Financial Performance - For the year ended December 31, 2023, the company reported a gross profit of RMB 14.81 million, a significant increase from RMB 7.40 million in 2022, representing a growth of approximately 100%[2] - The company incurred a net loss of RMB 816.32 million for the year, compared to a loss of RMB 140.50 million in the previous year, indicating a deterioration in financial performance[6] - The company reported a net loss of RMB 811,388,000 for the year ended December 31, 2023, compared to a net loss of RMB 140,498,000 for the previous year[43] - The company recognized a one-time non-cash loss of approximately HKD 858.1 million (equivalent to RMB 756.2 million) due to the issuance of planned shares[161] - The company reported a total revenue of RMB 140.3 million from external customers, with a reported loss of RMB 816.4 million before tax[194] Financial Stability - As of December 31, 2023, the company had current liabilities of approximately RMB 339.80 million and a capital deficit of RMB 146.10 million, highlighting financial instability[6] - The company recorded a net cash outflow from operating activities of approximately RMB 120.30 million during the year, with cash and bank balances totaling only RMB 17.40 million, raising concerns about its ability to continue as a going concern[6] - The company faces significant uncertainty regarding its ability to continue operations, dependent on successful negotiations with lenders and the generation of operational cash flow[7] - The company’s bank and cash balance remained low at approximately RMB 17.38 million as of December 31, 2023[94] Revenue Growth - Revenue from the Chinese market reached RMB 138.05 million in 2023, a substantial increase from RMB 59.08 million in 2022, reflecting strong market demand[16] - Total revenue increased from approximately RMB 90.5 million for the year ended December 31, 2022, to approximately RMB 140.3 million for the year ended December 31, 2023[101] - The footwear, apparel, and other sales segment contributed RMB 83.6 million, accounting for 59.6% of total revenue, compared to 73.8% in 2022[132] - The company has developed a new business segment providing digital marketing services, contributing RMB 11,314,000 to the total revenue[30] - Local sales of clothing products recorded stable growth, with average sales per customer increasing from approximately RMB 0.2 million in 2022 to approximately RMB 1.0 million in 2023[98] Cost Management - The company plans to implement multiple strategies to control operating costs and increase revenue, although the effectiveness of these strategies remains uncertain[7] - The sales and distribution expenses increased by 82.5% from approximately RMB 5.9 million in 2022 to about RMB 10.8 million in 2023, primarily due to rising employee costs and travel expenses[109] - General and administrative expenses increased by 27.3% from approximately RMB 32.0 million for the year ended December 31, 2022, to approximately RMB 40.8 million for the year ended December 31, 2023[138] Financing Activities - The company is exploring new financing options, including potential equity issuance to meet its financial obligations and improve liquidity[7] - The company has issued a total of 3,262,705,241 shares to creditors as part of a debt restructuring plan[24] - The company completed three new share placements during the year, significantly increasing cash inflow from financing activities to approximately RMB 140.0 million in 2023 from RMB 12.2 million in 2022[112] - The net proceeds from the first placement amounted to approximately HKD 64.9 million, fully utilized for general operating funds[144] - The second placement raised approximately HKD 60.6 million, also allocated for general operating funds[148] Asset Management - The company’s total assets and liabilities as of December 31, 2023, included a net book value of approximately RMB 165.4 million in right-of-use assets and property, plant, and equipment[182] - As of December 31, 2023, current assets amounted to RMB 100,153 thousand, while current liabilities were RMB 439,941 thousand, resulting in a current ratio of 22.8%[152] - The company’s trade receivables, net of provisions, were analyzed by invoice date, with no interest received or collateral held on these balances[46] Shareholder Returns - The company has not declared or approved any dividends for the years ended December 31, 2023, and December 31, 2022[26] - The company does not recommend a final dividend for the year ended December 31, 2023, consistent with the previous year[157] Market Position - The company completed the acquisition of 80.95% of the equity of Lida Elastic Fabric Co., Ltd., which will contribute to a new reportable segment focused on the sale of elastic bands for bras and underwear[12] - The acquisition aligns with the company's business strategy to expand its manufacturing and sales of elastic bands for bras and lingerie, enhancing product offerings and cash flow[66] - The company intends to acquire 20% to 28% of the issued share capital of China TianYF Holdings Group Limited, with an initial deposit of HKD 2 million paid[68]

