Core Insights - The core achievement of the company is reflected in its 2024 financial report, which shows a revenue of 484 million yuan and a net profit of 14.804 million yuan, marking a turnaround from losses to profitability [1] - The company has developed a compelling communication system that resonates with consumers by addressing their pain points, humor, emotional stories, and encouraging sharing, effectively transforming health tea into a solution for modern health concerns [6] Group 1: Pain Points - Health issues have become a significant concern for consumers due to modern lifestyle pressures, and health tea serves as a solution to alleviate these concerns [2] - The company positions its health tea as a "gentle health guardian," with specific products targeting urban consumers' sub-health issues, such as constipation and weight management [2] Group 2: Humor - The brand utilizes humor to make health maintenance more approachable, using engaging formats like comics and short videos to integrate health tea into everyday scenarios [3] - This strategy reduces psychological barriers and enhances product recall, particularly among younger consumers [3] Group 3: Emotional Connection - The essence of health tea extends beyond being a beverage; it serves as a medium for emotional connection, tapping into themes of filial piety and friendship [4] - By sharing relatable stories, the brand fosters a deeper trust and emotional resonance with consumers, positioning the product as a symbol of care for loved ones [4] Group 4: Sharing Ecosystem - The company encourages consumers to share their experiences, transforming individual testimonials into collective brand advocacy [5] - By leveraging social media and e-commerce platforms, the brand amplifies its reach and enhances consumer engagement through user-generated content [5] Group 5: Marketing Strategy - The marketing success of the company lies in its ability to address emotional needs through a four-step approach: identifying pain points, breaking barriers with humor, building connections through emotional stories, and promoting sharing [6] - This strategy has elevated health tea from a functional product to a symbol of a healthy lifestyle, contributing to sustained growth in health value [6]

Core Viewpoint - The company, Biyuan, positions itself as a leader in the herbal health tea segment by focusing on standardized product forms, quality control, and pricing strategies to meet consumer demands for health and convenience [1][9]. Group 1: Standardized Product Form - Biyuan has innovated the traditional tea bag model by introducing a dual-chamber tea bag design that eliminates metal contamination risks and uses eco-friendly materials [3]. - The company employs cold brew freeze-drying technology to quickly lock in nutrients, allowing for a convenient tea experience that aligns with modern urban lifestyles [3]. - Biyuan's product matrix combines traditional Chinese medicine with modern nutritional science, offering functional teas like Changjing Tea and Changrun Tea that cater to diverse health needs [2][3]. Group 2: Standardized Quality - Biyuan emphasizes quality as the foundation of its business, implementing a standardized quality management system throughout its supply chain [4]. - The company conducts thorough supplier assessments and maintains direct relationships with tea farmers in premium tea-producing regions to ensure raw material purity [4]. - Biyuan has invested significantly in a central testing laboratory to ensure that all raw materials meet strict quality standards, achieving a 100% product pass rate [4]. Group 3: Standardized Pricing - Biyuan adopts a standardized pricing strategy to make high-quality health teas accessible to a broader consumer base, with core products priced in the tens of yuan range [7]. - The company utilizes a multi-channel sales approach, including traditional retail, e-commerce, and new retail platforms, to maintain consistent pricing and enhance market penetration [8]. - Biyuan's commitment to affordable health options aligns with the growing demand for value among younger consumers, contributing to increased market share in this demographic [8]. Conclusion - Biyuan's three-pronged standardized approach—product innovation, quality assurance, and pricing strategy—establishes its competitive edge in the herbal tea market, promoting a shift towards a more regulated and health-conscious industry [9].

Industry Overview - The establishment of the Tea Industry and Health Branch of the China Health Care Association marks a significant milestone in the integration of the tea industry with health, providing a professional platform for development [1] - The tea industry is transitioning from a traditional beverage to a health solution, aligning with modern health concepts and appealing to younger consumers [1] Health Benefits of Tea - Tea has been recognized for its health benefits, containing natural components such as polyphenols and proteins that support its health properties [2] - Research indicates that tea polyphenols possess strong antioxidant capabilities and can prevent and inhibit various organ tumors [2] Innovative Applications - The combination of traditional Chinese medicine and tea has led to the development of new health solutions, such as herbal teas designed for specific health conditions [3] - Over 110 types of medicinal herbs have been identified for innovative "herb + tea" combinations, expanding the health tea category [3] Cultural and Emotional Value - The cultural aspects of tea, including its ritualistic preparation and consumption, contribute to its therapeutic value, aligning with modern consumers' desire for emotional well-being [3] Company Strategy - The company Bi Sheng Yuan has evolved from a "functional tea" provider to a "health management expert," adapting to consumer demands for comprehensive health solutions [4] - Bi Sheng Yuan has developed a full product matrix covering health foods, regular foods, and pharmaceuticals, catering to diverse consumer needs [5] Marketing and Distribution - The company has embraced multi-channel marketing strategies, leveraging both traditional retail and e-commerce platforms to reach a broader audience [6] - Bi Sheng Yuan has initiated a partnership model to enhance its marketing system, fostering sustainable growth [6] Future Opportunities - The tea industry is poised for unprecedented growth, driven by consumer demand for health and national trends, supported by favorable policies and technological advancements [7] - Bi Sheng Yuan aims to modernize the traditional tea industry through brand upgrades, product innovation, and marketing transformations, exploring new pathways for health and youthfulness [7]

Financial Performance - The company achieved revenue of RMB 484.3 million for the year ended December 31, 2024, a decrease of 10.8% compared to RMB 542.9 million in 2023[15]. - The total comprehensive income for 2024 was RMB 16.8 million, recovering from a total comprehensive loss of RMB 358.6 million in 2023[15]. - The revenue from the four health teas in 2024 was RMB 256.6 million, down 11.3% from RMB 289.4 million in 2023, primarily due to strategic adjustments and a reduction in settlement prices[89]. - The revenue from weight loss products in 2024 was RMB 148.0 million, a decrease of 8.5% from RMB 161.8 million in 2023, attributed to a decline in market share of the orlistat product[89]. - The gross profit margin for 2024 increased to 67.3%, up 3.5 percentage points from 63.8% in 2023, due to optimization of less competitive products and a decrease in procurement costs for weight loss products[90]. - The sales cost for 2024 was RMB 158.5 million, a decrease of 19.4% from RMB 196.7 million in 2023[90]. - The other income for 2024 was RMB 11.8 million, slightly up from RMB 11.0 million in 2023, mainly from interest income and government subsidies[91]. - In 2024, the company's sales and marketing expenses amounted to RMB 199.4 million, a decrease of 37.8% from RMB 320.7 million in 2023, representing 41.2% of total revenue[92]. - Employee benefits expenses in 2024 decreased by RMB 81.9 million compared to 2023, primarily due to strategic adjustments in the operating model and a reduction in sales personnel[93]. - Advertising expenses in 2024 decreased by RMB 41.2 million from 2023, mainly due to reduced advertising spending[94]. - Administrative expenses for 2024 were RMB 89.5 million, down 41.5% from RMB 153.1 million in 2023, accounting for 18.5% of total revenue[97]. - Research and development costs in 2024 were RMB 29.4 million, a decrease of 15.8% from RMB 34.9 million in 2023, representing 6.1% of total revenue[101]. - The company recorded a total comprehensive income of RMB 16.8 million in 2024, a significant improvement from a comprehensive loss of RMB 358.6 million in 2023[105]. - The net cash inflow from operating activities for continuing operations in 2024 was RMB 10.5 million, compared to a cash outflow of RMB 33.0 million in 2023[107]. - The net cash outflow from financing activities in 2024 was RMB 103.8 million, primarily due to dividend distributions to shareholders[107]. - The