Financial Performance - The total revenue for the six months ended June 30, 2023, was approximately RMB 99.6 million, a decrease of approximately 13.9% from RMB 115.6 million for the same period last year[13]. - The operating profit for the same period was approximately RMB 5.2 million, compared to an operating loss of approximately RMB 15.0 million for the same period last year[13]. - The net profit for the six months ended June 30, 2023, was approximately RMB 4.5 million, compared to a net loss of approximately RMB 16.2 million for the same period last year[14]. - Revenue from the Group's core brand, Bawang, was approximately RMB 96.1 million, accounting for approximately 96.5% of total revenue, representing a decrease of approximately 13.6% year-over-year[32]. - The Royal Wind brand generated revenue of approximately RMB 1.1 million, accounting for approximately 1.1% of total revenue, with a decrease of approximately 43.6% compared to the previous year[33]. - The Litao product series generated revenue of approximately RMB 2.3 million, accounting for approximately 2.3% of total revenue, with a slight increase of approximately 1.8% year-over-year[34]. - The Herborn skincare series generated revenue of approximately RMB 22,000, accounting for approximately 0.02% of total revenue, representing a decrease of approximately 56.0% compared to the same period last year[35]. - The Group's sales in overseas markets, including Hong Kong, Singapore, Thailand, Malaysia, the USA, and Mongolia, accounted for approximately 1.1% of total revenue during the six months ended June 30, 2023[41]. - For the six months ended June 30, 2023, the total sales revenue was distributed as follows: 54.0% through conventional channels and 46.0% through online channels[38]. - The Group recorded an operating profit of approximately RMB 5.2 million, compared to an operating loss of approximately RMB 15.0 million for the same period last year[48]. - The total number of shares that can be issued under the 2020 Share Option Scheme cannot exceed 30.0% of the company's total issued shares[154]. Distribution Network - As of June 30, 2023, the Bawang brand distribution network included 1,089 distributors and six KA retailers, covering 26 provinces and four municipalities in China[23]. - As of June 30, 2023, the Royal Wind brand distribution network included 1,058 distributors and one key account retailer, covering 26 provinces and four municipalities in China[24]. Marketing and Brand Strategy - The company engaged in cross-sector cooperation with Fairy Sword and Chivalrous Legend, producing a co-branded limited-edition haircare shampoo gift-pack[21]. - The company utilized social media platforms like Weibo, Douyin, and Xiaohongshu to enhance brand exposure and customer engagement[16][17]. - The company participated in community welfare events, donating products to needy women and impoverished families, enhancing its public image[22]. - The company advertised its products in metro stations of Shenzhen and other first-tier cities to increase brand visibility[16]. - The company aims to strengthen distributor confidence and accelerate the development of a new distribution network through in-store promotions[17]. - The Group plans to roll out new anti hair-fall shampoo products and scented shampoo bottles to attract high-end customers and younger demographics[73]. - The Group aims to enhance sales revenue through both conventional and online sales channels for its Royal Wind branded product series, targeting young consumers[75]. - The Group will expand its Herborn branded product line into shampoo products to supplement the previously underdeveloped market and enhance sales revenue[76]. - The Group intends to increase sales revenue by developing new distributors and establishing points-of-sale in uncovered markets[78]. - The Group plans to utilize major festive days for promotional activities in shopping malls to boost sales[80]. - The Group aims to achieve stable growth in online sales by optimizing operational efficiency and upgrading hair-care product categories[82]. - The Group will transform the sales platform on JD.com from consigned sales into direct-operated stores to enhance market share and sales revenue[82]. - The Group will continue to promote Bawang branded products through social media platforms to increase brand influence and sales growth[79]. - The company plans to increase weekend promotions and in-store events at high-quality sales points to enhance brand influence[83]. - The company aims to optimize operational efficiency and maintain market share for key products like anti-hair loss sprays and herbal shampoos through targeted marketing on platforms like Xiaohongshu and Alibaba[83]. - The company will transition its JD platform from a third-party operation to self-operated, enhancing product offerings in the shampoo category to increase market share[88]. - The company intends to boost sales on the Pinduoduo channel by introducing new products such as fragrant shampoo and hyaluronic acid shampoo while maintaining market share for existing hot items[88]. - The company will increase investment in live-streaming sales to enhance revenue through direct online sales[88]. - The company will maintain key online distributors by assisting with inventory planning and management, especially during promotional periods like Double 11[88]. Cost Management and Profitability - The cost of sales decreased to approximately RMB58.3 million, down by approximately RMB17.2 million (or 22.8%) from RMB75.5 million in the same period last year[39]. - Gross profit increased to approximately RMB41.2 million, representing a 2.8% increase from approximately RMB40.1 million for the same period last year, with a gross profit margin rising from 34.7% to 41.4%[40]. - Selling and distribution costs amounted to approximately RMB27.6 million, a decrease of approximately 38.3% from RMB44.7 million for the same period last year, with the percentage of revenue dropping from 38.7% to 27.7%[45]. - Administrative expenses were approximately RMB9.7 million, down by approximately 30.2% from RMB13.9 million for the same period last year[46]. - Other income increased to approximately RMB1.5 million, a 7.1% increase from RMB1.4 million for the same period last year[55]. Assets and Liabilities - As of June 30, 2023, the Group's cash, bank balances, and time deposits amounted to approximately RMB 107.6 million, a decrease of 13.5% from RMB 124.4 million as of December 31, 2022[97][99]. - The total assets of the Group decreased to RMB 212.5 million as of June 30, 2023, down from RMB 244.2 million as of December 31, 2022, representing a decline of 13.0%[99]. - Trade and other payables decreased by 44.1% to approximately RMB 44.5 million as of June 30, 2023, compared to RMB 79.6 million as of December 31, 2022[114][119]. - The Group had no bank borrowings as of June 30, 2023, consistent with the position as of December 31, 2022[116][121]. - The total personnel expenses for the six months ended June 30, 2023, were approximately RMB 23.0 million, down from RMB 25.8 million for the same period in 2022, indicating a decrease of 10.9%[124][125]. - The Group employed 430 employees as of June 30, 2023, a reduction from 468 employees as of June 30, 2022, reflecting a decrease of 8.1%[124][126]. - The Group's operations are primarily conducted in Renminbi, mitigating significant exchange rate risks associated with daily operations[103][104]. - The Board will continue to monitor foreign exchange exposure and is prepared to take prudent measures such as hedging when required[105]. Corporate Governance and Compliance - The company has complied with the applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2023[168]. - The company has adopted the Model Code for Securities Transactions by Directors and all Directors confirmed compliance throughout the review period[169]. - The Audit and Risk Management Committee reviewed the unaudited interim results for the six months ended June 30, 2023, and recommended its adoption by the Board[177]. - The ESG Committee was established on June 2, 2023, to oversee the Group's ESG performance and strategies[175]. Shareholder Information - As of June 30, 2023, Chen Qiyuan and Chen Zheng He each hold a long position of 1,900,840,000 ordinary shares, representing approximately 60.12% of the issued share capital of the Company[133]. - Wong Sin Yung holds a long position of 2,100,000 ordinary shares, representing approximately 0.07% of the issued share capital of the Company[133]. - Chen Qiyuan has beneficial interests in 20,000 shares of Fortune Station, representing 50.43% of its issued share capital[139]. - Chen Zheng He has a long position in 19,657 shares of Fortune Station, representing 49.57% of its issued share capital[139]. - As of June 30, 2023, no other directors or chief executives had interests or short positions in shares or debentures of the Company or its associated corporations that were required to be disclosed[140]. - The Company maintains a register of interests and short positions as required by the Securities and Futures Ordinance[141]. - The Company has not disclosed any substantial shareholders with interests or short positions in shares or underlying shares other than those mentioned[142]. Employee Policies - The Company emphasizes the importance of human resources policies for future development, including competitive compensation and a comfortable work environment[129]. - The Company has implemented a performance-based bonus scheme and stock option plan for employees[129]. - The share option scheme aims to motivate employees and retain those contributing to the long-term growth and profitability of the Group[148]. - The total number of shares in respect of which options may be granted under the 2020 Share Option Scheme is 316,244,072 shares, representing 10.0% of the issued share capital of the Company[152]. - The maximum number of shares issuable to each eligible participant in the 2020 Share Option Scheme within any 12-month period is limited to 1.0% of the shares of the Company in issue at any time[151]. - The 2020 Share Option Scheme was adopted on May 29, 2020, and will remain in force for 10 years unless cancelled or amended[149]. - No share options were outstanding or granted under the 2020 Share Option Scheme for the six months ended June 30, 2023[160]. - The beneficial interests of CHEN Qiyuan's five children under 18 in Heroic Hour represent 65.00% of the issued share capital of Heroic Hour[144]. - CHEN Zheng He is deemed to be interested in the shares of Fortune Station held by Heroic Hour due to his role as trustee[144].

