Investment Rating - The investment rating for the company is "Outperform the Market" [1][8] Core Views - The report highlights a recovery in revenue and a significant increase in profit, with total revenue reaching 2.744 billion HKD, a year-on-year increase of 17.1%, and a net profit of 116 million HKD, reflecting a year-on-year growth of 357.1% [5][8] - The company is actively pursuing a "self-operated + franchising" dual-drive model to enhance the quality of its offline stores, with a total of 3,816 stores as of 2023 [5][6] - The report anticipates continued revenue growth, projecting total revenues of 3.141 billion HKD in 2024, 3.547 billion HKD in 2025, and 3.938 billion HKD in 2026 [8][10] Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 2.744 billion HKD, up 17.08% year-on-year, while the gross profit margin decreased by 2.61 percentage points to 52.42% due to rising raw material costs [5][6] - The net profit margin increased by 3.13 percentage points, resulting in a net profit of 116 million HKD [5][10] Business Model and Strategy - The company continues to implement a dual-drive model of "self-operated + franchising," with self-operated stores generating 1.466 billion HKD (53.4% of total revenue) and franchised stores contributing 783 million HKD (28.5%) [5][6] - The company is focusing on optimizing store locations and improving operational efficiency, particularly in high-demand areas [5][6] Product Development - The company has diversified its product offerings, introducing new flavors and price ranges to attract a broader consumer base, with a notable sales contribution from lower-priced products [8][10] Future Projections - The report forecasts a steady increase in revenue and net profit over the next few years, with expected earnings per share (EPS) of 0.08 HKD in 2024, 0.11 HKD in 2025, and 0.14 HKD in 2026 [8][10]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company has significantly improved customer order numbers, with a focus on enhancing store operations [1] - The company has expanded its product price range and categories, leading to a 20% increase in customer orders despite a 1.73% decrease in average transaction value [4] - The company is actively integrating online and offline channels, with notable sales in late-night delivery and in-store promotions [4] Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 2.744 billion RMB, a year-on-year increase of 17.1%, and a net profit of 116 million RMB, up 357.1% [4] - The company plans to repurchase up to 400 million HKD of its shares to boost shareholder confidence [5] Store Expansion and Quality - The company increased its store count by 387 to a total of 3,816 stores in 2023, with a strong focus on key transportation hubs [4] - The number of stores in transportation hubs rose to 319, an increase of 141 stores year-on-year [4] Cost Management and Profitability - The company's gross margin was 52.42%, a decrease of 2.61 percentage points due to rising raw material costs [5] - The company improved its net profit margin to 4.21%, an increase of 3.13 percentage points year-on-year, aided by better cost management [5] Earnings Forecast - The company expects EPS of 0.08, 0.10, and 0.13 RMB for 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 21, 16, and 12 [6][7]

Investment Rating - The report maintains a "Buy" rating for Zhouheiya (1458 HK) [5] Core Views - Zhouheiya achieved revenue of RMB 2 744 million in 2023, a YoY increase of 17 1%, and net profit attributable to shareholders of RMB 116 million, a YoY surge of 357 1% [2] - The company strengthened its position in transportation hub stores, with single-store revenue showing moderate recovery [2] - Zhouheiya launched innovative "fresh-lock + hot braised" store formats, seeking new growth points [2] - Raw material prices gradually declined, leading to potential margin expansion [3] Financial Performance Revenue and Profit - 2023 revenue: RMB 2 744 million (+17 1% YoY) [2] - 2023 net profit: RMB 116 million (+357 1% YoY) [2] - 2023 gross margin: 52 4% (-2 6pcts YoY) [3] - 2023 net profit margin: 4 2% (+3 2pcts YoY) [3] Store Performance - Total stores: 3 816 (+11 3% YoY) [2] - New self-operated stores: 274 (+18 9% YoY) [2] - New franchised stores: 113 (+5 7% YoY) [2] - Average single-store revenue growth: 6 7% (self-operated), 6 9% (franchised) [2] Future Projections - 2024E revenue: RMB 3 262 million (+18 9% YoY) [4] - 2025E revenue: RMB 3 795 million (+16 3% YoY) [4] - 2024E net profit: RMB 211 million (+82 5% YoY) [4] - 2025E net profit: RMB 281 million (+33 1% YoY) [4] Business Strategy Product and Channel Development - Main product categories: duck and duck by-products (RMB 2 120 million, +17% YoY), other products (RMB 587 million, +18% YoY), franchising (RMB 35 million, +4 8% YoY) [2] - Focus on classic flavors and national trend braised food concept [2] Store Format Innovation - Launched two "fresh-lock + hot braised" combo stores in 2023 [2] - Hot braised products priced around RMB 20 [2] - Potential to attract both meal replacement and leisure snack consumers [2] Financial Ratios - 2023 ROE: 2 83% [4] - 2023 P/E: 33x [4] - 2024E P/E: 18x [4] - 2025E P/E: 14x [4] - 2026E P/E: 12x [4] Market Data - Current price: HKD 1 73 [5] - Market cap: HKD 4 1 billion [6] - 52-week range: HKD 1 61-3 79 [6] - 3-month turnover rate: 18 87% [6]

Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company achieved revenue of RMB 2.744 billion in 2023, a year-on-year increase of 17.1%, slightly exceeding the previous guidance of RMB 2.700 to 2.750 billion. The net profit attributable to shareholders was RMB 116 million, a significant year-on-year increase of 357.1%, surpassing the guidance of RMB 100 to 115 million [5]. - The total number of stores reached 3,816 by the end of 2023, with 1,720 self-operated stores and 2,096 franchised stores, covering 331 cities across 28 provinces, autonomous regions, and municipalities in China [5]. - The company is actively embracing the value-for-money consumption era by launching products priced between RMB 9.9 and 14.9, which has led to a more than 20% year-on-year increase in customer transactions [5]. Summary by Sections Revenue and Profitability - The company's revenue growth was driven by a 26.9% increase in self-operated stores and a 13.0% increase in franchised stores, while online sales declined by 5.1%. The product mix showed a 17.0% increase in duck and duck by-products and an 18.1% increase in other products, with the latter's proportion rising by approximately 0.2 percentage points to 21.4% [5]. - The gross profit margin decreased by approximately 2.6 percentage points to 52.4% due to rising raw material costs, but the overall net profit margin improved to 4.2% [6]. Store Expansion and Strategy - The company added 387 new stores in 2023, with a net increase of 277 in the first half and 110 in the second half. The proportion of franchised stores slightly decreased, with franchised stores accounting for 54.9% of the total [5]. - The company plans to explore new store formats that combine fresh-keeping and hot-marinated products to enhance store efficiency [5]. Dividends and Share Buyback - The company plans to distribute a dividend of HKD 0.05 per share, totaling approximately RMB 108 million, which represents about 93.5% of the annual net profit. Additionally, the board intends to utilize up to HKD 400 million for share buybacks, representing about 10% of the current market capitalization [6]. Earnings Forecast - The forecast for net profit attributable to shareholders for 2024, 2025, and 2026 is RMB 229 million, RMB 280 million, and RMB 316 million, respectively, corresponding to a price-to-earnings ratio of 16, 13, and 12 times based on the current stock price [6].

Financial Performance - Total revenue for the year ended December 31, 2023, was RMB 2,743,628, representing a 17.1% increase from RMB 2,343,353 in 2022[2] - Gross profit for the same period was RMB 1,438,161, up 11.5% from RMB 1,289,484 in the previous year[2] - Profit before tax surged to RMB 214,149, a significant increase of 291.3% compared to RMB 54,731 in 2022[2] - Net profit attributable to shareholders reached RMB 115,576, marking a 357.1% rise from RMB 25,283 in the prior year[2] - Total comprehensive income rose by 61.3% from RMB 78.0 million for the year ended December 31, 2022, to RMB 125.8 million for the year ended December 31, 2023[42] - The group's net profit increased by 357.1% from RMB 25.3 million for the year ended December 31, 2022, to RMB 115.6 million for the year ended December 31, 2023, with a net profit margin rising from 1.0% to 4.2%[40] - Basic and diluted earnings per share for 2023 were RMB 0.05, compared to RMB 0.01 in 2022[69] Revenue Sources - Revenue contribution from self-operated stores was RMB 1,466,122, accounting for 53.4% of total revenue, up from 49.3% in 2022[5] - Online channel revenue was RMB 395,972, representing 14.4% of total revenue, down from 17.8% in the previous year[5] - Revenue from customer contracts for 2023 reached RMB 2,743,628 thousand, a 16.9% increase from RMB 2,343,353 thousand in 2022[82] - Revenue from modified atmosphere packaging products was RMB 2,388,291 thousand in 2023, up from RMB 2,027,998 thousand in 2022, reflecting a growth of 17.7%[83] - Revenue from vacuum packaging products increased to RMB 261,636 thousand in 2023, compared to RMB 210,271 thousand in 2022, marking a rise of 24.4%[83] Store Operations - The total number of retail stores increased to 3,816, up from 3,429 in 2022[3] - The company continues to optimize its store network, with 1,720 self-operated stores and 2,096 franchised stores covering 331 cities across 28 provinces, autonomous regions, and municipalities in China[9] - The number of transportation hub stores increased by 141 to a total of 319 stores as of December 31, 2023[16] - The company plans to explore new store formats to improve store efficiency in the evolving consumer environment[26] Cost and Expenses - Cost of sales rose by 23.9% from RMB 1,053.9 million in 2022 to RMB 1,305.5 million in 2023, attributed to higher sales volume and significant increases in raw material prices[31] - Selling and distribution expenses rose by 5.6% from RMB 930.5 million in 2022 to RMB 983.0 million in 2023, reflecting the recovery of offline store operations[35] - Administrative expenses