Financial Performance - Revenue for the six months ended June 30, 2021, was RMB 142,942,000, a decrease of 29.5% compared to RMB 203,005,000 in the same period of 2020[3] - Gross profit for the period was RMB 19,850,000, down from RMB 29,589,000 in the previous year, reflecting a gross margin of 13.9%[3] - Loss for the period attributable to owners of the Company was RMB 28,725,000, compared to a loss of RMB 4,084,000 in the same period of 2020[3] - Total comprehensive loss for the period was RMB 28,777,000, significantly higher than RMB 4,908,000 in the prior year[3] - Basic and diluted loss per share was RMB 9.75 cents, compared to RMB 2.16 cents in the previous year[3] - The decline in financial performance was mainly due to decreased sales volume and increased selling and distribution expenses[82] - The gross profit decreased by approximately RMB10 million, or 33.3%, from approximately RMB30 million for the first half of 2020 to RMB20 million for the same period in 2021[90] - The Group's gross profit margin decreased from approximately 14.8% for the first half of 2020 to 14.0% for the Period[90] Revenue Breakdown - Revenue from POE umbrellas was RMB 35,109,000, down 37.9% from RMB 56,552,000 in 2020[47] - Revenue from nylon umbrellas and umbrella parts was RMB 63,008,000, an increase of 29.4% from RMB 48,645,000 in 2020[47] - Revenue from external customers in Japan decreased to RMB 49,748,000 from RMB 75,491,000, a decline of 34.2%[50] - Revenue from external customers in the PRC increased to RMB 38,284,000 from RMB 18,225,000, a growth of 109.5%[50] Assets and Liabilities - Current assets as of June 30, 2021, totaled RMB 470,904,000, a slight decrease from RMB 476,371,000 at the end of 2020[7] - Current liabilities increased to RMB 163,481,000 from RMB 154,971,000 at the end of 2020, primarily due to an increase in bank borrowings[7] - Net assets as of June 30, 2021, were RMB 414,983,000, down from RMB 426,225,000 at the end of 2020[7] - Trade and bills receivables as of June 30, 2021, totaled RMB111,322,000, significantly increasing from RMB49,433,000 as of December 31, 2020[71] - Trade and bills payables as of June 30, 2021, were RMB39,735,000, a decrease from RMB55,355,000 as of December 31, 2020[73] Cash Flow - Net cash used in operating activities was RMB 69,410,000 for the six months ended June 30, 2021, compared to a net cash generated of RMB 171,446,000 in the same period of 2020[35] - The net cash generated from financing activities was RMB 36,772,000 for the six months ended June 30, 2021, contrasting with a net cash used of RMB 183,302,000 in the same period of 2020[35] - As of June 30, 2021, cash and cash equivalents amounted to RMB 20,272,000, a decrease from RMB 58,319,000 as of January 1, 2021[36] Operational Strategy - The Company is focusing on expanding its market presence and enhancing its product offerings to drive future growth[4] - The Group is exploring and developing new business opportunities and projects to diversify its operations[81] - The Group aims to strengthen its competitive advantages and expand production capacity to meet increasing demand in the umbrella market[122] Employee and Administrative Costs - Total staff costs for the period were RMB 29,273,000, down 11.8% from RMB 33,009,000 in 2020[61] - Administrative expenses increased by approximately RMB5 million, or 27.8%, from approximately RMB18 million for the first half of 2020 to RMB23 million for the Period[93] Share Capital and Governance - The issued and fully paid ordinary shares increased to 302,880,000 as of June 30, 2021, from 227,160,000 at the beginning of the reporting period[76] - The Company adopted a Share Option Scheme on January 23, 2015, which will remain in force for ten years from the Listing Date[141] - The Audit Committee, established on January 23, 2015, comprises three independent non-executive Directors and has reviewed the financial reporting matters for the period[159] Market Conditions - The global economic environment remains challenging, influenced by the trade war between China and the U.S. and the impact of COVID-19 on consumer confidence and economic performance[125] - The Group may face risks related to fluctuations in raw material prices and unstable supply, which could negatively impact operations and profitability[102]

[Chairman's Statement](index=5&type=section&id=Chairman%27s%20Statement) Chairman Mr. Huang Wenji reported a **38.5% revenue decrease** to **RMB 344 million** in 2020, with annual loss expanding to **RMB 34 million**, and a strategic shift towards downstream distribution and brand building 2020 Fiscal Year Performance Overview | Indicator | 2020 (RMB) | 2019 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | 344 million | 559 million | -38.5% | | **Annual Loss** | 34 million | 16 million | +112.5% | | POE Umbrella Revenue | 66 million | 120 million | -45.0% | | Nylon Umbrella Revenue | 149 million | 179 million | -16.8% | | Umbrella Components Revenue | 129 million | 260 million | -50.4% | - The Board does not recommend a final dividend for the year ended December 31, 2020[11](index=11&type=chunk) - Future strategy shifts from upstream manufacturing to downstream distribution and brand building to promote higher-margin branded