Revenue Performance - Revenue for the six months ended June 30, 2024, was RMB 10.90 billion, a decrease of approximately 7.4% year-on-year[1] - For the six months ended June 30, 2024, the total revenue was RMB 11,798,972,000, a decrease of 7.9% compared to RMB 12,812,422,000 for the same period in 2023[10] - The revenue from merchandise sales was RMB 10,896,547,000, down 7.4% from RMB 11,771,962,000 in the previous year[10] - The revenue from large-scale supermarkets was RMB 5,220,509,000, a decrease of 11.1% from RMB 5,873,177,000 in the previous year[13] - The revenue from convenience stores was RMB 785,340,000, down 7.9% from RMB 852,375,000 in the prior year[13] - The revenue from large-scale supermarkets was approximately RMB 4.724 billion, a year-on-year decrease of about 10.0%[48] - The revenue from supermarkets was approximately RMB 5.372 billion, a year-on-year decrease of about 4.9%[51] Profitability - Gross profit was approximately RMB 1.25 billion, a decrease of RMB 235 million, with a gross margin of 11.49%[2] - The operating profit for the six months was RMB 106,849,000, a decrease of 39.7% compared to RMB 177,293,000 in the same period last year[14] - The company reported a pre-tax profit of RMB 17,522,000 for the six months ended June 30, 2024, compared to RMB 9,191,000 in the same period of 2023[14] - The net loss attributable to shareholders was approximately RMB 55 million, an improvement of RMB 62 million year-on-year[2] - The loss attributable to the company's shareholders was approximately RMB 0.55 million, a reduction in losses of about RMB 0.62 million year-on-year, with a net loss margin of approximately 0.50%[45] Assets and Liabilities - Total assets as of June 30, 2024, amounted to RMB 20.00 billion, down from RMB 20.99 billion as of December 31, 2023[3] - Non-current assets decreased to RMB 11.96 billion from RMB 13.39 billion[3] - Current assets included cash and cash equivalents of RMB 2.37 billion, down from RMB 2.45 billion[3] - Total liabilities decreased to RMB 19.59 billion from RMB 20.54 billion[4] - The net current liabilities as of June 30, 2024, were RMB 7,349,767,000, down from RMB 8,505,312,000 as of December 31, 2023[10] - Accounts payable decreased to RMB 2.885 billion as of June 30, 2024, from RMB 2.952 billion as of December 31, 2023[30] Store Operations - The company opened 123 new stores during the review period, bringing the total number of stores to 3,343[1] - The company closed 136 stores during the same period, comprising 45 direct-operated and 91 franchise stores[61] - As of June 30, 2024, the company operated a total of 3,343 stores, with approximately 84% located in the East China region[62] Cost Management - Total operating expenses increased to RMB 15,999,000 from RMB 1,557,000, showing a significant rise[18] - Distribution and selling costs were approximately RMB 1.973 billion, down RMB 208 million or 9.5% year-on-year, accounting for 18.11% of revenue, a decrease of 0.42 percentage points[39] - Administrative expenses were approximately RMB 324 million, a decrease of RMB 74 million or 18.5% year-on-year, representing 2.97% of revenue, down 0.40 percentage points[40] - Interest expense on lease liabilities decreased to RMB 94,010,000 from RMB 111,559,000, a reduction of approximately 15.8%[19] Strategic Initiatives - The company is undergoing strategic adjustments, including the closure of loss-making outlets, which has impacted overall sales performance[35] - The company emphasized the development of its private label products, launching a project for 100 low-priced promotional items to enhance market competitiveness[63] - The company initiated a strategic layout for the "silver economy," focusing on community-based services for elderly consumers[64] - The company implemented a marketing strategy around key events, successfully launching a membership program that increased brand loyalty[65] - The company optimized logistics processes to reduce operational costs and enhance profitability, implementing standardized procedures to improve cold chain logistics efficiency[66] - The company launched digitalization projects aimed at enhancing both online and offline consumer experiences, with four major digital initiatives already piloted[67] Human Resources - As of June 30, 2024, the company employed 23,415 staff members, with total labor costs amounting to approximately RMB 974.99 million[68] - The company focused on organizational efficiency by streamlining its structure and optimizing labor costs, enhancing the performance of frontline employees[68] - The company has committed to enhancing talent acquisition and training, establishing a recruitment platform to balance human resource allocation across subsidiaries[69] Compliance and Governance - The company has adopted revised Hong Kong Financial Reporting Standards, which will not have a significant impact on the financial statements[8] - The audit committee has reviewed the accounting principles adopted by the group and found no disagreements with the management[76] - The company has adopted the Securities Trading Standard Code, ensuring compliance by all directors and relevant employees during the review period[77] - The company confirmed compliance with the Corporate Governance Code, with minor deviations noted regarding the rotation of directors and attendance at board meetings[78][79] Future Outlook - In the second half of 2024, the company plans to respond to China's economic policies aimed at boosting domestic consumption, which is expected to create new growth opportunities in the retail sector[70] - The company aims to deepen overall business reforms, focusing on core capabilities and enhancing revenue-generating capabilities through channel expansion and supply chain optimization[71] - The company will issue up to 360 million new domestic shares at a subscription price of RMB 1.00 per share, providing strong financial support for business transformation[73]

