MORRIS HOME HOLDINGS LIMITED 慕容家居控股有限公司 （於開曼群島註冊成立之有限公司） （股份代號：1575） 茲 提 述 慕 容 家 居 控 股 有 限 公 司（「本公司」）就 本 集 團 截 至2023年12月31日止年度 的綜合業績而於2024年3月28日 刊 發 的 公 告（「該公告」）。除 另 有 界 定 外，本 公 告 所 用 詞 彙 與 該 公 告 所 界 定 者 具 有 相 同 涵 義。 承董事會命 慕容家居控股有限公司 主席兼執行董事 謝錦鵬 於 本 公 告 日 期，執 行 董 事 為 謝 錦 鵬 先 生 及 莊 子 毅 先 生；非 執 行 董 事 為 謝 學 勤 先 生 及 鄔 向 飛 女 士；而 獨 立 非 執 行 董 事 為 薛 永 恒 教 授、李 焯 芬 教 授、關 品 方 教 授 及 陳 建 花 女 士。 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 就 因 本 公 告 全 部 或 任 何 部 分 內 容 而 產 生 或 因 倚 賴 ...

Financial Performance - Revenue for the year ended December 31, 2023, increased by approximately 42.4% to approximately RMB 188.0 million, compared to RMB 132.0 million in 2022[2] - Gross profit for 2023 was approximately RMB 69.5 million, a significant increase from RMB 2.0 million in 2022[2] - Loss for the year decreased by approximately 87.1% to about RMB 26.1 million in 2023, down from RMB 202.6 million in 2022[2] - Basic loss per share improved to RMB 0.92 in 2023, compared to RMB 13.99 in 2022[12] - The total loss before tax for 2023 was RMB 26,130,000, significantly improved from a loss of RMB 203,418,000 in 2022[45] - The net loss for the group decreased by 87.1% to approximately RMB 26.1 million in 2023, down from RMB 202.6 million in 2022, mainly due to restructuring gains of approximately RMB 92.4 million[93] Dividends - The board of directors did not recommend any final dividend for the year ended December 31, 2023, consistent with 2022[2] - The group did not recommend any dividend payment for the year ending December 31, 2023, consistent with 2022[80] - The board of directors does not recommend the payment of a final dividend for the year ending December 31, 2023, maintaining the dividend at zero, consistent with the previous year[142] Assets and Liabilities - Total current assets decreased to RMB 240.9 million in 2023 from RMB 316.7 million in 2022[21] - Total current liabilities decreased to RMB 352.0 million in 2023 from RMB 437.0 million in 2022[24] - Non-current liabilities increased to RMB 84.5 million in 2023 from RMB 61.4 million in 2022[28] - As of December 31, 2023, the group's current liabilities and total liabilities were approximately RMB 111,024,000 and RMB 152,531,000, respectively, indicating significant uncertainty regarding the group's ability to continue as a going concern[37] - The total liabilities for 2023 were RMB 436,510,000, down from RMB 498,363,000 in 2022, a reduction of 12%[48] - As of December 31, 2023, the company's net current liabilities and total liabilities were approximately RMB 111,024,000 and RMB 152,531,000, respectively[127] Revenue Segments - Retail segment revenue for 2023 was RMB 58,644,000, down 17% from RMB 70,351,000 in 2022[45] - Production segment revenue for 2023 was RMB 129,331,000, up 109% from RMB 61,662,000 in 2022[45] - Total revenue from the sale of sand products and furniture reached RMB 187,967,000 in 2023, compared to RMB 131,725,000 in 2022, reflecting an increase of 42.6%[61] - Revenue from external customers in the United States increased to RMB 60,471,000 in 2023, up 41% from RMB 42,952,000 in 2022[54] - Revenue from external customers in Europe rose to RMB 50,012,000 in 2023, a significant increase from RMB 19,018,000 in 2022[54] Cost Management - The group is implementing cost control measures to achieve positive cash flow from operations[38] - Sales and distribution expenses rose by approximately 34.2% to RMB 48.7 million in 2023, driven by increased marketing and promotional expenditures[99] - Administrative expenses decreased by approximately 57.0% to RMB 64.9 million in 2023, primarily due to one-time severance and restructuring costs incurred in 2022[100] - The group’s total employee benefits expenses, excluding directors and key management personnel, decreased significantly from RMB 111,509,000 in 2022 to RMB 53,916,000 in 2023[71] Financing and Liquidity - The company has taken measures to alleviate liquidity pressure and improve its financial position[33] - The major shareholder has provided an unsecured loan of up to HKD 200,000,000 to support the group's ongoing operations, with approximately HKD 125,869,000 of this loan remaining undrawn as of December 31, 2023[37] - The group is actively seeking external financing to improve its working