Financial Performance - The total revenue for the year ended December 31, 2022, was approximately RMB 246.3 million, a decrease of about 10.0% from RMB 273.6 million in 2021[21]. - The operating loss for 2022 was approximately RMB 17.3 million, compared to an operating loss of approximately RMB 7.5 million in 2021[21]. - The net loss for the Group in 2022 was approximately RMB 19.4 million, up from a net loss of approximately RMB 9.1 million in 2021[22]. - The net loss ratio for 2022 was (7.9%), compared to (3.3%) in 2021[3]. - Basic and diluted loss per share for 2022 was (0.6144) RMB cents, compared to (0.2872) RMB cents in 2021[3]. - The Group recorded an operating loss of approximately RMB 17.3 million for the year ended December 31, 2022, compared to an operating loss of approximately RMB 7.5 million in 2021[23]. - The net loss for the Group for the year ended December 31, 2022, was approximately RMB 19.4 million, compared to a net loss of approximately RMB 9.1 million in the same period of 2021[23]. - The Group's total assets decreased to approximately RMB 244.2 million as of December 31, 2022, down from RMB 295.6 million in 2021, reflecting a decline of approximately 17.4%[150]. Revenue Breakdown - Revenue from shampoo and hair-care products was RMB 211.1 million in 2022, down from RMB 232.2 million in 2021[5]. - Revenue from the Bawang brand was RMB 237.7 million in 2022, a decrease from RMB 260.4 million in 2021[8]. - Revenue from online sales was approximately RMB 115.7 million, representing a decrease of approximately 17.9% from RMB 141.0 million in 2021[86]. - The core brand, Bawang, generated approximately RMB 237.7 million in revenue, accounting for approximately 96.5% of total revenue, and decreased by approximately 8.7% compared to 2021[87]. - The branded Chinese herbal anti-dandruff hair-care series, Royal Wind, generated approximately RMB 4.0 million in revenue, a decrease of approximately 32.3% compared to 2021[88]. - The natural-based branded shampoo, shower gel, and laundry detergent series, Litao, generated approximately RMB 4.6 million in revenue, representing a decrease of approximately 25.8% compared to 2021[89]. Cost and Expenses - Selling and distribution costs remained relatively stable at RMB 83.5 million in 2022 compared to RMB 84.3 million in 2021[3]. - Administrative expenses increased to RMB 32.4 million in 2022 from RMB 29.3 million in 2021[3]. - Cost of sales decreased to approximately RMB 153.8 million, down about 11.9% from RMB 174.6 million in 2021, with the cost as a percentage of revenue decreasing from approximately 63.8% in 2021 to approximately 62.4% in 2022[94][99]. - Gross profit decreased to approximately RMB 92.5 million, a decline of about 6.6% from RMB 99.0 million in 2021, while the gross profit margin increased from approximately 36.2% to approximately 37.6%[95][100]. - Other income decreased to RMB 3.6 million, a decline of 55.7% compared to 2021, primarily due to a reversal of impairment losses in property, plant, and equipment[96][101]. - Selling and distribution expenses for 2022 decreased to approximately RMB 83.5 million, a slight reduction of about 0.9% compared to approximately RMB 84.3 million in 2021, with the percentage of revenue increasing from approximately 30.8% in 2021 to approximately 33.9% in 2022[102][104]. - Administrative expenses for 2022 amounted to approximately RMB 32.4 million, representing an increase of approximately 10.3% compared to approximately RMB 29.3 million in 2021, with administrative expenses as a percentage of revenue rising from approximately 10.7% in 2021 to approximately 13.1% in 2022[104][110]. Market and Strategic Initiatives - During the year, a cross-sector cooperation with an online game company attracted over 3.0 million users to the Group's online store, leading to an increase in online sales revenue[38]. - A limited edition co-branded haircare gift-pack was launched, which attracted a readership of over 5.7 million on social media, enhancing publicity for the Group's branded products[42]. - The Group plans to focus on building a management team with strong experience in both domestic and global HPC sectors to regain sales growth momentum and profitability[32]. - The Group aims to strengthen its business model and positioning to acquire market shares from competitors, maintaining a multi-brand and multi-product strategy in the HPC sectors[32]. - The Group intends to enhance publicity and promotion of its branded products through various marketing strategies, including social media and celebrity endorsements[127]. - The Group plans to enhance sales revenue by launching new products such as ginger shampoo, scalp essence, and haircare essence oil through online sales channels[135]. - The Group aims to increase sales by leveraging major festive days for promotional activities in shopping malls, targeting events like International Women's Day and National Day[134]. - The Group will optimize operational efficiency and stabilize market share for hot-selling items, particularly the anti-hair fall haircare product series[137]. Human Resources and Governance - The Group employed approximately 442 employees as of December 31, 2022, a decrease from approximately 499 employees in 2021, with total personnel expenses amounting to approximately RMB 55.0 million[173]. - The Group emphasizes continuous investment in human capital to maintain a high-quality workforce, with various internal training programs conducted in 2022[177]. - The Group's human resources policies are deemed crucial for future development, focusing on promising career prospects and competitive employee remuneration[180]. - The Board of Directors consists of six members, including the Chairman and CEO, ensuring a separation of roles to enhance independence and accountability[186]. - The Board held 10 meetings in 2022, with full attendance from key members, indicating strong governance practices[195]. - The Group's commitment to corporate governance includes compliance with the applicable code provisions of the Corporate Governance Code for the year ended December 31, 2022[184]. Financial Management - The Group maintains a conservative financial management policy, with a gearing ratio of 0% as of December 31, 2022[150]. - The Group's management continues to monitor liquidity risks to ensure sufficient cash and cash equivalents for operational needs[71]. - As of December 31, 2022, the Group's cash, bank balances, and time deposits amounted to approximately RMB 124.4 million, an increase of 9.7% from RMB 113.3 million in 2021[148]. - Trade receivables decreased by approximately 28.5% to RMB 14.3 million as of December 31, 2022, down from RMB 20.0 million in 2021, primarily due to reduced sales through online and conventional channels[165]. - Trade and other payables were approximately RMB 79.6 million as of December 31, 2022, a decrease from RMB 83.5 million in 2021, mainly due to lower trade payables and accrued payroll[170].

Financial Performance - The total revenue for the six months ended June 30, 2022, was approximately RMB 115.6 million, remaining relatively stable compared to the same period last year[20]. - The operating loss for the same period was approximately RMB 15.0 million, compared to an operating loss of approximately RMB 14.1 million for the previous year[20]. - The net loss for the six months ended June 30, 2022, was approximately RMB 16.2 million, compared to a net loss of approximately RMB 14.3 million for the same period last year[22]. - For the six months ended June 30, 2022, the Group's revenue from operations was approximately RMB115.6 million, remaining relatively stable compared to the same period last year[46]. - Revenue from online sales channels was approximately RMB52.3 million, representing a decrease of approximately 8.6% from approximately RMB57.2 million for the same period last year[46]. - The core brand, Bawang, generated revenue of approximately RMB111.2 million, accounting for approximately 96.2% of the Group's total revenue, with an increase of approximately 0.9% compared to the same period last year[48]. - The branded Chinese herbal anti-dandruff haircare series, Royal Wind, generated revenue of approximately RMB2.0 million, accounting for approximately 1.7% of total revenue, with an increase of approximately 8.7% compared to the same period last year[49]. - The natural-based branded shampoo, shower gel, and laundry detergent series, Litao, generated revenue of approximately RMB2.3 million, accounting for approximately 2.0% of total revenue, representing a decrease of approximately 32.6% compared to the same period last year[50]. - The branded Chinese herbal skincare series, Herborn, generated revenue of approximately RMB0.05 million, accounting for approximately 0.1% of total revenue, with a decrease of approximately 54.2% compared to the same period last year[51]. - The Group recorded an operating loss of approximately RMB15.0 million, compared to a loss of RMB14.1 million in the same period last year[1]. - The net loss attributable to owners of the Company was approximately RMB16.2 million, compared to RMB14.3 million in the same period last year[1]. - The total comprehensive expense for the period attributable to owners of the company was RMB 16,706,000, compared to RMB 15,113,000 in 2021, indicating an overall increase in losses[178]. Marketing and Product Development - The Group continued to operate under a value-chain-oriented business model, maintaining sustainable levels of sales and operating costs[24]. - The Group implemented creative marketing strategies and programs through cross-industry