company's other net income in 2024 was RMB 6.4 million, up from RMB 0.7 million in 2023, including investment income of RMB 2.7 million[102]. - The share of profit from investments accounted for using the equity method was RMB 5.1 million in 2024, compared to RMB 1.0 million in 2023[103]. - As of December 31, 2024, the company's financial assets measured at fair value through profit or loss amounted to RMB 794 million, a decrease from RMB 901 million as of December 31, 2023[108]. - The company holds approximately RMB 698 million in receivables measured at amortized cost through the fund, along with restricted cash and cash equivalents of about RMB 135 million[109]. - The group's cash and cash equivalents, including bank balances and deposits, totaled RMB 1,478 million as of December 31, 2024, down from RMB 2,885 million a year earlier[110]. - The company's capital expenditures for 2024 were RMB 50 million, a decrease from RMB 68 million in 2023[114]. - The total inventory as of December 31, 2024, was RMB 264.11 million, an increase from RMB 235.69 million in 2023, with inventory turnover days reduced to 58 days from 123 days[116]. - The company's debt-to-asset ratio as of December 31, 2024, was 15.2%, down from 21.4% a year prior[121]. - There were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures in 2024[118]. - The company has no significant contingent liabilities or guarantees as of December 31, 2024[122]. - The company has not approved any major investments or capital asset purchases as of the report date[120]. Operational Efficiency and Strategy - The company implemented a partnership mechanism in September 2023, which was fully rolled out in 2024 across e-commerce and OTC business segments, enhancing operational efficiency[16]. - The company expanded its offline sales network to nearly 300,000 non-prescription drug stores across 31 provinces, regions, and municipalities in China by the end of 2024[6]. - The company operates 63 online stores across 18 e-commerce platforms, actively embracing new retail formats such as O2O and B2C[6]. - The company aims to continue innovating and providing high-quality health products and services, positioning itself as a leader in the health industry[7]. - The company faced multiple challenges in 2024, including external environmental changes and insufficient domestic demand, but management responded proactively to achieve satisfactory operational results[15]. - The company will enhance its partner mechanism starting September 2024, focusing on profit-oriented incentives to improve long-term market development awareness among partners[17]. - By 2025, the company aims to optimize its product and business layout while continuing to invest in R&D to drive product innovation and enhance consumer experience[17]. - The company plans to strengthen strategic partnerships with top 100 national chains and diversify marketing activities to improve inventory turnover rates[17]. - The company will focus on profitability in its e-commerce operations, aiming to reduce operational and logistics costs while exploring new business models[17]. - The company will implement a performance management system and enhance employee training to improve operational efficiency and product supply assurance[18]. - The company is committed to adapting to market changes by modernizing the Bishi Yuan brand through social media and content marketing strategies[17]. - The company will actively explore new e-commerce models such as O2O, B2C, live streaming, and interest-based e-commerce to meet changing consumer purchasing scenarios[17]. - The company has streamlined its agency product structure, significantly improving operational quality and sales performance in key product categories[40]. - The company successfully upgraded and transformed its health products, expanding their market for liver protection, sleep aid, and immune enhancement[62]. - The company applied for 2 invention patents and received 3 invention patents and 1 utility model patent, enhancing the technological content of its products[62]. - The company implemented strict quality control measures, combining manual and equipment monitoring to ensure product quality parameters are met[67]. - The BI system underwent comprehensive optimization and performance upgrades to enhance data security and provide precise real-time analysis[67]. - The company aims to enhance its online and offline operations by leveraging member resources and deepening cooperation with offline businesses[78]. - The company is expanding its presence on new retail platforms like Douyin and Kuaishou, aiming to increase market share and improve advertising efficiency[81]. - The company is committed to optimizing its product and channel strategies to strengthen brand influence and market position, particularly through content marketing and collaboration with media platforms[82]. Innovation and R&D - The company holds 25 health food approvals and 117 patents, including 21 invention patents, demonstrating its commitment to innovation[6]. - The R&D department published two academic articles in core journals by July 2024 to support the registration of new weight loss products[65]. - In 2024, the company accelerated the development of new health food products in response to new industry regulations, enhancing its innovation capabilities[61]. - The company aims to focus on "weight management" and "gastrointestinal health" while expanding its product categories to include OTC drugs, health foods, and regular foods[76]. - The company plans to optimize product structure and innovate marketing models to achieve high-quality development by 2025[76]. - The company is committed to modern production management and continuous improvement of production processes to ensure high-quality products[66]. Market Trends and Consumer Behavior - The company forecasts that the consumer health product industry in China is expected to reach $62.401 billion by 2025, with a growth rate exceeding 6%[32]. - In China, 62% of consumers prioritize health in their daily lives, significantly higher than the US (41%) and the UK (29%)[34]. - 74% of Chinese consumers indicated they would increase health-related spending if overall consumption levels decline[34]. - The global health and wellness food market is projected to grow by $627.6 billion from 2025 to 2029, with a CAGR of 9.8%[34]. - The company ranks among the top sellers in health food and weight loss categories on Tmall and JD platforms[39]. - The e-commerce business achieved its best operational results since inception by optimizing product structure and marketing strategies[41]. - During the Double Eleven sales event, the Pinduoduo platform saw daily sales exceed 50,000 units for the main product, Fibrous Tea[45]. - The flagship store's monthly sales increased from over RMB 800,000 in September-October to over RMB 1 million in November-December[45]. Environmental, Social, and Governance (ESG) Initiatives - The company emphasizes a systematic approach to ESG management, with a top-down strategy involving the board for decision-making and risk assessment[144]. - The ESG report is prepared in accordance with the Hong Kong Stock Exchange's guidelines, ensuring compliance and transparency in environmental, social, and governance matters[140]. - The board reviews and approves the ESG report annually to ensure it accurately reflects significant ESG issues and their impact on sustainable development[145]. - The company has established effective communication with stakeholders to understand their needs and concerns regarding ESG factors[145]. - The management team is committed to collecting relevant ESG data and reporting on performance regularly to ensure accountability[144]. - The company has a dedicated ESG leadership team, led by the CEO, to oversee the management and effectiveness of ESG strategies[144]. - The report includes quantifiable data to reflect the company's performance in environmental and social indicators, adhering to the principle of materiality[142]. - The company emphasizes the importance of stakeholder engagement for sustainable development, utilizing various communication channels to gather feedback and expectations[146]. - Key environmental, social, and governance (ESG) issues identified include air pollutant and greenhouse gas emissions management, supply chain management, and employee treatment[153]. - The company has implemented a "lean production" plan to optimize production processes, upgrade equipment, and improve energy efficiency, contributing to sustainable business development[157]. - No significant violations of environmental laws and regulations were reported during the reporting period, ensuring compliance with relevant legislation[158]. - The company actively promotes environmental awareness among employees and adheres to environmental laws and regulations[157]. - Key performance indicators related to emissions include measures to reduce industrial waste gas and improve overall air quality[160]. - The company's nitrogen oxide emissions decreased from 112.67 kg in 2023 to 108.09 kg in 2024, representing a reduction of approximately 4.6%[161]. - The total