Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 313,064 thousand, a decrease from RMB 408,721 thousand in the same period of 2021, representing a decline of approximately 23.4%[29] - Gross profit for the same period was RMB 49,706 thousand, down from RMB 57,781 thousand in 2021, indicating a decrease of about 14%[29] - Operating loss increased to RMB 11,529 thousand compared to RMB 6,069 thousand in the previous year, reflecting a rise of approximately 90.5%[29] - The net loss attributable to owners of the company for the period was RMB 14,297 thousand, compared to RMB 11,861 thousand in 2021, marking an increase of around 20.5%[29] - The total comprehensive income for the period ended June 30, 2022, was RMB 186,264,000, a decrease from RMB 239,469,000 in the same period of 2021, reflecting a decline of approximately 22%[42] - The company reported a net loss of RMB 14,297,000 for the period, compared to a loss of RMB 11,861,000 in the previous year, indicating a worsening of 20%[42] - The company reported a pre-tax loss of RMB 14,276,000 for the six months ended June 30, 2022, compared to a pre-tax loss of RMB 11,946,000 for the same period in 2021[53] - The net loss attributable to owners was approximately RMB 14,297,000, an increase of about RMB 2,436,000 or 20.54% compared to the previous year, mainly due to decreased sales leading to lower gross profit[136] Assets and Liabilities - Total assets decreased from RMB 256,883 thousand as of December 31, 2021, to RMB 235,577 thousand as of June 30, 2022, a decline of approximately 8.3%[31] - Current liabilities reduced significantly from RMB 224,702 thousand to RMB 153,515 thousand, a decrease of about 31.7%[31] - Cash and cash equivalents decreased from RMB 103,343 thousand to RMB 50,401 thousand, representing a decline of approximately 51.2%[31] - The company's total equity decreased from RMB 200,848 thousand to RMB 187,382 thousand, a reduction of about 6.7%[33] - The total bank borrowings as of June 30, 2022, were RMB 8,000,000, significantly reduced from RMB 60,000,000 as of December 31, 2021, a decrease of 86.7%[103] - The debt-to-equity ratio was approximately 4.27% as of June 30, 2022, a decrease from 29.9% as of December 31, 2021[150] Cash Flow - For the six months ended June 30, 2022, the net cash inflow from operating activities was RMB 27,981,000, compared to RMB 10,171,000 for the same period in 2021, representing a significant increase of 174%[42] - Cash and cash equivalents decreased by RMB 53,797,000 during the period, down from an increase of RMB 30,725,000 in the same period last year[42] - The company repaid bank loans amounting to RMB 52,000,000 during the period, compared to RMB 108,000,000 in the previous year, showing a reduction of 52% in loan repayments[42] - The company’s cash and cash equivalents as of June 30, 2022, stood at RMB 50,401,000, down from RMB 134,965,000 at the beginning of the year[42] Revenue Breakdown - Retail operations generated revenue of RMB 265,676,000, while wholesale distribution contributed RMB 47,388,000 for the six months ended June 30, 2022[53] - Revenue from retail store general sales was RMB 170,079,000 for the six months ended June 30, 2022, down from RMB 317,959,000 in 2021, reflecting a decline of approximately 46.5%[63] - The wholesale distribution segment's revenue decreased to RMB 47,388,000 in 2022 from RMB 73,169,000 in 2021, a decline of about 35.2%[63] - The company recognized contract revenue from customers of RMB 304,992,000 for the six months ended June 30, 2022, compared to RMB 398,697,000 for the same period in 2021, a decrease of approximately 23.5%[63] Operating Expenses - Other operating income decreased to RMB 15,613,000 in 2022 from RMB 18,563,000 in 2021, a decline of approximately 15.5%[65] - Selling and distribution costs were approximately RMB 67,003,000, a decrease of about RMB 1,170,000 or 1.72% year-on-year, attributed to a reduction in the number of retail stores[131] - Administrative expenses were approximately RMB 9,828,000, down about RMB 3,458,000 or 26.03% compared to the previous year, due to lower rental, promotional, and office expenses[132] - Financing costs decreased significantly to RMB 2,747,000 in 2022 from RMB 5,877,000 in 2021, a reduction of approximately 53.3%[68] Capital Expenditures - The company incurred RMB 2,943,000 in capital expenditures for property, plant, and equipment, a decrease from RMB 4,305,000 in the previous year, reflecting a reduction of 32%[42] - Capital expenditures for the period amounted to approximately RMB 2,943,000, primarily for the acquisition of properties, plants, and equipment for new and renovated retail stores[138] Employee and Management Information - The group employed a total of 1,132 employees as of June 30, 2022, with no significant labor disputes affecting operations[154] - The group’s management personnel compensation for the first half of 2022 totaled RMB 1,348,000, an increase from RMB 1,154,000 in the same period last year[114] Corporate Governance - The audit committee, consisting of independent non-executive directors, oversees financial reporting and internal control processes[175] - The company has not established an internal audit function but engages external consultants for annual evaluations of internal controls and risk management[172] - The board of directors confirms adherence to the corporate governance code throughout the reporting period, with minor deviations noted[172] Market and Strategic Developments - The company aims to adapt to changing consumer habits post-COVID-19 by enhancing fresh produce offerings and integrating online and offline platforms[123] - The group retained exclusive distribution rights for 23 brands in Foshan and Zhaoqing, focusing on expanding sub-distributors rather than retail customers[120] - The group added 1 retail store during the reporting period, bringing the total to 69 stores as of June 30, 2022, with 68 located in Guangdong Province, China, and 1 in Macau[117]

