Core Viewpoint - China Shun Ke Long (00974) reported a revenue of 246 million yuan for the six months ending June 30, 2025, representing a year-on-year decrease of 20.2% [1] - The company recorded a loss attributable to shareholders of 3.2 million yuan, a significant reduction of 82.79% compared to the previous year [1] - The loss per share was 0.01 yuan, indicating a decrease in operational losses compared to the same period last year [1] Summary by Category Financial Performance - Revenue for the period was 246 million yuan, down 20.2% year-on-year [1] - Loss attributable to shareholders was 3.2 million yuan, down 82.79% year-on-year [1] - Loss per share was reported at 0.01 yuan [1] Operational Changes - The decrease in revenue was primarily due to the company's strategy to optimize and close inefficient retail stores [1] - The net loss for the group was approximately 3.285 million yuan, indicating a significant reduction in operational losses compared to the same period last year [1]

[Financial Summary](index=1&type=section&id=Financial%20Summary) [Company Information and Announcement](index=1&type=section&id=Company%20Information%20and%20Announcement) China Shunke Long Holdings Limited announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025, which were reviewed by the Company's audit committee - China Shunke Long Holdings Limited (Stock Code: 974) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025[2](index=2&type=chunk) - The unaudited consolidated results have been reviewed by the Company's audit committee[2](index=2&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) For the six months ended June 30, 2025, the Company's revenue decreased by 20.2% to RMB 245,947 thousand, gross profit decreased by 25.7% to RMB 28,809 thousand, but loss for the period significantly narrowed by 82.5% to RMB 3,285 thousand; total assets and total liabilities also decreased by 10.2% and 12.2% respectively Financial Highlights for the Six Months Ended June 30 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 245,947 | 308,164 | -20.2% | | Gross Profit | 28,809 | 38,783 | -25.7% | | Loss for the period | (3,285) | (18,747) | -82.5% | | **As at period-end** | | | | | Total Assets | 273,622 | 304,700 | -10.2% | | Total Liabilities | 195,226 | 222,342 | -12.2% | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Company's revenue was RMB 245,947 thousand, gross profit RMB 28,809 thousand, loss for the period significantly narrowed to RMB 3,285 thousand, and basic and diluted loss per share was RMB 0.01 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 245,947 | 308,164 | | Cost of inventories sold | (217,138) | (269,381) | | Gross Profit | 28,809 | 38,783 | | Other operating income | 14,014 | 8,589 | | Selling and distribution costs | (36,482) | (56,311) | | Administrative expenses | (8,043) | (6,891) | | Finance costs | (2,242) | (2,264) | | Loss before tax | (3,243) | (18,677) | | Income tax expense | (42) | (70) | | Loss for the period | (3,285) | (18,747) | | Loss for the period attributable to owners of the Company | (3,200) | (18,596) | | Loss per share - basic and diluted (RMB) | (0.01) | (0.06) | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As at June 30, 2025, the Company's total non-current assets were RMB 83,912 thousand, total current assets RMB 190,810 thousand, and total current liabilities RMB 173,495 thousand; net assets decreased to RMB 78,396 thousand, mainly due to reduced retained earnings and exchange differences Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, plant and equipment | 23,625 | 23,452 | | Right-of-use assets | 45,645 | 54,785 | | Investment properties | 8,207 | 8,370 | | Deferred tax assets | 1,127 | 1,127 | | **Current Assets** | | | | Inventories | 62,459 | 77,535 | | Trade and bills receivables | 36,844 | 35,088 | | Deposits paid, prepayments and other receivables | 64,682 | 77,229 | | Cash and cash equivalents | 25,523 | 21,152 | | **Current Liabilities** | | | | Trade payables | 50,709 | 66,591 | | Other payables | 25,423 | 21,503 | | Bank borrowings | 62,000 | 62,000 | | **Net Assets** | 78,396 | 82,358 | | **Total Equity** | 78,396 | 82,358 | [Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the Company decreased from RMB 81,346 thousand at the beginning of the period to RMB 77,469 thousand, mainly due to a loss for the period of RMB 3,200 thousand and exchange differences of RMB 677 thousand arising from translation of financial statements Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | January 1, 2025 (RMB thousands) | Loss for the period (RMB thousands) | Exchange differences (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Total equity attributable to owners of the Company | 81,346 | (3,200) | (677) | 77,469 | | Non-controlling interests | 1,012 | (85) | – | 927 | | **Total Equity** | **82,358** | **(3,285)** | **(677)** | **78,396** | - Statutory reserve, in accordance with the PRC Company Law, requires 10% of annual statutory after-tax net profit (after offsetting any prior year losses) to be allocated until it reaches 50% of the registered capital[8](index=8&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash generated from operating activities was RMB 22,544 thousand, net cash used in investing activities RMB 3,613 thousand, and net cash used in financing activities RMB 13,912 thousand, resulting in a net increase in cash and cash equivalents of RMB 5,019 thousand Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Activity Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash from (used in) operating activities | 22,544 | (3,855) | | Net cash used in investing activities | (3,613) | (4,349) | | Net cash used in financing activities | (13,912) | (15,633) | | Net increase in cash and cash equivalents | 5,019 | (23,837) | | Cash and cash equivalents at January 1 | 21,152 | 48,683 | | Effect of foreign exchange rate changes | (648) | 272 | | Cash and cash equivalents at June 30 | 25,523 | 25,118 | [Notes to the Condensed Consolidated Interim Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [General Information and Basis of Preparation](index=7&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) China Shunke Long Holdings Limited is incorporated in the Cayman Islands, primarily operating supermarket chain stores in Guangdong Province, China, maintaining both retail and wholesale distribution channels; its shares are listed on the Main Board of the Hong Kong Stock Exchange, with Supply and Marketing Grand Bazaar Group as the controlling shareholder - The Company was incorporated in the Cayman Islands, and its shares were listed on the Main Board of The Stock Exchange of Hong Kong on September 10, 2015[10](index=10&type=chunk) - The Group operates supermarket chain stores, primarily in Guangdong Province, China, maintaining both retail and wholesale distribution channels[11](index=11&type=chunk) - The Company's controlling shareholder is Supply and Marketing Grand Bazaar Group (whose shares are listed on the Shenzhen Stock Exchange), and the ultimate controlling party is the All-China Federation of Supply and Marketing Cooperatives[11](index=11&type=chunk) [Accounting Policies](index=7&type=section&id=Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with those used for the 2024 annual consolidated financial statements; amendments to IFRS accounting standards were first applied in this interim period but did not have a significant impact on financial performance and position - The condensed consolidated financial statements are prepared on a historical cost basis and in accordance with International Accounting Standard 34 and the applicable disclosure requirements of Appendix D2 to the Listing Rules[12](index=12&type=chunk)[13](index=13&type=chunk) - Amendments to IFRS accounting standards (HKAS 21 Amendment: Lack of Exchangeability) were first applied in this interim period but did not have a significant impact on the Group's financial performance and position[14](index=14&type=chunk) [Operating Segment Information](index=8&type=section&id=Operating%20Segment%20Information) The Group has two reportable segments: retail store operations and wholesale distribution; for the six months ended June 30, 2025, retail store operations revenue was RMB 188,366 thousand and wholesale distribution revenue was RMB 57,581 thousand, with both segments reporting losses; all revenue and non-current assets primarily originate from China - The Group has two reportable segments: retail store operations (selling fresh food, groceries, and household items) and wholesale distribution (selling fast-moving consumer goods and groceries)[15](index=15&type=chunk)[17](index=17&type=chunk) Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (RMB thousands) | 2025 Loss (RMB thousands) | 2024 Revenue (RMB thousands) | 2024 Loss/Profit (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Retail store operations | 188,366 | (115) | 231,307 | (16,839) | | Wholesale distribution | 57,581 | (2,568) | 76,857 | 25 | | **Total** | **245,947** | **(2,683)** | **308,164** | **(16,814)** | - The Group's revenue from external customers and non-current assets are entirely from China (domicile)[19](index=19&type=chunk)[20](index=20&type=chunk) [Revenue and Other Operating Income](index=10&type=section&id=Revenue%20and%20Other%20Operating%20Income) For the six months ended June 30, 2025, the Group's revenue primarily came from goods sales, with retail store operations contributing RMB 184,134 thousand and wholesale distribution RMB 57,581 thousand; other operating income significantly increased by 63.2% year-on-year to RMB 14,014 thousand, mainly due to increased gains from early lease terminations Revenue Analysis (For the six months ended June 30) | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | General retail sales under retail store operations | 178,602 | 218,036 | | Bulk sales under retail store operations | 5,532 | 2,770 | | Integrated wholesale under wholesale distribution | 57,581 | 76,857 | | Commission income from franchise sales under retail store operations | 532 | 6,292 | | Rental income from subleasing certain retail areas under retail store operations | 3,700 | 4,209 | | **Total Revenue** | **245,947** | **308,164** | Other Operating Income Analysis (For the six months ended June 30) | Income Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Gain from early termination of leases | 3,111 | 183 | | Gain on disposal of property, plant and equipment | 29 | 89 | | Government grants | 110 | 8 | | Interest income from bank deposits | 42 | 130 | | Promotion income from suppliers | 5,012 | 5,299 | | Net rental income from investment properties | 1,458 | 1,371 | | Others | 4,252 | 1,509 | | **Total** | **14,014** | **8,589** | - The net gain from early termination of leases in the first half of 2025 was **RMB 3,111 thousand**, a significant increase from **RMB 183 thousand** in the same period of 2024[25](index=25&type=chunk) [Loss Before Tax](index=11&type=section&id=Loss%20Before%20Tax) For the six months ended June 30, 2025, loss before tax was RMB 3,243 thousand, a significant narrowing from RMB 18,677 thousand in the prior year; major expenses included employee benefit expenses of RMB 22,175 thousand and depreciation of right-of-use assets of RMB 8,843 thousand Items Deducted from Loss Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 3,511 | 3,571 | | Depreciation of investment properties | 163 | 163 | | Depreciation of right-of-use assets | 8,843 | 14,303 | | Total employee benefit expenses | 22,175 | 29,846 | | Total finance costs | 2,242 | 2,264 | [Income Tax Expense](index=12&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was RMB 42 thousand, a decrease from the prior year; PRC subsidiaries are subject to a 25% corporate income tax rate, with preferential rates for small low-profit enterprises, while Hong Kong and Macau subsidiaries incurred no taxable profits and thus no income tax - For the six months ended June 30, 2025, income tax expense was **RMB 42 thousand**, a decrease from **RMB 70 thousand** in the same period of 2024[29](index=29&type=chunk) - PRC subsidiaries are subject to a tax rate of **25%**, but small low-profit enterprises may enjoy preferential tax rates of **5% or 10%**[29](index=29&type=chunk)[30](index=30&type=chunk) - The Group did not incur taxable profits in the Cayman Islands, British Virgin Islands, Hong Kong, and Macau, thus no related income tax was payable[29](index=29&type=chunk)[30](index=30&type=chunk) [Dividends](index=12&type=section&id=Dividends) For the six months ended June 30, 2025, the Company neither paid nor proposed any interim dividends, and no dividends have been proposed since the end of the reporting period - No dividends were paid or proposed for the six months ended June 30, 2025 (six months ended June 30, 2024: nil), and no dividends have been proposed since the end of the reporting period (2024: nil)[31](index=31&type=chunk) [Loss Per Share](index=13&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the Company was RMB 0.01, a significant narrowing from RMB 0.06 in the prior year; diluted loss per share was the same as basic loss per share due to the absence of potential dilutive ordinary shares Loss Per Share Calculation (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company | (3,200) | (18,596) | | Weighted average number of ordinary shares used for basic and diluted loss per share calculation | 290,457,000 | 290,457,000 | | Loss per share - basic and diluted (RMB) | (0.01) | (0.06) | - As there were no outstanding potential dilutive ordinary shares for both periods, the diluted loss per share was the same as the basic loss per share[32](index=32&type=chunk) [Capital Expenditure](index=13&type=section&id=Capital%20Expenditure) For the six months