Financial Performance - For the six months ended June 30, 2023, the company's revenue was approximately RMB 140.7 million, an increase of 9.5% compared to RMB 128.5 million for the same period in 2022[14]. - Gross profit for the six months ended June 30, 2023, was approximately RMB 24.4 million, representing a significant increase of 55.4% from RMB 15.7 million in the same period last year[17]. - Operating profit for the six months ended June 30, 2023, was approximately RMB 97.6 million, a significant increase of 573.8% compared to an operating loss of RMB 20.6 million for the same period in 2022[23]. - Profit before tax for the six months ended June 30, 2023, was approximately RMB 85.6 million, compared to a loss before tax of RMB 32.5 million for the same period in 2022[25]. - Other income for the six months ended June 30, 2023, was approximately RMB 4.0 million, an increase of 29.0% compared to RMB 3.1 million for the same period in 2022[18]. - The net profit for the period was RMB 85,520,000, a turnaround from a net loss of RMB 32,466,000 in the same period last year[83]. - Basic and diluted earnings per share for the six months ended June 30, 2023, were RMB 0.40, compared to a loss of RMB 0.14 in the same period of 2022[157]. Revenue Breakdown - Revenue from home appliance sales was RMB 121,667,000, slightly down from RMB 126,815,000, a decrease of 4.3%[143]. - Revenue from liquor sales was RMB 17,235,000, with no prior year comparison available[143]. - The appliance segment generated revenue of RMB 122,934,000, while the liquor segment contributed RMB 17,235,000[145]. Cash and Liquidity - Cash and cash equivalents as of June 30, 2023, were approximately RMB 33.3 million, an increase of 296.4% from RMB 8.4 million as of December 31, 2022[28]. - The net cash generated from operating activities for the six months ended June 30, 2023, was RMB 14.297 million, a significant improvement from a net cash outflow of RMB 20.247 million in the same period of 2022[88]. - The total cash and cash equivalents at the end of the period rose to RMB 33.267 million, up from RMB 15.421 million at the end of June 2022[88]. - The company has received financial support from its major shareholder, with a commitment of up to RMB 400 million over an 18-month period to assist in fulfilling financial obligations[97]. Assets and Liabilities - The company's total assets as of June 30, 2023, were RMB 160,255,000, down from RMB 238,437,000 as of December 31, 2022[77]. - Total liabilities decreased to RMB 544,547,000 from RMB 709,153,000, indicating improved financial stability[79]. - The company's equity attributable to owners improved to a negative balance of RMB 401,890 from a negative balance of RMB 488,502,000, indicating a recovery in equity position[113]. Shareholder Information - As of June 30, 2023, the company has a total of 65,001,624 shares held by Mogen Ltd., representing approximately 29.64% of the company's equity[62]. - The major shareholders include Shenghang International Group Limited, which also holds 65,001,624 shares, accounting for 29.64% of the company's equity[63]. - Other significant shareholders include Opus Sanwei (International) Holdings Limited and Shan Weiwei, each holding 23,755,306 shares, which is about 10.83% of the company's equity[65]. Corporate Governance - The company has complied with the corporate governance code as of June 30, 2023, except for a deviation regarding the separation of roles between the Chairman and the CEO[69]. - The company has established a written guideline for employee securities trading, which meets or exceeds the standards set by the code[70]. - The company is focused on enhancing corporate governance and regularly reviews necessary measures to promote good practices[69]. Market and Strategic Initiatives - The company is focusing on expanding its sales in the sauce liquor market, which saw a production capacity growth of 16.7% year-on-year in 2022, reaching approximately 700,000 kiloliters[11]. - The company is enhancing its product offerings in the home appliance sector by promoting green and smart appliances, with a focus on health and intelligent features[12]. - The company is actively renovating its stores to improve customer experience and integrating various online and offline marketing channels[8]. - The company aims to increase its market share in the mid-to-high-end appliance segment, responding to the growing demand from the new middle-class population[12]. - The company plans to leverage the growth opportunities in the green smart home appliance market, focusing on rural and lower-tier markets to expand market share and brand influence[53]. Cost Management - The group is implementing cost control measures, including reducing discretionary spending and management costs, to enhance financial stability[97]. - The company has settled approximately RMB 60,000,000 in borrowings during the reporting period[140]. Economic Outlook - Future economic policies are expected to support growth in the retail sector, as indicated by the central economic work conference in December 2022[48]. - The liquor industry is projected to reach a sales revenue of CNY 255.6 billion by 2026, with an average annual growth rate of 6.5%[54].

Financial Performance - In 2022, the company's revenue was approximately RMB 262.3 million, a decrease of 12.9% compared to RMB 301.2 million in 2021[5]. - The operating loss for 2022 was approximately RMB 112.9 million, compared to RMB 38.7 million in 2021[5]. - The total loss for 2022 was approximately RMB 137.8 million, compared to RMB 62.2 million in 2021[5]. - Gross profit for 2022 was approximately RMB 38.2 million, an increase of 4.7% from RMB 36.5 million in 2021[26]. - The company reported a basic and diluted loss per share of RMB 0.624 for 2022, compared to RMB 0.294 in 2021[181]. - The company's total equity attributable to owners was negative RMB 488,502,000 in 2022, compared to negative RMB 351,735,000 in 2021, indicating a deterioration in shareholder equity[183]. - The company reported a loss attributable to shareholders of RMB 137.825 million for the year ended December 31, 2022, compared to a loss of RMB 62.179 million in 2021, representing a 121% increase in losses year-over-year[193]. - The company’s total equity decreased to RMB 17.786 million as of December 31, 2022, from RMB 20.987 million in 2021, reflecting a decline in shareholder value[187]. Market Strategy and Expansion - The company plans to enhance its retail strategy by integrating online and offline channels, focusing on customer satisfaction and exploring various marketing methods[8]. - The company is expanding into the liquor market, particularly in the sauce-flavored liquor segment, to improve overall profitability[8]. - The company aims to leverage technology to drive its new consumption strategy[12]. - The company is focusing on the sauce-flavored liquor market, which is expected to capture 30% of the overall liquor market share in the next decade, driven by the rising brand value of Guizhou Xijiu[20]. - The company plans to diversify its product offerings in the home appliance sector, emphasizing green and smart appliances, and introducing high-end products in the kitchen appliance category[22]. - The company plans to strengthen marketing for major appliances in response to favorable real estate policies and consumer demand[53]. - The company aims to enhance shareholder value and returns through strategic acquisitions and business expansion[128]. Economic Environment - The easing of COVID-19 restrictions from January 8, 2023, is expected to gradually reduce the negative impact on consumer markets[9]. - The company anticipates a rebound in consumer spending and economic growth in 2023 due to supportive economic policies[11]. - The overall economic environment remains challenging, with consumer spending and investment growth slowing down in 2022[15]. - The company reported a revenue of approximately RMB 262.3 million for 2022, primarily due to the ongoing impact of the COVID-19 pandemic and a sudden outbreak in Anhui province in 2022[23]. Financial Position and Liabilities - As of December 31, 2022, the group's cash and cash equivalents were approximately RMB 8.4 million, a decrease of 42.5% from RMB 14.6 million as of December 31, 2021[36]. - The group's inventory as of December 31, 2022, was approximately RMB 41.6 million, down 19.2% from RMB 51.5 million as of