increased by 2.1% from RMB 310.4 million in 2022 to RMB 317.0 million in 2023, due to provisions for credit impairment losses[36] - Employee benefits expenses rose to RMB 555,714 thousand in 2023 from RMB 495,750 thousand in 2022, an increase of 12.1%[90] Cash Flow and Financial Position - Cash and bank deposits decreased from RMB 1,245.2 million as of December 31, 2022, to RMB 1,074.5 million as of December 31, 2023[45] - The group's net asset value as of December 31, 2023, was approximately RMB 3,935.4 million, down from RMB 4,088.3 million as of December 31, 2022[44] - Cash generated from operating activities decreased from RMB 467.6 million for the year ended December 31, 2022, to approximately RMB 361.2 million for the year ended December 31, 2023[54] - The net cash generated from investing activities decreased from RMB 1,044.4 million to approximately RMB 563.2 million, primarily due to the redemption of structured deposits[54] - The net cash used in financing activities decreased from RMB 1,318.3 million to approximately RMB 1,046.5 million, mainly due to dividend payments and the repurchase of convertible bonds[55] Dividends and Shareholder Returns - The company plans to distribute a final dividend of HKD 0.05 per share, totaling approximately RMB 108,073,000, which is about 93.5% of the net profit for the year[7] - The interim dividend per share is HKD 0.12 (equivalent to RMB 0.11), and the final dividend per share is HKD 0.05 (equivalent to RMB 0.05), both compared to zero in the previous year[94] Market and Strategic Focus - The company expects to maintain strategic focus and enhance operational efficiency in the face of ongoing market challenges[26] - The company is focusing on enhancing the management of franchised stores to support their sustainable development[16] - The company aims to strengthen resource integration and enhance market share in community fresh e-commerce channels[18] - The group is advancing the construction of five major production centers nationwide, with the Huaxi factory set to commence production in 2024[25] Investments and Financing - The group plans to utilize internal resources and IPO proceeds for expansion and business operations[43] - The company issued convertible bonds totaling HKD 1,550,000,000 with a conversion price of HKD 10.40 per share, maturing in 2025[119] - As of December 31, 2023, all convertible bonds have been redeemed, with no conversions made since issuance[120] Governance and Compliance - The company has complied with the corporate governance code as of December 31, 2023[129] - The audit committee, consisting of three independent non-executive directors, reviewed the annual performance for the year ending December 31, 2023[131] - The annual performance announcement is published on the Hong Kong Stock Exchange website and the company's website[132]

Store Operations and Expansion - As of June 30, 2023, the Group had a total of 3,706 stores, including 1,542 self-operated stores and 2,164 franchised stores, covering 339 cities in 28 provinces, autonomous regions, and municipalities in China[12]. - The Group emphasized the quality of store openings and improved monitoring mechanisms to enhance store operations, ensuring a higher success rate for new stores[12]. - The Group is focusing on a dual-drive mode of "self-operation + franchise" to increase store density and brand penetration[12]. - The Group recorded a net increase of 46 stores in transportation hubs and 133 stores in shopping zones, commercial complexes, and supermarkets from December 31, 2022, to June 30, 2023[21]. - The total number of community stores reached 860 as of June 30, 2023, with plans to adjust annual targets for new community store openings based on market conditions[22]. Economic Environment and Consumer Trends - The overall economic recovery in China is still in its early stages, with uneven recovery trends across different industries, posing challenges for enterprises[7]. - Consumer habits have shifted significantly, with a preference for affordable and value-for-money products, alongside a trend towards integrated online and offline shopping experiences[8]. - 2023 is seen as a critical moment for rebuilding consumer confidence in the market, necessitating a re-evaluation of sales growth strategies[9]. - The macro-economic policies in China have started to show effectiveness, leading to a release of previously suppressed consumer demand[7]. - The integration of online and offline channels has become more complex and diversified, creating new consumption pathways[9]. Financial Performance - Revenue for the first half of 2023 was RMB 1,159,401,000, representing a 26.7% increase from RMB 915,235,000 in the same period of 2022[16]. - The Group's revenue for the six months ended June 30, 2023, was RMB 1,414,764, representing a 19.8% increase from RMB 1,181,078 in the same period of 2022[44]. - Gross profit for the same period was RMB 742,813, accounting for 52.5% of total revenue, compared to 56.9% in the previous year[45]. - Profit for the period reached RMB 101,742, a significant increase of 453.6% from RMB 18,377 in the prior year[45]. - The net profit margin improved to 7.2%, up