Financial Performance - For the fiscal year ending December 31, 2021, the group's revenue was approximately RMB 741.635 million, a decrease of about RMB 147 million compared to the fiscal year 2020[42]. - The net loss attributable to shareholders for the fiscal year 2021 was approximately RMB 38.045 million, an increase in loss of about RMB 21.5 million compared to the fiscal year 2020[42]. - The decline in revenue and increase in net loss were primarily due to the impact of the COVID-19 pandemic and the pressure from online e-commerce, which led to reduced sales in retail and wholesale distribution[42]. - The group's gross profit for the fiscal year 2021 was RMB 107.843 million, down from RMB 125.817 million in the previous year[39]. - Operating loss for the fiscal year 2021 was RMB 27.273 million, compared to an operating loss of RMB 2.702 million in fiscal year 2020[39]. - The company's revenue for the fiscal year 2021 was approximately RMB 742 million, a decrease of about RMB 147 million compared to the fiscal year 2020[59]. - Retail store revenue for fiscal year 2021 was approximately RMB 607.6 million, down by about RMB 84.1 million or 12.2% from fiscal year 2020[72]. - Wholesale distribution revenue for fiscal year 2021 was approximately RMB 134.0 million, a decrease of about RMB 63.0 million or 32% compared to fiscal year 2020[72]. - The company's gross profit margin increased to 14.5% in fiscal year 2021 from 14.2% in fiscal year 2020, primarily due to improved management of fresh products[75]. - Other operating income for fiscal year 2021 was approximately RMB 30.7 million, a decrease of about RMB 4.3 million or 12.3% compared to fiscal year 2020[78]. - Sales and distribution costs for fiscal year 2021 were approximately RMB 133.9 million, an increase of about RMB 6.6 million or 5.2% from fiscal year 2020[79]. - Administrative expenses for fiscal year 2021 were approximately RMB 31.8 million, a decrease of about RMB 4.3 million or 11.9% compared to fiscal year 2020[80]. - Financing costs for fiscal year 2021 were approximately RMB 10.6 million, a decrease of about RMB 0.9 million or 7.8% from fiscal year 2020[81]. - The total comprehensive expenses attributable to shareholders for fiscal year 2021 were approximately RMB 38.4 million, an increase of about RMB 20.2 million or 111.0% compared to fiscal year 2020[87]. - The group incurred an impairment loss of RMB 12,000 on properties, plants, and equipment in fiscal year 2021, primarily due to the impact of the COVID-19 pandemic on retail operations in Macau[82]. Assets and Liabilities - Total assets less current liabilities as of December 31, 2021, amounted to RMB 256.883 million, a decrease from RMB 316.279 million in the previous year[39]. - Non-current assets were valued at RMB 170.933 million as of December 31, 2021, down from RMB 186.444 million in the previous year[39]. - Current liabilities stood at RMB 224.702 million as of December 31, 2021, compared to RMB 284.003 million in the previous year[39]. - The company's net assets attributable to shareholders were RMB 199.751 million as of December 31, 2021, a decrease from RMB 238.160 million in the previous year[39]. - As of December 31, 2021, the group had cash and cash equivalents of approximately RMB 103.3 million, a slight decrease from RMB 104.0 million as of December 31, 2020[90]. - The group had a net asset value of approximately RMB 200.8 million as of December 31, 2021, down from RMB 239.5 million as of December 31, 2020[90]. - The total bank borrowings as of December 31, 2021, were approximately RMB 60.0 million, a decrease from RMB 108.0 million as of December 31, 2020[95]. Business Operations and Strategy - The retail and wholesale distribution business faced increased costs, contributing to the overall financial challenges experienced during the fiscal year 2021[42]. - The company opened one new retail store and closed four stores, resulting in a total of 68 retail stores by the end of fiscal year 2021[49]. - The company established partnerships with 15 new fruit and vegetable bases, which helped reduce procurement costs by over 5% for approximately 35% of vegetable items[60]. - Online sales increased by approximately 62% compared to the previous year, driven by new sales methods such as live streaming[60]. - The company maintained exclusive distribution rights for 23 brands in Foshan, Jiangmen, and Zhaoqing, focusing on expanding its distributor client base[55]. - The company launched the "Shun Ke Long Fresh Community" model, successfully opening multiple pilot stores to support its business transformation[46]. - The company upgraded 12 physical stores, which is expected to effectively boost sales[60]. - The company has a franchise program that allows interested parties to apply for brand retail store franchises, contributing to its wholesale distribution revenue[56]. - The company is actively expanding its market presence in the Guangdong-Hong Kong-Macao Greater Bay Area and other provinces, particularly in the Hainan Free Trade Zone[46]. - The company plans to enhance consumer loyalty through the new "Shun Ke Long Warehouse Membership Store" model, offering high-quality and differentiated products[63]. - The company aims to expand its online platform, particularly through its own e-commerce platform "Shun Ke Long You Xuan," to integrate online and offline sales channels[63]. - The group plans to reallocate part of the unutilized proceeds from the global offering to renovate existing retail stores to enhance competitiveness in Guangdong Province[196]. Leadership and Governance - Mr. Shang was appointed as the Chairman and Executive Director of the company on February 25, 2022, and has held multiple positions in major companies including serving as the Chairman of Supply and Marketing Group since January 2022[105]. - Mr. Han was appointed as the Chief Executive Officer on July 27, 2020, after serving as the Chief Financial Officer, and has been involved in various roles within the company and its subsidiaries since 2017[110]. - Ms. Wang was appointed as a Non-Executive Director on February 25, 2022, and previously served as the Chief Financial Officer from August 5, 2020, to February 25, 2022[115]. - The company has a strong leadership team with extensive experience in finance and management across various sectors, including logistics and technology[109]. - The company is focused on expanding its market presence