Company Operations and Market Presence - Lianhua Supermarket operates a total of 3,356 stores across 27 provinces and municipalities in China, maintaining its leading position in the fast-moving consumer goods retail sector [4]. - The company has expanded its retail formats to include large supermarkets, hypermarkets, and convenience stores, catering to diverse consumer needs [2]. - Lianhua Supermarket has been recognized as one of the "Outstanding Franchise Brands" by the China Chain Store & Franchise Association for several consecutive years [2]. - The company is actively developing rural markets, having opened new stores in rural areas of Chongming District, Shanghai, to meet local consumer needs [17]. - Lianhua Supermarket's total number of stores includes various formats, with significant presence in Shanghai, Jiangsu, and Zhejiang provinces [3]. - The company opened 337 new stores while closing 333 stores, indicating a cautious approach to store management amidst market changes [90]. - The supermarket segment, as the core development model, opened 299 new stores (93 direct-operated and 206 franchised) while closing 213 stores (39 direct-operated and 174 franchised), achieving a net increase of 86 stores [93][95]. - The convenience store segment opened 36 new stores (12 direct-operated and 24 franchised) but closed 104 stores (21 direct-operated and 83 franchised), resulting in a net decrease of 68 stores [95]. - As of the end of 2023, approximately 84.06% of the company's stores are located in the Greater East China region [94]. Financial Performance - In 2023, the company's revenue was RMB 21,835,879 thousand, a decrease of 11.5% compared to RMB 24,681,396 thousand in 2022 [48]. - The gross profit for 2023 was RMB 2,781,072 thousand, with a gross margin of 12.74%, down from 13.70% in 2022 [48]. - The company reported a net loss attributable to shareholders of RMB 791,317 thousand in 2023, compared to a loss of RMB 206,527 thousand in 2022, reflecting a significant increase in losses [48]. - The total assets of the company were RMB 20,989,143 thousand in 2023, a decrease from RMB 22,988,706 thousand in 2022 [51]. - The company reported a cash flow deficit of RMB 751,325 thousand in 2023, compared to a positive cash flow of RMB 1,005,489 thousand in 2022 [51]. - The average net asset loss rate was (169.16%) in 2023, indicating a significant decline in financial health compared to previous years [51]. - The company reported a pre-tax loss of approximately RMB 589 million, an increase in loss of about RMB 566 million year-on-year [64]. - The group reported a net loss attributable to shareholders of approximately RMB 791 million, compared to a loss of RMB 207 million in the previous year, representing an increase in loss of 283.2% [80]. Online Sales and E-commerce - Lianhua Supermarket achieved a two-digit growth in online sales, continuing to enhance its home delivery business and optimize post-sale processes [38]. - Online sales showed stable growth, increasing by 12% year-on-year [54]. - Online sales experienced double-digit growth, driven by enhanced online traffic conversion, improved product offerings, and optimized user experience [97][98]. - The company plans to enhance its e-commerce platform, expecting a 50% increase in online sales by the end of 2023 [150]. Community Engagement and Social Responsibility - Lianhua Supermarket has committed to providing 100,000 yuan annually to support local community projects in Yunnan Province [17]. - The company has established four essential goods reserve warehouses in Liuzhou City to ensure the supply of daily necessities [17]. - The company received the "2023 Outstanding Contribution Award" from the Food Safety Industry Association in Liuzhou [32]. - The total charitable donations made by the company during the fiscal year amounted to RMB 316,165 [186]. Strategic Initiatives and Future Outlook - The company aims to focus on health, cost-effectiveness, and product differentiation as key consumer decision factors in 2024 [44]. - The company will focus on high-quality development in 2024, leveraging market opportunities and emphasizing sustainable business practices [126]. - The company plans to explore new business opportunities to supplement and enhance its existing operations amid a challenging environment [128]. - The company aims to enhance revenue and reduce costs through six key initiatives, including supply chain optimization and digital efficiency improvements [125]. - The management team emphasized a commitment to sustainability, with plans to reduce carbon emissions by 20% by 2025 [150]. Management and Governance - The company has a strong management team with extensive experience in retail and strategic investment, including members from Alibaba Group and other notable firms [140][142][144]. - The board of directors includes experienced professionals with backgrounds in finance, economics, and retail management, ensuring strategic oversight [140][144]. - The company has maintained a strong governance structure with no reported interests or short positions held by directors or executives [198]. Supply Chain and Product Development - The company is developing its private label products, focusing on quality and health, and has introduced new self-owned brands to meet consumer demand [101]. - Supply chain optimization efforts include the replacement of inefficient suppliers and the introduction of new brands, enhancing competitive advantages and reducing procurement costs [102]. - The group aims to enhance supply chain quality and focus on developing private labels to improve competitiveness in the fresh goods sector [111]. Employee and Labor Management - The group has 25,735 employees as of December 31, 2023, with total labor costs approximately RMB 2,171.16 million [105]. - The group has implemented a core position contract system and dynamic personnel adjustments to improve operational efficiency and reduce labor costs [105]. - The group is focusing on talent acquisition and training, creating a shared platform for internal resource allocation to balance human resource gaps [107]. Market Expansion and Strategic Acquisitions - The company is actively exploring new market opportunities to diversify its revenue streams and reduce dependency on traditional retail channels [145]. - The company is considering strategic acquisitions to enhance its supply chain efficiency, with a budget of 2 billion RMB for potential deals [159]. - The company is expanding its market presence in Southeast Asia, targeting a 25% market share by 2025 [150].