Revenue Growth - Revenue increased by 178.0% from approximately RMB30.4 million for the six months ended 30 June 2022 to approximately RMB84.6 million for the six months ended 30 June 2023, driven by increased sales demand from Chinese customers post-COVID-19 and revenue from newly acquired subsidiaries[18]. - Revenue from sales of shoes and clothing rose from approximately RMB17.4 million for the six months ended 30 June 2022 to approximately RMB63.1 million for the six months ended 30 June 2023[22]. - The Group's revenue increased by 178.0% to approximately RMB 84.6 million for the six months ended 30 June 2023, compared to approximately RMB 30.4 million for the same period in 2022[34]. - Revenue for the six months ended June 30, 2023, was RMB 84,610,000, compared to RMB 30,433,000 for the same period in 2022, representing an increase of 177%[93]. - Revenue from fabric sales was RMB 13,139,000, while shoes and clothes sales generated RMB 63,053,000, and elastic webbings contributed RMB 8,418,000[143]. Expenses and Costs - Selling and distribution expenses surged by 701.6% from approximately RMB0.8 million for the six months ended 30 June 2022 to approximately RMB6.2 million for the six months ended 30 June 2023, due to increased transportation fees and promotion costs[1]. - General and administrative expenses decreased by 14.2% from approximately RMB14.7 million for the six months ended 30 June 2022 to approximately RMB12.7 million for the six months ended 30 June 2023, as the Group strictly controlled administrative costs[1]. - The Group's cost of sales rose by 162.5% from approximately RMB 28.1 million for the six months ended 30 June 2022 to approximately RMB 73.8 million for the six months ended 30 June 2023[42]. - The cost of sales increased by 162.5% from approximately RMB28.1 million for the six months ended 30 June 2022 to approximately RMB73.8 million for the six months ended 30 June 2023, consistent with overall revenue growth[68]. Profitability and Loss - Loss attributable to the owners of the Company decreased from approximately RMB50.3 million for the six months ended 30 June 2022 to approximately RMB8.9 million for the six months ended 30 June 2023[16]. - Loss per share decreased from RMB0.9105 for the six months ended 30 June 2022 to RMB0.0027 for the six months ended 30 June 2023[16]. - Gross profit for the same period was RMB 10,813,000, up from RMB 2,315,000 in 2022, indicating a significant improvement in profitability[93]. - Loss before tax decreased to RMB 9,067,000 in 2023 from RMB 49,658,000 in 2022, showing a reduction of approximately 82%[93]. - The total loss attributable to the owners of the company was RMB (8,868,000) for the period, compared to RMB (50,279,000) in the previous year[187]. Financial Position - The Group's borrowings decreased to approximately RMB 244.5 million as of 30 June 2023, down from RMB 1,076.1 million as of 31 December 2022[48]. - The Group's bank and cash balance was approximately RMB 23.6 million as of 30 June 2023, compared to approximately RMB 1.3 million as of 31 December 2022[47]. - The Group's net current liabilities improved to RMB (454,316,000) from RMB (1,226,749,000), reflecting a significant reduction in liabilities[119]. - As of June 30, 2023, net liabilities were reported at RMB (254,491,000), a reduction from RMB (1,175,335,000) at the end of 2022[96]. - The total equity attributable to the owners of the company at 30 June 2023 was RMB 1,311,619,000, up from RMB 679,186,000 at 30 June 2022[97]. Workforce and Operations - The total workforce increased to 321 as of 30 June 2023, up from 167 as of 31 December 2022[53]. - The Group plans to continue monitoring the industry and regularly review its business expansion plans to align with the best interests of the Group and its shareholders[3]. - The Group has incorporated a new subsidiary to start a new online advertising business in the second half of 2023, aiming to diversify income sources[56]. - The management is actively exploring opportunities for acquisitions of companies in Hong Kong and China to mitigate trading risks and enhance financial stability[57]. Corporate Governance and Compliance - The Board has resolved not to declare any dividend for the six months ended 30 June 2023, consistent with the previous year[79]. - The company complied with the Corporate Governance Code throughout the reporting period, except for code provision A.1.8 regarding insurance cover for directors[107]. - The Audit Committee, comprising three independent non-executive directors, oversees the financial reporting process and risk management[109]. - The Regulatory Compliance Committee ensures business operations comply with relevant laws and regulations[113]. - The company will continue to review and enhance its corporate governance practices to meet CG Code requirements[107]. Acquisitions and Investments - The acquisition of Leader Elastic Limited on April 28, 2023, involved purchasing 80.95% of its issued share capital, which is expected to enhance the production and sales of elastic webbing for bras and underwear[135]. - The total consideration for the acquisition of 80.95% equity interest in Leader Elastic Limited was approximately RMB 18,546,000[156]. - The acquisition of Leader Elastic Limited resulted in a gain on bargain purchase of RMB 7,767,000[149]. - The fair value of identifiable net assets of Leader Elastic Group at acquisition was RMB 44,908,000, with a purchase consideration of RMB 18,546,000[137]. Cash Flow and Liquidity - For the six months ended 30 June 2023, the net cash generated from operating activities was RMB 30,468,000, compared to a net cash used of RMB 3,560,000 in the same period of 2022[98]. - The company reported a net cash used in financing activities of RMB 5,370,000 for the period, compared to a net cash generated of RMB 2,015,000 in the previous year[98]. - The net cash used in investing activities was RMB 2,823,000 for the six months ended 30 June 2023, compared to a net cash generated of RMB 2,000,000 in the same period of 2022[98]. - As of June 30, 2023, the cash and cash equivalents at the end of the period were RMB 23,573,000, compared to RMB 692,000 at the end of June 2022[98].

