Financial Performance - The company reported a significant increase in revenue, achieving a total of $150 million, representing a 25% growth year-over-year[12]. - The gross profit margin improved to 40%, up from 35% in the previous year[12]. - Operating expenses were reduced by 5%, contributing to overall profitability[12]. - The Group's total revenue in 2020 was approximately RMB403.9 million, representing a decrease of approximately RMB148.0 million or 26.8% compared to 2019[29]. - Net loss attributable to owners of the Company was approximately RMB110.4 million, a significant decrease of approximately RMB113.9 million or 50.8% in loss compared to 2019[29]. - The Group's gross profit for the year ended 31 December 2020 was approximately RMB161,690,000, a decrease of approximately RMB81,636,000 or 33.6% compared to approximately RMB243,326,000 for the year ended 31 December 2019[42]. - The gross profit margin for 2020 was approximately 40.0%, down from approximately 44.1% in 2019[42]. - The Group recorded a loss for the year ended December 31, 2020, with financial details available in the consolidated financial statements on pages 81 to 87[141]. - The Board does not recommend the payment of a final dividend for 2020 due to ongoing operating losses[142]. Market and Product Development - User data showed an increase in active users, reaching 1.2 million, which is a 15% increase compared to the previous year[12]. - New product launches are expected to contribute an additional $30 million in revenue over the next fiscal year[12]. - The Group will focus on the research and development of new products to align with current consumption concepts and habits[31]. - There will be an increase in integrated sales of health drinks and bakery products to enhance product competitiveness[31]. - The Group aims to provide healthy, trendy, and aesthetically pleasing products in the future[31]. - The Group plans to focus on developing new products, including various types of bread, cakes, and desserts, and improving the taste and softness of existing products in 2020[100]. - The Group aims to transform its business model by optimizing and expanding sales channels, establishing interconnected online and offline operations, and enhancing the "Christine" brand image[101]. Strategic Initiatives - The company provided a positive outlook for the next quarter, projecting a revenue growth of 20% to $180 million[12]. - Market expansion plans include entering two new countries, which are projected to increase market share by 10%[12]. - The company is considering strategic acquisitions to enhance its product offerings and market presence[12]. - A new marketing strategy is being implemented, aiming to increase brand awareness by 30% over the next year[12]. - The Group is exploring new business patterns by cooperating with renowned convenience store chains and establishing smarter online sales channels[33]. - The Group aims to establish strategic cooperation with colleges of Chinese medicine to integrate food therapy and health care elements into its products[33]. Cost Management and Efficiency - The Group implemented effective cost control measures to mitigate losses during the challenging year[29]. - The Group closed down about 100 loss-making stores, significantly reducing operating costs and eliminating outdated production facilities[30]. - Selling and distribution expenses decreased by approximately RMB75,679,000 from approximately RMB341,994,000 in 2019 to approximately RMB266,315,000 in 2020 due to store closures and reduced revenue[42]. - Administrative expenses for the year ended 31 December 2020 amounted to approximately RMB42,133,000, representing a significant decrease of approximately RMB32,175,000 or 43.3% compared to RMB74,308,000 for the year ended 31 December 2019[44]. Governance and Management - The company has a strong board of directors with diverse expertise in law, finance, and management, enhancing its governance structure[119]. - The company is committed to maintaining high standards of corporate governance with independent non-executive directors actively involved in key committees[121]. - The board's composition reflects a balance of experience in both the bakery industry and financial management, positioning the company for strategic growth[121]. - The Company has appointed experienced executives in sales and management, including Ms. Liping Huang, who oversees sales in Zhejiang, Wuxi, and Suzhou with approximately 16 years of experience[129]. Financial Position and Risks - As of December 31, 2020, the Group had bank borrowings of approximately RMB100,000,000, up from approximately RMB35,950,000 in 2019[79]. - The Group's gearing ratio increased to approximately 105.9% as of December 31, 2020, compared to approximately 89.5% as of December 31, 2019, primarily due to an increase in bank borrowings[79]. - The Group continues to face risks from intense competition and ongoing increases in labor and raw material costs, leading to a strategy of closing loss-making stores[141]. - Food safety remains a significant industry risk, and the Group is committed to ensuring food safety while adhering to environmental and social responsibilities[141]. Future Outlook - The Group is confident in pushing forward with business transformation to create long-lasting value for the Company and shareholders[33]. - The management remains optimistic about the bakery industry's growth in China, citing continuous economic growth, low entry barriers, and an expanding customer base from first and second-tier cities to third and fourth-tier cities[94][99]. - The Group plans to innovate diversified business forms and promote intelligent management to capture the consumer market post-economic recovery[102].

