Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 493.8 million, representing a 19.8% increase from RMB 412.2 million in the same period of 2023[1] - Gross profit for the same period was RMB 135.6 million, up 17.4% from RMB 115.5 million year-on-year[1] - The company reported a net loss of RMB 43.6 million for the six months ended June 30, 2024, compared to a net loss of RMB 4.8 million in the prior year, indicating an increase in losses of 803.2%[1] - Basic and diluted loss per share was RMB 0.33, a significant increase of 725% from RMB 0.04 in the same period last year[1] - The gross margin decreased slightly to 27.5% from 28.0% year-on-year, while the EBITDA margin fell to (2.2%) from 6.4%[1] Assets and Liabilities - Total assets as of June 30, 2024, were RMB 845.0 million, an increase from RMB 810.9 million at the end of 2023[3] - Total liabilities increased to RMB 666.1 million from RMB 588.3 million at the end of 2023, with current liabilities exceeding current assets by RMB 147.3 million[4] - Inventory as of June 30, 2024, rose to RMB 80.7 million from RMB 60.5 million at the end of 2023[3] - Trade receivables increased slightly to RMB 240.5 million from RMB 238.7 million year-on-year[3] - Trade receivables as of June 30, 2024, amounted to RMB 329,338,000, an increase from RMB 320,639,000 as of December 31, 2023[37] - The expected credit loss provision for trade receivables was RMB 88,809,000 as of June 30, 2024, compared to RMB 81,898,000 as of December 31, 2023[37] - Total bank borrowings increased to RMB 417,840,000 as of June 30, 2024, from RMB 405,190,000 as of December 31, 2023[41] - Trade payables increased to RMB 54,608,000 as of June 30, 2024, compared to RMB 25,744,000 as of December 31, 2023[38] - The company’s total liabilities increased, reflecting a rise in trade and other payables to RMB 232,405,000 as of June 30, 2024, from RMB 167,313,000 as of December 31, 2023[38] Operational Highlights - The company primarily engages in the production and sale of jelly products, confectionery, beverages, and other snack foods, with operational decisions made by the executive directors[18] - Customer A contributed RMB 70,653,000 in revenue for the six months ended June 30, 2024, representing over 10% of the company's total revenue for that period[20] - Revenue from external customers for jelly products reached RMB 429,157 thousand, while total revenue was RMB 493,797 thousand for the six months ended June 30, 2024, representing an increase from RMB 412,182 thousand in the same period of 2023[21] - The gross profit for the jelly products segment was RMB 119,399 thousand, contributing to a total gross profit of RMB 135,580 thousand, compared to RMB 115,472 thousand in the previous year[21] - The reported segment performance showed a profit of RMB 14,945 thousand for the six months ended June 30, 2024, a decrease from RMB 44,718 thousand in the same period of 2023[22] - The company incurred a total operating loss of RMB 33,273 thousand for the six months ended June 30, 2024, compared to an operating profit of RMB 6,431 thousand in the same period of 2023[22] Financing and Capital Management - Major shareholder Zheng Yulong provided approximately RMB 57,127,000 in loans from a total financing of RMB 70,000,000 to support the company's ongoing operations and meet upcoming liabilities due by June 30, 2024[7] - The company agreed to issue 85,518,388 new shares at HKD 1.10 per share, raising a total of approximately HKD 94,070,000, which will offset amounts owed to related directors and shareholders[8] - The company is taking measures to secure external funding to improve its working capital and cash flow situation[9] - Cost control measures have been implemented to enhance production cost management and achieve profitability and positive cash flow from operations[10] - The company may consider divesting non-core businesses and/or financial assets if necessary for business restructuring[11] Expenses and Cash Flow - Sales and distribution expenses increased by approximately 70.5% to RMB 120.6 million, driven by higher logistics costs associated with increased sales through convenience stores and e-commerce[52] - Financing costs totaled RMB 10,501 thousand for the six months ended June 30, 2024, down from RMB 12,297 thousand in the same period of 2023[28] - Other income for the six months ended June 30, 2024, was RMB 4,831 thousand, slightly lower than RMB 4,896 thousand in the same period of 2023[25] - The company recorded a net loss of RMB 43.6 million for the first half of 2024, compared to a net loss of RMB 4.8 million in the same period last year, primarily due to increased sales and distribution expenses[55] Future Outlook and Strategy - The company plans to actively promote its brand and products in 2024 and beyond, while expanding new sales channels in China[67] - The board remains cautiously optimistic about the long-term development of the business despite challenges in the snack food industry[67] - The company completed a capital restructuring plan effective June 20, 2024, which included a share consolidation and capital reduction[42][43] - No significant investments, acquisitions, or disposals of subsidiaries or associates occurred in the first half of 2024[66] - The company has not engaged in any share buybacks or sales during the reporting period[68] Risk Management - No significant changes have occurred in risk management policies since the end of the last fiscal year, with ongoing exposure to market, credit, and liquidity risks[17] - The company has no significant contingent liabilities as of June 30, 2024[64]