greenhouse gas emissions (Scope 1) reduced from 356.37 tons CO2 equivalent in 2023 to 331.69 tons CO2 equivalent in 2024, a decrease of about 6.9%[163]. - The total greenhouse gas emissions (Scope 2) decreased from 1,331.90 tons CO2 equivalent in 2023 to 1,224.83 tons CO2 equivalent in 2024, reflecting a reduction of approximately 8.0%[163]. - The total hazardous waste emissions dropped significantly from 10.35 tons in 2023 to 5.84 tons in 2024, a decrease of about 43.5%[169]. - The total electricity consumption decreased from 1,493,900 kWh in 2023 to 1,365,900 kWh in 2024, representing a reduction of approximately 8.6%[176]. - The total natural gas consumption reduced from 60,252 m³ in 2023 to 57,802 m³ in 2024, a decrease of about 4.1%[176]. - The total fuel consumption decreased from 38,118 liters in 2023 to 30,000 liters in 2024, reflecting a reduction of approximately 21.4%[176]. - The density of hazardous waste emissions per million RMB revenue improved from 0.02 tons in 2023 to 0.01 tons in 2024, indicating enhanced efficiency[169]. - The company implemented measures to reduce waste generation and promote recycling, including encouraging employees to minimize food waste and adopt paperless practices[170]. - The company aims to enhance resource efficiency and reduce ecological footprint through its "4R" strategy: Replace, Reuse, Reduce, and Recycle[172]. - Water consumption decreased from 15,068 tons in 2023 to 8,329 tons in 2024, a reduction of approximately 44.3%[179]. - Water consumption density improved from 27.75 tons per million revenue in 2023 to 17.20 tons per million revenue in 2024, a decrease of approximately 38.2%[179]. - Packaging materials consumed increased from 585 tons in 2023 to 710 tons in 2024, an increase of approximately 21.4%[180]. - Packaging material density improved from 1.08 tons per million revenue in 2023 to 1.47 tons per million revenue in 2024, an increase of approximately 36.1%[180]. - The company achieved its environmental targets, including a 3% reduction in air emissions density and greenhouse gas emissions density compared to 2021[182]. - The company has implemented policies to reduce environmental impact, including compliance with Chinese environmental laws and monitoring air pollutants[184]. - The company is committed to energy conservation, aiming for a 2% reduction in electricity and natural gas consumption density by 2024 compared to 2021[182]. - The company has established flexible work arrangements and preventive measures to mitigate climate-related operational risks[189]. - The company regularly monitors climate-related trends and regulations to manage potential legal and reputational risks[190]. - The company has set a three-year target plan for environmental impact reduction, with specific goals for waste and resource management[181]. Employee Management and Training - As of December 31, 2024, the company had 128 employees in mainland China and Hong Kong, down from 179 employees as of December 31, 2023[127]. - Employee costs, including director remuneration, amounted to RMB 56.9 million for the year ending December 31, 2024, a decrease from RMB 210.9 million in 2023[127]. - The company emphasizes the recruitment, motivation, and retention of suitable talent, investing significantly in continuous education and training programs for employees[127]. - The company appointed Mr. Feng Bing as an independent non-executive director starting October 2023, who has over 31 years of corporate management and consulting experience[133]. - Mr. Zhao Yihong serves as the CEO of the group, with a background detailed in the board introduction[134]. - The group has a strong management team with extensive experience in various sectors, including pharmaceuticals and media, enhancing operational efficiency[136][137]. - The company provides competitive compensation, including basic salary, performance pay, and bonuses, linked to employee performance[194]. - The company has a standard working time of 7.5 hours per day and offers various types of leave, including annual leave and maternity leave[193]. - There were no fatalities or work-related injuries reported in the past three years, maintaining a 0% fatality rate[199]. - The company emphasizes a balanced work-life environment and adheres to relevant labor laws and regulations[193]. - All employees receive an employee handbook detailing employment terms, compensation, and policies[196]. - The company has implemented a recruitment management system to ensure fair hiring practices[196]. - Regular internal safety training is conducted to enhance employee awareness of occupational safety[198]. - The company encourages employee participation in training programs to improve skills and career development[199]. - Percentage of trained employees: Male 69.62%, Female 30.38%[200]. - Percentage of trained employees by type: Senior Management 7.59%, Middle Management 12.66%, Junior Employees 79.75%[200]. - Average training hours per employee: Male 232 hours, Female 166 hours[200]. - Average training hours by employee type: Senior Management 300 hours, Middle Management 98 hours, Junior Employees 76 hours[200].

Financial Performance - For the year ending December 31, 2024, the group's revenue from continuing operations was RMB 484.3 million, a decrease of 10.8% compared to RMB 542.9 million in 2023[3]. - The gross profit from continuing operations for 2024 was RMB 325.8 million, down 5.9% from RMB 346.2 million in 2023, with a gross profit margin of 67.3%, an increase of 3.5 percentage points from 63.8% in 2023[3]. - Operating expenses for continuing operations totaled RMB 318.2 million in 2024, a significant decrease of 37.4% from RMB 508.7 million in 2023[3]. - The total comprehensive income for 2024 was RMB 16.8 million, a turnaround from a comprehensive loss of RMB 358.6 million in 2023[4]. - Basic and diluted earnings per share attributable to the company's owners for 2024 were RMB 0.12, compared to a loss of RMB 2.45 per share in 2023[4]. - The operating profit for 2024 was RMB 21.6 million, a significant improvement from an operating loss of RMB 150.3 million in 2023[6]. - The company recorded a net profit from continuing operations of RMB 14.8 million in 2024, compared to a loss of RMB 159.1 million in 2023[6]. - The company achieved a net profit attributable to owners of RMB 16.8 million in 2024, compared to a loss of RMB 300.4 million in 2023[8]. - The total comprehensive income for the group was RMB 16.8 million in 2024, compared to a total comprehensive loss of RMB 358.6 million in 2023[64]. Revenue and Segment Performance - Revenue from the tea products segment decreased from RMB 371,119 thousand in 2023 to RMB 326,183 thousand in 2024, a decline of approximately 12.1%[22]. - Revenue from the weight loss and other pharmaceuticals segment decreased from RMB 171,757 thousand in 2023 to RMB 158,118 thousand in 2024, a decline of about 7.9%[22]. - Total revenue for the year ended December 31, 2024, was RMB 484,301,000, a decrease from RMB 542,876,000 in 2023, representing a decline of approximately 10.8%[24]. - The revenue from the core health tea products in 2024 was RMB 256.6 million, down 11.3% from RMB 289.4 million in 2023, primarily due to strategic adjustments and a reduction in settlement prices[124]. Assets and Liabilities - Total assets decreased from RMB 704,943 thousand in 2023 to RMB 560,693 thousand in 2024, a decline of approximately 20.4%[9]. - Non-current assets increased from RMB 277,073 thousand in 2023 to RMB 325,331 thousand in 2024, an increase of about 17.4%[9]. - Cash and cash equivalents decreased from RMB 169,082 thousand in 2023 to RMB 134,155 thousand in 2024, a decrease of approximately 20.6%[9]. - Trade receivables decreased significantly from RMB 48,195 thousand in 2023 to RMB 20,592 thousand in 2024, a decline of about 57.3%[9]. - The total liabilities decreased from RMB 150,973 thousand in 2023 to RMB 85,317 thousand in 2024, a decline of about 43.4%[10]. - The debt-to-asset ratio as of December 31, 2024, was 15.2%, down from 21.4% in 2023[152]. Dividends and Shareholder Returns - The board proposed a final dividend of HKD 0.10 per share, totaling approximately HKD 12,227,000, subject to shareholder approval[5]. - The company declared an interim dividend of HKD 0.9 per share, totaling approximately RMB 99,624,000[53]. - The proposed final dividend for the year ending December 31, 2024, is HKD 0.10 per share, totaling approximately HKD 12,227,000, subject to shareholder approval[158]. Operational Efficiency and Cost Management - The company has streamlined personnel in headquarters and production departments to improve efficiency and reduce costs[65]. - The total administrative expenses for the year ended December 31, 2024, were RMB 89,512,000, compared to RMB 153,050,000 in 2023, reflecting a decrease of approximately 41.5%[24]. - Sales and marketing expenses for 2024 were RMB 199.4 million, a significant decrease of 37.8% from RMB 320.7 million in 2023[128]. - The employee costs for the year ending December 31, 2024, were RMB 56.9 million, a decrease of 73% from RMB 210.9 million in 2023[157]. Research and Development - Research and