of 2019, **4** new patents were applied for, including **3** utility model patents and **1** invention patent[89](index=89&type=chunk) - In the second half, R&D thinking will be broader, not limited to existing product styles or structures, daring to innovate and break through, with products considering diversification, personalization, and refinement, and continuously improving the product system by adding new categories and enhancing new craftsmanship[90](index=90&type=chunk) [Production Technology](index=22&type=section&id=生產技術) Tanmujiang factory employs 731 staff, nearly half with disabilities, who craft exquisite combs, demonstrating their value, while the company continuously innovates equipment and processing methods, implementing lean production to control costs and increase output, with 23 technical innovation projects proposed and 9 initiated, prioritizing safety and a caring 6S work environment, and enhancing disabled employees' skills and living standards [Production Volume for the Six Months Ended June 30](index=22&type=section&id=截至六月三十日止六個月產量) For the six months ended June 30, 2019, comb production reached 1,986,888 units, a 6.9% increase year-on-year, while mirror and accessory production slightly decreased, totaling 2,361,744 units, a 5.4% overall increase Production Volume for the Six Months Ended June 30 | | 2019 (Units) | 2018 (Units) | | :--- | :------------ | :------------ | | Combs | 1,986,888 | 1,858,675 | | Mirrors, Accessories | 374,856 | 383,067 | | Total | 2,361,744 | 2,241,742 | - Comb production increased by **6.9% year-on-year**, while mirror and accessory production decreased by **2.1% year-on-year**[95](index=95&type=chunk) - Total production increased by **5.4% year-on-year**[95](index=95&type=chunk) - Tanmujiang factory employs **731** staff, nearly half of whom are disabled, proving their value through work[94](index=94&type=chunk) - The factory continuously researches and challenges equipment and processing method innovations, proposing **23** technical development and innovation projects in the first half, with **9** already underway[95](index=95&type=chunk) - Implemented lean production, increasing the utilization rate of recycled materials, effectively controlling costs, and improving production volume[95](index=95&type=chunk) - Highly values production safety, establishing a fume extraction system, adhering to 'visualized' inspection and rectification, and regularly conducting drills and safety knowledge dissemination[97](index=97&type=chunk) - Adheres to the 6S management model, creating a clean, tidy, and beautiful environment for employees, and providing one-on-one assistance to disabled employees to enhance their work and life skills[97](index=97&type=chunk) [Logistics and Distribution](index=23&type=section&id=物流配送) The logistics center efficiently organized production and expedited distribution to meet marketing demands in the first half of 2019, achieving a **99.8% customer order fulfillment rate**, with employees embodying the 'Honesty, Labor, Happiness' brand philosophy through multi-skilled, collective efforts to handle high workloads, especially during weekends and holidays - The logistics center efficiently organized production and expedited distribution, achieving a customer order fulfillment rate of **99.8%**[98](index=98&type=chunk) - Facing high demand for stock preparation during weekends and holidays, the logistics center implemented multi-skilled roles and collective action to collaboratively process orders[98](index=98&type=chunk) - Employees, under high work pressure, rarely complained, embodying the brand philosophy of 'Honesty, Labor, Happiness' through their actions[98](index=98&type=chunk) [Corporate Culture](index=23&type=section&id=企業文化) Tanmujiang actively promoted its corporate culture during the reporting period, centered on the 'Comb Garden' interactive exhibition in Shanghai and Hefei, attracting young consumers and generating 71 million exposures, while also launching a revamped official website with sales functionality, an official sales mini-program for new retail, and a member system to foster loyal customers, all while emphasizing the 'Honesty, Labor, Happiness' brand culture, particularly through the contributions of disabled employees [Comb Garden Themed Interactive Exhibition](index=23&type=section&id=梳情花園主題互動展) The 'Comb Garden' themed interactive exhibition, a major brand promotion event, offered immersive experiences through five sections including 'Warm Tree Hole' and 'Comb Forest,' successfully held in Shanghai and Hefei with themes of 'Girlfriends,' 'Friendship,' and 'Combing for Mom,' attracting media and influencers, generating **71 million exposures**, and expanding brand influence, with future events planned for Shenzhen and Chongqing - The 'Comb Garden' themed interactive exhibition is a major brand promotion event, featuring five sections interspersed with comb-making processes, offering an immersive experience[99](index=99&type=chunk) - Successfully held in Shanghai and Hefei, using different holiday and emotional themes as entry points, generating **71 million exposures** and expanding event influence[102](index=102&type=chunk) - Through the event, customers gained a deeper understanding of Tanmujiang combs' blend of fashion and tradition, exquisite craftsmanship, brand culture stories, and the 'Honesty, Labor, Happiness' corporate culture[102](index=102&type=chunk) - Future events are planned for Shenzhen Futian CBD's Huangting Plaza during Qixi Festival and Chongqing during National Day, with anticipated positive responses[103](index=103&type=chunk) [Official Website Revamp](index=24&type=section&id=官方網改版) Tanmujiang's official website was revamped in March 2019, significantly enhancing its appearance and introducing sales functionality for the first time, establishing an online proprietary sales platform, which, along with the official sales mini-program launched in early August, will integrate with the offline marketing network as a key tool for