Company Information [Company Overview](index=3&type=section&id=Company%20Overview) This section outlines the company's fundamental registration details, operational locations, listing information, board and committee members, and key professional partners - The company's board of directors comprises three executive directors (Zheng Yuhuan, Zheng Yushuang, Zheng Yulong), one non-executive director (Li Hongjiang), and three independent non-executive directors (Li Biao, Guo Li, Zhong Youtang)[5](index=5&type=chunk) - The company has established an Audit Committee, Remuneration Committee, and Nomination Committee, chaired by independent non-executive directors Zhong Youtang, Guo Li, and Li Biao, respectively[5](index=5&type=chunk)[6](index=6&type=chunk) Financial Summary and Overview [Summary of Financial Performance](index=5&type=section&id=Summary%20of%20Financial%20Performance) FY2023 revenue grew, but gross profit declined and losses widened; assets and equity decreased, with jelly products as the main revenue source Consolidated Income Statement Summary (For the year ended December 31) | Metric | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 764,377 | 684,263 | +11.7% | | Gross Profit | 218,940 | 244,192 | -10.3% | | Loss Before Tax | (104,754) | (67,671) | +54.8% | | Loss for the Year | (104,754) | (75,328) | +39.1% | Consolidated Statement of Financial Position Summary (As at December 31) | Metric | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total Assets | 810,907 | 977,311 | -17.0% | | Total Equity | 222,558 | 327,312 | -32.0% | | Total Liabilities | 588,349 | 649,999 | -9.5% | - The revenue structure by product shows **jelly products** as the absolute core, accounting for **87.1%** in 2023, with sweet products at 11.2%[7](index=7&type=chunk) Chairman's Statement [Operating Review and Outlook](index=7&type=section&id=Operating%20Review%20and%20Outlook) 2023 sales grew from new channels, but increased credit loss provisions and lower gross margins led to higher net losses; future strategy focuses on brand promotion, new products, and channel expansion Key Performance Indicators for FY2023 | Metric | 2023 | 2022 | Reason for Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 764.4 million | RMB 684.3 million | Consumer recovery and new sales channel expansion | | Gross Margin | 28.6% | 35.7% | Lower profitability of new sales channels | | Net Loss | RMB 104.8 million | RMB 75.3 million | Increase in expected credit loss provisions | | Advertising and Promotion Expenses | RMB 60.3 million | RMB 92.1 million | Reduced promotional activities required for snack chain convenience stores | - The Group recorded expected credit loss provisions of approximately **RMB 78.9 million** due to slow settlements or defaults by some distributors, leading to a significant reduction in distributor numbers from 1,095 to 729[14](index=14&type=chunk) - Future strategic priorities include: (i) actively promoting brand image and products; (ii) launching new snack foods periodically; and (iii) expanding coverage of new sales channels in China[17](index=17&type=chunk) Management Discussion and Analysis [Business Review](index=11&type=section&id=Business%20Review) 2023 revenue grew 11.7%, driven by jelly and sweet products through new channels, while other segments declined, and distributor count decreased by 33.4% FY2023 Revenue Performance by Product Line | Product Category | 2023 Revenue (RMB millions) | 2022 Revenue (RMB millions) | Y-o-Y Growth Rate | | :--- | :--- | :--- | :--- | | Jelly Products | 665.6 | 592.2 | +12.4% | | Sweet Products | 85.6 | 73.0 | +17.2% | | Beverage Products | 5.2 | 5.1 | +1.5% | | Other Snack Foods | 8.1 | 14.0 | -42.2% | | **Total** | **764.4** | **684.3** | **+11.7%** | - To mitigate credit risk, the company rigorously evaluated distributors, eliminating underperforming ones, reducing the number from 1,095 at the end of 2022 to **729** at the end of 2023, a **33.4% decrease**[22](index=22&type=chunk)[24](index=24&type=chunk) [Financial Review](index=12&type=section&id=Financial%20Review) Gross margin declined to 28.6%, net loss expanded to RMB 104.8 million due to increased credit loss provisions, and the debt-to-equity ratio rose to 202.8%, despite improved operating cash flow Key Financial Indicators Change | Metric | 2023 | 2022 | Primary Reason | | :--- | :--- | :--- | :--- | | Gross Margin | 28.6% | 35.7% | Increased proportion of lower-margin new sales channels | | Net Loss | RMB 104.8 million | RMB 75.3 million | Increase in expected credit loss provisions | | Debt-to-Equity Ratio | 202.8% | 156.6% | Decrease in equity and borrowings | | Net Cash Inflow from Operating Activities | RMB 88.6 million | RMB 15.5 million | Improved working capital management | | Trade Receivables Turnover Days | 147 days | 200 days | Improved collection performance | | Inventory Turnover Days | 50 days | 53 days | Enhanced inventory management efficiency | - Capital expenditure for the year was **RMB 40.4 million**, primarily for upgrading production lines[38](index=38&type=chunk) [Prospects and Risks](index=15&type=section&id=Prospects%20and%20Risks) Management anticipates business improvement with economic recovery, focusing on brand promotion, new products, and channel expansion, while facing key business, industry, operational, financial, and external risks - Future development strategies: - Actively promote brand image and products - Periodically launch new snack foods - Expand coverage of new sales channels in China[54](index=54&type=chunk) - Key risk factors: - **Business Risk**: Changes in consumer preferences and tastes - **Industry Risk**: Potential food safety and hygiene issues - **Operational Risk**: Insufficient or lacking internal procedures, personnel, and systems - **Financial Risk**: Detailed in Note 4 to the financial statements - **Disaster Events**: Epidemics or other catastrophic events[56](index=56&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) Biographies of Directors and Senior Management [Directors and Senior Management Profiles](index=17&type=section&id=Directors%20and%20Senior%20Management%20Profiles) This section provides biographies of board members and senior management, detailing their roles, experience, and relationships, with core leadership by the Zheng brothers and Li Hongjiang - The company's core leadership has significant family ties: Executive Directors Zheng Yulong, Zheng Yushuang, and Zheng Yuhuan are brothers, and Non-Executive Director Li Hongjiang is their brother-in-law; they co-founded the Group's jelly product business[64](index=64&type=chunk)[67](index=67&type=chunk)[69](index=69&type=chunk)[71](index=71&type=chunk) - Independent Non-Executive Director Mr Zhong Youtang possesses over **28 years of experience** in auditing, financial management, and compliance for Hong Kong-listed companies, and is a practicing accountant of the Hong Kong Institute of Certified Public Accountants[76](index=76&type=chunk) Corporate Governance Report [Governance Structure and Practices](index=20&type=section&id=Governance%20Structure%20and%20Practices) The company confirms 2023 compliance with the Corporate Governance Code, detailing board responsibilities, committee structures, separation of Chairman and CEO roles, and perfect board meeting attendance - The company has complied with all code provisions set out in Part 2 of the Corporate Governance Code for the year ended December 31, 2023, without any deviation[80](index=80&type=chunk) - The Board of Directors comprises **7 members**, including 3 executive