development costs for the year ended December 31, 2024, totaled RMB 29,359,000, compared to RMB 34,922,000 in 2023, indicating a reduction of approximately 16.1%[24]. - The company plans to continue enhancing product development and innovation, focusing on new products and channels by 2025[121]. - The company aims to increase R&D investment to drive product innovation and improve consumer experience, particularly in online shopping and after-sales service[66]. Market Strategy and Future Outlook - The company plans to explore new e-commerce models such as O2O, B2C, live streaming, and short video commerce to adapt to changing consumer purchasing scenarios[66]. - By 2025, the company expects the consumer health product market in China to reach $62.401 billion, maintaining a growth rate of over 6%[72]. - The company aims to focus on health consumer needs, particularly in weight management and gastrointestinal health, while expanding its product categories[115]. - The company will actively adapt to market changes and promote brand youthfulness through multi-channel strategies, including social media and content marketing[66]. Corporate Social Responsibility - The company has donated over 3.5 million RMB to environmental protection initiatives, enhancing public awareness of wildlife conservation[110]. - The company participates in poverty alleviation activities, supporting local agricultural development in various regions[113]. - The company emphasizes low-carbon economy practices, including process improvements and reducing emissions in production[114].

Financial Performance - The revenue from continuing operations for the first half of 2024 was RMB 254.3 million, a decrease of 25.8% compared to RMB 342.8 million in the same period of 2023[23]. - The group's gross profit from continuing operations for the first half of 2024 was RMB 173.4 million, a decrease of 22.1% compared to RMB 222.6 million in the same period of 2023[24]. - The gross profit margin for the first half of 2024 was 68.2%, an increase of 3.3 percentage points from 64.9% in the same period of 2023[24]. - Total operating expenses for the first half of 2024 were RMB 169.3 million, down 22.6% from RMB 218.8 million in the same period of 2023[24]. - The total comprehensive income for the first half of 2024 was RMB 8.5 million, compared to a total comprehensive loss of RMB 174.5 million in the same period of 2023[24]. - Revenue from the four tea products was RMB 135.4 million, a decrease of 17.1% year-on-year, while revenue from weight loss products was RMB 82.1 million, down 29.3% year-on-year[25]. - The company achieved a comprehensive income attributable to owners of RMB 8.5 million in the first half of 2024, a growth of 66.7% from RMB 5.1 million in the same period of 2023[25]. - The company reported a significant increase in total revenue from RMB 342,828,000 for the six months ended June 30, 2023, to RMB 254,286,000 for the same period in 2024, indicating a decline in performance[92]. - The company recorded a loss of RMB 116,219 thousand during the period, compared to a loss of RMB 7,813 thousand in the previous period[73]. Operational Highlights - The company has established partnerships covering nearly 290,000 OTC pharmacies and medical third-party terminals across 31 provinces, regions, and municipalities in China[2]. - The company operates 63 online stores across 18 e-commerce platforms, enhancing its market presence and product sales[2]. - The company continues to focus on herbal health and weight management, expanding its product line with new offerings such as Orlistat weight loss medication and probiotics[1]. - The company aims to maintain its industry-leading position by embracing new retail formats like Douyin and Kuaishou[2]. - The company expanded its offline OTC business to nearly 290,000 pharmacies across 31 provinces, regions, and municipalities in China[25]. - The e-commerce business operated 63 stores across 18 platforms for the sale of its products in the first half of 2024[25]. - The company implemented a new partner model for its e-commerce operations, leading to significant improvements in operational efficiency and cost reduction[29]. Research and Development - The company has received 26 health food approvals and holds 114 patents, including 20 invention patents, demonstrating its commitment to innovation[2]. - The company continued to advance R&D collaborations with universities, focusing on the scientific validation of health products, demonstrating significant efficacy in reducing disease risk factors[41]. - The company published 2 academic papers and obtained 1 utility model patent in the first half of 2024, supporting the development of new health products[42]. Marketing and Brand Strategy - The brand "Besunyen" has been recognized as a "China Famous Trademark" and has been awarded multiple accolades for credibility in the health product sector[2]. - The company is committed to providing high-quality health products and services, positioning itself as a leader in the health industry[2]. - The company targeted business professionals by advertising in high-end office elevators, effectively reaching the target audience and enhancing brand recall[36]. - The company expanded its marketing efforts in lower-tier cities, integrating products and services with local pharmacies to enhance consumer health awareness[37]. - The company implemented a content marketing strategy across social media platforms, driving sales growth for products like B420 coffee and PQQ cross-border products[39]. - The company established a deep partnership with influencers on Douyin, significantly enhancing brand exposure and achieving leading sales in the probiotic coffee category[32]. - During the Women's Day promotion, the company collaborated with top influencers on Kuaishou, achieving a single event sales GMV exceeding 20 million[33]. Financial Position and Cash Flow - Net cash inflow from operating activities for continuing operations was RMB 12.35 million in the first half of 2024, a significant decrease from RMB 44.31 million in the same period of 2023[56]. - The ending cash and cash equivalents balance was RMB 184.52 million as of June 30, 2024, down from RMB 264.96 million at the end of the same period in 2023[56]. - The Group's cash and cash equivalents, including bank balances, were RMB 2,481 million as of June 30, 2024, down from RMB 2,885 million as of December 31, 2023[58]. - Total inventory as of June 30, 2024, was RMB 198.58 million, down from RMB 235.69 million as of December 31, 2023[60]. - The Group's debt-to-asset ratio was 16.9% as of June 30, 2024, compared to 21.4% as of December 31, 2023[63]. - The company reported a net cash inflow from operating activities of RMB 12,354 thousand for the six months ended June 30, 2024, down from RMB 44,314 thousand in the same period of 2023, a decrease of about 72%[74]. - Cash and cash equivalents at the end of the period were RMB 184,518 thousand, compared to RMB 264,961 thousand at the end of the previous year, a decrease of approximately 30%[75]. Employee and Administrative Expenses - Employee benefits expenses decreased by RMB 48.2 million in the first half of 2024 compared to the first half of 2023, primarily due to a reduction in the number of sales personnel[50]. - Total administrative expenses for the first half of 2024 amounted to RMB 43.4 million, a 13.6% increase from RMB 38.2 million in the first half of 2023, mainly due to higher professional and consulting service fees[50]. - The group had 151 employees as of June 30, 2024, down from 179 employees as of December 31, 2023[66]. - Employee costs for the six months ended June 30, 2024, were RMB 24.5 million, a decrease of 70% from RMB 81.6 million in the same period of 2023[66]. Shareholder Information - The board proposed an interim dividend of HKD 0.9 per share, totaling approximately HKD 110,039,000, subject to shareholder approval[131]. - The total number of issued shares is 122,265,585[146]. - Zhao Yihong holds 62,975,657 shares, representing 51.51% of the total issued shares[145]. - Foreshore Holding Group Limited and its associated entities collectively own 61,219,437 shares, accounting for 50.07% of the total issued shares[147]. - The share option plan allows for a maximum issuance of 12,226,558 shares, which is 10% of the total issued shares[152]. - The share option plan was approved on April 11, 2024, and is valid for ten years[149]. - Each eligible participant in the share option plan can receive options not exceeding 1% of the total issued shares within any twelve-month period[153]. Compliance and Governance - The company has complied with the corporate governance code, except for the separation of the roles of Chairman and CEO[162][163]. - The audit committee consists of three independent non-executive directors, ensuring oversight of financial reporting and internal controls[164]. - The interim financial information for the six months ending June 30, 2024, has been reviewed by the auditors[165]. - The board has confirmed compliance with the standard code of conduct for securities transactions by directors for the six months ending June 30, 2024[166].

