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].

Financial Performance - For the first half of 2020, the company's revenue was approximately RMB 14.037 billion, an increase of about RMB 549 million, or 4.1% year-on-year, with same-store sales rising by approximately 1.23%[12] - The company's gross profit amounted to approximately RMB 2.024 billion, an increase of about RMB 201 million, or 11.1% year-on-year, resulting in a gross margin of approximately 14.42%, up from 13.51% in the same period last year[17] - The group's pre-tax profit was approximately RMB 263 million, a decrease of approximately RMB 3 million year-on-year, or 1.1%[26] - The net profit attributable to shareholders was approximately RMB 58.3 million, an increase of approximately RMB 14.4 million year-on-year, or 32.7%[28] - The company's basic and diluted earnings per share for the period were RMB 0.052, compared to RMB 0.039 for the same period last year[114] - The company reported a total comprehensive income of RMB 58,327 for the period, compared to RMB 43,965 in the previous period, an increase of 32.5%[121] Revenue Breakdown - The supermarket sector saw a revenue increase of approximately RMB 491 million, or 10.6% year-on-year, due to the transformation of store networks in the Shanghai area and the promotion of the store partner program[12] - The performance of the hypermarket segment generated revenue of RMB 8,634,011,000, while the supermarket segment contributed RMB 5,439,866,000, reflecting a year-on-year increase of 9.45% and 9.46% respectively[140] - The convenience store segment reported a revenue of approximately RMB 78.8 million, a decrease of approximately 16.5% year-on-year[37] - The convenience store segment reported a revenue of RMB 822,742,000, down from RMB 986,441,000 in the previous year, showing a decline of approximately 16.63%[140] Cost Management - Distribution and selling costs were approximately RMB 2.363 billion, a decrease of about RMB 225 million, or 8.7% year-on-year, accounting for 16.83% of revenue, down by 2.35 percentage points[17] - Administrative expenses were approximately RMB 416 million, an increase of about RMB 1 million, or 0.1% year-on-year, representing 2.96% of revenue, a decrease of 0.12 percentage points[18] - The company’s financial costs decreased to RMB 148,708 thousand from RMB 185,778 thousand, showing improved cost management[114] Digital Transformation and E-commerce - The company recognizes the importance of digital transformation as a necessary choice for competition in the retail sector, especially in light of the pandemic's impact on consumer behavior[11] - Online retail sales in China grew by 7.3% year-on-year in the first half of 2020, with physical goods online retail sales increasing by 14.3%, accounting for 25.2% of total retail sales[11] - The supermarket segment is leveraging digital integration and operational optimization to improve online sales capabilities and customer experience[48] - Online sales achieved double-digit growth, driven by improved supply chain and category development for home delivery services[50] Store Operations and Expansion - The group opened 135 new stores during the review period, including 26 directly operated stores and 109 franchise stores, with 73.3% of new stores located in the Yangtze River Delta region[46] - The supermarket segment opened 95 new stores, netting an increase of 45 stores after closing 50, with a focus on enhancing operational efficiency and fresh food capabilities[49] - The convenience store segment saw a net decrease of 58 stores, closing 97 while opening only 39, emphasizing stability and cost reduction strategies[50] - The group maintained a total of 3,339 stores as of June 30, 2020, with approximately 82.3% located in the East China region[50] Economic Environment - The overall economic environment in China faced challenges, with GDP declining by 1.6% year-on-year in the first half of 2020, but showing signs of recovery with a 3.2% growth in the second quarter[13] - The average disposable income of residents in China decreased by 1.3% year-on-year, while per capita consumption expenditure fell by 9.3%[14] - The COVID-19 pandemic has led to increased demand for essential products sold by the group, despite the negative impact on the global economy[129] Shareholder Information - As of June 30, 2020, the company had a significant shareholder, Bailian Group, holding approximately 45.90% of the shares[82] - Alibaba Group Holding Limited and its subsidiaries collectively hold 18% of the company's shares[83] - The company reported no interim dividend for the six months ended