from 1.6% in the previous year[45]. Cost Management and Supply Chain - The Group faced rising raw material costs in early 2023 but implemented supply chain optimization strategies to reduce costs and improve efficiency[35][36]. - Quality control of raw materials was maintained while digital and automated logistics management systems were applied to enhance the supply chain's flexibility and efficiency[37]. - Cost of sales increased by approximately 31.9% from RMB 509.5 million for the six months ended June 30, 2022, to RMB 672.0 million for the six months ended June 30, 2023[51]. Cash Flow and Financial Position - As of June 30, 2023, the Group's cash and bank balances were approximately RMB 1,165.9 million, down from RMB 1,245.2 million as of December 31, 2022[76][80]. - The Group's net cash generated from operating activities was approximately RMB 156.6 million, a decrease from RMB 321.9 million for the same period in 2022[92]. - The Group's total bank borrowings amounted to RMB 140.0 million, all due within one year, with a gearing ratio decreasing from 28.7% as of December 31, 2022, to 23.2% as of June 30, 2023[90]. - The Group's current assets as of June 30, 2023, were approximately RMB 2,712.2 million, while current liabilities were approximately RMB 830.5 million[75][79]. Shareholder Information and Dividends - An interim dividend of HK$0.12 per ordinary share was declared, totaling approximately RMB263,119,000, to be paid on or about September 7, 2023[118]. - As of June 30, 2023, Mr. Zhou Fuyu holds 1,371,457,951 shares, representing approximately 57.55% of the company's total shareholding[123]. - The total number of shares held by Ms. Tang Jianfang, including her interests in controlled corporations, is 1,371,457,951 shares, representing 57.55%[131]. Research and Development - The Group's improvement in research and development capabilities involved an allocation of RMB 60.0 million, also expected to be utilized within two years[87]. Risk Management - The Group does not face significant credit risk and liquidity risk, but is exposed to foreign exchange risk due to cash held in foreign currencies[77][81]. - The Group has implemented capital and investment policies to monitor and control risks related to its investment activities, allowing investments only in low-risk products[99].

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 1,414,764,000, representing a year-on-year increase of 19.8% from RMB 1,181,078,000[2]. - Gross profit for the same period was RMB 742,813,000, a 10.6% increase from RMB 671,529,000[2]. - Profit before tax surged to RMB 147,396,000, marking a significant increase of 230.5% compared to RMB 44,597,000 in the previous year[2]. - Net profit attributable to shareholders reached RMB 101,742,000, up 453.6% from RMB 18,377,000[2]. - The company reported a pre-tax profit of RMB 147.4 million, a 230.5% increase compared to RMB 44.6 million in the same period last year[25]. - Net profit for the period surged by 453.6% to RMB 101.7 million, compared to RMB 18.4 million in the previous year[25]. - Total comprehensive income for the period was RMB 118.2 million, up 212.0% from RMB 37.9 million for the same period in 2022[39]. - The group’s profit before tax for the six months ended June 30, 2023, was RMB 101,742,000, compared to RMB 18,377,000 for the same period in 2022, indicating a significant increase[90]. Revenue Sources - Revenue from self-operated stores accounted for 53.1% of total revenue, amounting to RMB 751,035,000, compared to 49.2% in the previous year[5]. - Online channels generated RMB 214,406,000, representing 15.2% of total revenue, down from 19.1% in the previous year[5]. - The Central China region contributed RMB 634,287,000, accounting for 54.7% of total revenue, up from 53.4% in the previous year[12]. - The revenue contribution from the South China region was RMB 194,379,000, representing 16.8% of total revenue, compared to 18.7% in the previous year[12]. - The total number of stores reached 3,706, comprising 1,542 self-operated stores and 2,164 franchised stores, covering 339 cities across 28 provinces, autonomous regions, and municipalities in China[10]. Store Operations and Expansion - The company plans to adjust its annual opening targets for community stores based on market conditions and consumer trends, with a total of 860 community stores as of June 30, 2023[16]. - The company emphasizes quality over quantity in store expansion, focusing on improving store operational quality and success rates[10]. - The number of stores in transportation hubs increased by 46 compared to December 31, 2022, while the number of stores in commercial complexes and supermarkets increased by 133 during the same period[16]. - The total number of stores in East China reached 504, contributing 13.6% to total revenue, an increase from 12.2% in the previous year[11]. - The company is actively optimizing its store network structure in response to changing market trends and consumer behavior[16]. Product Development and Innovation - The new spicy product line launched in early 2023 generated nearly RMB 300.0 million in revenue in the first half of 2023, targeting consumers who