Financial Performance - The revenue from continuing operations for the first half of 2024 was RMB 254.3 million, a decrease of 25.8% compared to RMB 342.8 million in the same period of 2023[1]. - The gross profit from continuing operations for the first half of 2024 was RMB 173.4 million, down 22.1% from RMB 222.6 million in the same period of 2023, with a gross profit margin of 68.2%, up from 64.9%[1]. - Operating expenses for continuing operations totaled RMB 169.3 million, a decrease of 22.6% from RMB 218.8 million in the same period of 2023[1]. - The total comprehensive income for the first half of 2024 was RMB 8.5 million, compared to a total comprehensive loss of RMB 174.5 million in the same period of 2023[2]. - Basic and diluted earnings per share for continuing operations were RMB 6.39, down from RMB 9.13 in the first half of 2023[2]. - Total revenue for the six months ended June 30, 2024, was RMB 254,286 thousand, with tea products contributing RMB 167,576 thousand and weight loss and other pharmaceuticals contributing RMB 86,710 thousand[14]. - Gross profit for the tea products segment was RMB 128,364 thousand, while the weight loss and other pharmaceuticals segment reported a gross profit of RMB 45,071 thousand[14]. - The operating profit for the continuing operations was RMB 11,655 thousand, with a profit from continuing operations of RMB 7,813 thousand[14]. - The company reported a net profit of RMB 5,130,000 for the six months ended June 30, 2023[15]. - The company incurred a net loss of RMB 326,000 from the sale of Zhuhai Kangbaina Pharmaceutical Co., Ltd.[24]. Assets and Liabilities - Non-current assets as of June 30, 2024, amounted to RMB 329.5 million, an increase from RMB 277.1 million as of December 31, 2023[5]. - Current assets totaled RMB 347.2 million as of June 30, 2024, down from RMB 427.9 million as of December 31, 2023[5]. - The total assets as of June 30, 2024, were RMB 676.7 million, compared to RMB 704.9 million as of December 31, 2023[5]. - Total liabilities decreased from RMB 150,973 thousand as of December 31, 2023, to RMB 114,248 thousand as of June 30, 2024, representing a reduction of approximately 24%[6]. - Total equity increased from RMB 553,970 thousand as of December 31, 2023, to RMB 562,435 thousand as of June 30, 2024, reflecting a growth of about 1.5%[6]. - The total current liabilities decreased from RMB 145,661 thousand to RMB 109,467 thousand, a decline of approximately 25%[6]. - Trade receivables decreased to RMB 34,466,000 as of June 30, 2024, down from RMB 48,286,000 as of December 31, 2023[37]. - Trade payables decreased to RMB 2,085,000 as of June 30, 2024, compared to RMB 16,547,000 as of December 31, 2023[38]. - The group’s cash and cash equivalents, including bank balances, were RMB 248.1 million as of June 30, 2024, compared to RMB 288.5 million as of December 31, 2023[74]. - The group’s debt-to-asset ratio as of June 30, 2024, was 16.9%, down from 21.4% as of December 31, 2023[80]. Dividends and Shareholder Information - The board proposed an interim dividend of HKD 0.9 per share, totaling approximately HKD 110 million, subject to shareholder approval[2]. - The board proposed an interim dividend of HKD 0.9 per share, totaling HKD 110,039,026.5, subject to shareholder approval[39]. - The interim report for the six months ending June 30, 2024, will be sent to shareholders and published on the company's website[94]. Operational Strategies and Market Performance - The group expanded its offline OTC business to nearly 290,000 pharmacies across 31 provinces and cities in China, while online sales were conducted through 63 stores on 18 e-commerce platforms[40]. - The group launched a new partner model for offline channels, focusing on deepening the layout of weight loss products while maintaining stable pricing across channels[41]. - The group successfully exported over 10,000 boxes of its Changrun Tea to the United States and launched the "Besunyen Vita Eslife WEIGHT HEALTH CAPSULE" in collaboration with New Zealand partners[46]. - The group implemented a short video collaboration mechanism with thousands of influencers on Douyin, enhancing brand exposure and reputation[47]. - The group achieved significant operational cost reductions by restructuring its e-commerce operations and optimizing service platform costs[44]. - The online and offline sales strategies included interactive promotions through chain pharmacies and live streaming to enhance customer engagement and sales[42]. - The group maintained strict price management to prevent malicious low pricing and ensure healthy market operations across various sales channels[43]. - The company has established a deep cooperation with Douyin and Kuaishou, developing multiple new products based on platform data and market trends[48]. - The company has expanded its marketing strategy by integrating short drama marketing, significantly increasing brand exposure and targeting specific consumer groups[49]. - The company has focused on the business weight loss market by utilizing elevator advertising in high-end office buildings, effectively reaching white-collar consumers[51]. Research and Development - The company has made significant advancements in R&D, including clinical trials for new health products in collaboration with universities[56]. - The company has filed for multiple patents, including a new product technology support patent for its "Bishengyuan Lingzhi Goji Fuling Tea"[57]. Governance and Compliance - The audit committee consists of three independent non-executive directors, ensuring oversight of financial reporting and internal controls[89]. - The company plans to review its governance structure periodically to ensure effective leadership and decision-making[88]. - The company has complied with various legal regulations, with no significant non-compliance issues reported for the first half of 2024[83]. - The company has established a strong relationship with suppliers and customers, with no significant disputes reported[85]. Future Outlook - The company plans to address market changes and economic challenges in the second half of 2024 by optimizing mechanisms and focusing on reform outcomes[59]. - The company aims to enhance its competitiveness by expanding multi-channel product layouts and refining online and offline operations[60]. - The company plans to continue brand building and product development to meet the growing health demands of consumers[60].