Financial Performance - The group reported a net loss attributable to shareholders of approximately RMB 791 million, an increase in loss of approximately RMB 585 million year-on-year, with a net loss margin of approximately 3.62%, up 2.78 percentage points year-on-year [9]. - The total revenue for the year was RMB 21.836 billion, a decrease of 11.5% compared to RMB 24.681 billion in the previous year [39]. - The total comprehensive loss attributable to the company's shareholders for 2023 was RMB 791,317, compared to RMB 206,527 in 2022, representing an increase of 282.5% [47]. - The company reported a pre-tax loss of RMB 589,389 in 2023, compared to a pre-tax loss of RMB 23,572 in 2022, indicating a significant increase in losses [47]. - The net loss attributable to shareholders was RMB 791 million, an increase of 283.2% compared to RMB 207 million in the previous year [39]. - The operating loss was approximately RMB 228 million, with a loss attributable to shareholders of approximately RMB 791 million, resulting in a basic loss per share of RMB 0.71 [62]. - Basic loss per share for 2023 was RMB 0.71, compared to RMB 0.18 in 2022, indicating a worsening of the company's financial performance [47]. - The company reported a net loss attributable to shareholders for 2023 was RMB 791,317,000, compared to a loss of RMB 206,527,000 in 2022 [145]. Revenue and Segments - The supermarket segment recorded revenue of approximately RMB 10.514 billion, a year-on-year decrease of approximately RMB 177 million, accounting for about 48.2% of the group's total revenue [17]. - The convenience store segment achieved revenue of approximately RMB 1.587 billion, a year-on-year increase of approximately RMB 91 million, representing a growth of about 6.0% [21]. - The total revenue for the year 2023 was RMB 23,255,978 thousand, a decrease of 11.6% from RMB 26,301,850 thousand in 2022 [101]. - Revenue from the hypermarket segment fell to RMB 10,777,339,000 in 2023 from RMB 13,650,205,000 in 2022, a decrease of 21.5% [131]. - The total income from leasing activities amounted to RMB 483,467 thousand in 2023, up from RMB 438,257 thousand in 2022, representing an increase of 10.3% [89]. Store Operations - The total number of stores as of December 31, 2023, was 3,356, with a net increase of 4 stores compared to the end of 2022, and approximately 84.06% of the stores located in the Greater East China region [5]. - The group opened 337 new stores, including 107 direct-operated stores and 230 franchise stores, while closing 333 stores [32]. - The group opened 36 new convenience stores during the reporting period, including 12 directly operated and 24 franchised stores, while closing 104 stores [5]. - The total number of stores reached 3,356, with 337 new stores opened during the review period, including 2 large comprehensive supermarkets and 299 supermarkets [62]. Costs and Expenses - Distribution and selling costs and administrative expenses were approximately RMB 5.069 billion, a decrease of about RMB 435 million or 7.9% year-on-year [62]. - Total employee costs decreased to RMB 2,171,162,000 in 2023 from RMB 2,347,317,000 in 2022, a reduction of 7.5% [120]. - The distribution and sales costs decreased to approximately RMB 4.287 billion, down by about RMB 429 million or 9.1% compared to the previous year [159]. Assets and Liabilities - The company's net current liabilities increased to RMB 8,505,312, up from RMB 6,555,008 in 2022, indicating a rise in financial obligations [52]. - The total assets amounted to RMB 20.989 billion, down from RMB 22.989 billion in the previous year [65]. - The total liabilities were RMB 20.541 billion, compared to RMB 21.742 billion in the previous year [66]. - The company's cash and cash equivalents increased to RMB 1.35 billion in 2023, up from RMB 600 million in 2022, reflecting improved liquidity [151]. Joint Ventures and Other Income - The group reported a share of losses from joint ventures amounting to approximately RMB 361 million, an increase of RMB 250 million year-on-year [27]. - The company's share of losses from joint ventures was RMB (361,398) thousand in 2023, compared to RMB (111,526) thousand in 2022, indicating a substantial increase in losses from joint ventures [89]. - The total revenue from other income and gains was approximately RMB 508 million, reflecting a year-on-year increase of about RMB 37 million or 7.8% [158]. Strategic Initiatives - The group is focusing on community integration and enhancing store capabilities to improve customer attraction and operational efficiency [44]. - The group actively expanded its online sales strategies, achieving double-digit growth through enhanced user experience and product offerings [174]. - The group has initiated comprehensive digital transformation projects, significantly optimizing operational models and improving data accuracy and traceability [179]. - The group plans to focus on high-quality development in 2024, aiming to deepen reform and innovation to drive sustainable business growth [198]. Economic Environment - The overall economic environment in China showed resilience, with GDP growth of 5.2% in 2023, which may positively impact the company's future performance [152]. - The overall retail sales in the offline market decreased by 3.6% year-on-year, reflecting a cautious consumer spending trend [170].

Financial Performance - In the first half of 2023, the company's revenue was approximately RMB 11.772 billion, a decrease of about RMB 1.813 billion or 13.3% year-on-year[10]. - Gross profit for the period was approximately RMB 1.487 billion, down by about RMB 312 million or 17.3% year-on-year, with a gross margin of 12.63%[11]. - The company reported a pre-tax profit of approximately RMB 9 million, a decrease of about RMB 122 million year-on-year[19]. - The loss attributable to shareholders was approximately RMB 116.461 million, a decrease in profit of about RMB 130.865 million year-on-year, with a net loss margin of 0.99%[21]. - The company reported a net loss of RMB 70,986 for the six months ended June 30, 2023, compared to a profit of RMB 61,407 in the previous year[81]. - The company reported a total comprehensive loss of RMB 116,461,000 for the period, compared to a total comprehensive income of RMB 14,404,000 in the previous year[89]. - The company reported a net loss attributable to shareholders of RMB 2,275,000 for the six months ended June 30, 2023, compared to a profit of RMB 704,000 in the same period of 2022[102]. - The basic loss per share was RMB 0.104, compared to earnings of RMB 0.013 per share in the same period last year[81]. Revenue Breakdown - The large-scale comprehensive supermarket segment recorded revenue of approximately RMB 5.251 billion, a year-on-year decrease of approximately RMB 1.892 billion, representing a decline of 26.5%[25]. - The supermarket segment achieved revenue of approximately RMB 5.650 billion, an increase of approximately RMB 97 million, representing a year-on-year growth of 1.8%[28]. - The convenience store segment recorded revenue of approximately RMB 823 million, an increase of approximately RMB 118 million, representing a year-on-year growth of 16.7%[32]. - Revenue from merchandise sales was RMB 11,771,962 thousand, down 13.4% from RMB 13,585,003 thousand in the previous year[109]. - The performance of the hypermarket segment generated revenue of RMB 5,873,177 thousand, a decrease of 24.4% from RMB 7,773,972 thousand in the prior year[114]. - The supermarket segment reported revenue of RMB 6,038,883 thousand, an increase of 2.3% compared to RMB 5,905,912 thousand in the previous year[114]. - The