December 31, 2021[37]. - The group's trade receivables were approximately RMB 4.0 million as of December 31, 2022, a decrease of 41.2% from RMB 6.8 million as of December 31, 2021[40]. - The capital debt ratio as of December 31, 2022, was 297.4%, an increase from 192.0% as of December 31, 2021[42]. - The group's borrowings reached RMB 442.2 million as of December 31, 2022, an increase of 9.0% from RMB 405.7 million as of December 31, 2021[43]. - The company’s total liabilities exceeded total assets by approximately RMB 470.716 million as of December 31, 2022, compared to RMB 332.891 million in 2021, indicating increased financial strain[193]. Governance and Compliance - The board of directors has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, to oversee specific aspects of the company's affairs[71]. - The Audit Committee held two meetings during the year to review the annual financial performance for 2021 and the interim results for 2022, with all members in attendance[72]. - The company has adopted a board diversity policy, recognizing the benefits of a diverse board as a key factor in maintaining competitive advantage[79]. - The company has implemented a structured process for the appointment and re-election of directors, as outlined in its articles of association[68]. - The company has established a shareholder communication policy to ensure that shareholder opinions and inquiries are properly addressed[102]. - The company has implemented procedures to strictly prohibit unauthorized access and use of insider information[95]. Employee and Management Information - The group had 267 employees as of December 31, 2022, a decrease of 11.6% from 302 employees as of December 31, 2021[49]. - As of December 31, 2022, 56% of the company's 267 employees are female, with one female member on a six-member board[81]. - The company has a diverse board with members holding various degrees and qualifications, including a master's degree in business administration from the University of Leeds[159]. - The management team is committed to maintaining high standards of corporate governance and operational efficiency[159]. Acquisition and Future Plans - The company has entered into a conditional sale agreement to acquire Shengshang Entrepreneurial Services Co., Ltd. for a total consideration of HKD 1,995,000,000, which will involve the issuance of 3,990,000,000 new shares at an issue price of HKD 0.50 per share[127]. - The acquisition represents an increase of approximately 1,819.59% of the company's existing issued share capital as of the date of the acquisition agreement[127]. - The company aims to diversify its revenue sources and improve financial performance through this acquisition[128]. - The financial performance and operational strategies will be closely monitored post-acquisition to ensure alignment with the company's growth objectives[128].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚賴該等內 容而引致的任何損失承擔任何責任。 （於開曼群島註冊成立的有限公司） （股份代號：1280） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 的 年 度 業 績 公 告 摘要 1. 二零二二年的收入約為人民幣262.3百萬元，較二零二一年約人民幣301.2百 萬元減少12.9%。主要因為二零一九冠狀病毒病疫情持續，對安徽主要經營 區域封城，揚州地區管控嚴格，以及調整收入結構，提升收入質量，減少收 益不高的收入項所致。 2. 二零二二年的毛利率為14.6%，二零二一年則為12.1%。 ...

Financial Performance - For the six months ended June 30, 2022, the company's revenue was approximately RMB 128.5 million, a decrease of 20.6% compared to RMB 161.8 million for the same period in 2021[14]. - Gross profit for the six months ended June 30, 2022, was approximately RMB 15.7 million, a decrease of 3.1% from RMB 16.2 million in the same period of 2021[17]. - Operating loss for the six months ended June 30, 2022, was approximately RMB 20.6 million, an increase of 25.6% from RMB 16.4 million for the same period in 2021[23]. - Loss before tax for the six months ended June 30, 2022, was approximately RMB 32.5 million, compared to RMB 29.0 million for the same period in 2021[25]. - Net loss for the period was RMB 32,466,000, compared to a net loss of RMB 29,056,000 in the same period last year, representing an increase in losses[87]. - Revenue for the six months ended June 30, 2022, was RMB 128,452,000, a decrease of 20.6% compared to RMB 161,840,000 for the same period in 2021[85]. - Revenue from goods sales was RMB 126,815,000, down from RMB 161,250,000, indicating a decline of 21.3%[173]. - The cost of goods sold for the six months ended June 30, 2022, was RMB 112,586,000, compared to RMB 145,351,000 in 2021, reflecting a decrease of 22.5%[181]. Cost and Expenses - The company's cost of sales for the same period was approximately RMB 112.8 million, down 22.6% from RMB 145.7 million in the previous year, attributed to a reduction in sales scale[16]. - Sales and marketing expenses totaled approximately RMB 19.0 million for the six months ended June 30, 2022, a decrease of 24.9% from RMB 25.3 million for the same period in 2021[20]. - Administrative expenses amounted to approximately RMB 20.8 million for the six months ended June 30, 2022, an increase of 24.6% compared to RMB 16.7 million for the same period in 2021[21]. - Other income for the six months ended June 30, 2022, was approximately RMB 3.1 million, a decrease of 36.7% compared to RMB 4.9 million for the same period in 2021[18]. - Other net income for the six months ended June 30, 2022, was approximately RMB 0.5 million, a decrease of 88.9% compared to RMB 4.5 million for the same period in 2021[19]. - The group’s employee benefits expenses, including directors' remuneration, were RMB 11,678,000, a slight decrease from RMB 12,151,000 in 2021[181]. Market and Strategic Focus - The company is focusing on enhancing marketing strategies and exploring emerging channels to adapt to changing consumer behavior and preferences[8]. - The company aims to establish a data processing empowerment platform to drive digital retail and improve data sharing and marketing effectiveness[11]. - The company plans to diversify its product offerings by promoting green and smart home appliances, responding to the growing demand for high-end products[12]. - The domestic new middle-class population is approximately 180 million, with the number of middle-class families reaching 33.2 million, indicating a significant market opportunity[12]. - The company is enhancing customer experience by renovating stores and integrating multiple channels such as live streaming and social media[9]. - The company is committed to building a smart home ecosystem and increasing the selection of health-oriented smart appliances[12]. - The company is focusing on enhancing sales of major home appliances, particularly in response to the real estate market's influence on new housing demand and appliance upgrades[53]. - The management is exploring new business areas and enhancing the sales of green and mid-to-high-end home appliances to diversify the sales structure[55]. - The company is actively adjusting marketing strategies to leverage policy benefits and stimulate consumer demand in third and fourth-tier cities[54]. - The management team is participating in economic policy forums to stay updated on industry trends and explore high-margin projects[55]. Financial Position and Liquidity - Cash and cash equivalents as of June 30, 2022, were approximately RMB 15.4 million, an increase of 5.5% from RMB 14.6 million as of December 31, 2021[28]. - Inventory as of June 30, 2022, was approximately RMB 56.3 million, an increase of 9.3% from RMB 51.5 million as of December 31, 2021[29]. - The debt-to-equity ratio as of June 30, 2022, was 211.6%, compared to 192.0% as of December 31, 2021[36]. - The company continues to face significant uncertainties regarding its ability to continue as a going concern due to the net loss and current liabilities exceeding current assets by RMB 223,617,000[96]. - The company has received an irrevocable financial support commitment of up to RMB 400 million from its major shareholder, Chongqing Shengshang Information Technology Co., Ltd., to assist in fulfilling its financial obligations over the next 18 months[99]. - The company maintains a liquidity risk management strategy through internal sales proceeds and external funding sources, ensuring sufficient cash for operational needs[118]. - The total assets as of June 30, 2022, amounted to RMB 327,310,000, a decrease from RMB 360,474,000 as of December 31, 2021, representing a decline of approximately 9.2%[80]. - Total liabilities as of June 30, 2022, were RMB 