Revenue and Sales Performance - Jelly product sales reached approximately RMB 564.8 million, a year-on-year increase of about 19.4%, accounting for 59.0% of total revenue[1] - Puff product sales amounted to approximately RMB 265.1 million, a year-on-year increase of about 17.6%, representing 27.7% of total revenue[3] - Seasoning product sales were approximately RMB 73.6 million, a year-on-year decrease of about 11.9%, accounting for 7.7% of total revenue[4] - Sales of candy and other products were approximately RMB 54.0 million, a year-on-year decrease of about 31.1%, representing 5.6% of total revenue[7] - The group's overall sales recorded continuous growth over the past three years, with revenue in the fiscal year 2022 increasing by 11.3% year-on-year[22] - Revenue for the fiscal year 2022 reached RMB 957,569 thousand, representing an increase of 11.3% compared to RMB 860,254 thousand in 2021[59] Gross Profit and Margins - The gross profit for jelly products was approximately RMB 157.6 million, up about 21.1%, with a gross margin of 27.9%, an increase of 0.4 percentage points year-on-year[1] - The gross profit for puff products was approximately RMB 66.6 million, up about 23.8%, with a gross margin of 25.1%, an increase of 1.2 percentage points year-on-year[3] - The gross profit for seasoning products was approximately RMB 19.0 million, down about 27.8%, with a gross margin of 25.8%, a decrease of 5.7 percentage points year-on-year[4] - The gross margin for candy and other products improved to 7.6%, an increase of 2.2 percentage points year-on-year[7] - Gross profit for the reporting period was approximately RMB 247.3 million, up by RMB 33.0 million or 15.4% compared to RMB 214.3 million in the previous year, with a gross margin of 25.8%[26] - Gross profit for the fiscal year 2022 was approximately RMB 247.3 million, up 15.4% from RMB 214.3 million in 2021, with a gross margin increase of 0.9 percentage points to 25.8%[59] Expenses and Losses - Distribution and selling expenses were approximately RMB 139.6 million, a year-on-year increase of about 1.1%, accounting for 14.6% of total revenue[8] - Administrative expenses were approximately RMB 122.7 million, a year-on-year decrease of about 9.6%, representing 12.8% of total revenue[9] - The net loss attributable to shareholders for the fiscal year 2022 was approximately RMB 1.4 million, significantly reduced from RMB 80.8 million in the previous year, marking a decrease of RMB 79.4 million[26] - The company reported a net loss attributable to shareholders of approximately RMB 1.4 million for the fiscal year 2022, significantly reduced from a net loss of RMB 80.8 million in 2021, a decrease of RMB 79.4 million[53] - The company reported a net loss of RMB 1,768 thousand for the year, significantly improved from a net loss of RMB 80,897 thousand in 2021[143] Operational Efficiency and Management - The group has successfully optimized and upgraded packaging for key products to improve brand visibility and market share[15] - The group reduced low-margin product sales through e-commerce channels, leading to a decrease in overall losses by approximately RMB 13.7 million[24] - The group aims to enhance internal management processes and invest in talent development and information management systems to improve operational efficiency and core competitiveness[119] - The inventory turnover period improved to 19 days from 23 days in the previous year, indicating better inventory management[60] - The accounts receivable turnover period decreased to 2 days from 3 days, reflecting improved collection efficiency[60] Strategic Initiatives and Future Plans - The group plans to continue expanding its product offerings in the snack category, including candies and chocolates, to meet the growing consumer demand for healthy snacks[13] - The group aims to enhance brand exposure through social media platforms and targeted marketing strategies, particularly focusing on young consumer demographics[19] - The group is committed to increasing the number of retail points and expanding sales in surrounding areas of new production bases to drive revenue growth[15] - The group anticipates that the overall consumer spending in China