ended June 30, 2025, the Group added RMB 4,079 thousand in property, plant and equipment; at period-end, the carrying value of property, plant and equipment was RMB 23,625 thousand, and investment properties RMB 8,207 thousand; some buildings and investment properties were pledged to banks for financing Changes in Property, Plant and Equipment and Investment Properties (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Carrying value of property, plant and equipment at beginning of period | 23,452 | 28,095 | | Additions | 4,079 | 4,916 | | Disposals | (395) | (348) | | Depreciation/Amortisation | (3,511) | (3,571) | | Carrying value of property, plant and equipment at end of period | 23,625 | 29,092 | | Carrying value of investment properties at beginning of period | 8,370 | 8,697 | | Depreciation/Amortisation of investment properties | (163) | (163) | | Carrying value of investment properties at end of period | 8,207 | 8,534 | - As at June 30, 2025, buildings with a carrying value of **RMB 10,334 thousand** and investment properties with a carrying value of **RMB 8,207 thousand** were pledged to banks[34](index=34&type=chunk) [Leases](index=14&type=section&id=Leases) As at June 30, 2025, total right-of-use assets were RMB 45,645 thousand and total lease liabilities RMB 40,642 thousand; new right-of-use assets of RMB 4,424 thousand were added, and depreciation of right-of-use assets of RMB 8,843 thousand and lease liability interest expense of RMB 1,181 thousand were recognized; total lease cash outflow was RMB 13,298 thousand Right-of-Use Assets (As at period-end) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Other leased properties held for own use | 25,821 | 34,525 | | Ownership interests in leased land | 19,824 | 20,260 | | **Total** | **45,645** | **54,785** | Lease Liabilities (As at period-end) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current | 18,911 | 24,303 | | Non-current | 21,731 | 31,527 | | **Total** | **40,642** | **55,830** | Lease-Related Amounts Recognized in Profit or Loss (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of right-of-use assets | 8,843 | 14,303 | | Interest expense on lease liabilities | 1,181 | 1,702 | | Gain from early termination of leases | 3,111 | 183 | | Short-term lease expenses | 337 | 460 | - For the six months ended June 30, 2025, total lease cash outflow was **RMB 13,298 thousand**[41](index=41&type=chunk) [Trade and Bills Receivables](index=16&type=section&id=Trade%20and%20Bills%20Receivables) As at June 30, 2025, total trade and bills receivables were RMB 36,844 thousand, a slight increase from RMB 35,088 thousand at the end of 2024; the average credit period is 0 to 180 days, with receivables within 30 days accounting for the highest proportion Trade and Bills Receivables (As at period-end) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 39,020 | 38,111 | | Less: Impairment allowance for trade receivables | (2,201) | (3,069) | | Net trade receivables | 36,819 | 35,042 | | Bills receivables | 25 | 46 | | **Total** | **36,844** | **35,088** | - The average credit period granted to customers or tenants is generally **0 to 180 days** from the invoice date[42](index=42&type=chunk) Ageing Analysis of Trade Receivables (As at period-end) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 30 days | 15,378 | 13,172 | | 31 to 60 days | 6,924 | 6,742 | | 61 to 180 days | 10,549 | 7,607 | | 181 to 365 days | 299 | 3,120 | | Over 1 year to 2 years | 3,635 | 4,326 | | Over 2 years | 34 | 75 | | **Total** | **36,819** | **35,042** | [Trade Payables](index=17&type=section&id=Trade%20Payables) As at June 30, 2025, total trade payables were RMB 50,709 thousand, a decrease from RMB 66,591 thousand at the end of 2024; the Group generally obtains credit periods of 0 to 360 days from its suppliers - The Group generally obtains credit periods of **0 to 360 days** from its suppliers[43](index=43&type=chunk) Ageing Analysis of Trade Payables (As at period-end) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current to 30 days | 16,740 | 29,472 | | 31 to 60 days | 9,100 | 11,643 | | 61 to 180 days | 10,667 | 12,481 | | 181 to 365 days | 7,593 | 4,901 | | Over 1 year to 2 years | 1,829 | 2,357 | | Over 2 years | 4,780 | 5,737 | | **Total** | **50,709** | **66,591** | [Amounts Due from Related Companies](index=17&type=section&id=Amounts%20Due%20from%20Related%20Companies) As at June 30, 2025, amounts due from related companies were trade-related, unsecured, interest-free, and repayable on demand; the carrying value includes accumulated impairment losses of RMB 440 thousand - Amounts due from related companies are trade-related, unsecured, interest-free, and repayable on demand[45](index=45&type=chunk) - The carrying value includes accumulated impairment losses of **RMB 440 thousand**[45](index=45&type=chunk) [Bank Borrowings](index=17&type=section&id=Bank%20Borrowings) As at June 30, 2025, the Group had RMB 62,000 thousand in secured bank borrowings, bearing fixed annual interest rates of 3.35% to 3.45%, all repayable within one year; these borrowings are secured by certain buildings, right-of-use assets, and investment properties Bank Borrowings (As at period-end) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Secured bank borrowings classified as current liabilities | 62,000 | 62,000 | | Due within one year | 62,000 | 62,000 | - Bank borrowings bear fixed annual interest rates of **3.35% to 3.45%** (December 31, 2024: 3.45% to 3.6%)[47](index=47&type=chunk) - The Group's interest-bearing bank borrowings are secured by certain buildings, right-of-use assets, and investment properties[48](index=48&type=chunk)[49](index=49&type=chunk) [Share Capital](index=18&type=section&id=Share%20Capital) As at June 30, 2025, the Company's authorized share capital was 2,000,000,000 ordinary shares of HKD 0.01 each, with 290,457,000 issued and fully paid ordinary shares of HKD 0.01 each, having a carrying value of RMB 2,387 thousand Share Capital (As at period-end) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Authorized share capital (2,000,000,000 shares of HKD 0.01 each) | 15,826 | 15,826 | | Issued and fully paid share capital (290,457,000 shares of HKD 0.01 each) | 2,387 | 2,387 | [Operating Lease Arrangements](index=18&type=section&id=Operating%20Lease%20Arrangements) The Group, as lessor, subleases internal areas of its retail stores and leases out investment properties for terms ranging from 1 to 10 years; as at June 30, 2025, irrevocable operating lease payments receivable within one year amounted to RMB 8,966 thousand - The Group subleases certain internal areas of its retail stores and leases out its investment properties, with negotiated lease terms ranging from **1 to 10 years**[49](index=49&type=chunk) Future Operating Lease Payments Receivable (As at period-end) | Period | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within one year | 8,966 | 9,397 | [Major Non-Cash Transactions](index=19&type=section&id=Major%20Non-Cash%20Transactions) For the six months ended June 30, 2025, the Group had a non-cash increase in right-of-use assets and lease liabilities of RMB 4,424 thousand due to retail store lease arrangements; concurrently, non-cash decreases of RMB 4,721 thousand in right-of-use assets and RMB 7,832 thousand in lease liabilities resulted from early lease terminations - Due to retail store lease arrangements, there was a non-cash increase in right-of-use assets and lease liabilities of **RMB 4,424 thousand**[50](index=50&type=chunk) - Due to early lease terminations, there was a non-cash decrease in right-of-use assets of **RMB 4,721 thousand** and a non-cash decrease in lease liabilities of **RMB 7,832 thousand**[50](index=50&type=chunk) [Related Party Transactions](index=19&type=section&id=Related%20Party%20Transactions) For the six months ended June 30, 2025, the Group had purchases of goods from related companies amounting to RMB 265 thousand, and no sales of goods; total key management personnel compensation was RMB 1,449 thousand Related Party Transactions (For the six months ended June 30) | Related Party Relationship | Nature of Transaction | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | | Related companies | Sales of goods | – | 4 | | Related companies | Purchases of goods | 265 | 17 | Key Management Personnel Compensation (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 1,320 | 1,305 | | Contributions to retirement benefit schemes | 129 | 97 | | **Total** | **1,449** | **1,402** | - The consideration for sales and purchase transactions was based on past transaction prices, market prices, and discount rates, with a credit period of within **90 days**[53](index=53&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=20&type=section&id=Business%20Review) The Group operates as a supermarket chain in Guangdong Province, China, encompassing retail store operations, integrated wholesale, and franchise operations; as at June 30, 2025, the number of retail stores decreased to 39, and franchised retail stores to 939, while integrated wholesale focuses on attracting more distributors - The Group operates as a supermarket chain, primarily in Guangdong Province, China, maintaining both retail and wholesale distribution channels[54](index=54&type=chunk) [Retail Stores](index=20&type=section&id=Retail%20Stores) As at June 30, 2025, the Group's total number of retail stores decreased from 51 at the beginning of the year to 39, mainly due to closing or converting inefficient stores; 38 are in Guangdong Province, China, and 1 in Macau, China Retail Store Count Changes | Period/Year | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Beginning of period/year | 61 | 51 | | Additions | 6 | 0 | | Reductions | (16) | (12) | | End of period/year | 51 | 39 | Retail Store Geographical Distribution (June 30, 2025) | Location | Number of Retail Stores | | :--- | :--- | | Foshan | 32 | | Zhaoqing | 4 | | Zhuhai | 1 | | Shenzhen | 1 | | Total Guangdong Province | 38 | | Macau | 1 | | **Total** | **39** | [Integrated Wholesale](index=21&type=section&id=Integrated%20Wholesale) As at June 30, 2025, the Group retained exclusive distribution rights for 16 brands in Foshan and Zhaoqing, with an increased focus on attracting more distributors rather than retailers as customers - The Group retains exclusive distribution rights for **16 brands** in Foshan and Zhaoqing[56](index=56&type=chunk) - The Group is focusing more on attracting distributors rather than retailers as customers[56](index=56&type=chunk) [Franchise Operations](index=21&type=section&id=Franchise%20Operations) The Group operates a franchise program, and as at June 30, 2025, the number of franchised retail stores decreased from 1,181 at the beginning of the year to 939 - The Group operates a franchise program, and revenue from selling goods to franchisees constitutes part of its wholesale distribution revenue[57](index=57&type=chunk) Franchised Retail Store Count Changes | Period/Year | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Beginning of period/year | 1,008 | 1,181 | | Additions | 173 | 3 | | Reductions | 0 | 245 | | End of period/year | 1,181 | 939 | [Recent Developments and Outlook](index=21&type=section&id=Recent%20Developments%20and%20Outlook) In the first half of 2025, Shunke Long continued its "one store, one policy" strategy, significantly narrowing losses by optimizing the supply chain, closing inefficient stores, and expanding new customers; the second half will focus on "stabilizing existing business, expanding new business, and improving quality" strategies, optimizing supply chain management, innovating procurement models, enhancing gross profit margins, and accelerating diversified growth drivers and new business formats, including launching large-scale school food delivery projects and transitioning to an integrated brand trading model - In the first half of 2025, Shunke Long continued to implement its "one store, one policy" strategy, achieving positive progress in profit improvement initiatives and significantly narrowing its losses[58](index=58&type=chunk) - The supermarket segment significantly improved operational efficiency through supply chain and cost structure optimization; the brand agency business adjusted its distribution layout and expanded its operating model; the group purchasing segment achieved strong growth; and the headquarters segment maintained stable operations through cost control and improved management efficiency[59](index=59&type=chunk) - In the second half of the year, the Company will continue to focus on the "stabilizing existing business, expanding new business, and improving quality" strategy, further optimizing supply chain management, innovating procurement models, enhancing gross profit margins, and strengthening operational guidance for adjusted stores[60](index=60&type=chunk) - The group purchasing segment will continue to expand its institutional and corporate customer base and actively prepare for the launch of large-scale school food delivery projects; the brand agency business will accelerate its transformation towards an integrated brand trading model[60](index=60&type=chunk) [Financial Review](index=22&type=section&id=Financial%20Review) Revenue for the period decreased by 20.2% year-on-year to RMB 246.0 million, with gross profit margin decreasing by 0.9% to 11.7%; other operating income grew by 63.2%, selling and distribution costs significantly decreased by 35.2%, administrative expenses increased by 16.7%, finance costs slightly decreased by 1.0%, and income tax expense decreased; ultimately, net loss attributable to owners of the Company significantly narrowed by 82.8% to RMB 3.2 million [Revenue](index=22&type=section&id=Revenue) Revenue for the period was approximately RMB 246.0 