prefer milder flavors[20]. - The shrimp ball product line achieved over RMB 120.0 million in revenue in the first half of 2023, expanding the product matrix beyond duck products[20]. - New products launched within one year accounted for over 20% of total sales in the first half of 2023, reflecting the effectiveness of the company's product innovation strategy[20]. - The community fresh food segment recorded a revenue of about RMB 75.0 million in the first half of 2023, driven by optimized channel strategies and enhanced platform resource exposure[18]. Cost Management and Efficiency - Sales costs rose by approximately 31.9% to RMB 672.0 million for the six months ended June 30, 2023, primarily due to increased customer traffic and significant raw material price hikes[28]. - Gross profit increased by 10.6% to RMB 742.8 million for the six months ended June 30, 2023, but the gross margin decreased from 56.9% to 52.5% due to rising costs[29]. - The group has implemented a flexible supply chain strategy to mitigate the impact of rising raw material costs, focusing on quality improvement and cost reduction[22]. - The group is continuously optimizing its logistics management systems, including TMS and WMS, to improve supply chain efficiency and reduce costs[22]. Financial Position and Assets - As of June 30, 2023, the group's net asset value was RMB 4,228.9 million, including current assets of approximately RMB 2,712.2 million and non-current assets of approximately RMB 2,793.3 million[42]. - The company has reduced total liabilities by RMB 366.8 million, with current liabilities decreasing by RMB 84.1 million and non-current liabilities by RMB 282.7 million[52]. - The company’s equity as of June 30, 2023, was RMB 4,228,910 thousand, reflecting a stable financial position amidst market fluctuations[72]. - The company has allocated RMB 345.2 million for general working capital, with RMB 268.0 million already used[46]. Shareholder Returns - The company declared an interim dividend of HKD 0.12 per share, totaling approximately RMB 263,119,000[7]. - The company has a reserve of approximately RMB 1,212.5 million available for distribution to shareholders as of June 30, 2023[65]. - Basic earnings per share for the six months ended June 30, 2023, was RMB 0.04, an increase from RMB 0.01 in the same period of 2022[95]. Market Outlook and Strategy - The market outlook indicates a recovery in consumer demand, with a focus on practical and cost-effective consumption patterns[9]. - The company aims to adapt to changing consumer preferences and enhance brand value to achieve sustainable growth[9]. - The company plans to enhance operational efficiency and explore community consumption scenarios to foster new growth drivers amid market uncertainties[24]. - The company anticipates that the overall consumer market will gradually recover despite facing multiple challenges in the short term[24].

Store Expansion and Development - In 2022, Zhou Hei Ya had over 3,400 stores, with a focus on expanding community stores and penetrating lower-tier markets to enhance business resilience[14] - As of the end of 2022, the total number of stores exceeded 3,400, with a focus on expanding community stores to enhance business resilience[16] - The total number of retail stores increased from 2,781 in 2021 to 3,429 in 2022, reflecting a growth strategy in both new and mature markets[30] - The Group aims to open around 1,000 new retail stores in 2023, continuing to optimize its retail store structure[39] - As of December 31, 2022, there were 792 community stores covering 109 cities, with a sales amount of approximately RMB 430 million from community store terminals[40] - The Group launched the "National Community Store Project" in early 2022 to expand the community store model throughout China[40] Financial Performance - The Group's total revenue decreased by 18.3% from RMB2,870.0 million in 2021 to RMB2,343.4 million in 2022, primarily due to the ongoing COVID-19 pandemic and reduced customer flow[67] - Profit for the year decreased by 92.6% from RMB342.4 million in 2021 to RMB25.3 million in 2022[72] - The Group's basic and diluted earnings per share dropped to RMB0.01 in 2022 from RMB0.15 in 2021, a decline of 93.3%[72] - The Group's total comprehensive income decreased by 75.6% to RMB78.0 million in 2022 from RMB319.7 million in 2021[90] - As of December 31, 2022, the Group had net assets of approximately RMB4,088.3 million, down from RMB4,210.3 million in 2021[99] - The Group's cash and bank deposits decreased to approximately RMB 1,245.2 million as of December 31, 2022, down from RMB 2,101.3 million as of December 31, 2021[102] Supply Chain and Cost Management - Zhou Hei Ya adapted its supply chain by upgrading the Operating Cost Management (OCM) mechanism and optimizing procurement strategies to manage rising raw material costs[14] - The Group continuously improved its operating cost management (OCM) mechanism to mitigate the impact of rising raw material costs on gross profit margin[53] - The Group's flexible supply chain strategy focuses on quality improvement, supply assurance, and cost reduction[55] - The company upgraded its production