cooperation to enhance brand image and product promotion[25]. - A notable collaboration occurred with Netease CC Live Streaming, leveraging their large subscriber base to promote the Bawang brand and stimulate sales[27]. - The company collaborated with NetEase CC Live to create co-branded gift boxes featuring popular game streamers, which significantly boosted brand interest and sales[28]. - A partnership with the "Gao Kao on the Palm" app enhanced brand recognition among the younger generation through integrated promotional materials[29]. - The company successfully promoted its herbal haircare products within the online game "Absolute Performance," targeting an 80% female gamer demographic[31]. - The company launched its classic herbal product series in the Russian and Mongolian markets, as well as anti-hair fall products in the US market, expanding its overseas sales channels[33]. - The introduction of Bawang Blossom Flower Shower Gel and a new toothpaste series filled market gaps in the flower shower gel and herbal oral hygiene segments[34]. - The company continued to develop new products under the Bawang Herbal Fairy Animations Series, creating a unique IP image and appealing to the youth market[35]. - New anti-hair fall and oil-controlling shampoo products were launched on the T-Mall platform, aligning with consumer demand for oil control[37]. Distribution and Sales Channels - As of June 30, 2022, the Bawang brand distribution network included 980 distributors and eight key retailers, covering 26 provinces and four municipalities in China[39]. - The Royal Wind brand also had a distribution network of 980 distributors as of June 30, 2022, with products sold in multiple countries including Hong Kong and Singapore[40]. - The Litao product line, targeting second and third-tier cities, had a distribution network of 931 distributors as of June 30, 2022, with plans for further market expansion[41]. - Sales through distributors accounted for 49.2% of total revenue, while online sales accounted for 22.1%, totaling 71.3% from distributors[53]. - Sales to overseas markets, including Hong Kong, Singapore, Thailand, Malaysia, USA, Russia, and Mongolia, accounted for approximately 2.4% of total revenue during the six months ended June 30, 2022[54]. Cost and Expenses - For the six months ended June 30, 2022, the cost of sales was approximately RMB75.5 million, a slight decrease of 0.3% from RMB75.7 million in the same period last year, representing 65.3% of revenue[1]. - The Group's gross profit for the same period was approximately RMB40.1 million, a 0.5% increase from RMB39.9 million, with a gross profit margin rising from 34.5% to 34.7%[1]. - Selling and distribution costs increased by approximately 6.4% to RMB44.7 million, rising from 36.3% of revenue in 2021 to 38.7% in 2022[1]. - Administrative expenses decreased by approximately 1.4% to RMB13.9 million, primarily due to reduced research and development expenses[1]. - Other income increased by approximately 40.6% to RMB1.4 million, driven by gains from accounts payable and scrap material sales[1]. Economic Context - The International Monetary Fund (IMF) cut its growth forecast for China's economy to 3.3% for 2022, down from 4.8%[70]. - China's economy grew by 0.4% in Q2 2022, resulting in a 2.5% growth for the first half of the year, which was below expectations[72]. - Analysts expect China's recovery to continue amid global recession fears, with infrastructure investment likely acting as a key growth driver[73]. - The International Monetary Fund (IMF) revised its forecast for China's economic growth in 2022 from 4.8% to 3.3% due to tightening monetary policies, with a further slowdown expected to 2.9% in 2023[74]. - The Chinese government set a GDP growth target of approximately 5.5% for 2022, higher than Reuters' forecast of 4.0%[74]. Corporate Strategy and Future Plans - The Group's corporate theme for 2022 is "Continue our Growth at a Steady Pace," reflecting a cautious approach to business development amid ongoing risks[77]. - The Group plans to enhance revenue for Bawang-branded products through various strategies, including participation in advertising festivals and targeted promotions for young consumers[78]. - The Group aims to increase sales revenue for Royal Wind branded products primarily through online sales channels targeting young consumers[80]. - The Group will continue to develop Litao branded products through traditional channels, focusing on household care items like laundry detergent[81]. - The Group intends to deepen cooperation with distributors by leveraging festive promotional activities and enhancing brand influence through creative marketing strategies[82]. - The Group plans to optimize operations on Taobao and diversify product offerings to capture market shares and increase online sales revenue[83]. - The Group will implement supporting policies for elite distributors like JD.com and vip.com to boost sales revenue from these channels[84]. - The Group plans to optimize operations on the Taobao platform to maintain market share in hair care products and develop new products like hair oils and body wash to increase flagship store sales[85]. - The Group aims to enhance sales revenue by developing internal live streaming resources and leveraging active user networks on other platforms[87]. Financial Position and Management - As of June 30, 2022, the Group's cash and bank balances were approximately RMB 93.7 million, down from RMB 113.3 million as of December 31, 2021[89]. - The Group maintains a conservative financial management policy with a gearing ratio of 0% as of June 30, 2022[91]. - The Group's operations are primarily conducted in Renminbi, minimizing significant exchange rate risks[96]. - As of June 30, 2022, the Group's trade and other payables were approximately RMB 64.8 million, a decrease of 22.4% from approximately RMB 83.5 million as of December 31, 2021[107]. - The total personnel expenses for the six months ended June 30, 2022, amounted to approximately RMB 25.8 million, down from approximately RMB 27.3 million for the same period in 2021[116]. - The Group employed 468 employees as of June 30, 2022, a decrease from 495 employees as of June 30, 2021[116]. - The Group did not have any bank borrowings as of June 30, 2022, consistent with the situation as of December 31, 2021[110]. - The Group's human resources policies are aimed at maintaining a stable workforce through promising career prospects and competitive remuneration[122]. - The Group's employees in the PRC and Hong Kong participate in social insurance and provident fund schemes, along with performance-based incentive bonuses[121]. Shareholder Information - The Directors and chief executive held a total of 1,900,840,000 shares, representing approximately 60.12% of the issued share capital of the Company[125]. - CHEN Qiyuan holds a beneficial interest of approximately 50.43% in the issued share capital of Fortune Station, equating to 1,900,840,000 shares[134]. - CHEN Zheng He is deemed to have an interest in 49.57% of Fortune Station's shares held by Heroic Hour, which he controls[136]. - The five children of CHEN Qiyuan under the age of 18 hold a combined interest of 65.00% in Heroic Hour, which in turn holds 49.57% of Fortune Station[137]. - As of June 30, 2022, Heroic Hour held approximately 942,199,659 shares of Fortune Station, representing 29.80% of the issued share capital[139]. - No other directors or executives had interests or short positions in shares of the company or its associated corporations as of June 30, 2022[135]. Share Option Scheme - The total number of ordinary shares held by CHEN Qiyuan is 20,000, which is 50.43% of the interest in Fortune Station[130]. - The total number of shares that may be granted under the 2020 Share Option Scheme is 316,244,072 shares, representing 10.0% of the issued share capital of the Company as of the date of the interim report[149]. - The maximum number of shares that may be issued upon the exercise of all outstanding options under the 2020 Share Option Scheme must not exceed 30.0% of the total number of shares in issue at any time[147]. - The maximum number of shares issuable to each eligible participant in the 2020 Share Option Scheme within any 12-month period is limited to 1.0% of the shares of the Company in issue at any time[147]. - Share options granted to connected persons or their associates require prior approval from independent non-executive Directors[150]. - Any share options granted to substantial shareholders or independent non-executive Directors exceeding 0.1% of the shares in issue and with an aggregate value over HK$5 million within any 12-month period require shareholders' approval[150]. - The exercise price of share options is determined by the Board and must be at least the highest of the closing price on the offer date, the average closing price for the preceding five business days, or the nominal value of a share[155]. - The 2020 Share Option Scheme was adopted on May 29, 2020, and will remain in force for 10 years unless cancelled or amended[144]. - There is no general requirement on the minimum holding period or performance targets for exercising options under the 2020 Share Option Scheme[153]. - The offer of a grant of share options is deemed accepted when the Company receives the signed offer letter and a non-refundable payment of HK$1.00 within 21 days[157]. - The company has not disclosed any new product developments or market expansion strategies in the provided documents[138]. - There are no reported mergers or acquisitions in the recent financial disclosures[138].