Business Expansion - The company has established a new subsidiary to launch an online media advertising business in the second half of 2023, aiming to increase revenue sources through partnerships with mainstream media and an experienced advertising team[1]. - The company plans to expand its revenue sources through the new online media advertising business[1]. - The new advertising business is expected to enhance the company's overall revenue generation capabilities[1]. - The Group has incorporated a new subsidiary to commence a new business in advertising on online media in the second half of 2023, aiming to increase income sources[65]. Financial Performance - The Group's revenue increased by 178.0% to approximately RMB84.6 million for the six months ended 30 June 2023, compared to approximately RMB30.4 million for the same period in 2022[38]. - Loss attributable to the owners of the Company decreased from approximately RMB50.3 million for the six months ended 30 June 2022 to approximately RMB8.9 million for the six months ended 30 June 2023[27]. - Revenue from shoes and clothing amounted to approximately RMB63.1 million, representing 74.5% of total revenue for the six months ended 30 June 2023[44]. - The gross margin increased from 7.6% for the year ended 30 June 2022 to 12.8% for the year ended 30 June 2023, primarily due to increased local sales in the PRC[45]. - The increase in revenue was mainly attributed to the rise in sales demand from customers in the PRC post-COVID-19 and contributions from newly acquired subsidiaries[38]. - Gross profit for the six months ended June 30, 2023, was approximately RMB 10.8 million, with a gross profit margin of 12.8%, compared to RMB 2.3 million and 7.6% for the same period in 2022[57]. - The company reported a loss before tax of RMB 9,067,000, which is an improvement from a loss of RMB 49,658,000 in the same period last year[104]. - The net current liabilities improved to RMB (454,316,000) from RMB (1,226,749,000) year-over-year, reflecting a stronger financial position[94]. Corporate Governance - The company has confirmed compliance with the Model Code for securities transactions by directors during the review period[8]. - The Company is committed to high corporate governance standards and has complied with the Corporate Governance Code, except for code provision A.1.8 regarding insurance cover for Directors[16]. - The Company will continue to review and enhance its corporate governance practices to meet CG Code requirements[16]. - The Company has not engaged in any business that competes with its Group as of June 30, 2023, ensuring no conflicts of interest among Directors[16]. Share Capital and Transactions - An aggregate of 3,262,705,241 Scheme Shares were allotted at an issue price of HK$0.317 per share, totaling approximately HK$1,034.3 million for settlement of admitted claims[10]. - The Company successfully placed 133,690,000 Placing Shares at a price of HK$0.490 per share, raising approximately HK$64.3 million for general working capital[12]. - A second placing of 64,230,000 Placing Shares was completed at a price of HK$0.950 per share, generating net proceeds of approximately HK$60.4 million for general working capital[12]. - The company issued 3,262,741,000 scheme shares at an issue price of HK$0.317 per share, totaling approximately HK$1,034.3 million for settlement of claims[189]. Current Liabilities and Financial Position - Total current liabilities increased to RMB 588,348,000 as of June 30, 2023, compared to RMB 1,284,755,000 at the end of 2022, reflecting a reduction in financial obligations[94]. - The total current liabilities as of June 30, 2023, were RMB 224,466,000, a decrease from RMB 955,030,000 as of December 31, 2022, indicating a reduction of 76.5%[193]. - The Group's borrowings decreased to approximately RMB 244.5 million as of June 30, 2023, down from RMB 1,076.1 million as of December 31, 2022[67]. - The Group's secured bank borrowings increased to approximately RMB 171,757,000 as of June 30, 2023, compared to RMB 110,265,000 as of December 31, 2022[194]. Workforce and Training - The Group's total workforce increased to 321 employees as of June 30, 2023, compared to 167 employees as of December 31, 2022[72]. - The Group emphasizes training and development of staff, reflecting its commitment to a learning and sharing culture[72]. Dividends - The Group did not declare any dividend for the six months ended June 30, 2023, consistent with the previous year[73]. - The Board does not recommend the distribution of an interim dividend to shareholders for the six months ended June 30, 2023[197].

Financial Restructuring - The company issued a total of 3,262,705,241 shares at an issue price of HKD 0.317 per share to settle claims amounting to approximately HKD 1,034.3 million[5]. - The net liabilities after the completion of the plan are projected to be RMB (258,504) thousand, reflecting a significant reduction from RMB (1,175,335) thousand before the plan[6]. - The company’s total current liabilities before the plan were RMB 1,284,755 thousand, which decreased to RMB 489,017 thousand after the issuance of new shares[6]. - The company’s equity increased from RMB 7,753 thousand to RMB 303,253 thousand following the completion of the share issuance plan[6]. - The company raised approximately HKD 1,034.28 million through a special authorization issuance for debt repayment, with no actual cash proceeds received[52]. Loan Management - The company is negotiating with banks to extend the repayment terms of bank loans totaling RMB 11 million and RMB 49 million, originally due in January and February 2023, to January and February 2024[8]. - The company has engaged in discussions with local creditors to negotiate the extension of existing loans in Hubei and Fujian provinces[7]. - The company has successfully repaid approximately RMB 0.2 million of the outstanding debt to the Industrial and Commercial Bank of China since January 1, 2022[9]. - The company is required to pay penalty interest on overdue loans until full repayment is made, as per the bank loan agreements[33]. - As of the end of 2022, the company reported secured bank loans of approximately RMB 110.3 million and unsecured bank loans of approximately RMB 52.7 million, with overdue bank loans totaling approximately RMB 103.0 million[48]. - The overdue loans related to subsidiaries in Fujian and Hubei have been outstanding since the fiscal year ending December 31, 2017[48]. - The total principal owed by Yingfeiling and Fengtai Hubei is RMB 102.975 million, with penalty interest amounting to RMB 15.551 million, bringing the total to RMB 118.526 million[49]. - The company has not yet established any formal agreements with creditors regarding the extension of existing loans, and discussions with potential investors for fundraising are ongoing[43]. Liquidity and Cash Flow - The company has implemented measures to alleviate liquidity pressure and improve cash flow, with expectations of sufficient cash resources to meet operational funding needs over the next 12 months[2]. - The company is actively seeking additional financing channels, including the potential issuance of new shares under general or special mandates[23]. - The company is considering further fundraising activities to generate cash flow, which could be used to repay current and overdue bank loans[28]. - The company has not received any further legal actions from banks regarding overdue loans as of the announcement date[22]. - The company is assessing its ability to continue as a going concern, considering its current liquidity, performance, and available financing sources[42]. Business Development - The company is actively seeking new business opportunities as part of its ongoing strategy[12]. - The company is in discussions with various potential business partners across multiple industries, including information technology and artificial intelligence, to develop new business opportunities[24]. - The company has not yet reached any agreements with business partners, and any formal agreements will be announced at an appropriate time[36]. Audit and Compliance - The audit committee has reviewed the action plan to address the audit qualification and supports the management's view on the company's ability to continue as a going concern[16]. - The company aims to eliminate the audit qualification opinion by implementing action plans and achieving preliminary repayment agreements with creditors[28]. Acquisition Plans - The company plans to extend the completion date of an acquisition from April 14, 2023, to April 28, 2023, pending a special shareholders' meeting on April 24, 2023[53].