and enhancing its operational efficiency through strategic leadership changes and management expertise[110]. - The company aims to leverage its leadership's extensive experience to drive growth and innovation in its operations and market strategies[110]. - The company is committed to maintaining high standards of corporate governance and financial transparency, as evidenced by the leadership's previous roles in regulatory compliance[109]. - The strategic appointments within the company are expected to enhance its competitive edge in the market and support future growth initiatives[110]. - The company has a strong governance structure with independent non-executive directors overseeing audit and remuneration committees[118]. - The management team includes professionals with extensive experience in finance and corporate governance, enhancing the company's strategic decision-making capabilities[120]. - The company emphasizes compliance and governance, with a dedicated company secretary managing regulatory affairs[126]. - The board of directors includes members with diverse backgrounds in finance, law, and corporate governance, contributing to comprehensive oversight[121]. Corporate Governance and Compliance - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange's listing rules and has complied with all provisions as of December 31, 2021[128]. - The board held five meetings during the year ending December 31, 2021, with attendance rates for individual directors recorded[138]. - The company has implemented a board diversity policy, considering various measurable aspects such as gender, age, and professional experience to enhance performance quality[134]. - The board is responsible for leading and controlling the company, making objective decisions in the best interest of the company[142]. - The company has arranged appropriate directors' and officers' liability insurance for potential legal claims against its directors and senior management[141]. - New appointees to the board receive formal training to understand the company's operations and their responsibilities under listing rules[145]. - The company has a nomination committee that monitors the execution of the board diversity policy and reviews it periodically[134]. - All directors have confirmed compliance with the standard code for securities trading as of December 31, 2021[129]. - The board's decision-making retains authority over significant matters, including policies, strategies, and financial information[143]. - The company encourages directors and senior management to participate in relevant training courses to enhance their knowledge and skills[145]. - The board of directors has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with specific written terms of reference[150]. - The Audit Committee consists of three independent non-executive directors and has held four meetings during the year ended December 31, 2021[151][152]. - The Remuneration Committee reviewed the remuneration policy and performance of executive directors during the year ended December 31, 2021[155]. - The Nomination Committee assessed the independence of independent non-executive directors and reviewed the board's structure and diversity during the year ended December 31, 2021[156]. - The annual audit fee charged by Shinewing (HK) CPA Limited was RMB 1,080,000, while the interim review fee was RMB 100,000[166][167]. - All independent non-executive directors confirmed their independence according to the listing rules, with none serving for more than nine years[146]. - The board members are required to retire and seek re-election at least every three years[146]. - The company has received independent confirmations from all independent non-executive directors regarding their independence[146]. - The board of directors is responsible for preparing the consolidated financial statements, ensuring they present a true and fair view of the group's financial position as of December 31, 2021[169]. - The company has not identified any significant uncertainties that may cast doubt on its ability to continue as a going concern[169]. - The company appointed Shinewing (HK) CPA Limited as the external auditor for the year ended December 31, 2021[171]. - The company has implemented strict internal control and risk management systems to maintain business performance and reputation[173]. - The board believes that the risk management and internal control systems are adequate and effective for the year ended December 31, 2021[173]. - The company did not have an internal audit function for the year ended December 31, 2021, and hired an independent consultant for evaluation[173]. - The company emphasizes effective communication with shareholders through various channels, including annual reports and shareholder meetings[179]. - The board held one shareholder meeting during the year ended December 31, 2021[179]. Market Outlook and Future Plans - The company operates as an investment holding company with a focus on supermarket chain operations in Guangdong Province, China[183]. - The group reported a financial performance discussion and analysis for the year ending December 31, 2021, highlighting key risks and uncertainties faced by the group[184]. - The board has decided not to declare any final dividend for the year ending December 31, 2021[189]. - The net proceeds from the global offering amounted to approximately HKD 188.6 million (equivalent to approximately RMB 155.0 million) after deducting underwriting fees and related expenses[196]. - The group is continuously evaluating the retail market outlook and the economic conditions in China to determine the most effective allocation of resources[196].

中國順客隆控股有限公司 CHINA SHUN KE LONG HOLDINGS LIMITED (Incorporated in the Cayman Islands with limited liability) Stock code : 974 ( 於開曼群島註冊成立的有限公司 ) 股份代號 : 974 中期報告 2021 INTERIM REPORT 2021 目錄 | --- | --- | |------------------------------|-------| | | | | 公司資料 | 2 | | 簡明綜合損益及其他全面收益表 | 3 | | 簡明綜合財務狀況表 | 4 | | 簡明綜合權益變動表 | 6 | | 簡明綜合現金流量表 | 7 | | 簡明綜合中期財務報表附註 | 8 | | 管理層討論及分析 | 26 | | 其他資料 | 34 | 公司資料 董事 執行董事 杜小平先生（主席） 韓瑋先生（行政總裁） 非執行董事 王福林先生 獨立非執行董事 鄭學啟先生 王一林先生 鄒平學先生 審核委員會 鄭學啟先生（主席） 王一林先生 鄒平學先生 薪酬委員會 王一林先生（主席） 杜小平先 ...

