Financial Performance - AEON Stores (Hong Kong) reported total revenue of HKD 8,692,870, a decrease of 9.2% from HKD 9,571,321 in 2022[2] - The company recorded a net loss of HKD 187,802, compared to a net loss of HKD 224,716 in the previous year, representing a 16.4% improvement[3] - Total comprehensive loss for the year was HKD 185,913, down from HKD 207,876 in 2022, indicating a 10.6% reduction[3] - The loss per share improved to HKD 72.56 from HKD 84.57, a decrease of 14.5%[2] - The company reported a pre-tax loss of HKD 185,280,000 for the year ended December 31, 2023, compared to a pre-tax loss of HKD 219,518,000 for the year ended December 31, 2022[17][18] - The adjusted EBITDA for the year was a loss of HKD 157.8 million, worsening from a loss of HKD 60.8 million in 2022[45] - The adjusted EBITDA for 2023 was reported at HKD (157,811) thousand, compared to HKD (60,831) thousand in 2022, indicating a worsening performance[49] Assets and Liabilities - Non-current assets decreased to HKD 3,213,060 from HKD 3,502,113, reflecting a decline of 8.3%[5] - Current assets also fell to HKD 2,365,946 from HKD 2,535,405, a decrease of 6.7%[5] - The company's total liabilities decreased to HKD 3,049,656 from HKD 3,151,152, a reduction of 3.2%[5] - As of December 31, 2023, the total lease liabilities were HKD 3,208.8 million, a decrease from HKD 3,481.3 million in 2022[47] - As of December 31, 2023, the current liabilities exceeded current assets by HKD 683.7 million, compared to HKD 615.8 million in 2022[47] Revenue Breakdown - Direct sales in Hong Kong amounted to HKD 3,842,063,000, while in Mainland China, it was HKD 4,324,963,000, contributing to a total of HKD 8,167,026,000 in direct sales[12] - Franchise sales revenue reached HKD 525,844,000, with HKD 298,804,000 from Hong Kong and HKD 227,040,000 from Mainland China[12] - The Hong Kong business recorded a revenue decline of 9.7% to HKD 4,140.9 million, with a segment loss of HKD 149.9 million[36] - The mainland China business generated revenue of HKD 4,552 million, down from HKD 4,986 million in 2022, with a loss of HKD 61.5 million, an improvement from a loss of HKD 117.5 million in the previous year[37] Cost Management - Total other income for 2023 was HKD 483,092,000, slightly down from HKD 483,692,000 in 2022, with a notable decrease in rental income from investment properties[21] - Government subsidies recognized in 2023 amounted to HKD 751,000, a significant drop from HKD 26,400,000 in 2022, reflecting reduced support from pandemic relief programs[22] - Advertising, promotion, and selling expenses decreased to HKD 295,979,000 in 2023 from HKD 329,068,000 in 2022, indicating cost-cutting measures[23] Operational Developments - The company opened new stores, including a Daiso Japan outlet and two KOMEDA'S Coffee locations, to enhance its market presence and customer experience[35] - The group plans to open 3 new stores in the Greater Bay Area and upgrade 2 existing stores in the coming year[42][40] - The group aims to increase the proportion of its private brands like TOPVALU and expand its online supermarket business, Net Super[39] - The group will continue to implement digital transformation initiatives, including the expansion of electronic shelf labels and self-checkout systems[39] Employee and Resource Management - The group employed approximately 5,400 full-time and 3,800 part-time staff as of December 31, 2023, focusing on employee development and communication[51] - The group has no bank borrowings, thus no capital and debt ratios were disclosed, indicating sufficient internal resources for future expansion[46] Future Outlook - AEON Co., Ltd. has committed to provide support to the company, ensuring the ability to meet financial obligations for the next twelve months[7] - The company has not identified any significant uncertainties that could impact its ability to continue as a going concern[7] - The total capital expenditure for 2024 is projected to be approximately HKD 160.0 million for new store openings and renovations[43]

Financial Performance - Total revenue for the six months ended June 30, 2023, was HKD 4,521,844, a decrease of 10.4% compared to HKD 5,048,699 in the same period of 2022[4] - The company reported a loss before tax of HKD 75,520, improving from a loss of HKD 152,463 in the previous year, representing a 50.5% reduction in losses[4] - Basic and diluted loss per share for the period was HKD 30.07, compared to HKD 55.62 in the same period last year, indicating a 46.1% improvement[4] - Total comprehensive loss for the period was HKD 75,651, a decrease from HKD 147,203 in the previous year, reflecting a 48.6% reduction[6] - The company reported a significant increase in investment income to HKD 11,537, up from HKD 9,236, marking a growth of 25.0%[4] - The company reported a loss of HKD 78,194,000 for the period ending June 30, 2023, compared to a loss of HKD 75,248,000 for the same period in 2022, indicating a year-over-year increase in losses of approximately 2.5%[14] - Total comprehensive income for the period was a loss of HKD 78,016,000, compared to a loss of HKD 60,817,000 in the previous year, reflecting a decline of about 28.2%[14] - Operating cash flow before changes in working capital was HKD 464,694,000, down from HKD 503,173,000 in the prior year, representing a decrease of approximately 7.5%[17] Assets and Liabilities - Non-current assets decreased to HKD 3,061,109 as of June 30, 2023, down from HKD 3,502,113 at the end of 2022, a decline of 12.6%[8] - Current liabilities decreased to HKD 3,081,906 from HKD 3,151,152, showing a reduction of 2.2%[10] - The company’s cash and cash equivalents decreased to HKD 952,160 from HKD 1,133,879, a decline of 16.0%[8] - The company’s total equity attributable to owners was HKD (83,478) as of June 30, 2023, compared to HKD (274) at the end of 2022[10] - The company’s current liabilities exceeded