million, a year-on-year decrease of 20.2%, mainly due to the optimization and closure or conversion of inefficient retail stores and a reasonable reduction in the scale of distribution agency brands - Revenue for the period was approximately **RMB 246.0 million**, a **20.2% decrease** compared to the same period in 2024[62](index=62&type=chunk) - Revenue from retail store business was approximately **RMB 188.4 million**, a **18.6% decrease** year-on-year; revenue from wholesale distribution business was approximately **RMB 57.6 million**, a **25.1% decrease** year-on-year[62](index=62&type=chunk) [Gross Profit Margin](index=22&type=section&id=Gross%20Profit%20Margin) Gross profit margin for the period was 11.7%, a decrease of 0.9% from 12.6% in the same period of 2024 - Gross profit margin for the period was **11.7%**, a **0.9% decrease** from **12.6%** in the same period of 2024[63](index=63&type=chunk) [Other Operating Income](index=23&type=section&id=Other%20Operating%20Income) Other operating income for the period was approximately RMB 14.0 million, a year-on-year increase of 63.2%, mainly due to increased gains from early termination of lease contracts and increased income from converted franchised retail stores - Other operating income for the period was approximately **RMB 14.0 million**, a **63.2% increase** compared to the same period in 2024[64](index=64&type=chunk) - The increase was mainly due to increased gains from early termination of lease contracts and increased income from converted franchised retail stores[64](index=64&type=chunk) [Selling and Distribution Costs](index=23&type=section&id=Selling%20and%20Distribution%20Costs) Selling and distribution costs for the period were approximately RMB 36.5 million, a year-on-year decrease of 35.2%, mainly due to significant reductions in labor and lease costs from optimizing and closing inefficient retail stores, and active cost control by management - Selling and distribution costs for the period were approximately **RMB 36.5 million**, a **35.2% decrease** compared to the same period in 2024[65](index=65&type=chunk) - The decrease was mainly due to significant reductions in labor costs and lease costs from optimizing and closing or converting inefficient retail stores, as well as reasonable control over vehicle delivery fees, utilities, and advertising and promotion expenses[65](index=65&type=chunk) [Administrative Expenses](index=23&type=section&id=Administrative%20Expenses) Administrative expenses for the period were approximately RMB 8.0 million, a year-on-year increase of 16.7%, mainly due to reduced lease concessions for retail stores and forfeiture of some early lease termination deposits for optimized and closed retail stores - Administrative expenses for the period were approximately **RMB 8.0 million**, a **16.7% increase** compared to the same period in 2024[66](index=66&type=chunk) - The increase was mainly due to reduced lease concessions for retail stores and forfeiture of some early lease termination deposits for optimized and closed retail stores[66](index=66&type=chunk) [Finance Costs](index=23&type=section&id=Finance%20Costs) Finance costs for the period were approximately RMB 2.2 million, a slight year-on-year decrease of 1.0%, mainly due to a decrease in unrecognized finance expenses on lease liabilities - Finance costs for the period were approximately **RMB 2.2 million**, a **1.0% decrease** compared to the same period in 2024[67](index=67&type=chunk) - The decrease was mainly due to a year-on-year decrease in unrecognized finance expenses on lease liabilities[67](index=67&type=chunk) [Income Tax Expense](index=23&type=section&id=Income%20Tax%20Expense) Income tax expense for the period was approximately RMB 42 thousand, a decrease of RMB 28 thousand year-on-year, mainly due to a subsidiary's supplementary corporate income tax payment in the prior year - Income tax expense for the period was approximately **RMB 42 thousand**, a **RMB 28 thousand decrease** compared to the same period in 2024[68](index=68&type=chunk) - The decrease was due to a subsidiary being determined not to be a small low-profit enterprise and making a supplementary corporate income tax payment in the same period of 2024[68](index=68&type=chunk) [Net Loss](index=24&type=section&id=Net%20Loss) Net loss attributable to owners of the Company for the period was approximately RMB 3.2 million, a year-on-year reduction of 82.8%, mainly due to a significant decrease in selling and distribution costs and an increase in other operating income - Net loss attributable to owners of the Company for the period was approximately **RMB 3.2 million**, an **82.8% reduction** compared to the same period in 2024[69](index=69&type=chunk) - The decrease in net loss was mainly due to a significant reduction in selling and distribution costs and an increase in other operating income[69](index=69&type=chunk) [Total Comprehensive Expense](index=24&type=section&id=Total%20Comprehensive%20Expense) Total comprehensive expense attributable to owners of the Group for the period was approximately RMB 3.9 million, a year-on-year decrease of 78.8%, consistent with the reduction in net loss - Total comprehensive expense attributable to owners of the Group for the period was approximately **RMB 3.9 million**, a **78.8% decrease** compared to the same period in 2024[70](index=70&type=chunk) - The decrease was mainly due to a significant reduction in selling and distribution costs and an increase in other operating income[70](index=70&type=chunk) [Capital Expenditure](index=24&type=section&id=Capital%20Expenditure) The Group's capital expenditure requirements primarily involve additions to property, plant and equipment for new retail stores and renovation of existing ones; expenditure for the period was approximately RMB 4.1 million - The Group's capital expenditure requirements primarily involve additions to property, plant and equipment for new retail stores and renovation of existing retail stores[71](index=71&type=chunk) - The Group's expenditure on property, plant and equipment for the period was approximately **RMB 4.1 million**[71](index=71&type=chunk) [Use of Proceeds](index=24&type=section&id=Use%20of%20Proceeds) The net proceeds from the global offering were approximately RMB 155.0 million, with an amended allocation plan to adapt to market changes; as at June 30, 2025, most of the proceeds have been utilized, with the remaining RMB 6.9 million primarily for renovating existing retail stores, expected to be fully utilized by December 31, 2026 - The net proceeds from the global offering were approximately **HKD 188.6 million** (approximately **RMB 155.0 million**), with an amended allocation plan to adapt to the slowdown in China's economic growth and the retail market outlook[72](index=72&type=chunk)[73](index=73&type=chunk) Use and Allocation of Net Proceeds | Use | Original Allocation (RMB millions) | Revised Allocation (RMB millions) | Actual Utilized as at June 30, 2025 (RMB millions) | Remaining as at June 30, 2025 (RMB millions) | | :--- | :--- | :--- | :--- | :--- | | Opening new retail stores | 116.9 | 74.4 | 74.4 | – | | Renovating existing retail stores | – | 27.1 | 20.2 | 6.9 | | Repaying bank borrowings | – | 27.9 | 27.9 | – | | Upgrading information systems | 11.2 | 11.2 | 11.2 | – | | Renovating and expanding distribution centers | 13.3 | 0.8 | 0.8 | – | | General working capital | 13.6 | 13.6 | 13.6 | – | | **Total** | **155.0** | **155.0** | **148.1** | **6.9** | - The Board expects the unutilized balance to be used as disclosed in the Company's announcement dated June 19, 2024, and is expected to be fully utilized by **December 31, 2026**[74](index=74&type=chunk) [Liquidity and Financial Resources](index=25&type=section&id=Liquidity%20and%20Financial%20Resources) As at June 30, 2025, the Group had cash and cash equivalents of approximately RMB 25.5 million, net current assets of approximately RMB 16.2 million, and net assets of approximately RMB 78.4 million; unutilized bank facilities amounted to RMB 28.0 million; total trade and other receivables decreased by 9.6%, mainly due to reduced prepayments for goods and recovery of some long-term deposits - As at June 30, 2025, the Group had cash and cash equivalents of approximately **RMB 25.5 million** (December 31, 2024: RMB 21.2 million)[75](index=75&type=chunk) - Net current assets were approximately **RMB 16.2 million** (December 31, 2024: RMB 20.4 million), and net assets were approximately **RMB 78.4 million** (December 31, 2024: RMB 82.4 million)[75](index=75&type=chunk) - Total trade and bills receivables and deposits paid, prepayments and other receivables decreased by **9.6%**, mainly due to reduced prepayments for goods to brand manufacturers and the recovery of some long-term deposits[76](index=76&type=chunk) [Material Investments](index=25&type=section&id=Material%20Investments) The Group held no material investments during the period - The Group held no material investments during the period[77](index=77&type=chunk) [Material Acquisitions and Disposals](index=25&type=section&id=Material%20Acquisitions%20and%20Disposals) The Group did not undertake any material acquisitions or disposals of subsidiaries or associates during the period - The Group did not undertake any material acquisitions or disposals of subsidiaries or associates during the period[78](index=78&type=chunk) [Indebtedness and Pledges of Assets](index=26&type=section&id=Indebtedness%20and%20Pledges%20of%20Assets) As at June 30, 2025, the Group had RMB 62.0 million in bank borrowings, all repayable within one year, secured by certain buildings, right-of-use assets, and investment properties - As at June 30, 2025, the Group had bank borrowings of **RMB 62.0 million**, all repayable within one year[79](index=79&type=chunk) - These loans bear fixed annual interest rates of **3.35%-3.45%**[79](index=79&type=chunk) - Pledged assets include buildings with a carrying value of approximately **RMB 10.3 million**, right-of-use assets of approximately **RMB 18.1 million**, and investment properties of approximately **RMB 8.2 million**[84](index=84&type=chunk) [Gearing Ratio](index=26&type=section&id=Gearing%20Ratio) As at June 30, 2025, the Group's gearing ratio (total borrowings divided by total equity) was approximately 79.1%, an increase from 75.3% as at December 31, 2024 - As at June 30, 2025, the Group's gearing ratio was approximately **79.1%** (December 31, 2024: 75.3%)[80](index=80&type=chunk) [Foreign Exchange Risk](index=26&type=section&id=Foreign%20Exchange%20Risk) Most of the Group's assets, liabilities, and cash flows are denominated in RMB, and management believes that exchange rate fluctuations between RMB and foreign currencies will not have a significant impact on financial position and performance; no hedging activities are intended for the current period or the near future - Most of the Group's assets, liabilities, and cash flows are denominated in RMB, and management believes that exchange rate fluctuations will not have a significant impact[81](index=81&type=chunk) - No hedging activities are intended for the current period or the near future[81](index=81&type=chunk) [Contingent Liabilities](index=26&type=section&id=Contingent%20Liabilities) As at June 30, 2025, the Group had not provided any guarantees to any third parties and had no material contingent liabilities - As at June 30, 2025, the Group had not provided any guarantees to any third parties and had no material contingent liabilities[82](index=82&type=chunk) [Employees](index=26&type=section&id=Employees) As at June 30, 2025, the Group had a total of 578 employees; the Company offers competitive salaries and internal training, maintains good employee relations, and has not experienced any significant labor disputes - As at June 30, 2025, the Group had a total of **578 employees**[83](index=83&type=chunk) - Employee salaries are maintained at a competitive level, with internal training and bonuses provided[83](index=83&type=chunk) - No significant impact on operations due to labor disputes occurred during the period, nor were there any significant difficulties in recruiting senior staff[83](index=83&type=chunk) [Other Information](index=27&type=section&id=Other%20Information) [Interim Dividend](index=27&type=section&id=Interim%20Dividend) The Board has resolved not to declare any interim dividend for the period - The Board has resolved not to declare any interim dividend for the period[85](index=85&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=27&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[86](index=86&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=27&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As at June 30, 2025, Ms. Wang Hui and Ms. Du Jing held 50,000 and 99,100 ordinary shares of Supply and Marketing Grand Bazaar Group Co., Ltd. respectively, each representing less than 0.01% of the total issued shares; no other directors or chief executives had disclosable interests or short positions Directors' Long Positions in Ordinary Shares of Associated Corporations (June 30, 2025) | Director's Name | Name of Associated Corporation | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Shares of Associated Corporation | | :--- | :--- | :--- | :--- | :--- | | Ms. Wang Hui | Supply and Marketing Grand Bazaar Group Co., Ltd. | Beneficial owner | 50,000 | 0.00% | | Ms. Du Jing | Supply and Marketing Grand Bazaar Group Co., Ltd. | Beneficial owner | 99,100 | 0.00% | - Save as disclosed above, no other directors and chief executives had any interests or short positions required to be recorded in the register or otherwise notified to the Company and the Stock