capital, liquidity, and cash flow situation[38] - The group is actively negotiating repayment arrangements with creditors to improve cash flow and is seeking additional financing options, including shareholder loans and bank borrowings[118] - The group has not utilized approximately HKD 125.9 million of the maximum unsecured loan facility of HKD 200 million provided by a major shareholder as of December 31, 2023[118] Restructuring and Compliance - The restructuring plan was approved by the court on August 5, 2022, and became effective on the same date, impacting the company's financial obligations[65] - The total liabilities under the restructuring plan amounted to RMB 292,290,000, with specific repayment terms outlined for creditors[66] - The independent auditor's report expressed a qualified opinion regarding the receivables and payables from related parties due to insufficient audit evidence[123] - The company has adopted the standards set out in the Listing Rules for directors' securities transactions and confirmed compliance during the reporting period[131] Market Expansion - The group expanded its market presence in the US and Europe, including countries such as the UK, France, Norway, Spain, and Ireland, to capture new customer segments[88] - The company plans to continue expanding its existing markets, including the United States, Europe, and mainland China, while operating under a light asset model to reduce operational pressure and risk[132] Employee and Operational Changes - The company employed 338 employees as of December 31, 2023, down from 350 employees as of December 31, 2022[128] - Total salary and related costs (excluding director remuneration) for 2023 amounted to approximately RMB 53.9 million, compared to RMB 111.5 million in 2022[128]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 就 因 本 公 告 全部或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責 任。 MORRIS HOME HOLDINGS LIMITED 慕容家居控股有限公司 （於開曼群島註冊成立之有限公司） （股份代號：1575） 茲 提 述 慕 容 家 居 控 股 有 限 公 司（「本公司」）就 委 任 獨 立 非 執 行 董 事 而 於2023年7 月5日 刊 發 的 公 告（「該公告」）英 文 版 本 及 本 公 司 截 至2023年6月30日止六個月的 中 期 報 告（「中期報告」）英 文 版 本。除 另 有 指 明 外，本 公 告 所 用 詞 彙 與 該 公 告 所 界 定 者 具 有 相 同 涵 義。 該 公 告 及 中 期 報 告 中 文 版 本 的 相 關 披 露 資 料 均 屬 正 確。 | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|- ...

Financial Performance - In the first half of 2023, Morris Home Holdings recorded a revenue growth of 65.7% due to the development of its own brand and exploration of retail channels in key markets such as China, the USA, and the UK[1]. - Revenue increased by approximately 65.7% to approximately RMB89.3 million for the six months ended 30 June 2023, compared to approximately RMB53.9 million in 2022[15]. - Gross profit recorded was approximately RMB25.6 million for the six months ended 30 June 2023, a turnaround from a gross loss of approximately RMB4.3 million in 2022[15]. - The Group recorded a loss of approximately RMB14.6 million for the six months ended 30 June 2023, significantly reduced from a loss of approximately RMB125.9 million in 2022[15]. - Basic loss per share was approximately RMB0.52 cents for the six months ended 30 June 2023, down from approximately RMB12.00 cents in 2022[15]. - Loss attributable to the owners of the company for the six months ended 30 June 2023 was RMB (13,797,000), a significant improvement from RMB (123,990,000) in the same period of 2022, representing a reduction of approximately 88.87%[34]. - Total comprehensive loss attributable to the owners of the company was RMB (8,645,000) for the six months ended 30 June 2023, compared to RMB (119,476,000) for the same period in 2022, indicating a decrease of about 92.75%[34]. - Basic and diluted loss per share attributable to ordinary equity holders of the company was (0.52) RMB for the six months ended 30 June 2023, a significant improvement from (12.00) RMB in the same period of 2022[34]. - The total comprehensive loss for the period was RMB 141,355,000, which includes an exchange difference gain of RMB 5,152,000[58]. Cost Control and Management - The company implemented strict cost control measures, resulting in a gross profit margin increase of 28.7%, turning a loss into a profit[1]. - The gross profit margin improved to 28.7% during the reporting period, reflecting effective cost control