convenience store segment showed revenue growth to RMB 852,375 thousand, up 16.8% from RMB 729,720 thousand[114]. Cost and Expenses - Distribution and selling costs were approximately RMB 2.181 billion, a decrease of about RMB 141 million or 6.1% year-on-year, accounting for 18.53% of revenue[15]. - Administrative expenses rose to approximately RMB 398 million, an increase of about RMB 21 million or 5.5% year-on-year, representing 3.38% of revenue[16]. - Total operating expenses decreased significantly to RMB 1,557,000 in 2023 from RMB 27,866,000 in 2022, a reduction of 94.4%[118]. - Interest expenses on lease liabilities decreased to RMB 111,559,000 in 2023 from RMB 126,530,000 in 2022, a decline of 11.87%[119]. Cash Flow and Assets - As of June 30, 2023, the group's cash and cash equivalents and time deposits amounted to approximately RMB 815,991.9 million, with a net inflow of approximately RMB 56,928.9 million during the review period, primarily from operating activities[22]. - The net cash generated from operating activities for the six months ended June 30, 2023, was RMB 702,387,000, a significant decline of 55.8% from RMB 1,586,891,000 in the same period of 2022[91]. - Total assets as of June 30, 2023, amounted to RMB 21,678,276, a decrease from RMB 22,988,706 as of December 31, 2022[84]. - The company’s total liabilities decreased to RMB 20,506,453,000 as of June 30, 2023, from RMB 21,742,435,000 as of December 31, 2022, indicating a reduction in overall debt levels[86]. Store Operations - In the first half of 2023, the company opened 141 new stores, including 46 direct-operated stores and 95 franchise stores, with 68.79% of new stores located in the Yangtze River Delta region[40]. - As of June 30, 2023, the company operated a total of 3,362 stores, with approximately 84.47% located in the East China region[41]. - The company closed 131 stores during the review period, including 33 direct-operated and 98 franchise stores[40]. Strategic Initiatives - The company is actively optimizing its leasing strategy, resulting in improved occupancy rates and increased leasing income[12]. - The company is focusing on optimizing product categories and enhancing the competitiveness of products, brands, and displays, with an emphasis on introducing new and trending products[44]. - The company is implementing a digital transformation project in 2023, focusing on enhancing product digitization, optimizing the supply chain, and upgrading the financial digital system[45]. - The company aims to improve operational efficiency by optimizing internal core business processes and enhancing management efficiency[47]. - The company is actively recruiting and training talent, creating a shared platform for talent exchange among subsidiaries[50]. Shareholder Information - As of June 30, 2023, the major shareholders include Shanghai Bailian Group holding approximately 20.03% of the company's shares, and Alibaba Group holding 18.00%[63]. - Bailian Group directly and indirectly holds 513,869,400 shares, representing 45.90% of the total share capital[65]. - Alibaba Group controls multiple entities that collectively own 201,528,000 shares, accounting for 18% of the total share capital[67]. Governance and Compliance - The audit committee reviewed the unaudited interim accounts for the six months ending June 30, 2023, with no disagreements on accounting principles or methods[71]. - The company confirmed compliance with the corporate governance code, except for certain deviations regarding the rotation of directors[73]. - Non-executive directors were absent from a board meeting held on March 28, 2023, due to other work commitments[73]. Market and Economic Environment - The company’s operating environment showed a GDP growth of 5.5% in China, but supermarket retail sales declined by 0.4% year-on-year due to intensified competition[9]. - The group launched several marketing campaigns, including the "Bailian 120th Anniversary" and "55 Shopping Festival," resulting in over 69.55 million brand media exposures and more than 1 million reads on hot topics[51].

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，概不會就本公告全部或任何 部份內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 （在中華人民共和國註冊成立的股份有限公司） 00980 （股份代號： ） 公佈截至二零二三年六月三十日止半年度業績 財務摘要 截至二零二三年六月三十日止，本集團： • 117.72 13.3% 12.2% 營業額達人民幣 億元，同比下降約 ，同店銷售同比下降約 。 26.5% 1.8% 其中大型綜合超市業態下降約 ，超級市場業態增長約 ，便利店業態 16.7% 增長約 。 • 14.87 17.3% 12.63% 毛利額約為人民幣 億元，同比下降約 ，毛利率約 。綜合收益 23.65% 1.37 率約 ，同比增加約 個百分點。 • 0.85 0.72% 0.41 經營盈利約為人民幣 億元，經營利潤率約為 ，同比下降約 個百 1.16 分點。歸屬於本公司的股東應佔虧損約為人民幣 億元。每股基本虧損人 0.10 民幣 元。 ...

Company Overview - Lianhua Supermarket has a total of 3,352 stores across 24 provinces and municipalities in China as of December 31, 2022[1]. - The company operates three main retail formats: large supermarkets, hypermarkets, and convenience stores, under various brands including "Century Lianhua" and "Lianhua Supermarket"[1]. - Lianhua Supermarket has been recognized as one of the "Outstanding Franchise Brands" by the China Chain Store & Franchise Association in recent years[1]. - The company maintained its leading position in the fast-moving consumer goods retail sector in China[1]. Financial Performance - In 2022, the company's total revenue was approximately RMB 24.681 billion, a year-on-year decrease of about 0.3%[28]. - The total loss for the year was approximately RMB 0.24 billion, reduced by RMB 2.5 billion compared to the previous year[28]. - The net loss attributable to shareholders was approximately RMB 2.12 billion, a decrease in loss of about RMB 2.11 billion year-on-year[28]. - The company's revenue for 2022 was approximately RMB 24.68 billion, a decrease of about RMB 0.78 billion or 0.3% compared to 2021[42]. - Gross profit for 2022 was approximately RMB 3.38 billion, an increase of about RMB 0.32 billion or 10.5% year-on-year, with a gross margin of 13.70%, up from 12.37% in the previous year[43]. - Other income decreased to approximately RMB 2.06 billion, down by about RMB 0.20 billion or 8.7% compared to the previous year[44]. - The company reported a net loss attributable to shareholders of approximately RMB 0.21 billion in 2022, an improvement from a loss of RMB 0.42 billion in 2021[1]. - The total assets amounted to approximately RMB 22.93 billion, while total liabilities were approximately RMB 21.74 billion, indicating a capital structure under pressure[37]. - The cash flow from operations improved significantly to approximately RMB 1.01 billion, compared to RMB 0.18 billion in 2021[37]. - The company maintained a current ratio of 0.60, indicating liquidity challenges compared to previous years[37]. - The average return on total assets was -0.93%, reflecting ongoing operational difficulties[37]. Pandemic Response and Community Support - The company has expanded its logistics capabilities, providing over 41,000 "Home Comfort Packages" in response to emergency supply demands during the Shanghai pandemic[14]. - Lianhua Supermarket has been involved in community support initiatives, including the distribution of over 113,100 "New Year Gift Packages" to citizens in quarantine during the pandemic[13]. - The company has established a leadership group for pandemic response, ensuring continuous supply of essential goods through its supply chain advantages[14]. - Lianhua Supermarket's logistics company operates 24/7 to meet urgent supply needs, demonstrating its operational resilience[14]. - In Q2 2022, the company achieved a supply guarantee amount of RMB 810 million for pandemic-related living materials[18]. - The company provided over RMB 1 billion in essential supplies during the pandemic, serving