current assets by HKD 662,516,000 as of June 30, 2023, raising concerns about liquidity[20] - The company’s directors have reviewed cash flow forecasts and expect sufficient resources to continue operations for the next 12 months[20] Revenue Breakdown - Direct sales in Hong Kong were HKD 1,952,438,000, down from HKD 2,193,787,000, representing a decline of 11%[28] - Direct sales in China were HKD 2,301,364,000, down from HKD 2,578,917,000, reflecting a decrease of 10.7%[28] - The group’s revenue for the first half of 2023 decreased by 10.4% to HKD 4,521.8 million compared to HKD 5,048.7 million in 2022[76] Expenses and Costs - Total other expenses decreased to HKD 530,320,000 in 2023 from HKD 562,002,000 in 2022, representing a reduction of approximately 5.6%[34] - The cost of goods sold for the period was HKD 3,217,693,000, down from HKD 3,618,488,000 in the previous year, indicating a decrease of approximately 11.1%[37] - Employee costs decreased by 10.7%, representing 10.9% of revenue, down from 11.0% in 2022[76] Dividends and Shareholder Returns - The company paid dividends amounting to HKD 5,200,000 during the period, consistent with the previous year’s dividend payments[14] - The interim dividend declared for the six months ended June 30, 2023, is HKD 0.02 per share, down from HKD 0.03 per share in 2022[77] Strategic Initiatives - The group plans to enhance online supermarket activities and introduce delivery services in the AEON App in the second half of 2023 to boost online sales and customer loyalty[72] - The group will accelerate product reform and expand differentiation to meet post-pandemic shopping needs, while increasing the proportion of private label products[74] - The group will continue to optimize its operational network, having closed underperforming stores to reduce financial burdens[70] - The group aims to enhance digital transformation to improve operational efficiency and reduce labor costs[71] - The group opened a new supermarket in Guangzhou in August 2023 and plans to open another in Zhuhai in September 2023[74] Governance and Compliance - The company has adhered to the corporate governance code as per the listing rules Appendix 14 for the six months ending June 30, 2023[90] - The audit committee, along with management, reviewed the unaudited interim results for the six months ending June 30, 2023[91] - Director compensation is determined based on company performance, profitability, industry salary levels, and current market conditions, with specific amounts listed for each director[93]

Sales Performance and Growth Strategies - In 2022, the company's sales performance was significantly impacted by COVID-19 restrictions, with store closures and reduced operating hours affecting overall sales[11] - The company's own brand product sales improved compared to the previous year, indicating potential for further growth[11] - The company plans to enhance its e-commerce capabilities and promote the use of the "AEON App" to drive online sales growth and maintain customer loyalty[11] - New physical stores were opened in mainland China, contributing to growth and strengthening the company's presence in the Greater Bay Area[12] - The company anticipates a double-digit growth in the online retail market, focusing on strengthening its e-commerce business in 2023[12] - The company aims to implement three main strategies: product reform, digital transformation, and new store development, with a focus on increasing sales of higher-margin products[13] - The "AEON App" is set to officially launch in Hong Kong in 2023, expected to boost online supermarket business growth[13] - The company is committed to reducing reliance on consignment products and increasing sales of its own supply chain products through direct sales plans in mainland China and Hong Kong[13] Financial Performance - Hong Kong business revenue reached HKD 4,585.3 million, a 1.5% increase from HKD 4,516.2 million in 2021, with a segment loss of HKD 124.2 million compared to a loss of HKD 184.1 million in 2021[19] - China business revenue decreased by 1.0% to HKD 4,986.0 million from HKD 5,038.7 million in 2021, with a loss of HKD 117.5 million compared to a loss of HKD 265.0 million in 2021[23] - The group's total revenue for 2022 increased by 0.2% year-on-year to HKD 9,571.3 million, with a gross profit margin of 29.5%[30] - Other income decreased by HKD 34.9 million to HKD 52.2 million, primarily due to the impact of the COVID-19 pandemic on sub-tenant businesses[30] - The adjusted EBITDA for the year was a loss of HKD 60.8 million, an improvement from a loss of HKD 65.9 million in 2021[33] - The company recorded a loss attributable to equity holders of HKD 219.9 million, a reduction of HKD 250.1 million compared to a loss of HKD 470.0 million in 2021[31] Operational Efficiency and Investments - The company will invest approximately HKD 128 million in capital expenditures for new store openings, renovations, and digital transformation in 2023[29] - The company closed underperforming stores in Dongguan and Guangzhou to reduce financial burdens and improve operational efficiency[23] - The introduction of self-service cash machines and an upgraded AEON App aims to enhance customer service and operational efficiency[19][26] Environmental and Sustainability Initiatives - Aeon reported a total of 502 tons of direct carbon dioxide emissions from its store operations in 2022, primarily from kitchens and factories using gas[53] - Indirect carbon dioxide emissions from electricity consumption in stores amounted to 114,998 tons in 2022[54] - Aeon recycled a total of 1,625 tons of food waste in 2022, converting it into animal feed, electricity, and compost[56] - The company collected 86.3 tons of used cooking oil for recycling into biodiesel products in 2022[57] - The company aims to reduce greenhouse gas emissions and energy consumption through the adoption