measures[19]. - The company is committed to strict cost control to ensure greater returns for shareholders and stakeholders[50]. - Administrative expenses decreased by approximately 82.2% from RMB 112.0 million for the six months ended June 30, 2022, to approximately RMB 19.9 million for the six months ended June 30, 2023[138]. - Finance costs increased by approximately 34.2% from RMB 3.8 million for the six months ended June 30, 2022, to approximately RMB 5.1 million for the six months ended June 30, 2023[138]. Management Changes and Strategy - New independent non-executive directors were appointed, bringing significant expertise and credibility to the company's management[1]. - The new management team and independent directors have led the Group in optimizing product offerings and operational transformations since 2022[22]. - The addition of a new management team and renowned independent non-executive directors (INEDs) is expected to enhance operational capabilities[50]. - Management anticipates a gradual recovery in performance following the completion of proposed share subscription matters[122]. - The management is committed to long-term growth and stability, focusing on nurturing relationships with major clients[122]. Market Presence and Expansion - The Group showcased its furniture and sofas at the High Point Market in the United States and the Shenzhen International Furniture Fair, expanding its global market presence[29]. - The Group plans to continue exploring the domestic sofa and furniture market in China and will participate in exhibitions and launch new products[129]. - The Group's strategies include cultivating proprietary brands and establishing a youthful and stylish sofa and furniture brand within the mid-market segment[129]. - The company is focusing on broadening income sources and cutting expenditures by exploring overseas markets and optimizing human resources[147]. - The company plans to continue its market expansion efforts in both domestic and international markets[147]. Financial Position and Liabilities - Total current assets as of 30 June 2023 were RMB 296,280,000, down from RMB 316,743,000 at the end of 2022[54]. - Total current liabilities decreased to RMB 393,180,000 from RMB 436,971,000, indicating better management of short-term obligations[54]. - The company reported a net current liabilities position of RMB (96,900,000), an improvement from RMB (120,228,000) at the end of 2022[54]. - Non-current liabilities increased to RMB 94,409,000 from RMB 61,392,000, primarily due to an increase in convertible loans and lease liabilities[56]. - As of June 30, 2023, the Group's interest-bearing bank and other borrowings amounted to approximately RMB 151.8 million, up from approximately RMB 69.2 million as of December 31, 2022[138]. Shareholder Information - The Board does not recommend the payment of any interim dividend for the six months ended 30 June 2023[15]. - The company issued new ordinary shares from placing, raising RMB 19,597,000, with transaction costs attributable to the issue amounting to RMB 236,000[58]. - As of June 30, 2023, the company held 75,812,000 ordinary shares in treasury, representing 2.76% of the shares in issue, with a nominal value of approximately RMB 8,992,000[38]. - As of June 30, 2023, Century Icon holds 1,300,038,000 shares, representing 47.27% of the company's issued shares[161]. - Morris Capital owns 666,500,000 shares, accounting for 24.24% of the company's issued shares[161]. Operational Challenges and Recovery - Looking forward, the Group anticipates challenges from persistent inflation, aggressive interest rate hikes, and geopolitical conflicts affecting consumer confidence[31]. - The company has demonstrated resilience in overcoming challenges posed by the U.S.-China trade tensions and temporary factory shutdowns in China[121]. - The overall operational disruptions have led to a strategic reassessment aimed at enhancing customer confidence and stabilizing future growth[122]. - The company is actively working to rebuild relationships with key clients and restore order volumes, which are gradually increasing[122]. - The company is engaged in discussions to resolve discrepancies with UK clients to ensure business operations resume smoothly[122].