the company's new retail initiatives - In March 2019, Tanmujiang's official website completed its revamp, significantly enhancing its appearance and establishing an online proprietary sales platform for the first time[104](index=104&type=chunk) - The official sales mini-program officially launched in early August, integrating with the offline marketing network as a key tool for Tanmujiang's new retail initiatives[104](index=104&type=chunk) [Member System](index=25&type=section&id=會員系統) The Tanmujiang member system, launched in March 2019, aims to serve as a brand-to-member connection rather than just a marketing tool, with future efforts focused on fostering strong interactions and cultivating loyal customers to increase customer loyalty - In March 2019, the Tanmujiang member system officially launched, aiming to serve as a brand-to-member connection[105](index=105&type=chunk) - Future efforts will focus on building good interactions with members through the system, cultivating loyal customers, and increasing customer loyalty[105](index=105&type=chunk) [Practicing 'Honesty, Labor, Happiness' in Action](index=25&type=section&id=身體力行，踐行「誠實、勞動、快樂」) Nearly half of Tanmujiang's team comprises disabled individuals who embody the 'Honesty, Labor, Happiness' brand culture through their work, proving their self-worth, while the company remains committed to being a quality domestic brand, diligently cultivating its niche, and continuously spreading this spirit as a core long-term development strategy - Nearly half of Tanmujiang's team consists of disabled individuals who embody the 'Honesty, Labor, Happiness' brand culture through their actions, proving their self-worth to society[106](index=106&type=chunk) - The company is committed to being a quality domestic brand, diligently cultivating its niche, and continuing to spread the spirit of 'Honesty, Labor, Happiness' as a long-term development strategy[106](index=106&type=chunk) [Human Resources and Integrated Governance](index=25&type=section&id=人力資源及綜合治理) Tanmujiang factory employs 731 staff, including 363 disabled employees, for whom the company provides work, skills training, and comprehensive benefits (e.g., staff meals, transport, sports facilities, dormitories), fostering a learning and benevolent environment, with plans for innovative evaluation and reward mechanisms, and in the first half of 2019, general employee wages increased by RMB 100, disabled employee wages by RMB 150, and prosthetics were installed for 11 disabled colleagues, demonstrating deep employee care - Tanmujiang factory employs **731** staff, including **363** disabled employees, for whom the company provides work, skills, and family support[107](index=107&type=chunk) - The company fosters an environment of mutual learning and progress, prioritizing benevolence, and plans to establish or improve innovative evaluation and reward mechanisms[107](index=107&type=chunk) - In the first half of 2019, general employee wages increased by **RMB 100**, disabled employee wages increased by **RMB 150**, and prosthetics were installed for **11** disabled colleagues[107](index=107&type=chunk) [Financial Review](index=27&type=section&id=財務回顧) The financial review analyzes key metrics for the six months ended June 30, 2019, showing an 8.1% revenue increase, a slight gross margin decline due to sales mix, significant growth in other income, reduced administrative expenses driving an 11.4% operating profit increase, and a 13.3% profit for the period, with ample liquidity, no bank borrowings, and healthy cash flow, despite increased financing cash outflows [Revenue](index=27&type=section&id=收益) For the six months ended June 30, 2019, the Group's revenue was approximately **RMB 170,355,000**, an **8.1% year-on-year increase**, primarily driven by enhanced offline business organization, store image, and distribution channels, as well as proactive online marketing strategies, with gift sets contributing the most and other accessories and franchise fees showing significant growth Revenue Composition and Change | Sales Category | 2019 (RMB thousands) | Share (%) | 2018 (RMB thousands) | Share (%) | Year-on-year Change (%) | | :--- | :------------------ | :------- | :------------------ | :------- | :----------- | | Combs | 37,956 | 22.3 | 36,672 | 23.3 | 3.5 | | Mirrors | 309 | 0.2 | 324 | 0.2 | (4.7) | | Gift Sets | 129,958 | 76.2 | 119,339 | 75.7 | 8.9 | | Other Accessories | 1,811 | 1.1 | 1,057 | 0.7 | 71.3 | | Franchise Fee Income | 321 | 0.2 | 186 | 0.1 | 72.6 | | **Total Revenue** | **170,355** | **100.0** | **157,578** | **100.0** | **8.1** | - Revenue increase was primarily due to improved offline business team organization, store image, and channel distribution, as well as proactive online business marketing strategies[113](index=113&type=chunk) [Cost of Sales](index=27&type=section&id=銷售成本) For the six months ended June 30, 2019, the Group's cost of sales was approximately **RMB 63,923,000**, a **25.1% year-on-year increase**, primarily due to revenue growth and a decrease in gross profit margin Cost of Sales Change | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :----------- | | Cost of Sales | 63,923 | 51,114 | 25.1 | - The increase in cost of sales was primarily attributable to increased revenue and a decrease in gross profit margin[115](index=115&type=chunk) [Gross Profit and Gross Profit Margin](index=27&type=section&id=毛利及毛利率) For the six months ended June 30, 2019, the Group's gross profit was approximately **RMB 106,432,000**, a marginal **0.0% year-on-year decrease**, with the gross profit margin falling from **67.6%** in 2018 to **62.5%** in 2019, mainly due to a shift in sales mix towards products with lower gross profit margins Gross Profit and Gross Profit Margin Change | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :----------- | | Gross Profit | 106,432 | 106,464 | (0.0) | | Gross Profit Margin | 62.5% | 67.6% | (5.1) percentage points | - The decrease in gross profit margin was mainly due to a change in sales