umbrellas and create greater shareholder value[14](index=14&type=chunk)[16](index=16&type=chunk) - The Group aims to maintain its leading position in the Japanese market, develop its own brands in the Chinese market, and expand market share in existing markets like Hong Kong, Cambodia, and South Korea[13](index=13&type=chunk)[16](index=16&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=7&type=section&id=Business%20Review) The Group's core business involves manufacturing and selling POE umbrellas, nylon umbrellas, and related components, primarily for export (84% of total revenue) to Japan, Hong Kong, and South Korea, with a strategic shift towards downstream distribution and brand building - The Group primarily engages in manufacturing and sales of POE umbrellas, nylon umbrellas, and components like plastic fabric and central shafts[18](index=18&type=chunk) - In 2020, export sales accounted for approximately **84% of total revenue**, mainly to Japan, Hong Kong, and South Korea; domestic market sales accounted for approximately **16%**[19](index=19&type=chunk)[20](index=20&type=chunk) - The new business strategy shifts focus from upstream manufacturing to downstream distribution and brand building to promote higher-margin branded umbrellas[21](index=21&type=chunk)[24](index=24&type=chunk) [Financial Review](index=8&type=section&id=Financial%20Review) In FY2020, revenue decreased by **38.5%** to **RMB 344 million**, with annual loss expanding to **RMB 34 million** due to revenue decline and asset impairment, while liquidity improved significantly FY2020 Key Financial Indicators Changes | Indicator | 2020 (RMB) | 2019 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | 344 million | 559 million | -38.5% | | **Gross Profit** | 53 million | 66 million | -19.7% | | **Gross Margin** | 15.3% | 11.8% | +3.5pp | | **Annual Loss** | 34 million | 16 million | +112.5% | | **Finance Costs** | 4 million | 11 million | -63.6% | - The primary reasons for the expanded annual loss were (i) reduced revenue due to the pandemic; and (ii) recognition of approximately **RMB 23 million** in impairment losses on property, plant and equipment and right-of-use assets[35](index=35&type=chunk) Liquidity and Financial Resources (as of year-end) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | **Bank Balances and Cash** | 115 million RMB | 82 million RMB | | **Short-term Bank Borrowings** | 77 million RMB | 203 million RMB | | **Current Ratio** | 3.4 times | 2.3 times | | **Debt-to-Asset Ratio** | 34% | 56% | [Key Operating Metrics](index=10&type=section&id=Key%20Operating%20Metrics) In 2020, the Group's operating efficiency metrics showed significant changes, with inventory turnover days increasing to 323 days due to slower sales, while trade receivables turnover days decreased to 120 days, and trade payables turnover days increased to 54 days Changes in Operating Turnover Days | Indicator | 2020 (days) | 2019 (days) | | :--- | :--- | :--- | | **Inventory Turnover Days** | 323 | 154 | | **Trade Receivables Turnover Days** | 120 | 135 | | **Trade Payables and Bills Payable Turnover Days** | 54 | 25 | [Principal Risks and Uncertainties](index=10&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group faces key operational risks including reliance on major customers, exposure to political and economic fluctuations and foreign exchange rate changes in key markets, and potential negative impacts from raw material price volatility, supply instability, or rising labor costs - Loss of major customers could significantly and adversely impact the Group's business, financial condition, and operating results[40](index=40&type=chunk) - The Group faces risks related to sales in Japan, China, and other overseas markets, such as political and economic instability and foreign currency exchange rate fluctuations[43](index=43&type=chunk) - Raw material price volatility, supply instability, and labor shortages or rising costs are other major risks faced by the Group[43](index=43&type=chunk) [Use of Proceeds](index=12&type=section&id=Use%20of%20Proceeds) The company reallocated unutilized global offering proceeds to align with its new strategy, with **RMB 37 million** unutilized as of end-2020, primarily for new brand acquisition and brand promotion Use of Net Proceeds (as of December 31, 2020) | Purpose | Revised Allocation (million RMB) | Unutilized Amount as of End 2020 (million RMB) | | :--- | :--- | :--- | | Enhancing Brand Awareness and Promotion | 27.2 | 7.3 | | Acquisition of New Brand Names and Investment in Trading Companies | 36.9 | 29.7 | | **Total** | **106.0** | **37.0** | - The remaining approximately **RMB 7.3 million** for brand promotion is expected to be fully utilized by December 31, 2021[55](index=55&type=chunk)[57](index=57&type=chunk) - The remaining approximately **RMB 29.7 million** for acquiring new brands and investing in trading companies is expected to be fully utilized by December 31, 2022[61](index=61&type=chunk)[62](index=62&type=chunk) [Future Prospects](index=16&type=section&id=Future%20Prospects) The Group aims to maintain its leading position in the Japanese umbrella market, promote its own brands in China, and expand market share in existing markets like Hong Kong, Cambodia, and