Financial Performance - For the fiscal year ending December 31, 2020, the total revenue of China Shun Ke Long Holdings Limited was approximately RMB 888.7 million, a decrease of about RMB 56.5 million compared to the previous year[8]. - The net loss attributable to shareholders for the fiscal year 2020 was approximately RMB 16.5 million, narrowing by about RMB 4.1 million compared to the previous year[8]. - In the fiscal year 2020, the company's revenue was approximately RMB 888.7 million, a decrease of about RMB 56.5 million or 6% compared to the fiscal year 2019, primarily due to the impact of COVID-19 on wholesale distribution sales[38]. - Retail store business revenue for fiscal year 2020 was approximately RMB 691.7 million, an increase of about RMB 27.3 million or 4.1% compared to fiscal year 2019, attributed to refined management and improved customer service[38]. - Wholesale distribution revenue for fiscal year 2020 was approximately RMB 197.0 million, a decrease of about RMB 83.8 million or 29.8% compared to fiscal year 2019, mainly due to the termination of low-margin sugar business and the impact of COVID-19 on clients[38]. - The gross profit margin for the company in fiscal year 2020 was 14.2%, slightly down from 14.3% in fiscal year 2019, primarily due to increased sales discounts during promotional activities[39]. - Other operating income for fiscal year 2020 was approximately RMB 35.0 million, a decrease of about RMB 2.7 million or 7.2% compared to fiscal year 2019, mainly due to reduced promotional income from suppliers[42]. Supply Chain and Operations - The company has established partnerships with 26 fruit and vegetable bases to strengthen its fresh supply chain for the fiscal year 2020[10]. - The company operates over 700 suppliers, maintaining exclusive distribution rights for 26 brands in the Foshan, Jiangmen, and Zhaoqing regions[10]. - The company aims to strengthen its regional leadership position through supply chain enhancements, which is a fundamental business logic in fresh produce competition[10]. - The company retained exclusive distribution rights for 26 brands in Foshan, Jiangmen, and Zhaoqing, focusing on expanding its distributor client base rather than retail clients[23]. - The company has implemented a reward and punishment mechanism to enhance employee motivation and has provided comprehensive training for its staff[12]. - The company is actively expanding its fresh food retail format "Shun Ke Long Fresh Community" to meet community needs and is also expanding its wholesale business with significant projects[29]. Market and Community Engagement - The company emphasizes community marketing through its platform "Shun Ke Long Youxuan" and collaborates with e-commerce platforms like "Taoxian Da," "Ele.me," and "JD Daojia" to enhance online and offline integration[9]. - The company has responded to government poverty alleviation initiatives by connecting with 13 poverty alleviation bases and purchasing over 30 poverty alleviation products[12]. - The company has achieved approximately 600,000 followers through various member application scenarios, leveraging platforms like Ele.me and JD Daojia[28]. - The company plans to expand its market presence in the Guangdong-Hong Kong-Macao Greater Bay Area and other provinces, particularly in the Hainan Free Trade Zone[14]. Environmental, Social, and Governance (ESG) Practices - The company emphasizes sustainable development as a key to ongoing success, integrating environmental, social, and governance (ESG) considerations into its business strategy[66]. - The board oversees the company's ESG direction and ensures effective risk management and internal control mechanisms related to ESG matters[67]. - The total greenhouse gas emissions for the group were 16,639.27 tons of CO2 equivalent in fiscal year 2020, down from 19,214.26 tons in fiscal year 2019, indicating a reduction of approximately 13.4%[89]. - The group has implemented ISO 14001:2015 environmental management system to ensure sustainable business practices[88]. - The group has adopted the "4R principles" (Reduce, Reuse, Recycle, Replace) for waste management to minimize environmental impact[88]. - The company emphasizes environmental protection and sustainable practices in its operations[105]. Employee and Management Structure - The group had a total of 1,295 employees as of December 31, 2020, a slight decrease from 1,308 employees as of December 31, 2019[90]. - The average training hours per employee during the reporting period is 2.78 hours, with male employees averaging 2.58 hours and female employees averaging 2.85 hours[131]. - The company has achieved OHSAS 18001 certification for its occupational health and safety management system, ensuring a safe working environment[120]. - The company has implemented measures to prevent child labor and forced labor, strictly adhering to local laws and regulations[132]. - The company has a diverse board with independent directors, which may enhance governance and oversight[162]. - The management team has a strong educational background, with Mr. Han holding an MBA from Tsinghua University, which may contribute to informed decision-making[160]. Corporate Governance - The company emphasizes high standards of corporate governance, adhering to the principles outlined in the Hong Kong Stock Exchange's Corporate Governance Code[172]. - The company has established a balanced power structure within the board, consisting of two executive directors, one non-executive director, and three independent non-executive directors, to safeguard shareholder interests[173]. - The company has been compliant with the Corporate Governance Code since July 27, 2020, after appointing Du Xiaoping as Chairman and Han Wei as CEO[173]. - The board is responsible for leading and controlling the company, overseeing business strategies and performance[188]. - All directors contribute valuable business experience and knowledge to ensure effective board operations[188].

Financial Performance - Revenue for the six months ended June 30, 2020, was RMB 469,349,000, an increase of 3.99% compared to RMB 455,535,000 for the same period in 2019[10] - Gross profit for the same period was RMB 65,605,000, a decrease of 3.36% from RMB 68,057,000 in 2019[10] - Operating profit decreased to RMB 3,123,000, down 11.36% from RMB 3,523,000 in the previous year[10] - The net loss for the period was RMB 2,378,000, an improvement from a loss of RMB 3,873,000 in 2019[10] - The group reported a loss before tax of RMB 1,805,000 for the six months ended June 30, 2020, improving from a loss of RMB 2,767,000 in 2019[43] - The net loss attributable to shareholders was approximately RMB 2,488,000, a decrease of about 27.2% compared to the same period in 2019, mainly due to increased retail store sales and effective cost control[118] Assets and Liabilities - Total assets as of June 30, 2020, were RMB 581,251,000, a decrease from RMB 597,163,000 as of December 31, 2019[12] - Current liabilities increased to RMB 276,255,000 from RMB 174,094,000 in the previous year[12] - Non-current liabilities totaled RMB 49,702,000, a decrease from RMB 165,472,000 