of energy-efficient systems and practices[58] Employee and Community Engagement - The company employed approximately 5,600 full-time and 3,800 part-time staff in Hong Kong and China as of December 31, 2022[36] - The average employee turnover rate for the year was 5.3%, with male turnover at 6.2% and female turnover at 5.0%[68] - The company has established various training programs to support employee development, including basic education and internal certification systems[73] - AEON donated approximately HKD 1.7 million to various charitable organizations benefiting the elderly, youth, disabled, and environmental protection during the year[90] - AEON provided food donations valued at HKD 800,000 to food banks operated by charitable organizations, directly assisting low-income families[91] Corporate Governance and Compliance - The board consists of 8 members, including 2 executive directors, 3 non-executive directors, and 3 independent non-executive directors, complying with the listing rules[107] - The company has adopted the corporate governance code as per the listing rules, ensuring compliance throughout the year[106] - The company emphasizes anti-corruption measures and requires all business partners to strictly adhere to its anti-corruption policies[88] - The audit committee reviews the group's financial statements, internal financial reports, risk management, and internal control systems, meeting with management and external auditors at least twice a year[137] Risk Management - The company has established a risk control self-assessment matrix focusing on ten major enterprise risk factors, which includes financial, operational, and compliance risks[153] - The internal audit team regularly reviews the internal control system and reports the audit results to management, with two reports submitted to the audit committee annually[155] - The board has reviewed the effectiveness of the risk management and internal control systems, ensuring they are adequate and effective[156]

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之內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部份內容而產生或因倚賴該等內容 而引致之任何損失承擔任何責任。 AEON STORES (HONG KONG) CO., LIMITED 永旺(香港)百貨有限公司 （於香港註冊成立之有限公司） （股份代號：984） 2022全年業績 永旺（香港）百貨有限公司（「本公司」）董事會（「董事會」）欣然宣佈本公司及其附屬公司（「本 集團」或「永旺」）截至2022年12月31日止年度之業績，連同上個財政年度之比較數字如下： 綜合損益報表 截至2022年12月31日止年度 附註 2022年 2021年 港幣千元 港幣千元 收益 3 9,571,321 9,554,854 其他收入 5 483,692 499,658 投資收入 22,215 22,122 租賃按金利息收入 10,802 10,414 採購貨品及存貨變動 (6,750,962) (6,796,846) 員工成本 (1,100,476) (1,101,078) 投資物業折舊 (68,861) (85,369) 物業，廠 ...

Financial Performance - Revenue for the six months ended June 30, 2022, was HKD 5,048,699, an increase of 5.0% compared to HKD 4,807,110 in the same period of 2021[5] - The company reported a loss before tax of HKD 152,463, improving from a loss of HKD 262,541 in the previous year, representing a 42% reduction in losses[5] - The net loss for the period was HKD 157,619, compared to a net loss of HKD 266,482 in 2021, indicating a 41% improvement[8] - Basic and diluted loss per share was HKD 55.62, compared to HKD 94.38 in the same period last year, reflecting a 41% decrease in loss per share[5] - The total comprehensive income for the period was a loss of HKD 129,961,000, compared to a loss of HKD 227,247,000 in the previous period, showing a reduction of approximately 42.9%[23] Assets and Liabilities - Total assets decreased to HKD 6,755,798 as of June 30, 2022, from HKD 7,454,051 as of December 31, 2021, a decline of approximately 9.4%[13] - Non-current assets decreased to HKD 3,977,002 from HKD 4,455,658, a reduction of about 10.7%[13] - Current liabilities decreased to HKD 3,332,792 from HKD 3,459,736, showing a decrease of approximately 3.7%[13] - As of June 30, 2022, the total equity attributable to shareholders decreased to HKD 68,343,000 from HKD 203,444,000 as of December 31, 2021, representing a decline of approximately 66.4%[20] - The company's total liabilities decreased from HKD 3,994,315,000 to HKD 3,423,006,000, reflecting a decline of approximately 14.3%[20] Cash Flow and Financing - The company reported a net cash flow from operating activities of HKD 486,340,000, up from HKD 371,833,000 in the previous year, indicating a growth of approximately 30.7%[8] - The financing activities used cash of HKD 545,291,000, which is an increase from HKD 503,731,000 in the previous year, indicating higher financing costs[8] - The investment activities resulted in a net cash outflow of HKD 76,187,000, a decrease from HKD 167,407,000 in the previous year, suggesting reduced capital expenditures[8] Revenue Breakdown - Direct sales in Hong Kong reached HKD 2,193,787,000, while in China, it was HKD 2,578,917,000, contributing to a total of HKD 4,772,704,000 in direct sales[37] - In the first half of 2022, the company's revenue from Hong Kong operations increased by 4.2% to HKD 2,347.2 million compared to HKD 2,252.6 million in 2021[93] - In mainland China, the company's revenue rose by 5.8% to HKD 2,701.5 million, up from HKD 2,554.5 million in 2021[98] Operational Developments - The company continues to explore market expansion opportunities and new product development strategies to enhance future performance[5] - The company opened its fourth AEON STYLE store in Yau Tong, introducing various new Japanese elements and products[92] - The company established a regional franchise agreement with Komeda Co., Ltd to open "KOMEDA Coffee Shop" in Hong Kong, accelerating its development in the restaurant chain sector[93] Cost Management - The group has reduced employee costs by 2.0%, which now account for 11.0% of revenue, down from 11.8% in 2021[106] - The company reported a decrease in management and utility expenses to HKD 8,783 thousand from HKD 8,965 thousand[20] Dividends and Shareholder Information - The company declared dividends of HKD 5,200,000 during the period, down from HKD 7,800,000 in the previous period, a decrease of approximately 33.3%[23] - As of June 30, 2022, AEON Co., Ltd. holds 157,536,000 shares, representing approximately 60.59% of the total issued shares[127] Governance and Compliance - The board of directors has complied with the corporate governance code as per the listing rules during the six-month period ending June 30, 2022[125] - The company confirmed that all directors adhered to the standards set forth in the code of conduct for securities transactions during the six-month period ending June 30, 2022[129]