mix, resulting in a lower proportion of revenue from higher gross profit margin products[116](index=116&type=chunk) [Other Income](index=28&type=section&id=其他收入) For the six months ended June 30, 2019, net other income was approximately **RMB 29,147,000**, a **25.1% year-on-year increase**, primarily driven by an increase of approximately **RMB 3,689,000** in China VAT preferential refunds and approximately **RMB 11,454,000** in fair value changes of financial assets at fair value through profit or loss Net Other Income Change | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :----------- | | Net Other Income | 29,147 | 23,290 | 25.1 | - The main increase came from an increase of approximately **RMB 3,689,000** in China VAT preferential refunds and an increase of approximately **RMB 11,454,000** in fair value changes of financial assets at fair value through profit or loss[119](index=119&type=chunk) [Selling and Distribution Expenses](index=28&type=section&id=銷售及分銷開支) For the six months ended June 30, 2019, the Group's selling and distribution expenses were approximately **RMB 25,737,000**, a **13.4% year-on-year increase**, primarily due to an increase of approximately **RMB 2,079,000** in staff costs and commission fees Selling and Distribution Expenses Change | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :----------- | | Selling and Distribution Expenses | 25,737 | 22,686 | 13.4 | - The increase was primarily due to an increase of approximately **RMB 2,079,000** in staff costs and commission fees[120](index=120&type=chunk) [Administrative Expenses](index=28&type=section&id=行政開支) For the six months ended June 30, 2019, the Group's administrative expenses were approximately **RMB 16,248,000**, a **15.5% year-on-year decrease**, mainly due to a reduction of approximately **RMB 2,735,000** in staff relocation allowances and compensation expenses Administrative Expenses Change | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :----------- | | Administrative Expenses | 16,248 | 19,226 | (15.5) | - The main decrease came from a reduction of approximately **RMB 2,735,000** in staff relocation allowances and compensation expenses[121](index=121&type=chunk) [Operating Profit](index=28&type=section&id=經營溢利) For the six months ended June 30, 2019, the Group's operating profit was approximately **RMB 87,720,000**, an **11.4% year-on-year increase**, primarily driven by increased other income, reduced administrative expenses, and decreased other operating expenses, partially offset by increased selling and distribution expenses Operating Profit Change | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :----------- | | Operating Profit | 87,720 | 78,753 | 11.4 | - The increase in operating profit was primarily attributable to an increase in other income of approximately **RMB 5,857,000**, a decrease in administrative expenses of approximately **RMB 2,978,000**, and a decrease in other operating expenses of approximately **RMB 3,215,000**, partially offset by an increase in selling and distribution expenses of approximately **RMB 3,051,000**[123](index=123&type=chunk) [Finance Costs](index=28&type=section&id=融資開支) For the six months ended June 30, 2019, the Group's finance costs were approximately **RMB 328,000**, compared to zero in the prior period, entirely due to the adoption of new HKFRS 16 from January 1, 2019, with no bank borrowings during the period Finance Costs Change | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :------------------ | :------------------ | | Finance Costs | 328 | – | - Finance costs arose due to the Group's adoption of new HKFRS 16 from January 1, 2019[124](index=124&type=chunk) - The Group had no interest-bearing bank borrowings in both reporting periods[124](index=124&type=chunk) [Profit Before Tax](index=29&type=section&id=除稅前溢利) For the six months ended June 30, 2019, the Group's profit before tax was approximately **RMB 87,392,000**, an **11.0% year-on-year increase**, primarily due to the growth in operating profit during the reporting period Profit Before Tax Change | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :----------- | | Profit Before Tax | 87,392 | 78,753 | 11.0 | - The increase in profit before tax was primarily attributable to an increase in operating profit of approximately **RMB 8,967,000** during the reporting period[126](index=126&type=chunk) [Income Tax Expense](index=29&type=section&id=所得稅開支) For the six months ended June 30, 2019, the Group's income tax expense was approximately **RMB 14,346,000**, a marginal **0.5% year-on-year increase**, primarily due to increased profit before tax, with the effective tax rate slightly decreasing from **18.1%** in 2018 to **16.4%** in 2019 Income Tax Expense and Effective Tax Rate Change | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :----------- | | Income Tax Expense | 14,346 | 14,272 | 0.5 | | Effective Tax Rate | 16.4% | 18.1% | (1.7) percentage points | - The increase in income tax expense was primarily attributable to an increase in profit before tax during the reporting period[127](index=127&type=chunk) [Profit for the Period](index=29&type=section&id=期內溢利) For the six months ended June 30, 2019, the Group's profit for the period was approximately **RMB 73,046,000**, a **13.3% year-on-year increase** Profit for the Period Change | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :----------- | | Profit for the Period | 73,046 | 64,481 | 13.3 | [Liquidity and Sources of Funding](index=29&type=section&id=流動資金及資金來源) The Group primarily uses cash generated from operations and long- and short-term bank borrowings to meet working capital needs, with no bank loans during the reporting period, and the Board believes the Group has sufficient working capital for at least the next twelve months, with cash and bank balances totaling **RMB 39,459,000** as of June 30, 2019 - The Group primarily uses cash generated from operations and various long- and short-term bank borrowings to meet working capital needs, with no bank loans during