June 30, 2020[91] Compliance and Governance - The audit committee confirmed that the interim financial statements for the six months ended June 30, 2020, comply with applicable accounting standards and regulations[93] - The company confirmed compliance with the Corporate Governance Code, except for deviations regarding the rotation of directors[100] - The company has adopted the Securities Trading Standards Code for all directors and supervisors since July 1, 2020, with full compliance reported[95] Future Outlook and Strategies - The company plans to enhance its store formats, focusing on transforming large supermarkets into community service centers to improve overall efficiency[69] - The company aims to optimize its supply chain integration, leveraging big data and AI technologies to enhance operational capabilities and support new retail digital operations[67] - The company is committed to accelerating the growth of its home delivery business by enhancing fresh product offerings and online-offline collaboration[70] - The company will implement consumer-oriented S-level marketing across various business formats, establishing a comprehensive eCRM membership system[73]

Company Overview - Lianhua Supermarket operates a total of 3,352 stores across 21 provinces and municipalities in China, maintaining its leading position in the fast-moving consumer goods retail sector[2]. - The company has expanded its retail formats to include large comprehensive supermarkets, supermarkets, 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 was listed on the Hong Kong Stock Exchange on June 27, 2003, becoming the first Chinese retail chain to do so[2]. - Lianhua Supermarket has a total of 372.6 million H shares issued[12]. - The company has a registered office located in Shanghai, China, and its main operational location in Hong Kong[12]. Financial Performance - The company achieved a revenue of approximately RMB 25.9 billion in 2019, marking a year-on-year increase of about 1.9%[41]. - The operating loss for the year was approximately RMB 32 million, while the loss attributable to shareholders was around RMB 378 million, equating to a loss per share of RMB 0.34[41]. - In 2019, the total revenue was RMB 25,859,198, showing an increase from RMB 25,389,082 in 2018[60]. - The gross profit for 2019 was RMB 3,518,840, with a gross margin of 13.61%[60]. - The net loss attributable to shareholders was RMB (378,301), with a net loss margin of (1.46)%[60]. - The company's net asset value as of December 31, 2019, was approximately RMB 2,046.51 million, a decrease of about 16.8% from RMB 2,459.93 million in 2018[63]. - Total assets increased to approximately RMB 23,552.46 million, up about 36.9% from RMB 17,190.11 million in 2018[63]. - Total liabilities rose to approximately RMB 21,505.95 million, an increase of about 46.0% from RMB 14,730.18 million in 2018[63]. Strategic Initiatives - The company continues to focus on expanding its brand presence and enhancing its supply chain capabilities through innovative projects[17]. - Lianhua's strategic initiatives include enhancing customer experience and operational efficiency through technology and logistics improvements[17]. - The company plans to enhance its supply chain and accelerate the transformation of large supermarkets[52]. - The focus for 2020 includes organizational reform and improving operational efficiency[53]. - The company aims to develop a multi-format and digital new retail strategy to improve retail efficiency[52]. - The company is committed to building a consumer demand-oriented corporate culture and enhancing employee engagement through performance-based incentives[146]. Store Expansion and Formats - A total of 316 new stores were opened, with 106 being directly operated and 210 franchised, while 335 stores were closed, resulting in a net decrease of 19 stores compared to the end of 2018[105][112]. - The supermarket segment opened 250 new stores, including 88 directly operated and 162 franchised, while closing 139 stores, achieving a net increase of 111 stores[109]. - Lianhua's discount concept store in Hangzhou has officially opened, marking a new retail format[21]. - Lianhua's "Lianhua Whale Selection" store opened, representing a new retail format trial in digital Hangzhou[22]. - Lianhua Supermarket's "Wuan Food Collection" experience store has opened in Shanghai, combining supermarket, dining, and processing[30]. Awards and Recognition - The company has received various awards for its commitment to integrity and food safety in the retail sector[14][15]. - Lianhua was awarded the "Outstanding Franchise Brand" by