Store Expansion and Sales Growth - As of June 30, 2022, the total number of direct-sale and franchised stores exceeded 800, with 537 direct-sale stores and 267 franchised stores, a significant increase from approximately 700 as of December 31, 2021[24]. - For the six months ended June 30, 2022, the Group's total system sales increased by 13.4% to RMB1,230 million, up from RMB1,084.5 million for the same period in 2021[25]. - The Group's operational empowerment strategy has led to a notable increase in store numbers, reflecting growth in market presence[24]. - The number of members increased from approximately 16.0 million at the beginning of the year to approximately 20.0 million[34]. - Best Food's franchise partners expanded significantly, with multiple new stores opened in Jiangsu and other provinces[34]. Financial Performance - Best Food's revenue decreased by 27.6% from RMB 370.2 million in the first half of 2021 to RMB 268.1 million in the corresponding period of 2022[39]. - Revenue from restaurant operations fell by 36.5% from RMB 250.4 million in the first half of 2021 to RMB 159.0 million in the same period of 2022[39]. - Revenue from delivery business decreased by 9.6% from RMB 98.6 million in the first half of 2021 to RMB 89.1 million in the corresponding period of 2022[39]. - The Group recorded a loss for the period of approximately RMB107.3 million for the six months ended June 30, 2022, compared to a profit of RMB1.2 million for the six months ended June 30, 2021[53]. - The company reported a loss for the period of RMB 107.3 million in 2022, compared to a profit of RMB 1.2 million in 2021[58]. - Adjusted loss for the period was RMB 67.7 million, a significant decline from the adjusted profit of RMB 15.4 million in the previous year[58]. - EBITDA for the first half of 2022 was negative at RMB 22.7 million, down from RMB 99.6 million in the same period of 2021[65]. - The total comprehensive loss for the period was RMB 117,717,000, significantly down from a total comprehensive income of RMB 1,534,000 in the prior year[198]. - The basic and diluted loss per share attributable to equity holders of the company was RMB (6.39) for the six months ended June 30, 2022, compared to earnings of RMB 0.33 in the same period of 2021[198]. Operational Strategies and Adaptations - The Company is focusing on developing a digital-based and multi-brand food and beverage platform while ensuring sufficient cash flows and sustainable operations[23]. - Best Food is actively mitigating the impact of the COVID-19 pandemic on the catering industry through operational, digital, and investment empowerment[23]. - The Company has noted phased progress in enhancing its core capabilities despite the short-term pressures from the pandemic[23]. - The pandemic has significantly impacted the catering industry, prompting the Company to adapt its strategies accordingly[23]. - Best Food continues to explore new opportunities for expansion and improvement in its service offerings[23]. - The Company aims to leverage limited resources effectively to enhance operational capabilities and drive growth[23]. - The Company plans to focus on franchise business development, digital system promotion, operational efficiency improvement, and investment empowerment[76]. Cost Management and Expenses - Raw material used and changes in inventories of finished goods decreased by 25.9% from RMB149.3 million for the six months ended 30 June 2021 to RMB110.6 million for the corresponding period of 2022[45]. - Online platform service charges and delivery fees decreased by 17.1% from RMB21.1 million for the six months ended 30 June 2021 to RMB17.5 million for the corresponding period of 2022[45]. - Employee benefit expense decreased by 22.5% from RMB110.5 million for the six months ended 30 June 2021 to RMB85.6 million for the corresponding period of 2022[45]. - Depreciation of right-of-use assets decreased by 8.0% from RMB52.5 million for the six months ended 30 June 2021 to RMB48.3 million for the corresponding period of 2022[45]. - Depreciation and amortisation of other assets decreased by 34.8% from RMB20.7 million for the six months ended 30 June 2021 to RMB13.5 million for the corresponding period of 2022[48]. - Property rentals and other related expenses decreased by 34.5% from RMB13.9 million for the six months ended 30 June 2021 to RMB9.1 million for the corresponding period of 2022[48]. - Other expenses decreased by 25.5% from RMB31.8 million for the six months ended 30 June 2021 to RMB23.7 million for the corresponding period of 2022[48]. - Finance expenses remained unchanged at RMB23.0 million for both the six months ended 30 June 2021 and 2022[48]. Assets and Liabilities - As of June 30, 2022, the Group's total shareholders' equity was RMB239.2 million, down from RMB355.4 million as of December 31, 2021[76]. - The Group's current assets were RMB243.2 million, while current liabilities were RMB406.1 million, resulting in a current ratio of 0.60 as of June 30, 2022, compared to 0.69 as of December 31, 2021[76]. - Total assets decreased from RMB 1,520,296,000 as of December 31, 2021, to RMB 1,401,378,000 as of June 30, 2022, representing a decline of approximately 7.8%[200]. - Non-current assets decreased from RMB 1,229,349,000 to RMB 1,158,186,000, a reduction of about 5.8%[200]. - Current assets decreased from RMB 290,947,000 to RMB 243,192,000, reflecting a decline of approximately 16.4%[200]. - Cash and cash equivalents, including restricted cash, decreased from RMB 62,571,000 to RMB 28,086,000, a significant drop of about 55.1%[200]. - Trade and other receivables decreased by 3.3% from RMB 100.2 million as of December 31, 2021, to RMB 96.9 million as of June 30, 2022[70]. - Inventories decreased from RMB 35.2 million as of December 31, 2021, to RMB 30.3 million as of June 30, 2022, reflecting a slowdown in inventory turnover from 43 days to 54 days[70]. Share Capital and Corporate Governance - As of June 30, 2022, the company had 1,578,664,000 shares in issue[2]. - Sonic Tycoon Limited held 1,183,998,000 shares and had beneficial interest in convertible bonds amounting to HK$610,676,480, convertible into 517,522,440 shares at an initial conversion price of HK$1.18 per share[3]. - The company did not purchase, sell, or redeem any of its listed securities during the six months ended June 30, 2022[173]. - The company complied with the Corporate Governance Code throughout the reporting period[174]. - The unaudited interim results for the reporting period were reviewed by the audit committee, which includes all independent non-executive directors[176]. - All directors confirmed compliance with the Model Code for Securities Transactions throughout the reporting period[175]. Future Outlook and Growth Potential - The Directors believe there is still significant growth potential in the catering industry in China despite recent fluctuations[73]. - The company has been exploring business development through acquisitions and/or expansion of existing business, evaluating its financial position and resources for potential long-term funding[193].