in the previous year[14] - The total trade payables as of June 30, 2020, were RMB 106,373,000, a decrease from RMB 116,252,000 as of December 31, 2019, indicating a decline of about 8.5%[81] - The carrying amount of right-of-use assets for leased properties was RMB 89,452,000 as of June 30, 2020, down from RMB 97,488,000 as of December 31, 2019[66] Cash Flow - For the six months ended June 30, 2020, the company reported a cash flow from operating activities of RMB (17,586) thousand, compared to RMB (7,495) thousand for the same period in 2019[22] - The company incurred a net cash outflow from investing activities of RMB (1,426) thousand for property, plant, and equipment purchases, and RMB (63,500) thousand for financial assets measured at fair value through profit or loss[22] - The company’s financing activities resulted in a net cash outflow of RMB (18,684) thousand, compared to RMB (6,290) thousand in the prior year[22] - As of June 30, 2020, the group had cash and cash equivalents of approximately RMB 107,971,000, down from approximately RMB 122,635,000 as of December 31, 2019[125] Revenue Segmentation - Revenue from external customers for the retail segment was RMB 366,136 thousand, and for the wholesale distribution segment was RMB 103,213 thousand, totaling RMB 469,349 thousand[39] - Retail store revenue was approximately RMB 366,136,000, an increase of about RMB 36,732,000 or 11.2% compared to the same period in 2019, driven by increased customer demand during the pandemic and new store openings[110] - Wholesale distribution revenue was approximately RMB 103,213,000, a decrease of about RMB 22,909,000 or 18.2% compared to the same period in 2019, mainly due to a significant reduction in corporate clients as many stores were closed during the pandemic[110] Corporate Governance - The company appointed Mr. Du Xiaoping as Chairman and Executive Director effective July 27, 2020, and Mr. Zheng Xueqi as Independent Non-Executive Director and Audit Committee Chairman on the same date[146] - The Audit Committee, consisting of independent non-executive directors, has been established in accordance with listing rules and corporate governance code, with Mr. Zheng Xueqi serving as the Chairman[150] - The company has adhered to the corporate governance code throughout the period, with a noted exception regarding the separation of the roles of Chairman and CEO, which was rectified on July 27, 2020[149] Market Strategy and Operations - The company is adapting its store strategies to optimize performance in response to changing market conditions and consumer demands[106] - The company plans to continue expanding its online business, including home delivery services and live streaming sales, in the second half of 2020[107] - The company has launched a new online wholesale business through a WeChat mini-program, targeting end commercial customers to increase wholesale profit margins[108] Employee and Shareholder Information - The group had a total of 1,337 employees as of June 30, 2020, with 1,287 located in China and 50 in Hong Kong and Macau[134] - Major shareholders collectively hold approximately 70.42% of the company's shares, totaling 204,558,317 shares[139]

Financial Performance - The total revenue for China Shun Ke Long Holdings Limited in 2019 was approximately RMB 945.2 million, a decrease of about RMB 41.8 million compared to 2018[10]. - The net loss attributable to shareholders for 2019 was approximately RMB 20.6 million, compared to a profit of RMB 11.4 million in 2018[10]. - The company’s gross profit for 2019 was RMB 134.8 million, down from RMB 143.3 million in 2018, reflecting the challenges faced in maintaining profitability[7]. - In 2019, the company added RMB 40 million in wholesale revenue, ensuring relative stability in overall sales performance despite a decline compared to 2018[19]. - Retail store business revenue for fiscal year 2019 was approximately RMB 664.4 million, down about RMB 61.5 million or 8.5% from fiscal year 2018, mainly due to a decrease in sugar sales[45]. - Wholesale distribution revenue for fiscal year 2019 was approximately RMB 280.8 million, an increase of about RMB 19.7 million or 7.5% from fiscal year 2018, driven by a 90% increase in durian sales to corporate clients[45]. - The gross profit margin for fiscal year 2019 was 14.3%, slightly down from 14.5% in fiscal year 2018, mainly due to increased sales discounts during promotional activities[46]. - Other operating income for fiscal year 2019 was approximately RMB 37.7 million, a decrease of about RMB 17.3 million from fiscal year 2018, primarily due to reduced promotional income from suppliers[50]. - Selling and distribution costs for fiscal year 2019 were approximately RMB 144.8 million, an increase of about RMB 2.6 million or 1.8% from fiscal year 2018, mainly due to increased promotional expenses and retail store operating costs[51]. - The company's net loss attributable to shareholders for fiscal year 2019 was approximately RMB 20.6 million, a decrease of about RMB 32.0 million or 280.7% compared to fiscal year 2018, mainly due to reduced gross profit, other operating income, and impairment losses[56]. Business Strategy and Operations - The company faced intense market competition and challenges in upgrading its business model, leading to a significant impact on its financial performance[11][12]. - The company opened and transformed several stores in 2019, adopting a fresh food business model, although some new stores were still in the market cultivation phase and operating at a loss[12]. - The company launched the "Shun Ke Long Fresh Community" model, achieving revenue increases ranging from 30% to 200% in several community stores[15]. - The company initiated a multi-channel marketing strategy, achieving annual sales of RMB 3 million and over 300 daily orders through partnerships with platforms like JD Daojia and Meituan Waimai[17]. - The online membership count reached 500,000, enhancing customer engagement and service quality[17]. - The company invested in digital upgrades, implementing mobile inspection systems and smart inventory management systems to improve operational efficiency and reduce error rates[18]. - The company plans to enhance its product strength by establishing direct procurement processes and focusing on core categories, particularly fresh products[35]. - The company aims to improve service quality through a complete PDCA management system and store image innovation[36]. - The introduction of various digital systems, including a price comparison system and automated replenishment system, is intended to facilitate future business model transformation[36]. Market Presence and Expansion - The number of franchise stores increased to 670 in 2019, a nearly 40% rise from 482 in 2018, primarily concentrated in Foshan and Zhuhai regions[21]. - As of December 31, 2019, the company operated 68 retail stores in Guangdong and 2 in Macau, maintaining a total of 70 stores[27]. - During the COVID-19 outbreak, 66 stores continued operations, and online business surged by approximately 300%[34]. - The company secured first-level agency rights for Yili