Exchange[88](index=88&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=28&type=section&id=Substantial%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As at June 30, 2025, the All-China Federation of Supply and Marketing Cooperatives and its multi-level controlled corporations (including Supply and Marketing Grand Bazaar International Holdings Limited) collectively held 204,558,317 shares of the Company, representing 70.42% of the total issued shares; additionally, Infini Capital Management held 27,600,000 shares, representing 9.50% Substantial Shareholders' Long Positions in Shares (June 30, 2025) | Name of Substantial Shareholder | Capacity | Number of Shares (Long Position) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | All-China Federation of Supply and Marketing Cooperatives | Interest of controlled corporation | 204,558,317 | 70.42% | | Beijing Zhonghe Nongxin Enterprise Management Consulting Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | China Supply and Marketing Group Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | China Supply and Marketing Commercial Circulation Group Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | Zhonghe Lian Investment Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | New Cooperation Commercial Chain Group Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | Supply and Marketing Grand Bazaar Group Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | Hainan Supply and Marketing Grand Bazaar Holdings Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | Hainan Supply and Marketing Grand Bazaar Supply Chain Network Technology Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | Green Industry (Hong Kong) Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | Supply and Marketing Grand Bazaar International Holdings Limited | Beneficial owner | 204,558,317 | 70.42% | | Infini Capital Management | Beneficial owner | 27,600,000 | 9.50% | - The All-China Federation of Supply and Marketing Cooperatives indirectly holds **70.42%** of the Company's shares through multi-level equity control, ultimately holding interests in Supply and Marketing Grand Bazaar International Holdings Limited[94](index=94&type=chunk) [Share Option Scheme](index=29&type=section&id=Share%20Option%20Scheme) The Company's share option scheme was approved on August 19, 2015, to incentivize management and employees; as at the date of this interim report, the maximum number of shares subject to options that may be granted is 28,647,700 shares (approximately 9.86% of issued shares); no options were granted during the period - The share option scheme was approved on **August 19, 2015**, to incentivize management and employees[92](index=92&type=chunk) - The maximum number of shares subject to options that may be granted is **28,647,700 shares** (approximately **9.86%** of issued shares)[92](index=92&type=chunk) - No share options were granted before the end of the period[92](index=92&type=chunk) [Directors' Securities Transactions](index=29&type=section&id=Directors%27%20Securities%20Transactions) The Company has adopted the Model Code as the standard for directors' securities transactions; all directors confirmed compliance with the required standards of the Model Code throughout the period - The Company has adopted the Model Code as its own code of conduct for directors' securities transactions[93](index=93&type=chunk) - All directors confirmed compliance with the required standards set out in the Model Code throughout the period[93](index=93&type=chunk) [Sufficiency of Public Float](index=30&type=section&id=Sufficiency%20of%20Public%20Float) The Directors confirm that the Company has maintained the public float as required by the Listing Rules throughout the period and up to the date of this interim report - The Directors confirm that the Company has maintained the public float as required by the Listing Rules throughout the period and up to the date of this interim report[95](index=95&type=chunk) [Corporate Governance Practices](index=30&type=section&id=Corporate%20Governance%20Practices) The Company has complied with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules during the period, including appointing a Deputy CEO, revising the Nomination Committee's terms of reference to promote board diversity, appointing Nomination Committee members, successfully holding the AGM, and changes in company secretary and principal place of business in Hong Kong - The Company has complied with all code provisions of the Corporate Governance Code throughout the period[96](index=96&type=chunk) [Senior Management Personnel Arrangements](index=30&type=section&id=Senior%20Management%20Personnel%20Arrangements) The Company appointed Mr. Bai Tao as Deputy Chief Executive Officer on April 25, 2025, to enhance the management structure, strengthen daily operational management, and improve strategic execution capabilities - On **April 25, 2025**, the Company appointed Mr. Bai Tao as Deputy Chief Executive Officer[97](index=97&type=chunk) - Mr. Bai's extensive experience in the retail industry helps to improve the management structure, strengthen daily operational management, and enhance strategic execution capabilities[97](index=97&type=chunk) [Amendments to the Terms of Reference of the Nomination Committee](index=30&type=section&id=Amendments%20to%20the%20Terms%20of%20Reference%20of%20the%20Nomination%20Committee) On May 23, 2025, the Company revised the Nomination Committee's terms of reference to clarify its composition, operation, and responsibilities, including requiring at least one director of a different gender, aiming to promote board diversity and improve corporate governance structure - On **May 23, 2025**, the Company revised the terms of reference of the Nomination Committee, further clarifying its composition, operation, and responsibilities[98](index=98&type=chunk) - The revisions include requiring the committee to have at least one director of a different gender, aiming to promote board diversity and improve the corporate governance structure[98](index=98&type=chunk) [Appointment of Members to the Nomination Committee](index=30&type=section&id=Appointment%20of%20Members%20to%20the%20Nomination%20Committee) On May 28, 2025, the Company appointed Ms. Wang Hui, Executive Director and Chief Executive Officer, and Mr. Zheng Xueqi, Independent Non-executive Director, as members of the Nomination Committee to ensure gender diversity and strengthen board governance capabilities - On **May 28, 2025**, the Company appointed Ms. Wang Hui, Executive Director and Chief Executive Officer, and Mr. Zheng Xueqi, Independent Non-executive Director, as members of the Nomination Committee[99](index=99&type=chunk) - This aims to ensure gender diversity within the committee and further strengthen board governance capabilities[99](index=99&type=chunk) [Annual General Meeting and Protection of Shareholders' Rights](index=31&type=section&id=Annual%20General%20Meeting%20and%20Protection%20of%20Shareholders%27%20Rights) The Company held its Annual General Meeting on June 6, 2025, where all proposed resolutions were passed with 100% affirmative votes, demonstrating the Company's commitment to safeguarding shareholders' participation in decision-making and maintaining transparency - The Company held its Annual General Meeting on **June 6, 2025**, with all incumbent directors attending in person or electronically, and votes scrutinized by an independent third party[100](index=100&type=chunk) - All proposed resolutions were passed with **100% affirmative votes**, fully demonstrating the Company's commitment to safeguarding shareholders' participation in decision-making and maintaining transparency[100](index=100&type=chunk) [Change of Company Secretary](index=31&type=section&id=Change%20of%20Company%20Secretary) Mr. Qiu Minghao resigned as Company Secretary on June 30, 2025; Ms. Pang Hui, President of Anfu Zhixin Management Limited, was appointed as Company Secretary, authorized representative, and agent for service of process on June 30, 2025, to ensure continuity and professionalism of the company secretarial function - Mr. Qiu Minghao resigned as Company Secretary on **June 30, 2025**[101](index=101&type=chunk) - On **June 5, 2025**, the Company signed a listed company secretarial service agreement with Anfu Zhixin Management Limited, and on **June 30, 2025**, appointed Ms. Pang Hui, President of Anfu Zhixin, as Company Secretary, authorized representative, and agent for service of process[101](index=101&type=chunk) [Change of Principal Place of Business in Hong Kong](index=31&type=section&id=Change%20of%20Principal%20Place%20of%20Business%20in%20Hong%20Kong) The Company's principal place of business in Hong Kong has changed to Room 1602, 16/F, Yan Wing Commercial Building, 9 Irving Street, Causeway Bay, Hong Kong, effective June 30, 2025 - The Company's principal place of business in Hong Kong has changed to **Room 1602, 16/F, Yan Wing Commercial Building, 9 Irving Street, Causeway Bay, Hong Kong**, effective **June 30, 2025**[102](index=102&type=chunk) [Continuing Commitments](index=31&type=section&id=Continuing%20Commitments) The Company will continue to improve its corporate governance structure, promote diversified development, enhance transparency, and increase decision-making efficiency to ensure stable operations and create long-term value for shareholders - The Company will continue to improve its corporate governance structure, promote diversified development, enhance transparency, and increase decision-making efficiency to ensure stable operations and create long-term value for shareholders[103](index=103&type=chunk) [Events After the Reporting Period](index=31&type=section&id=Events%20After%20the%20Reporting%20Period) The Board is not aware of any disclosable material events occurring after June 30, 2025, and up to the date of this interim report - The Board is not aware of any disclosable material events occurring after **June 30, 2025**, and up to the date of this interim report[104](index=104&type=chunk) [Audit Committee](index=32&type=section&id=Audit%20Committee) The Company has established an Audit Committee, primarily responsible for providing independent opinions to the Board on financial reporting processes, internal controls, and the effectiveness of risk management systems; the condensed consolidated financial statements for this period, though unaudited, have been reviewed by the Audit Committee; all committee members are independent non-executive directors, with Mr. Zheng Xueqi serving as Chairman - The Company has established an Audit Committee in compliance with the Listing Rules and the Corporate Governance Code[105](index=105&type=chunk) - The primary responsibility of the Audit Committee is to provide independent opinions to the Board on the Group's financial reporting processes, internal control procedures, and the effectiveness of its risk management systems[105](index=105&type=chunk) - The Group's condensed consolidated financial statements for the six months ended June 30, 2025, although unaudited, have been reviewed by the Audit Committee[105](index=105&type=chunk) - The Audit Committee members include Mr. Zheng Xueqi (Chairman), Mr. Gao Jingyuan, and Mr. Wu Kai, all of whom are independent non-executive directors[106](index=106&type=chunk)

Summary of Key Points Core Viewpoint - As of August 14, 200 stocks reached their 52-week highs, with notable performances from China Shun Ke Long (00974), Weijun Biotechnology (00660), and Century Group International (02113) leading the list with high rates of increase [1][2]. 52-Week High Rankings - China Shun Ke Long (00974) achieved a closing price of 1.380 and a peak price of 1.890, marking a 50.00% increase [2]. - Weijun Biotechnology (00660) closed at 0.239 with a peak of 0.280, reflecting a 40.70% increase [2]. - Century Group International (02113) had a closing price of 0.172 and a peak of 0.235, resulting in a 39.88% increase [2]. - Other notable stocks include: - China International (01064) with a 35.71% increase [2]. - Harmony Auto (03836) with a 22.91% increase [2]. - Guolian Communication (08060) with a 22.73% increase [2]. Additional Stocks with Significant Increases - Several other companies also showed notable increases, including: - Paig BioPharma-B (02565) with a 20.22% increase [2]. - Dinos Environmental (01452) with a 19.13% increase [2]. - Via Biotechnology (01873) with a 15.89% increase [2]. - The list continues with various companies achieving increases ranging from 10% to 15% [2][3]. 52-Week Low Rankings - The report also highlights stocks that reached their 52-week lows, such as: - Xi Ye Rong Technology (08107) with a decrease of 10.53% [6]. - Kun Group (00924) with a decrease of 9.84% [6]. - Lu Jin (01098) with a decrease of 9.21% [7].

Core Viewpoint - The company, China Shun Ke Long (00974.HK), will hold a board meeting on August 22, 2025, to review and approve its interim results for the six months ending June 30, 2025, and to consider the proposal for an interim dividend distribution, if any [1] Group 1 - The board meeting is scheduled for August 22, 2025 [1] - The meeting will focus on the interim results for the six months ending June 30, 2025 [1] - The company will also consider the proposal for an interim dividend distribution [1]

董 事 會 會 議 召 開 日 期 香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 告 的 內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 對 因 本 公 告 全 部 或 任 何 部 分 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 CHINA SHUN KE LONG HOLDINGS LIMITED 中國順客隆控股有限公司 （於 開 曼 群 島 註 冊 成 立 之 有 限 公 司 ） （股份代號：974） 中 國 順 客 隆 控 股 有 限 公 司（「本公司」）董事會（「董事會」）謹此宣佈，本公司謹訂於 二 零 二 五 年 八 月 二 十 二 日（星期五）舉行董事會會議，藉以（其中包括）(i) 考慮及 批 准 本 公 司 及 其 附 屬 公 司 截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 之 中 期 業 績 及其 刊發；及(ii) 考慮派付中期股息（如有）。 承 董 事 會 命 中 國 順 客 ...