Financial Performance - For the six months ended June 30, 2023, revenue increased by approximately 65.7% to approximately RMB 89.3 million, compared to RMB 53.9 million in the same period of 2022[2] - Gross profit for the same period was approximately RMB 25.6 million, a significant improvement from a gross loss of approximately RMB 4.3 million in 2022[2] - The company recorded a loss of approximately RMB 14.6 million for the six months ended June 30, 2023, compared to a loss of approximately RMB 125.9 million in the same period of 2022[2] - Basic loss per share for the period was approximately RMB 0.52, a substantial decrease from RMB 12.00 in 2022[2] - The group reported a loss before tax of RMB 14,634 thousand for the six months ended June 30, 2023, compared to a loss of RMB 125,895 thousand for the same period in 2022, showing an improvement in financial performance[19] - The net loss for the group during the reporting period was approximately RMB 14.6 million, a significant reduction from a net loss of approximately RMB 125.9 million in 2022, primarily due to increased revenue in the first half of 2023[29] - The basic and diluted loss per share for the six months ended June 30, 2023, was RMB (13,797) thousand, compared to RMB (123,990) thousand for the same period in 2022, indicating a reduction in losses[25] Assets and Liabilities - Total non-current assets as of June 30, 2023, were approximately RMB 49.95 million, slightly down from RMB 50.16 million as of December 31, 2022[9] - Current assets totaled approximately RMB 296.28 million as of June 30, 2023, compared to RMB 316.74 million at the end of 2022[9] - Current liabilities amounted to approximately RMB 393.18 million, a decrease from RMB 436.97 million at the end of 2022[9] - The company's total equity attributable to owners was approximately RMB (135.67) million as of June 30, 2023, compared to RMB (127.02) million at the end of 2022[11] - The total liabilities exceeded total assets by approximately RMB 141,355,000 as of June 30, 2023, compared to RMB 120,228,000 and RMB 131,459,000 on December 31, 2022[58] - Trade payables and notes payable decreased to approximately RMB 93.7 million as of June 30, 2023, down from approximately RMB 143.9 million as of December 31, 2022[47] Revenue Segmentation - The retail segment reported external sales of RMB 41,030 thousand for the six months ended June 30, 2023, compared to RMB 36,219 thousand for the same period in 2022, representing an increase of approximately 5.0%[19] - The production segment recorded internal sales of RMB 74,492 thousand for the six months ended June 30, 2023, compared to RMB 3,965 thousand for the same period in 2022, indicating a significant increase[19] - Revenue from external customers for the period ending June 30, 2023, was RMB 89,255 thousand, a 65.5% increase from RMB 53,949 thousand in the same period of 2022[84] - Revenue from the United States market significantly increased to RMB 39,053 thousand in 2023 from RMB 10,867 thousand in 2022, representing a growth of 259.5%[84] Expenses and Costs - The group's sales cost increased by approximately 9.3% to about RMB 63.7 million for the six months ended June 30, 2023, compared to approximately RMB 58.3 million for the same period in 2022, driven by the recovery of export business[34] - Administrative expenses decreased by approximately 82.2% to about RMB 19.9 million for the six months ended June 30, 2023, down from approximately RMB 112.0 million in 2022, mainly due to one-time severance payments related to the temporary shutdown of the Chinese factory[36] - Sales and distribution expenses increased by approximately 54.5% to about RMB 21.8 million for the six months ended June 30, 2023, compared to approximately RMB 14.1 million in 2022, attributed to increased export volume following the resumption of manufacturing activities in China[43] - The group's financing costs rose by approximately 34.2% to about RMB 5.1 million for the six months ended June 30, 2023, from approximately RMB 3.8 million in 2022, mainly due to increased interest on lease liabilities[44] Corporate Governance and Strategy - The board of directors did not recommend any interim dividend for the six months ended June 30, 2023, consistent with the previous year[2] - The board has reviewed the company's corporate governance practices and confirmed compliance with the corporate governance code during the