milk and expanded online supply partnerships in 2019, indicating positive development in wholesale agency business[20]. Financial Position and Assets - The total assets decreased from RMB 433.8 million in 2018 to RMB 423.1 million in 2019, while total liabilities increased significantly[7]. - As of December 31, 2019, the group had cash and cash equivalents of approximately RMB 122.6 million, a slight increase from RMB 121.7 million in 2018[59]. - The net current assets as of December 31, 2019, were approximately RMB 259.7 million, up from RMB 180.0 million in 2018[59]. - The group had bank borrowings of approximately RMB 108 million as of December 31, 2019, unchanged from 2018, with a fixed annual interest rate of 5.46%[64][65]. - The debt-to-asset ratio increased to 41.9% in 2019 from 38.9% in 2018, reflecting a higher level of leverage[67]. Environmental and Social Responsibility - The company has implemented the ISO 14001:2015 environmental management system to ensure sustainable operations[92]. - The company aims to enhance its environmental, social, and governance performance while creating greater value for society[85]. - The company has adopted waste management principles based on the "4R" approach: Reduce, Reuse, Recycle, and Replace[92]. - The company is committed to fostering employee awareness of environmental protection and compliance with relevant laws[92]. - The company has established effective management policies and internal control systems regarding environmental, social, and governance matters[89]. - The company is focused on maintaining a sustainable business model by integrating environmental considerations into its decision-making processes[92]. - The group reported nitrogen oxides (NOx) emissions of 522.68 kg, sulfur oxides (SOx) emissions of 0.75 kg, and particulate matter (PM) emissions of 50.08 kg[95]. - Total greenhouse gas emissions for the group amounted to 19,214.26 tons of CO2 equivalent, with direct emissions (Scope 1) at 135.42 tons and indirect emissions (Scope 2) at 19,078.84 tons[96]. - The group has established guidelines for the management and disposal of hazardous waste, although no hazardous waste was generated during the reporting period[101]. - The group emphasizes the importance of a comfortable and green working environment, regularly monitoring indoor air quality[115]. Employee and Labor Relations - The group maintained a competitive salary level for its 1,308 employees, with no significant labor disputes reported[71]. - The group has established a fair and reasonable compensation system, providing competitive salaries and benefits based on market benchmarks[119]. - The group actively encourages employees to report safety issues and has implemented emergency plans for accidents[128]. - The group has achieved OHSAS 18001 certification for its occupational health and safety management system, ensuring a safe working environment[126]. - No work-related fatalities occurred during the reporting period, and there were no significant violations of health and safety regulations[127]. Community Engagement and Charitable Activities - The company donated approximately RMB 13,507 to various charitable organizations during the reporting period[150]. - A donation of RMB 10,888 was made specifically to the Lecong Charity Association[151]. - The company actively engages with local charities to understand social needs and strengthen community ties[150]. - The company aims to promote social stability and improve the quality of life for disadvantaged groups through community investment[149]. - The company encourages employees to participate in charitable activities to foster a sense of social responsibility[150]. Supply Chain and Product Safety - The company has established a food safety management system to ensure high standards of food quality and safety[144]. - The company maintains a strict supplier selection system, emphasizing product quality and compliance with local environmental laws[138]. - The company actively monitors and manages its supply chain to ensure sustainability and reliability[136]. - Customer complaints are treated as an essential part of quality management, with a commitment to understanding and addressing the root causes[143]. - The company has a policy in place for managing expired food products, ensuring proper disposal and documentation[144].

Financial Performance - Revenue for the six months ended June 30, 2019, was RMB 455,535,000, a decrease of 3.4% compared to RMB 470,067,000 for the same period in 2018[10] - Gross profit for the same period was RMB 68,057,000, down 7.5% from RMB 73,810,000 in 2018[10] - Operating profit decreased significantly to RMB 3,523,000, a decline of 72.5% from RMB 12,784,000 in the previous year[10] - The company reported a net loss of RMB 3,873,000 for the period, compared to a profit of RMB 7,922,000 in 2018[10] - The total comprehensive loss for the period was RMB (3,765) thousand, which includes a loss of RMB (3,417) thousand and a foreign exchange gain of RMB 108 thousand[15] - The company incurred a loss of RMB (3,417) thousand during the period, reflecting a significant decrease compared to the previous year's loss[15] - The company reported a loss attributable to equity holders of RMB 3,417,000 for the six months ended June 30, 2019, compared to a profit of RMB 7,776,000 for the same period in 2018, representing a significant decline[57] - The net loss attributable to shareholders for the period was approximately RMB 3,873,000, a decrease of about 148.9% compared to the same period in 2018, primarily due to reduced revenue from retail and wholesale operations[103] Assets and Liabilities - Total assets as of June 30, 2019, amounted to RMB 635,772,000, an increase from RMB 542,620,000 at the end of 2018[11] - Current assets totaled RMB 444,543,000, slightly down from RMB 444,690,000 at the end of 2018[11] - The company’s cash and cash equivalents were RMB 106,707,000, a decrease from RMB 121,723,000 in the previous year[11] - Trade receivables increased to RMB 34,003,000 from RMB 24,456,000 in 2018, reflecting a growth of 39%[11] - The company’s current liabilities rose to RMB 288,395,000, compared to RMB 264,732,000 at the end of 2018[11] - Total liabilities rose to RMB 363,474,000 from RMB 220,102,000, an increase of 65.0% year-over-year[44] - Non-current liabilities related to lease liabilities amounted to RMB 75,079 thousand as of June 30, 2019, with total non-current liabilities also at RMB 75,079 thousand[13] - The net asset value decreased to RMB 272,298 thousand as of June 30, 2019, down from RMB 277,888 thousand as of December 31, 2018, representing a decline of approximately 2.1%[13] - The total equity attributable to owners of the company was RMB 271,038 thousand as of June 30, 2019, compared to RMB 276,172 thousand at the end of 2018, indicating a decrease of about 1.9%[13] Revenue Segmentation - The company reported total revenue of RMB 455,535,000 for the six months ended June 30, 2019, with RMB 329,413,000 from retail operations and RMB 126,122,000 from wholesale distribution[40] - Retail segment revenue increased to RMB 281,448,000 from RMB 