Financial Performance - Revenue for 2021 was RMB 273,604,000, a decrease of 0.5% from RMB 275,987,000 in 2020[9] - Gross profit for 2021 was RMB 99,031,000, resulting in a gross margin of 36.2%, compared to 39.2% in 2020[9] - Loss for the year attributable to owners of the Company was RMB 9,084,000, with a net loss ratio of 3.3%[9] - The total revenue for the Group for the year ended 31 December 2021 was approximately RMB273.6 million, a decrease of approximately 0.9% from RMB276.0 million in 2020[27][28] - The net loss for the Group for the year ended 31 December 2021 was approximately RMB9.1 million, compared to a net loss of approximately RMB4.0 million in 2020[29] - The Group's gross profit decreased to approximately RMB99.0 million, representing a decrease of approximately 8.4% compared to RMB108.1 million in 2020, with a gross profit margin decline from approximately 39.2% to 36.2%[105] - The Group recorded a loss of approximately RMB9.1 million for 2021, compared to a loss of approximately RMB4.0 million for 2020[108] Revenue Breakdown - Revenue from shampoo and hair-care products was RMB 232,166,000, down from RMB 249,230,000 in 2020[11] - Revenue from other household and personal care products increased to RMB 40,259,000 from RMB 24,868,000 in 2020, representing a growth of 62.0%[11] - The core brand, Bawang, generated approximately RMB260.4 million in revenue, accounting for approximately 95.2% of total revenue by product category in 2021[91] - Revenue from online sales was approximately RMB141.0 million, representing a decrease of approximately 8.2% from RMB153.5 million in 2020, while conventional sales increased by approximately 8.3%[90] Marketing and Brand Strategy - The Group plans to focus on expanding its product lines and enhancing market presence in the coming year[26] - The Group's marketing strategy included a collaboration with a puppetry artist, resulting in a series of animations and a cobranded anti-hair fall haircare gift-pack, which gained significant attention[42][46] - The marketing campaign attracted over 15 million views and media coverage from more than 25 news agencies in China[46] - The Group launched a giftbox in collaboration with Grain Mill, combining Bawang Black Sesame Shampoo and Eruptive Hair-grow Black Sesame Pills to enhance consumer recognition of product functionality[47] - The Group's marketing strategy included collaborations with popular social media platforms like Little Red Book, Weibo, B Station, and Tik Tok to promote anti-hair fall products[52] Operational Challenges - The company reported an operating loss of RMB 7,534,000 for 2021, compared to an operating loss of RMB 2,804,000 in 2020[9] - The cost of sales in 2021 amounted to approximately RMB174.6 million, an increase of approximately 4.0% from RMB167.9 million in 2020[102] - The percentage of revenue attributed to cost of sales increased from approximately 60.8% in 2020 to approximately 63.8% in 2021[102] - The Group recognized impairment losses of approximately RMB0.9 million for trade receivables for the year ended December 31, 2021, using the expected credit loss model[76][80] Future Outlook and Strategy - The Group plans to focus on building a management team with strong experience in both domestic and global HPC sectors to regain sales growth momentum and profitability[35][38] - The Group aims to strengthen its business model and positioning to acquire market shares from competitors while maintaining a multi-brand and multi-product strategy in the HPC sectors[35][38] - The company expects the Chinese and global economies to be unstable in 2022 and beyond, necessitating cautious business strategies[113] - The corporate theme for 2022 is "Continue our Growth at a Steady Pace"[114] Human Resources and Governance - The Group employed approximately 499 employees as of December 31, 2021, an increase from approximately 477 employees as of December 31, 2020, representing a growth of about 4.6%[165] - The Group's human resources policies are designed to maintain a stable workforce, emphasizing promising career prospects and competitive remuneration[171] - The Board of Directors comprised six members as of December 31, 2021, including the Chairman and the CEO, ensuring a diverse governance structure[176] - The Company has adopted a Model Code for Securities Transactions by Directors, with all Directors confirming compliance throughout the year under review[175] Corporate Social Responsibility - During the year, the Group participated in community welfare events, donating Bawang-branded products to COVID-19 affected areas and impoverished families, enhancing its corporate image[57] - The Group is committed to investing in human capital to retain a quality workforce and maintain good relationships with employees[160] Financial Position - The Group's cash, bank balances, and time deposits amounted to approximately RMB 113.3 million as of December 31, 2021, down from RMB 122.3 million in 2020[134][135] - Total assets increased to RMB 295.6 million in 2021 from RMB 264.6 million in 2020, maintaining a gearing ratio of 0%[136][137] - The Group's trade receivables as of December 31, 2021, were approximately RMB 20.0 million, a decrease of approximately 9.5% from RMB 22.1 million in 2020, attributed to a decline in overall sales through online and conventional channels[154]

Financial Performance - The total revenue for the six months ended June 30, 2021, was approximately RMB 115.6 million, representing a decrease of approximately 6.7% from RMB 123.9 million for the same period last year[15]. - The operating loss for the same period was approximately RMB 14.1 million, compared to an operating loss of approximately RMB 4.6 million for the same period last year[15]. - The net loss for the six months ended June 30, 2021, was approximately RMB 14.3 million, compared to a net loss of approximately RMB 5.3 million for the same period last year[16]. - Revenue through the online sales channel was approximately RMB 57.2 million, representing a decrease of approximately 12.4% from RMB 65.3 million for the same period last year[32]. - The core brand Bawang generated revenue of approximately RMB110.3 million, accounting for 95.4% of total revenue, representing a decrease of approximately 4.3% compared to the same period last year[36][42]. - The Royal Wind anti-dandruff haircare series generated revenue of approximately RMB1.9 million, accounting for 1.6% of total revenue, with a decrease of approximately 17.4% year-over-year[37][44]. - The Litao natural-based product series generated revenue of approximately RMB3.4 million, accounting for 2.9% of total revenue, reflecting a decrease of approximately 15.0% compared to the previous year[38][43]. - The Herborn skincare series generated revenue of approximately RMB0.1 million, accounting for 0.1% of total revenue, with a significant decrease of approximately 94.4% year-over-year[39][45]. - Loss before taxation for the period was RMB 14,338,000, compared to RMB 5,295,000 in the previous year, marking an increase of 170.5%[191]. - Loss for the period attributable to owners of the Company was RMB 14,338,000, compared to RMB 5,295,000 in the same period of 2020, representing an increase of 170.5%[192]. Cost and Expenses - Cost of sales amounted to approximately RMB75.7 million, a decrease of approximately RMB3.5 million (or 4.4%) from the previous year, but as a percentage of revenue, it increased from approximately 63.9% to 65.5%[47][48]. - Gross profit decreased to approximately RMB39.9 million, down approximately 10.9% from RMB44.8 million, with the gross profit margin decreasing from 36.1% to 34.5%[49][51]. - Selling and distribution costs increased to approximately RMB42.0 million, up approximately 12.9% from RMB37.2 million, with the percentage of revenue rising from 30.0% to 36.3%[50][52]. - Administrative expenses increased to approximately RMB14.1 million, representing a 7.6% increase from RMB13.1 million, primarily due to higher salaries and research and development expenses[54][59]. - The Group recorded an operating loss of approximately RMB14.1 million, compared to a loss of approximately RMB4.6 million in the same period last year, attributed to decreased revenue and increased marketing expenses[56][61]. Distribution and Sales Channels - As of June 30, 2021, the Bawang brand distribution network comprised 882 distributors and eight key account retailers, covering 26 provinces and four municipalities in China[24]. - The Royal Wind brand distribution network included 139 distributors, also covering 26 provinces and four municipalities in China as of June 30, 2021[25]. - The Litao products distribution network comprised 104 distributors and five key account retailers, targeting second-tier and third-tier cities in China as of June 30, 2021[26]. - The Group has established online flagship stores for its brands on 14 online retailing platforms in China, aiming to deepen efforts in this channel[27]. - The Group intends to optimize operations and stabilize market share for hot-selling items such as anti-hair fall products through its online flagship stores[88]. - The Group will continue to deepen cooperation with distributors and stimulate sales revenues through promotional activities during key holidays and events[87]. Corporate Strategy and Future Plans - The Group plans to launch four new anti-dandruff product series under the Royal Wind brand to cater to young consumers, primarily sold through conventional channels[80]. - The Group aims to enhance revenue for Bawang-branded products by leveraging consumer confidence in domestic products and appointing internet celebrities as brand ambassadors[79]. - The Group plans to launch several herbal shampoo products under the BaWang brand to expand its product range and will sell these through traditional channels[89]. - The Group aims for stable sales growth in e-commerce channels, optimizing operations and developing high-end products to maintain market share[90]. - The OEM business has seen substantial growth in the first half of the year, with plans to strengthen customer relationships and expand into different personal care products[95]. Assets and Liabilities - As of June 30, 2021, cash and cash equivalents were RMB 101.4 million, down from RMB 122.3 million as of December 31, 2020[105]. - Total assets decreased to RMB 227.6 million as of June 30, 2021, from RMB 264.6 million as of December 31, 2020[105]. - The Group maintains a gearing ratio of 0%, indicating no outstanding loans as of the reporting date[105]. - As of June 30, 2021, the Group's trade and other payables were approximately RMB69.6 million, representing a decrease of 14.1% from RMB81.1 million as of December 31, 2020[121]. - The total personnel expenses for the six months ended June 30, 2021, amounted to approximately RMB27.3 million, down from approximately RMB29.0 million for the same period in 2020[131]. - The Group employed 495 employees as of June 30, 2021, compared to 508 employees as of June 30, 2020[131]. Shareholding and Corporate Governance - CHEN Qiyuan holds a long position of 1,900,840,000 ordinary shares, representing approximately 60.12% of the issued share capital of the Company[141]. - CHEN Zheng He also holds a long position of 1,900,840,000 ordinary shares, equivalent to approximately 60.12% of the issued share capital of the Company[141]. - WONG Sin Yung has a long position of 2,100,000 ordinary shares, accounting for about 0.07% of the issued share capital of the Company[141]. - The Company has no substantial shareholders other than the directors and chief executives with interests or short positions in shares as of June 30, 2021[150]. - The overall structure of shareholding shows a concentrated ownership with key individuals holding substantial percentages of the Company’s shares[141]. - The company has complied with the applicable code provisions of the Corporate Governance Code during the reporting period[177]. Cash Flow and Financial Position - The net cash used in operating activities was RMB 15,016,000, compared to cash generated of RMB 19,125,000 in the same period of 2020, reflecting a decrease of approximately 178%[196]. - The company reported a net cash inflow from investing activities of RMB 288,000, a recovery from a net cash outflow of RMB 9,826,000 in the previous year[198]. - The net cash used in financing activities was RMB 6,255,000, down from RMB 13,770,000 in the same period of 2020, indicating a reduction of approximately 54%[198]. - The company experienced a net decrease in cash and cash equivalents of RMB 20,983,000 for the six months ended June 30, 2021, compared to a decrease of RMB 4,471,000 in the same period of 2020[198].