reporting period[55] - The company plans to continue developing its own brand and focusing on the mid-range market for stylish sofas and furniture[51] - The group is actively negotiating with stakeholders for further financing options, including shareholder loans and new convertible bonds, to improve liquidity[59] - The group is taking measures to strengthen cost control to achieve positive cash flow from operations[123] - The group plans to continue exploring opportunities in overseas markets and domestic sales in China and Hong Kong to counteract economic weakness[136] Market Expansion - The group has established a flagship showroom and a self-operated retail store in mainland China, along with six self-operated retail stores and seven consignment points in Hong Kong, indicating ongoing market expansion efforts[31] - The group will continue to participate in exhibitions and launch new products to explore the domestic sofa and furniture market in China[137] Other Financial Metrics - The company has approximately RMB 33,000 thousand in restricted cash as of June 30, 2023, unchanged from December 31, 2022[109] - The company reported a foreign exchange gain of RMB 851 thousand for the six months ended June 30, 2023, compared to no gain in the previous year[92] - The company’s credit loss provision net amount was RMB 129 thousand for the period, compared to RMB 5,429 thousand in the previous year[89] - The company has no outstanding stock options as of June 30, 2023, with a total of 100,000,000 stock options available for grant under the stock option plan[49]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 就 因 本 公 告 全部或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責 任。 除 年 報 所 載 之 資 料 外，董 事 會 謹 此 向 本 公 司 股 東 及 潛 在 投 資 者 提 供 以 下 補 充 資 料。 有 關 截 至2022年12月31日止年度之年報之 補充公告 受限制股份獎勵計劃 計 劃 授 權（即99,000,000股 股 份）佔 本 公 司 於 年 報 日 期 已 發 行 股 份 的3.6%。 變動及狀況 承董事會命 慕容家居控股有限公司 主席兼執行董事 謝錦鵬 於 本 公 告 日 期，執 行 董 事 為 謝 錦 鵬 先 生、莊 子 毅 先 生 及 鄒 格 兵 先 生；非 執 行 董 事 為 謝 學 勤 先 生 及 鄔 向 飛 女 士；而 獨 立 非 執 行 董 事 為 薛 永 恒 教 授、李 焯 芬 教 授、關 品 方 教 授 及 陳 建 花 女 士。 MORRIS HOME HOLDINGS LIMI ...

Financial Reporting and Performance - The Group's financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, ensuring a true and fair view of the financial position[16]. - The Group reported significant uncertainties regarding its ability to continue as a going concern, highlighted by net loss and net current liabilities[16]. - The Group's financial performance and key financial indicators are detailed in the annual report, specifically on pages 6, 7-8, and 20-34[80]. - Gross profit decreased by approximately 98.0% to approximately RMB2.0 million in 2022, down from approximately RMB99.7 million in 2021[157]. - The company reported a loss of approximately RMB202.6 million for the year ended 31 December 2022, an increase of about 64.2% compared to a loss of approximately RMB123.4 million in 2021[157]. - Revenue decreased by approximately 73.8% to approximately RMB132.0 million in 2022 compared to approximately RMB502.9 million in 2021[171]. - Basic loss per share was approximately RMB13.99 cents in 2022, compared to approximately RMB13.15 cents in 2021[171]. - The Group did not recommend the payment of any dividends for the year ended December 31, 2022[110]. - The board did not recommend any dividend for the year ended December 31, 2022[171]. - The loss for the year increased by approximately 64.2% to approximately RMB 202.6 million in 2022, compared to RMB 123.4 million in 2021[199]. - Revenue for 2022 decreased by approximately 73.8% to approximately RMB 132.0 million, down from approximately RMB 502.9 million in 2021[199]. - Basic loss per share for 2022 was approximately RMB 13.99, compared to 13.15 in 2021[199]. Corporate Governance and Risk Management - An independent review of the Group's risk management and internal control systems was conducted during the reporting period to maintain high standards of corporate governance[46]. - The Group's risk management and internal control systems are designed to manage risks rather than eliminate them, providing reasonable assurance against material misstatement[45]. - The Board is responsible for reviewing the effectiveness of the Group's risk management and internal control systems at least annually[37]. - The Group's risk management and internal control systems have been reviewed and deemed adequate and effective by the Board and Audit Committee during the