over 5,400 community committees and distributing 450,000 citizen gift packages[29]. - The company’s Jiangsu subsidiary provided emergency supplies totaling RMB 928,500 during a pandemic response, delivering 25,645 items[22]. - The company completed over 300,000 orders for epidemic prevention materials and achieved a total supply amount exceeding RMB 1 billion during the year[87]. Store Operations and Expansion - The company opened 348 new stores during the period, including 161 direct-operated and 187 franchised stores, while closing 275 stores[77]. - The net increase in supermarket outlets was 70, with 276 new openings and 206 closures[80]. - The total number of stores as of December 31, 2022, was 3,352, representing a net increase of 73 stores from the previous year[81]. - The company maintained a store renewal rate of 90% across its national network[77]. - The company opened the "New Standard Supermarket 3.0" model store, focusing on fresh produce and enhancing product quality[20]. - The company’s new store in Yiwu introduced 111 high-fit brands, including 23 first stores, to meet local consumer demands[24]. Digital Transformation and Marketing - The company launched its first "Metaverse" concept store, enhancing its digital presence[18]. - The "Light Up Dreams Dinner" campaign reached 2.08 million visits, a 96% year-on-year increase, and added 111,000 new members, a 160% increase[18]. - The company participated in the "Love Shopping Shanghai" electronic coupon initiative, with 594 stores involved, resulting in sales of RMB 156.4 million and government subsidies of RMB 58.93 million[20]. - The company is actively pursuing digital transformation projects to enhance operational efficiency and customer experience through advanced systems and intelligent hardware[88]. - The company plans to enhance its digital transformation strategy, allocating 500 million RMB for technology upgrades and digital marketing efforts[134]. Strategic Focus and Future Outlook - The company plans to focus on business transformation, category optimization, and system upgrades as part of its 2023 strategy[33]. - The company aims to integrate online and offline sales networks to achieve sustainable development in the retail sector[33]. - The management highlighted plans for market expansion and enhancing online business growth in response to changing consumer behavior[40]. - The company is focusing on integrating online and offline sales networks and enhancing the supply chain to improve operational efficiency[97]. - The company will implement a digital transformation strategy, including system upgrades and the establishment of a digital store framework[108]. - In 2023, the company will prioritize business development and expansion in key urban areas while optimizing supply chain and product categories[111]. - The company is exploring potential acquisitions to strengthen its market position, with a budget of 500 million allocated for this purpose[126]. - Overall, the company remains optimistic about future growth, driven by new strategies and market expansion efforts[126]. Shareholder Information and Corporate Governance - The company has not declared any interim or final dividends for the fiscal year 2022[9]. - The company proposed not to distribute a final dividend for the year ending December 31, 2022, based on its financial performance and other factors[163]. - As of December 31, 2022, the total number of issued shares was 1,119,600,000, with H-shares accounting for 372,600,000 shares, representing approximately 33.28% of the total share capital[173]. - The company confirmed that its public float complied with the listing rules during the review period[172]. - The company’s major shareholder, Bailian Group, directly and indirectly holds 45.90% of the company's shares, totaling 513,869,400 shares[184]. - The company’s board of directors and executives do not hold any shares or related interests that require disclosure under the Securities and Futures Ordinance as of December 31, 2022[180]. - The company must comply with regulatory requirements in China for the conversion of non-listed foreign shares into new H shares[181]. - The company has established a framework for resolving disputes between H shareholders and domestic shareholders through arbitration[178].

Pandemic Impact and Recovery - In the first half of 2022, the company's operations were severely impacted by the COVID-19 pandemic, particularly in April and May, with a significant decline in retail sales of 11.1% and 6.7% respectively[18]. - The company's operations in the Yangtze River Delta region, where 80% of its stores are located, were particularly affected by the pandemic, leading to temporary store closures[18]. - The overall GDP growth in Shanghai for the first quarter of 2022 was 3.1%, while the second quarter saw a significant decline of 13.7% due to the pandemic[18]. - The company emphasized the integration of logistics and supply chain management to ensure supply during the pandemic, showcasing its operational resilience[21]. - The company’s performance in the first half of 2022 was bolstered by effective supply chain management during the pandemic, which helped mitigate losses from store closures[116]. - The logistics faced severe challenges due to the Shanghai pandemic, but the group quickly adapted to restore efficiency[65]. - The group engaged in rent negotiations with tenants to mitigate losses due to store closures during the pandemic[64]. - The company is actively deploying emergency plans and prevention measures to ensure the quality and safety of supply during the pandemic[68]. Financial Performance - The group's revenue for the second quarter of 2022 was approximately RMB 57.15 billion, an increase of about RMB 1.13 billion, representing a year-on-year growth of approximately 2.0%[24]. - The group's total revenue for the first quarter of 2022 was approximately RMB 78.70 billion, an increase of about RMB 2.34 billion, representing a year-on-year growth of approximately 3.1%[24]. - The gross profit for the group during the review period was approximately RMB 17.99 billion, a decrease of about RMB 0.37 billion, primarily due to a reduction in subsidy income by approximately RMB 0.19 billion[24]. - The group's pre-tax profit for the review period was approximately RMB 1.31 billion, an increase of about RMB 0.06 billion, representing a year-on-year growth of approximately 5.2%[28]. - The company’s revenue for the six months ended June 30, 2022, was RMB 13,585,003 thousand, an increase of 2.6% compared to RMB 13,238,371 thousand for the same period in 2021[102]. - Gross profit for the same period was RMB 1,798,960 thousand, up from RMB 1,618,729 thousand, reflecting a gross margin improvement[102]. - The net profit attributable to the company's shareholders was RMB 13,700 thousand, a decrease from RMB 20,077 thousand in the previous year, indicating a decline of 31.8%[102]. - The company reported total comprehensive income of RMB 60,126 thousand for the period, consistent with the previous year's figure[102]. Store Operations and Expansion - The group opened 203 new stores in the first half of 2022, including 133 direct-operated stores and 70 franchise stores, with 172 new stores located in the Yangtze River Delta region, accounting for 84.73% of new openings[51]. - The group’s total number of stores reached 3,336, with approximately 84.95% located in the Greater East China region[52]. - The company faced significant operational challenges due to the pandemic, particularly in the Yangtze River Delta region, impacting store operations in Shanghai and surrounding