Financial Performance - The total revenue for BaWang International for the year ended December 31, 2020, was approximately RMB 276.0 million, representing an increase of approximately 6.9% from RMB 258.2 million in 2019[26]. - The operating loss for the year ended December 31, 2020, reduced to approximately RMB 2.8 million, compared to an operating loss of approximately RMB 12.9 million in 2019[26]. - The net loss for the Group was approximately RMB 4.0 million for the year ended December 31, 2020, down from a net loss of approximately RMB 6.1 million in 2019[26]. - Gross profit margin for 2020 was 39.2%, a decrease from 44.6% in 2019[5]. - The loss attributable to owners of the Company for 2020 was RMB 4.0 million, with a net loss ratio of 1.5%[5]. - The basic and diluted loss per share for 2020 was RMB 0.1277, an improvement from RMB 0.1929 in 2019[5]. - The Group's revenue from the Bawang brand was RMB 260.9 million in 2020, compared to RMB 241.5 million in 2019[14]. - Revenue from the core brand, Bawang, was approximately RMB 261.0 million, accounting for approximately 94.6% of the Group's total revenue, with an increase of approximately 8.1% compared to 2019[75]. - Revenue from the conventional sales channel increased by approximately 16.3% compared to 2019, while online sales revenue remained stable[70]. - The cost of sales in 2020 amounted to approximately RMB 167.9 million, an increase of approximately 17.3% from RMB 143.1 million in 2019, with the cost of sales as a percentage of revenue rising from approximately 55.4% in 2019 to approximately 60.8% in 2020[84]. - The group's gross profit decreased to approximately RMB 108.1 million in 2020, a decline of approximately 6.0% from RMB 115.0 million in 2019, with the gross profit margin decreasing from approximately 44.6% in 2019 to approximately 39.2% in 2020[84]. - Other income increased to RMB 3.7 million in 2020, representing a 23.3% increase compared to 2019[85]. - Selling and distribution costs decreased to approximately RMB 84.5 million in 2020, a decrease of approximately 19.3% compared to 2019, with selling and distribution costs as a percentage of revenue decreasing from approximately 40.5% in 2019 to 30.6% in 2020[85]. - Administrative expenses for 2020 amounted to approximately RMB 27.3 million, a decrease of approximately 10.8% compared to RMB 30.6 million in 2019, with administrative expenses as a percentage of revenue at approximately 9.9% in 2020 compared to 11.9% in 2019[92]. - The Group recognized impairment losses of approximately RMB 2.8 million in respect of trade receivables for the year under review[93]. - There was no income tax expense for the year ended December 31, 2020, compared to an over-provision for income tax in prior years of approximately RMB 9.1 million written back in 2019[95]. - The Group recorded a loss of approximately RMB 4.0 million for 2020, an improvement from a loss of approximately RMB 6.1 million in 2019[96][97]. Revenue Breakdown - Revenue from shampoo and hair-care products was RMB 249.2 million in 2020, up from RMB 234.1 million in 2019[8]. - Revenue from other household and personal care products increased to RMB 24.9 million in 2020, compared to RMB 22.2 million in 2019[8]. - Revenue from skincare products was RMB 1.9 million in 2020, slightly up from RMB 1.8 million in 2019[8]. - The branded Chinese herbal anti-dandruff hair-care series, Royal Wind, generated approximately RMB 4.9 million in revenue, representing a decrease of approximately 30.0% compared to 2019[76]. - The natural-based branded shampoo, shower gel, and laundry detergent products series, Litao, generated approximately RMB 7.6 million in revenue, reflecting an increase of approximately 1.3% compared to 2019[77]. - The branded Chinese herbal skin-care series, Herborn, generated approximately RMB 2.0 million in revenue, representing an increase of approximately 11.1% compared to 2019[78]. - The revenue for the hair care and body wash product line was approximately RMB 7.6 million, accounting for 2.8% of the group's total revenue in 2020, an increase of about 1.3% from 2019[80]. - The revenue for the herbal skincare brand, Ben Cao Tang, was approximately RMB 2.0 million, representing 0.7% of the group's total revenue in 2020, with an increase of approximately 11.1% compared to 2019[80]. Market Strategy and Product Development - The Group launched a new Bawang-branded antiseptic sanitary product series, including disinfectant floor cleaner liquid, sanitizing laundry detergents, liquid handwash, and anti-bacterial hand gel, to meet consumer demand during the pandemic[39]. - The Group introduced value-for-money family size packaging series to satisfy consumer demand for hair-care products amid increased health awareness[39]. - The Group successfully rolled out gift-pack product series during major online shopping festivals, which were well-received by consumers[43]. - The Group appointed a young brand ambassador to create a youthful brand image and attract young female consumers[43]. - The Group utilized social media platforms and advertising in metro stations to increase product visibility and consumer engagement[43]. - The Group plans to strengthen its management team to regain sales growth momentum and improve profitability in the short term[33]. - The long-term strategy includes maintaining a multi-brand and multi-product approach to capture market share from competitors in the household and personal care sectors[33]. - The Group plans to roll out new Bawang-branded amino acid products in Walmart and Yonghui to increase sales revenue[113]. - The Group intends to enhance brand influence through interactive promotional activities and appoint internet celebrities as brand ambassadors[113][114]. - For the Royal Wind brand, the Group plans to introduce new hair-care products primarily through live streaming and online channels[116]. - The Group aims to streamline Herborn product offerings and introduce new hair-care products, focusing on offline supermarkets and online sales[116]. - The Group plans to adjust the product categories for the Ben Cao Tang brand by adding hair care products alongside skincare, primarily selling through offline supermarkets and e-commerce channels[119]. - The Group aims to launch a new anti-dandruff product series under the Chasing Wind brand to boost sales[119]. Distribution and Sales Channels - Bawang brand distribution network comprised approximately 838 distributors and six key retailers, covering 27 provinces and four municipalities in China as of December 31, 2020[48]. - Royal Wind brand distribution network included approximately 178 distributors and six key retailers, also covering 27 provinces and four municipalities in China as of December 31, 2020[48]. - Litao products distribution network consisted of approximately 54 distributors, maintaining coverage in 27 provinces and four municipalities in China as of December 31, 2020[48]. - The Group established 12 online retailing platforms for Bawang, Royal Wind, and Herborn branded products, with two platforms launched during the year[52]. - The Group aims to achieve stable sales growth in its online sales channel by optimizing operations and creating hot-selling product series such as anti-hair fall and hair-care products[125]. - The Group plans to horizontally develop the market by introducing a second series of hot-selling items like hair masks and shower gels to increase market share[125]. - The Group will enhance sales revenue by providing tailor-made products to key online distributors and maintaining operations of its direct-operating channel[125]. - The Group is open to exploring potential business opportunities with overseas distributors for launching branded products in other countries[127]. Operational Challenges and Responses - The Group faced challenges due to rising labor costs and the impact of the COVID-19 pandemic, leading to temporary disruptions in operations[58]. - The Group's strategy includes reducing production costs in response to industry challenges and the pandemic's impact[58]. - The Group's financial management policies remain conservative, ensuring a solid financial position[132]. - The Group continues to monitor foreign exchange exposure and is prepared to take hedging measures if necessary[135]. - The Group will continue to enhance production efficiency and quality through flexible supply chain management and training for workers[127]. Corporate Governance and Management - The Board of Directors comprised six members as of December 31, 2020, including the Chairman and the CEO, ensuring a separation of roles to reinforce independence[162]. - The Group's human resources policies are aimed at maintaining a stable workforce through promising career prospects and good staff remuneration[157]. - The Board held nine meetings in 2020, with full attendance from all members[165]. - The Company has adopted a Dividend Policy intending to declare dividends semi-annually, with an aggregate amount not exceeding 30% of anticipated consolidated net annual profits[173]. - The Board will consider various factors, including operations, earnings, and financial condition, when deciding on dividend proposals[173]. - The Nomination Committee will assess candidates based on personal integrity, experience relevant to the Group's business, and Board diversity[172]. - The Diversity Policy considers aspects such as gender, cultural background, and professional experience in Board appointments[173]. - The Company has a structured process for nominating candidates for election at shareholders' meetings, ensuring compliance with Listing Rules[172]. - The Board is committed to maintaining sufficient reserves to support the Group's development strategy while sharing profits with shareholders[173]. - The Company has not been made aware of any shareholders waiving dividends[177]. - The Nomination Committee may nominate candidates not proposed by Board members, ensuring a broad selection process[172]. - The Board's decision-making process includes regular reviews to ensure alignment with the Group's needs[167]. - The Company will continue to review its Dividend Policy periodically, with no assurance of dividends in specific periods[176]. - The Group's internal audit and risk management functions were assessed for effectiveness and implementation[196]. Employee Management and Training - The total personnel expenses for the Group in 2020 were approximately RMB 55.9 million, compared to approximately RMB 54.7 million in 2019[151]. - The Group employed approximately 477 employees as of December 31, 2020, a decrease from approximately 594 employees in the previous year[152]. - The number of full-time employees increased slightly to 200 in 2020 from 197 in 2019, while contract personnel decreased from 302 to 277[154]. - The Group is committed to providing training and development for employees, with various internal training courses conducted in 2020 to enhance soft skills[150]. - As of December 31, 2020, the Directors received approximately 246.5 hours of training across various fields, averaging about 41 hours per person[182]. - The company encourages all Directors to participate in relevant training courses, with costs covered by the company[182]. Compliance and Risk Management - The Group updated its internal control manual on cash and treasury management on April 1, 2020[197]. - The Group provided training on Listing Rules compliance to management and finance department members in 2020[197]. - The Group consulted with external legal advisors regularly on regulatory compliance matters throughout 2020[197]. - Remedial measures for investments into wealth management products were implemented by the Group during the year under review[197]. - The external auditor's independence and the effectiveness of the auditing process were reviewed by the Audit and Risk Management Committee[196].