the reporting period[129](index=129&type=chunk) - The Board believes the Group has sufficient working capital to meet its funding requirements for at least the next twelve months[129](index=129&type=chunk) - As of June 30, 2019, the Group's cash and bank balances amounted to **RMB 39,459,000**[129](index=129&type=chunk) [Cash Flows](index=29&type=section&id=現金流量) The Group's cash flows are primarily used for working capital, debt interest and principal repayment, facilities, and business growth, with net cash from operating activities increasing by **RMB 10,639,000** to **RMB 39,745,000**, net cash from investing activities significantly increasing by **RMB 218,021,000** to **RMB 65,268,000** due to higher maturity proceeds from financial assets and reduced purchase expenditures, and net cash used in financing activities decreasing by **RMB 129,672,000** to **RMB 116,412,000** due to a reduction in unpledged bank deposits Cash Flow Changes | Cash Flow Category | 2019 (RMB thousands) | 2018 (RMB thousands) | Change (RMB thousands) | | :--- | :------------------ | :------------------ | :---------------- | | Net Cash From Operating Activities | 39,745 | 29,106 | +10,639 | | Net Cash From/(Used In) Investing Activities | 65,268 | (152,753) | +218,021 | | Net Cash (Used In)/From Financing Activities | (116,412) | 13,260 | (129,672) | - The increase in net cash from investing activities was primarily due to an increase of approximately **RMB 93,704,000** in maturity proceeds from financial assets at fair value through profit or loss and a decrease of approximately **RMB 125,425,000** in purchase expenditures[133](index=133&type=chunk) - The decrease in net cash from financing activities was primarily due to a reduction of approximately **RMB 141,000,000** in unpledged bank deposits[134](index=134&type=chunk) [Capital Structure](index=30&type=section&id=資本架構) As of June 30, 2019, and during the reporting period, the Group had no bank loans or asset charges, with capital expenditures primarily for property, plant, and equipment, leasehold improvements, and vehicles, totaling **RMB 1,869,000** for the period - As of June 30, 2019, and during the reporting period, the Group had no bank loans or asset charges[135](index=135&type=chunk)[137](index=137&type=chunk) - Capital expenditures primarily included purchases of property, plant, and equipment, leasehold improvements, and vehicles, totaling **RMB 1,869,000** for the reporting period[138](index=138&type=chunk) [Exchange Rate Risk](index=31&type=section&id=匯率風險) The Group's primary business operates in RMB and HKD as functional and operating currencies, thus it is exposed to foreign exchange risks arising from these two currencies, with no significant risk from other exchange rate fluctuations - The Group is primarily exposed to foreign exchange risks arising from RMB and HKD[141](index=141&type=chunk) - The Group has no significant risk from other exchange rate fluctuations[141](index=141&type=chunk) [Contingent Liabilities, Legal and Potential Proceedings](index=31&type=section&id=或有負債、法律訴訟及潛在訴訟) As of June 30, 2019, the Group had no significant contingent liabilities, legal proceedings, or potential proceedings - As of June 30, 2019, the Group had no significant contingent liabilities, legal proceedings, or potential proceedings[142](index=142&type=chunk) [Material Acquisitions and Disposals](index=31&type=section&id=重大收購和出售) For the six months ended June 30, 2019, the Group had no material acquisitions or disposals - For the six months ended June 30, 2019, the Group had no material acquisitions or disposals[143](index=143&type=chunk) [Going Concern](index=31&type=section&id=持續經營) Based on its current financial position and available financing, the Board believes the Group has sufficient financial resources to continue as a going concern for the foreseeable future (at least twelve months), thus the financial statements are prepared on a going concern basis - The Group has sufficient financial resources to continue as a going concern for the foreseeable future, and the financial statements are prepared on a going concern basis[144](index=144&type=chunk) [Future Outlook](index=31&type=section&id=未來展望) For the second half of 2019, Tanmujiang will focus on internal management, continuous improvement of brand image, products, and packaging, and open-minded product R&D, planning to adjust underperforming stores, actively expand omni-channel marketing domestically and internationally, and enhance the product system through new categories and craftsmanship for diversification, personalization, and refinement, while pragmatically communicating the brand to resonate with younger consumers, adapting to market changes, and upholding the 'Honesty, Labor, Happiness' culture to become a global leading comb brand - In the second half, the company will focus on internal management, continuously enhancing corporate image, products, packaging, and brand awareness, and developing products with an open mindset[146](index=146&type=chunk) - Actively expand omni-channel marketing both domestically and internationally, considering diversification, personalization, and refinement, and continuously improve the product system by adding new categories and enhancing new craftsmanship[146](index=146&type=chunk) - Pragmatically communicate the brand, better connect with younger consumers, and keep pace with market changes[146](index=146&type=chunk) - The company will uphold the cultural philosophy of 'Honesty, Labor, Happiness,' staying true to its original intention of making combs, pursuing a long-term development path, and aiming to be a global comb brand[146](index=146&type=chunk) [Human Resources and Training](index=31&type=section&id=人力資源及培訓) As of June 30, 2019, the Group employed 969 staff across mainland China, Hong Kong, and overseas, committed to providing employment opportunities for disabled individuals and emphasizing employee self-improvement through various training formats (exhibitions, workshops, seminars, on-the-job