Financial Performance - In 2021, AEON Stores (Hong Kong) reported a decline in revenue and gross profit due to intensified competition and the impact of COVID-19 variants on retail sales[32]. - Hong Kong business revenue decreased by 7.7% to HKD 4,516.2 million, with a loss of HKD 184.1 million compared to a profit of HKD 62.3 million in the previous year[44]. - In China, revenue declined by 0.6% to HKD 5,038.7 million, with a loss of HKD 265.0 million compared to a loss of HKD 73.0 million in the previous year[46]. - The group's total revenue for 2021 decreased by 4.1% to HKD 9,554.9 million compared to HKD 9,961.9 million in 2020, with a maintained gross profit margin of 28.9%[49]. - The group recorded a loss attributable to equity holders of HKD 470.0 million for the year, an increase from a loss of HKD 36.8 million in 2020[49]. Expansion and Store Openings - The company successfully opened six new supermarkets in 2021, aligning with its expansion plans in the Greater China region[32]. - The group opened 6 new supermarkets during the year and launched the fourth AEON STYLE store in Yau Tong in February 2022[46]. - The group plans to open 2 new supermarkets in the second half of 2022 while closing 1 store in Dongguan to improve operational efficiency[49]. - AEON is committed to a strategy of stable annual new store openings to expand its business footprint[34]. Digital Transformation and E-commerce - AEON plans to improve its digital capabilities and expand its product categories on the AEON APP to boost offline sales[33]. - The group partnered with foodpanda mall to enhance online sales, offering a variety of products including Topvalu food and HÓME CÓORDY home goods[43]. - The group aims to enhance operational efficiency through the introduction of Mobile Assistant and self-checkout systems to improve service quality[46]. - The company aims to enhance customer experience through digital transformation and the optimization of customer relationship management via the AEON App[49]. Environmental Sustainability - Aeon reported a total carbon dioxide emission of 612 tons from direct sources, primarily from kitchens and factories in its stores for the year 2021[80]. - Indirect carbon dioxide emissions from electricity consumption in stores amounted to 124,242 tons in 2021[81]. - Aeon recycled a total of 3,249 tons of food waste for reuse in 2021, converting it into animal feed, electricity, and compost[83]. - The company collected 93.1 tons of used cooking oil for recycling into biodiesel products in 2021[84]. - The company aims to reduce greenhouse gas emissions from all business activities to achieve a low-carbon society[73]. Employee and Workforce Management - As of December 31, 2021, the company employed approximately 9,800 employees, with 2,600 males and 7,200 females[95]. - The average employee turnover rate for the year was 5.8%, with male turnover at 6.5% and female turnover at 5.5%[98]. - The company reported a total of approximately 2,300 workdays lost due to occupational injuries during the reporting year[103]. - The average training hours completed per employee were 2.1 hours for males and 1.9 hours for females[115]. - The company has established various training programs, including a basic education program for new employees and an internal certification system for specific roles[107][108]. Corporate Governance - The board consists of 12 members, including 4 executive directors, 4 non-executive directors, and 4 independent non-executive directors, meeting the requirement of one-third independent directors as per listing rules[163]. - The company confirmed full compliance with the corporate governance code throughout the year ending December 31, 2021[161]. - The board has established committees with defined responsibilities to oversee various aspects of the company's operations and strategy[165]. - The company has adopted a diversity policy for board members, considering factors such as gender, age, cultural background, and professional experience to enhance performance and sustainability[164]. - The company has implemented measures to ensure compliance with listing rules and regulations regarding director appointments[182]. Community Engagement and Social Responsibility - The company donated approximately HKD 2.0 million to various charitable organizations benefiting the elderly, youth, and disabled individuals through the "AEON Happy Yellow Receipt" program[134]. - The company provided food donations valued at HKD 1.4 million to food banks operated by charitable organizations to assist low-income families[135]. - The company contributed approximately HKD 390,000 to the AEON Scholarship Program for high school and university students during the year[135]. Supply Chain and Product Safety - The company maintains a strong commitment to supply chain management, ensuring safe food and reliable products to meet customer needs[123]. - The company has established a department to review supplier backgrounds to ensure compliance with product safety regulations[124]. - The percentage of recalled products due to safety and health reasons during the reporting year was less than 0.00005%[126]. - Approximately 2,000 complaints related to products and services were received during the reporting year, with 58% resolved without charge, 26% through exchanges or refunds, and 16% through other means[128].