South Korea, by continuing its strategic shift towards downstream distribution and brand building and exploring new business opportunities - The Group's primary goal is to maintain and strengthen its leading position in the Japanese market and promote its own branded umbrellas in the Chinese market[66](index=66&type=chunk)[69](index=69&type=chunk) - The Group will shift its business focus from upstream manufacturing to downstream distribution networks and brand building to promote higher-margin branded umbrellas, aiming for better returns for shareholders[67](index=67&type=chunk)[69](index=69&type=chunk) - To achieve business diversification, the Group is actively exploring and developing new business opportunities and projects[67](index=67&type=chunk) [Corporate Governance Report](index=17&type=section&id=Corporate%20Governance%20Report) [Corporate Governance Practices](index=17&type=section&id=Corporate%20Governance%20Practices) The company maintains high corporate governance standards, with two deviations from the code: combined Chairman and CEO roles, and independent non-executive directors' absence from the 2020 AGM; the Board oversees risk management and internal controls - The company deviates from the Corporate Governance Code as the roles of Chairman and Chief Executive Officer are held by the same person (Mr. Huang Wenji), which the Board believes facilitates business strategy execution and decision-making[72](index=72&type=chunk)[73](index=73&type=chunk) - Another deviation is that three independent non-executive directors were unable to attend the Annual General Meeting on June 30, 2020, due to other commitments[74](index=74&type=chunk) - The Board is responsible for evaluating and determining risks, ensuring the establishment and maintenance of appropriate and effective risk management and internal control systems; in 2020, the company engaged an external consulting firm for internal audit functions and found no material deficiencies[139](index=139&type=chunk)[150](index=150&type=chunk) [Board and Committee Attendance](index=20&type=section&id=Board%20and%20Committee%20Attendance) In FY2020, the Board held 6 meetings with full attendance from all directors, and all members fully attended their respective audit, remuneration, and nomination committee meetings; however, most executive directors and some independent non-executive directors were absent from the three general meetings 2020 Board Meeting Attendance (Attended/Held) | Director Name | General Meetings | Board Meetings | Audit Committee | Remuneration Committee | Nomination Committee | | :--- | :--- | :--- | :--- | :--- | :--- | | **Executive Directors** | | | | | | | Huang Wenji | 0/3 | 6/6 | N/A | N/A | N/A | | Yang Guang | 0/3 | 6/6 | N/A | N/A | N/A | | Lin Zhenshuang | 0/3 | 6/6 | N/A | N/A | N/A | | Zhong Jianxiong | 1/3 | 6/6 | N/A | N/A | N/A | | **Independent Non-Executive Directors** | | | | | | | Cao Siwei | 2/3 | 6/6 | 2/2 | 1/1 | 1/1 | | Yang Xuetai | 0/3 | 6/6 | 2/2 | 1/1 | 1/1 | | Li Jieying | 0/3 | 6/6 | 2/2 | 1/1 | 1/1 | [Environmental, Social and Governance Report](index=33&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) [ESG Report](index=33&type=section&id=ESG%20Report) This report outlines the company's 2020 ESG performance, detailing environmental efforts under ISO 14001, social compliance with labor laws and employee training, and governance practices including supply chain management and community donations 2020 Environmental Performance Indicators | Indicator | 2020 Data | | :--- | :--- | | **Total Energy Consumption** | Approx. 6,627 MWh equivalent | | **Total Water Consumption** | 123,287 cubic meters | | **Total GHG Emissions (Scope 1+2+3)** | Approx. 4,030 tonnes of CO2 equivalent | | **Non-Hazardous Waste Generated** | 240 tonnes | - As of end-2020, the Group had **1,062 employees** in China, with a male-to-female ratio of approximately **1.3:1**; **457 employees** received training during the year, representing a training ratio of **43%**[223](index=223&type=chunk)[231](index=231&type=chunk) - The Group strictly adheres to labor standards, with no instances of child or forced labor reported during the period[235](index=235&type=chunk)[238](index=238&type=chunk) - During the year, the Group donated a total of **RMB 410,000** to various charitable organizations, supporting community culture, education, and health development[255](index=255&type=chunk)[256](index=256&type=chunk) [Biographical Details of Directors and Senior Management](index=42&type=section&id=Biographical%20Details%20of%20Directors%20and%20Senior%20Management) [Directors and Senior Management Biographies](index=42&type=section&id=Directors%20and%20Senior%20Management%20Biographies) This section details the backgrounds of the company's Board members and senior management, including executive directors led by founder and Chairman Mr. Huang Wenji, and independent non-executive directors with expertise in accounting, industrial design, and financial administration, along with key senior management - Executive Directors include: **Mr. Huang Wenji** (Chairman, Founder), **Mr. Yang Guang** (Deputy General Manager, responsible for production), **Mr. Lin Zhenshuang** (International Business Department