692,667,000, slightly down from RMB 693,365,000 at the end of 2021[82]. - The company's total equity as of June 30, 2022, was RMB 327,310,000, down from RMB 360,474,000 at the end of 2021[82]. - The company's capital structure included an equity deficit of RMB 383,510,000 as of June 30, 2022, compared to a deficit of RMB 351,735,000 as of December 31, 2021[122]. Risks and Challenges - The macroeconomic environment remains challenging, with ongoing impacts from the pandemic and geopolitical tensions affecting market conditions[7]. - The company faces a potential foreign exchange loss of approximately RMB 1,705,000 if the RMB depreciates/appreciates by 5% against the HKD, based on its currency assets and liabilities as of June 30, 2022[110]. - The company has fixed-rate borrowings of RMB 2,000,000 and approximately RMB 411,533,000 in other borrowings as of June 30, 2022, exposing it to fair value interest rate risk[111]. - The company has not hedged its cash flow and fair value interest rate risks, which primarily arise from its borrowings[111]. - The company has limited credit risk associated with its bank balances, as the counterparties are high credit-rated banks, resulting in no provisions for bank balances as of June 30, 2022[114]. - The company continues to implement cost control measures, including reducing discretionary spending and management costs, to ensure sufficient operating funds for the next 12 months[100]. Shareholder Information - The company's legal capital as of June 30, 2022, stands at $12 million, divided into 600 million shares[59]. - Major shareholder Yuan Li holds 65,001,624 shares, representing approximately 29.64% of the company's equity[63]. - The company has no unexercised stock options or any significant transactions involving directors during the reporting period[58][61]. - The group did not declare any interim dividends for the six months ended June 30, 2022, consistent with the previous year[188].

Financial Performance - In 2021, the gross profit margin was 12.1%, compared to 6.6% in 2020[6]. - The operating loss for 2021 was approximately RMB 387 million, down from RMB 635 million in 2020[10]. - The total loss for 2021 was approximately RMB 622 million, compared to RMB 850 million in 2020[11]. - The company's revenue for 2021 was approximately RMB 301.2 million, a decrease of 14.4% compared to RMB 351.7 million in 2020, primarily due to the ongoing impact of the COVID-19 pandemic and a sudden outbreak in Yangzhou[32]. - Gross profit for the year ended December 31, 2021, was approximately RMB 36.5 million, an increase of 56% from RMB 23.4 million in 2020[34]. - Operating loss for the year was approximately RMB 38.7 million, a reduction of 39% from RMB 63.5 million in 2020, attributed to cost control and improved revenue quality[40]. - The company's administrative expenses decreased by 27.2% to approximately RMB 33.5 million from RMB 46.1 million in 2020, reflecting effective cost management[39]. - Cash and cash equivalents as of December 31, 2021, were approximately RMB 14.6 million, a decrease of 60% from RMB 36.5 million in 2020[45]. - The company reported a pre-tax loss of RMB 62,154,000 for 2021, an improvement from a loss of RMB 84,931,000 in 2020, representing a reduction of approximately 26%[196]. - Basic and diluted loss per share was RMB (0.294), an improvement from RMB (0.552) in 2020[190]. Market Outlook - The company anticipates a rebound in consumer spending as the negative impacts of the pandemic gradually diminish in 2022 and beyond[18]. - The company is focusing on rural market expansion by leveraging new government policies aimed at promoting rural consumption and upgrading durable goods[30]. - The company anticipates improved consumer demand for home appliances in 2022, driven by the easing of COVID-19 restrictions and government policies supporting economic stability[60]. - The "dual carbon" national strategy presents significant market development opportunities for the home appliance industry[19]. Strategic Initiatives - The company plans to enhance its data-driven platform construction to improve supply chain efficiency and reduce costs[19]. - The company aims to leverage technological empowerment to drive new consumption strategies[21]. - The company is focusing on integrating online and offline experiences to adapt to the evolving retail landscape influenced by the pandemic[18]. - The company plans to focus on dual upgrades in consumption and products, emphasizing smart, personalized, and high-quality home appliances[61]. - The company is establishing a data processing platform to drive digital retail transformation, capitalizing on the growing internet user base in China, which reached 1.011 billion by June 2021[65]. - The company is focusing on digital retail transformation by establishing a data processing enabling platform to enhance information flow and data sharing, aiming for more accurate category planning and effective marketing analysis[66]. - The company aims to enhance customer experience through a digital-centric approach, integrating online and offline channels for a seamless purchasing experience[66]. - The company is diversifying its product offerings, emphasizing health and smart home appliances, and introducing high-end products in the washing and kitchen appliance categories[31]. Corporate Governance - The company emphasizes the importance of corporate governance and has adhered to the corporate governance code, ensuring transparency and accountability to shareholders[68]. - The board consists of seven members, including three executive directors and three independent non-executive directors, ensuring a balanced governance structure[72]. - The company has implemented a clear division of roles between the chairman and the CEO to enhance operational effectiveness[75]. - The company has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, to oversee specific aspects of its affairs[81]. - The Audit Committee held two meetings during the year to review the annual financial performance for 2020 and the interim performance for 2021, with all members in attendance[83]. - The Remuneration Committee conducted two meetings to review the remuneration policies and packages for executive directors and senior management[87]. - The Nomination Committee held two meetings to assess the composition and independence of the board, ensuring a balanced diversity perspective[89]. - The company has adopted a board diversity policy, recognizing the importance of diversity at the board level to maintain competitive advantage[90]. - The board has authorized the Nomination Committee to select and appoint directors, ensuring continuity and appropriate leadership at the board level[92]. Risk Management - The board is responsible for the overall risk management and internal control systems, ensuring shareholder interests and asset protection[99]. - The company has implemented procedures to identify, handle, and disclose inside information, ensuring strict access control[100]. - The company encourages shareholder participation in annual meetings to directly address any inquiries to the board or management[104]. - The company has a shareholder communication policy to ensure that shareholder opinions and issues are properly addressed[105]. Shareholder Information - The company does not recommend any final dividend for the year ending December 31, 2021, consistent with 2020[55]. - The group has no reserves available for distribution to shareholders as of December 31, 2021[121]. - The company aims to declare and recommend dividends amounting to no less than 15% of the annual net profit, subject to various conditions[105]. - The company has a significant shareholder, Opus Smart Holdings, with 23,755,306 shares, accounting for 10.83% of the total equity[134]. - As of December 31, 2021, the company has 65,001,624 shares held by Shenghang International, representing a 29.64% ownership stake[132]. Operational Efficiency - The company is committed to optimizing various aspects, including after-sales support and information systems, to enhance operational efficiency[28]. - The company is leveraging new technologies to digitize every aspect of appliance retail, including sales, logistics, and warehousing, to improve turnover efficiency[66]. - The company plans to focus on enhancing operational efficiency and exploring new market opportunities to drive future growth[199].