training) to enhance skills, marketing strategies, teamwork, and professional etiquette, thereby solidifying and practicing Tanmujiang's corporate culture - As of June 30, 2019, the Group employed a total of **969 staff** across mainland China, Hong Kong, and overseas[147](index=147&type=chunk) - The Group is committed to providing employment opportunities for disabled individuals and highly values employee self-improvement[147](index=147&type=chunk) - Through various themed exhibitions, workshops, seminars, and employee training, the company enhances staff work skills, marketing strategies, techniques, and methods, and deepens their sense of belonging to the Group[147](index=147&type=chunk) [Other Information](index=32&type=section&id=其他資料) This section discloses non-financial material information for Tanmujiang Holding Co., Ltd., including directors' and major shareholders' securities interests, share option scheme details, capital commitments, public float, dividend policy, IPO proceeds usage, corporate governance practices, standard code for securities transactions, audit committee responsibilities, and post-reporting period events, providing investors with a comprehensive view of governance, ownership, and future direction [Directors' Interests in Competing Businesses](index=32&type=section&id=董事於競爭性業務的權益) For the six months ended June 30, 2019, no directors of the Company held any interests in businesses directly or indirectly competing or potentially competing with the Group's business - For the six months ended June 30, 2019, no directors of the Company held any interests in any business directly or indirectly competing or potentially competing with the Group's business[149](index=149&type=chunk) [Directors' Securities Interests](index=32&type=section&id=董事之證券權益) As of June 30, 2019, Mr. Tan Chuanhua held interests in 167,700,000 shares, representing **67.43%** of the issued share capital, through his controlled company, Leading Champ Investment Limited, while Mr. Tan Lizi beneficially owned 300,000 shares, representing **0.12%**, derived from share options granted under the share option scheme Directors' Interests in the Company's Shares | Director Name | Capacity/Nature of Interest | Number of Securities | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Tan Chuanhua | Interest in controlled corporation | 167,700,000 | 67.43% | | Tan Lizi | Beneficial owner | 300,000 | 0.12% | - Tan Chuanhua holds a **51%** interest in Leading Champ Investment Limited and is deemed to have an interest in the **167,700,000** shares held by Leading Champ[150](index=150&type=chunk) - Mr. Tan Lizi's beneficial interest is derived from share options granted under the share option scheme[151](index=151&type=chunk) [Major Shareholders' Securities Interests](index=33&type=section&id=主要股東之證券權益) As of June 30, 2019, Tan Chuanhua, Fan Chengqin, and Leading Champ Investment Limited each held a long position in 167,700,000 shares of the Company, representing **67.43%** of the issued share capital, with Tan Chuanhua and Fan Chengqin holding **51%** and **49%** interests in Leading Champ respectively, both considered controlling shareholders Major Shareholders' Interests in the Company's Shares | Name | Capacity/Nature of Interest | Number of Shares | Type | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Tan Chuanhua | Interest in controlled corporation | 167,700,000 | Long Position | 67.43% | | Fan Chengqin | Interest in controlled corporation | 167,700,000 | Long Position | 67.43% | | Leading Champ | Beneficial owner | 167,700,000 | Long Position | 67.43% | - Tan Chuanhua holds a **51%** interest in Leading Champ, and Fan Chengqin holds a **49%** interest in Leading Champ; both are considered controlling shareholders as defined by the Listing Rules[154](index=154&type=chunk)[155](index=155&type=chunk) [Share Option Scheme](index=33&type=section&id=購股權計劃) The Company adopted a share option scheme on November 17, 2009, to incentivize eligible persons, valid for ten years, with total shares issuable not exceeding **10%** (25,000,000 shares) of the initial issued share capital, and a **1%** individual limit within any twelve-month period; as of June 30, 2019, 700,000 options were granted and accepted, representing **0.28%** of issued share capital, with an exercise price of **HKD 4.896** per share - The share option scheme was adopted on November 17, 2009, to recognize and incentivize eligible persons, with a ten-year validity period[157](index=157&type=chunk)[158](index=158&type=chunk)[165](index=165&type=chunk) - The total number of shares that may be issued upon exercise of options shall not exceed **10%** (**25,000,000** shares) of the total issued shares at the time of initial listing, with a **1%** exercise limit for any single eligible person within any twelve-month period[160](index=160&type=chunk)[161](index=161&type=chunk) Summary of Share Options as of June 30, 2019 | Grantee | Position in the Group | Number of Outstanding Share Options as of June 30, 2019 | Approximate Percentage of Total Issued Share Capital of the Company | | :--- | :--- | :--- | :--- | | Mr. Tan Lizi | Executive Director | 300,000 | 0.12% | | Ms. Liu Kejia | Marketing Director (Online Business) | 200,000 | 0.08% | | Mr. Luo Hongping | Administrative Director | 200,000 | 0.08% | | **Total** | | **700,000** | **0.28%** | - The share option exercise price is **HKD 4.896** per share, with the grant date being August 31, 2018[165](index=165&type=chunk)[166](index=166&type=chunk) [Capital Commitments](index=35&type=section&id=資本承擔) As of June 30, 2019, the Group's contracted but unprovided capital commitments for the acquisition of property, plant, and equipment were approximately **RMB 954,000**, a decrease from **RMB 1,535,000** as of December 31, 2018 Capital Commitments Change | Indicator | June 30, 2019 (RMB thousands) | December 31, 2018 (RMB thousands) | | :--- | :----------------------- | :------------------------ | | Capital Commitments | 954 | 1,535 | - Capital commitments