| 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00974 | 說明 | 中國順客隆 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 2,000,000,000 | HKD | | 0.01 | HKD | | 20,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 2,000,000,000 | HKD | | 0.01 | HKD | | 20,000,000 | 本月底法定/註冊股本總額： HKD 20,000,000 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 中國順客隆控股有限公司 呈交日 ...

Company Overview - China Shun Ke Long is a well-known supermarket chain operator primarily located in Guangdong Province, with a significant network in Foshan, one of the wealthiest cities in the region [4] - The company operates 84 retail stores, including 68 supermarkets and 16 hypermarkets across Guangdong and Macau [4] - The company aims to become one of the largest supermarket operators in Guangdong's third and fourth-tier cities and plans to expand its retail network through new store openings and an online supermarket [4][5] Financial Performance - As of December 31, 2024, China Shun Ke Long reported total revenue of 593 million yuan, a year-on-year decrease of 11.16% [2] - The company recorded a net profit attributable to shareholders of -67.976 million yuan, a significant decline of 154.08% year-on-year [2] - The gross profit margin stood at 12.12%, with a debt-to-asset ratio of 72.97% [2] Stock Performance - Over the past month, China Shun Ke Long's stock has increased by 37.5%, but it has a year-to-date decline of 17.2%, underperforming the Hang Seng Index by 14% [2] - The stock closed at 1.0 HKD per share on May 12, with a trading volume of 40,000 shares and a turnover of 37,900 HKD, reflecting a volatility of 25.97% [1] Industry Context - The average price-to-earnings (P/E) ratio for the professional retail industry is 5.53 times, while China Shun Ke Long's P/E ratio is -3.05 times, ranking it 64th in the industry [3] - The company faces competition from both domestic and international retail chains, as well as local supermarket operators in a fragmented market [5] Business Strategy - The company focuses on enhancing customer satisfaction through a customer-centric approach and adjusting its product mix [4] - It aims to leverage internet technology and supply chain management to improve the shopping experience and drive market transformation [5]

Financial Performance - For the fiscal year ending December 31, 2024, the company's revenue was approximately RMB 592.9 million, a decrease of about RMB 74.5 million compared to the fiscal year ending December 31, 2023[13]. - The net loss for the fiscal year 2024 was approximately RMB 68.2 million, an increase in loss of about RMB 41.5 million compared to the previous fiscal year[13]. - The decrease in revenue was primarily due to a reduction in collective procurement business and the closure of several retail stores[13]. - The company's gross profit margin decreased, leading to a reduction in overall gross profit, influenced by the operating environment and decreased supplier channel income[13]. - Retail store business revenue for fiscal year 2024 was approximately RMB 431.1 million, down by about RMB 101.3 million or 19.0% from fiscal year 2023[34]. - Wholesale distribution revenue increased to approximately RMB 161.8 million, an increase of about RMB 26.8 million or 19.9% compared to fiscal year 2023[34]. - The company's gross profit margin decreased to 12.1% in fiscal year 2024 from 13.7% in fiscal year 2023, primarily due to lower wholesale distribution margins[35]. - The net loss for fiscal year 2024 was approximately RMB 68.2 million, an increase in loss of about RMB 41.5 million or 155.6% compared to fiscal year 2023[42]. - Total comprehensive expenses for fiscal year 2024 are approximately RMB 68.1 million, an increase of RMB 41.7 million or 158.3% compared to fiscal year 2023[43]. - The company reported a loss before tax of RMB 68,487,000, compared to a loss of RMB 27,456,000 in 2023, indicating a significant increase in losses[197]. - Net loss for the year was RMB 68,198,000, which is a 156.5% increase from RMB 26,684,000 in the prior year[197]. - Basic and diluted loss per share for the year was RMB 0.23, compared to RMB 0.09 in 2023, reflecting a worsening financial position[197]. Business Strategy and Operations - The company is focusing on a multi-channel business model that includes retail, wholesale, online-offline integration, and community marketing to enhance customer satisfaction and brand value[12]. - The company aims to expand its business footprint beyond the Guangdong-Hong Kong-Macao Greater Bay Area to other regions in China[12]. - The company is focusing on transforming its business model by launching new formats such as "supply and marketing discount stores" and "24-hour AI smart unmanned stores" to adapt to market changes[24]. - The company aims to enhance its supply chain by reducing intermediaries through direct supply from manufacturers and nationwide joint procurement, which is expected to improve gross profit margins[24]. - The company plans to strengthen its e-commerce presence and community group buying initiatives, collaborating with third-party platforms like Meituan and JD Daojia to boost sales[24]. - The company aims to explore new business development opportunities outside Guangdong Province and in Hong Kong, leveraging favorable policies in Hainan Free Trade Port[25]. - The company is actively adjusting its business development direction to become a leading urban-rural circulation operator in China[25]. - The company aims to expand its business model by developing discount stores and collective procurement and distribution services[26]. - The company intends to leverage new media marketing and enhance its online platform scale, including its own e-commerce platform[26]. Market Environment - The retail industry in China is facing significant challenges due to economic pressures, changing consumer spending habits, and insufficient consumer demand[14]. - The overall consumer market in China is expected to show stable growth in 2024, despite ongoing challenges in the retail sector[14]. - The company faces risks from intense competition in the retail sector and changing customer preferences, which may impact future growth and profitability[29][30]. Corporate Governance - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange's listing rules, ensuring high standards of corporate governance[70]. - The company has established a board diversity policy, considering various measurable aspects such as gender, age, and professional experience in its board composition[76]. - The roles of the chairman and the CEO are clearly defined to ensure a balance of power and authority within the company[79]. - The company has complied with all provisions of the corporate governance code as of December 31, 2024, following the appointment of a new independent non-executive director[72]. - The company has implemented a standard code for securities trading by directors, ensuring compliance among all board members[73]. - The nomination committee is responsible for monitoring the implementation of the board diversity policy and will review it periodically to ensure its effectiveness[76]. - The company is committed to fair treatment of employees from diverse backgrounds, ensuring the protection of their legal rights[78]. - The board of directors held four meetings during the year ending December 31, 2024, with individual attendance records documented[81]. - The audit committee conducted four meetings during the year, reviewing the group's interim and annual performance and discussing financial reports[94]. - The company has established appropriate directors and officers liability insurance to cover potential legal claims against its directors and senior management[86]. - All independent non-executive directors confirmed their independence according to the listing rules, with none serving for more than nine years[92]. - The company has three established board committees: the Audit Committee, the Remuneration Committee, and the Nomination Committee, each with specific written terms of reference[93]. - The company encourages continuous professional development for directors, with all participating in relevant training courses at the company's expense[89]. - The board retains decision-making authority on significant matters, including policy, strategy, budget, and major transactions[88]. - The company has implemented a system for independent professional advice for directors to fulfill their responsibilities, with costs covered by the company[87]. - The board's effective operation is supported by the diverse business experience and expertise of all directors, including independent and non-executive members[87]. Financial Position and Assets - As of December 31, 2024, the company has cash and cash equivalents of approximately RMB 21.2 million, down from RMB 48.7 million as of December 31, 2023[46]. - The total debt as of December 31, 2024, is approximately RMB 62.0 million, an increase from RMB 28.0 million as of December 31, 2023[49]. - The company's asset-liability ratio increased to 75.3% in fiscal year 2024 from 18.6% in fiscal year 2023[51]. - Accounts receivable turnover days increased to 22.0 days in fiscal year 2024 from 18.0 days in fiscal year 2023[51]. - Inventory turnover days decreased to 54.0 days in fiscal year 2024 from 60.1 days in fiscal year 2023[51]. - The return on equity for fiscal year 2024 is -83.6%, compared to -17.9% in fiscal year 2023[51]. - The company has no significant capital commitments or major investments planned for fiscal year 2024[45][47]. - There were no significant acquisitions or disposals of subsidiaries during fiscal year 2024[48]. - The company has sufficient retained earnings and distributable reserves to support its operations and shareholder interests[128]. - The company’s financing needs and expected capital expenditure requirements are aligned with its business expansion plans[128]. - The company has reallocated part of the unutilized net proceeds from opening new retail stores to renovating existing stores and repaying bank loans due to the slowdown in China's economic growth[131]. - The company’s total liabilities increased from RMB 170,265 thousand in 2023 to RMB 190,815 thousand in 2024, reflecting a rise of approximately 12.1%[198]. - Total non-current assets decreased from RMB 131,072 thousand in 2023 to RMB 93,494 thousand in 2024, a decline of approximately 28.7%[198]. - Current assets decreased from RMB 234,434 thousand in 2023 to RMB 211,206 thousand in 2024, a reduction of about 9.9%[198]. - Current liabilities increased from RMB 170,265 thousand in 2023 to RMB 190,815 thousand in 2024, an increase of approximately 12.1%[198]. - Net current assets decreased significantly from RMB 64,169 thousand in 2023 to RMB 20,391 thousand in 2024, a decline of about 68.3%[198]. - Total equity decreased from RMB 150,415 thousand in 2023 to RMB 82,358 thousand in 2024, a drop of approximately 45.3%[199]. - Cash and cash equivalents decreased from RMB 48,683 thousand in 2023 to RMB 21,152 thousand in 2024, a decline of about 56.5%[198]. - Trade payables decreased from RMB 78,384 thousand in 2023 to RMB 66,591 thousand in 2024, a reduction of approximately 15.0%[198]. - The company's reserves decreased from RMB 146,794 thousand in 2023 to RMB 78,959 thousand in 2024, a decline of about 46.3%[199]. Shareholder and Stock Information - The company has not declared any dividends for the fiscal years reported[9]. - The company has not declared any final dividends for the fiscal year ending December 31, 2024, as per its dividend policy[124]. - The company operates as an investment holding company, focusing on supermarket chain operations primarily in Guangdong Province, China[121]. - The company has a stock option plan that allows for the issuance of up to 28,647,700 shares, representing about 9.86% of the shares issued as of the report date[135]. - The total number of shares that can be issued under the stock option plan is capped at 10% of the total shares post-global offering, amounting to 28,647,700 shares, which is approximately 9.86% of the shares issued as of the report date[137]. - The total number of shares issued and to be issued under the stock option plan for each eligible participant cannot exceed 1% of the issued shares as of the grant date within any 12-month period[138]. - The exercise price for any specific stock option must be determined by the board but cannot be lower than the highest of the closing price on the grant date or the average closing price over the five trading days preceding the grant date[145]. - The stock option plan is effective for 10 years from the date of approval and can only be terminated early by shareholder resolution or board decision[143]. - Major shareholders hold a total of 204,558,317 shares, representing 70.42% of the company's equity[151]. - Infini Capital Management is a beneficial owner with 27,600,000 shares, accounting for 9.50% of the equity[151]. - As of December 31, 2024, the indirect controlling shareholder holds approximately 70.42% of the company's issued shares[149]. - The company has no other stock option plans apart from the one mentioned, and no options have been granted that exceed the 30% limit on total shares[137]. - The company has received no applications for stock options that would exceed the 1% limit without shareholder approval[139]. Compliance and Risk Management - The company has implemented a robust internal control and risk management system, with an independent consultant assessing its effectiveness during the year ending December 31, 2024[109]. - The board confirmed that the consolidated financial statements fairly reflect the group's financial position as of December 31, 2024, and its performance for the year[104]. - The company has established an insider information policy to manage and disclose insider information in compliance with relevant regulations[110]. - The company adopted an anti-corruption and bribery policy in 2022, ensuring effective risk management and internal control systems for the fiscal year ending December 31, 2024[111]. - The company maintained the required public float as per listing rules throughout the reporting period[172]. - There were no significant events requiring disclosure that occurred after December 31, 2024, up to the date of the report[174].