Financial Performance - The Group's gross profit for 2022 was approximately RMB 7.4 million, representing a gross profit margin of approximately 8.2%, an increase from RMB 3.6 million and 2.3% in 2021[3][4]. - The profit margin for sales of shoes and clothing increased to approximately 10.5% in 2022 due to the commencement of local sales of clothing products in the PRC[3][4]. - Total cost of sales for the Group in 2022 was RMB 83.1 million, compared to RMB 151.9 million in 2021, indicating a significant reduction in costs[3]. - The Group incurred a loss of approximately RMB139,836,000 for the year ended 31 December 2022, with net current liabilities and capital deficiency of approximately RMB1,226,749,000 and RMB1,175,335,000 respectively[55]. - Selling and distribution expenses increased by 95.9% from approximately RMB3.0 million in 2021 to approximately RMB5.9 million in 2022 due to hiring more sales personnel[47]. - General and administrative expenses rose by 0.9% from approximately RMB31.7 million in 2021 to approximately RMB32.0 million in 2022, primarily due to increased staff costs and legal fees[48]. - The Group's total bank and cash balance was low at RMB1,298,000 as of 31 December 2022, indicating a net operating cash outflow for the year[55]. - The Group's bank borrowings of approximately RMB162,974,000 are subject to renewal or full repayment within the next twelve months, with approximately RMB102,974,000 overdue[55]. - The Group's ability to continue as a going concern depends on securing new financing, negotiating with lenders, obtaining external funding, and generating operating cash flows[60]. - For the year ended December 31, 2022, the Group reported a loss of approximately RMB 139.84 million, with current liabilities net amounting to approximately RMB 1.23 billion and capital deficiency of about RMB 1.18 billion[86]. - The Group's cost of sales decreased by 45.3% from approximately RMB 151.9 million for the year ended December 31, 2021, to approximately RMB 83.1 million, consistent with the decline in revenue for the year[81]. - The Group's revenue primarily came from two main geographical areas: Mainland China and Korea[121]. Corporate Governance - The Board is led by Acting Chairman Mr. Li Wanyuan, who is responsible for the Group's strategic direction and objectives[2]. - The Audit Committee reviewed the Group's 2022 interim financial statements and management accounts during meetings held in 2022[32][33]. - The Regulatory Compliance Committee held one meeting in the year to discuss compliance with relevant laws and regulations in China and Hong Kong[35]. - The Group's strategy includes enhancing corporate governance practices and ensuring compliance with applicable laws and regulations[20][34]. - The Board consists of 5 members, with 1 member having overseas working experience and 2 members possessing accounting or professional qualifications[22]. - The Audit Committee reviewed the external auditor's report and confirmed no disagreements regarding the selection or appointment of external auditors[51]. - The Group is in the process of locating an internal control advisor to address identified deficiencies in its internal control system[70]. - The Nomination Committee aims to ensure board diversity, including gender diversity, and will regularly review measurable targets to achieve this[41]. - The Audit Committee reviews the independent auditor's effectiveness and independence annually, ensuring compliance with audit processes[80]. - The Regulatory Compliance Committee ensures the Group's business operations comply with relevant laws and regulations, reporting directly to the Board[85]. - The Company has received confirmations of independence from all independent non-executive Directors, ensuring compliance with Listing Rules[190]. Financing and Capital Management - The Company plans to negotiate with financial institutions for restructuring existing borrowings or obtaining new financing to alleviate liquidity pressure[87]. - The Group aims to convince lenders of defaulted borrowings not to demand immediate repayment of principal and interest[87]. - The Company intends to raise external funding by issuing new shares to potential investors[87]. - Following the completion of the scheme shares issuance on January 4, 2023, all claims owed to scheme creditors, including bondholders, will be fully discharged[87]. - The directors believe that the Group will have sufficient working capital to finance operations and meet financial obligations within twelve months from December 31, 2022[87]. - The net proceeds from the 2022 First Share Subscription amounted to approximately HK$2.42 million, intended for debt restructuring and general working capital[129]. - The Company completed a share consolidation on 8 March 2022, consolidating every 10 existing shares into 1 consolidated share[126]. - The first share subscription completed on May 11, 2022, involved the issuance of 10,455,107 shares at a subscription price of HK$0.24 per share, raising net proceeds of approximately HK$2.42 million for restructuring and working capital[166]. - The Group's treasury activities are primarily managed through deposits with financial institutions, mainly in Renminbi and Hong Kong dollars, to minimize funding costs[158]. - The Group adopts a prudent cash and financial management policy to support its working capital and capital expenditure needs[157]. Operational Performance - The Group is engaged in the sales of shoes, clothes, and the manufacturing and sale of fabrics and yarns[120]. - The Group's management measures and technology improvements led to reduced unit electricity consumption and expenses in production compared to the previous year[184]. - Other income decreased by 46.3% from approximately RMB4.0 million in 2021 to approximately RMB2.1 million in 2022, mainly due to the absence of a reversal of impairment loss recognized in 2021[175]. - The net foreign exchange loss for 2022 was approximately RMB58.2 million, primarily due to the depreciation of RMB against HKD, affecting bonds valued at approximately RMB913.2 million[176]. - The Group's rental income increased from approximately RMB0.8 million in 2021 to approximately RMB1.5 million in 2022[175]. Shareholder Relations - The Company emphasizes the importance of effective communication with shareholders to enhance investor relations and transparency[79]. - The Group did not recommend the payment of a dividend for the year ended December 31, 2022, consistent with the previous year[184]. - As of December 31, 2022, no reserves of the Company were available for distribution, the same as in 2021[185]. - The Group did not make any charitable donations during the year, maintaining the same position as in 2021[186]. - The remuneration for executive directors includes a monthly salary of HK$30,000 for Mr. Li Wanyuan and HK$20,000 for Ms. Lin Yuxi, along with management bonuses at the Board's discretion[192]. - The Group's consolidated financial statements for the year ended December 31, 2022, are detailed in the annual report, summarizing the results and assets and liabilities over the last five financial years[194].