were primarily for the acquisition of property, plant, and equipment[167](index=167&type=chunk) [Public Float](index=35&type=section&id=公眾持股量) Based on publicly available information and to the best knowledge of the directors, at least **25%** of the Company's issued share capital is held by public shareholders, complying with Listing Rules requirements - At least **25%** of the Company's issued share capital is held by public shareholders[168](index=168&type=chunk) [Dividends](index=36&type=section&id=股息) The Company declared and paid a final dividend of **HKD 25.86 cents** per share (approximately **RMB 56,359,000**) and a special dividend of **HKD 25.86 cents** per share (approximately **RMB 56,359,000**) for the year ended December 31, 2018, but the Board did not propose an interim dividend for the six months ended June 30, 2019 - The Company declared and paid a final dividend of **HKD 25.86 cents** per share, totaling approximately **RMB 56,359,000**, for the year ended December 31, 2018[170](index=170&type=chunk) - A special dividend of **HKD 25.86 cents** per share, totaling approximately **RMB 56,359,000**, was also distributed to company shareholders[170](index=170&type=chunk) - The Board did not propose an interim dividend for the six months ended June 30, 2019[171](index=171&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=36&type=section&id=購買、出售或贖回本公司上市證券) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[172](index=172&type=chunk) [Use of Net Proceeds from the Company's Initial Public Offering](index=36&type=section&id=本公司首次公開發售所得款項淨額的用途) The Company's IPO in December 2009 yielded net proceeds of approximately **HKD 132,900,000** (approximately **RMB 116,800,000**), with approximately **RMB 54,200,000** utilized as of June 30, 2019, primarily for enhancing design and product development, improving operational efficiency, sales network and production facility construction, and working capital, while plans for high-end home decor and fashion craft stores were discontinued due to market changes - The Company's IPO in December 2009 yielded net proceeds of approximately **HKD 132,900,000** (approximately **RMB 116,800,000**)[173](index=173&type=chunk) - As of June 30, 2019, approximately **RMB 54,200,000** of the net proceeds had been utilized, with **RMB 25,500,000** for enhancing design and product development and improving operational efficiency, **RMB 16,500,000** for enhancing the sales network and support services and constructing production facilities, and **RMB 12,200,000** for working capital[173](index=173&type=chunk) - Due to changes in market conditions and the Group's business strategy, business development plans for high-end home decor and fashion craft stores have been discontinued[173](index=173&type=chunk) [Corporate Governance Practices](index=36&type=section&id=企業管治常規) The Board is committed to adhering to the Corporate Governance Code, continuously strengthening internal control systems and director training, and despite the deviation from Code Provision A.2.1 where Mr. Tan Chuanhua serves as both Chairman and CEO, the Board believes this structure provides strong and consistent leadership, balanced by independent non-executive directors, benefiting the Company's overall business operations - The Board is committed to adhering to the Corporate Governance Code and has adopted various measures to strengthen internal control systems and ongoing professional training for directors[173](index=173&type=chunk) - There is a deviation from Corporate Governance Code Provision A.2.1, as Mr. Tan Chuanhua concurrently serves as both Chairman and Chief Executive Officer[175](index=175&type=chunk) - The Board believes this structure provides strong and consistent leadership for the Group, and with strong and independent non-executive directors, it does not compromise the balance of power[175](index=175&type=chunk) [Standard Code for Securities Transactions](index=37&type=section&id=證券交易之標準守則) The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules, confirming compliance by all directors during the reporting period, and also implemented written guidelines no less stringent than the Model Code for senior management and employees who may possess unpublished inside information, which have also been complied with - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules, and all directors have confirmed compliance[176](index=176&type=chunk) - The Company has also adopted written guidelines no less stringent than the Model Code for employees who may possess unpublished inside information, and no breaches have occurred[176](index=176&type=chunk) [Audit Committee](index=37&type=section&id=審核委員會) The Audit Committee, established on November 17, 2009, comprises three independent non-executive directors with Mr. Zhou Jinrong as Chairman, primarily responsible for independent review and oversight of financial reporting, internal control effectiveness, and ensuring external auditor independence and audit efficiency, having reviewed and agreed to the Company's unaudited condensed consolidated interim financial information, results announcement, and accounting policies adopted in this interim report for the six months ended June 30, 2019 - The Audit Committee was established on November 17, 2009, comprising three independent non-executive directors, with Mr. Zhou Jinrong as Chairman[178](index=178&type=chunk) - Its primary responsibilities include independent review and oversight of financial reporting, internal control effectiveness, and ensuring the independence and audit efficiency of external auditors[178](index=178&type=chunk) - The Committee has reviewed and agreed to the Company's unaudited condensed consolidated interim financial information, results announcement, and accounting policies adopted in this interim report for the six months ended June 30, 2019[178](index=178&type=chunk) [Events After Reporting Period](index=38&type=section&id=本報告期後事項) As of the date of this report, there are no significant events after