Financial Performance - For the six months ended June 30, 2021, the company's revenue was approximately RMB 161.8 million, an increase of 36.7% compared to RMB 118.4 million for the same period in 2020[14]. - Gross profit for the six months ended June 30, 2021, was approximately RMB 16.2 million, representing a significant increase of 145.5% from RMB 6.6 million in the prior year[18]. - Other income recorded for the same period was approximately RMB 4.9 million, an increase of 19.5% compared to RMB 4.1 million in the previous year[19]. - Operating loss for the six months ended June 30, 2021, was approximately RMB 16.4 million, a reduction of 67.5% compared to RMB 50.4 million for the same period in 2020[23]. - Loss before tax for the six months ended June 30, 2021, was approximately RMB 29 million, compared to RMB 56.6 million for the same period in 2020[25]. - The company reported a net loss of RMB 29,056 thousand for the six months, an improvement from a net loss of RMB 56,679 thousand in the same period last year[91]. - The company reported a loss attributable to equity holders of RMB 26,122,000 in the first half of 2021, an improvement from a loss of RMB 55,461,000 in the same period of 2020, indicating a reduction of 52.9%[196]. Cost and Expenses - The company's cost of sales for the same period was approximately RMB 145.7 million, up 30.3% from RMB 111.8 million in the previous year, attributed to increased sales volume[17]. - Total sales and marketing expenses for the six months ended June 30, 2021, were approximately RMB 25.3 million, a decrease of 19.7% compared to RMB 31.5 million for the same period in 2020[21]. - Administrative expenses for the six months ended June 30, 2021, totaled approximately RMB 16.7 million, down 45.6% from RMB 30.7 million for the same period in 2020[22]. - Employee benefit expenses decreased to RMB 12,151,000 in the first half of 2021, down from RMB 21,117,000 in the same period of 2020, a reduction of 42.3%[189]. - Net financial costs for the six months ended June 30, 2021, were approximately RMB 12.7 million, an increase of 105% from RMB 6.2 million for the same period in 2020[24]. Market and Product Strategy - The company is leveraging the "1+1>2" synergy effect through its subsidiary Anhui Sihai Huijin Appliance Sales Co., Ltd., enhancing store management and achieving sales targets[9]. - The company is actively utilizing the rural market expansion policy, aiming to increase penetration of home appliances in rural areas, particularly focusing on air conditioners and range hoods[10]. - The company is diversifying its product offerings, emphasizing green and smart home appliances, and introducing high-end products in the washing and refrigeration categories[13]. - The company is responding to the growing demand from approximately 180 million new middle-class consumers and 33.2 million middle-class households in China[13]. - The company plans to enhance product upgrades in household appliances, focusing on health, personalization, and smart technology, driven by trends in consumer demand and technological advancements[52]. Financial Position - Cash and cash equivalents as of June 30, 2021, were approximately RMB 31.2 million, a decrease of 38.7% from RMB 50.9 million as of December 31, 2020[29]. - Total assets decreased to RMB 347,446 thousand as of June 30, 2021, down from RMB 414,664 thousand at the end of 2020[88]. - Total liabilities decreased to RMB 647,217 thousand from RMB 720,131 thousand, indicating improved financial stability[88]. - The company's equity attributable to owners was RMB (317,824) thousand, slightly improved from RMB (326,454) thousand at the end of 2020[88]. - Current liabilities exceeded current assets by approximately RMB 257,416,000 as of June 30, 2021, indicating significant uncertainty regarding the company's ability to continue as a going concern[100]. Share Issuance and Capital Structure - The company issued a total of 36,546,624 ordinary shares to Shenghang International Group Limited, raising approximately HKD 928,984.36, with a net amount of HKD 690,984.36 after expenses[59]. - The company's authorized share capital increased from USD 4 million to USD 12 million, expanding the number of shares from 200 million to 600 million[65]. - The company raised approximately HKD 39.3 million from the issuance of 30,455,520 ordinary shares, with a net amount of approximately HKD 38.9 million after related expenses[62]. - The company issued 36,546,624 new shares at a subscription price of HKD 1.14 per share, raising approximately HKD 41,663,000[147]. - The weighted average number of ordinary shares issued increased to 159,311,000 shares in the first half of 2021, compared to 131,639,000 shares in the same period of 2020, reflecting a growth of 20.9%[196]. Governance and Compliance - The audit committee consists of independent non-executive directors with appropriate professional qualifications[79]. - The company has adhered to the corporate governance code as per the listing rules during the reporting period[77]. - The company has established written guidelines for employee securities trading, which meet or exceed the standards of the code[78]. - The company has no directors with interests in competing businesses as defined by the listing rules during the reporting period[76]. - The company did not recommend any interim dividend for the six months ended June 30, 2021[43].