Reporting Period[69]. - The Audit Committee is chaired by an independent non-executive Director, ensuring oversight of financial reporting and compliance[5]. - The Group's internal control system aligns with the COSO framework to achieve operational effectiveness and compliance with laws[64]. - The Group's principal risks and uncertainties are outlined in the annual report, highlighting potential challenges[61]. - The Group's major risks and uncertainties are outlined in the annual report, specifically on pages 35-37[81]. Transparency and Communication - The total fees paid to external auditors for services provided during 2022 were disclosed, reflecting the Group's commitment to transparency[20]. - The Company maintains a high level of transparency through various communication channels, including the AGM and publication of annual reports[76]. - The Company has established communication channels with investors to update them on business developments and financial performance[76]. - The Group has adopted an inside information policy to enhance the handling of sensitive information and ensure timely public disclosures[49]. - Shareholders holding at least one-tenth of the paid-up capital have the right to requisition an extraordinary general meeting[72]. - The report on environmental, social, and governance aspects will be published simultaneously with the annual report on the Company's and Stock Exchange's websites[101]. - The Company has a dedicated investor relations personnel to address shareholder inquiries and maintain engagement[58]. Environmental Compliance and Sustainability - The Group complied with relevant environmental laws and regulations during 2022, ensuring adherence to applicable laws that significantly impact operations[62]. - The Group is committed to environmental sustainability and compliance with applicable laws and regulations, having adhered to significant laws affecting operations in 2022[81]. Business Strategy and Operations - The Group's subsidiaries are primarily engaged in the manufacturing and sale of sofas, sofa covers, and other furniture products[106]. - The company faced significant capital problems in 2022 but managed to resume business through the completion of placing and subscription of new shares[173]. - The company plans to operate under a light asset model to reduce operational pressure and risks in the future[177]. - The company aims to continue expanding its existing markets, including the United States, Europe, and Mainland China[177]. - The management team changes are expected to bring greater positive effects and possibilities for the company[177]. - The company is committed to maintaining relationships with customers and launching diversified high-quality products[173]. - The company has a vast domestic sales network and solid business foundation in the sofa export business[173].

Financial Performance - The company reported total revenue of RMB 132,013,000 for the year ended December 31, 2022, compared to RMB 502,932,000 in 2021, indicating a significant decline [2]. - The cost of sales was RMB 130,013,000 for 2022, down from RMB 403,276,000 in 2021, reflecting a reduction in operational costs [2]. - The net loss attributable to equity holders of the company was RMB 199,679,000 in 2022, compared to RMB 121,508,000 in 2021, representing an increase in losses [6]. - Basic loss per share attributable to ordinary equity holders was RMB 13.99 for 2022, compared to RMB 13.15 in 2021, indicating a worsening financial position [7]. - The total comprehensive loss for the year was RMB 195,464,000, up from RMB 126,108,000 in the previous year, highlighting increased overall losses [10]. - The company incurred a pre-tax loss of RMB 203,418,000 in 2022, compared to RMB 120,286,000 in 2021, showing a significant increase in operational losses [15]. Expenses and Costs - Administrative expenses rose to RMB 150,842,000 in 2022 from RMB 112,686,000 in 2021, indicating higher overhead costs [15]. - Financing costs decreased to RMB 7,501,000 in 2022 from RMB 22,468,000 in 2021, suggesting improved debt management [15]. Other Income - Other income and gains increased to RMB 34,574,000 in 2022 from RMB 23,894,000 in 2021, reflecting better performance in non-core activities [15]. Reporting and Compliance - The company plans to disclose the annual report based on the revised financial statements in accordance with listing rules [7].