areas[116]. - The convenience store segment reported a revenue of approximately RMB 452 million in Q1 2022, an increase of RMB 23 million year-on-year, but in Q2 2022, revenue decreased to approximately RMB 705 million, a decline of RMB 86 million year-on-year, accounting for about 5.2% of the group's total revenue[39]. Cost Management and Efficiency - The distribution and selling costs for the group were approximately RMB 23.22 billion, a decrease of about RMB 0.03 billion, representing a year-on-year decline of approximately 0.1%[26]. - The total labor expenditure was approximately RMB 1,194.15 million during the review period[60]. - The group focused on organizational restructuring to improve management efficiency and control personnel allocation[61]. - The company upgraded its comprehensive budget management and cost control system, enhancing the analysis and evaluation mechanisms[68]. - The total expenses of various business units showed a noticeable decline, with budget ratios and year-on-year comparisons both decreasing[68]. Strategic Initiatives - The company launched a series of promotional activities during the New Year sales season, including "Opening Red Promotions" and "Billion Red Packet Celebrations," which significantly enhanced sales performance[20]. - The group continues to optimize its supply chain by focusing on high-quality new product introductions and implementing a product elimination system for underperforming items[56]. - The group implemented a digital transformation strategy, accelerating the rollout of digital stores nationwide[59]. - The group strengthened its member system and private traffic operations, optimizing member marketing through big data, leading to a significant decrease in total expenses across various business units after absorbing the impact of pandemic costs[68]. Acquisitions and Investments - The acquisition of a 60% stake in Zhejiang Bailian Supermarket Co., Ltd. was completed in January 2022 for a cash consideration of RMB 180,000,000[183][184]. - The revenue contribution from Zhejiang Bailian Supermarket for the period was RMB 292,579,000, with a loss of RMB 21,000 recorded in the interim profit[193]. - The company reported a significant increase in investment and financial cooperation with subsidiaries, amounting to RMB 993,490 thousand as of June 30, 2022, compared to RMB 794,640 thousand as of December 31, 2021, representing a growth of approximately 25%[173]. Shareholder and Governance - The board of directors proposed not to declare an interim dividend for the period ending June 30, 2022[85]. - The company has adopted the Securities Trading Standards Code as its internal compliance guideline, ensuring all directors and supervisors adhered to the code during the review period[85]. - The board of directors has not established a clear mechanism for the rotation of directors, deviating from the code provisions[88]. - Non-executive directors were absent from certain board meetings due to other work commitments, but decisions were made and communicated to all directors[88].

Store Operations and Expansion - The total number of stores operated by Lianhua Supermarket has reached 3,279, covering 23 provinces and municipalities in China[4]. - The company aims to continue its expansion strategy through direct operation, franchising, and acquisitions to strengthen its market position[4]. - The total number of partner stores reached 303 by the end of 2021, indicating ongoing expansion efforts[50]. - The total number of new stores opened during the period was 336, including 70 direct-operated stores and 266 franchise stores[99]. - The company closed 249 stores during the period, including 54 direct-operated stores and 195 franchise stores[99]. - As of December 31, 2021, the company had a total of 3,279 stores, an increase of 87 stores compared to the end of 2020, with approximately 84.90% located in the Greater East China region[110]. - The supermarket segment opened 214 new stores, including 44 direct-operated and 170 franchised stores, and closed 147 stores, resulting in a net increase of 67 stores[104]. - The convenience store segment opened 117 new stores, with 21 direct-operated and 96 franchised, while closing 97 stores, leading to a net increase of 20 stores[106]. Financial Performance - In 2021, the company recorded a revenue of approximately RMB 24.76 billion, a year-on-year decrease of about 6.0%[40]. - The net loss attributable to shareholders for the year was approximately RMB 423 million, an increase in loss of about RMB 103 million compared to the previous year[40]. - The gross profit for 2021 was RMB 3,061,729, resulting in a gross margin of 12.37%, down from 13.43% in 2020[54]. - The company reported a pre-tax loss of approximately RMB 274 million, an increase in loss of about RMB 259 million year-on-year[72]. - The net loss attributable to shareholders was approximately RMB 422.78 million, an increase in loss of about RMB 103.49 million or 32.4% year-on-year[76]. - The company’s shareholder equity decreased from approximately RMB 1.45 billion to approximately RMB 1.03 billion, primarily due to a loss of approximately RMB 422.78 million during the period[91]. - The company reported a significant increase in revenue, achieving a total of 51 million in the latest fiscal year, representing a year-over-year growth of 15%[186]. - The company reported a significant increase in revenue, achieving a year-over-year growth of 15% in Q2 2023, totaling $1.2 billion[196]. Digital Transformation and Technology - The company has achieved full digital coverage of stores in Shanghai by the end of 2021, with pilot promotions in Jiangsu and Anhui regions[44]. - The company is focusing on digital transformation, including cloud infrastructure and business data governance, to improve operational efficiency and data sharing[145]. - The company launched the "Lianhua Group Purchase" mini-program, a new business model for online ordering and in-store pickup[22]. - The company has focused on digital store system construction and operational upgrades, enhancing delivery efficiency and order fulfillment capabilities[47]. - The company is enhancing its digital systems to optimize workflows and improve operational efficiency, reducing reliance on manual processes[121]. - The company is investing $50 million in R&D for new technologies aimed at enhancing customer experience[196]. Supply Chain and Logistics - The company is focused on enhancing its logistics and supply chain capabilities to improve efficiency and customer satisfaction[18]. - The company aims to enhance its supply chain and integrate online and offline sales networks as part of its strategic focus for 2022[50]. - The company aims to strengthen its supply chain capabilities by building a cold chain logistics system to support the expansion of its franchise business[106]. - The company has committed to improving the efficiency of its supply chain through the integration of logistics and financial support systems[130]. - The company expanded third-party logistics operations and improved delivery response times to support business transformation[122]. Marketing and Customer Engagement - The company implemented a series of large-scale marketing activities to enhance brand awareness and consumer experience, including "Harvest 1 Yuan Purchase" and "30th Anniversary Weibo Brand Interaction"[44]. - The company developed a self-media ecosystem, optimizing marketing tools such as WeChat and video live streaming, which contributed to membership growth[119]. - The company aims to enhance customer engagement through improved service