Financial Performance - Revenue for the year ended December 31, 2024, was RMB 592,941,000, a decrease of 11.2% compared to RMB 667,409,000 in 2023[2] - Gross profit decreased by 21.2% to RMB 71,880,000 from RMB 91,204,000 year-over-year[2] - Operating loss increased by 71.2% to RMB (38,328,000) compared to RMB (22,393,000) in the previous year[2] - Net loss for the year was RMB (68,198,000), a significant increase of 155.6% from RMB (26,684,000) in 2023[2] - Total revenue for the year ended December 31, 2024, was RMB 592,941 thousand, a decrease of 11.1% from RMB 667,409 thousand in 2023[18] - The reported loss before tax for the year ended December 31, 2024, was RMB 68,487 thousand, compared to a loss of RMB 27,456 thousand in 2023[19] - The company reported a loss attributable to shareholders of RMB 67,976,000 for the year ended December 31, 2024, compared to a loss of RMB 26,754,000 in 2023, resulting in a basic and diluted loss per share of RMB (0.23) compared to RMB (0.09) in the previous year[36] - The group's net loss for fiscal year 2024 was approximately RMB 68.2 million, an increase in loss of about RMB 41.5 million or 155.6% compared to fiscal year 2023, primarily due to decreased sales revenue and lower gross margin[71] Assets and Liabilities - Total assets decreased by 16.6% to RMB 304,700,000 from RMB 365,506,000 year-over-year[2] - Total liabilities increased by 3.4% to RMB 222,342,000 compared to RMB 215,091,000 in 2023[2] - Net asset value dropped by 45.2% to RMB 82,358,000 from RMB 150,415,000 in the previous year[2] - Current ratio decreased to 1.11 from 1.37 year-over-year[2] - Total non-current assets decreased from RMB 131,072 thousand in 2023 to RMB 93,494 thousand in 2024, a decline of approximately 28.7%[4] - Current assets decreased from RMB 234,434 thousand in 2023 to RMB 211,206 thousand in 2024, a decline of about 9.9%[4] - Total liabilities increased from RMB 170,265 thousand in 2023 to RMB 190,815 thousand in 2024, an increase of approximately 12.1%[4] - Net current assets decreased significantly from RMB 64,169 thousand in 2023 to RMB 20,391 thousand in 2024, a decline of about 68.3%[4] - Total equity decreased from RMB 150,415 thousand in 2023 to RMB 82,358 thousand in 2024, a decrease of approximately 45.3%[5] - Cash and cash equivalents dropped from RMB 48,683 thousand in 2023 to RMB 21,152 thousand in 2024, a decline of about 56.5%[4] Segment Performance - Retail segment revenue for the year ended December 31, 2024, was RMB 431,125 thousand, a decrease of 19.0% from RMB 532,389 thousand in 2023[18] - Wholesale distribution segment revenue for the year ended December 31, 2024, was RMB 161,816 thousand, an increase of 19.9% from RMB 135,020 thousand in 2023[18] - The retail segment reported a loss of RMB 59,925 thousand for the year ended December 31, 2024, compared to a loss of RMB 25,590 thousand in 2023[18] - The wholesale distribution segment reported a loss of RMB 4,333 thousand for the year ended December 31, 2024, compared to a profit of RMB 1,954 thousand in 2023[18] Operational Changes and Strategies - The company plans to apply new international financial reporting standards, which are not expected to have a significant impact on the group's performance and financial position[11] - The company plans to enhance revenue performance by launching "supply and marketing discount stores" and adjusting operations for loss-making stores[53] - The company aims to develop "24-hour AI smart unmanned stores," with 27 existing stores integrating cloud monitoring capabilities[53] - The company is expanding its online sales channels, including "Douyin Small Hour Delivery" and its own e-commerce platforms, to boost sales volume[54] - The company is committed to improving supply chain systems through direct sourcing and national joint procurement to enhance gross profit margins[54] - The company is exploring development opportunities outside Guangdong Province, including Hong Kong, leveraging favorable policies in Hainan Free Trade Port[55] - The company is focused on transforming its business model to integrate retail, wholesale, and online-offline fusion, aiming to become a leading supermarket enterprise in the Guangdong-Hong Kong-Macao Greater Bay Area[55] Governance and Compliance - The board is committed to high levels of corporate governance, which is essential for protecting shareholder interests and enhancing corporate value[92] - The company did not comply with Listing Rules 3.10(1), 3.21, 3.25, and 3.27A after the resignation of Mr. Wang Yilin as an independent non-executive director on October 26, 2023[93] - The company is actively seeking suitable candidates to fill vacancies and comply with listing regulations, expanding its search channels to various industry associations and individuals with diverse backgrounds and skills[94] - After Mr. Gao Jingyuan is appointed as an independent non-executive director on March 27, 2024, the number of independent non-executive directors will meet the minimum requirement of Listing Rule 3.10(1)[95] - The audit committee has reviewed the accounting standards and practices adopted by the group, and the financial statements for the year ending December 31, 2024, have been reviewed and deemed compliant with applicable accounting standards[97] Employee and Labor Relations - The group had a total of 784 employees, with 776 located in mainland China and 8 in Hong Kong[84] - The group maintains competitive salary levels for employees and conducts annual reviews based on relevant labor market and economic conditions[84] - There were no significant impacts on operations due to labor disputes during the fiscal year 2024[84]

[Company Information](index=2&type=section&id=Company%20Information) This section provides essential corporate details for China Shun Ke Long Holdings Company Limited, including board members, principal places of business, and stock code [Company Basic Information](index=2&type=section&id=Company%20Information) This chapter provides fundamental corporate information, including board members, principal business locations, and key identifiers, establishing context for the report - The company's principal place of business is located in Lecong Town, Shunde District, Foshan City, Guangdong Province, China, with its principal place of business in Hong Kong at 5/F, Lincoln House, 979 King's Road, Taikoo Place[9](index=9&type=chunk) - Executive Directors include Mr. Wang Rengang (Chairman) and Ms. Wang Hui (Chief Executive Officer)[9](index=9&type=chunk) - The company's stock code is **974**[9](index=9&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Report period revenue decreased by 4.6% year-on-year to RMB308,164 thousand, with gross profit falling to RMB38,783 thousand, and net loss attributable to owners of the company expanding to RMB18,596 thousand 2024 H1 Key Profit or Loss Data | Indicator | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 308,164 | 323,177 | | Cost of inventories sold | (269,381) | (277,113) | | Gross profit | 38,783 | 46,064 | | Other operating income | 8,589 | 13,360 | | Selling and distribution costs | (56,311) | (60,278) | | Administrative expenses | (6,891) | (9,406) | | Finance costs | (2,264) | (2,478) | | Loss before tax | (18,677) | (12,747) | | Loss for the period | (18,747) | (12,751) | | Loss for the period attributable to owners of the Company | (18,596) | (12,622) | | Loss per share – basic and diluted (RMB) | (0.06) | (0.04) | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, total non-current assets were RMB122,128 thousand, total current assets were RMB206,080 thousand, and net current assets decreased to RMB46,843 thousand, reflecting a reduction in net assets and total equity Key Financial Position Data as of June 30, 2024 | Indicator | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Non-current assets | 122,128 | 131,072 | | Current assets | 206,080 | 234,434 | | Total current liabilities | 159,237 | 170,265 | | Net current assets | 46,843 | 64,169 | | Total assets less current liabilities | 168,971 | 195,241 | | Non-current liabilities | 37,036 | 44,826 | | Net assets | 131,935 | 150,415 | | Total equity | 131,935 | 150,415 | [Condensed Consolidated Statement of Changes in Equity](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity attributable to owners of the company decreased from approximately RMB149,181 thousand at the beginning of the period to RMB130,852 thousand at the end of June 30, 2024, primarily due to the loss and total comprehensive expense for the period Overview of Changes in Equity for 2024 H1 | Indicator | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Equity attributable to owners of the Company at beginning of period | 149,181 (December 31, 2023) | 161,502 (December 31, 2022) | | Total comprehensive expense for the period | (18,329) | (12,321) | | Equity attributable to owners of the Company at end of period | 130,852 | 149,181 | - Consolidated reserves arose from reorganization, including deemed distributions upon acquisition of subsidiaries from the controlling shareholder[14](index=14&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2024, cash flow from operating activities turned into a net outflow of RMB3,855 thousand, while cash and cash equivalents significantly decreased to RMB25,118 thousand at period-end Overview of Cash Flows for 2024 H1 | Indicator | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Net cash (used in) generated from operating activities | (3,855) | 6,526 | | Net cash used in investing activities | (4,349) | (1,415) | | Net cash used in financing activities | (15,633) | (22,996) | | Net decrease in cash and cash equivalents | (23,837) | (17,885) | | Cash and cash equivalents at June 30 | 25,118 | 31,438 | [Notes to the Condensed Consolidated Interim Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section details the basis of preparation, accounting policies, segment information, revenue, expenses, asset and liability composition, and related party transactions, providing in-depth context for the financial statements [1. General Information and Basis of Preparation](index=9&type=section&id=1.%20General%20Information%20and%20Basis%20of%20Preparation) The company, incorporated in the Cayman Islands and listed in Hong Kong, primarily operates retail stores and wholesale distribution in China and Macau, with its ultimate controlling shareholder being the All China Federation of Supply and Marketing Cooperatives - The company primarily engages in retail store operations and management and wholesale distribution of goods in China and Macau[17](index=17&type=chunk) - The controlling shareholder is Supply and Marketing Grand Bazaar Group, with the ultimate controlling party being the All China Federation of Supply and Marketing Cooperatives[17](index=17&type=chunk) - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and Appendix D2 of the Listing Rules of the Stock Exchange of Hong Kong[17](index=17&type=chunk) [2. Principal Accounting Policies](index=10&type=section&id=2.%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value, and new IFRS standards had no significant impact - The financial statements are primarily prepared on a historical cost basis, with certain financial instruments measured at fair value[19](index=19&type=chunk) - The new and revised International Financial Reporting Standards applied in the current period had no significant impact on financial performance and position[20](index=20&type=chunk) [3. Operating Segment Information](index=10&type=section&id=3.%20Operating%20Segment%20Information) The Group has two reportable segments: retail store operations and wholesale distribution, with all external customer revenue derived from China - The Group has two reportable segments: retail store operations and wholesale distribution[21](index=21&type=chunk) Segment Revenue and Results (2024 H1 vs 2023 H1) | Segment | 2024 H1 Revenue (RMB thousands) | 2023 H1 Revenue (RMB thousands) | 2024 H1 Segment (Loss) Profit (RMB thousands) | 2023 H1 Segment Loss (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Retail store operations | 231,307 | 255,292 | (16,839) | (10,829) | | Wholesale distribution | 76,857 | 67,885 | 25 | (38) | | Total | 308,164 | 323,177 | (16,814) | (10,867) | - All the Group's revenue from external customers is derived from China[26](index=26&type=chunk) [4. Revenue and Other Operating Income](index=13&type=section&id=4.%20Revenue%20and%20Other%20Operating%20Income) Total revenue for 2024 H1 was RMB308,164 thousand, with other operating income decreasing by 35.7% year-on-year, mainly due to reduced supplier promotion income and government grants Revenue Sources (2024 H1 vs 2023 H1) | Revenue Source | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | General retail sales under retail store operations | 135,950 | 158,856 | | Bulk sales under retail store operations | 84,856 | 94,088 | | Integrated wholesale under wholesale distribution | 76,857 | 62,561 | | Commission income from concessionaire sales under retail store operations | 6,292 | 2,374 | | Rental income from subleasing certain retail areas | 4,209 | 5,298 | | **Total Revenue** | **308,164** | **323,177** | Other Operating Income Sources (2024 H1 vs 2023 H1) | Other Operating Income Source | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Gain on expiry of leases | 183 | 806 | | Gain on disposal of property, plant and equipment | 89 | 387 | | Government grants | 8 | 323 | | Interest income from bank deposits | 130 | 192 | | Promotion income from suppliers | 5,299 | 6,990 | | Net rental income from investment properties | 1,371 | 1,313 | | Others | 1,509 | 3,349 | | **Total** | **8,589** | **13,360** | - Other operating income decreased by **35.7%** year-on-year, primarily due to reduced supplier promotion income and government grants[30](index=30&type=chunk) [5. Loss Before Tax](index=14&type=section&id=5.