Financial Performance - In 2022, the company's revenue decreased by approximately 73.8% to about RMB 132.0 million, compared to RMB 502.9 million in 2021[3]. - The gross profit for 2022 fell by approximately 98.0% to about RMB 2.0 million, down from RMB 99.7 million in 2021[3]. - The net loss for the year increased by approximately 64.2% to about RMB 202.6 million, compared to RMB 123.4 million in 2021[3]. - Basic loss per share for 2022 was approximately RMB 13.99, compared to RMB 13.15 in 2021[8]. - The group reported a total comprehensive loss attributable to owners of the company of RMB 206.5 million in 2022, compared to RMB 126.1 million in 2021[22]. - The company reported a total loss before tax of RMB 203,418,000 in 2022, compared to a loss of RMB 120,286,000 in 2021, indicating a worsening of approximately 69.1%[60]. - The company recorded a loss of RMB 20,632,000 in the retail segment for 2022, an improvement from a loss of RMB 27,583,000 in 2021[60]. - The company reported a significant decrease in revenue from major customers, with Customer 1 generating RMB 18,607,000 in 2022 compared to RMB 140,930,000 in 2021, a decline of approximately 86.8%[66]. - The company reported a significant increase in employee benefits expenses, totaling RMB 111,509 thousand in 2022, compared to RMB 79,831 thousand in 2021[52]. Assets and Liabilities - The group’s current liabilities and total liabilities as of December 31, 2022, were approximately RMB 120.2 million and RMB 131.5 million, respectively[15]. - Non-current assets increased significantly to RMB 50,161 thousand in 2022 from RMB 8,709 thousand in 2021, representing a growth of 476%[25]. - Current assets decreased to RMB 316,743 thousand in 2022 from RMB 366,173 thousand in 2021, a decline of 13.5%[25]. - Total liabilities increased to RMB 498,363 thousand in 2022 from RMB 426,053 thousand in 2021, reflecting a rise of 16.9%[40]. - The company's net current liabilities worsened to RMB (120,228) thousand in 2022 compared to RMB (47,876) thousand in 2021[25]. - The total equity of the company showed a negative balance of RMB (131,459) thousand in 2022, worsening from RMB (51,171) thousand in 2021[27]. Debt and Financing - The group is currently negotiating repayment arrangements with several creditors to address its debt situation[16]. - The restructuring plan for two indirect wholly-owned subsidiaries was approved by the Chinese court, allowing for an estimated 80% repayment of trade payables and other liabilities[16]. - The company plans to seek external funding to improve working capital and cash flow, including shareholder loans and bank borrowings[55]. - The company is actively negotiating repayment arrangements with several creditors to improve cash flow and working capital[126]. - The company aims to obtain external funding to enhance its liquidity and operational cash flow situation[127]. - The net proceeds from the second placement amounted to approximately HKD 23.71 million, which was fully utilized for debt repayment[160][176]. - The total salary and related costs for 2022 amounted to RMB 111.5 million, an increase from RMB 79.8 million in 2021[191]. Operational Challenges - The company is facing significant uncertainty regarding its ability to continue as a going concern, depending on its ability to meet future operational funding and financing needs[16]. - The group faced significant impacts from U.S.-China tensions and the COVID-19 pandemic, leading to a substantial decline in performance in the North American region compared to the previous year[90]. - The company acknowledges significant uncertainties regarding its ability to continue as a going concern, dependent on meeting future operational funding and financing needs[153]. Strategic Initiatives - The company is implementing measures to improve financial conditions and reduce liquidity pressure, including cost control strategies[31]. - The group focused on optimizing procurement processes and enhancing production efficiency to control costs while ensuring product quality and customer service stability[89]. - The company plans to continue expanding its existing markets, including the United States, Europe, and mainland China, while adopting a light asset model to reduce operational pressure and risk[133]. - The company is focusing on product design and R&D investments to enhance market competitiveness and meet diverse customer needs[112]. - The company has established six self-operated retail stores and seven consignment points in Hong Kong, introducing a one-stop decoration and furniture service[113]. Governance and Management - The board of directors did not recommend any dividend payment for the year ended December 31, 2022, consistent with the previous year[3]. - The board of directors has appointed a new chairman and CEO, ensuring no overlap in roles[183]. - The audit committee consists of independent non-executive directors, ensuring compliance with governance standards[186].