Industry Recovery and Challenges - The food and beverage industry did not fully recover to pre-pandemic conditions in 2021, facing challenges from pandemic resurgence and oversupply[20]. - In the first quarter of 2022, the food and beverage industry is expected to face a reshuffle, presenting both challenges and opportunities for the Group[27]. - The performance of the Xinladao Group for the year ended December 31, 2021, was below management's forecast due to the impact of COVID-19[69]. Digital Transformation and Operational Efficiency - The Group is committed to transitioning towards a digital multi-brand operating platform to enhance operational and investment management capabilities[20]. - Digital operations improved efficiency and allowed the Group to better understand customer needs, leading to the development of favored products[20]. - Best Food has developed a one-stop smart cashier system and order-via-mobile-app system during 2021, enhancing operational efficiency[44]. - The Group aims to enhance its capabilities in investment management, operations, and digitalization to build a unique restaurant ecosystem platform[27]. - The company aims to enhance management and operational efficiency comprehensively through the development of a business data analysis system in 2022[42]. Franchise Development and Partnerships - The Group focused on developing a profitable franchise model and identified regional franchisees and real estate developers as partners[20]. - The franchise business strategy focuses on increasing channel development efficiency and establishing a franchise support system, with successful new product launches leading to satisfactory growth in single-store sales[35]. - Best Food plans to continue investing in refined management strategies, including customer-segmentation marketing and the development of an intelligent takeaway system in 2022[42]. - The franchise regions for Yujian Xiaomian have expanded to areas including Fujian, attracting employees to participate in the franchise business[41]. - The Group plans to expedite collaboration with capable regional franchisees to promote optimized store layouts[74]. Financial Performance and Revenue Growth - Revenue increased by 15.7% from RMB650.7 million in 2020 to RMB753.0 million in 2021, driven by the recovery of restaurant operations and increased delivery orders[48]. - Revenue from restaurant operations rose by 11.6% from RMB448.8 million in 2020 to RMB500.9 million in 2021, attributed to the easing of the COVID-19 pandemic[48]. - Delivery business revenue grew by 20.7% from RMB170.8 million in 2020 to RMB206.1 million in 2021, mainly due to an increase in the number of delivery orders[48]. - Raw material used and changes in inventories increased by 15.9% from RMB248.4 million in 2020 to RMB288.0 million in 2021, reflecting the recovery of restaurant operations[46]. Cost and Expense Management - Employee benefit expenses increased by 8.8% from RMB200.2 million in 2020 to RMB217.9 million in 2021, primarily due to increased staff working hours[53]. - Property rentals and other related expenses surged by 236.5% from RMB9.6 million in 2020 to RMB32.3 million in 2021, as a percentage of revenue increased from 1.5% to 4.3%[55]. - Other expenses rose by 24.1% from RMB77.2 million in 2020 to RMB95.8 million in 2021, reflecting the resumption of operations[56]. Losses and Impairments - The Group recorded a loss attributable to equity holders of approximately RMB 639.6 million for the year ended December 31, 2021, compared to a loss of RMB 140.9 million for the year ended December 31, 2020[61]. - Goodwill decreased by 92.2% from RMB 580.9 million as of December 31, 2020, to RMB 45.5 million as of December 31, 2021, primarily due to an impairment loss of RMB 535.4 million recognized in 2021[66]. - As of December 31, 2021, the Group recorded an impairment loss of goodwill and trademark amounting to RMB535 million and RMB31 million respectively[71]. Governance and Compliance - The Company has complied with the Corporate Governance Code throughout the year ended December 31, 2021[102]. - The Board consists of three executive Directors and three independent non-executive Directors, with independent Directors representing more than one-third of the Board[107]. - The Audit Committee, established in 2011, consists of three independent non-executive directors and meets regularly to review the Group's financial reporting and internal controls[121]. - The Company ensures that all Directors have full and timely access to information and can seek independent professional advice at the Company's expense[110]. Risk Management and Internal Controls - The system of risk management and internal controls is designed to assist the Group in identifying and managing significant risks while ensuring compliance with relevant laws and regulations[167]. - The Board is responsible for reviewing the effectiveness of the risk management and internal controls system to safeguard the interests of Shareholders[168]. - The Group has established an internal audit function to continuously review the effectiveness of the risk management and internal control systems[173]. Shareholder Engagement and Dividend Policy - The Company has adopted a dividend policy that allows for the distribution of dividends based on various factors including financial performance, capital requirements, and liquidity position[182]. - The annual general meeting serves as a platform for shareholders to raise comments and exchange views with the Board[189]. - Shareholders can requisition an extraordinary general meeting if they hold not less than one-tenth of the paid-up capital with voting rights[184]. Management Team and Experience - Mr. Wang has been the CEO since August 26, 2019, focusing on investments in the consumer and retail sector for over 18 years[196]. - The management team includes professionals with advanced degrees from prestigious institutions, enhancing the company's strategic capabilities[195][200]. - The company emphasizes investment in fast-moving consumer goods (FMCG) and catering sectors, indicating a strategic focus on these areas[196].

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