cost management system and optimized procurement strategies to mitigate rising raw material costs[16] Marketing and Consumer Engagement - The company emphasized omni-channel development, enhancing access to consumers through diversified channels, including delivery services and live-streaming sales[12] - Zhou Hei Ya's marketing strategies included rejuvenating marketing efforts and promoting new products to increase profitability[12] - The introduction of a national brand spokesperson in the first half of 2022 successfully attracted the attention of the new generation, boosting their purchasing power[16] - The content marketing center established in 2022 effectively reached core consumer groups across platforms like Douyin and Xiaohongshu, enhancing brand exposure[16] - The Group established a unified national marketing system to enhance brand image and consumer awareness[48] Product Innovation and Development - In 2022, the company launched a new product, crayfish balls, which contributed to sustained sales growth through innovative marketing and packaging strategies[16] - The focus on product diversity and innovation is expected to cater to evolving consumer preferences and drive future growth[16] - The Group expanded its product offerings in 2022 to include crayfish balls, vegetarian products, spiced products, and sweet chili products[50] Economic and Market Environment - Despite the challenges posed by the COVID-19 pandemic, Zhou Hei Ya reported a gradual improvement in the consumption environment and consumer willingness by the end of 2022[11] - The overall economic environment in China showed signs of stability and resilience, providing new development opportunities for consumer goods retail enterprises[11] - The Group anticipates a recovery in the consumption market in 2023, driven by improved consumer confidence and willingness to spend[19] - The complex external environment presents both challenges and new opportunities for the consumer goods industry, necessitating a focus on brand image and consumer connection[26] Management and Governance - The company was founded in 2002 and established its holding company in June 2006, focusing on leisure marinated products with approximately 20 years of industry experience[152] - The CEO has over 22 years of operational and management experience in the consumer goods sector, previously holding senior positions in multinational companies[152] - The company has a strong supply chain management led by an executive director with extensive experience in procurement and operations[152] - The leadership team includes members with significant experience in both domestic and international markets, enhancing the company's strategic capabilities[161][165] Employee and Incentive Programs - The organization expanded the scope of equity incentives in 2022, enhancing employee motivation and ensuring sustainable development[17] - The Company adopted a Restricted Share Unit Scheme on July 25, 2018, to incentivize Directors, senior management, and employees[135] - As of March 31, 2023, 208 selected persons had received RSUs representing 26,099,684 shares, which is 1.1% of the Company's issued shares[136] Risks and Compliance - Key risks include uncertainty in opening profitable new retail stores and expansion into new geographical markets[173] - Financial risks faced by the Group include foreign currency risk, credit risk, and liquidity risk[174] - The Group strictly complies with relevant employment laws and provides a safe working environment and competitive remuneration[178] - The Group has established long-term communication mechanisms with stakeholders to manage environmental and social regulatory risks[181]

Financial Performance - Total revenue for the year ended December 31, 2022, was RMB 2,343,353, a decrease of 18.3% from RMB 2,869,963 in 2021[2] - Gross profit for the same period was RMB 1,289,484, down 22.2% from RMB 1,658,393 in 2021[2] - Profit before tax decreased significantly by 87.9% to RMB 54,731 from RMB 450,990 in the previous year[2] - Net profit attributable to shareholders was RMB 25,283, a decline of 92.6% compared to RMB 342,424 in 2021[2] - In 2022, the total revenue was approximately RMB 1,848,258 thousand, a decrease of 17.3% compared to RMB 2,234,859 thousand in 2021[13] - The total comprehensive income for the year was RMB 77.99 million in 2022, a decrease of 75.6% from RMB 319.7 million in 2021[28] - The net profit for the year decreased by 92.6% to RMB 25.3 million, down from RMB 342.4 million in the previous year, resulting in a net profit margin drop from 11.9% to 1.0%[39] - Total comprehensive income fell by 75.6% to RMB 78.0 million, compared to RMB 319.7 million for the previous year[41] Revenue Sources - Revenue contribution from duck and duck by-products was RMB 1,812,346, accounting for 77.3% of total revenue[4] - Revenue from self-operated stores was RMB 1,155,446, representing 49.3% of total revenue, down from 57.3% in 2021[6] - Online channel revenue was RMB 417,366, which accounted for 17.8% of total revenue, down from 19.1% in the previous year[6] - Revenue from customer contracts for 2022 was RMB 2,343,353 thousand, a decrease of 