0 ® 克莉絲汀 克 莉 絲 汀 國 際 控 股 有 限 公 司 CHRISTINE INTERNATIONAL HOLDINGS LIMITED (於開曼群島註冊成立之有限公司) (Incorporated in the Cayman Islands with limited liability) 股份代號 Stock Code: 1210 INTERIM REPORT 2020 中期報告 CONTENTS 目錄 | --- | --- | --- | --- | --- | --- | |----------|----------------------|----------------------------------------|------------------------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 目錄 | | CONTENTS | | | | 公司資料 | | Corporate Information | | 2 | ...

Financial Performance - In 2019, the Group's revenue was approximately RMB 551,941,000, representing a decrease of approximately 16.88% compared to RMB 664,017,000 in 2018[25]. - The Group's overall same-store sales growth rate for the year was -10.07%, influenced by an outdated marketing model and declining brand efficiency[25]. - The gross profit for the Group in 2019 was RMB 243,326,000, down from RMB 295,900,000 in 2018, reflecting a decrease of approximately 17.73%[24]. - Cash and bank card sales amounted to approximately RMB284,692,000, a decrease of about 20.04% from RMB356,021,000 in 2018[31]. - Gross profit for the year ended 31 December 2019 was approximately RMB243,326,000, a decrease of about 17.77% from RMB295,900,000 in 2018[31]. - The gross profit margin for 2019 was approximately 44.09%, slightly down from 44.56% in 2018[31]. - Other income for the year ended December 31, 2019, amounted to approximately RMB4,953,000, an increase of approximately RMB53,626,000 compared to a loss of RMB48,673,000 for the year ended December 31, 2018[33]. - Net losses decreased by approximately RMB7,878,000 from approximately RMB232,175,000 for the year ended December 31, 2018, to approximately RMB224,297,000 for the year ended December 31, 2019[34]. - The Group recorded a loss for the year ended 31 December 2019, with financial details available in the consolidated financial statements on pages 88 to 94[125]. Store Operations - The total number of stores decreased from 586 at the end of 2018 to 476 at the end of 2019, resulting in a net reduction of 110 stores[25]. - The closure of 117 poorly-performing stores was part of a strategy to manage operating costs, despite opening 7 new stores[25]. - The number of closed stores in Shanghai was 43, accounting for 36.75% of total closures for the year[29]. - The Group's strategy includes closing down cost-ineffective stores that record frequent losses[125]. Revenue Breakdown - Revenue from moon cakes decreased from RMB 58,058,000 in 2018 to RMB 31,559,000 in 2019, a decline of approximately 45.70%[24]. - Revenue from bread and cakes was RMB 407,651,000 in 2019, down from RMB 475,354,000 in 2018, a decrease of approximately 14.23%[24]. - The total revenue from pastries was RMB 72,210,000 in 2019, down from RMB 80,309,000 in 2018, a decrease of approximately 10.00%[24]. - Sales revenue from bread and cakes decreased by approximately RMB67,703,000, or 14.24%, compared to 2018[28]. - Sales revenue from pastries decreased by approximately RMB8,099,000, or 10.08%, compared to 2018[28]. - The turnover of moon cakes decreased by approximately RMB26,499,000, representing a decrease of approximately 45.64%[28]. - Revenue from Jiangsu Province and Zhejiang Province decreased by approximately RMB67,690,000 and RMB23,741,000, representing decreases of 36.08% and 26.42%, respectively[29]. Marketing and Sales Strategy - The Group's marketing strategies and sales channels were ineffective, leading to a continuous decline in overall operating income for the year[25]. - Seasonal products like moon cakes faced reduced market demand and increased competition from alternative products, contributing to declining performance[25]. - The Group aims to explore new business forms such as online sales and OEM of bakery products to improve future performance[76]. - Product development will emphasize differentiation, personalization, and regionalization to meet market demands[78]. - Improvements in the delivery and