delivery, targeting a 15% increase in customer satisfaction scores[186]. - A new marketing strategy is set to roll out, aiming to increase brand awareness by 30% over the next six months[196]. Community and Social Responsibility - Lianhua Supermarket has been involved in various community recognition events, highlighting its commitment to social responsibility and community development[17]. - The company participated in emergency supply tasks in Shaoxing, completing 7 missions and supplying over 260,000 items[32]. - The company was recognized as a "Key Backbone Enterprise for Ensuring Supply and Stabilizing Prices" in Hangzhou for the 2021-2022 period[30]. Organizational Structure and Human Resources - The group reduced its total workforce to 27,780 employees, a decrease of 3,588 employees during the review period[125]. - The company faces challenges such as an inefficient organizational structure, aging management, and insufficient operational capabilities among store partners, which impact employee motivation[142]. - The company plans to enhance organizational efficiency through restructuring, optimizing staffing models, and improving incentive mechanisms to boost employee engagement[143]. - The company is focusing on optimizing employee compensation management to enhance frontline staff income and performance incentives[128]. Strategic Acquisitions - The company completed the acquisition of Zhujing Yibai Supermarket Co., marking a significant step in market expansion[27]. - Lianhua Huashang acquired 60% of Zhejiang Bailian Supermarket Co., Ltd. for RMB 180 million, enhancing its market presence in Zhuji City[156]. - The acquisition allows Lianhua Huashang to leverage Bailian Supermarket's strong brand recognition and market share in Zhuji, aiming to strengthen regional competitiveness[156].

Economic Performance - In the first half of 2021, China's GDP grew by 12.7% year-on-year, with an average growth rate of 5.3% over two years[17]. - The total retail sales of consumer goods in China increased by 23.0% year-on-year in the first half of 2021, contributing 61.7% to economic growth[18]. - Per capita disposable income in China rose by 12.0% in real terms in the first half of 2021, with an average growth rate of 5.2% over two years[18]. - The online retail sales in China grew by 23.2% year-on-year in the first half of 2021, with physical goods online retail sales increasing by 18.7%[19]. - The proportion of service consumption in total household consumption reached 52.5% in the first half of 2021, an increase of 3.2 percentage points[18]. Financial Performance - The group's revenue for the review period was approximately RMB 13.238 billion, a decrease of about RMB 799 million, down approximately 5.7% year-on-year[21]. - The group's gross profit amounted to approximately RMB 1.619 billion, a decrease of about RMB 405 million, representing a decline of 20.0% compared to the previous year[21]. - Same-store sales decreased by approximately 7.90% year-on-year, primarily impacted by the COVID-19 pandemic[21]. - The group's pre-tax profit for the review period was approximately RMB 125 million, a decrease of about RMB 138 million, down approximately 52.5% year-on-year[23]. - The company reported a net profit of RMB 60,120 thousand, a decline of 58.8% compared to RMB 146,030 thousand in the previous year[91]. - Basic earnings per share decreased to RMB 0.018 from RMB 0.052, reflecting a 65.4% drop[91]. - The company reported a total comprehensive income of RMB 20,077,000 for the six months ended June 30, 2021, compared to RMB 58,327,000 for the same period in 2020, reflecting a decrease of about 65.6%[98]. Segment Performance - The revenue from the large-scale comprehensive supermarket segment was approximately RMB 7.250 billion, a year-on-year decline of about 9.6%, accounting for approximately 54.8% of the group's total revenue[25]. - The supermarket segment recorded a revenue of approximately RMB 5,098.65 million, a decrease of about RMB 37.60 million or 0.7% year-on-year, accounting for approximately 38.5% of the group's total revenue[26]. - The convenience store segment achieved a revenue of approximately RMB 790.57 million, an increase of about 0.4% year-on-year, with same-store sales rising by approximately 32.99%[29]. Cost and Expenses - Distribution and selling costs were approximately RMB 2.325 billion, a decrease of about RMB 0.038 billion, down approximately 1.6% year-on-year[23]. - Administrative expenses were approximately RMB 423 million, an increase of about RMB 8 million, up approximately 1.8% year-on-year[23]. - The overall operating profit margin for the supermarket segment decreased by 0.73 percentage points to approximately 1.31%[26]. Store Operations - The group opened 161 new stores during the period, including 34 direct-operated and 127 franchise stores, with 79.5% located in the Yangtze River Delta region[36]. - The group closed 99 stores during the period, including 23 direct-operated and 76 franchise stores, resulting in a net increase of 40 stores in the supermarket segment[37]. - As of June 30, 2021, the group had a total of 3,254 stores, with approximately 85.3% located in the East China region[40]. Supply Chain and Product Strategy - The group enhanced its supply chain integration, optimizing product categories and focusing on "quality fresh" offerings[42]. - The group actively adjusted its product category structure, controlling stockout rates and shortening turnover days to enhance consumer perception and sales of core categories[42]. - The group launched its own brand series, including "Lianhua Quality," "Youxiang," and "Youpin Life," to strengthen market competitiveness[44]. Marketing and Consumer Engagement - The group improved its marketing strategies, focusing on consumer engagement and enhancing the effectiveness of promotional activities through collaboration with JBP suppliers[47]. - The group emphasized the development of its membership system and private traffic operations, increasing new member acquisition through online channels[51]. - The group aims to create a unified brand strategy to enhance brand awareness and improve consumer shopping experiences[49]. Digital Transformation - The group focused on digital store transformation, enhancing operational efficiency through the implementation of a digital store system and advanced technologies like big data and AI[56]. - The company aims to enhance its digital systems across operations, procurement, sales, distribution, and finance, improving operational efficiency in large supermarkets[63]. - The digitalization of supermarket stores will be consolidated, maintaining efficiency gains and gradually covering all national stores[63]. Future Outlook - In the second half of 2021, the group aims to enhance overall sales and operational capabilities, with a focus on expanding store locations and optimizing rental costs[60]. - The group anticipates a positive trend in the consumer market as consumer confidence gradually improves in the second half of 2021[58]. - The company has not disclosed any specific future outlook or guidance in the provided documents[87]. Governance and Compliance - The audit committee reviewed the group's unaudited interim accounts for the six months ended June 30, 2021, and found them compliant with applicable accounting standards[78]. - The company has adopted the Securities Trading Code as a guideline for all directors and supervisors regarding securities trading[78]. - Non-listed foreign shareholders have the same rights as domestic shareholders, including the right to attend and vote at shareholder meetings[76].