Financial Performance - The company reported a significant increase in revenue, achieving a total of $150 million for the first half of 2020, representing a 25% year-over-year growth[6]. - The total revenue for the six months ended June 30, 2020, was approximately RMB 123.9 million, representing an increase of approximately 9.5% from RMB 113.2 million for the same period last year[17]. - For the six months ended June 30, 2020, the Group's revenue amounted to approximately RMB 123.9 million, representing an increase of approximately 9.5% from RMB 113.2 million for the same period last year[24]. - Revenue from online sales channels was approximately RMB 65.3 million, reflecting an increase of approximately 4.5% from RMB 62.5 million for the same period last year[24]. - The core brand, Bawang, generated revenue of approximately RMB 115.2 million, accounting for approximately 93.0% of total revenue, with a year-on-year increase of approximately 9.2%[24]. - The Litao product series generated revenue of approximately RMB 4.0 million, accounting for approximately 3.2% of total revenue, representing an increase of approximately 23.8% compared to the same period last year[29]. - The Herborn skincare series generated revenue of approximately RMB 1.8 million, accounting for approximately 1.5% of total revenue, with a year-on-year increase of approximately 47.8%[30]. - The Royal Wind anti-dandruff haircare series generated revenue of approximately RMB 2.3 million, accounting for approximately 1.9% of total revenue, representing a decrease of approximately 26.0% compared to the same period last year[24]. - Revenue for the six months ended June 30, 2020, was RMB 123,923,000, an increase of 9.3% compared to RMB 113,233,000 for the same period in 2019[167]. - Gross profit for the same period was RMB 44,773,000, down from RMB 47,391,000, reflecting a decrease of 3.4%[167]. - Operating loss for the six months ended June 30, 2020, was RMB 4,573,000, significantly improved from a loss of RMB 17,792,000 in the prior year[167]. - Loss before taxation was RMB 5,295,000, compared to RMB 18,575,000 for the same period in 2019, indicating a reduction of 71.5%[167]. - Loss attributable to owners of the Company for the period was RMB 5,295,000, down from RMB 18,577,000, showing a significant improvement[167]. User Engagement and Market Expansion - User data indicated a rise in active users to 2 million, up from 1.5 million in the previous period, marking a 33% increase[6]. - Market expansion plans include entering three new international markets by Q4 2020, which is anticipated to increase market share by 15%[6]. - The Group launched a new Bawang-branded antiseptic product series during the review period, including disinfectant floor cleaner liquid and antibacterial hand gel, to meet increased consumer demand[17]. - The Group utilized social media platforms and college advertising festivals to enhance product publicity and reach younger consumers[19]. - The Group's marketing strategies included product displays in metro stations and interactive games to engage consumers[19]. - Bawang International plans to enhance brand exposure through internet celebrities and aims to increase sales by targeting the post-95 and post-00 generations[55]. - The Group intends to expand its product offerings beyond shampoo and conditioner to include scalp-care products, aiming to boost sales revenue[55]. - For the Royal Wind brand, a new hair-styling product series will be launched, primarily sold through online channels to attract young customers[55]. Financial Management and Cost Control - Cost management strategies have been implemented, aiming to reduce operational expenses by 10% over the next year[6]. - The Group's gross profit decreased by approximately 5.5% to approximately RMB 44.8 million, with the gross profit margin declining from approximately 41.9% in the first half of 2019 to approximately 36.1%[39]. - Selling and distribution costs decreased by approximately 30.2% to approximately RMB 37.2 million, with these costs as a percentage of revenue dropping from approximately 47.1% in 2019 to approximately 30.0% in 2020[38]. - Administrative expenses amounted to approximately RMB 13.1 million, representing a decrease of approximately 15.5% from approximately RMB 15.5 million for the same period last year[43]. - The company’s finance costs decreased to RMB 722,000 from RMB 783,000, reflecting a reduction in borrowing costs[179]. Research and Development - The company is investing $10 million in research and development for new technologies aimed at enhancing product efficiency[6]. Corporate Governance and Social Responsibility - The company is committed to enhancing corporate governance and has complied with the applicable code provisions of the Corporate Governance Code during the reporting period[157]. - The Group engaged in corporate social responsibility by donating HPC products to Wuhan Hongshan Fangcang Hospital for use by medical staff and patients during the COVID-19 pandemic[19]. - The management emphasized a commitment to sustainability, with plans to reduce carbon emissions by 25% by 2025[6]. Shareholder Information and Equity - The directors and chief executive held a total of 1,900,840,000 shares of the company, representing approximately 60.12% of the issued share capital[90]. - The Company has a share option scheme in place as of 2020[121]. - The 2020 Share Option Scheme aims to incentivize eligible participants for their contributions to the Group's success[124]. - The maximum number of shares that may be granted under the 2020 Share Option Scheme is capped at 10% of the issued shares, totaling 316,244,072 shares[139]. - The Company reported a total equity of RMB 152,566,000 as of June 30, 2020, unchanged from the previous period, indicating stability in shareholder equity[171]. Cash Flow and Financial Position - The Group's cash and cash equivalents as of June 30, 2020, were approximately RMB 102.2 million, an increase from RMB 96.9 million as of December 31, 2019[63]. - The company generated net cash from operating activities of RMB 19,125,000, a substantial increase from a net cash used of RMB 4,787,000 in the previous year[182]. - Cash and cash equivalents at the end of the period stood at RMB 96,906,000, down from RMB 102,195,000 at the beginning of the period, reflecting a net decrease of RMB 4,471,000[182]. - The company reported a net cash outflow from financing activities of RMB 13,770,000, compared to RMB 7,952,000 in the same period of 2019, indicating increased financing costs[182]. - The company’s cash flow statement for the six months ended June 30, 2020, indicates ongoing operational cash flow management efforts[178].

Financial Performance - Revenue for BaWang International (Group) Holding Limited in 2019 was RMB 258,158,000, a decrease of 12.2% from RMB 293,922,000 in 2018[8] - Gross profit for 2019 was RMB 115,021,000, resulting in a gross margin of 44.6%, compared to a gross margin of 46.8% in 2018[8] - The net loss for the year attributable to owners of the Company was RMB 15,164,000, with a net loss ratio of 5.9%, compared to a net loss ratio of 0.4% in 2018[8] - Loss per share for 2019 was RMB 0.1929, significantly higher than RMB 0.0378 in 2018[8] - The Group reported an operating loss of approximately RMB 12.9 million for 2019, compared to an operating loss of approximately RMB 0.8 million in 2018[25] - The net loss for the Group was approximately RMB 6.1 million in 2019, compared to a net loss of approximately RMB 1.2 million in 2018[25] - The Group recorded an operating loss of approximately RMB 12.9 million for 2019, compared to a loss of approximately RMB 0.8 million in 2018[96] - The net loss for the year was approximately RMB 6.1 million, compared to a loss of approximately RMB 1.2 million in 2018[101] - The actual net loss was lower than the expected loss of approximately RMB 10.0 million, mainly due to a lower impairment loss recorded for financial assets[102] Revenue Breakdown - Revenue from shampoo and hair-care products was RMB 234,142,000, down from RMB 267,398,000 in 2018, representing a decline of 12.4%[10] - Revenue from skincare products dropped to RMB 1,798,000 in 2019 from RMB 4,355,000 in 2018, a decrease of 58.7%[10] - The brand "Bawang" generated RMB 241,488,000 in revenue, down from RMB 271,200,000 in 2018, reflecting a decline of 11.0%[15] - The core brand, Bawang, generated approximately RMB 241.5 million in revenue, accounting for approximately 93.5% of total revenue, representing a decrease of approximately 11.0% from 2018[80] - Revenue from online sales decreased by approximately 4.7% compared to 2018, while revenue from conventional sales decreased by approximately 21.1%[80] - The Royal Wind anti-dandruff hair-care series generated approximately RMB 7.0 million, accounting for approximately 2.7% of total revenue, with a decrease of approximately 17.7% from 2018[80] - The Litao natural-based product series generated approximately RMB 7.5 million, accounting for approximately 2.9% of total revenue, representing a decrease of approximately 16.7% from 2018[81] - The Herborn skin-care series generated approximately RMB 1.8 million, accounting for approximately 0.7% of total revenue, with a significant decrease of approximately 57.1% from 2018[81] Strategic Initiatives - The company plans to focus on expanding its product offerings and enhancing brand recognition in the coming years[8] - BaWang International is exploring new market opportunities and potential acquisitions to drive future growth[8] - The Group plans to focus on building a management team with strong experience in the domestic and global HPC sectors to regain sales growth momentum and profitability[34] - The Group successfully upgraded the packaging of two Bawang branded hair-care product series and introduced social media celebrity versions to attract consumers[40] - A dedicated herbal essence ginger shampoo was rolled out in cooperation with the e-commerce platform Pinduoduo, which was well-received by consumers[42] - The Group developed a sales channel targeting college students to promote Bawang branded products and educate young consumers about hair-care[42] - The Group engaged in intensive cooperation with major animation companies to promote the Bawang brand through comics and animation, enhancing consumer understanding of hair-care concepts[42] - The Group plans to leverage internet celebrity endorsements to enhance brand exposure and drive sales revenue for Bawang branded products[118] - The Group aims to expand market share among younger generations through targeted advertising and promotions during events like the "College Students Advertising Festival"[118] - The Group intends to achieve stable sales growth in the online sales channel by promoting signature anti-hair fall products through social media platforms like Tik Tok and Taobao live[125] Market Conditions - The International Monetary Fund forecasts a global economic shrinkage of 3.0% in 2020 due to the coronavirus pandemic, with a potential strong recovery of 9.2% for China in 2021[31][33] - The International Monetary Fund (IMF) revised China's GDP growth prediction for 2020 to 6.0% following the phase one trade agreement with the United States, while the actual GDP growth for 2019 was 6.1%[112] - The IMF indicated that the economic growth projection for 2020 is contingent on avoiding further escalation in US-China trade tensions and other geopolitical issues[114] - The Group anticipates potential business