Financial Performance - The Group recorded revenue of approximately RMB90.5 million for the year ended 31 December 2022, representing a decrease of approximately 41.8% compared to RMB155.5 million for the year ended 31 December 2021[14]. - Loss attributable to owners of the Company increased from approximately RMB100.5 million in 2021 to approximately RMB140.5 million in 2022, representing an increase of approximately 39.8%[14]. - The Group's revenue decreased by 41.8% to approximately RMB90.5 million in 2022 compared to the previous year[22]. - Loss attributable to owners of the Company increased by 39.8% to approximately RMB140.5 million in 2022[22]. - The Group's revenue decreased from approximately RMB 155.5 million in 2021 to approximately RMB 90.5 million in 2022, representing a decline of about 41.8%[65]. - The export sales of footwear and apparel dropped from approximately RMB 125.6 million in 2021 to approximately RMB 66.8 million in 2022, a decrease of approximately 46.8%[51]. - The Group's cost of sales decreased by 45.3% from approximately RMB 151.9 million in 2021 to approximately RMB 83.1 million in 2022, aligning with the reduced turnover[53]. - Gross profit for 2022 was approximately RMB 7.4 million, with a gross profit margin of approximately 8.2%, compared to a gross profit of approximately RMB 3.6 million and a margin of 2.3% in 2021[53]. Sales and Revenue Breakdown - Revenue from sales of shoes, clothes, and others contributed approximately RMB66.8 million in 2022, down from RMB125.6 million in 2021[14]. - Revenue from fabric sales was approximately RMB23.7 million in 2022, compared to RMB29.9 million in 2021[14]. - Local sales of clothing products generated revenue of approximately RMB35.4 million during the year[35]. - The total revenue breakdown for 2022 showed that shoes, clothes, and others accounted for 73.8% of total revenue, while fabrics accounted for 26.2%[66]. Cost and Profit Margins - The gross profit margin improved to approximately 8.2% in 2022, up from approximately 2.3% in the previous year[14]. - The profit margin for local sales of clothing products was approximately 11.3%, while the profit margin for export sales was approximately 9.7%[25]. - The average selling price of fabric products decreased from approximately RMB5.4 per meter in 2021 to RMB5.2 per meter in 2022, a decrease of approximately 3.7%[34]. - The average cost of fabrics decreased from approximately RMB5.3 per meter in 2021 to approximately RMB5.0 per meter in 2022[24]. - The gross profit margin for shoes, clothes, and others improved to approximately 10.5% in 2022 from 2.2% in 2021[70]. Operational Developments - The Group established a subsidiary in Shishi City, Fujian province, PRC, to manufacture and sell clothing products to local customers starting in the second half of 2022[6]. - Management plans to boost local sales of clothing products in the PRC in 2023 to generate higher profit margins[6]. - The Group incorporated a new subsidiary in Shishi, Fujian, to manufacture and sell various clothing products starting in the second half of 2022[25]. - The company focused on recruiting more staff for a new clothing production line in Fujian, emphasizing competitive remuneration and training[193]. Financial Position and Cash Flow - The financial position of the Group is expected to improve by discharging all bond liabilities and accrued bond interests for the financial year ending 31 December 2023[12]. - Management will closely monitor the Group's financial performance, financial position, and cash flow to maintain normal operations[12]. - For the year ended December 31, 2022, net cash used in operating activities amounted to RMB 12.5 million, compared to RMB 0.3 million in 2021[81]. - Net cash generated from financing activities was approximately RMB 12.2 million in 2022, a significant increase from net cash used of approximately RMB 1.0 million in 2021, primarily due to reduced repayment of borrowings[81]. Share Capital and Corporate Governance - The Company completed a share consolidation, two subscriptions of new shares, and a placing of new shares during the year[104]. - The net proceeds from the 2022 First Share Subscription of approximately HK$2.42 million were intended for debt restructuring costs and general working capital[110]. - The company announced a share consolidation on January 13, 2022, consolidating every ten existing shares into one consolidated share, effective March 8, 2022[137]. - The 2022 First Share Subscription raised approximately HK$2.42 million, intended for debt restructuring costs and general working capital[141]. - The 2022 Second Share Subscription raised approximately HK$4.59 million, with net proceeds used for debt restructuring and general working capital[115][143]. - The 2022 Placing raised capital by issuing 15,055,354 shares at a price of HK$0.52 per share, enhancing the company's financial position[120][122]. - The company has adopted the Corporate Governance Code as its own code of corporate governance, ensuring compliance throughout the reporting period[170]. - The board of directors consists of two executive directors and three independent non-executive directors, maintaining at least one independent director with appropriate professional qualifications[181]. - The Company has adopted the corporate governance principles as set out in the CG Code and has complied with applicable code provisions throughout the year, except for code provision A.1.8[198]. Employee and Workforce Information - The company had a total workforce of 167 as of December 31, 2022, with total staff costs of approximately RMB10.7 million for the year[132]. - The total employee cost for the year ended December 31, 2022, was approximately RMB10.7 million, up from RMB4.9 million in 2021, reflecting an increase in workforce from 83 to 167 employees[165]. - The company is committed to providing competitive compensation plans and fostering a culture of learning and sharing among its employees[166]. Risk Management - The company has a low foreign exchange risk as most transactions are conducted in Renminbi, with limited exposure to USD transactions[187].