18.3% from RMB 2,869,963 thousand in 2021[79] - Revenue from modified atmosphere packaging products was RMB 2,027,998 thousand in 2022, down from RMB 2,498,285 thousand in 2021, representing a decline of 18.8%[79] - Revenue from retail store franchise fees increased to RMB 33,608 thousand in 2022, up from RMB 27,601 thousand in 2021, reflecting a growth of 21.5%[79] Store Expansion and Operations - The total number of retail stores increased to 3,429 from 2,781 in the previous year[3] - The number of community stores reached 792 by the end of 2022, with a total sales revenue of approximately RMB 430 million, and the target is to exceed 1,300 community stores by the end of 2023[18] - The company plans to open around 1,000 new stores in 2023, continuing to optimize the store structure[17] - The community store model is being expanded nationwide, following successful pilot programs in Wuhan and other cities[18] - The company has initiated a project to enhance operational efficiency through a systematic approach to store inspections, employee training, and marketing execution[18] Marketing and Product Development - The group successfully launched a new product, the shrimp ball, which achieved a monthly sales volume exceeding 1 million boxes in 2022, addressing consumer pain points[21] - During the FIFA World Cup in 2022, the group conducted promotional activities that significantly increased consumer attention and purchases, leveraging partnerships with brands like KFC[22] - The group enhanced its marketing strategy by utilizing national brand ambassador Yang Chaoyue, which attracted a large number of followers and increased brand visibility[22] - The group expanded its product line to include new flavors and types, transitioning from promotion-driven to new product-driven growth strategies[21] Financial Position and Cash Flow - Cash and bank deposits amounted to approximately RMB 1,245.2 million, a decrease from RMB 2,101.3 million as of December 31, 2021[45] - The group’s net asset value as of December 31, 2022, was approximately RMB 4,088.3 million, down from RMB 4,210.3 million the previous year[44] - The net cash generated from operating activities decreased from RMB 539.8 million for the year ended December 31, 2021, to approximately RMB 467.6 million for the year ended December 31, 2022[54] - The net cash used in investing activities for the year ended December 31, 2022, was approximately RMB 1,044.4 million, mainly due to the purchase of structured deposits and other financial assets totaling RMB 4,389.3 million[54] - The net cash used in financing activities for the year ended December 31, 2022, was approximately RMB 1,318.3 million, primarily due to dividend payments of RMB 236.3 million and the repurchase of convertible bonds of RMB 886.5 million[55] Cost Management and Efficiency - The company faced significant cost pressure due to rising raw material prices and inflation, prompting continuous improvements in OCM (Operational Cost Management) to mitigate the impact on gross margin[23] - Cost of sales reduced by 13.0% from RMB 1,211.6 million in 2021 to RMB 1,053.9 million in 2022, attributed to decreased customer flow and lower material costs[30] - Selling and distribution expenses decreased by 14.2% from RMB 1,084.9 million in 2021 to RMB 930.5 million in 2022, primarily due to reduced rental costs during the pandemic[34] - The average inventory turnover days increased from 86.9 days for the year ended December 31, 2021, to 104.4 days for 2022, primarily due to production slowdowns caused by the pandemic and rising raw material prices[63] Governance and Compliance - The audit committee reviewed and discussed the annual performance for the year ended December 31, 2022, confirming the financial statements were consistent with the audited figures[128] - The company has complied with the corporate governance code as of December 31, 2022[126] - The company has adopted the standard code for securities trading by directors, ensuring compliance throughout the year[127] - The annual performance announcement is available on the Hong Kong Stock Exchange website and the company's website[129] Future Outlook - The company anticipates that the consumer market will gradually recover in 2023, despite short-term pressures on consumption growth[26] - The company plans to steadily advance high-quality store expansion and accelerate community consumption scene layout in 2023[26] - The company aims to optimize product structure and create a diversified product innovation system in the upcoming year[26] - The company will focus on integrating supply chain management to reduce costs and enhance efficiency against external risks[26]