Financial Performance - Revenue for the six months ended June 30, 2021, was HKD 4,807,110, a decrease of 6.8% from HKD 5,157,673 in the same period of 2020[5] - The company reported a loss of HKD 266,482 for the period, compared to a loss of HKD 63,041 in the previous year, indicating a significant increase in losses[7] - The loss attributable to equity holders of the company was HKD 245,377, compared to a profit of HKD 72,029 in the same period last year[5] - The basic loss per share for the period was HKD 94.38, compared to HKD 27.70 in the same period of 2020[5] - The company reported a loss of HKD 72,029 for the six months ended June 30, 2021, compared to a profit of HKD 35,223 in the same period of 2020[16] - The company reported a total loss before tax of HKD 262,541,000 for the six months ended June 30, 2021, compared to a loss of HKD 52,985,000 for the same period in 2020[37][42] - The loss for the period attributable to equity holders was HKD 245,377,000, compared to a loss of HKD 72,029,000 for the same period last year, representing an increase in loss of approximately 241.5%[58] - The group recorded a loss attributable to shareholders of HKD 245.4 million, compared to a loss of HKD 72 million in 2020[112] Assets and Liabilities - Total assets as of June 30, 2021, amounted to HKD 6,779,981, down from HKD 8,343,744 as of December 31, 2020[10] - The company's non-current assets, including property, plant, and equipment, decreased to HKD 642,380 from HKD 645,756 year-on-year[10] - The net current liabilities increased to HKD 323,981, compared to HKD 94,311 in the previous year, reflecting a deterioration in liquidity[10] - The company’s total liabilities increased to HKD 3,134,617 from HKD 3,198,726 year-on-year, indicating a slight reduction in overall debt[10] - Non-current liabilities totaled HKD 4,075,776, slightly down from HKD 4,295,386 as of December 31, 2020[12] - As of June 30, 2021, total equity decreased to HKD 569,588, down 32.9% from HKD 849,632 as of December 31, 2020[12] Cash Flow and Investments - Operating cash flow before changes in working capital was HKD 462,310, a decrease of 20.1% from HKD 578,640 in 2020[20] - Cash and cash equivalents decreased by HKD 299,305, resulting in a balance of HKD 1,264,310 as of June 30, 2021[20] - The company’s retained earnings as of June 30, 2021, were HKD 115,381, a significant decrease from HKD 353,290 in the previous year[16] - The company reported a total impairment loss on goodwill of HKD 43,000,000 during the reporting period[42] - The total investment income for the six months ended June 30, 2021, was HKD 9,703,000, compared to HKD 11,509,000 in the same period of 2020[37][42] - The company’s investment activities resulted in a net cash outflow of HKD 167,407 for the period[20] Revenue Breakdown - Direct sales in Hong Kong amounted to HKD 2,097,096,000, while in China, it was HKD 2,423,706,000, contributing to a total of HKD 4,520,802,000 in direct sales[32] - Hong Kong business revenue decreased by 7.0% to HKD 2,252.6 million in the first half of 2021, compared to HKD 2,423.3 million in 2020[98] - China business revenue declined by 6.6% to HKD 2,554.5 million, down from HKD 2,734.4 million in 2020[99] Operational Changes and Strategies - The company plans to open 3 new stores in the second half of 2021, aiming for a total of 6 new stores in the Greater Bay Area for the year[105] - The company has partnered with foodpanda mall to enhance online business, offering a variety of products for online sales and home delivery[98] - The company is focusing on digital transformation, including O2O expansion and CRM promotion, with improvements to the "AEON Home Delivery" app[105] - The company aims to streamline its operational network to improve efficiency and drive performance improvement[106] - The company anticipates that the consumption voucher scheme will boost local consumer sentiment and sales in the second half of 2021[102] Expenses and Cost Management - Advertising, promotion, and selling expenses decreased to HKD 147,225,000 from HKD 149,855,000, a decline of approximately 1.1%[43] - Maintenance and repair expenses increased to HKD 179,301,000 from HKD 169,715,000, an increase of about 5.9%[43] - Administrative expenses rose to HKD 126,848,000 from HKD 117,142,000, reflecting an increase of approximately 8.9%[43] - Employee costs rose by 5.9%, accounting for 11.8% of revenue, up from 10.4% in 2020[110] Corporate Governance and Compliance - The company complied with the corporate governance code during the six months ended June 30, 2021[130] - The audit committee reviewed the unaudited interim results for the six months ended June 30, 2021[131] - Changes in the board of directors included the appointment of new members and changes in roles effective May 28, 2021[132] Shareholder Information - AEON Co., Ltd. holds 157,536,000 shares, representing approximately 60.59% of the total issued shares[124] - Standard Life Aberdeen plc and its affiliates hold 16,062,000 shares, accounting for 6.18% of the total issued shares[124] - AEON Co., Ltd. owns 281,138,000 shares in ACS, which represents 67.13% of ACS's issued share capital[125] - The company did not purchase, sell, or redeem any of its listed securities during the six months ended June 30, 2021[127] - The company maintained sufficient public float as of June 30, 2021[129]