Financial Performance - The Group's revenue decreased by 79.1% to approximately RMB30.4 million for the six months ended June 30, 2022, compared to approximately RMB145.7 million for the same period in 2021[9]. - Loss attributable to the owners of the Company increased from approximately RMB40.3 million for the six months ended June 30, 2021, to approximately RMB50.3 million for the six months ended June 30, 2022[10]. - Revenue from fabric products decreased from approximately RMB15.9 million to RMB13.1 million, with sales quantities dropping to approximately 2.56 million meters from 2.7 million meters[13]. - Revenue from sales of shoes and clothing decreased significantly from approximately RMB129.8 million to approximately RMB17.4 million due to reduced demand from Korean customers[13]. - The overall decrease in revenue was mainly attributed to decreased sales demand from customers in Korea, affected by the new wave of the COVID-19 pandemic[9]. - The loss per share decreased from RMB1.03 to RMB0.91 for the respective periods[10]. - The Group's financial performance reflects the ongoing challenges posed by the pandemic, particularly in the Korean market[9]. - Future outlook remains cautious as the Company navigates through the ongoing effects of the pandemic on consumer demand and market conditions[9]. - The Group's total revenue for the six months ended 30 June 2022 was approximately RMB30.4 million, a decrease from RMB145.7 million for the same period in 2021[16]. - Gross profit for the same period was RMB 2,315,000, down from RMB 6,959,000 in 2021, indicating a gross margin drop[92]. - Loss from operations increased to RMB 14,571,000 compared to a loss of RMB 3,025,000 in the previous year, reflecting a worsening operational performance[92]. - Loss before tax for the period was RMB 49,658,000, compared to RMB 40,260,000 in 2021, showing an increase in pre-tax losses[92]. - The total comprehensive loss attributable to the owners of the Company for the period was RMB 50,279,000, up from RMB 40,260,000 in the prior year[92]. Cost and Expenses - Cost of sales decreased by 79.7% from approximately RMB138.7 million in the first half of 2021 to approximately RMB28.1 million in the first half of 2022[17]. - Selling and distribution expenses decreased by 25.9% from approximately RMB1.0 million in the first half of 2021 to approximately RMB0.8 million in the first half of 2022[27]. - General and administrative expenses decreased by 1.4% from approximately RMB15.0 million in the first half of 2021 to approximately RMB14.8 million in the first half of 2022[29]. - Finance costs decreased from approximately RMB37.2 million in the first half of 2021 to approximately RMB35.1 million in the first half of 2022[29]. - Other income changed from approximately RMB6.0 million in the first half of 2021 to an expense of approximately RMB1.3 million in the first half of 2022, mainly due to exchange losses[23]. Assets and Liabilities - As of 30 June 2022, the Group's bank and cash balances amounted to approximately RMB0.7 million, down from approximately RMB2.2 million as of 31 December 2021[31]. - The Group's borrowings increased to approximately RMB1,025.5 million as of 30 June 2022, up from RMB970.9 million as of 31 December 2021[32]. - Non-current assets as of June 30, 2022, were valued at RMB 195,739,000, a decrease from RMB 206,213,000 at the end of 2021[94]. - Current liabilities totaled RMB 1,128,309,000, compared to RMB 1,093,130,000 at the end of 2021, indicating an increase in short-term obligations[94]. - The Group's net current liabilities were RMB (1,101,742,000), slightly worsening from RMB (1,071,621,000) at the end of 2021[94]. - Total assets less current liabilities stood at RMB (906,003,000), compared to RMB (865,414,000) at the end of 2021, reflecting a decline in overall asset position[94]. - As of June 30, 2022, non-current liabilities increased to RMB 190,020, up from RMB 182,383 as of December 31, 2021, representing a growth of approximately 4.5%[96]. - The total deficit as of June 30, 2022, was RMB (1,096,023), compared to RMB (1,047,797) at the end of 2021, indicating an increase in deficit of about 4.6%[96]. Cash Flow - The net cash generated from operating activities for the six months ended June 30, 2022, was RMB (3,560), a decline from RMB 1,082 in the same period of 2021[100]. - Cash and cash equivalents at the end of the period were RMB 692, a decrease from RMB 1,027 at the end of June 30, 2021, representing a decline of approximately 32.6%[100]. - The company reported a net cash used in financing activities of RMB 2,015 for the six months ended June 30, 2022, compared to RMB (3,211) in the same period of 2021, indicating improved cash flow management[100]. Corporate Governance and Compliance - The Board has resolved not to declare any dividend for the six months ended June 30, 2022 (2021: Nil)[49]. - The company has complied with the Corporate Governance Code, except for code provision A.1.8 regarding insurance cover for directors against legal actions[72][73]. - The company is committed to enhancing its corporate governance practices to meet the requirements of the Corporate Governance Code[74]. - The company has not reported any related party transactions or connected transactions during the reporting period[68]. Strategic Initiatives - The Company is exploring new strategies to mitigate the impact of market fluctuations and enhance revenue streams moving forward[9]. - The management is actively exploring opportunities to engage in different businesses through acquisitions in Hong Kong and the PRC to improve the Group's financial position and cash flow[52]. - The Directors plan to expand the sales scale of the Group's shoes and clothing business and restructure the loss-making fabrics business through reinvestment or divestment[53]. - The Scheme to address the Company's existing indebtedness has been sanctioned by the Hong Kong Court, with conditions precedent being satisfied[60]. - The company completed the subscription of 12,546,128 shares at a price of HK$0.375 per share, resulting in net proceeds of approximately HK$4.59 million for general working capital and debt restructuring[65]. Market Conditions - The textile industry in China saw a 5.7% year-on-year increase in revenue, totaling RMB2.52 trillion in the first half of 2022, despite a 17% decline in total profits for textile companies[13]. - The Group's revenue from external customers in the PRC was RMB 13,074,000 for the six months ended June 30, 2022, down from RMB 15,850,000 in 2021, representing a decline of 17.7%[119]. - The Group's revenue from Korea was RMB 15,356,000 for the six months ended June 30, 2022, significantly down from RMB 119,434,000 in 2021, indicating a decline of 87.2%[119].