Store Operations - In the first half of 2022, the Group had a total of 3,160 stores, including 1,342 self-operated stores and 1,818 franchised stores, covering 297 cities in 27 provinces, autonomous regions, and municipalities in China[12]. - As of June 30, 2022, the total number of stores reached 3,160, comprising 1,342 self-operated stores and 1,818 franchised stores, covering 297 cities across 27 provinces in China[14]. - The Group contracted with approximately 500 franchisees, with a total of 1,818 franchised stores across the country as of June 30, 2022[21]. - The geographic coverage of offline stores was improved, with balanced development between self-operated and franchised businesses[18]. Financial Performance - Revenue for the first half of 2022 was RMB 915,235,000, a decrease of 19.4% compared to RMB 1,136,145,000 in the same period of 2021[16]. - The Group's total revenue decreased by approximately 18.7% from RMB 1,453.0 million for the six months ended June 30, 2021, to RMB 1,181.1 million for the six months ended June 30, 2022[43]. - Profit for the period decreased to RMB 18.4 million, a decline of 92.0% compared to RMB 229.6 million for the same period in 2021[42]. - The net profit margin for the six months ended June 30, 2022, was 1.6%, down from 15.8% in the previous year[42]. - Total comprehensive income for the period amounted to RMB 37.9 million, compared to RMB 223.2 million for the same period in 2021, reflecting a decline of approximately 83%[49]. Market Trends and Consumer Behavior - The total retail sales of consumer goods in China showed a downward trend period-over-period, reflecting continued depression of consumer sentiment[7]. - The pandemic and global economic fluctuations have significantly impacted the consumer industry, leading to a profound change in consumption structure and preferences[8]. - The young generation has become the main consumer group, pursuing trendy, convenient, and cost-effective products[8]. - The shift in consumption mode and social isolation has caused continuous fluctuations in consumer traffic, resulting in lower-than-expected recovery[8]. Strategic Initiatives - The Group aims to explore new development areas based on consumer demands and optimize consumer experience to achieve sustainable growth[9]. - The Group is focusing on expanding its overall scale of existing channels and exploring more precise and segmented sales channels[9]. - The Group launched the "National Community Store Project" in early 2022, achieving a total of 561 community stores by June 30, 2022[20]. - The Group focused on exploring community store models to seek new market opportunities in the post-pandemic era[20]. Cost Management and Efficiency - The Group optimized its operating cost management system to address rising raw material costs due to the pandemic and global inflation, focusing on cost reduction and efficiency improvement[30][32]. - The Group's supply chain optimization efforts included dynamic management of logistics and warehouse distribution to reduce costs and improve efficiency[31][32]. - The Group's focus on organizational capacity enhancement included innovative training and the release of a "Development Manual for Retail Terminal Personnel" to improve management efficiency[34][36]. Revenue Sources and Contributions - The revenue from Internet O&O business accounted for 32.1% of the total interim revenue in 2022[22]. - Revenue contribution from Central China was RMB 488,835,000, accounting for 53.4% of total revenue[16]. - Sales derived from franchisees increased by approximately 39.9% from the corresponding period in 2021[44]. Economic Outlook - The international situation remains uncertain, contributing to a significant slowdown in global economic growth[7]. - The Group remains confident in long-term economic recovery and healthy domestic growth despite current global economic stagnation risks[37]. - The Group anticipates that the prolonged pandemic will adversely impact its operations and financial performance in the short run, but remains optimistic about long-term industry development[39]. Employee and Incentive Plans - The Group implemented a diversified employee incentive plan, awarding 26,792,953 ordinary shares to 212 selected individuals as of June 30, 2022, based on performance achievements[35][36]. - The Group had a total of 4,185 employees as of June 30, 2022, with approximately 61.4% in retail operations and sales[97]. Cash Flow and Financial Position - As of June 30, 2022, the Group's cash and bank balances were approximately RMB 1,142.5 million, down from RMB 2,101.3 million as of December 31, 2021[56]. - The Group's net assets decreased to RMB 4,030.8 million as of June 30, 2022, from RMB 4,210.3 million as of December 31, 2021, a decline of approximately 4.3%[53]. - For the six months ended June 30, 2022, net cash generated from operating activities was approximately RMB 321.9 million, a slight decrease from RMB 322.3 million in the same period of 2021[74]. Investment and Capital Expenditures - The total amount utilized for the construction and improvement of processing facilities was RMB 1,158.5 million, with a remaining balance of RMB 99.8 million as of June 30, 2022[67]. - The Group's capital expenditures amounted to RMB 111.9 million, primarily for the establishment and improvement of processing facilities[88]. Shareholder Information - The company proposed not to declare any interim dividend for the six months ended June 30, 2022, consistent with the previous year[189]. - The interests of Directors and the chief executive in the Company's shares were disclosed as required under the Securities and Futures Ordinance[111].