sales process of cold chain products are underway to enhance taste and consumer experience[82]. Financial Management - The Group adopted a prudent financial management approach to maintain sound liquidity amid a year-on-year decline in cash positions[61]. - The current ratio as of December 31, 2019, was 22.36%, down from 65.94% as of December 31, 2018[63]. - The Group's gearing ratio was approximately 89.54% as of December 31, 2019, compared to 62.53% in 2018, primarily due to a decline in revenue and an increase in bank borrowings[63]. - The Group aims to improve its financial structure and replenish working capital before considering dividend distribution[125]. Human Resources - As of December 31, 2019, the total number of employees in the Group was 3,306, down from 4,345 as of December 31, 2018, with total staff costs approximately RMB 282,457,000[76]. - The majority of employees are sales staff in stores, and the Group is currently implementing store-closure plans and staff downsizing, affecting job rotation and multi-skills training[169]. - The Group's human resources focus includes training and controlling labor costs amid ongoing restructuring efforts[169]. Corporate Governance - The Company has maintained compliance with relevant laws and regulations that significantly impact its operations, as outlined in the Corporate Governance Report[123]. - The Company has received annual confirmations of independence from all independent non-executive Directors, affirming their compliance with independence guidelines[151]. - The Company has arranged appropriate directors' and officers' liability insurance coverage for its Directors and officers[165]. Shareholder Information - The largest supplier accounted for 11.27% of the Group's total purchases, while the top five suppliers represented 29.59% of total purchases[149]. - No single customer accounted for over 10% of the Group's total sales during the year ended December 31, 2019[149]. - The report highlights the ownership structure and interests of various shareholders, emphasizing the control by certain individuals and corporations[183].

Revenue Performance - For the six months ended June 30, 2019, the Group's operating revenue was approximately RMB 258,151,000, representing a decrease of approximately 17.5% compared to RMB 312,971,000 for the same period in 2018[12][13]. - The decline in revenue is attributed to high homogeneity of bakery products and fierce industry competition, leading to a continuous decrease in market share[12][13]. - The Group's overall revenue decline is linked to the closure of underperforming stores and reduced brand visibility in the market[12][13]. - The operating profit for bread and cakes was RMB 72,703,000 for the first half of 2019, down from RMB 93,593,000 in the same period of 2018, reflecting a decline of approximately 22.3%[11]. - Revenue from other products was RMB 23,437,000 in 2019, compared to RMB 27,817,000 in 2018, marking a decrease of approximately 15.7%[11]. - Operating revenue from bread and cakes decreased by approximately RMB 45,460,000 or 18.5% in the first half of 2019 compared to the same period in 2018[17]. - The Group's revenue decreased by approximately 8.2% for the six months ended June 30, 2019, compared to the end of the previous year[36]. - The Group's revenue for the six months ended June 30, 2019, was RMB 258,151,000, a decrease of 17.7% compared to RMB 312,971,000 in the same period of 2018[155]. Store Operations - The Group closed several loss-making stores, resulting in a year-on-year decrease in the number of stores[12][13]. - The number of stores decreased from 616 at the end of June 2018 to 533 at the end of the first half of 2019, with a net decrease of 83 stores, including 44 in Shanghai, 21 in Jiangsu, and 18 in Zhejiang[15]. - The number of closed stores in the Shanghai area represented 40.7% of the total closed stores in the first half of 2019, compared to 48.2% in the same