Debt Management - The company reported a total debt of approximately RMB 636.41 million, with interest rates ranging from 1.5% to 40%[9] - The company is currently negotiating with banks to extend the repayment terms of approximately RMB 100 million and RMB 90 million of short-term bank loans due in January and April 2022, respectively[11] - The company has overdue bank loans totaling approximately RMB 63.3 million, down from RMB 69.2 million in 2020[11] - The overdue bank loans and penalties as of December 31, 2021, totaled RMB 69,499,000, with principal owed to Infineon at RMB 45,729,000 and to Fengtai Hubei at RMB 17,534,000, plus penalties of RMB 6,236,000[12] - The company is committed to continuing discussions with banks to extend the repayment deadlines for existing loans[11] Cash Flow and Liquidity - The company has taken measures to alleviate cash flow pressure and improve liquidity, assuming successful implementation of these measures[5] - The company aims to generate operational cash flow and secure additional financing to meet business and funding needs[5] - The company believes it will have sufficient cash resources to meet operational funding and financing needs over the next 12 months[5] - Infineon's net current liabilities were approximately RMB 162.4 million, and total liabilities were about RMB 110.4 million as of December 31, 2021, indicating insufficient funds to repay overdue loans[14] Debt Restructuring - The company plans to issue shares to creditors as part of its debt restructuring plan, which was approved on June 8, 2022[9] - The company raised approximately HKD 7.80 million and HKD 2.42 million through equity fundraising activities in July and April-May 2022, respectively, for general working capital and debt restructuring[15] Acquisition Plans - The company is in the process of acquiring 51% equity in a target company, with the deadline extended to June 30, 2022, to finalize the acquisition[16] - The acquisition is expected to expand the company's production and sales of elastic bands for bras and underwear, enhancing future product offerings and cash flow[18] - The company is negotiating to further extend the acquisition deadline and is preparing a circular for shareholders regarding the acquisition details[18] Audit and Going Concern - The audit committee supports the board's view on the company's ability to continue as a going concern, contingent on the successful execution of the action plan[6] - The auditor indicated that if all action plans are implemented, the audit qualification related to going concern may be removed[20] - If the company fails to implement its plans, it may need to adjust asset values and classify non-current assets and liabilities as current, which could impact its financial statements[19] Communication with Stakeholders - The company will provide updates to shareholders and investors regarding any significant developments at an appropriate time[23] - The company has faced delays in implementing its action plan due to the COVID-19 pandemic and related government restrictions[8]

Financial Performance - The Group recorded revenue of approximately RMB155.5 million for the year ended 31 December 2021, representing a decrease of approximately 24.7% compared to RMB206.7 million in 2020[6]. - Loss attributable to owners of the Company decreased from approximately RMB219.0 million in 2020 to approximately RMB100.5 million in 2021, representing a decrease of approximately 54.1%[6]. - The Group's revenue decreased by 24.7% to approximately RMB155.5 million in 2021 compared to the previous year[20]. - Loss attributable to owners of the Company decreased by 54.1% to approximately RMB100.5 million in 2021[20]. - The Group incurred a loss of approximately RMB100,528,000 for the year ended 31 December 2021[183]. - As of 31 December 2021, the Group had net current liabilities of approximately RMB1,071,627,000 and net liabilities of approximately RMB1,047,797,000[183]. - The Group's bank borrowings amounted to approximately RMB163,312,000 and bonds of approximately RMB638,180,000, which are subject to renewal or repayment within the next twelve months[183]. - There is a material uncertainty regarding the Group's ability to continue as a going concern, dependent on successful negotiations with creditors[183]. - The consolidated financial statements have been prepared on a going concern basis, contingent on the Group's ability to meet its liabilities as they fall due[183]. Revenue Breakdown - Sales of shoes, clothes, and others contributed approximately RMB125.6 million in revenue for 2021, down from RMB191.4 million in 2020[6]. - Sales of fabrics contributed approximately RMB29.9 million in revenue for 2021, an increase from RMB15.2 million in 2020[6]. - The total revenue from shoes, clothes, and others was RMB125.6 million, accounting for 80.8% of total revenue in 2021[33]. - Sales of shoes and clothes decreased by approximately 34.4% from RMB191.4 million in 2020 to RMB125.6 million in 2021[30]. - The sales of fabric products increased from approximately RMB15.2 million in 2020 to approximately RMB29.9 million in 2021, representing a 96.4% increase[30]. Cost and Profitability - The gross profit margin for the Group's products improved to approximately 2.3% in 2021, compared to a gross loss margin of approximately 6.0% in the previous year[6]. - The Group's cost of sales decreased by 30.6% from approximately RMB219.0 million in 2020 to approximately RMB151.9 million in 2021[34]. - The gross profit for 2021 was approximately RMB3.6 million, with a gross profit margin of 2.3%, compared to a gross loss of approximately RMB12.3 million and a gross loss margin of 6.0% in 2020[39]. - Other income decreased by 48.4% from approximately RMB40.8 million in 2020 to approximately RMB21.1 million in 2021, primarily due to a decline in net foreign exchange gains[44]. - Selling and distribution expenses decreased by 58.9% from approximately RMB7.4 million in 2020 to approximately RMB3.0 million in 2021[44]. - General and administrative expenses decreased by 66.6% from approximately RMB101.3 million in 2020 to approximately RMB33.8 million in 2021[44]. - Finance costs decreased by 46.2% from approximately RMB127.0 million in 2020 to approximately RMB68.3 million in 2021[44]. Market and Business Outlook - The Group's fabrics business showed signs of recovery in 2021, following the recovery of domestic demand for textile products in China[7]. - The economy of Korea, a major overseas market for the Group, is projected to grow approximately 4% in 2021, aiding the recovery of local consumption markets[7]. - Management plans to closely monitor sales markets and adjust sales strategies as necessary to maintain normal operations[7]. - The Group is focused on maintaining financial performance, financial position, and cash flow to ensure ongoing operations[7]. Corporate Governance - The Company has adopted the Corporate Governance Code as its own code of corporate governance, ensuring compliance throughout the year ended December 31, 2021[74]. - The Board comprises three executive Directors and three independent non-executive Directors, maintaining compliance with the Listing Rules regarding independent Directors[75]. - The Company emphasizes continuous professional development for Directors to keep their knowledge and skills updated[109]. - The Board is responsible for leadership and control of the Company, overseeing strategic decisions and performance, while delegating day-to-day management to executive Directors and senior management[86]. - The Company established a Regulatory Compliance Committee to ensure adherence to relevant regulations[123]. - The Nomination Committee consists of three independent non-executive Directors, focusing on board structure and director appointments[124]. - The Company will continue to review and enhance its corporate governance practices to meet the requirements of the Corporate Governance Code[77]. Internal Control and Audit - The Company appointed Elite Partners Risk Advisory Services Limited as the Internal Control Adviser to enhance internal controls and ensure timely escalation of significant financial issues[173]. - The Group's internal control system is designed to ensure reliability of financial reporting and compliance with applicable laws and regulations[195]. - The Audit Committee reviews the independent auditor's independence and effectiveness of the audit process annually[198]. - The Board is responsible for maintaining an adequate internal control system to safeguard shareholder investments and Company assets[195]. Employee and Workforce - The Group's workforce increased to 83 employees as of December 31, 2021, compared to 55 employees in the previous year[69]. - The Company is committed to staff training and development, emphasizing a learning and sharing culture within the organization[69].