Financial Performance - The company's revenue for the year ended December 31, 2023, was RMB 542.9 million, a decrease of 32.2% compared to RMB 801.3 million in the previous year[14]. - The total comprehensive loss for the year was RMB 358.6 million, an increase of 243.5% from RMB 104.4 million in the prior year[14]. - The loss attributable to owners of the company was RMB 300.4 million, up 203.1% from RMB 99.1 million in the previous year[14]. - The gross profit for 2023 was RMB 346.2 million, down from RMB 492.6 million in 2022, reflecting a significant decline in profitability[62]. - The operating loss for the year was RMB 150.3 million, compared to a loss of RMB 31.4 million in the previous year[62]. - The company reported a net loss of RMB 357.5 million for 2023, compared to a loss of RMB 104.4 million in 2022[63]. - The revenue from weight loss products was RMB 161.8 million in 2023, down 28.5% from RMB 226.2 million in 2022[66]. - The net comprehensive loss for 2023 was RMB 358.6 million, widening from RMB 104.4 million in 2022, attributed to decreased revenue from weight loss and other products[80]. - The company reported a net loss attributable to owners of RMB 299.2 million in 2023, compared to RMB 99.1 million in 2022, reflecting a larger loss than previously anticipated[80]. Operational Strategy - The company has made significant adjustments to its operational management strategy in response to economic uncertainties and market challenges[14]. - The company implemented a management principle focusing on "stabilizing operations, restructuring, reducing costs, and improving quality and efficiency" in early 2023[15]. - In 2023, the company restructured its business by divesting several subsidiaries, including Zhongshan Wanhua Pharmaceutical Co., which helped to focus on core business lines and enhance organizational vitality[16]. - The company intends to optimize online shopping experiences and reduce operational and logistics costs to focus on profitability[17]. - The company has optimized its organizational management system to improve operational efficiency by streamlining personnel and outsourcing non-core business functions[36]. Market Presence and Innovation - The company continues to focus on innovation and quality to provide high-quality health products and services[6]. - The company aims to become a leader in the health industry by continuously innovating and enhancing product quality[6]. - The company has established a distribution network covering nearly 290,000 non-prescription drug pharmacies and medical third-party terminals across 31 provinces and municipalities in China[5]. - The company operates 85 online stores across 18 e-commerce platforms to sell its products, including new product lines[5]. - The company has received 25 health food approvals and holds 113 patents, including 19 invention patents[5]. - The company aims to increase R&D investment to innovate products and improve consumer experience based on market demand and feedback[17]. - The company forecasts that the consumer health product industry in China will reach a market size of $62.401 billion by 2025, with a growth rate exceeding 6%[24]. Marketing and Brand Development - The company plans to enhance brand building and youth engagement in 2024 through multi-channel marketing strategies, including social media and content marketing[17]. - The company has updated the packaging of its four tea products to attract younger consumers, enhancing brand recognition[32]. - The company has launched large-scale annual campaigns focused on weight loss, increasing brand visibility in the market[33]. - The company has implemented content marketing strategies through product placements in popular TV dramas, enhancing brand visibility and consumer engagement[39]. - The company has established a youth-oriented brand ecosystem by collaborating with educational institutions, engaging over 20,000 creative students in brand activities[39]. Environmental and Social Responsibility - The company has donated over RMB 3.5 million to environmental protection initiatives and social welfare activities since 2015[48]. - The company has established a special charity fund in 2023 to support various social welfare activities, including education and poverty alleviation[49]. - The company actively participates in rural revitalization and poverty alleviation initiatives, helping local farmers and communities[51]. - The company is committed to improving employee environmental awareness and compliance with relevant environmental laws[131]. - The company aims to align its operations with the United Nations Sustainable Development Goals (SDGs) to enhance its ESG performance[126]. Employee Management and Corporate Governance - The company has established flexible work arrangements and preventive measures to mitigate climate-related risks, including extreme weather events[157]. - The company conducts annual employee performance reviews to assess potential for promotion and development opportunities[159]. - The company ensures that any termination of employment is based on reasonable and legal grounds, adhering to standard procedures[160]. - The company promotes diversity and equal opportunity in hiring practices, prohibiting discrimination of any form[163]. - The company has maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange, ensuring transparency and accountability to shareholders[185]. Financial Management and Investments - The company’s cash flow for operations and capital expenditures in 2023 primarily came from operating activities, proceeds from the sale of subsidiaries, and rights issue funds[81]. - The net cash inflow from investing activities for continuing operations was RMB 66.8 million, primarily due to the sale of subsidiaries, compared to a net outflow of RMB 61.8 million in 2022[82]. - The company had no bank borrowings as of December 31, 2023, compared to RMB 177.6 million in borrowings in 2022[84]. - The company has capital commitments for property, plant, and equipment amounting to RMB 2.4 million as of December 31, 2023, down from RMB 12.6 million a year earlier[97]. - The company has committed to anti-corruption measures, including a zero-tolerance policy towards bribery and fraud, and has implemented a whistleblowing system to encourage reporting of suspicious activities[179].

Financial Performance - For the year ended December 31, 2023, the revenue from continuing operations was RMB 542.9 million, a decrease of 32.2% compared to RMB 801.3 million in 2022[19]. - The gross profit from continuing operations for 2023 was RMB 346.2 million, down 29.7% from RMB 492.6 million in 2022, with a gross margin of 63.8%, an increase of 2.3 percentage points from 61.5% in 2022[19]. - The total comprehensive loss for 2023 was RMB 358.6 million, compared to RMB 104.4 million in 2022, with a comprehensive loss attributable to owners of the company amounting to RMB 300.4 million[20]. - The basic and diluted loss per share attributable to owners for 2023 was RMB 2.45, with a loss of RMB 1.30 per share from continuing operations and RMB 1.15 per share from discontinued operations[20]. - Operating loss increased significantly to RMB 150,287,000 compared to a loss of RMB 31,377,000 in 2022[21]. - The net loss for the year was RMB 357,514,000, which is a substantial increase from RMB 104,389,000 in 2022[22]. - The accumulated losses increased to RMB 827.2 million in 2023 from RMB 527.9 million in 2022, indicating a worsening financial position[13]. - The company reported a financial cost net amount of RMB 364 thousand, with financial income of RMB 1,634 thousand and financial costs of RMB 1,998 thousand[46]. - The company’s income tax expense for 2023 was RMB 9.4 million, a significant decrease from RMB 29.0 million in 2022 due to reduced taxable profits[117]. Assets and Liabilities - Non-current assets decreased to RMB 277.1 million in 2023 from RMB 794.4 million in 2022, reflecting a significant reduction in property, plant, and equipment[12]. - Current assets totaled RMB 427.9 million in 2023, down from RMB 742.8 million in 2022, primarily due to a decrease in inventory and trade receivables[12]. - The total assets of the company decreased to RMB 704.9 million in 2023 from RMB 1,537.1 million in 2022[12]. - The company’s total liabilities decreased to RMB 150,973,000 from RMB 484,728,000 in the previous year, indicating a significant reduction in financial obligations[29]. - The company’s total equity and liabilities amounted to RMB 704,943,000, down from RMB 1,537,138,000 in 