Financial Performance - In 2020, Qidian International Co., Ltd. reported revenue of approximately RMB 351.7 million, a decrease compared to the previous year[7]. - The gross profit margin for 2020 was 6.6%, down from 8.2% in 2019[7]. - The operating loss for 2020 was approximately RMB 63.5 million, an improvement from an operating loss of RMB 94.8 million in 2019[9]. - The company's revenue for the year ended December 31, 2020, was approximately RMB 351.7 million, a decrease of 25.3% compared to RMB 470.7 million for the year ended December 31, 2019, primarily due to the impact of the pandemic[26]. - The cost of sales and services for the year ended December 31, 2020, was approximately RMB 328.4 million, a decrease of 24.0% from RMB 432.0 million for the year ended December 31, 2019, mainly due to reduced sales volume[28]. - Gross profit for the year ended December 31, 2020, was approximately RMB 23.4 million, a decrease of 39.7% compared to RMB 38.7 million for the year ended December 31, 2019[29]. - The company's operating loss for the year ended December 31, 2020, was approximately RMB 63.5 million, a decrease of 33.0% from RMB 94.8 million for the year ended December 31, 2019[34]. - Other income for the year ended December 31, 2020, was approximately RMB 5.2 million, down from RMB 9.0 million for the year ended December 31, 2019[30]. - The company's sales and marketing expenses for the year ended December 31, 2020, totaled approximately RMB 50.0 million, a decrease of 35.3% from RMB 77.4 million for the year ended December 31, 2019[32]. - Administrative expenses for the year ended December 31, 2020, were approximately RMB 46.1 million, a decrease of 28.8% from RMB 64.6 million for the year ended December 31, 2019[33]. - The net financial costs for the year ended December 31, 2020, were approximately RMB 21.4 million, an increase of 51.8% from RMB 14.1 million for the year ended December 31, 2019[35]. - The pre-tax loss for the year ended December 31, 2020, was approximately RMB 84.9 million, compared to a pre-tax loss of RMB 108.9 million for the year ended December 31, 2019[36]. - The company's loss attributable to equity holders for the year ended December 31, 2020, was approximately RMB 83.2 million, compared to a loss of RMB 108.8 million for the year ended December 31, 2019, representing a decrease in loss of 23.1%[38]. - The group reported a loss of RMB 84,952,000 for the year ended December 31, 2020, with a net current liability of RMB 140,340,000 and total liabilities of RMB 305,467,000[185]. Market Strategy and Outlook - The company plans to focus on the construction and development of private traffic elements in retail, including "people, goods, and venues" to enhance efficiency and reduce costs[13]. - The company aims to build a data platform focused on private traffic acquisition, inventory management, and business operations to minimize waste caused by mismatched consumer supply and demand information[13]. - The company anticipates new demand in the home appliance sector due to increased consumer focus on health, disinfection, and air purification products as a result of the pandemic[14]. - The "14th Five-Year Plan" in China is expected to boost consumer spending on durable goods, including home appliances, and promote e-commerce development[14]. - The company will leverage its brand advantages to tap into the rural market and increase rural home appliance consumption[16]. - The maturity of 5G technology is expected to create new business models and consumer experiences, providing significant market opportunities[15]. - The company expresses confidence in overcoming challenges and advancing its technology-enabled new consumption strategy[17]. - The company is focusing on expanding its presence in rural markets and enhancing its product offerings in health and smart appliances, anticipating a market growth rate exceeding 30% in the comfort home systems segment[24][25]. - The outlook for 2021 indicates a strong recovery momentum in the Chinese economy, with expectations for significant GDP growth driven by real estate recovery and favorable industry policies[58]. - The company aims to capture incremental market share by enhancing rural logistics and after-sales service platforms in response to government policies promoting rural consumption[61]. - New marketing strategies, including live streaming and 3D shopping experiences, are being implemented to boost sales and adapt to changing consumer behaviors[62]. - The establishment of a data processing platform will enhance digital retail capabilities, allowing for more accurate category planning and effective marketing decision-making[63]. - The company is responding to trends in consumer and product upgrades, focusing on health-related small appliances and high-end products to meet increasing demand from middle-to-high income households[64]. - The real estate sector's post-cycle recovery and the replacement demand for home appliances are expected to drive sales growth, with a projected 15.27% year-on-year increase in property sales area in October 2020[65]. Corporate Governance - The board of directors has complied with the listing rules by appointing at least three independent non-executive directors, constituting at least one-third of the board[76]. - The company has established a clear division of responsibilities between the Chairman and the CEO, with Mr. Yuan Li serving as Chairman and Ms. Liu Siming as CEO[77]. - The audit committee held four meetings during the year to review the financial performance for the year 2019 and the interim results for 2020[84]. - The audit committee consists of independent non-executive directors, ensuring compliance with the requirement that independent directors constitute a majority[84]. - The remuneration committee is responsible for reviewing the compensation packages of individual executive directors and senior management, ensuring transparency in the remuneration process[87]. - The company has received written annual independence confirmations from all independent non-executive directors, affirming their compliance with independence guidelines[76]. - The company encourages continuous professional development for all directors to ensure they remain informed and relevant in their contributions[81]. - The board has established three committees: the audit committee, the remuneration committee, and the nomination committee, each with clear written terms of reference[82]. - The company’s articles of association require all directors to retire at least every three years, with provisions for re-election at the annual general meeting[80]. - The company has not encountered any disagreements with external auditors regarding their appointment, designation, or dismissal during the year[85]. - The company held two meetings of the remuneration committee during the year to review compensation policies and executive remuneration packages[88]. - The nomination committee has established a diversity policy for the board, considering factors such as gender, age, culture, education background, professional qualifications, skills, knowledge, and industry experience[91]. - The board of directors has maintained a suitable balance of diversity, with the nomination committee reviewing the board's structure and composition annually[91]. - The board is responsible for overall risk management and internal control systems, ensuring shareholder interests and asset protection[100]. - The company has adopted a standard code for securities trading, ensuring compliance by all directors and employees with written guidelines[96]. - The board has a responsibility for preparing the financial statements for the year ending December 31, 2020, ensuring clarity and balance in disclosures[98]. - The company has established an internal audit function to review significant financial and operational issues and report findings to the audit committee[100]. - The nomination committee is composed of three independent non-executive directors, ensuring independence in the evaluation of board members[89]. - The company aims to maintain a balanced perspective on diversity related to business growth and will consider measurable targets for implementing the diversity policy[91]. - The board has reviewed corporate governance policies and practices, ensuring compliance with legal and regulatory requirements[94]. - The external auditor's fees for the year ended December 31, 2020, amounted to approximately RMB 1.917 million, with RMB 1.735 million for audit services and RMB 182,000 for non-audit services[102]. Shareholder Information - The company does not recommend any final dividend for the year ended December 31, 2020[53]. - The company has adopted a dividend policy aiming to distribute at least 15% of the annual net profit as dividends, subject to various conditions and factors[106]. - No interim dividends were declared during the year, and the board does not recommend any final dividends for the year[119]. - As of December 31, 2020, there were no reserves available for distribution to shareholders[123]. - The company has a total of 28,455,000 shares held by Shenghang International Group Limited, representing approximately 15.57% of the company's equity[135]. - The major shareholders include Mogen Ltd. and Shenghang International Group Limited, each holding 28,455,000 shares, which is 15.57% of the company's equity[136]. - The company has no knowledge of any tax relief available to shareholders for holding its securities[126]. - There were no related party transactions or ongoing related party transactions that required disclosure, except for those mentioned in the report[132]. - The board of directors includes both executive and non-executive members, with specific appointments and resignations noted during the year[128]. - The company has no provisions for preemptive rights in its articles of association, which means it is not required to offer new shares to existing shareholders on a pro-rata basis[125]. - The company’s subsidiaries and their details as of December 31, 2020, are disclosed in the financial statements[127]. - The company has undergone internal restructuring involving equity transfers among its subsidiaries[131]. - The board of directors has no interests in businesses that compete or may compete with the company as of December 31, 2020[130]. Capital Structure and Financing - The company issued a total of 25,379,600 ordinary shares on May 28, 2020, to improve its capital structure, with a net amount of approximately HKD 27.3 million after expenses[150]. - The company also issued 30,455,520 ordinary shares on September 16 and 22, 2020, with a total nominal value of USD 609,110, aimed at enhancing its capital structure[151]. - The adjusted exercise price for stock options granted in 2015 is HKD 33.8, with 21,500,000 options unexercised as of January 1, 2020[145]. - The company completed a share consolidation on January 7, 2020, converting every 20 shares into 1 share, changing the par value from USD 0.001 to USD 0.02[148]. - The company changed its name from "Huiyin Smart Community Co., Ltd." to "Qidian International Co., Ltd." effective January 3, 2020[148]. - The total number of stock options canceled or lapsed during the year was 1,644,000[140]. - The company reported a significant ownership structure, with Tianjin Bohai Commodity Exchange holding 7.17% of the total shares[137]. - The company aims to optimize its shareholder base through the issuance of new shares, enhancing its asset-liability ratio[150]. - The net proceeds from the first subscription of shares were approximately HKD 27.7 million, after deducting related expenses[150]. - The company has a total of 11,955,181 shares held by Zhonghua Ruike Investment Development, representing 6.54% of the equity[137]. - The total amount raised from Subscription Item 2 is approximately HKD 39.3 million, with a net amount of approximately HKD 38.9 million after deducting related professional fees and expenses of about HKD 0.4 million[152]. - As of December 31, 2020, approximately HKD 15.3 million of the net proceeds from Subscription Item 2 has been utilized, including about HKD 12.0 million for repaying trade payables and notes payable, and about HKD 3.3 million for general working capital[152]. - Approximately HKD 23.6 million of the unutilized proceeds is deposited in licensed banks in China and Hong Kong, intended for future repayment of trade payables and notes payable, as well as general working capital[152]. Audit and Compliance - The audit committee consists of three independent non-executive directors, ensuring compliance with the relevant regulations of the stock exchange[165]. - The company did not purchase, sell, or redeem any of its listed securities during the year ended December 31, 2020[158]. - The audit assessed the effectiveness of management's internal controls related to the going concern assumption, including cash flow projections and significant assumptions such as sales volume and average selling price[186]. - The audit process identified and assessed risks of material misstatement in the consolidated financial statements due to fraud or error[195]. - The appropriateness of accounting policies and the reasonableness of accounting estimates and related disclosures were evaluated[197]. - The auditor concluded on the appropriateness of the going concern basis of accounting, highlighting significant uncertainties that may affect the group's ability to continue as a going concern[197]. - Sufficient and appropriate audit evidence was obtained regarding the financial information of the group's entities or business activities[199]. - Communication with governance included the planned audit scope, timing, and significant audit findings, including any major deficiencies in internal controls identified during the audit[199]. - The audit report described key audit matters that were most important to the audit of the current period's consolidated financial statements[199]. - The audit engagement partner for this independent auditor's report is Xiao Junwu, with a practicing certificate number P05898[200].