251,537,000, representing a growth of 11.9% year-over-year[47] - Wholesale segment revenue decreased to RMB 122,436,000 from RMB 175,036,000, a decline of 30.0% compared to the previous year[47] - The company incurred a reported loss of RMB 1,598,000 across its segments, with retail operations showing a loss of RMB 1,374,000 and wholesale distribution a loss of RMB 224,000[40] Cash Flow and Financing - The company reported a net cash outflow from operating activities of RMB (7,495) thousand for the six months ended June 30, 2019, compared to RMB (42,824) thousand for the same period in 2018, showing an improvement[20] - The company received interest income of RMB 580 thousand during the six months ended June 30, 2019, compared to RMB 356 thousand in the same period of 2018, indicating a growth of approximately 62.9%[20] - The company’s financing activities resulted in a cash outflow of RMB (6,290) thousand for the six months ended June 30, 2019, compared to RMB (2,434) thousand in the same period of 2018, indicating increased financing costs[20] - The group has bank borrowings of RMB 108,000,000 as of June 30, 2019, with a fixed interest rate of 5.23%[69] - The group had a net cash position as cash and cash equivalents exceeded interest-bearing debt as of June 30, 2019[114] Operational Highlights - The company confirmed lease liabilities of RMB 119,677,000 as of January 1, 2019, following the adoption of IFRS 16, with a weighted average incremental borrowing rate of 6.09% applied[30][33] - Depreciation expense for right-of-use assets was RMB 17,344,000, and interest expense on lease liabilities was RMB 3,405,000 for the six months ended June 30, 2019[34] - The company’s reportable segments include retail operations and wholesale distribution, each requiring different business strategies[39] - The total reportable segment assets amounted to RMB 604,093,000, with retail operations contributing RMB 490,645,000 and wholesale distribution RMB 113,448,000[40] - The company recognized financing costs of RMB 6,290,000, with RMB 5,940,000 attributed to retail operations and RMB 350,000 to wholesale distribution[40] Strategic Initiatives - Future strategies include focusing on fresh produce and community stores, as well as leveraging e-commerce platforms to enhance sales channels[91] - The group plans to implement targeted performance improvement plans for underperforming stores and negotiate with suppliers to reduce procurement costs[91] - The group plans to transform retail stores into community fresh food stores and focus on developing online-to-offline (O2O) business strategies[93] Corporate Governance - The audit committee has been established in compliance with listing rules and corporate governance codes, with independent non-executive directors as members[134] - The company has adhered to the corporate governance code throughout the reporting period, with some exceptions noted in a previous announcement[133] - The interim financial data has not been audited but has been reviewed by the audit committee[135] Employee and Management Information - As of June 30, 2019, the group employed a total of 1,373 staff, with 1,332 based in China and 41 in Hong Kong and Macau, maintaining competitive salary levels and good employee relations[118] - The group’s management compensation increased to RMB 2,705,000 in 2019 from RMB 1,301,000 in 2018[81] Related Party Transactions - The group reported related party transactions, including sales of goods amounting to RMB 3,873,000 in the first half of 2019, compared to RMB 1,686,000 in the same period of 2018[77] - The board was unaware of the related party transactions until August 2019, leading to a breach of listing rules due to non-compliance with reporting and approval requirements[122] - The board has taken remedial actions to ensure strict compliance with listing rules following the identification of the related party transactions[122]

Financial Performance - In 2018, China Shun Ke Long Holdings Limited achieved sales revenue of over RMB 987 million, reflecting a growth despite a challenging market environment[9]. - The gross profit for 2018 was RMB 143.274 million, with a gross margin reflecting the company's operational efficiency[7]. - The net profit attributable to shareholders for 2018 was RMB 11.247 million, indicating a stable performance amidst rising costs[7]. - For the fiscal year 2018, the company's revenue was approximately RMB 987.0 million, a slight increase of about RMB 32.8 million or 3.4% compared to the fiscal year 2017[29]. - The retail store business generated revenue of approximately RMB 725.9 million, an increase of about RMB 48.9 million or 7.2% from the previous year, primarily due to new store sales in Foshan and increased sales of imported fresh fruits[29]. - The wholesale distribution business revenue was approximately RMB 261.1 million, a decrease of about RMB 16.1 million or 5.8%, mainly due to a significant reduction in average procurement amounts from corporate clients[29]. - The company's gross profit margin for fiscal year 2018 was 14.5%, down from 15.4% in fiscal year 2017, attributed to lower profits from promotional activities and sales of imported fresh fruits[31]. - The company's other operating income for fiscal year 2018 was approximately RMB 55.0 million, a decrease of about RMB 0.6 million from the previous year, mainly due to reduced promotional income from suppliers[33]. - The sales and distribution costs for fiscal year 2018 were approximately RMB 142.2 million, an increase of about RMB 1.2 million or 0.9%, primarily due to increased promotional costs for direct sales and online advertising[34]. - The group's net profit attributable to shareholders for the fiscal year 2018 was approximately RMB 11.4 million, a slight decrease of about RMB 0.5 million or 4.2% compared to 2017, mainly due to increased sales and distribution costs[39]. - The total comprehensive income attributable to shareholders for the fiscal year 2018 was approximately RMB 13.8 million, an increase of about RMB 5.4 million or 64.3% from 2017[40]. Retail Expansion - The company expanded its retail presence by opening 8 new stores in Foshan, bringing the total number of retail and franchise stores in Guangdong Province and Macau to 70[9]. - The company opened 8 new retail stores and closed 2, resulting in a total of 70 retail stores by the end of fiscal year 2018, with 67 located in Guangdong Province and 3 in Macau[20][22]. - The company decided to slow down the opening of new retail stores due to the recent slowdown in China's economic growth, reallocating funds to enhance existing stores and reduce bank borrowings[176]. Marketing and Promotions - The F2C (Factory to Consumer) initiative successfully generated over RMB 2 million in sales during the first Shun Ke Long Appliance Festival, with plans to continue this annual event[10]. - Promotional activities, including two 79% discount sales, contributed an increase of over RMB 26 million in sales for the year[10]. - The introduction of new imported products, such as skincare items and durian, led to significant sales, with durian sales exceeding RMB 37 million in 