Financial Performance - In 2022, the company's revenue decreased by approximately 73.8% to about RMB 132.0 million, compared to RMB 502.9 million in 2021[7]. - The gross profit for 2022 fell by approximately 98.0% to about RMB 2.0 million, down from RMB 99.7 million in 2021[7]. - The net loss for the year increased by approximately 64.2% to about RMB 202.6 million, compared to RMB 123.4 million in 2021[7]. - Basic loss per share for 2022 was approximately RMB 13.99, compared to RMB 13.15 in 2021[7]. - The total comprehensive loss attributable to the owners of the company for the year was HKD 206,506,000, compared to HKD 126,108,000 in the previous year[29]. - The company reported a total loss before tax of RMB 203,418 thousand in 2022, compared to a loss of RMB 120,286 thousand in 2021, representing an increase in losses of approximately 69.1%[59]. - The basic loss per share for the company in 2022 was RMB 0.1399, compared to RMB 0.1315 in 2021, with a total loss attributable to ordinary equity holders of approximately RMB 199.7 million in 2022, up from RMB 121.5 million in 2021[143]. Assets and Liabilities - The total non-current assets increased to RMB 50.2 million in 2022 from RMB 8.7 million in 2021[5]. - Current assets decreased to RMB 316.7 million in 2022 from RMB 366.2 million in 2021[5]. - Current liabilities increased to RMB 437.0 million in 2022 from RMB 414.0 million in 2021[5]. - The net current liabilities amounted to RMB 120.2 million in 2022, compared to RMB 47.9 million in 2021[5]. - Total consolidated assets decreased to RMB 366,904 thousand in 2022 from RMB 374,882 thousand in 2021, a reduction of approximately 2.9%[43]. - Total liabilities increased to RMB 498,363 thousand in 2022 from RMB 426,053 thousand in 2021, reflecting an increase of about 16.9%[43]. Cash Flow and Financing - The group is actively seeking external funding to improve its working capital, liquidity, and cash flow situation[37]. - The group is in discussions with stakeholders to secure further financing, including shareholder loans and new convertible bonds, to enhance liquidity[37]. - The company reported a government subsidy of RMB 4,412,000 in 2022, compared to RMB 3,057,000 in 2021, indicating an increase of about 44.4%[67]. - The total financing costs decreased significantly to RMB 7,501,000 in 2022 from RMB 22,468,000 in 2021, a reduction of approximately 66.7%[67]. - The net proceeds from the second placement were allocated to debt repayment, with RMB 23.71 million used for this purpose[150]. - After the completion of the share subscription and third placement, a total of HKD 35.7 million was reallocated, with HKD 26.6 million for debt repayment and HKD 9.1 million for operational funding[153]. Operational Challenges and Restructuring - The company reported significant uncertainty regarding its ability to continue as a going concern due to its financial position[22]. - The group has implemented measures to strengthen cost control, aiming to achieve positive cash flow from operations[24]. - The group has developed a restructuring plan to address their debt situation, with an estimated 80% of trade payables expected to be settled[37]. - The restructuring plan has been approved by the Chinese court, extending the maturity of all interest-bearing bank loans to 2030 and reclassifying them as non-current liabilities[37]. - The group’s management acknowledges significant uncertainty regarding the ability to implement the plans and measures currently in progress[24]. Revenue Breakdown - Retail segment revenue for 2022 was RMB 70,351 thousand, a significant decrease from RMB 216,304 thousand in 2021, representing a decline of approximately 67.5%[59]. - Production segment revenue for 2022 was RMB 61,662 thousand, down from RMB 286,628 thousand in 2021, indicating a decline of about 78.5%[59]. - Revenue from external customers in China (including Hong Kong) decreased to RMB 65,764,000 in 2022 from RMB 71,869,000 in 2021, representing a decline of approximately 8.8%[64]. - Revenue from the United States was RMB 42,952,000 in 2022, with total revenue from all regions amounting to RMB 132,013,000, down from RMB 502,932,000 in 2021, indicating a significant decrease of about 73.8%[64]. Employee and Operational Costs - Employee benefits expenses (excluding directors and key management personnel remuneration) rose to RMB 111,509,000 in 2022 from RMB 79,831,000 in 2021, an increase of about 39.8%[68]. - Total salary and related costs (excluding director remuneration) for 2022 amounted to approximately RMB 111.5 million, compared to RMB 79.8 million in 2021, representing an increase of 39.9%[95]. - Administrative expenses increased by approximately 33.8% from RMB 112.7 million in 2021 to RMB 150.8 million in 2022, primarily due to redundancy costs related to factory shutdowns in China[115]. - Selling and distribution expenses decreased by approximately 46.5% from RMB 67.8 million in 2021 to RMB 36.3 million in 2022, mainly due to reduced exports following factory shutdowns[114]. Strategic Initiatives - The group is investing in product design and research and development to enhance market competitiveness and has developed a multi-tiered product line to meet diverse customer needs[119]. - The group aims to optimize procurement processes and improve production efficiency through automation to control production costs while ensuring product quality[128]. - The company plans to operate under a light asset model to reduce operational pressure and risks, while continuing to expand existing markets, including the US, Europe, and mainland China[147]. - The group continues to monitor foreign exchange risks closely, as most sales are denominated in USD while costs are incurred in RMB[112].