the reporting period - As of the date of this report, there are no significant events after the reporting period[180](index=180&type=chunk) [Disclosure of Information](index=38&type=section&id=信息披露) The Company will dispatch its interim report for the six months ended June 30, 2019, to its shareholders in due course and will publish it on the HKEX website and the Company's website - The Company will dispatch its interim report for the six months ended June 30, 2019, to its shareholders in due course and will publish it on the HKEX website and the Company's website[181](index=181&type=chunk) [Consolidated Statement of Profit or Loss](index=39&type=section&id=綜合損益表) This Consolidated Statement of Profit or Loss presents Tanmujiang Holding Co., Ltd.'s financial performance for the six months ended June 30, 2019, with revenue of **RMB 170,355,000**, gross profit of **RMB 106,432,000**, operating profit of **RMB 87,720,000**, profit for the period of **RMB 73,046,000**, and basic earnings per share of **RMB 29.4 cents** Consolidated Statement of Profit or Loss for the Six Months Ended June 30 | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :------------------ | :------------------ | | Revenue | 170,355 | 157,578 | | Cost of Sales | (63,923) | (51,114) | | Gross Profit | 106,432 | 106,464 | | Other Income | 29,147 | 23,290 | | Selling and Distribution Expenses | (25,737) | (22,686) | | Administrative Expenses | (16,248) | (19,226) | | Other Operating Expenses | (5,874) | (9,089) | | Operating Profit | 87,720 | 78,753 | | Finance Costs | (328) | – | | Profit Before Tax | 87,392 | 78,753 | | Income Tax | (14,346) | (14,272) | | Profit for the Period | 73,046 | 64,481 | | Basic Earnings Per Share (RMB cents) | 29.4 | 25.9 | - The Group first adopted HKFRS 16 with a modified retrospective approach on January 1, 2019, and comparative figures have not been restated[184](index=184&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=40&type=section&id=綜合損益及其他全面收益表) This Consolidated Statement of Profit or Loss and Other Comprehensive Income shows Tanmujiang Holding Co., Ltd.'s profit for the period and other comprehensive income for the six months ended June 30, 2019, with profit for the period at **RMB 73,046,000**, and total comprehensive income for the period reaching **RMB 76,330,000** after including exchange differences on translation of functional currency to presentation currency of **RMB 3,284,000** Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Six Months Ended June 30 | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :------------------ | :------------------ | | Profit for the Period | 73,046 | 64,481 | | Exchange Differences on Translation from Functional Currency to Presentation Currency | 3,284 | (4,337) | | Total Comprehensive Income for the Period | 76,330 | 60,144 | [Consolidated Statement of Financial Position](index=41&type=section&id=綜合財務狀況表) This Consolidated Statement of Financial Position presents Tanmujiang Holding Co., Ltd.'s assets, liabilities, and equity as of June 30, 2019, with total non-current assets of **RMB 247,477,000**, total current assets of **RMB 537,541,000**, current liabilities of **RMB 68,664,000**, and net assets of **RMB 680,870,000**, notably including new right-of-use assets and lease liabilities due to HKFRS 16 adoption Consolidated Statement of Financial Position as of June 30, 2019 | Indicator | June 30, 2019 (RMB thousands) | December 31, 2018 (RMB thousands) | | :--- | :----------------------- | :------------------------ | | Property, Plant and Equipment | 60,752 | 60,883 | | Investment Properties | 100,120 | 100,120 | | Right-of-use Assets | 31,605 | – | | Financial Assets at Fair Value Through Profit or Loss (Non-current) | 55,000 | 65,000 | | Inventories | 156,846 | 145,626 | | Trade Receivables | 7,673 | 2,351 | | Financial Assets at Fair Value Through Profit or Loss (Current) | 324,070 | 370,480 | | Cash and Bank Balances | 39,459 | 46,203 | | Trade Payables | 3,711 | 3,617 | | Other Payables and Accruals | 31,624 | 42,166 | | Lease Liabilities (Current) | 4,935 | – | | Income Tax Payable | 28,394 | 27,164 | | Lease Liabilities (Non-current) | 9,845 | – | | Deferred Tax Liabilities | 24,968 | 31,267 | | Net Assets | 680,870 | 717,258 | - The Group first adopted HKFRS 16 with a modified retrospective approach on January 1, 2019, leading to the recognition of right-of-use assets and lease liabilities[190](index=190&type=chunk) [Consolidated Statement of Changes in Equity](index=42&type=section&id=綜合權益變動表) This Consolidated Statement of Changes in Equity outlines Tanmujiang Holding Co., Ltd.'s equity movements for the six months ended June 30, 2019, with total equity decreasing to **RMB 680,870,000** from **RMB 717,258,000** at the end of 2018, primarily due to dividends paid of **RMB 112,718,000**, partially offset by profit for the period of **RMB 73,046,000** and positive changes in foreign currency translation reserve Consolidated Statement of Changes in Equity for the Six Months Ended June 30 | Indicator | June 30, 2019 (RMB thousands) | December 31, 2018 (RMB thousands) | | :--- | :----------------------- | :------------------------ | | Share Capital | 2,189 | 2,189 | | Share Premium | 110,503 | 110,503 | | Capital Reserve | 2,767 | 2,767 | | Statutory Reserve | 17,542 | 17,542 | | Other Reserves | 12,245 | 12,245 | | Equity-settled Share-based Payment Reserve | 47 | 47 | | Foreign Currency Translation Reserve | (15,878) | (19,162) | | Retained Profits | 405,415 | 445,087 | | **Total** | **680,870** | **717,258** | - Profit for the period was **RMB 73,046,000**, with exchange differences on translation from functional currency to presentation currency of **RMB 3,284,000**[194](index=194&type=chunk) - Dividends paid during the period amounted to **RMB 112,718,000**[194](index=194&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=43&type=section&id=簡明綜合現金流量表) This Condensed Consolidated Statement of Cash Flows presents Tanmujiang Holding Co., Ltd.'s cash flow movements for the six