directors, 1 non-executive director, and 3 independent non-executive directors, meeting the Listing Rules' requirement for independent non-executive directors to constitute over one-third of the board[85](index=85&type=chunk)[87](index=87&type=chunk) 2023 Board Meeting Attendance Record | Director Name | Attendance/Meetings | | :--- | :--- | | Mr Zheng Yuhuan | 4/4 | | Mr Zheng Yushuang | 4/4 | | Mr Zheng Yulong | 4/4 | | Mr Li Hongjiang | 4/4 | | Mr Li Biao | 4/4 | | Ms Guo Li | 4/4 | | Mr Zhong Youtang | 4/4 | [Risk Management and Internal Control](index=29&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board confirms responsibility for risk management and internal control; an independent consultant identified deficiencies, and the company is implementing improvement recommendations - The Board is fully responsible for overseeing the design, implementation, and effectiveness of risk management and internal control systems, reviewed at least annually through the Audit Committee[129](index=129&type=chunk) - The company engaged an independent professional consultant to review its internal controls, identifying several deficiencies, and is now implementing the consultant's recommendations to ensure compliance with Listing Rules[130](index=130&type=chunk)[131](index=131&type=chunk) Directors' Report [Principal Activities and Results](index=33&type=section&id=Principal%20Activities%20and%20Results) This section reiterates the Group's principal business of producing and selling jelly, sweets, beverages, and other snack foods in China, with no final dividend recommended for FY2023 - The Board does not recommend the payment of any final dividend for the year ended December 31, 2023[151](index=151&type=chunk) [Directors' and Shareholders' Interests](index=36&type=section&id=Directors%20and%20Shareholders'%20Interests) This section discloses directors' and major shareholders' interests, with Alliance Holding (controlled by the Zheng brothers and Li Hongjiang) holding 45.97% and Zheng Yulong personally owning 9.02%; no share options have been granted Major Shareholders and Directors' Shareholdings (As at December 31, 2023) | Shareholder/Director Name | Nature of Interest | Number of Shares Held | Approximate Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | | Alliance Holding | Beneficial Owner | 610,915,527 | 45.97% | | Zheng Yulong | Interest in Controlled Corporation | 610,915,527 | 45.97% | | | Beneficial Owner | 119,935,060 | 9.02% | | Zheng Yushuang | Interest in Controlled Corporation | 610,915,527 | 45.97% | | Zheng Yuhuan | Interest in Controlled Corporation | 610,915,527 | 45.97% | | Li Hongjiang | Interest in Controlled Corporation | 610,915,527 | 45.97% | - The company adopted a share option scheme in 2021, but no share options have been granted since its adoption as of the reporting date[181](index=181&type=chunk)[184](index=184&type=chunk) [Customers and Suppliers](index=40&type=section&id=Customers%20and%20Suppliers) This section discloses customer and supplier concentration, with the largest customer accounting for 10.5% of total turnover and the top five for 38.1% in 2023, showing increased customer concentration, while supplier concentration remained stable Customer and Supplier Concentration | Concentration Metric | 2023 | 2022 | | :--- | :--- | :--- | | Percentage of total turnover from largest customer | 10.5% | 7.0% | | Percentage of total turnover from top five customers | 38.1% | 24.4% | | Percentage of total purchases from largest supplier | 7.9% | 6.4% | | Percentage of total purchases from top five suppliers | 25.3% | 24.9% | Independent Auditor's Report [Auditor's Opinion and Key Audit Matters](index=43&type=section&id=Auditor's%20Opinion%20and%20Key%20Audit%20Matters) The auditor issued an unmodified opinion but highlighted a material uncertainty regarding going concern due to a significant net loss and current liabilities exceeding current assets, with expected credit loss provisions for trade receivables as a key audit matter - The auditor issued an unmodified opinion but drew attention to a "material uncertainty related to going concern"[212](index=212&type=chunk)[214](index=214&type=chunk) - The primary factors leading to going concern uncertainty are a net loss of approximately **RMB 104.8 million** for the year ended December 31, 2023, and current liabilities exceeding current assets by approximately **RMB 94.37 million**[214](index=214&type=chunk) - A key audit matter is "Expected credit loss provisions for trade receivables," as its assessment involves significant management judgment[216](index=216&type=chunk)[218](index=218&type=chunk) Consolidated Financial Statements [Financial Statements Overview](index=47&type=section&id=Financial%20Statements%20Overview) This section presents the four core audited consolidated financial statements for FY2023, including income, financial position, equity changes, and cash flow statements, reflecting the Group's financial performance, position, and cash flows Key Items from Consolidated Income Statement (2023) | Item | Amount (RMB thousands) | | :--- | :--- | | Revenue | 764,377 | | Gross Profit | 218,940 | | Operating Loss | (82,058) | | Loss and Total Comprehensive Loss for the Year | (104,754) | Key Items from Consolidated Statement of Financial Position (As at December 31, 2023) | Item | Amount (RMB thousands) | | :--- | :--- | | Total Assets | 810,907 | | Total Equity | 222,558 | | Total Liabilities | 588,349 | | Net Current Liabilities | (94,369) | Notes to the Consolidated Financial Statements [Note 3: Going Concern Basis](index=54&type=section&id=Note%203%3A%20Going%20Concern%20Basis) This note details the material uncertainty regarding going concern, citing a net loss and current liabilities exceeding current assets; management's plans include shareholder support, debt management, external financing, cost control, and potential non-core asset sales - The validity of the going concern assumption depends on future business success, generation of sufficient cash flows, and the ability to refinance or restructure borrowings[255](index=255&type=chunk) - One mitigating measure is financial support from major shareholder Mr Zheng Yulong, who has provided partial loan financing and agreed to continue support to ensure the company can meet its liabilities due within the next 12 months[255](index=255&type=chunk) [Note 4: Financial Risk Management](index=72&type=section&id=Note%204%3A%20Financial%20Risk%20Management) This note outlines the Group's primary financial risks, with credit risk a core focus for trade receivables, significant