2022[29]. Revenue Breakdown - Total revenue for the tea products segment was RMB 371,119 thousand, while the weight loss and other pharmaceuticals segment generated RMB 171,757 thousand, leading to a total revenue of RMB 542,876 thousand[46]. - Revenue from the weight loss products in 2023 was RMB 161.8 million, down 28.5% from RMB 226.2 million in 2022[87]. - Revenue from an external online sales platform was approximately RMB 56,724,000, accounting for 10.4% of total revenue, slightly down from 10.9% in 2022[45]. Cost Management - The company reported a significant decrease in sales and marketing expenses to RMB 320,704,000 from RMB 378,850,000 in the previous year, reflecting a cost-cutting strategy[21]. - The company's sales cost for 2023 was RMB 196.7 million, a decrease of 36.3% from RMB 308.8 million in 2022[91]. - In 2023, the company's sales and marketing expenses amounted to RMB 320.7 million, a decrease of 15.4% from RMB 378.9 million in 2022, representing 59.1% of total revenue[94]. - Administrative expenses rose to RMB 153.1 million in 2023, up 32.3% from RMB 115.7 million in 2022, largely due to strategic adjustments and one-time severance payments[97]. Strategic Initiatives - The company continues to focus on the production and sale of functional health tea products and weight loss medications[16]. - The company engaged in strategic adjustments by establishing joint ventures and service agreements to enhance distribution and operational services[33]. - The company aims to enhance supply chain management by adopting a "one product, one strategy" approach to meet market demands for small batch and rapid response[111]. - The company plans to continue enhancing its product offerings and services in the health industry[87]. - The company aims to improve operational management efficiency and data processing capabilities while enhancing employee training and performance management systems[147]. Market Position and Future Plans - The company aims to focus on high-quality development and profitability in 2024, leveraging consumer health needs as a driver for innovation[104]. - Plans for 2024 include deepening channel development and enhancing market position through operational reforms and increased advertising[107]. - The company will strengthen cooperation with new business partners to improve channel control and pricing strategies in 2024[108]. - The company plans to continue expanding its new retail business, focusing on emerging marketing platforms like Douyin and Kuaishou to increase market share[109]. - The company has maintained a healthy financial status while adapting to market competition through operational reforms[171]. Research and Development - Research and development costs totaled RMB 34,922 thousand, with RMB 13,898 thousand from the tea products segment and RMB 21,024 thousand from the weight loss and other pharmaceuticals segment[46]. - New product development includes the successful launch of health products like Lingzhi Ginseng Granules and Lingzhi Goji Reishi Tea, expanding into liver protection and immune enhancement markets[185]. - The company has strengthened its innovation capabilities by refining health food product approvals and enhancing production management processes[185]. Corporate Social Responsibility - The company has established a charity fund in collaboration with the Beijing Charity Foundation, which provided various forms of assistance to disadvantaged groups in 2022[195]. - The company has donated over RMB 3.5 million to environmental protection initiatives since 2015, raising public awareness about wildlife protection[195].

Financial Performance - The group's operating expenses for the first half of 2023 amounted to RMB 222.6 million, a decrease of 1.4% compared to RMB 225.7 million in the same period of 2022[10] - The group's gross profit from continuing operations for the first half of 2023 was RMB 222.2 million, a decrease of 8.3% compared to RMB 242.3 million in the same period of 2022[23] - The group's gross profit margin from continuing operations for the first half of 2023 was 64.8%, an increase of 4.8 percentage points compared to 60.0% in the same period of 2022[23] - The company's attributable comprehensive loss for the first half of 2023 was RMB 116.2 million, with a comprehensive income from continuing operations of RMB 1.3 million and a comprehensive loss from discontinued operations of RMB 117.5 million[24] - The company's revenue from continuing operations in the first half of 2023 was RMB 343.0 million, a decrease of 15.1% compared to the same period in 2022[32] - The company's total comprehensive loss for the first half of 2023 was RMB 174.5 million, with a comprehensive income from continuing operations of RMB 1.3 million and a comprehensive loss from discontinued operations of RMB 175.8 million[33] - The company's revenue in the first half of 2023 was RMB 343.0 million, a year-on-year decrease of 15.1%, with revenue from "Four Teas" at RMB 163.4 million (down 3.9%) and revenue from weight-loss drugs at RMB 116.2 million (down 3.1%)[35] - Sales cost for the first half of 2023 was RMB 120,827 thousand, compared to RMB 161,487 thousand in the same period of 2022[103] - Gross profit for the first half of 2023 was RMB 222,160 thousand, with a gross margin of 64.8%, up from 60.0% in 2022[103] - Sales and marketing expenses for the first half of 2023 were RMB 162.1 million, almost unchanged from RMB 162.4 million in 2022[104] - Employee benefits expenses decreased by RMB 6.6 million in the first half of 2023 compared to the same period in 2022, mainly due to a reduction in sales staff[105] - R&D costs for the first half of 2023 were RMB 18,609 thousand, accounting for 5.4% of revenue, up from 1.0% in 2022[107] - Total revenue for 2023 was RMB 342.987 million, a decrease from RMB 403.774 million in 2022[128] - Revenue from weight loss products in 2023 was RMB 116.184 million, accounting for 33.9% of total revenue, down 3.1% from 2022[128][129] - Revenue from other health products in 2023 was RMB 54.313 million, a significant decrease of 28.9% from 2022[128][129] - Marketing and promotional expenses in 2023 were RMB 66.251 million, a decrease of RMB 10.7 million from 2022, mainly due to reduced e-commerce platform promotion fees[131] - Administrative expenses in 2023 were RMB 41.8 million, a 29.3% decrease from 2022, driven by cost optimization and organizational restructuring[133] - The company's asset-liability ratio as of June 30, 2023, was 19.0%, down from 31.5% at the end of 2022[145] - The company sold 51% equity in target companies for a total consideration of RMB 137.7 million, resulting in a post-tax loss of RMB 175.8 million from discontinued operations[144] - Employee costs for the first half of 2023 were RMB 81.8 million, down from RMB 95.4 million in the same period in 2022[148] - The company's total inventory as of June 30, 2023, was RMB 35.3 million, a significant decrease from RMB 109.239 million in 2022[143] - Revenue for the first half of 2023 was RMB 343.0 million, a decrease of 15.1% compared to RMB 403.8 million in the same period of 2022[150] - Gross profit margin increased to 64.8% in the first half of 2023, up 4.8 percentage points from 60.0% in the same period of 2022, driven by higher-margin products and reduced procurement costs for weight-loss drugs[151] - Advertising expenses increased by RMB 18.7 million in the first half of 2023 compared to the same period in 2022[152] - R&D costs rose to RMB 18.6 million in the first half of 2023, up from RMB 4.2 million in the same period of 2022, primarily due to outsourced R&D activities[155] - The company recorded a total comprehensive loss of RMB 174.5 million in the first half of 2023, compared to a loss of RMB 9.1 million in the same period of 2022[156] - The company's total comprehensive loss attributable to owners for the six months ended June 30, 2023, was RMB 116,219 thousand, compared to a loss of RMB 6,621 thousand in the same period in 2022[177] - The loss from discontinued operations for the six months ended June 30, 2023, was RMB 117,501 thousand, compared to a loss of RMB 2,591 thousand in the same period in 2022[177] - The company's total assets decreased from RMB 1,537,138 thousand as of December 31, 2022, to RMB 911,200 thousand as of June 30, 2023[179][181] - The company's total liabilities decreased from RMB 484,728 thousand as of December 31, 2022, to RMB 173,082 thousand as of June 30, 2023[181] - The company's total equity decreased from RMB 1,052,410 thousand as of January 1, 2023, to RMB 738,118 