Manager, responsible for sales), and **Mr. Zhong Jianxiong** (responsible for strategic planning and finance)[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) - Independent Non-Executive Directors include: **Mr. Cao Siwei** (accounting background), **Mr. Yang Xuetai** (art and design background), and **Ms. Li Jieying** (finance and administration background)[266](index=266&type=chunk) - Senior management includes **Mr. Liu Liangping**, Research and Development Department Manager[266](index=266&type=chunk) [Report of the Directors](index=44&type=section&id=Report%20of%20the%20Directors) [Directors' Report](index=44&type=section&id=Directors%27%20Report) This report outlines the Group's principal business and financial position for FY2020, noting high customer concentration (top five clients accounted for **73%** of total revenue), no recommended annual dividend, and details on directors' and major shareholders' equity interests Major Customer and Supplier Concentration | Concentration Indicator | 2020 | 2019 | | :--- | :--- | :--- | | **Largest Customer as % of Total Revenue** | 20% | 18.1% | | **Top Five Customers as % of Total Revenue** | 73% | 59.4% | | **Largest Supplier as % of Total Purchases** | 9% | 35.0% | | **Top Five Suppliers as % of Total Purchases** | 25% | 53.4% | - The Board does not recommend a final dividend for the year ended December 31, 2020[291](index=291&type=chunk) - On May 14, 2020, the company granted share options to several directors and employees under the share option scheme, with an adjusted exercise price of **HKD 0.464 per share** after share consolidation[317](index=317&type=chunk)[361](index=361&type=chunk) - During the year, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[301](index=301&type=chunk) [Independent Auditor's Report](index=58&type=section&id=Independent%20Auditor%27s%20Report) [Auditor's Report](index=58&type=section&id=Auditor%27s%20Report) Auditor Kaiyuan Xinde Certified Public Accountants Limited issued an unmodified opinion on the company's 2020 consolidated financial statements, highlighting key audit matters regarding contingent consideration and asset impairment assessment - The auditor issued an **unmodified opinion**, stating that the consolidated financial statements fairly present the Group's financial position and performance[374](index=374&type=chunk)[377](index=377&type=chunk) - Key Audit Matter One: Fair value measurement of contingent consideration payable, which involves significant management judgment and reliance on independent external valuation[379](index=379&type=chunk)[382](index=382&type=chunk) - Key Audit Matter Two: Impairment of property, plant and equipment and right-of-use assets, which involves significant management judgment on key assumptions such as future revenue, operating profit margins, and discount rates[379](index=379&type=chunk)[385](index=385&type=chunk) [Consolidated Financial Statements](index=65&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=65&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended December 31, 2020, the Group reported revenue of **RMB 344 million**, a **38.5% decrease**, with gross profit at **RMB 52.8 million**, down **19.7%**, and annual loss expanding to **RMB 34.31 million** Consolidated Statement of Profit or Loss Summary (RMB thousands) | Item | 2020 | 2019 | | :--- | :--- | :--- | | **Revenue** | 344,390 | 558,599 | | **Gross Profit** | 52,795 | 65,861 | | **Loss Before Tax** | (31,823) | (11,441) | | **Loss for the Year Attributable to Owners of the Company** | (34,312) | (16,247) | | **Basic Loss Per Share (RMB cents)** | (17.78) | (8.58) | [Consolidated Statement of Financial Position](index=66&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2020, the Group's total assets were **RMB 582 million**, total liabilities decreased to **RMB 155 million**, and total equity stood at **RMB 426 million**, indicating a stable financial position Consolidated Statement of Financial Position Summary (RMB thousands) | Item | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Non-current Assets** | 105,238 | 134,665 | | **Current Assets** | 476,371 | 582,873 | | **Total Assets** | 581,609 | 717,538 | | **Current Liabilities** | 154,971 | 250,407 | | **Non-current Liabilities** | 413 | 15,031 | | **Total Liabilities** | 155,384 | 265,438 | | **Total Equity** | 426,225 | 452,100 | [Consolidated Statement of Changes in Equity](index=68&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) As of end-2020, the Group's total equity was **RMB 426 million**, a decrease of approximately **RMB 25.88 million** from the beginning of the year, primarily due to the **RMB 34.31 million** loss for the year, partially offset by new share issuance and share option grants - Total equity decreased from **RMB 452.1 million** at the beginning of the year to **RMB 426.2 million** at year-end[423](index=423&type=chunk) - Key factors in equity changes include: an annual loss of **RMB 34.31 million**, an increase of **RMB 6.38 million** from new share issuance, an increase of **RMB 1.8 million** from share option grants, and **RMB 0.28 million** from capital contribution by shareholders[423](index=423&type=chunk) [Consolidated Statement of Cash