the Zhejiang Chain Operation Association[32]. - Lianhua's logistics supply chain optimization project won the "Best Practice Case Award" at the 2019 China Retail Supply Chain Annual Conference[19]. - The company received two prestigious awards from Transform Magazine for "Best Brand Visual Performance - Retail Industry Gold Award" and "Best Brand Building Internal Communication Silver Award"[43]. Digital Transformation and Innovation - The company launched the "Lianhua Brand Renewal" project in 2018, focusing on consumer insight analysis and brand positioning to enhance consumer connection[42]. - The company is focusing on digital transformation by developing new digital platforms for customer engagement and sales growth[117]. - The company is integrating business support platforms and optimizing big data platforms to enhance information security and support new retail digital management capabilities[158]. - The company is actively promoting its private label brands, which have shown continuous growth and increased sales share, contributing to overall revenue improvement[124]. Community and Social Responsibility - The "Love Charity" project continues to promote social responsibility and community support[50]. - Lianhua's community fresh food model store in Beiyuan has opened, effectively utilizing cloud data for targeted customer service[19]. - Lianhua's community business center in Hangzhou has opened, focusing on a new model for community commercial centers[32]. Leadership and Management - The company has appointed several experienced executives, including Mr. Liang Baolong as Deputy General Manager since March 2012, who has extensive experience in logistics and management[194]. - The management team collectively brings decades of experience from various reputable companies in the retail and logistics sectors, which is expected to drive future growth[194][195][197]. - The strategic appointments aim to strengthen the company's operational capabilities and market competitiveness[195]. Market Outlook and Challenges - The market competition is expected to intensify, with pressures from cost increases and structural adjustments[52]. - The group is facing risks related to new store development, with longer cultivation periods and rising rental costs impacting profitability[137]. - The group anticipates increased vacancy rates in physical stores due to changing consumer habits and challenges in rent collection[140]. - The company anticipates stable growth in consumer spending, driven by consumption upgrades, which will support economic growth in 2020[150].

Economic Environment - In the first half of 2019, the company's revenue growth was impacted by a 6.3% increase in GDP, which was a 0.2 percentage point decrease compared to the previous year[11] - The retail sales of consumer goods in China increased by 8.4% year-on-year in nominal terms, but this was a 1.0 percentage point decline from the previous year[11] - Supermarkets, department stores, specialty stores, and convenience stores saw retail sales growth of 7.4%, 1.5%, 5.3%, and 3.0% respectively, all of which were lower than the previous year's growth rates[11] - The contribution rate of consumption to economic growth exceeded 60% in the first half of 2019, indicating a strong reliance on consumer spending[11] - The average disposable income of residents increased by 6.5% in the first half of 2019, indicating a positive trend in consumer purchasing power[11] - The overall economic indicators are operating within a reasonable range, suggesting stability in the macroeconomic environment[11] Company Performance - The group's revenue for the first half of 2019 was approximately RMB 13.488 billion, an increase of about RMB 409 million or 3.1% year-on-year[13] - Other income for the group was approximately RMB 1.216 billion, an increase of about RMB 98 million or 8.7% year-on-year, mainly due to increased income from suppliers[13] - Gross profit for the group was approximately RMB 1.822 billion, a decrease of about RMB 64 million or 3.4% year-on-year, with a gross margin of 13.51%, down 0.91 percentage points from the previous year[13] - The group's profit attributable to shareholders was approximately RMB 43.965 million, an increase of about RMB 4.595 million or 11.7% year-on-year[16] - EBITDA for the group was approximately RMB 1.192 billion, an increase of about RMB 740 million or 163.7% year-on-year[16] - The group's pre-tax profit was approximately RMB 266 million, an increase of about RMB 26 million or 11.0% year-on-year[16] Segment Performance - The large-scale supermarket segment recorded revenue of approximately