Market Performance - The overall retail sales of the home appliance market in China for the first half of 2020 reached RMB 369 billion, representing a decline of 14.13% year-on-year[9]. - The company experienced a significant decrease in store foot traffic due to the impact of the COVID-19 pandemic and flooding, affecting market expansion[13]. - There is a growing demand for health-oriented smart appliances, with significant sales increases in products like disinfection cabinets and air purifiers, despite an overall market contraction[16]. - Revenue from home appliance sales was RMB 115,017,000, down 46.6% from RMB 215,173,000 in the previous year[183]. - Maintenance and installation service revenue decreased to RMB 3,406,000 from RMB 13,830,000, representing a decline of 75.4%[183]. Financial Performance - The company's revenue for the six months ended June 30, 2020, was approximately RMB 118.4 million, a decrease of 48.3% compared to RMB 229.0 million for the same period in 2019[19]. - Gross profit for the six months ended June 30, 2020, was approximately RMB 6.6 million, a decrease of 72.5% from RMB 24.0 million in 2019[22]. - Operating loss for the six months ended June 30, 2020, was approximately RMB 50.4 million, an increase of 169.5% compared to RMB 18.7 million in 2019[28]. - The net loss attributable to equity holders for the same period was approximately RMB 55.5 million, compared to RMB 30.3 million in 2019[32]. - The company reported a net loss of RMB 56,679,000 for the six months ended June 30, 2020, compared to a net loss of RMB 32,301,000 for the same period in 2019[110]. Cost and Expenses - The cost of sales for the same period was approximately RMB 111.8 million, down 45.5% from RMB 205.0 million in 2019, attributed to reduced sales volume[21]. - Employee benefit expenses, including directors' remuneration, increased to RMB 21,117 thousand, up 52.1% from RMB 13,901 thousand in 2019[188]. - The company incurred a depreciation expense of RMB 5,036 thousand for property, plant, and equipment, down 65.6% from RMB 14,613 thousand in 2019[188]. - The net financial costs for the six months ended June 30, 2020, were approximately RMB 6.2 million, a decrease of 54.4% from RMB 13.6 million in 2019[29]. Cash Flow and Liquidity - Cash and cash equivalents as of June 30, 2020, were approximately RMB 28.1 million, an increase of 18.6% from RMB 23.7 million as of December 31, 2019[33]. - The company's current liabilities exceeded its current assets by approximately RMB 411,576,000, indicating significant liquidity concerns[110]. - Operating cash flow improved to RMB 14,393,000 for the six months ended June 30, 2020, compared to a cash outflow of RMB 36,307,000 in the prior year[106]. - The company has received financial support commitments totaling RMB 230 million from its major shareholder to assist in meeting financial obligations[111]. Inventory and Receivables - Inventory as of June 30, 2020, was approximately RMB 55.6 million, a decrease of 28.1% from RMB 77.3 million as of December 31, 2019[34]. - The total trade receivables amounted to RMB 17,233 million, with an expected credit loss of RMB 1,937 million[133]. - The provision for trade receivables increased to RMB 19,170,000 from RMB 17,233,000, indicating a rise of 11%[148]. - The aging analysis of trade receivables showed that amounts overdue for more than 365 days increased to RMB 12,184,000 from RMB 11,707,000, an increase of 4%[150]. Strategic Initiatives - The company is focusing on integrating management experience from its subsidiary, Anhui Sihai, to optimize management teams and enhance operational efficiency[13]. - The company plans to accelerate its layout in the rural market, leveraging national policies to expand sales channels and increase market share in lower-tier cities[14]. - New marketing strategies, including live streaming and 3D shopping experiences, are being implemented to boost sales in the home appliance market[55]. - The company is focusing on digital retail transformation, utilizing technologies like big data and AI to enhance customer experience and operational efficiency[56]. Corporate Governance and Shareholder Information - Major shareholders include Mogen Ltd. and Shenghang International Group Limited, each holding 18.69% of the company[78]. - The company has complied with the corporate governance code as per the Stock Exchange's requirements during the reporting period[83]. - The company aims to improve its asset-liability ratio and optimize its shareholder base through the issuance of new shares[66]. - The company did not declare any interim dividends for the six months ending June 30, 2020[46]. Legal and Compliance Matters - The group is involved in a legal dispute regarding a potential loss of RMB 35.5371 million related to prepayments to suppliers, with ongoing court proceedings expected to recover approximately RMB 50 million in assets[117]. - The group has not entered into any forward contracts to hedge its foreign exchange risk, which primarily arises from assets and liabilities denominated in HKD and USD[125].