Flows](index=70&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2020, the Group generated **RMB 155 million** in net cash from operating activities, a significant improvement, with net cash outflow from investing activities of **RMB 0.87 million**, and from financing activities of **RMB 122 million**, resulting in a net increase of **RMB 32.38 million** in cash and cash equivalents Consolidated Statement of Cash Flows Summary (RMB thousands) | Item | 2020 | 2019 | | :--- | :--- | :--- | | **Net Cash From Operating Activities** | 155,452 | 9,351 | | **Net Cash (Used In)/From Investing Activities** | (866) | 492 | | **Net Cash Used In Financing Activities** | (122,209) | (1,656) | | **Net Increase in Cash and Cash Equivalents** | 32,377 | 8,187 | | **Cash and Cash Equivalents at End of Period** | 58,319 | 26,151 | [Notes to the Consolidated Financial Statements](index=72&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed explanations and supplementary information for the consolidated financial statements, covering company information, accounting policies, key judgments and estimates, financial data breakdowns, related party transactions, and subsidiary acquisition details - Note 7 discloses revenue breakdown by product category, with **nylon umbrellas** being the largest revenue source, accounting for approximately **43%** of total revenue[729](index=729&type=chunk) - Note 8 discloses revenue by geographical region, with **Cambodia, Japan, and China** being the top three markets, contributing approximately **38%, 33%, and 16%** of revenue respectively[734](index=734&type=chunk) - Note 31 details the acquisition of Jinjiang Jingting Trading Co., Ltd. in 2019, including consideration, net assets acquired, and goodwill generated[908](index=908&type=chunk)[911](index=911&type=chunk)[916](index=916&type=chunk) [Financial Summary](index=173&type=section&id=Financial%20Summary) [Five-Year Financial Summary](index=173&type=section&id=Five-Year%20Financial%20Summary) This section provides a summary of the Group's key financial data for the past five fiscal years (2016-2020), showing a continuous decline in revenue since 2016, consecutive losses in 2019 and 2020, and a decrease in total assets and net assets over the last two years Five-Year Performance Trend (RMB thousands) | Year | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 344,390 | 558,599 | 521,186 | 538,264 | 603,985 | | **(Loss)/Profit Before Tax** | (31,823) | (11,441) | 25,260 | 6,705 | 13,514 | Five-Year Assets and Liabilities Trend (RMB thousands) | Year | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | 581,609 | 717,538 | 701,426 | 681,201 | 713,292 | | **Net Assets** | 426,225 | 452,100 | 461,204 | 440,586 | 430,983 |

Financial Performance - Revenue for the six months ended June 30, 2020, was RMB 203,005,000, a decrease of 36.5% compared to RMB 319,735,000 in the same period of 2019[3]. - Gross profit for the period was RMB 29,589,000, down 29.0% from RMB 41,723,000 in 2019[3]. - The company reported a loss before tax of RMB 1,577,000, compared to a profit of RMB 7,217,000 in the previous year[3]. - Total comprehensive loss for the period attributable to owners of the Company was RMB 4,908,000, compared to a comprehensive income of RMB 3,635,000 in 2019[3]. - Basic and diluted loss per share for the period was RMB (2.16) cents, compared to earnings of RMB 1.01 cents per share in the previous year[3]. - The decline in financial performance was mainly due to a substantial decrease in demand for nylon umbrellas as a result of the COVID-19 pandemic[74]. - The loss attributable to owners of the Company was approximately RMB 4 million for the Period, compared to a profit of approximately RMB 3 million for the first half of 2019[74]. - Revenue decreased from approximately RMB 320 million for the first half of 2019 to RMB 203 million for the Period, representing a decrease of approximately 36.6% due to reduced demand for nylon umbrellas[81]. Assets and Liabilities - Net current assets as of June 30, 2020, were RMB 333,199,000, slightly up from RMB 332,466,000 at the end of 2019[6]. - Total assets less current liabilities amounted to RMB 469,770,000, compared to RMB 471,709,000 at the end of 2019[6]. - The company’s net assets as of June 30, 2020, were RMB 449,435,000, down from RMB 452,100,000 at the end of 2019[6]. - The company experienced a significant increase in trade payables, which rose to RMB 54,548,000 from RMB 31,479,000 in 2019[6]. - Cash and cash equivalents decreased to RMB 30,258,000 from RMB 66,152,000 at the end of 2019[6]. - Cash and cash equivalents as of June 30, 2020, were RMB 8,461,000, a decrease from RMB 76,317,000 as of June 30, 2019, indicating a decline of approximately 88.9%[27]. Cash Flow - For the six months ended June 30, 2020, net cash generated from operating activities was RMB 171,446,000, a significant increase from RMB 18,731,000 in the same period of 2019, representing an increase of approximately 815%[25]. - Net cash used in investing activities for the six months ended June 30, 2020, was RMB 4,742,000, compared to RMB 2,692,000 in 2019, reflecting an increase of approximately 76%[25]. - Net cash used in financing activities for the six months ended June 30, 2020, was RMB 183,302,000, a substantial