liquidity risk with the debt-to-equity ratio rising to 202.8%, and interest rate risk from floating-rate borrowings - The debt-to-equity ratio (total borrowings and directors' loans/total equity) increased from **156.6%** in 2022 to **202.8%** in 2023[356](index=356&type=chunk) Expected Credit Loss Provisions for Trade Receivables (December 31, 2023) | Ageing | Gross Carrying Amount (RMB thousands) | Loss Allowance (RMB thousands) | | :--- | :--- | :--- | | Current or less than 30 days | 230,978 | 10,597 | | 31 to 90 days | 9,650 | 797 | | 91 to 180 days | 10,909 | 1,402 | | Over 180 days | 2,371 | 2,371 | | Individually assessed | 66,731 | 66,731 | | **Total** | **320,639** | **81,898** | [Note 6: Segment Information and Revenue](index=80&type=section&id=Note%206%3A%20Segment%20Information%20and%20Revenue) This note provides operating segment information by product, showing jelly products as the largest revenue source but incurring an operating loss, while sweet products were profitable, and other smaller segments recorded losses, with a single largest customer contributing over 10% of revenue FY2023 Segment Results | Segment | Revenue (RMB thousands) | Reportable Segment Results (RMB thousands) | | :--- | :--- | :--- | | Jelly Products | 665,559 | (2,274) | | Sweet Products | 85,558 | 13,556 | | Beverage Products | 5,201 | (55,088) | | Other Snack Foods | 8,059 | 1,286 | | **Total** | **764,377** | **(42,520)** | - In 2023, a single largest customer (Customer A) contributed **RMB 79.56 million** in revenue, accounting for **10.4%** of total revenue[369](index=369&type=chunk) [Note 24: Bank Borrowings](index=94&type=section&id=Note%2024%3A%20Bank%20Borrowings) As of end-2023, total bank borrowings were RMB 405 million, all current liabilities due within one year, with most (RMB 363 million) secured by land use rights, buildings, and executive directors' personal guarantees - As at December 31, 2023, total bank borrowings amounted to **RMB 405.2 million**, all repayable within one year or on demand[421](index=421&type=chunk) - Secured borrowings are guaranteed by the Group's land use rights, buildings, and personal guarantees from executive directors Zheng Yushuang, Zheng Yuhuan, and Zheng Yulong, among others[424](index=424&type=chunk)

Financial Performance - Total revenue for the year ended December 31, 2023, was RMB 764.4 million, representing an increase of 11.7% compared to RMB 684.3 million in 2022[5] - Gross profit decreased to RMB 218.9 million, down 10.4% from RMB 244.2 million in the previous year, resulting in a gross margin of 28.6%, a decline of 7.1 percentage points[5] - EBITDA for the year was RMB 49.9 million, a decrease of 28.6% from RMB 69.9 million in 2022, leading to an EBITDA margin of 6.5%, down 3.7 percentage points[5] - The company reported a net loss of RMB 104.8 million for the year, which is a 39.2% increase from a net loss of RMB 75.3 million in 2022[5] - Basic and diluted loss per share increased to RMB 0.08, up 33.3% from RMB 0.06 in the previous year[5] Assets and Liabilities - Total assets decreased to RMB 810.9 million from RMB 977.3 million in 2022, reflecting a significant reduction in current assets[8] - Total liabilities decreased to RMB 588.3 million from RMB 650.0 million in 2022, with current liabilities exceeding current assets by RMB 94.4 million[9][14] - Inventory decreased to RMB 60.5 million from RMB 75.4 million in 2022, and trade receivables fell to RMB 238.7 million from RMB 321.9 million[8] - As of December 31, 2023, the company has bank borrowings of approximately RMB 405,190,000, with RMB 285,300,000 due within one year[16] - The asset-liability ratio increased to 202.8% as of December 31, 2023, compared to 156.6% as of December 31, 2022[71] Operational Strategy - The company continues to focus on the production and sales of jelly products, confectionery, beverages, and other snack foods, aiming for market expansion and product innovation[11] - The company plans to adopt new corporate governance measures to enhance operational efficiency and address financial challenges[3] - The company has implemented cost control measures to enhance production cost and expense management, aiming for profitability and positive cash flow from operations[18] - The company plans to actively promote its brand and products in 2024 and beyond, and to expand the coverage of new sales channels in China[91] - The company plans to continue developing new healthy snack foods to meet diverse customer tastes[62] Segment Performance - For the fiscal year ending December 31, 2023, the company reported total revenue of RMB 764,377,000, with jelly products contributing RMB 665,559,000[30] - The gross profit for the jelly products segment was RMB 191,504,000, while the total gross profit across all segments was RMB 218,940,000[30] - The reported segment performance resulted in a loss of RMB 42,520,000 for the year, with total operating loss amounting to RMB 82,058,000[31] - Revenue from jelly products increased by approximately 12.4% to RMB 665.6 million for the year ended December 31, 2023, attributed to the expansion of new sales channels[58] - Revenue from candy products increased by approximately 17.2% to RMB 85.6 million for the year ended December 31, 2023, also due to the expansion of new sales channels[59] Financial Management - The company has received financial support from major shareholder Mr. Zheng Yulong, providing approximately RMB 46,081,000 from a loan of RMB 70,000,000 to ensure operational continuity[16] - The company is taking measures to secure external funding to improve its working capital, liquidity, and cash flow situation[16] - The company incurred a net loss of RMB 104.8 million for the year ended December 31, 2023, compared to a net loss of RMB 75.3 million for the previous year, representing an increase of approximately 39.2%[56][68] - Sales costs increased by approximately 23.9% to RMB 545.4 million for the year ended December 31, 2023, mainly due to the corresponding increase in sales[63] - Other income for 2023 decreased to RMB 4,254,000 from RMB 6,915,000 in 2022, with no government subsidies recognized in 2023[34] Corporate Governance - The company has complied with all provisions of the corporate governance code for the year ended December 31, 2023, with no deviations reported[98] - The audit committee consists of three independent non-executive directors, ensuring oversight of financial reporting and internal controls[95] - The company is committed to strict corporate governance practices to enhance accountability and transparency for