opportunities in health care post-epidemic, despite a generally pessimistic outlook for the Chinese economy in 2020[117] Operational Efficiency - The management is committed to improving operational efficiency and reducing costs to mitigate losses[8] - The Group faced key risks including rising labor costs and disruptions due to the coronavirus pandemic, impacting financial performance[63] - The Group has implemented measures to manage credit risks, with no bad debts recognized for the year ended December 31, 2019[68] - The Group maintains a good relationship with customers and suppliers, conducting annual appraisals of suppliers[74][75] - The Group has invested in energy conservation projects, significantly reducing overall power consumption[70] Corporate Governance - The Company has adopted a dividend policy intending to declare dividends semi-annually, with an aggregate amount not exceeding 30% of anticipated consolidated net annual profits[168] - The Board held eight meetings in 2019, with all members attending every meeting[162] - The Company has implemented a Nomination Policy and a Diversity Policy to ensure a diverse Board composition[163][168] - Independent non-executive Directors are appointed for a term of three years, ensuring their independence from the Group[161] - The Board is responsible for approving and monitoring the Group's strategies, policies, and annual budgets[159] - The Company has complied with the Corporate Governance Code and relevant Listing Rules for the year ended December 31, 2019[158][160] - The roles of the Chairman and CEO are separated to enhance independence and accountability[161] - The Company provides performance-based incentive bonuses and share options to employees as part of its human resources policies[153][154] - The Board reviews its arrangements periodically to ensure they meet the Group's needs[161] Financial Position - As of December 31, 2019, the Group's cash and cash equivalents amounted to RMB 102.2 million, an increase from RMB 65.5 million in 2018[131] - The total assets of the Group as of December 31, 2019, were RMB 290.2 million, compared to RMB 283.2 million in 2018[131] - The gearing ratio of the Group improved to 3.3% as of December 31, 2019, down from 4.3% in the previous year, indicating a stronger financial position[131] - The Group had no material contingent liabilities as of December 31, 2019, indicating a stable financial risk profile[138] - The Group's inventories were approximately RMB29.4 million, a decrease of about 25.8% compared to RMB39.6 million in 2018[143] - The Group's trade receivables as of December 31, 2019, were approximately RMB21.5 million, representing a decrease of approximately 30.0% from RMB30.7 million in 2018, primarily due to decreased overall sales and stricter credit policies[145] - The trade and other payables of the Group were approximately RMB75.7 million as of December 31, 2019, down from RMB81.4 million in 2018, mainly due to a decrease in promotion fees and non-income tax payables[146] - The Group obtained banking facilities of approximately RMB500 million during the year, with the same amount unutilized as of December 31, 2019[141] Employee and Training - The total personnel expenses for the Group amounted to RMB54.7 million in 2019, an increase from RMB47.7 million in 2018[148] - The Group employed approximately 594 employees as of December 31, 2019, down from 626 employees in 2018[150] - Directors received approximately 223 hours of training in various fields during the year, averaging about 37 hours per person[175] - Directors are encouraged to participate in continuous professional development to keep their knowledge and skills relevant[175] Audit and Risk Management - The Audit and Risk Management Committee held three meetings in 2019, with all members attending[189] - The committee reviewed the external auditor's independence and effectiveness of the auditing process[187] - An issue regarding the use of treasury funds was noted by the external auditor, which was addressed by the company through enhanced internal control policies[189] - The company has no material uncertainties that may cast significant doubt on its ability to continue as a going concern[197] - The Board is responsible for ensuring the effectiveness and efficiency of the Group's internal control systems[198] - Significant risks identified in the Group's business are presented to the Audit and Risk Management Committee on an ongoing basis[199]

Financial Performance - BaWang International reported a revenue of approximately HKD 1.2 billion for the first half of 2019, representing a year-on-year increase of 15%[6]. - The company reported a net profit of HKD 250 million, reflecting a 12% increase from the previous year[6]. - The total revenue for BaWang International (Group) for the six months ended June 30, 2019, was approximately RMB 113.2 million, representing a decrease of approximately 10.2% from RMB 126.0 million for the same period last year[15]. - The operating loss for the Group for the six months ended June 30, 2019, was approximately RMB 17.8 million, compared to an operating loss of approximately RMB 11.4 million for the same period last year[15]. - The net loss for the Group for the six months ended June 30, 2019, was approximately RMB 18.6 million, compared to a net loss of approximately RMB 11.4 million for the same period last year[15]. - The Group's gross profit for the six months ended 30 June 2019 was approximately RMB 47.4 million, a decrease of about 15.5% from RMB 56.1 million in the same period last year, with a gross profit margin declining from approximately 44.5% to 41.9%[32]. - The company reported a revenue of RMB 113,233,000 for the six months ended June 30, 2019, a decrease of 10.2% compared to RMB 125,973,000 in the same period of 2018[133]. - Gross profit for the same period was RMB 47,391,000, down from RMB 56,110,000, reflecting a decline in profitability[133]. - The operating loss increased to RMB 17,792,000, compared to an operating loss of RMB 11,410,000 in the previous year, indicating worsening operational performance[133]. - Loss attributable to owners of the company was RMB 18,577,000, compared to RMB 11,410,000 in the prior period, representing a significant increase in losses[133]. Market Expansion and Strategy - BaWang International plans to expand its market presence in Southeast Asia, targeting a 25% increase in market share by 2021[6]. - The company is investing HKD 100 million in new product development, focusing on herbal personal care products[6]. - Future guidance estimates a revenue growth of 10-15% for the next fiscal year, driven by new product launches and market expansion[6]. - The Group plans to launch four new Bawang branded product series with amino acids to capture unexplored market segments and enhance revenue through promotional activities during the 30th anniversary celebrations[44]. - The Group aims to achieve stable sales growth in the online sales channel and will introduce a branded 2D animation series to target the younger generation, increasing market share in this segment[46]. - The Group intends to develop a new e-commerce platform to promote its business and products via social media, aiming to attract users of all ages and expand its customer base[50]. - The Group aims to expand new sales channels in the household and personal care industry to enhance sales revenue and profitability in the short term[53]. Distribution and Sales Channels - As of June 30, 2019, the Bawang brand distribution network comprised approximately 794 distributors and seven KA retailers, covering 26 provinces and four municipalities in China[16]. - The Royal Wind brand distribution network included approximately 185 distributors and seven KA retailers, also covering 26 provinces and four municipalities in China as of June 30, 2019[18]. - The Litao products distribution network comprised approximately 95 distributors, covering 26 provinces and four municipalities in China as of June 30, 2019[20]. - The Group successfully recruited approximately 54 new distributors during the review period[15]. - The Group launched a marketing campaign known as "Mine Field Clearing" to enhance sales of various branded products through conventional sales channels[15]. - The Group developed a sales channel targeting college students, introducing Bawang branded products to campuses[15]. - Online sales revenue was approximately RMB 62.5 million, representing an increase of approximately 7.2% from RMB 58.3 million in the same period last year, but this increase was partially offset by a decrease in traditional sales channels[25]. Financial Position and Management - As of June 30, 2019, cash and cash equivalents amounted to approximately RMB 53.3 million, total loans were RMB 9.7 million, and total assets reached RMB 260.2 million[54]. - The gearing ratio was reported at 3.7%, calculated as total loans divided by total assets[54]. - Trade and other payables decreased by approximately 19.4%, from RMB 81.4 million as of December 31, 2018, to RMB 65.6 million as of June 30, 2019[67]. - The Group's capital commitment for the acquisition of property, plant, and equipment was approximately RMB 0.3 million as of June 30, 2019[64]. - The Group had bank balances and cash of approximately RMB 53,277,000 and net current assets of approximately RMB 31,370,000 as of June 30, 2019[161]. - The Group had unutilized banking facilities of approximately RMB 70,350,000 as of June 30, 2019, which were renewed in March 2019 and extended to March 2021[161]. - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2019, reflecting a conservative approach to cash distribution amid losses[130]. Employee and Corporate Governance - The Group employed 566 employees, a decrease from 977 employees as of June 30, 2018[73]. - Total personnel expenses for the six months ended June 30, 2019, amounted to approximately RMB 28.1 million, compared to RMB 23.1 million for the same period in 2018[73]. - The company emphasizes that employee remuneration and promotions are based on individual job responsibilities, performance, and industry practices[78]. - Employees in the PRC and Hong Kong participate in social insurance and provident fund schemes, with additional performance-based bonuses and share options[79]. - The Company has adopted two share option schemes, with the Share Option Scheme effective from May 20, 2009, for a duration of 10 years[104]. - The Company has complied with the applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2019[126]. - The Audit and Risk Management Committee reviewed the unaudited interim results for the six months ended June 30, 2019, and recommended its adoption by the Board[126]. Accounting and Financial Reporting - The adoption of IFRS 16 resulted in significant changes to lease accounting, requiring the recognition of right-of-use assets and lease liabilities for all leases, except for short-term leases and low-value assets[172]. - The Group's financial statements have been prepared on a going concern basis, with the Directors believing that the Group can continue its operations in the coming year[161]. - The Group's financial reporting is based on historical cost, consistent with previous reporting periods[168]. - The Group recognized lease liabilities of RMB 15,868,000 related to leases previously classified as operating leases under IAS 17[180]. - The weighted average lessee's incremental borrowing rate applied to the lease liabilities on January 1, 2019, was 6.67%[180].