increase from RMB 7,093,000 in 2019, representing an increase of about 2,585%[25]. Revenue Breakdown - Revenue from the sale of goods for the six months ended June 30, 2020, was RMB 203,005,000, down from RMB 319,735,000 in 2019, indicating a decrease of about 36.5%[30]. - Revenue from POE umbrellas increased to RMB 56,552,000 in 2020 from RMB 49,527,000 in 2019, representing a growth of 14.1%[40]. - Revenue from nylon umbrellas decreased significantly to RMB 48,645,000 in 2020 from RMB 184,287,000 in 2019, a decline of 73.6%[40]. - Revenue from umbrella parts rose to RMB 97,808,000 in 2020, up from RMB 85,921,000 in 2019, marking an increase of 13.5%[40]. - The Group's revenue from external customers in Japan decreased to RMB 75,491,000 in 2020 from RMB 89,126,000 in 2019, a decline of 15.3%[43]. - Revenue from external customers in Cambodia decreased to RMB 84,355,000 in 2020 from RMB 96,902,000 in 2019, a decline of 13.0%[43]. - The Group's major customers included Customer A with revenue of RMB 37,318,000 in 2020, down from RMB 57,506,000 in 2019, a decrease of 35.1%[46]. Expenses - Total staff costs for the six months ended June 30, 2020, were RMB 33,009,000, a decrease of 31.2% compared to RMB 47,928,000 in 2019[54]. - Research and development expenses for the period were RMB 3,636,000, down from RMB 4,253,000 in 2019, a decrease of 14.5%[55]. - Selling and distribution expenses increased, including marketing and promotion expenses to enhance brand awareness[74]. - Selling and distribution expenses increased by approximately RMB 6 million, or 100%, from approximately RMB 6 million for the first half of 2019 to RMB 12 million for the Period, primarily due to increased promotion expenses[80]. - Administrative expenses decreased by approximately RMB 7 million, or 28%, from approximately RMB 25 million for the first half of 2019 to RMB 18 million for the Period, mainly due to a decrease in equity-settled share-based payments[80]. Shareholding and Corporate Governance - Mr. Huang Wenji holds a long position with 125,033,900 shares, representing 66.05% of the total shareholding[124]. - Jicheng Investment Limited, wholly owned by Mr. Huang Wenji, has 123,140,900 shares, accounting for 65.05% of the total shareholding[122]. - Ms. Chen Jieyou, spouse of Mr. Huang Wenji, is deemed to have an interest in 123,140,900 shares, also representing 65.05%[125]. - The report indicates a significant concentration of shareholding among a few individuals, primarily Mr. Huang Wenji[124]. Strategic Initiatives - The Group is exploring and developing new business opportunities and projects to diversify its operations[73]. - The Group plans to further expand its branded umbrellas by intensifying marketing activities, with an allocation of RMB 10.6 million for this purpose[94]. - The Group has allocated RMB 36.9 million for investing in a trading company as part of its growth strategy[94]. - The Group aims to maintain and strengthen its position as a leading umbrella manufacturer in the Japan market and increase market share in existing markets such as Hong Kong, Cambodia, and South Korea[104]. - The Group intends to expand production capacity and enhance research and development capabilities to meet increasing demand in the umbrella market[105]. Market Conditions - The operating environment remains challenging due to the global economic slowdown, trade tensions between the PRC and the United States, and the impact of COVID-19 on consumer confidence[105]. - The Group's profitability may be adversely affected by the loss of key customers and changes in market demand levels for its products[86]. - The Group's sales are primarily made in US dollars, RMB, and Japanese Yen, exposing it to exchange rate risks[86]. Other Information - The Group did not declare or propose any dividends during the reported period, consistent with 2019[60]. - The Group completed the acquisition of 100% equity interest in Jinjiang Jingting for RMB 5 million in cash and a promissory note of RMB 24 million with a 36-month maturity term[102]. - The Group's current ratio improved to approximately 4.7 times as of June 30, 2020, compared to 2.3 times as of December 31, 2019[84]. - The average trade receivables turnover day increased from approximately 135 days for the year ended December 31, 2019, to approximately 198 days for the Period[84]. - The inventory turnover days increased from approximately 154 days for the year ended December 31, 2019, to approximately 282 days for the Period[84]. - As of June 30, 2020, the Group employed a total of 1,404 employees, an increase from 1,364 employees as of December 31, 2019[91]. - As of June 30, 2020, the Group had no significant capital commitments or contingent liabilities[91].

ANNUAL REPORT 2019 年報 CHINA JICHENG HOLDING LIMITED 中國集成控股有限公司 CHINA JICHENG HOLDINGS LIMITED 中國集成控股有限公司 (Incorporated in the Cayman Islands with limited liability) （於開曼群島註冊成立之有限公司） Stock Code 股份代號: 1027 ANNUAL REPORT 年報 2019 CONTENTS | --- | --- | --- | |---------------------------------------------------------|----------------------------|-------| | | | 目錄 | | Corporate Information | 公司資料 | 2 | | Chairman's Statement | 主席報告 | 4 | | Management Discussion and Analysis | 管理層討論與分析 | 6 | | Corporate Governance ...