months ended June 30, 2019, with net cash from operating activities of **RMB 39,745,000**, net cash from investing activities of **RMB 65,268,000**, and net cash used in financing activities of **RMB 116,412,000**, resulting in a net decrease in cash and cash equivalents of **RMB 11,399,000** and an ending balance of **RMB 39,459,000** Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 30 | Indicator | 2019 (RMB thousands) | 2018 (RMB thousands) | | :--- | :------------------ | :------------------ | | Net Cash From Operating Activities | 39,745 | 29,106 | | Net Cash From/(Used In) Investing Activities | 65,268 | (152,753) | | Net Cash (Used In)/From Financing Activities | (116,412) | 13,260 | | Net Decrease in Cash and Cash Equivalents | (11,399) | (110,387) | | Cash and Cash Equivalents at June 30 | 39,459 | 100,026 | - The Group first adopted HKFRS 16 with a modified retrospective approach on January 1, 2019, and comparative figures have not been restated[196](index=196&type=chunk) [Notes to the Unaudited Interim Financial Report](index=44&type=section&id=未經審核中期財務報告附註) These notes provide detailed explanations and supplementary information for Tanmujiang Holding Co., Ltd.'s unaudited interim financial report, covering general information, basis of preparation, significant accounting policies (especially HKFRS 16 adoption impact), segment reporting, operating seasonality, revenue and other income, profit before tax, income tax, earnings per share, fixed assets, trade receivables, financial assets, cash and bank balances, trade payables, dividends, share capital, financial instruments, and contingent liabilities, offering crucial context and data for understanding the financial statements [1. General Information](index=44&type=section&id=1.%20一般資料) Tanmujiang Holding Co., Ltd. is an exempted company incorporated in the Cayman Islands, with its shares listed on the Main Board of The Stock Exchange of Hong Kong Limited, having its registered office in the Cayman Islands and principal place of business in Jurong City, Jiangsu Province, China - Tanmujiang Holding Co., Ltd. is incorporated in the Cayman Islands, with its shares listed on the Main Board of The Stock Exchange of Hong Kong Limited[200](index=200&type=chunk) - The company's registered office is in the Cayman Islands, and its principal place of business is in Jurong City, Jiangsu Province, China[200](index=200&type=chunk) [2. Basis of Preparation](index=44&type=section&id=2.%20編製基準) The unaudited interim financial report is prepared in accordance with applicable disclosure requirements of the Listing Rules of The Stock Exchange of Hong Kong Limited and HKAS 34 Interim Financial Reporting issued by the HKICPA, comprising condensed consolidated financial statements and selected explanatory notes, highlighting significant changes in financial position and performance since the 2018 financial statements, and has been reviewed by the Company's Audit Committee - The unaudited interim financial report is prepared in accordance with the Listing Rules of The Stock Exchange of Hong Kong Limited and HKAS 34[201](index=201&type=chunk) - The report includes condensed consolidated financial statements and selected explanatory notes, clarifying significant changes in financial position and performance since the 2018 financial statements[201](index=201&type=chunk) - The interim financial report is unaudited but has been reviewed by the Company's Audit Committee[202](index=202&type=chunk) [3. Significant Accounting Policies](index=45&type=section&id=3.%20主要會計政策) This section outlines the Group's significant accounting policies for preparing the condensed consolidated financial statements, particularly the impact of adopting HKFRS 16 'Leases' from January 1, 2019, which introduced a single accounting model requiring lessees to recognize right-of-use assets and lease liabilities, significantly affecting financial performance and cash flow presentation, and also explains key accounting judgments and sources of estimation uncertainty [New and Revised Standards Adopted by the Group](index=45&type=section&id=本集團採納之新訂及經修訂準則) The Group first applied HKFRS 16 'Leases' from January 1, 2019, using a modified retrospective approach, recognizing the cumulative effect of initial application as an adjustment to the opening equity balance for 2019, with comparative figures not restated, as the standard introduced a single accounting model requiring lessees to recognize right-of-use assets and lease liabilities (except for short-term and low-value leases), positively impacting operating profit in the consolidated statement of profit or loss and other comprehensive income, and reclassifying rent payments from operating to financing activities in the consolidated statement of cash flows - The Group initially applied HKFRS 16 'Leases' from January 1, 2019, using a modified retrospective approach, with comparative figures not restated[207](index=207&type=chunk) - HKFRS 16 introduced a single accounting model, requiring lessees to recognize right-of-use assets and lease liabilities for all leases (except for short-term leases and leases of low-value assets)[206](index=206&type=chunk) - The adoption of HKFRS 16 had a positive impact on operating profit presented in the consolidated statement of profit or loss and other comprehensive income, and resulted in significant changes in cash flow presentation in the consolidated statement of cash flows (reclassification of rent payments from operating to financing activit

2018年報 （於開曼群島註冊成立的有限公司﹚ 股份代號 : 837 CARPENTER TAN HOLDINGS LIMITED 譚木匠控股有限公司 目 錄 | --- | --- | --- | --- | --- | |-------|---------------------------------------|--------------------------------------------------------------------------------------------------------------------------|-------|-------| | | | | | | | | | | | | | | 1 2 4 5 6 24 27 39 54 | 目錄 公司資料 財務摘要 主席報告書 管理層討論與分析 董事及高級管理人員簡介 企業管治報告 董事會報告 獨立核數師報告 | | | | | 58 | 綜合損益表 | | | | | | | | | | | 59 | 綜合損益及其他全面收益表 | | | 公司資料 | --- | --- | |----------- ...