shareholders[98] - The company has established written guidelines for employees regarding securities trading to prevent insider trading[101] - No incidents of employees violating the written guidelines on securities trading were reported for the year ended December 31, 2023[102] Future Outlook - The company anticipates that the application of new and revised international financial reporting standards will not have a significant impact on its financial statements in the foreseeable future[22] - The company has not applied any new or revised international financial reporting standards that have been issued but are not yet effective[22] - The company plans to hold its annual general meeting on June 18, 2024, for the year ended December 31, 2023[105] - The board proposed amendments to the existing company bylaws to comply with the latest electronic communication requirements[108] - The annual report for the year ended December 31, 2023, will be sent to shareholders and made available on the company's website[104]

Revenue Performance - The company recorded revenue of RMB 412.2 million for the first half of 2023, an increase of approximately 18.2% compared to the same period last year, primarily driven by a 20.2% increase in jelly product sales[15]. - Jelly product revenue increased from RMB 323.2 million in the first half of 2022 to RMB 388.6 million in the first half of 2023, reflecting a growth of about 20.2%[19]. - Sweet product revenue increased by approximately 18.1% to RMB 17.4 million in the first half of 2023, attributed to additional discounts offered to distributors post-Chinese New Year[21]. - Beverage product revenue rose by approximately 43.6% to RMB 3.6 million in the first half of 2023, mainly due to increased sales of dairy beverages[22]. - Other snack food revenue decreased by approximately 67.5% to RMB 2.7 million, as the company did not launch new products in this category during the reporting period[23]. Profitability and Loss - The gross profit for the first half of 2023 decreased by approximately 0.1% to RMB 115.5 million, with the gross margin declining from 33.2% in the first half of 2022 to 28.0% due to rising raw material and labor costs[24]. - The company reported a net loss of RMB 4.8 million for the first half of 2023, compared to a net loss of RMB 4.9 million in the same period of 2022, primarily due to increased advertising and promotional expenses of RMB 9.8 million[16]. - The net loss for the six months ended June 30, 2023, was RMB 4.8 million, a slight improvement from a net loss of RMB 4.9 million in the same period of 2022, mainly due to increased advertising and promotional expenses of RMB 9.8 million for new jelly products[28]. - The reported segment performance showed a loss of RMB 4,832 million for the period, with operating profit of RMB 6.431 million[71]. Expenses and Cost Management - The sales cost for the first half of 2023 increased by approximately 27.3% to RMB 296.7 million, driven by the corresponding increase in sales volume[24]. - Sales and distribution expenses increased by approximately 23.8% to RMB 70.8 million in the first half of 2023, primarily due to a 28.4% increase in advertising and promotional expenses to RMB 44.3 million[25]. - Administrative expenses decreased by approximately 2.3% to RMB 42 million in the first half of 2023, attributed to enhanced cost control measures by management[26]. - The company has implemented cost control measures to achieve profitability and positive cash flow operations[59]. Distribution and Network Management - The company had 634 distributors as of June 30, 2023, down from 930 distributors as of June 30, 2022, indicating a strategic shift in distribution network management[18]. - The company continues to expand its new retail, e-commerce, and social media distribution channels, which have started to show positive effects on sales since the end of 2022[15]. Cash Flow and Financial Position - Operating cash inflow for the first half of 2023 was RMB 56.3 million, a significant improvement from a cash outflow of RMB 37.9 million in the same period of 2022[31]. - Current liabilities exceeded current assets by RMB 16,833,000 as of June 30, 2023, compared to RMB 9,503,000 as of December 31, 2022[55]. - Cash and cash equivalents decreased to RMB 66,781,000 from RMB 71,876,000 at the beginning of the period[52]. - The company plans to seek external funding to improve its working capital and cash flow situation[58]. - The main shareholder has provided financial support amounting to approximately RMB 44,403,000 to help meet upcoming financial obligations[56]. Asset Management - As of June 30, 2023, total assets amounted to RMB 974,086,000, a slight decrease from RMB 977,311,000 as of December 31, 2022[46]. - The company’s total equity decreased to RMB 322,480,000 from RMB 327,312,000 as of December 31, 2022[48]. - The company’s non-current assets totaled RMB 355,159,000, slightly up from RMB 352,661,000 as of December 31, 2022[46]. Shareholder and Governance - The company does not recommend the payment of an interim dividend for the six months ended June 30, 2023[41]. - The new share option plan adopted on June 23, 2021, allows for the issuance of up to 10% of the total issued shares, equivalent to 132,897,700 shares[102]. - As of June 30, 2023, the total number of share options available under the new share option plan is 132,897,700[105]. - Directors and senior executives hold significant interests in the company, with Zheng Yulong holding a beneficial interest in 119,935,060 shares, representing 9.02% of the company[107]. - The company has established an audit committee in accordance with the Hong Kong Stock Exchange Listing Rules, consisting of three independent non-executive directors[119]. - The board believes that the company has complied with the corporate governance code as per the Listing Rules for the six months ended June 30, 2023[120]. Risk Management - The group faces market risks including currency and interest rate risks, as well as credit and liquidity risks[62]. - The group has not made any changes to its risk management policies since the end of the previous financial year[63].

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佈之內容概不負責， 對其準確性或完整性亦不發表任何聲明，且表明不會就因本公佈全部或任何部份內 容或因倚賴該等內容而引致之任何損失承擔任何責任。 LABIXIAOXIN SNACKS GROUP LIMITED 蠟 筆 小 新 休 閒 食 品 集 團 有 限 公司 （於百慕達註冊成立的有限公司） 1262 （股份代號： ） 2023 6 30 6 截至 年 月 日止 個月 中期業績公佈 財務摘要 6未3經0審核6 截至202月3 日止 個2月022 +/(-) 年 年 人民幣百萬元人民幣百萬元 主要收益表項目 412.2 348.6 +18.2% 收益 115.5 115.6 -0.1% 毛EB利ITDA(1) 26.4 44.1 -40.1% (4.8) (4.9) -2.0% 期內虧損 主要表現指標 28.0% 33.2% -5.2 ...