Financial Performance - In 2019, the revenue was approximately RMB 470.7 million, a decrease of 48.9% compared to RMB 920.8 million in 2018, primarily due to the strategic abandonment of underperforming and loss-making new retail businesses[9] - The gross profit margin for 2019 was approximately 8.2%, compared to 2.5% in 2018[10] - The operating loss for 2019 was approximately RMB 94.8 million, an improvement from an operating loss of RMB 144.3 million in 2018[11] - The total loss for 2019 was approximately RMB 108.9 million, compared to a loss of RMB 165.8 million in 2018[12] - The total revenue for the year ended December 31, 2019, was approximately RMB 470.7 million, a decrease of about 48.9% compared to approximately RMB 920.8 million for the year ended December 31, 2018[35] - The company recorded a loss of approximately RMB 108.9 million for the year ended December 31, 2019, compared to a loss of approximately RMB 165.8 million for the year ended December 31, 2018[36] - The gross profit margin for the years ended December 31, 2019, and 2018, was approximately 8.2% and 2.5%, respectively[36] - The cost of sales and services for the year ended December 31, 2019, was approximately RMB 432.0 million, a decrease of 51.9% from approximately RMB 897.6 million for the year ended December 31, 2018[39] - Gross profit for the year ended December 31, 2019, was approximately RMB 38.7 million, an increase of 66.8% compared to RMB 23.2 million for the year ended December 31, 2018[40] - Other income for the year ended December 31, 2019, was approximately RMB 9.0 million, a decrease of 41.9% from approximately RMB 15.5 million for the year ended December 31, 2018[41] - Operating loss for the year ended December 31, 2019, was approximately RMB 94.8 million, a decrease of 34.3% compared to approximately RMB 144.3 million for the year ended December 31, 2018[45] Strategic Initiatives - The company aims to leverage the 5G era and integrate OTO and IoT concepts to enhance customer experience and promote new consumption strategies[15] - The company has restructured its management framework and ecosystem relationships in the retail sector over the past two years, which is expected to positively impact market performance starting in 2020[16] - The company plans to utilize cloud computing and big data technology to develop new consumption models empowered by technology[18] - The company is positioned as a leading brand in the home appliance market in China's third and fourth-tier cities, focusing on balancing customer acquisition costs and logistics[18] - The company expresses confidence in overcoming challenges and advancing its technology-enabled new consumption strategy[19] - The company is concentrating on the home appliance sector, leveraging national policies to expand market share and increase sales[35] - The company is enhancing its sales system and training to adapt to market opportunities and improve overall performance[26] - The company aims to integrate OTO and IoT concepts into its products and models to enhance customer experience and improve supply chain systems in the 5G era[81] - The company is accelerating its new consumption strategy by enhancing logistics infrastructure and building a robust supply chain[81] Human Resources and Corporate Culture - The company organized over 20 training sessions for employees, with participation exceeding 1,000 instances, to improve skills and capabilities[32] - The company focused on building a strong corporate culture to enhance employee cohesion and execution力[35] - The group employed 480 staff as of December 31, 2019, representing a 28.9% decrease from 675 employees a year earlier[71] Market Outlook - The outlook for 2020 remains positive for the home appliance retail industry, driven by government policies to boost consumption and the potential of lower-tier cities[74] - The "Home Appliance Subsidy 2.0" policy is expected to promote the sale of 150 million energy-efficient smart appliances, potentially driving consumption by approximately RMB 700 billion from 2019 to 2021[80] - The group aims to enhance its market share in third and fourth-tier cities, leveraging its established brand reputation and market experience[79] - The company plans to increase the proportion of high-margin products and smart green appliances in its retail offerings to improve overall profitability[80] Governance and Compliance - The company has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee to oversee specific aspects of its affairs[98] - The Audit Committee held four meetings during the year to review the financial performance for the interim and annual results[100] - The Remuneration Committee conducted one meeting to review the remuneration policies and compensation packages for executive directors and senior management[102] - The Nomination Committee held one meeting to assess the board's structure, size, and composition, ensuring a balanced diversity perspective[103] - The company has adopted a board diversity policy, recognizing the importance of diversity in maintaining competitive advantage[106] - The Nomination Committee will review the board diversity policy annually to ensure its effectiveness[107] - The Audit Committee is composed of independent non-executive directors, ensuring compliance with regulatory requirements[99] - The Remuneration Committee includes one executive director and two independent non-executive directors, promoting transparency in compensation decisions[101] - The company encourages continuous professional development for all directors to maintain their knowledge and skills[94] - The board of directors is responsible for the financial reporting of the company and the group for the year ended December 31, 2019[114] - The board has reviewed the effectiveness of the group's risk management and internal control systems, identifying areas for improvement and implementing appropriate measures[118] - The company has complied with all resumption conditions and guidelines, restoring trading on November 11, 2019[117] - The internal control consultant has been further appointed to assist in extended investigations, issuing second and third phase investigation reports[117] - The board has ensured that all directors have adhered to the standard code of conduct regarding securities trading throughout the year[111] - The company has established written guidelines for employees regarding securities trading to prevent unauthorized access and use of sensitive information[112] - The board has maintained a sufficient risk management and internal control system to protect shareholder interests and group assets[115] - The company has implemented procedures to identify, handle, and disclose inside information, ensuring strict prohibition of unauthorized access[116] - The attendance records of directors at board and committee meetings indicate high levels of participation, with executive directors attending 100% of meetings[110] - The company has taken proactive actions to address issues identified in the internal control reports, including improving existing internal control systems[117] Shareholder Information - The company reported a total of 569,100,000 shares held by Shenghang International Group Limited, representing approximately 22.42% of the company's equity[153] - The company has a significant shareholder, Mogen Ltd., which also holds 569,100,000 shares, equating to 22.42% of the company's equity[155] - BOCE (Hong Kong) Co., Limited holds 261,900,000 shares, accounting for 10.32% of the company's equity[155] - Zhonghua Ruike Investment Development Limited holds 239,103,625 shares, representing 9.42% of the company's equity[158] - The company has adopted a share option scheme to incentivize and reward participants, which was established on March 5, 2010[160] - The board of directors has the discretion to invite any executive, non-executive, or independent non-executive directors to participate in the share option scheme[161] - The company disclosed significant related party transactions in accordance with the Listing Rules Chapter 14A[151] - As of December 31, 2019, there were no directors with interests in businesses that compete or may compete with the company's operations[149] - The company has a total of 1,000,000 share options held by former executive director Cao Kuanping and his spouse, representing a minor interest[157] - The total number of share options available for issuance under the share option plan is capped at 10% of the total issued shares as of the special general meeting date on December 10, 2015[162] - As of the report date, there are 1,644,000 unexercised share options available for subscription, representing 1.29% of the company's issued share capital[170] - The maximum number of shares that can be granted to each participant under the share option plan is limited to 1% of the total issued shares within any twelve-month period[165] - No share options