%20Loss%20Before%20Tax) The Group's operating loss is primarily influenced by depreciation expenses for property, plant and equipment and right-of-use assets, as well as employee benefit expenses Key Operating Expenses (2024 H1 vs 2023 H1) | Expense Item | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 3,571 | 3,721 | | Depreciation of right-of-use assets | 14,303 | 16,019 | | Total employee benefit expenses | 29,846 | 31,947 | [6. Finance Costs](index=15&type=section&id=6.%20Finance%20Costs) Total finance costs for 2024 H1 amounted to RMB2,264 thousand, mainly comprising interest on bank borrowings and lease liabilities, showing a slight year-on-year decrease Composition of Finance Costs (2024 H1 vs 2023 H1) | Finance Cost Source | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank borrowings | 562 | 223 | | Interest on lease liabilities | 1,702 | 2,255 | | **Total** | **2,264** | **2,478** | [7. Income Tax Expense](index=15&type=section&id=7.%20Income%20Tax%20Expense) Income tax expense for 2024 H1 was RMB70 thousand, with certain Chinese subsidiaries, including Guangdong Shun Ke Long Commercial Chain Co., Ltd., enjoying preferential tax rates - Income tax expense for 2024 H1 was **RMB70 thousand**, a significant increase from RMB4 thousand in 2023 H1[10](index=10&type=chunk)[33](index=33&type=chunk) - Chinese subsidiaries are subject to a **25%** corporate income tax rate, with some small-profit enterprises and high-tech enterprises, such as Guangdong Shun Ke Long Commercial Chain Co., Ltd., enjoying preferential rates of **15%**[34](index=34&type=chunk) [8. Dividends](index=16&type=section&id=8.%20Dividends) For the six months ended June 30, 2024, the company neither paid nor proposed any dividends - No dividends were paid or proposed for 2024 H1 and 2023 H1[36](index=36&type=chunk) [9. Loss Per Share](index=16&type=section&id=9.%20Loss%20Per%20Share) Basic and diluted loss per share for 2024 H1 expanded to RMB0.06, consistent with diluted loss per share due to the absence of potential dilutive ordinary shares Loss Per Share (2024 H1 vs 2023 H1) | Indicator | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Loss per share – basic and diluted (RMB) | (0.06) | (0.04) | | Weighted average number of ordinary shares | 290,457,000 | 290,457,000 | - Diluted loss per share is the same as basic loss per share as there were no outstanding potential dilutive ordinary shares for both periods[37](index=37&type=chunk) [10. Capital Expenditure](index=17&type=section&id=10.%20Capital%20Expenditure) In 2024 H1, the Group added RMB4,916 thousand in property, plant and equipment, with certain buildings and investment properties pledged to banks Changes in Carrying Amounts of Property, Plant and Equipment and Investment Properties (2024 H1) | Asset Category | Carrying Amount as of January 1, 2024 (RMB thousands) | Additions (RMB thousands) | Depreciation/Amortization (RMB thousands) | Carrying Amount as of June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Property, plant and equipment | 28,095 | 4,916 | (3,571) | 29,092 | | Investment properties | 8,697 | – | (163) | 8,534 | - As of June 30, 2024, buildings with a carrying amount of approximately **RMB10,768 thousand** and investment properties of approximately **RMB8,533 thousand** were pledged to banks[39](index=39&type=chunk) [11. Leases](index=18&type=section&id=11.%20Leases) As of June 30, 2024, total right-of-use assets amounted to RMB77,628 thousand and total lease liabilities were RMB60,329 thousand, with new additions primarily for retail store, warehouse, and office property leases Overview of Lease Assets and Liabilities (June 30, 2024 vs December 31, 2023) | Lease Asset/Liability | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Total right-of-use assets | 77,628 | 87,204 | | Total lease liabilities | 60,329 | 69,162 | | Current lease liabilities | 23,293 | 24,336 | | Non-current lease liabilities | 37,036 | 44,826 | - Additions to right-of-use assets amounted to **RMB11,364 thousand** in 2024 H1, mainly due to new leases and renewals of existing retail store, warehouse, and office property leases[40](index=40&type=chunk) - The Group recognized rental income of **RMB4,209 thousand** from subleasing right-of-use assets in 2024 H1[41](index=41&type=chunk) [12. Trade and Bills Receivables](index=20&type=section&id=12.%20Trade%20and%20Bills%20Receivables) As of June 30, 2024, total trade and bills receivables were RMB33,345 thousand, including an impairment allowance of RMB1,820 thousand for trade receivables, with an average credit period of 0 to 180 days Trade and Bills Receivables (June 30, 2024 vs December 31, 2023) | Indicator | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 35,163 | 37,975 | | Less: Impairment allowance for trade receivables | (1,820) | (1,237) | | Bills receivable | 2 | 233 | | **Total** | **33,345** | **36,971** | - The average credit period for trade receivables generally ranges from **0 to 180 days** from the invoice date[46](index=46&type=chunk) [13. Trade Payables](index=21&type=section&id=13.%20Trade%20Payables) As of June 30, 2024, total trade payables decreased to RMB69,544 thousand from RMB78,384 thousand at the end of 2023, with the Group generally obtaining credit terms of 0 to 360 days from suppliers Aging Analysis of Trade Payables (June 30, 2024 vs December 31, 2023) | Aging | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Current to 30 days | 19,261 | 34,168 | | 31 to 60 days | 18,292 | 15,128 | | 61 to 180 days | 17,877 | 12,113 | | 181 to 365 days | 5,773 | 8,506 | | Over 1 year | 8,341 | 8,469 | | **Total** | **69,544** | **78,384** | - The Group generally obtains credit terms of **0 to 360 days** from its suppliers[47](index=47&type=chunk) [14. Amounts Due from Related Companies](index=22&type=section&id=14.%20Amounts%20Due%20from%20Related%20Companies) As of June 30, 2024, amounts due from related companies were trade-related, unsecured, interest-free, and repayable on demand, with a carrying amount including an accumulated impairment loss of RMB370 thousand - Amounts due from related companies are trade-related, unsecured, interest-free, and repayable on demand[48](index=48&type=chunk) - The carrying amount includes an accumulated impairment loss of **RMB370 thousand**[48](index=48&type=chunk) [15. Bank Borrowings](index=22&type=section&id=15.%20Bank%20Borrowings) As of June 30, 2024, bank borrowings totaled RMB28,000 thousand, bearing a fixed annual interest rate of 3.95% and secured by certain buildings, right-of-use assets, and investment properties, all repayable within one year Overview of Bank Borrowings (June 30, 2024 vs December 31, 2023) | Indicator | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Secured bank borrowings | 28,000 | 28,000 | - Bank borrowings bear a fixed annual interest rate of **3.95%** and are secured by buildings, right-of-use assets, and investment properties[49](index=49&type=chunk) - All bank borrowings are repayable within one year[49](index=49&type=chunk) [16. Share Capital](index=23&type=section&id=16.%20Share%20Capital) As of June 30, 2024, authorized share capital comprised 2,000,000,000 ordinary shares of HK$0.01 each, with 290,457,000 issued and fully paid ordinary shares amounting to RMB2,387 thousand Share Capital Structure (June 30, 2024 vs December 31, 2023) | Share Capital Type | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Authorised share capital | 15,826 | 15,826 | | Issued and fully paid share capital | 2,387 | 2,387 | - Issued and fully paid share capital consists of **290,457,000** ordinary shares of HK$0.01 each[50](index=50&type=chunk) [17. Operating Lease Arrangements](index=23&type=section&id=17.%20Operating%20Lease%20Arrangements) The Group acts as a lessor, subleasing internal retail store areas and leasing investment properties for terms ranging from 1 to 10 years, with RMB12,036 thousand in undiscounted lease payments receivable within one year Operating Lease Payments Receivable within One Year (June 30, 2024 vs December 31, 2023) | Lease Payment Term | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Within one year | 12,036 | 15,767 | - The Group acts as a lessor, subleasing internal retail store areas and leasing investment properties, with lease terms ranging from **1 to 10 years**[51](index=51&type=chunk) [18. Major Non-Cash Transactions](index=23&type=section&id=18.%20Major%20Non-Cash%20Transactions) In 2024 H1, the Group experienced non-cash increases in right-of-use assets and lease liabilities of RMB11,364 thousand due to retail store lease arrangements, alongside non-cash decreases from early lease terminations - In 2024 H1, non-cash increases in right-of-use assets and lease liabilities of **RMB11,364 thousand** arose from retail store lease arrangements[52](index=52&type=chunk) - In 2024 H1, non-cash decreases in right-of-use assets of **RMB6,637 thousand** and lease liabilities of **RMB6,820 thousand** resulted from early lease terminations[52](index=52&type=chunk) [19. Related Party Transactions](index=24&type=section&id=19.%20Related%20Party%20Transactions) In 2024 H1, the Group engaged in sales of goods transactions of RMB4 thousand and purchases of goods transactions of RMB17 thousand with related companies, with key management personnel remuneration totaling RMB1,402 thousand Related Party Transactions (2024 H1 vs 2023 H1) | Transaction Nature | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Sales of goods (Related companies) | 4 | 36 | | Purchases of goods (Related companies) | 17 | – | Key Management Personnel Remuneration (2024 H1 vs 2023 H1) | Key Management Personnel Remuneration | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 1,305 | 1,205 | | Pension scheme contributions | 97 | 92 | | **Total** | **1,402** | **1,297** | [Management Discussion and Analysis](index=25&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's business operations, retail and wholesale channels, and franchise performance in 2024 H1, outlining strategies for market challenges, future outlook, and detailed financial analysis of revenue, gross margin, costs, and net loss [Business Review](index=25&type=section&id=Business%20Review) The Group, a supermarket chain operator primarily in Guangdong, China, maintained its retail and wholesale distribution channels, adding 4 new retail stores and expanding its franchise network to 1,180 stores - The Group primarily operates supermarket chain stores in Guangdong Province, China, maintaining both retail and wholesale distribution channels[55](index=55&type=chunk) Changes in Number of Retail Stores (2024 H1 vs 2023) | Retail Store Count | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Beginning of period/year | 61 | 67 | | Increase | 4 | 4 | | Decrease | (3) | (10) | | End of period/year | 62 | 61 | - As of June 30, 2024, the Group had a total of **62** retail stores, with **61** in Guangdong Province, China, and **1** in Macau[56](index=56&type=chunk) - The wholesale distribution business retains exclusive distribution rights for **24** brands and focuses more on attracting distributor clients[58](index=58&type=chunk) Changes in Number of Franchise Retail Stores (2024 H1 vs 2023) | Franchise Retail Store Count | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Beginning of period/year | 1,008 | 823 | | Increase | 172 | 185 | | End of period/year | 1,180 | 1,008 | [Recent Developments and Outlook](index=26&type=section&id=Recent%20Developments%20and%20Outlook) Facing online competition and weak consumer confidence, the Group implemented measures like "Supply and Marketing Discount Stores" and "24-hour AI Smart Unattended Stores," focusing on supply chain reform, new media marketing, and exploring international business - Facing the impact of online channels and weak consumer confidence, the Group implemented various measures, including establishing "Supply and Marketing Discount Stores," optimizing stores, and expanding "Shun Ke Long Fresh Food Community" and "24-hour AI Smart Unattended Stores"[61](index=61&type=chunk) - Actively developing "Douyin Hourly Delivery" business and continuously expanding proprietary e-commerce platforms "Shun Ke Long Premium Selection" and "Yubanghang Mini Program" to achieve online-offline integration[61](index=61&type=chunk) - The future will continue to focus on the supermarket chain business, adhering to a "retail + wholesale + franchise operation + centralized procurement and distribution + online-offline integration + community marketing" sales model, and exploring international business[61](index=61&type=chunk) - Key tasks for the second half of the year include optimizing the supply chain, expanding AI smart unattended stores and fresh food communities, developing supply and marketing discount stores and centralized procurement and distribution businesses, upgrading old stores, new media marketing, and international