period of 2018[17]. - The number of stores decreased by 59 during the six months ended June 30, 2019, leading to a reduction in receivables by approximately RMB 5,828,000 compared to December 31, 2018[48]. Financial Performance - The Group recorded a loss of approximately RMB 107,563,000, a decrease of approximately RMB 7,992,000 compared to a loss of approximately RMB 115,555,000 for the corresponding period in 2018[28]. - Gross operating profit for the six months ended June 30, 2019, was approximately RMB 110,936,000, a decrease of 17.4% from RMB 134,275,000 in the same period of 2018[19]. - The total payroll during the period amounted to approximately RMB 138.079 million, accounting for 53.5% of operating revenue, an increase of 6.2% compared to the previous year[141]. - The Group reported a loss before taxation of RMB 107,349,000 for the six months ended June 30, 2019, compared to a loss of RMB 115,763,000 in the prior year[155]. - The company recorded a loss and total comprehensive expense for the period of RMB (107,563) thousand for the six months ended June 30, 2019[162]. Brand and Market Position - The weakened brand recognition has negatively impacted the Group's operational performance, with most single stores recording lower operating revenue than previous periods[12][13]. - The competitive landscape in the bakery industry remains challenging, necessitating strategic adjustments to regain market share[12][13]. - The Group plans to optimize existing retail stores and maintain branding to capture further development opportunities in the bakery market[150]. - The Company aims to enhance its market position by selling finished or semi-finished products to various distributors and optimizing existing retail outlets[147]. Cash Flow and Liquidity - As of June 30, 2019, cash and bank deposits amounted to approximately RMB 78,122,000, a decrease of approximately RMB 104,010,000 compared to RMB 182,132,000 as of December 31, 2018, primarily due to a net cash outflow of approximately RMB 53,372,000 from operating activities[66]. - The current ratio as of June 30, 2019, was 28.74%, significantly lower than 65.94% as of December 31, 2018, due to decreased operating revenue affecting cash reserves[66]. - The total current liabilities exceeded total current assets by RMB 378,744 thousand as of June 30, 2019, indicating a liquidity concern[170]. - Cash and cash equivalents decreased by RMB 104,010 thousand, from RMB 182,132 thousand at the beginning of the period to RMB 78,122 thousand at the end of the period[168]. Accounting Policies and Standards - The Group has applied HKFRS 16 for the first time, which supersedes HKAS 17 Leases, impacting the accounting policies for leases[178]. - The Group recognizes right-of-use assets at the commencement date of the lease, measured at cost less any accumulated depreciation and impairment losses[180]. - The Group's financial statements for the six months ended 30 June 2019 reflect the impacts of the new accounting standards implemented[177]. - The Group's accounting policies have been updated to align with the latest HKFRSs, ensuring compliance and accuracy in financial reporting[174]. - The Group's transition to HKFRS 16 did not require restatement of comparative information[190]. Employee and Payroll Information - The Group had a total of 3,903 employees as of June 30, 2019, representing a decrease of 11.1% compared to the same period in 2018[141]. Future Plans and Investments - The Company plans to allocate 41% of the net proceeds (HK$146.288 million) for opening new retail outlets, with no funds remaining unutilized[138]. - 39% of the net proceeds (HK$139.152 million) is designated for expanding production capacity and improving information technology systems, with an expected completion timeline by the end of 2021[138]. - 10% of the net proceeds (HK$35.68 million) is allocated for R&D of new products, with HK$24.386 million already utilized[138].