Revenue Performance - The Group's revenue decreased by 22.3% to approximately RMB145.7 million for the six months ended June 30, 2021, compared to approximately RMB187.5 million for the same period in 2020[15]. - Revenue from sales of shoes and clothing decreased from approximately RMB176.1 million to approximately RMB129.8 million due to reduced demand from customers in Korea and Japan[22]. - Revenue from fabric products increased from approximately RMB11.4 million to RMB15.9 million, driven by an increase in average selling price to approximately RMB6.2 per meter[21]. - The overall decrease in revenue was mainly attributed to a decrease in sales demand from customers in Korea and Japan due to the new wave of COVID-19 pandemic[15]. - The Group's revenue for the six months ended 30 June 2021 was approximately RMB145.7 million, a decrease of 22.3% from RMB187.5 million for the same period in 2020[26]. Profit and Loss - Loss attributable to the owners of the Company decreased from approximately RMB74.4 million for the six months ended June 30, 2020, to approximately RMB40.3 million for the six months ended June 30, 2021[16]. - Loss per share decreased from RMB0.31 for the six months ended June 30, 2020, to RMB0.10 for the six months ended June 30, 2021[16]. - Gross profit increased to approximately RMB6.96 million for the six months ended 30 June 2021, with a gross profit margin of 4.8%, up from 1.4% in the same period of 2020[33]. - Loss from operations decreased to RMB3,025,000 compared to RMB38,459,000 in the previous year, showing a reduction in operational losses[109]. - Loss before tax improved to RMB40,260,000 from RMB74,355,000 in 2020, reflecting a 45.5% reduction in losses[109]. Expenses and Cost Management - The cost of sales decreased by 25.0% from approximately RMB184.9 million in the first half of 2020 to approximately RMB138.7 million in the first half of 2021[27]. - Selling and distribution expenses decreased by 60.2% to approximately RMB1.0 million for the six months ended June 30, 2021, down from RMB2.6 million in the same period of 2020[37]. - General and administrative expenses decreased by 46.6% to approximately RMB15.0 million for the six months ended June 30, 2021, compared to RMB28.0 million in the same period of 2020[39]. Financial Position - As of June 30, 2021, the Group's bank and cash balances amounted to approximately RMB1.0 million, down from approximately RMB3.6 million as of 31 December 2020[41]. - The Group's borrowings increased to approximately RMB971.6 million as of June 30, 2021, compared to RMB950.9 million as of 31 December 2020[42]. - The current ratio was 4.9%, down from 5.4% as of December 31, 2020, indicating a slight decrease in liquidity[47]. - The total liabilities of the Group as of June 30, 2021, were RMB1,263,049,000, with segment liabilities for fabrics at RMB291,402,000[131]. Corporate Governance and Compliance - The company complied with the Corporate Governance Code except for code provision A.1.8 regarding insurance cover for directors[90]. - The company will continue to review and enhance its corporate governance practices to meet the requirements of the Corporate Governance Code[92]. - All directors confirmed compliance with the Model Code for securities transactions during the review period[93]. Acquisitions and Future Plans - The Company agreed to acquire 51% equity interests of the Target Company, which is expected to enhance the production and sales of elastic webbing for bras and underwear, thereby strengthening future revenue sources and cash flow[54]. - The management is actively exploring acquisition opportunities in Hong Kong and PRC to diversify trading risks and improve financial position and cash flow[66]. - The management is preparing a circular with details of the acquisition and will keep shareholders informed through further announcements[57]. Share Capital and Securities - The total number of issued and fully paid ordinary shares increased to 435,629,000 from 302,521,000 as of January 1, 2021, representing a growth of approximately 44%[163]. - The company issued unsecured bonds with an aggregate principal value of approximately RMB887,590,000, unchanged from December 31, 2020[161]. - The company raised RMB5,499,000 from the issuance of new shares during the period, compared to RMB2,816,000 in the previous year, representing an increase of about 95.0%[117]. Cash Flow and Liquidity - The company reported a net cash generated from operating activities of RMB1,082,000 for the six months ended June 30, 2021, compared to a net cash used of RMB(23,814,000) in the same period of 2020[117]. - Cash and cash equivalents at the end of the period were RMB1,027,000, down from RMB8,573,000 at the end of June 2020, indicating a decrease of approximately 88.0%[117]. - The company is in discussions with creditors for a debt restructuring plan and has filed an application with the High Court of Hong Kong[71].