were granted, exercised, cancelled, or lapsed during the year ended December 31, 2019[170] - The total sales from the top five customers accounted for approximately 11.97% of the total revenue, with the largest customer contributing about 3.83%[181] - The total procurement from the top five suppliers represented approximately 36.43% of total procurement, with the largest supplier accounting for about 9.16%[181] Audit and Financial Reporting - The external auditor's fees for the year ended December 31, 2019, amounted to approximately RMB 4.58 million, with RMB 4.27 million for audit services and RMB 0.31 million for non-audit services[119] - The financial statements for the year ended December 31, 2019, were audited by Guo Fu Hao Hua (Hong Kong) CPA Limited, following the resignation of the previous auditor[187] - The company will propose the reappointment of Guo Fu Hao Hua as the auditor at the upcoming annual general meeting[187] Corporate Changes - The company approved a share consolidation on January 3, 2020, merging every 20 existing shares into one share with a par value of $0.02[188] - The company changed its name from "Huiyin Smart Community Co., Ltd." to "Qidian International Co., Ltd." effective January 3, 2020[188] - The company’s shares were traded under the new English abbreviation "QIDIAN INTL" effective February 17, 2020[188] Impact of COVID-19 - The impact of the COVID-19 pandemic on the company's business performance is expected to be negative, with uncertainties regarding the extent of financial impact due to travel restrictions and other preventive measures[191] Management Changes - The company appointed Sun Lejiu as an executive director on March 9, 2020[190] - The board of directors includes key members such as Yuan Li (Chairman) and Liu Simei (CEO), with various appointments and tenures detailed[196] - Mr. Yuan Li has been appointed as the executive director and chairman since December 29, 2017, with extensive experience in internet, education, and finance sectors[197] - Ms. Liu Siming has over 28 years of experience in finance and accounting, currently serving as the CEO since March 9, 2020, and previously as CFO[198]

Financial Performance - The company recorded a loss of approximately RMB 32.3 million for the six months ended June 30, 2019, a reduction of 64.8% compared to a loss of RMB 91.7 million for the same period in 2018[10]. - The company's revenue for the six months ended June 30, 2019, was approximately RMB 229.0 million, a decrease of 59.7% compared to RMB 568.1 million for the same period in 2018[22]. - Gross profit for the six months ended June 30, 2019, was approximately RMB 24.0 million, a decrease of 33.9% from RMB 36.3 million in 2018[25]. - The company's operating loss for the six months ended June 30, 2019, was approximately RMB 18.7 million, a decrease of 78.7% from RMB 87.7 million in 2018[33]. - The loss attributable to equity holders for the six months ended June 30, 2019, was approximately RMB 30.3 million, compared to RMB 87.2 million in 2018[37]. - The net loss for the period was RMB 32,301 thousand, compared to a net loss of RMB 91,697 thousand in the prior year, indicating a significant reduction in losses[99]. - Total comprehensive loss for the period was RMB 32,301 thousand, with the loss attributable to equity holders of the company being RMB 30,323 thousand, down from RMB 87,154 thousand in the previous year[102]. - The group reported a loss before tax of RMB (32,239) thousand and a net loss of RMB (32,301) thousand for the period[197]. - The operating loss for the group was RMB (18,661) thousand, and the net financial costs amounted to RMB (13,578) thousand[197]. Revenue and Sales - The domestic home appliance market's retail sales reached RMB 412.5 billion in the first half of 2019, showing a year-on-year decline of 2.1%[5]. - Social retail sales of consumer goods in China grew by 8.4% year-on-year, indicating a significant contribution of consumption to economic development[4]. - Traditional business sales amounted to RMB 215,173,000, while new retail business sales were not reported for the current period, compared to RMB 469,742,000 and RMB 79,229,000 respectively in the previous year[193]. - Maintenance and installation service revenue was RMB 13,830,000, down from RMB 19,100,000 in the prior year, representing a decline of 27.5%[193]. - For the six months ended June 30, 2019, total group revenue was RMB 229,003 thousand, with all revenue coming from traditional business[197]. Cost and Expenses - The cost of sales for the same period was approximately RMB 205.0 million, down 61.5% from RMB 531.8 million in 2018, attributed to a reduction in sales scale[24]. - Other income recorded was approximately RMB 5.6 million, a decrease of 37.4% from RMB 9.0 million in 2018, mainly due to reduced sales scale[26]. - Financial costs netted approximately RMB 13.6 million, an increase of 382.3% from RMB 2.8 million in 2018, due to changes in financing structure[34]. - The group incurred a tax expense of RMB (62) thousand during the current period[197]. - Capital expenditures for the current period were RMB 117 thousand, while depreciation expenses were RMB 14,613 thousand[197]. Assets and Liabilities - Total assets as of June 30, 2019, amounted to RMB 641,838 thousand, an increase from RMB 601,885 thousand at the end of 2018[94]. - Total liabilities increased to RMB 852,005 thousand from RMB 772,784 thousand at the end of 2018, reflecting a rise in financial obligations[97]. - As of June 30, 2019, the group's trade receivables and notes receivable amounted to RMB 20.9 million, a decrease of 12.9% compared to RMB 24.0 million as of December 31, 2018, primarily due to the sale of Nanjing Lehu[41]. - As of June 30, 2019, the group's trade payables and notes payable were approximately RMB 139.7 million, a decrease of 13.6% from RMB 161.7 million as of December 31, 2018[42]. - The group's capital debt ratio as of June 30, 2019, was 132.7%, up from 128.4% as of December 31, 2018[43]. Cash Flow and Liquidity - Cash and cash equivalents as of June 30, 2019, were approximately RMB 54.2 million, an increase of 12.8% from RMB 48.1 million as of December 31, 2018[38]. - The net cash outflow from operating activities for the six months ended June 30, 2019, was approximately RMB 39.2 million, a decrease of about 87.2% compared to RMB 306.8 million for the same period in 2018[47]. - Cash used in operating activities was RMB 39,244 thousand, a significant decrease from RMB 306,750 thousand in the same period last year, indicating improved cash flow management[107]. - The company generated net cash from financing activities of RMB 44,554 thousand, compared to RMB 364,070 thousand in the previous year, reflecting a decrease in financing activities[107]. - The company aims to maintain sufficient cash through internal sales and external funding sources to meet liquidity needs[174]. Strategic Focus and Market Position - The company is focusing on optimizing customer service through unified service standards and a comprehensive after-sales service management system[12]. - The company aims to strengthen cross-industry alliances to expand user acquisition channels and improve user stickiness[11]. - The company is transitioning from traditional appliance retail to a new retail model, integrating O2O, 5G, and IoT technologies[63]. - The group plans to focus on the home appliance business and increase market share in third-tier to emerging cities in East China over the next five years[59]. - There is significant market potential in third-tier and emerging cities in China, expected to last for at least the next 30 years[63]. Risk Management - The company has identified various financial risks, including foreign exchange risk and liquidity risk, as part of its overall risk management strategy[141]. - The company faces foreign exchange risk primarily related to HKD and USD, with a potential pre-tax loss increase/decrease of approximately RMB 2,245,000 if RMB depreciates/appreciates by 5% against HKD[148]. - The company has not hedged its cash flow and fair value interest rate risks, which are primarily from borrowings[151]. Employee and Corporate Governance - As of June 30, 2019, the group had 590 employees, a decrease of 12.6% from 675 employees as of December 31, 2018[55]. - The company has implemented a detailed internal control manual to enhance supervision and execution of internal controls, finalized on February 26, 2019[6]. - The company has maintained sufficient public float throughout the reporting period, complying with listing rules[90]. Legal and Compliance - The company is currently involved in legal proceedings regarding a potential loss of RMB 35,537,100 related to prepayment issues, with ongoing court hearings expected to recover some losses through seized assets[117]. - There were no significant post-reporting date events affecting the company beyond routine business activities[92].