Financial Performance - The company reported a revenue of HKD 10,200 million for the year 2020, showing a significant increase compared to previous years[9] - Hong Kong business revenue increased by 15.5% to HKD 4.8943 billion, up from HKD 4.239 billion in 2019, with a profit turnaround from a loss of HKD 114.8 million to a profit of HKD 62.3 million, an improvement of HKD 177.1 million[30] - The company's China business revenue decreased by 3.6% to HKD 5.0676 billion, down from HKD 5.2548 billion in 2019, with losses reduced to HKD 73 million from HKD 80.6 million[32] - The overall revenue for the company increased by 4.9% year-on-year to HKD 9.619 billion, compared to HKD 9.438 billion in 2019, while the gross margin decreased by 1% to 28.9%[32] - The group recorded a loss attributable to equity holders of HKD 36.8 million for the year, an improvement from a loss of HKD 188.7 million in 2019, a decrease of HKD 151.9 million[35] - Total dividends for the year amounted to HKD 0.10 per share, down from HKD 0.27 per share in 2019[35] Strategic Initiatives - The company aims to enhance its private label offerings, including brands like "TOPVALU" and "HÓME CÓORDY," to drive sales growth and improve profit margins over the next three years[19] - The digital transformation strategy will be accelerated, with plans to upgrade the "AEON Home Delivery" app and enhance customer service through data analysis to improve operational efficiency[20] - The company plans to increase the proportion of health-related products, focusing on "natural" as a key concept in health and beauty care, aligning with consumer demand for quality living[19] - The company will implement structural reforms to adapt to changing market conditions and consumer behaviors, aiming for long-term business sustainability[18] - The company aims to achieve a comprehensive integration of online and offline services to enhance customer satisfaction and quality of life[22] Operational Efficiency - The company reported a significant improvement in operational efficiency and revenue structure due to early digital transformation initiatives[18] - The company will continue to strengthen its digital membership services by analyzing consumer behavior to increase customer loyalty and expand its customer base[20] - The supermarket business outperformed the Hong Kong market with a sales growth of 10-20% due to enhanced product offerings and the expansion of the private label Topvalu[28] - The company has implemented more self-checkout systems and mobile payment options to enhance customer convenience[30] - The company is focusing on expanding its online supermarket services to adapt to changing consumer behaviors[32] Employee and Workforce Management - The group employed approximately 6,500 full-time and 3,100 part-time staff in Hong Kong and China as of December 31, 2020, focusing on employee development and communication[37] - The company employed approximately 9,600 staff as of December 31, 2020, with 2,600 males and 7,000 females[76][77] - The overall employee turnover rate for the year was 6.1%[82] - The employee turnover rate by age group was 9.7% for ages 18 to 35, 2.8% for ages 36 to 50, and 3.3% for those over 50[83] - The company has established various training programs to support employee development, including basic education and internal certification systems[90] Sustainability and Environmental Impact - In 2020, the company emitted a total of 750 tons of direct CO2 emissions from kitchen operations and 110,358 tons from electricity consumption[62][63] - The company recycled 2,679 tons of food waste in 2020, converting it into animal feed, electricity, and compost[64] - The total energy consumption for the year was 144,155,000 kWh for electricity and 3,214,000 kWh for gas[66] - The total water consumption for the year was 1,150,000 cubic meters[67] - The company aims to reduce greenhouse gas emissions and improve energy efficiency but has not set specific targets yet[65][66] Corporate Governance - The board consists of 12 members, including 5 executive directors, 3 non-executive directors, and 4 independent non-executive directors, with independent directors making up one-third of the board[144] - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange's listing rules, ensuring compliance with relevant regulations[141] - The board is responsible for overseeing the company's business, strategic decisions, and performance, retaining authority over key matters such as dividend declarations[146] - The company has a commitment to continuous review of its corporate governance practices in line with the latest developments[141] - The board members do not have significant financial, business, familial, or other relationships with each other, ensuring independence[145] Community Engagement - The company donated approximately HKD 2.0 million to various charitable organizations supporting the elderly, youth, and disabled individuals through its community welfare programs[119] - The company contributed approximately HKD 390,000 to its scholarship program for high school and university students, aimed at supporting the next generation of leaders[119] - The company provided food donations valued at HKD 500,000 to food banks operated by charitable organizations, directly assisting low-income families[119] - The company actively engages in community programs to enhance local economic conditions and welfare, supporting various age groups from infants to university students[118] Risk Management - The company has adopted a "Risk Control Self-Assessment Matrix" to prioritize and manage risks, focusing on nine major risk categories including financial, product and service, and information security risks[189] - The board has reviewed the effectiveness of the risk management and internal control systems, ensuring they are adequate and effective[191] - The internal audit team evaluates the efficiency and effectiveness of the risk management and internal control systems, reporting results to management and the audit committee twice a year[190] - The Audit Committee ensured the objectivity and credibility of the group's financial reporting, meeting with management and external auditors at least twice a year[176] - The company has implemented management, technical, and physical measures to protect customer data, preventing unauthorized access and ensuring compliance with applicable regulations[118]