thousand as of June 30, 2023[183] - The company's non-current assets decreased from RMB 794,366 thousand as of December 31, 2022, to RMB 334,251 thousand as of June 30, 2023[179] - The company's current assets decreased from RMB 742,772 thousand as of December 31, 2022, to RMB 576,949 thousand as of June 30, 2023[179] - The company's inventory decreased from RMB 109,239 thousand as of December 31, 2022, to RMB 35,300 thousand as of June 30, 2023[179] - The company's cash and cash equivalents increased from RMB 230,320 thousand as of December 31, 2022, to RMB 264,961 thousand as of June 30, 2023[179] - The company's total comprehensive loss for the six months ended June 30, 2023, was RMB 174,490 thousand, compared to a loss of RMB 9,110 thousand in the same period in 2022[183] Sales and Distribution - The group's offline sales business covered nearly 410,000 OTC pharmacies and supermarkets across 31 provinces, autonomous regions, and municipalities through 118 distributors and 98 sub-distributors in the first half of 2023[16] - The group's online sales team operated 120 stores on 36 e-commerce platforms, selling products including the four teas, Orlistat, and other group products in the first half of 2023[16] - The group's offline sales team directly serves nearly 100,000 OTC pharmacies and supermarkets[16] - The group has been actively exploring new retail channels such as Douyin, Kuaishou, O2O, and B2C to accelerate market entry for new products[16] - The company's offline sales business covered nearly 410,000 OTC pharmacies and third terminals across 31 provinces, autonomous regions, and municipalities through 118 distributors and 98 sub-distributors[26] - The company's online sales team operates 120 stores on 36 e-commerce platforms, focusing on products like "Four Teas" and Orlistat[26] - The company is actively exploring new retail models such as TikTok, Kuaishou, O2O, B2C, and cross-border e-commerce to accelerate market entry for new products[26] - The company implemented a "one-row-one-control" promotional marketing campaign in the weight loss and intestinal health product categories, focusing on core and regional key chains[27] - The company leveraged O2O, membership platforms, and live streaming to enhance consumer engagement and increase purchase intent[28] - The company has implemented a strategy to enhance sales through data-driven analysis, focusing on metrics such as distribution rate, number of stores, customer order growth, and single-store productivity[79] - The e-commerce division has improved inventory management, reducing inventory turnover time and minimizing losses from expired products, while also decreasing inventory levels and capital tied up in stock[85] - The company has strengthened platform communication and resource collaboration, securing favorable terms and policy support from platforms like JD.com during major promotions such as 38, 55, and 618[87] - The company has leveraged high-speed rail media to enhance brand influence, focusing on short-term high exposure strategies to rapidly cover target markets and boost brand momentum[90] - The company has targeted the family demographic in the new retail era, aiming to capture growth opportunities in lower-tier markets[92] - The company has engaged with Generation Z through campus activities and collaborations with academic institutions, promoting a healthy lifestyle and gathering creative insights for product development and marketing[94] - The company achieved a closed-loop operation system for product promotion and sales on the Douyin platform, enhancing the effectiveness of platform promotion and acquiring more high-quality new customers[114] - The company expanded its e-commerce channels by adding Baidu Health Mall and Dewu platform in the first half of 2023[115] - The company collaborated with China High-Speed Rail to reach a large number of passengers and release brand potential[118] Research and Development - The group has 38 health food approvals and 116 patented technologies, including 18 invention patents[4] - The group's production base for the four teas is located in Beijing's Fangshan District, with facilities and processes compliant with national GMP standards and certified by ISO9001, ISO22000, and HACCP systems[15] - The company completed the national key R&D project on the evaluation system and demonstration research platform for traditional Chinese medicine health products[95] - The company completed the development and academic research of a new product, Poria and Alisma Tablets, with weight-loss health functions[124] - The company plans to focus on R&D, market trends, and consumer demand, particularly in weight management and gastrointestinal health, while exploring new retail channels[127] Corporate Governance and Shareholding - Executive Director Zhao Yihong holds a 51.34% beneficial interest in the company's shares, including direct and indirect holdings through controlled entities[48][49] - Foreshore Holding Group Limited, controlled by Zhao Yihong, holds a 50.07% stake in the company's issued shares[54] - Peng Wei, a major shareholder, holds an 8.41% stake in the company's issued shares[54] - Everyoung Investment Holdings Limited, controlled by Peng Wei, holds a 7.59% stake in the company's issued shares[54] - The company's total issued shares as of June 30, 2023, amounted to 122,265,585 shares[56] - The company's board has decided not to declare any dividends for the six months ended June 30, 2023[63] Operational Efficiency and Cost Management - The company is optimizing its organizational structure and product portfolio to improve operational efficiency and profitability[35] - The company's wage, bonus, and other allowances expenses for the six months ended June 30, 2023, totaled RMB 4,687,000[68] - The company's pension costs for the six months ended June 30, 2023, amounted to RMB 143,000[68] - The company's total employee benefits expenses for the six months ended June 30, 2023, were RMB 4,830,000[68] - The company has signed non-cancellable operating leases for offices and staff dormitories, with future minimum lease payments not recognized as liabilities on the balance sheet[70] - The company's capital commitments for property, plant, and equipment as of June 30, 2023, amounted to RMB 7,211,000[69] - Capital expenditures for property, plant, and equipment totaled RMB 3.2 million in the first half of 2023, down from RMB 11.4 million in the same period of 2022[164] - Inventory levels decreased significantly, with finished goods inventory dropping to RMB 28.8 million as of June 30, 2023, from RMB 59.8 million as of December 31, 2022[166] - The company utilized RMB 125.9 million from a rights issue for its intended purposes as of June 30, 2023[163] - Capital commitments for property, plant, and equipment stood at RMB 7.2 million as of June 30, 2023, down from RMB 12.6 million as of December 31, 2022[195] - The company allocated funds for investments in funds and other financial assets to generate investment income while maintaining liquidity[194] Cash Flow and Financial Position - Cash and cash equivalents, including time deposits, amounted to RMB 377.9 million as of June 30, 2023, down from RMB 483.8 million as of December 31, 2022[161] - Bank borrowings decreased to RMB 5.0 million as of June 30, 2023, with an interest rate of 4.70%, compared to RMB 177.6 million as of December 31, 2022[162] - Operating cash flow from continuing operations increased to RMB 44,126 thousand in H1 2023, compared to a negative RMB 52,704 thousand in H1 2022[185] - Net cash inflow from operating activities reached RMB 88,197 thousand in H1 2023, a significant improvement from RMB 9,505 thousand in H1 2022[185] - Proceeds from the sale of financial assets at fair value through profit or loss amounted to RMB 263,170 thousand in H1 2023, slightly lower than RMB 411,898 thousand in H1 2022[185] - Net cash inflow from investing activities decreased to RMB 18,013 thousand in H1 2023 from RMB 85,016 thousand in H1 2022[185] - Net cash outflow from financing activities was RMB 71,313 thousand in H1 2023, higher than RMB 49,463 thousand in H1 2022[185] Sustainability and Corporate Responsibility - The company emphasized sustainable development, employee welfare, and maintaining strong relationships with suppliers and customers[197] - The company invested in employee education and training programs to enhance skills and collaboration[198] Financial Reporting Standards - The interim financial information was prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[200]