RMB 7.850 billion, accounting for 58.2% of the group's total revenue, with a year-on-year increase of 0.2%[18] - The operating profit margin for the large-scale supermarket segment was approximately 3.90%, an increase of 0.89 percentage points year-on-year[20] - The supermarket segment recorded revenue of approximately RMB 464,476.7 million, accounting for about 34.4% of the group's total revenue, with a year-on-year increase of approximately RMB 38,829.0 million, or 9.1%[21] - Same-store sales in the supermarket segment increased by approximately 1.20% year-on-year[21] - The gross profit margin for the supermarket segment decreased by 0.45 percentage points to 13.38%[24] - The convenience store segment achieved revenue of approximately RMB 94,382.7 million, representing about 7.0% of the group's total revenue, with a year-on-year increase of approximately 0.4%[25] - The convenience store segment reported an operating loss of approximately RMB 7,465.2 million, an increase in loss of approximately RMB 426.9 million year-on-year[25] Store Expansion and Operations - The group opened 124 new stores in the first half of 2019, including 4 large supermarkets and 43 supermarkets and convenience stores[34] - The total number of stores as of June 30, 2019, was 3,401, with a net increase of 30 stores compared to the end of 2018[37] - The group has no bank borrowings and no pledged assets as of June 30, 2019[28] Strategic Initiatives - The company is focusing on enhancing the consumer experience through innovative offline retail strategies, which are becoming new growth points for business[11] - The company plans to expand its market presence by leveraging new retail models that integrate online and offline shopping experiences[11] - The company is focusing on sustainable growth in the fresh produce category, establishing a nationwide integrated procurement platform to enhance core cost advantages and optimize product structure[41] - The company is enhancing its private label marketing strategy by creating a multi-dimensional shopping experience and increasing brand engagement through storytelling and quality emphasis[46] - The company is actively developing cross-industry alliances and partnerships with payment platforms to create a diversified marketing network[51] - The company is committed to enhancing customer service standards and operational efficiency, aligning its retail functions with new retail concepts to better serve consumers[48] Financial Position - The company's total assets as of June 30, 2019, amounted to RMB 23,264,512 thousand, an increase from RMB 17,190,110 thousand as of December 31, 2018[104] - The company's equity attributable to shareholders was RMB 2,194,219 thousand, up from RMB 2,156,997 thousand at the end of 2018[106] - The company reported a significant increase in cash and cash equivalents, totaling RMB 1,844,133 thousand, down from RMB 2,661,100 thousand at the end of 2018[104] - The company's net current liabilities reached RMB 4,414,419,000 as of June 30, 2019, up from RMB 3,282,693,000 as of December 31, 2018[118] Compliance and Governance - The audit committee confirmed that the interim accounts for the six months ending June 30, 2019, comply with applicable accounting standards and regulations[88] - The company has adopted the Securities Trading Standards Code for all directors' securities transactions, with full compliance reported during the review period[88] - The company has complied with all provisions of the Corporate Governance Code, except for certain deviations regarding the rotation of directors[88] Accounting Standards - The group has adopted the new and revised Hong Kong Financial Reporting Standards, effective from January 1, 2019, which did not have a significant impact on the financial performance and position for the current and prior periods[120] - The application of HKFRS 16 has resulted in significant changes in the accounting treatment of leases, impacting the financial statements[129] - The company confirmed the recognition of right-of-use assets and related lease liabilities under HKFRS 16, with a total lease liability of RMB 7,961,049,000 as of January 1, 2019[144] Shareholder Information - As of June 30, 2019, the major shareholder, Bailian Group Co., Ltd., holds approximately 51.16% of Bailian Shares, translating to 513,869,400 shares, which represents 45.90% of the total voting rights[74] - Alibaba Group Holding Limited indirectly owns 201,528,000 shares of the company, accounting for 18% of the voting rights[75] - The company did not declare an interim dividend for the six months ending June 30, 2019[85]