Revenue Performance - Revenue for the six months ended June 30, 2020, was HKD 5,157,673, an increase of 6.8% compared to HKD 4,829,780 for the same period in 2019[7] - For the six months ended June 30, 2020, total revenue reached HKD 5,157,673,000, an increase from HKD 4,829,780,000 for the same period in 2019, representing a growth of approximately 6.8%[38] - Direct sales in Hong Kong amounted to HKD 2,288,453,000, up from HKD 1,917,985,000 in the previous year, reflecting a growth of about 19.3%[38] - Direct sales in China were HKD 2,615,829,000, compared to HKD 2,561,054,000 in the prior year, indicating a growth of approximately 2.1%[38] - Hong Kong business revenue increased by 15.9% to HKD 2,423,300,000, compared to HKD 2,091,600,000 in 2019, with losses narrowing to HKD 66,600,000 from HKD 89,000,000[89] Financial Performance - The company reported a loss of HKD 63,041 for the period, significantly improved from a loss of HKD 147,936 in the previous year, representing a reduction of 57.6%[9] - The company reported a net loss of HKD 72,029,000 for the six months ended June 30, 2020, compared to a net loss of HKD 149,096,000 for the same period in 2019, representing a 51.7% improvement[53] - The company reported a loss before tax of HKD 52,985,000 for the six months ended June 30, 2020, compared to a loss of HKD 140,883,000 for the same period in 2019, showing an improvement in financial performance[38] Assets and Liabilities - Total assets as of June 30, 2020, amounted to HKD 5,041,543, down from HKD 5,441,479 as of December 31, 2019, indicating a decrease of 7.4%[13] - As of June 30, 2020, total equity decreased to HKD 824,703,000 from HKD 906,284,000 at the end of 2019, representing a decline of approximately 9.0%[19] - The company’s cash and cash equivalents stood at HKD 1,335,562, down from HKD 1,470,515, a decrease of 9.1%[13] - Non-current liabilities decreased to HKD 4,705,030,000 from HKD 5,079,875,000, reflecting a reduction of approximately 7.4%[19] - The company’s total liabilities decreased to HKD 4,705,030,000 from HKD 5,079,875,000, indicating a reduction of approximately 7.4%[19] Cash Flow and Investments - Operating cash flow for the six months ended June 30, 2020, was HKD 570,912,000, an increase from HKD 527,074,000 in the same period of 2019, showing a growth of about 8.3%[23] - The company reported a net cash outflow from investing activities of HKD 224,216,000 for the six months ended June 30, 2020, compared to an inflow of HKD 148,046,000 in the previous year[23] - Cash and cash equivalents decreased to HKD 1,335,562,000 as of June 30, 2020, from HKD 1,853,797,000 at the beginning of the year, a decline of approximately 28.0%[23] Expenses and Cost Management - The group incurred total expenses of HKD 507,686,000 for the six months ended June 30, 2020, slightly down from HKD 535,820,000 in the same period of 2019[45] - Employee costs decreased by 6.1%, accounting for 10.4% of sales revenue, down from 11.8% in 2019[93] - The group’s advertising, promotion, and selling expenses were HKD 149,855,000, nearly unchanged from HKD 149,940,000 in the previous year[45] Future Outlook and Strategy - The company plans to focus on market expansion and new product development to drive future growth[6] - Future guidance indicates a cautious outlook due to ongoing market uncertainties but aims for gradual recovery in the second half of 2020[6] - The group aims to enhance online sales and diversify services, including product reservation and delivery services, to improve performance[100] - The group plans to open 15 new Living Plaza stores in 2020, significantly exceeding the total number of stores in 2019[100] Government Support and Subsidies - The group recognized government subsidies totaling HKD 13,020,000 from the Hong Kong government and HKD 4,083,000 from local governments in China during the reporting period[41] - The group received government subsidies of HKD 17,103,000 during the reporting period, with HKD 15,477,000 related to COVID-19 support[82] - In August 2020, the group received an additional subsidy of HKD 59,944,000 for three months of salary cost compensation[83] Shareholder Information - AEON Co., Ltd. holds 157,536,000 shares, representing 60.59% of the total issued shares[112] - Standard Life Aberdeen plc and its affiliated investment management hold 21,960,000 shares, accounting for 8.45% of the total issued shares[112] Director Remuneration - Directors' remuneration is determined based on the company's performance, profitability, industry salary levels, and current market conditions[121] - The total remuneration for directors includes amounts such as HKD 1,420,000 for 翟錦源 and HKD 1,247,000 for 劉志森[121] - The remuneration structure is effective from January 1, 2020, and is calculated proportionally based on the duration of service within the appointment year[121]

Financial Performance - Hong Kong business revenue decreased by 3.2% year-on-year to HKD 4.239 billion, down from HKD 4.3769 billion in 2018[42]. - The Hong Kong segment recorded a loss of HKD 114.8 million, compared to a profit of HKD 9.1 million in 2018[42]. - In China, revenue slightly declined by 0.8% to HKD 5.2548 billion, down from HKD 5.299 billion in 2018[45]. - The total revenue for the group was HKD 9.438 billion, a decrease from HKD 9.679 billion in 2018, with a gross margin of 29.9% compared to 31.0% in the previous year[45]. - The board proposed a final dividend of HKD 0.05 per share, down from HKD 0.22 per share in 2018, resulting in a total dividend of HKD 0.27 per share for the year[45]. - As of December 31, 2019, the company's distributable reserves included retained earnings of HKD 659,309,000, down from HKD 1,217,000,000 in 2018[197]. - The group reported a mid-term dividend of HKD 0.22 per share, totaling HKD 57,200,000, and proposed a final dividend of HKD 0.05 per share, amounting to HKD 13,000,000[195]. Strategic Initiatives - The company's revenue structure reform aims to increase the sales proportion of private label brands to improve profit margins and overall profitability[33]. - The company plans to implement a multi-channel development strategy to enhance customer loyalty and improve operational efficiency[34]. - The company aims to leverage its purchasing network from