Company Overview - Lianhua Supermarket operates a total of 3,192 stores across 20 provinces and municipalities in China as of December 31, 2020[2]. - The company has expanded its retail formats to include large supermarkets, hypermarkets, and convenience stores under various brands, continuously recognized as one of China's excellent franchise brands[2]. - Lianhua Supermarket was the first Chinese retail chain to be listed on the Hong Kong Stock Exchange on June 27, 2003[2]. - The total number of stores includes various formats such as Century Lianhua, Lianhua Supermarket, Hualian Supermarket, and Lianhua Express[2]. - The company has a registered office in Shanghai, China, and is listed under stock code 0980 on the Hong Kong Stock Exchange[7]. - The company has a total issued H shares of 372,600,000 shares[7]. Financial Performance - The company reported a net loss attributable to shareholders of approximately RMB 319 million for the year, a year-on-year reduction in loss of about RMB 59 million, with a loss per share of approximately RMB 0.29[25]. - The company recorded a revenue of approximately RMB 26.331 billion in 2020, indicating continuous improvement in overall business performance[26]. - The company's revenue for 2020 was RMB 26,331,155 thousand, an increase from RMB 25,859,198 thousand in 2019, representing a growth of approximately 1.83%[40]. - The gross profit for 2020 was RMB 3,535,291 thousand, with a gross profit margin of 13.43%, slightly down from 13.61% in 2019[40]. - The company reported a net loss attributable to shareholders of RMB 319,286 thousand in 2020, compared to a loss of RMB 378,301 thousand in 2019, indicating an improvement in financial performance[40]. - The total assets as of December 31, 2020, were RMB 23,220,754 thousand, a slight decrease from RMB 23,552,460 thousand in 2019[42]. - The total liabilities were RMB 21,465,660 thousand, remaining relatively stable compared to RMB 21,505,954 thousand in 2019[42]. - The average return on total assets was -1.37% in 2020, an improvement from -1.86% in 2019[42]. Strategic Initiatives - The company has established a strategic partnership with Bailian Group, marking the first commercial project in the Lingang New Area of the China (Shanghai) Pilot Free Trade Zone[9]. - The company plans to focus on three key strategies in 2021: comprehensive promotion of all-domain sales, acceleration of core category consumer perception and sales enhancement, and organizational transformation with digital operations[36]. - The company aims to transform its large supermarkets into community service centers, enhancing social experiences and community services[28]. - The company is committed to digital transformation and innovation in response to new consumer trends, including online consumption and smart retail[33]. - The company aims to enhance operational efficiency and improve user experience through a new retail model focused on community service and last-mile delivery[90]. Community and Social Responsibility - During the pandemic, the company supplied around 10,000 bottles of medical alcohol as a low-cost disinfectant in Wuhu, becoming the first supermarket in the city to serve as a government material sales point[10]. - The company received the "Outstanding Contribution Enterprise" award from the Zhejiang Provincial Chain Operation Association for its efforts during the pandemic[16]. - The company was awarded the title of "Advanced Collective in Fighting COVID-19" by the Hangzhou Municipal Committee and Government[19]. - The company reported a total charitable donation of RMB 451,994 during the fiscal year[196]. Digital Transformation and Innovation - The company completed the digital system rollout in 55 stores by the end of 2020, marking its entry into the digital era[14]. - The company has implemented a full-process quality monitoring system for its private brands, ensuring unified management from quality control to packaging design[102]. - The company established a comprehensive eCRM membership system driven by big data, enhancing member engagement and consumption frequency[110]. - The group is accelerating the digitalization of store management, with a pilot program launched in Shanghai for digital store systems[114]. Market Expansion and Product Development - The company is actively developing its private label brands, focusing on fresh products and increasing their penetration in core categories[101]. - The company is exploring new business models, including community fresh experience stores and selected supermarkets, to cater to evolving consumer demands[92]. - The company is considering strategic acquisitions to enhance its supply chain efficiency, with a budget of 2 billion RMB for potential deals[157]. - Market expansion plans include entering three new provinces, which are projected to increase market share by 10%[157]. Operational Efficiency - The company has implemented a contract management system to enhance its sustainable development foundation, allowing for a more flexible workforce[33]. - The logistics efficiency and service support have been strengthened, ensuring smooth operations across all business segments[29]. - The company aims to improve operational efficiency, targeting a reduction in costs by 5% through process optimization[157]. - The company aims to enhance its supply chain integration and provide high-quality products across all categories, focusing on the vision of becoming a comprehensive retail provider in China[137]. Employee and Talent Development - The total employee count as of December 31, 2020, was 31,368, a reduction of 3,870 employees during the review period, with total labor costs amounting to approximately RMB 2,533.856 million[112]. - The group focused on enhancing the training and development of backup and innovative talents, completing further iterations of the course system[113]. - The management team includes experienced professionals with backgrounds in finance and operations, enhancing the company's strategic capabilities[180][181]. Future Outlook - The company provided a positive outlook for the next quarter, projecting a revenue growth of 12% to 15%[157]. - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[169]. - The management team emphasized the importance of sustainability initiatives, planning to invest 300 million RMB in eco-friendly practices[157].