Financial Performance - The company recorded revenue of RMB 684.3 million for the year ended December 31, 2022, representing an increase of approximately 5.6% compared to RMB 648.1 million in 2021[15] - Gross profit for the year was RMB 244.2 million, with a gross margin of 35.7%, slightly up from 34.6% in 2021[15] - The company experienced a net loss of RMB 75.3 million for the year, compared to a net loss of RMB 65.2 million in 2021[15] - The group's revenue for the year ended December 31, 2022, was RMB 684.3 million, an increase of approximately 5.6% compared to 2021, primarily driven by a 14.5% increase in jelly product sales[28] - The net loss for the year ended December 31, 2022, was RMB 75.3 million, compared to a net loss of RMB 65.2 million in the previous year, mainly due to an increase in expected credit loss provisions of approximately RMB 47.5 million[30] - The expected credit loss provisions increased by approximately 136.2% to RMB 47.5 million due to slow settlements or defaults from distributors[30] - Revenue from other leisure foods decreased by approximately 53.9% to RMB 14 million for the year ended December 31, 2022, primarily due to production interruptions and reduced purchases by distributors in anticipation of COVID-19 cases before the Lunar New Year[36] - Cost of sales increased by approximately 3.8% to RMB 440.1 million, while gross profit rose by approximately 8.9% to RMB 244.2 million, resulting in a slight increase in gross margin from 34.6% to 35.7%[37] - The net loss for the year ended December 31, 2022, was RMB 75.3 million, an increase of approximately 15.5% compared to a net loss of RMB 65.2 million in the previous year[43] Assets and Equity - Total assets decreased to RMB 977.3 million in 2022 from RMB 1.29 billion in 2021, reflecting a decline in both non-current and current assets[16] - Non-current assets decreased to RMB 352.7 million in 2022 from RMB 421.6 million in 2021, indicating a significant reduction in long-term investments[16] - Total equity fell to RMB 327.3 million in 2022 from RMB 402.6 million in 2021, highlighting a decline in shareholder value[16] Cash Flow and Expenditures - The group generated operating cash inflow of RMB 15.5 million in 2022, a significant improvement from an operating cash outflow of RMB 135.3 million in 2021[22] - Capital expenditures for the year ended December 31, 2022, amounted to RMB 12.8 million, primarily for upgrading production lines[22] - Cash and bank balances decreased to RMB 71.9 million as of December 31, 2022, from RMB 80.6 million a year earlier, primarily due to repayment of bank loans[44] Sales and Marketing - The company has been expanding its new retail, e-commerce, social media, and community distribution channels, which began to show results in 2022, particularly boosting jelly product sales[20] - The company plans to continue leveraging new sales channels to enhance revenue growth moving forward[20] - The company plans to actively promote its brand and products in 2023 and beyond, while also launching new snack products to enhance consumer choices[24] - The company is considering strategic acquisitions to enhance its product portfolio and market presence[81] - A new marketing strategy has been implemented, focusing on digital channels, which is anticipated to increase customer engagement by 25%[81] Employee and Management - As of December 31, 2022, the group employed approximately 1,300 employees, an increase from 1,170 employees in 2021, with total salary expenses amounting to RMB 106 million for the year[58] - The board of directors determines the compensation for directors and senior management based on the group's operating performance, individual performance, and comparable market statistics[59] - The company has committed to providing career development opportunities for female employees to promote gender equality in senior management roles[118] Governance and Compliance - The company has adhered to the corporate governance code throughout the fiscal year, with no deviations reported[88] - The board of directors consists of seven members, including three executive directors, one non-executive director, and three independent non-executive directors[90] - The company has established appropriate insurance arrangements for directors and senior management against legal claims arising from corporate activities[86] - The company has adopted a code of conduct for securities trading that complies with the standards set forth in the listing rules[105] - The company emphasizes compliance with relevant laws and regulations affecting its performance, as detailed in the environmental, social, and governance section of the annual report[155] Risk Management - The group acknowledges various risks, including changes in consumer preferences, confidence, and income levels, which could impact spending on its products[62] - The leisure food industry faces potential food safety and hygiene issues, which could lead to product liability claims and damage to the group's brand reputation[64] - The company has established a risk management framework involving the board of directors, audit committee, and senior management to oversee risk management and internal control systems[134] - The company believes its risk management and internal control systems are effective and adequate[131] Future Outlook - The group anticipates a recovery in the Chinese economy and snack food industry in the second half of 2023, despite short-term pressures from COVID-19 cases[24] - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[81] - The company is investing in new technology development, allocating approximately $5 million for R&D initiatives[81] Shareholder Information - The company did not recommend the payment of dividends for the year ended December 31, 2022, consistent with the previous year[157] - The company has adopted a sustainable dividend policy aimed at balancing shareholder expectations and prudent capital management[149] - As of December 31, 2022, the company had a total of 1,328,977,000 shares issued, with significant shareholdings by directors and senior executives[181]

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佈之內容概不負責， 對其準確性或完整性亦不發表任何聲明，且表明不會就因本公佈全部或任何部份內 容或因倚賴該等內容而引致之任何損失承擔任何責任。 LABIXIAOXIN SNACKS GROUP LIMITED 蠟 筆 小 新 休 閒 食 品 集 團 有 限 公司 （於百慕達註冊成立的有限公司） 1262 （股份代號： ） 2022 12 31 截至 年 月 日止年度 全年業績公佈 財務摘要 12 31 截至 月 日止年度 2022 2021 年 年 變動 +/(-)% 人民幣百萬元 人民幣百萬元 主要收益表項目 684.3 648.1 +5.6% 收益 244.2 224.3 +8.9% 溢利 EBITDA1 69.9 101.1 -30.9% (75.3) (65.2) +15.5% ...