business expansion[62](index=62&type=chunk) [Financial Review](index=28&type=section&id=Financial%20Review) In 2024 H1, the Group's revenue decreased by 4.6% to RMB308.2 million, gross margin fell by 1.7% to 12.6%, and net loss attributable to owners of the company increased by 47.6% to RMB18.6 million Key Financial Indicators Changes (2024 H1 vs 2023 H1) | Indicator | 2024 H1 (RMB millions) | 2023 H1 (RMB millions) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 308.2 | 323.2 | -4.6% | | Revenue from retail store operations | 231.3 | 255.3 | -9.4% | | Revenue from wholesale distribution business | 76.9 | 67.9 | +13.3% | | Gross profit margin | 12.6% | 14.3% | -1.7% | | Other operating income | 8.6 | 13.4 | -35.7% | | Selling and distribution costs | 56.3 | 60.3 | -6.6% | | Administrative expenses | 6.9 | 9.4 | -26.7% | | Finance costs | 2.3 | 2.5 | -8.6% | | Net loss attributable to owners of the Company | 18.6 | 12.6 | +47.6% | - The decrease in revenue was mainly due to reduced retail store sales and lower demand for group-buying business from some customers[63](index=63&type=chunk) - The increase in net loss was primarily due to reduced gross profit from lower sales, as well as decreased rental income, supplier promotion service fees, and government grants[69](index=69&type=chunk) [Capital Expenditure](index=29&type=section&id=Capital%20Expenditure) The Group's capital expenditure primarily focused on acquiring property, plant and equipment for new store openings and existing store renovations, with approximately RMB4.9 million spent during the period - Approximately **RMB4.9 million** was spent on property, plant and equipment during the period[71](index=71&type=chunk) [Use of Proceeds](index=29&type=section&id=Use%20of%20Proceeds) Net proceeds from the global offering were approximately RMB155.0 million, with RMB142.5 million utilized as of June 30, 2024, and the remaining RMB12.5 million reallocated for existing retail store renovations - Net proceeds from the global offering were approximately **RMB155.0 million**[72](index=72&type=chunk) - As of June 30, 2024, **RMB142.5 million** of the net proceeds had been utilized, with **RMB12.5 million** remaining[73](index=73&type=chunk) - The use of the remaining **RMB12.5 million** has been reallocated to "renovation of existing retail stores" and is expected to be utilized by December 31, 2026[73](index=73&type=chunk) [Liquidity and Financial Resources](index=30&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2024, cash and cash equivalents were approximately RMB25.1 million, net current assets were RMB46.8 million, and unutilized bank facilities amounted to RMB62.0 million Overview of Liquidity and Financial Resources (June 30, 2024 vs December 31, 2023) | Indicator | June 30, 2024 (RMB millions) | December 31, 2023 (RMB millions) | | :--- | :--- | :--- | | Cash and cash equivalents | 25.1 | 48.7 | | Net current assets | 46.8 | 64.2 | | Net assets | 131.9 | 150.4 | - Unutilized bank facilities amounted to **RMB62.0 million**[74](index=74&type=chunk) - Total trade receivables and deposits paid, prepayments, and other receivables decreased by approximately **RMB3.4 million**, mainly due to the recovery of receivables from customer merchandise sales and a reduction in supplier prepayments[75](index=75&type=chunk) [Significant Investments](index=31&type=section&id=Significant%20Investments) The Group held no significant investments during the period - The Group held no significant investments during the period[76](index=76&type=chunk) [Material Acquisitions and Disposals](index=31&type=section&id=Material%20Acquisitions%20and%20Disposals) The Group did not undertake any material acquisitions or disposals of subsidiaries or associated companies during the period - The Group did not undertake any material acquisitions or disposals of subsidiaries or associated companies during the period[76](index=76&type=chunk) [Indebtedness and Charges on Assets](index=31&type=section&id=Indebtedness%20and%20Charges%20on%20Assets) As of June 30, 2024, the Group's bank borrowings of RMB28.0 million were secured by buildings, right-of-use assets, and investment properties with carrying amounts of approximately RMB10.8 million, RMB18.9 million, and RMB8.5 million, respectively - Bank borrowings of **RMB28.0 million** are secured by buildings, right-of-use assets, and investment properties[77](index=77&type=chunk) - All loans bear a fixed annual interest rate of **3.95%** and are repayable within one year[77](index=77&type=chunk) [Gearing Ratio](index=31&type=section&id=Gearing%20Ratio) As of June 30, 2024, the Group's gearing ratio was approximately 21.2%, an increase from 18.6% at the end of 2023 Gearing Ratio (June 30, 2024 vs December 31, 2023) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Gearing ratio | 21.2% | 18.6% | [Foreign Exchange Risk](index=32&type=section&id=Foreign%20Exchange%20Risk) The Group's assets, liabilities, and cash flows are primarily denominated in RMB, and management believes exchange rate fluctuations will not significantly impact financial position or performance, with no current hedging intentions - The majority of the Group's assets, liabilities, and cash flows are denominated in **RMB**[80](index=80&type=chunk) - Management believes exchange rate fluctuations will not have a significant impact and currently has no intention to engage in hedging activities[80](index=80&type=chunk) [Contingent Liabilities](index=32&type=section&id=Contingent%20Liabilities) As of June 30, 2024, the Group had not provided any guarantees to third parties and had no significant contingent liabilities - The Group had not provided any guarantees to third parties and had no significant contingent liabilities[81](index=81&type=chunk) [Employees](index=32&type=section&id=Employees) As of June 30, 2024, the Group had 904 employees, with 895 in mainland China and 9 in Hong Kong, offering competitive salaries and internal training - As of June 30, 2024, the Group had a total of **904** employees, with **895** based in mainland China and **9** in Hong Kong[82](index=82&type=chunk) - Employee salaries are maintained at a competitive level, with internal training and bonuses provided[82](index=82&type=chunk) [Other Information](index=33&type=section&id=Other%20Information) This section covers interim dividend policy, trading of listed securities, directors' and major shareholders' interests, share option scheme, compliance with securities dealing code, public float, changes in directors' information, corporate governance, post-reporting period events, and the audit committee's composition and responsibilities [Interim Dividends](index=33&type=section&id=Interim%20Dividends) The Board has resolved not to declare any interim dividend for the period - The Board has resolved not to declare any interim dividend for the period[83](index=83&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=33&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[83](index=83&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=33&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2024, Executive Director Ms. Wang Hui and Non-executive Director Ms. Du Jing held minor long positions in ordinary shares of associated corporation Supply and Marketing Grand Bazaar Group Co., Ltd Directors' Long Positions in Ordinary Shares of Associated Corporations (June 30, 2024) | Director's Name | Name of Associated Corporation | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Ms. Wang Hui | Supply and Marketing Grand Bazaar Group Co., Ltd. | Beneficial owner | 215,812 | 0.00% | | Ms. Du Jing | Supply and Marketing Grand Bazaar Group Co., Ltd. | Beneficial owner | 99,100 | 0.00% | - Save as disclosed above, no director or chief executive had any disclosable interests in shares[84](index=84&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=34&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2024, Supply and Marketing Grand Bazaar International Holdings Co., Ltd. held 70.42% of the company's shares as beneficial owner, with the All China Federation of Supply and Marketing Cooperatives indirectly holding the same percentage Substantial Shareholders' Interests in Shares and Underlying Shares (June 30, 2024) | Name of Substantial Shareholder | Capacity | Number of Shares (Long Position) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | All China Federation of Supply and Marketing Cooperatives | Interest in controlled corporation | 204,558,317 | 70.42% | | Supply and Marketing Grand Bazaar International Holdings Co., Ltd. | Beneficial owner | 204,558,317 | 70.42% | | Infini Capital Management | Beneficial owner | 27,600,000 | 9.50% | - The All China Federation of Supply and Marketing Cooperatives indirectly holds **70.42%** of the company's shares through multiple layers of equity control[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) [Share Option Scheme](index=35&type=section&id=Share%20Option%20Scheme) The company's share option scheme, approved on August 19, 2015, has a limit of 28,647,700 shares, representing approximately 9.86% of issued shares, with no options granted during the period - The share option scheme has a limit of **28,647,700** shares, representing approximately **9.86%** of the issued shares[88](index=88&type=chunk) - No share options were granted before the end of the period[88](index=88&type=chunk) [Directors' Securities Transactions](index=35&type=section&id=Directors'%20Securities%20Transactions) The company has adopted the Model Code, and all directors confirmed compliance with its required standards during the period - All directors confirmed compliance with the required standards set out in the Model Code during the period[89](index=89&type=chunk) [Sufficiency of Public Float](index=35&type=section&id=Sufficiency%20of%20Public%20Float) The directors confirmed that the company maintained the public float required by the Listing Rules throughout the period and up to the date of this interim report - The directors confirmed that the company maintained the public float required by the Listing Rules throughout the period and up to the date of this interim report[89](index=89&type=chunk) [Changes in Directors' Information](index=35&type=section&id=Changes%20in%20Directors'%20Information) Executive Director and CEO Ms. Wang Hui will no longer receive annual remuneration for her executive directorship from June 1, 2024, while Mr. Wang Rengang, Ms. Wang Hui, and Ms. Du Jing were appointed as Party Committee members or secretaries of Supply and Marketing Grand Bazaar from April 2024 - Executive Director and Chief Executive Officer Ms. Wang Hui will no longer receive annual remuneration for her executive directorship from June 1, 2024[90](index=90&type=chunk) - Mr. Wang Rengang, Ms. Wang Hui, and Ms. Du Jing were appointed as Party Committee members or secretaries of Supply and Marketing Grand Bazaar from April 2024[90](index=90&type=chunk) [Corporate Governance Practices](index=36&type=section&id=Corporate%20Governance%20Practices) The company's corporate governance practices are based on the Corporate Governance Code set out in Appendix C1 of the Listing Rules - The company's corporate governance practices are based on the Corporate Governance Code set out in Appendix C1 of the Listing Rules[92](index=92&type=chunk) [Matters of Non-Compliance with Listing Rules 3.10(1), 3.21, 3.25 and 3.27A](index=36&type=section&id=Matters%20of%20Non-Compliance%20with%20Listing%20Rules%203.10(1),%203.21,%203.25%20and%203.27A) Following Mr. Wang Yilin's resignation as an independent non-executive director, the company temporarily non-complied with Listing Rules regarding independent non-executive directors and committee compositions, but regained compliance upon Mr. Gao Jingyuan's appointment on March 27, 2024 - Following Mr. Wang Yilin's resignation, the company temporarily non-complied with Listing Rules **3.10(1), 3.21, 3.25, and 3.27A**[93](index=93&type=chunk) - With the appointment of Mr. Gao Jingyuan as an independent non-executive director on March 27, 2024, the company has regained compliance[93](index=93&type=chunk) [Events After Reporting Period](index=36&type=section&id=Events%20After%20Reporting%20Period) The Board is unaware of any disclosable material events occurring after June 30, 2024, and up to the date of this interim report - The Board is unaware of any disclosable material events occurring after June 30, 2024, and up to the date of this interim report[93](index=93&type=chunk) [Audit Committee](index=36&type=section&id=Audit%20Committee) The Audit Committee, established in compliance with Listing Rules, provides independent opinions on financial reporting, internal controls, and risk management, and has reviewed the unaudited condensed consolidated financial statements for the period - The Audit Committee was established in compliance with the Listing Rules, with primary responsibilities to provide independent opinions on financial reporting procedures, internal control procedures, and risk management systems[94](index=94&type=chunk) - The condensed consolidated financial statements for the period are unaudited but have been reviewed by the Audit Committee[94](index=94&type=chunk) - The Audit Committee members include Mr. Zheng Xueqi (Chairman), Mr. Gao Jingyuan, and Mr. Wu Kai, all of whom are independent non-executive directors[95](index=95&type=chunk)