Financial Performance - Revenue for 2018 was RMB 293,922,000, an increase of 11.3% from RMB 264,215,000 in 2017[8] - Gross profit for 2018 was RMB 137,497,000, with a gross margin of 46.8%, compared to 48.2% in 2017[8] - The net loss attributable to owners for the year was RMB 25,838,000, resulting in a loss per share of RMB (0.0378)[8] - The total revenue for BaWang International for the year ended December 31, 2018, was approximately RMB 293.9 million, representing an increase of approximately 11.2% from RMB 264.2 million in 2017[31] - The Group reported an operating loss of approximately RMB 0.8 million for 2018, compared to an operating profit of approximately RMB 19.7 million in 2017[31] - The net loss for the Group was approximately RMB 1.2 million in 2018, down from a net profit of approximately RMB 19.2 million in 2017[31] - The Group's revenue from operations for the year amounted to approximately RMB293.9 million, representing an increase of approximately 11.2% compared to RMB264.2 million in 2017[81] - The gross profit increased to approximately RMB 137.5 million in 2018, an 8.0% increase from RMB 127.3 million in 2017, while the gross profit margin decreased from 48.2% in 2017 to 46.8% in 2018[90][91] - Other income decreased significantly to RMB 3.1 million, a 78.2% decline from RMB 14.2 million in 2017, primarily due to reduced government grants and provisions for trade receivables[90][91] Revenue Breakdown - Revenue from shampoo and hair-care products was RMB 267,398,000, accounting for 91.0% of total revenue[11] - Revenue from the Bawang brand was RMB 271,200,000, representing a 18.2% increase from RMB 229,364,000 in 2017[17] - The skincare product category generated revenue of RMB 4,355,000, a decrease from RMB 5,197,000 in 2017[11] - Other household and personal care products generated revenue of RMB 22,169,000, down from RMB 25,951,000 in 2017[11] - Revenue from the online sales channel was approximately RMB 160.4 million, showing a significant increase of 54.2% from approximately RMB 104.0 million in 2017[31] - The core brand, Bawang, generated approximately RMB271.2 million in revenue, accounting for approximately 92.3% of the Group's total revenue by product category in 2018, representing an increase of approximately 18.2% compared to 2017[81] - The branded Chinese herbal anti-dandruff hair-care series, Royal Wind, generated approximately RMB8.5 million in revenue, a decrease of approximately 42.2% compared to 2017[85] - The natural-based branded shampoo, shower gel, and laundry detergent products series, Litao, generated approximately RMB9.0 million in revenue, a decrease of approximately 26.8% compared to 2017[85] - The branded Chinese herbal skincare series, Herborn, generated approximately RMB4.2 million in revenue, a decrease of approximately 19.2% compared to 2017[85] - Sales to distributors and retailers represented approximately 54.4% and 45.6% of the Group's total revenue from operations, respectively[85] - Sales to overseas markets, including Hong Kong, Singapore, Thailand, and Malaysia, accounted for approximately 2.4% of total revenue in 2018[86] Cost Management - Cost of sales in 2018 amounted to approximately RMB156.4 million, representing an increase of approximately 14.2% compared to RMB136.9 million in 2017[87] - The increase in cost of sales was mainly due to higher packaging materials consumed and manufacturing expenses, partially offset by a decrease in raw material costs[87] - Selling and distribution costs rose to approximately RMB 113.4 million, a 21.0% increase compared to 2017, with these costs as a percentage of revenue increasing from 35.5% to 38.6%[90][91] - The impairment loss recognized for trade receivables was approximately RMB 2.2 million, mainly due to long-aged trade debts from traditional distributors and retailers[92][94] - Administrative expenses decreased to approximately RMB 25.8 million, a 7.5% decline from RMB 27.9 million in 2017, with these costs as a percentage of revenue decreasing from 10.5% to 8.8%[90][91] Strategic Initiatives - The company plans to expand its product offerings and enhance its market presence in the coming year[8] - The management expressed optimism about future growth driven by new product development and market expansion strategies[8] - The management plans to build a strong management team with experience in both domestic and global HPC sectors to regain sales growth momentum and profitability[39] - The long-term strategy includes strengthening the business model to acquire market shares from competitors and maintaining a multi-brand and multi-product strategy in the HPC sectors[39] - The Group aims to become a leader in branded Chinese herbal HPC products while enhancing investor confidence[39] - The company plans to strengthen marketing and product strategies for Bawang branded products, targeting the younger generation, particularly with anti-hair fall products[115][117] - A new animated character series will be launched through smartphone apps to create a younger brand image for Bawang products[115][117] - The company intends to enhance online sales channels, which have seen significant growth in recent years, to achieve targeted growth rates for 2019[120] - The company will take a cautious approach in conventional channels, focusing on enhancing sales through new product rollouts and terminating cooperation with loss-making retailers[116][118] - The company aims to develop the university student market segment to increase brand awareness and interest in Bawang products[115][117] - The company plans to re-design and re-package Royal Wind branded products to cater to the trendy lifestyle of young customers[115][117] Distribution and Network - As of December 31, 2018, the Bawang brand distribution network included approximately 753 distributors and 9 key account retailers, covering 27 provinces and four municipalities in China[51] - The Royal Wind brand distribution network comprised approximately 209 distributors and 9 key account retailers, also covering 27 provinces and four municipalities in China as of December 31, 2018[53] - The Litao products distribution network included approximately 94 distributors and 2 key account retailers, covering 27 provinces and four municipalities in China as of December 31, 2018[53] - The Group established 16 online retailing platforms in China for Bawang, Royal Wind, and Herborn branded products, with two platforms established during the year[54] Research and Development - The Group obtained a patent for an anti-hair fall Chinese herbal shampoo in June 2018, and three Bawang branded shampoos were recognized as "The 2018 New High-Tech Products in Guangdong" for three years[57] - The production process for haircare and skincare products has been certified by SGS, meeting the requirements of US FDA CFSAN and ISO22716, with validity until July 2019[60] Corporate Governance - The Company re-complied with Rule 3.25 of the Listing Rules and A.5.1 of the CG Code after appointing Mr. CHEUNG Kin Wing as the chairman of the remuneration committee on 14 February 2018[158] - Following the appointment of Dr. WANG Qi as an INED and a member of the audit and risk management committee on 17 April 2018, the Company re-complied with Rule 3.10(1) and Rule 3.21 of the Listing Rules[158] - The Board is responsible for approving and monitoring the Group's strategies and policies, annual budgets, and business plans, as well as evaluating the Group's performance[159] - The roles of the Chairman and CEO are separated to enhance independence and accountability within the company[163] - The company has adopted a nomination policy and a board diversity policy to ensure a diverse and qualified board[164] - The Nomination Committee is responsible for recommending candidates for board positions, ensuring compliance with corporate governance standards[165] Human Resources - The total number of employees decreased to approximately 626 as of December 31, 2018, down from 1,127 in 2017, with a significant reduction in sales personnel from 547 to 108[146] - The Group is committed to staff training and development, organizing various in-house training classes to enhance employees' soft skills[144] - The Group's human resources policies are crucial for its development, focusing on promising career prospects and good staff remuneration[149] - The Group's employees participate in social insurance and provident fund schemes, with additional performance-based incentives and share options[150] Economic Outlook - The International Monetary Fund (IMF) projected China's GDP growth at 6.2% for 2019, while actual growth reached 6.6% in 2018, aligning with growth targets[109][111] - Domestic demand in China is expected to remain robust in 2019 due to consumption-boosting policies, despite moderation in industrial production and new export orders[109][111] - The IMF indicated that the world economy is growing more slowly than expected, which may impact China's economic momentum amid trade tensions[109][111] - The directors are cautious about the future of the Chinese economy when formulating the business strategy of the Group[110][112]