Financial Performance - Revenue for the six months ended June 30, 2019, was RMB 319,735,000, representing a 23.5% increase from RMB 258,770,000 in the same period of 2018[3] - Gross profit for the period was RMB 41,723,000, with a gross margin of approximately 13.0%[3] - Profit before taxation decreased to RMB 7,217,000, down 33.8% from RMB 10,794,000 in the previous year[3] - Profit for the period attributable to owners of the Company was RMB 3,024,000, a decline of 62.8% compared to RMB 8,114,000 in 2018[3] - Total comprehensive income for the period attributable to owners of the Company was RMB 3,635,000, down from RMB 8,166,000 in the prior year[3] - The Company reported a basic and diluted earnings per share of RMB 0.08 cents, down from RMB 0.21 cents in the previous year[3] - Profit attributable to owners of the Company was approximately RMB3 million, reflecting a decrease of 62.7% compared to 2018[88] - Basic earnings per share was RMB0.08 cents for the Period[88] Revenue Breakdown - Revenue from POE umbrellas was RMB 49,527,000 in 2019, while nylon umbrellas generated RMB 184,287,000, and umbrella parts contributed RMB 85,921,000[30] - Revenue from external customers by geographical location showed that Japan contributed RMB 89,126,000, PRC contributed RMB 52,058,000, and Cambodia significantly increased to RMB 96,902,000 from RMB 29,397,000 in 2018[34] - The Group's total revenue for the six months ended June 30, 2019, was RMB 319,735,000, an increase of 23.5% compared to RMB 258,770,000 for the same period in 2018[34] Cost and Expenses - Cost of inventories recognized as an expense was RMB 278,012,000, up from RMB 218,523,000 in 2018, reflecting increased production costs[49] - Research and development expenses were RMB 4,253,000, a decrease from RMB 10,274,000 in the previous year, indicating a shift in investment strategy[49] - Selling and distribution expenses decreased by approximately RMB1 million, or 15.2%, from approximately RMB7 million in the first half of 2018 to RMB6 million in the period, attributed to tight control over promotion expenses[93] - Administrative expenses increased by approximately RMB1 million, or 3.6%, from approximately RMB24 million in the first half of 2018 to RMB25 million in the period, mainly due to equity-settled share-based payments of approximately RMB7 million[93] Cash Flow and Assets - Net cash generated from operating activities was RMB 18,731,000, a significant improvement compared to cash used of RMB 41,657,000 in the same period of 2018[12] - Current assets totaled RMB 602,874,000, an increase from RMB 568,527,000 at the end of 2018[6] - Cash and cash equivalents at June 30, 2019, were RMB 76,317,000, up from RMB 67,352,000 at the beginning of the year[14] - Trade receivables at 30 June 2019 totaled RMB 233,437,000, slightly down from RMB 234,075,000 at 31 December 2018[64] - Trade payables at 30 June 2019 were RMB 32,810,000, a decrease from RMB 35,204,000 at 31 December 2018[66] Corporate Governance - The Company is committed to high standards of corporate governance, with a Board comprising four executive Directors and three independent non-executive Directors[144] - Mr. Huang serves as both Chairman and CEO, which the Directors believe facilitates business strategy execution and decision-making[144] - The Audit Committee, established on January 23, 2015, comprises three independent non-executive Directors and has reviewed the Group's accounting principles and financial reporting matters[149] - The Remuneration Committee, also established on January 23, 2015, consists of three independent non-executive Directors, with Ms. Lee Kit Ying as chairperson[152] - The Nomination Committee, established on January 23, 2015, includes three independent non-executive Directors, with Mr. Yang Xuetai as Chairman[152] Strategic Initiatives - The Group aims to maintain and strengthen its leading position in the umbrella manufacturing market in Japan and its own brand umbrella manufacturing in China, while expanding market share in Hong Kong, Cambodia, and South Korea[131] - The Group plans to enhance its marketing activities to promote brand awareness both domestically and overseas, with a focus on traditional media and trade fairs[120] - The Group plans to enhance its production capacity and R&D capabilities to meet the growing demand in the umbrella market[131] - The Group is exploring and developing new business opportunities and projects to diversify its operations[131] Employee and Shareholder Information - The Group employed a total of 1,647 employees as of June 30, 2019, an increase from 1,592 employees as of December 31, 2018[113] - The emolument policy for employees is based on experience, qualifications, and competence, with additional benefits including contributions to provident funds and social insurance[113] - The Company expresses appreciation to all colleagues, shareholders, customers, bankers, and business associates for their support[152] Acquisitions - The acquisition of Jinjiang Jingting was completed for RMB5,000,000 in cash and a promissory note of RMB24,000,000[80] - Goodwill of RMB5,565,000 was recognized based on the fair value of identifiable assets and liabilities of Jinjiang Jingting[84] - Jinjiang Jingting contributed approximately RMB7,491,000 to the Group's revenue and a profit of approximately RMB275,000 for the period ended 30 June 2019[84] - The Group completed the acquisition of 100% equity interest in Jinjiang Jingting for a total consideration of RMB29 million, consisting of RMB5 million in cash and a promissory note of RMB24 million[124] Market Conditions - The global economic performance remains sluggish, and the operating environment is challenging due to the trade war between China and the United States, impacting consumer confidence[131] - The Group is committed to creating higher value and better returns for shareholders amidst market challenges[131]