Financial Performance - In 2018, the Group's revenue was approximately RMB664,017,000, representing a decrease of approximately 17.52% compared to RMB805,046,000 in 2017[14]. - The decline in revenue was primarily due to the closure of 66 poorly-performing stores, resulting in a net decrease of 62 stores from 648 at the end of 2017 to 586 at the end of 2018[14]. - The overall same-store sales growth rate for the Group in 2018 was negative 10.8%, attributed to factors such as outdated products and marketing channels[14]. - The gross profit for the year ended 31 December 2018 was approximately RMB295,900,000, representing a decrease of approximately 18.85% compared to RMB364,618,000 for the year ended 31 December 2017, with a gross profit margin of 44.56%[22]. - Net losses increased by approximately RMB103,521,000 from RMB128,654,000 in 2017 to RMB232,175,000 in 2018, with a net profit margin decrease from -15.98% to -34.97%[32]. - The Group recorded impairment losses of approximately RMB58,022,000 for the year ended 31 December 2018, an increase of approximately RMB55,455,000 compared to losses of RMB2,567,000 in 2017[26]. - The Group recorded a loss for the year ended 31 December 2018, with no final dividend recommended for 2018[156]. Revenue Sources and Trends - Revenue from retail outlets in Shanghai accounted for approximately 58.21% of the Group's total revenue for 2018, a slight decrease from 58.05% in 2017, with a revenue decline of approximately RMB80,756,000 or 17.28% compared to 2017[16]. - Sales revenue from major products, including bread and cakes, decreased by approximately RMB100,371,000 or 17.43% in 2018 compared to 2017, while sales of pastries decreased by approximately RMB16,563,000 or 17.10%[16]. - Revenue from moon cakes decreased by approximately RMB9,492,000 or 14.05% in 2018 compared to 2017, reflecting a sluggish traditional consumption market[16]. Store Operations and Strategy - The total number of retail outlets decreased from 648 to 586, impacting overall revenue negatively[14]. - The company plans to continue its strategy of closing underperforming stores to improve overall performance[14]. - The Group closed 34 stores in Shanghai during 2018, representing 51.52% of total store closures for the year[16]. Expenses and Cost Management - Sales expenses for the year ended 31 December 2018 were approximately RMB401,938,000, a decrease of approximately RMB30,117,000 from RMB432,055,000 in 2017, attributed to a reduction in operational scale and employee costs[27]. - Selling expenses decreased by approximately RMB30,117,000 from RMB432,055,000 in 2017 to RMB401,938,000 in 2018 due to the closure of certain stores[30]. - Administrative expenses increased by approximately RMB694,000 to RMB77,167,000 in 2018, primarily due to increased salary expenses for R&D and product manufacturing[32]. Cash Flow and Liquidity - As of December 31, 2018, cash and bank deposits amounted to approximately RMB182,132,000, a decrease of approximately RMB145,898,000 compared to RMB328,030,000 as of December 31, 2017, primarily due to a decline in revenue and sales of prepaid cards and coupons[61]. - The net cash outflow from operating activities during the year was approximately RMB135,936,000, attributed to the decline in revenue and sales of prepaid cards and coupons[61]. - The current ratio as of December 31, 2018, was 65.94%, down from 93.13% as of December 31, 2017, indicating a deterioration in liquidity[61]. Market and Consumer Insights - The domestic bakery market growth rate decreased from 15.2% in 2011 to 10% in 2017, indicating a slowing trend but still optimistic growth potential due to the large industry output value[86]. - The company aims to focus on product innovation and market forecasting to adapt to changing consumer preferences, particularly targeting younger demographics[88]. - The majority of new generation consumers are expected to be young women, with a rapid increase in demand for delicate desserts and pastries[89]. Research and Development - The company plans to enhance R&D in cold chain products to improve competitiveness in the new operating model of onsite mini bakery stores[97]. - The R&D department will develop occasion-themed products tailored for various festivals to attract customers and meet consumer needs[97]. - The company will focus on improving commercial packaging to enhance first impressions and increase sales chances[97]. Management and Governance - The company has appointed a diverse board of directors with expertise in finance, law, and healthcare, enhancing its strategic decision-making capabilities[124][125][128]. - The management team includes professionals with significant experience in auditing and corporate finance, ensuring robust financial oversight[133]. - The board's composition reflects a commitment to governance and compliance, with members holding relevant certifications and qualifications[127]. Risks and Challenges - The company faces risks from intense competition in the baking industry, which has led to continuous losses and the closure of unprofitable stores[151]. - Food safety remains a significant industry risk, and the company is committed to upholding food safety standards[151]. - The Group continues to face risks from intense competition, increasing labor costs, and raw material prices, leading to a strategy of closing loss-making stores[155]. Future Outlook - The company provided guidance for the next fiscal year, projecting revenue growth of BB% and aiming to reach a target of $CC million[106]. - Market expansion efforts are underway, with plans to enter new regions, potentially increasing market share by FF%[109]. - The company is considering strategic acquisitions to enhance its product offerings and market presence, with a budget of $GG million allocated for this purpose[110].