2018[10]. Strategic Partnerships - The company initiated the Taoxian Da project with Alibaba, which not only contributed to revenue growth but also helped accumulate valuable online data and attract younger customers[11]. - The company plans to deepen cooperation with Taoxian Da in 2019 to enhance customer service and experience in the Greater Foshan area[11]. Financial Position - Total assets as of December 31, 2018, amounted to RMB 444.69 million, with total liabilities of RMB 264.732 million, showcasing the company's financial position[7]. - As of December 31, 2018, the group had cash and cash equivalents of approximately RMB 121.7 million, down from approximately RMB 164.5 million as of December 31, 2017[42]. - The group had bank borrowings of approximately RMB 108.0 million as of December 31, 2018, compared to RMB 92.0 million as of December 31, 2017[46]. - The group reported a return on equity of 4.1% for the fiscal year 2018, down from 4.5% in 2017[49]. - The group had a current ratio of 1.7x as of December 31, 2018, compared to 1.6x in 2017[49]. Corporate Governance - The company has maintained compliance with the corporate governance code as of December 31, 2018, ensuring high standards of governance to protect shareholder interests[91]. - The board of directors held a total of 10 meetings during the year, with the attendance records indicating active participation from executive and non-executive members[94]. - The company has a strong board of directors with members holding degrees in economics, finance, and accounting, ensuring robust governance and oversight[83][84][86][87]. - The company has adopted a standard code for securities trading by directors, confirming adherence to these standards for the fiscal year ending December 31, 2018[92]. - The board is committed to continuous improvement in corporate governance practices to meet evolving shareholder and investor expectations[91]. - The company has arranged appropriate liability insurance for directors and senior officers against potential legal claims[97]. - All directors are required to disclose their other positions, ensuring transparency and accountability within the board[98]. - New directors receive formal training to understand the company's operations and their responsibilities under listing rules[99]. - The board's decision-making includes significant matters such as policy, strategy, budget, and risk management, ensuring comprehensive oversight[98]. - The company encourages ongoing professional development for directors to enhance their contributions to the board[99]. Environmental and Social Responsibility - The company emitted approximately 6,968 tons of carbon dioxide in 2018[59]. - Total water consumption for the company in 2018 was about 44,472 cubic meters[61]. - The company consumed approximately 8.82 million kilowatt-hours of electricity in 2018[63]. - The company distributed 10,888 kilograms of shopping bags and packaging materials to customers in 2018[63]. - The company has implemented various training programs for employees to ensure career development and performance evaluation[70]. - The company strictly adheres to labor laws and has no records of child or forced labor as of December 31, 2018[71]. - The company emphasizes food safety and regularly trains procurement and retail staff on relevant laws and regulations[73]. - The company has a volunteer team that engages in community service and donations to support local communities[77]. - The company has a strong anti-corruption policy that all employees and business partners must adhere to[76]. Management and Leadership - The company appointed Mr. Meng Hanting as CEO and Executive Director on March 2, 2018, bringing experience from Deloitte and Global Capital Investment Limited[80]. - Mr. Han Wei was appointed as Executive Director and Chief Financial Officer on September 13, 2017, with extensive experience in financial management across various companies[81]. - The Chief Financial Officer has over 20 years of experience in accounting and corporate secretarial fields, enhancing the company's financial oversight capabilities[89]. - The company appointed a new CEO, Mr. Meng Hanting, on March 2, 2018, and the chairman position was held by Mr. Wang Zheng until August 30, 2018, when Mr. Sun Qianhao took over[121]. Shareholder Engagement - The company aims to maintain effective communication with shareholders, particularly through annual general meetings[161]. - The company allows shareholders holding at least 10% of the paid-up capital to request a special general meeting[158]. - The company confirmed that there are no significant uncertainties that may cast doubt on its ability to continue as a going concern[150]. Agreements and Contracts - The total amount paid or payable under the 2018 procurement renewal agreement for the year ended December 31, 2018, was approximately RMB 40.7 million, within the annual cap of RMB 48.0 million set for that year[197]. - The total amount received or receivable under the 2018 sales renewal agreement for the year ended December 31, 2018, was approximately RMB 6.4 million, within the annual cap of RMB 9.0 million set for that year[198]. - The 2018 procurement renewal agreement allows the group to exclusively procure fresh meat and other agricultural products from the Lecong Group, effective from January 1, 2018[197]. - The 2018 sales renewal agreement allows the group to continue selling daily necessities, food, and stationery to the Lecong Group, effective from January 1, 2018[198]. - The agreements with the Lecong Group were renewed for three years starting January 1, 2018, and are based on historical transaction prices, current market prices, and bulk purchase discounts[194]. Stock Options and Incentives - The company has established a share option scheme to incentivize and reward eligible participants, with a maximum limit of 10% of the total shares issued post-global offering, amounting to 28,647,700 shares[185]. - The company must seek shareholder approval for any further grants of stock options exceeding 1% of the issued shares as of the grant date[187]. - The exercise price for any specific stock options granted must not 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[192]. - The exercise period for stock options will be determined by the board but cannot exceed ten years from the grant date[188]. - There is no minimum holding period required before exercising stock options[189]. - The company must pay HKD 1.0 as the consideration for accepting the stock options[190]. - The company has not granted any share options under the share option scheme as of the report date[181]. Future Outlook - The company is continuously evaluating the retail market outlook and the economic situation in China to determine the most effective allocation of resources[176]. - The company aims to increase the proportion of direct procurement from production sites to reduce costs and improve gross margins[28]. - The company plans to enhance its "new retail" business by strengthening partnerships with e-commerce platforms and improving logistics capabilities, including setting up front warehouses[27][28].