Financial Performance - The Group's revenue for the year ended 31 December 2018 decreased to approximately RMB521 million, representing a decrease of approximately 3.2% compared to 2017[11]. - Profit attributable to the owner of the Company increased to approximately RMB19 million, representing an increase of approximately 429.7% compared to 2017[11]. - Revenue from POE umbrella products decreased by approximately RMB99 million, or 35.7%, from approximately RMB276 million in 2017 to approximately RMB177 million in 2018[11]. - Revenue from nylon umbrella products increased by approximately RMB14 million, or 7.9%, from approximately RMB171 million in 2017 to approximately RMB185 million in 2018[11]. - Revenue from umbrella parts products increased by approximately RMB68 million, or 74.2%, from approximately RMB91 million in 2017 to approximately RMB159 million in 2018[11]. - The Group's revenue decreased from approximately RMB 538 million for the year ended 31 December 2017 to approximately RMB 521 million for the year ended 31 December 2018, representing a decrease of approximately 3.2%[30]. - Revenue from overseas customers accounted for approximately 74% of the Group's total revenue for the year ended 31 December 2018, while domestic customers accounted for approximately 26%[21][22]. Cost and Profitability - The cost of sales decreased from approximately RMB 457 million for the year ended 31 December 2017 to approximately RMB 442 million for the year ended 31 December 2018, representing a decrease of approximately 3.4%[30]. - Gross profit decreased by approximately RMB 2 million, or 1.9%, from approximately RMB 81 million for the year ended 31 December 2017 to approximately RMB 79 million for the year ended 31 December 2018, while gross profit margin increased from approximately 15.0% to approximately 15.2%[30]. - Other income and gains increased by approximately RMB 9 million, or 188.8%, from approximately RMB 5 million for the year ended 31 December 2017 to approximately RMB 14 million for the year ended 31 December 2018[30]. - Selling and distribution expenses decreased by approximately RMB 2 million or 10.9% from approximately RMB 13 million for the year ended 31 December 2017 to approximately RMB 11 million for the year ended 31 December 2018[30]. - Administrative expenses decreased by approximately RMB11 million, or 19.7%, from approximately RMB57 million for the year ended 31 December 2017 to approximately RMB46 million for the year ended 31 December 2018[33]. - Finance costs increased by approximately RMB1 million, or 11.2%, from approximately RMB9 million for the year ended 31 December 2017 to approximately RMB10 million for the year ended 31 December 2018[33]. - Income tax expense increased by approximately RMB3 million, or 106.6%, from approximately RMB3 million for the year ended 31 December 2017 to approximately RMB6 million for the year ended 31 December 2018[33]. - Profit for the year increased by approximately RMB15 million, or 429.7%, from approximately RMB4 million for the year ended 31 December 2017 to approximately RMB19 million for the year ended 31 December 2018[33]. Business Strategy and Focus - The Company aims to maintain and strengthen its position as a leading umbrella manufacturer focused on the Japan market and its own branded products in the PRC market[14]. - The Group plans to shift its business focus from upstream manufacturing to downstream distribution network and brand building[15]. - The Group is exploring and developing new business opportunities and projects to diversify its business[15]. - The Group seeks to increase its market share in existing markets such as Hong Kong, Cambodia, and South Korea[14]. - The Group's new strategy aims to enhance shareholder returns by promoting its own branded umbrellas with higher profit margins[23]. - Future business focus will shift from upstream manufacturing to downstream distribution and brand building to enhance margins and shareholder returns[55]. Corporate Governance - The Company has committed to high standards of corporate governance, with a board comprising four executive directors and three independent non-executive directors[60]. - The Board resolved to reallocate approximately RMB61.4 million of unutilized net proceeds, with RMB36.9 million allocated for acquiring new brand names and/or licensing rights of umbrella products from Southeast Asian countries[46]. - The Company has established corporate governance policies and practices, ensuring compliance with laws and regulations[78]. - The Audit Committee, Nomination Committee, and Remuneration Committee support the Board, each with defined terms of reference approved by the Board[86]. - The Company has a Board Diversity Policy to ensure a diverse composition of the Board[92]. - The Company Secretary maintains detailed minutes of Board meetings, which include decisions made and dissenting views expressed, available for inspection[99]. Risk Management - The Group has established risk management procedures to address significant risks associated with its business, with annual reviews conducted by the Board[108]. - The internal control systems are designed to reduce risks associated with the business and minimize adverse impacts from those risks[110]. - The Audit Committee reviews the risk management and internal controls that are significant to the Group on an ongoing basis[108]. - The Group's risk management strategies include risk retention, avoidance, sharing, diversification, and transfer[108]. - For the year ended December 31, 2018, no significant deficiencies or weaknesses in the internal control system were identified by the external advisory firm[110]. Environmental Impact - The Group aims to reduce CO2 emissions and land contamination by complying with local environmental laws and regulations[139]. - The Group implemented measures to minimize material usage in manufacturing to maximize resource efficiency[144]. - The Group's policies ensure that wastewater is properly connected to the municipal sewage system and all land waste is sent to municipal solid waste management plants[144]. - The Group has not reported any non-compliance with environmental regulations during the year ended 31 December 2018[138]. - Water consumption decreased from 145,151 m³ in 2017 to 130,935 m³ in 2018, representing a reduction of approximately 9.0%[147]. - Electricity consumption decreased from 7,473,707 kWh in 2017 to 7,142,702 kWh in 2018, representing a reduction of approximately 4.4%[149]. Employee and Community Engagement - The total number of employees in China was 1,592 as of December 31, 2018, with a gender ratio of 1:0.86[155]. - The Group reported no work injuries or work-related fatalities during the year ended 2018[165]. - The Group donated RMB 70,000 to various recognized charity organizations, including Yongchun Charity Federation, to support community programs[176]. - There were over 3,569 participants in training courses during the year, with a male to female ratio of 1:0.8[165]. - The Group has established a comprehensive vertical supply chain management system with 789 suppliers, approximately 97% of which are located in Mainland China[170].