Financial Performance - For the year ended December 31, 2021, the company's revenue was RMB 648.1 million, an increase from RMB 508.8 million in 2020, representing a growth of approximately 27.4%[16] - The gross profit for 2021 was RMB 224.3 million, up from RMB 166.5 million in 2020, resulting in a gross margin of 34.6% compared to 32.7% in the previous year[16] - The company reported a loss of RMB 65.2 million for the year, which is an increase from a loss of RMB 29.4 million in 2020[16] - The EBITDA margin for the company was reported at 10.2% for 2021, compared to a negative margin in the previous year, indicating a recovery in operational efficiency[12] - For the fiscal year ending December 31, 2021, the company's product sales amounted to RMB 648.1 million, representing an increase of approximately 27.4% compared to the previous year[20] - The gross profit margin for the fiscal year ending December 31, 2021, improved to approximately 34.7%, up from 32.7% in the previous year, primarily due to the elimination of low-margin products[20][37] - The company recorded a net loss of RMB 65.2 million for the fiscal year ending December 31, 2021, which is an increase of 121.8% compared to a net loss of RMB 29.4 million for the previous year[20] Assets and Liabilities - Total assets decreased to RMB 1,290.1 million in 2021 from RMB 1,529.2 million in 2020, reflecting a decline of approximately 15.6%[16] - Total equity also declined to RMB 402.6 million in 2021 from RMB 467.8 million in 2020, a decrease of about 13.9%[16] - The company’s non-current assets were RMB 421.6 million in 2021, down from RMB 523.8 million in 2020, indicating a reduction of approximately 19.5%[16] - The company’s current liabilities were RMB 871.6 million in 2021, a decrease from RMB 1,045.6 million in 2020, showing a reduction of about 16.6%[16] Cash Flow and Expenditures - The company generated a net cash outflow from operations of RMB 135.3 million for the fiscal year ending December 31, 2021[21] - Capital expenditures for the fiscal year ending December 31, 2021, were RMB 20.1 million, mainly for upgrading production lines[21] - Cash and bank balances decreased to RMB 80.6 million as of December 31, 2021, from RMB 258.8 million as of December 31, 2020, primarily due to repayment of bank loans and interest payments[48] - The company incurred a net cash outflow from operating activities of RMB 135.3 million for the year ended December 31, 2021, compared to RMB 12.5 million in 2020[49] Revenue Sources - Revenue from jelly products increased by approximately 34.7% to RMB 517.4 million for the fiscal year ending December 31, 2021[31] - Revenue from other leisure food products surged by approximately 97.0% to RMB 30.2 million, driven by the launch of a new series of healthy tofu products[36] Operational Strategy - The management noted an improvement in the business environment as consumer sentiment in China gradually recovered from the impacts of COVID-19[19] - The company plans to focus on expanding its product offerings and enhancing distribution channels to capture market opportunities[19] - The company aims to actively promote its brand and products in 2022 and beyond, while also launching new leisure food products to enhance consumer choices[21] - The company believes that the COVID-19 pandemic may present opportunities for industry upgrades and consolidation, which could help expand its market share[21] Employee and Governance - The company employed approximately 1,170 employees as of December 31, 2021, with total salary expenses amounting to RMB 99.3 million for the year[61] - The board of directors held four meetings to review and approve the company's financial and operational performance for the year ending December 31, 2021[105] - All directors attended 100% of the board meetings and the 2021 annual general meeting[107] - The company has adopted a code of conduct for securities trading that complies with the standards set out in the listing rules[112] Risk Management - The company emphasizes the importance of effective communication with shareholders to strengthen investor relations and enhance understanding of business performance[147] - The internal audit department is tasked with independently reviewing the adequacy and effectiveness of the risk management and internal control systems[141] - The company has developed and adopted clear risk management procedures and guidelines, with regular internal assessments conducted[140] Shareholder Information - The decision to pay dividends will be made at the discretion of the board, based on operational performance, financial condition, and future prospects[115] - The group did not recommend a final dividend for the year ended December 31, 2021, consistent with the previous year[162] - As of December 31, 2021, the company’s board members and senior executives held a total of 610,915,527 shares through controlled corporations, representing approximately 45.97% of the company's shares[184] Stock Options - The new stock option plan was adopted on June 23, 2021, allowing the board to grant options to eligible participants, including employees and consultants, to enhance work efficiency and retain contributors to long-term growth[196] - No stock options were granted under the new stock option plan for the year ending December 31, 2021[199]

Financial Performance - For the first half of 2021, Labixiaoxin Snacks Group recorded revenue of RMB 361.4 million, an increase of approximately 44.5% compared to the same period last year, driven by a 43.5% increase in jelly product sales and a 385.9% increase in other snack food sales [21]. - The net profit for the first half of 2021 was RMB 27.5 million, a significant recovery from a net loss of RMB 76.6 million in the same period of 2020, primarily due to improved gross profit from jelly products and property sales [22]. - Revenue for the six months ended June 30, 2021, was RMB 361,351 thousand, representing a 44.5% increase from RMB 250,063 thousand in the same period of 2020 [47]. - Gross profit for the same period was RMB 127,691 thousand, up from RMB 92,340 thousand, indicating a gross margin improvement [47]. - Operating profit turned positive at RMB 44,426 thousand compared to an operating loss of RMB 57,212 thousand in the prior year [47]. - Net profit before tax was RMB 28,636 thousand, a significant recovery from a loss of RMB 76,883 thousand in the previous year [47]. - The company reported a net profit attributable to equity holders of RMB 27,477,000 for the six months ended June 30, 2021, compared to a loss of RMB 76,637,000 in the same period of 2020 [86]. - Basic earnings per share for the period was RMB 0.021, a significant improvement from a loss per share of RMB 0.058 in the previous year [86]. Revenue Breakdown - Jelly product revenue increased from RMB 228.6 million in the first half of 2020 to RMB 328.1 million in the first half of 2021, with jelly food sales rising by 23.3% to RMB 172.4 million and jelly drink sales increasing by 75.3% to RMB 155.7 million [23]. - The sales of sweet products rose by approximately 16.2% from RMB 16 million in the first half of 2020 to RMB 18.6 million in the first half of 2021, attributed to the recovery of consumer demand [24]. - Revenue from other snack foods surged by 385.9% to RMB 13.5 million, mainly due to the launch of a new series of healthy tofu products that received positive customer feedback [26]. - The beverage product revenue decreased by approximately 56.6% to RMB 1.2 million in the first half of 2021, as the company shifted focus from beverages to higher-margin jelly products [25]. Cost and Expenses - Sales cost increased by approximately 48.1% to RMB 233.7 million in the first half of 2021, while gross profit rose by about 38.3% to RMB 127.7 million, resulting in a slight decrease in gross margin from 36.9% to 35.3% [27]. - Selling and distribution expenses rose by approximately 38.6% to RMB 50.7 million, primarily due to an increase in advertising and promotional expenses by about 36.7% to RMB 24.3 million [28]. - Financing costs for the six months ended June 30, 2021, decreased to RMB 16,172 thousand from RMB 20,529 thousand in the same period of 2020, a reduction of approximately 21.5% [78]. - The company reported a net financing cost of RMB 15,790 thousand for the six months ended June 30, 2021, down from RMB 19,671 thousand in the same period of 2020 [78]. Distribution and Market Expansion - As of June 30, 2021, the company had 915 distributors, an increase from 900 distributors as of June 30, 2020, reflecting the ongoing expansion of its distribution network [22]. - The company plans to expand distribution channels through new retail, e-commerce, social media, and community initiatives over the next few years [44]. Financial Stability - The company's asset-liability ratio improved to 119.8% as of June 30, 2021, down from 147.6% at the end of 2020, indicating better financial stability [31]. - The company believes it will have sufficient operating funds to meet its financial obligations for the next 12 months [56]. - The board of directors has reviewed the cash flow forecasts and considers the going concern basis for preparing the financial statements to be appropriate [56]. Capital Expenditure and Investments - Capital expenditure for the first half of 2021 was RMB 9.9 million, primarily for upgrading production lines [34]. - The company has no significant investments, acquisitions, or disposals of subsidiaries or associates during the period ending June 30, 2021 [135]. Shareholder Information - The company’s major shareholders include Zheng Yulong, Zheng Yushuang, Zheng Yuhuan, and Li Hongjiang, each holding significant stakes through Alliance Food And Beverages (Holding) Company Limited [123][124]. - Zheng Yulong holds a beneficial interest in 119,935,060 shares, representing approximately 9.02% of the company's equity [124]. - The total number of shares held by Alliance Holding is 610,915,527, accounting for 45.97% of the company's equity [123]. Employee and Governance - As of June 30, 2021, the company had approximately 1,170 employees, with total salary expenses of RMB 50.9 million for the six months ending on that date [134]. - The company has maintained compliance with corporate governance codes and has not deviated from the corporate governance practices as of June 30, 2021 [138].