the AEON Group in Japan to enhance revenue capabilities and provide a wider variety of quality products[33]. - The group plans to open 7 new stores in China in 2020, focusing on small supermarkets in Guangzhou[2]. - The total capital expenditure for 2020 is expected to be approximately HKD 299.7 million, primarily for store renovations and new store openings[3]. - The group intends to strengthen its online supermarket services and improve customer relationship management strategies in 2020[2]. - The group aims to enhance its product offerings by increasing the development and sales of TOPVALU products in China[2]. Digital Transformation - The company is committed to digital transformation initiatives, including self-checkout systems and QR code shopping, to adapt to changing consumer demands[34]. - The introduction of the AEON APP "AEON Home Delivery" received positive feedback and is set for a full launch in the first half of 2020, enhancing customer convenience[34]. - The group introduced a new self-service payment system to improve the shopping experience and reduce checkout times[40]. - The group completed the upgrade of its ERP system to enhance productivity and operational efficiency[41]. - The group is focusing on digital transformation in daily operations to enhance efficiency and reduce manpower requirements[2]. Environmental Sustainability - In 2019, the total direct carbon dioxide emissions from the group's kitchen operations amounted to 899 tons, a decrease from 969 tons in 2018[74]. - Indirect carbon dioxide emissions from electricity consumption in 2019 totaled 122,463 tons, up from 110,093 tons in 2018[74]. - The group recycled 2,272 tons of food waste in 2019, down from 3,429 tons in 2018[75]. - A total of 70,778 liters of used cooking oil were collected for recycling into biodiesel in 2019, compared to 72,252 liters in 2018[75]. - The group's electricity and gas consumption for the year was 171,400,000 kWh and 14,300,000 MJ, respectively, compared to 152,500,000 kWh and 15,500,000 MJ in 2018[77]. - Water usage for the year was 1,280,000 cubic meters, a decrease from 1,340,000 cubic meters in 2018[77]. - The group distributed 206,700 kilograms of shopping bags and packaging materials in the year, down from 235,800 kilograms in 2018[78]. - The company aims to achieve a balance between environmental protection and enriching lives through its environmental policy[68]. - The group emphasizes sustainable procurement practices to preserve limited natural resources in fisheries and agriculture[79]. Corporate Governance - The company has maintained high levels of corporate governance practices to enhance shareholder value and interests[125]. - The board regularly reviews corporate governance practices to ensure compliance with regulatory requirements[125]. - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange listing rules[125]. - The company has complied with the code provisions throughout the year ending December 31, 2019, except for certain deviations disclosed in the report[126]. - The board consists of 10 members, including 4 executive directors, 2 non-executive directors, and 4 independent non-executive directors, with independent directors making up one-third of the board[128]. - The board held a total of 7 meetings during the year, with all meetings properly notified at least 14 days in advance[134]. - The company has adopted a diversity policy for board members, considering factors such as gender, age, cultural background, and professional experience to enhance performance and sustainability[129]. - The company has a nomination policy that outlines key selection criteria for appointing or reappointing directors to ensure a balance of skills and diversity[144]. - The company emphasizes the importance of continuous professional development for directors, ensuring they stay updated on business performance and regulatory requirements[150]. Employee Engagement and Training - AEON established various employee training programs, including a basic education program for new hires and an internal certification system for specific roles[87]. - AEON's collaboration with Tsinghua University aims to enhance human resource development in social sciences, inviting selected talents for specialized courses[91]. - AEON's employee performance evaluations occur biannually, focusing on work challenges and future career development[86]. - AEON's employee training includes a code of conduct review to reinforce ethical standards and shared values among staff[92]. - As of December 31, 2019, the group employed approximately 6,600 full-time and 3,800 part-time employees in Hong Kong and China[55]. Community Engagement - AEON donated approximately HKD 1.8 million worth of goods to 122 charitable organizations through the "AEON Happy Yellow Receipt" initiative, contributing 1% of the total receipts collected[101]. - AEON collected nearly 186,200 books and raised about HKD 1.1 million for educational projects in impoverished areas of China through the annual "Used Book Recycling Charity Sale" campaign[104]. - AEON provided over 20,000 items to food banks, valued at more than HKD 500,000, to assist low-income families[105]. - AEON planted nearly 50 trees as part of its community engagement initiatives, promoting a green lifestyle[101]. Risk Management - The board is responsible for overseeing the risk management and internal control systems of the group, which includes a self-assessment matrix for risk control[178]. - The risk control self-assessment matrix focuses on nine major categories of enterprise risk factors, including financial, product and service, and information security risks[179]. - The internal audit team evaluates the efficiency and effectiveness of the risk management and internal control systems, reporting results to management and the audit committee twice a year[179]. - The company established a related party transaction group to assist the board in reviewing and monitoring existing and proposed related party transactions[181].