Financial Performance - Total revenue for 2020 was RMB 508.8 million, an increase of 9.0% from RMB 466.6 million in 2019[17] - Gross profit for 2020 reached RMB 166.5 million, with a gross margin of 32.7%, compared to RMB 139.0 million and a gross margin of 29.8% in 2019[17] - The company reported a net loss of RMB 29.4 million for 2020, a significant improvement from a net loss of RMB 170.1 million in 2019[17] - EBITDA for 2020 was RMB 15.98 million, a significant recovery from an EBITDA loss of RMB 153.3 million in 2019[17] - For the fiscal year ended December 31, 2020, the group's product sales amounted to RMB 508.8 million, representing an increase of approximately 9.0% compared to the fiscal year ended December 31, 2019[20] - The net loss for the fiscal year ended December 31, 2020, was RMB 29.4 million, a decrease of approximately 82.7% from the net loss of RMB 170.1 million for the fiscal year ended December 31, 2019[20] Assets and Liabilities - Total assets as of December 31, 2020, were RMB 1,529.2 million, slightly up from RMB 1,485.9 million in 2019[17] - Current assets increased to RMB 1,005.4 million in 2020, compared to RMB 698.7 million in 2019[17] - Total liabilities rose to RMB 1,061.4 million in 2020, compared to RMB 988.6 million in 2019[17] - The company’s total equity decreased to RMB 467.8 million in 2020 from RMB 497.2 million in 2019[17] - As of December 31, 2020, the group had a debt-to-asset ratio of 147.6%[21] - The group’s asset-liability ratio was 147.6% as of December 31, 2020, compared to 141.9% as of December 31, 2019[44] Revenue Breakdown - Revenue from jelly products increased by approximately 10.0% to RMB 384.2 million for the fiscal year ended December 31, 2020[30] - Revenue from jelly food increased by approximately 4.6% to RMB 237.5 million, while revenue from jelly drinks increased by approximately 20.0% to RMB 146.7 million[30] - Revenue from other snack foods increased by approximately 292.3% to RMB 15.3 million, primarily due to a significant increase in sales of tofu products[34] Operational Developments - The company plans to expand its product offerings and enhance market penetration in the coming years[17] - New product development initiatives are underway to capture emerging consumer trends in the snack food sector[17] - The group plans to continue promoting its brand and products, launch new snack foods, and reorganize production facilities to improve efficiency[22] Cash Flow and Expenditures - The group recorded capital expenditures of RMB 9.1 million for the fiscal year ended December 31, 2020, mainly for upgrading production lines[21] - As of December 31, 2020, cash and bank balances increased to RMB 258.8 million from RMB 24.8 million as of December 31, 2019, primarily due to proceeds from the sale of a subsidiary[44] - The group reported a net cash outflow from operating activities of RMB 12.5 million for the year ended December 31, 2020, compared to a net inflow of RMB 35 million in 2019[45] Corporate Governance - The company has adhered to all corporate governance code provisions for the year ended December 31, 2020, with no deviations reported[90] - The company has established appropriate insurance for directors and senior management against legal claims arising from corporate activities[94] - The board is responsible for overseeing the overall development of the company, including strategy formulation and financial performance review[92] - The company has established three committees: the Nomination Committee, the Remuneration Committee, and the Audit Committee, to oversee specific areas of the company's affairs[116] Shareholder Information - As of December 31, 2020, the group did not recommend the payment of a final dividend for the year, consistent with the previous year[155] - The group has no established dividend payout ratio, and any dividend payments will depend on operational performance, cash flow, and financial condition[157] - The board of directors will review the dividend policy annually, considering various factors including future prospects[157] Risk Management - The company has adopted clear risk management procedures and guidelines, with regular internal assessments to identify potential risks affecting operations and financial processes[135] - The board is responsible for evaluating and determining the nature and extent of risks the company is willing to take to achieve strategic objectives[135] Employee and Management Information - The total salary expenditure for employees was RMB 72.1 million for the year ending December 31, 2020, with approximately 1,060 employees[59] - The company’s procurement department is led by Mr. Chen Jianming, who has over 21 years of experience in business and banking[87] - The company’s sales and marketing department is managed by Mr. Lian Xi, who has over 21 years of experience in the food production industry[86] Strategic Planning - The company is actively involved in strategic planning and business development to enhance its market presence[78] - The company is focused on expanding its product offerings and exploring new market opportunities[78] Miscellaneous - The company reported no contingent liabilities as of December 31, 2020[58] - The company has a commitment to quality control and has implemented advanced quality management practices[75] - The company maintains a cautious optimism regarding long-term growth despite short-term challenges in the snack food industry[64]