will gradually recover as the impact of COVID-19 diminishes[41] - The group plans to seek investment opportunities in fast-growing consumer goods companies that can synergize with its business[119] Financial Position and Assets - Total assets as of December 31, 2022, amounted to RMB 2,056,733 thousand, reflecting a growth of 7.3% from RMB 1,916,728 thousand in 2021[60] - The net cash position decreased by 19.9% to RMB 274,115 thousand from RMB 342,307 thousand in the previous year[60] - The company maintained a net current asset position of RMB 91,240 thousand, slightly down by 0.5% from RMB 91,669 thousand in 2021[60] - The group completed the development and construction of a new production base in Xiantao, Hubei Province, which replaced the existing facility, enhancing production capacity and environmental efficiency[53] - The group had approximately 2,600 employees as of December 31, 2022, a decrease from 2,700 in 2021[81] Shareholder and Investment Information - Major shareholders include Sure Wonder Limited with a 54.44% stake and Tianli Investment Limited with a 6.05% stake as of December 31, 2022[85] - The total number of share options granted under the plan as of December 31, 2022, was 32,639,655, with an unexercised option count of 25,469,655[126] - The group has no significant contingent liabilities as of December 31, 2022[99] - The company did not recommend a final dividend for the year ended December 31, 2022, consistent with the previous year[195] Market and Industry Outlook - The company believes that the leisure food industry in China will continue to develop, driven by overall economic growth and rising consumer demand[48] - The company is focused on enhancing product quality and market reputation as part of its strategic initiatives[147] - The company continues to focus on the manufacturing, distribution, and sale of food and snack products in China, which remains its core business[172]

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 分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 Qinqin Foodstuffs Group (Cayman) Company Limited 親親食品集團（開曼）股份有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1583） 截至二零二二年十二月三十一日止財政年度之全年業績公告 財務摘要 關鍵財務表現及比率 截至十二月三十一日止年度 二零二二年 二零二一年 變幅 人民幣千元 人民幣千元 收入 957,569 860,254 11.3% 毛利 247,317 214,343 15.4% 毛利率 25.8% 24.9% 0.9百分點 扣除利息、稅項、折舊及 攤銷前盈利(1) 76,861 7,750 891.8% 本公司股東應佔虧損 (1,387) (80,841) -98.3% 每股虧損 — 基本 人民幣(0.002)元 人民幣(0.107)元 ...

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 531,529 thousand, representing a 5.1% increase from RMB 505,620 thousand in the same period of 2021[18]. - Gross profit increased by 10.7% to RMB 143,635 thousand, with a gross margin of 27.0%, up from 25.7% in the previous year[18]. - Profit attributable to shareholders was RMB 4,626 thousand, a turnaround from a loss of RMB 8,653 thousand in the prior year, marking a 1.5 times improvement[18]. - Operating profit significantly increased to RMB 13,088 thousand from RMB 273 thousand year-on-year[32]. - Net profit for the period was RMB 4,487 thousand, a turnaround from a loss of RMB 8,653 thousand in the previous year[34]. - Basic and diluted earnings per share for the period were RMB 0.006, compared to a loss per share of RMB 0.011 in the prior year[32]. - The total comprehensive income for the six months ended June 30, 2022, was RMB 4,604 thousand, compared to a loss of RMB 8,653 thousand for the same period in 2021, indicating a turnaround in performance[44]. Assets and Liabilities - The company's total assets decreased by 6.9% to RMB 1,784,307 thousand from RMB 1,916,728 thousand as of December 31, 2021[18]. - Total assets as of June 30, 2022, were RMB 1,784,307 thousand, down from RMB 1,916,728 thousand at the end of 2021[36]. - Total liabilities decreased to RMB 510,810 thousand from RMB 648,821 thousand, showing a reduction in financial obligations[39]. - As of June 30, 2022, the total liabilities amounted to RMB 464,821 thousand, with current liabilities of RMB 456,037 thousand[64]. - The company’s retained earnings as of June 30, 2022, were RMB 507,999 thousand, a slight increase from RMB 576,706 thousand as of June 30, 2021, indicating a decrease of approximately 11.9%[44]. Cash Flow and Financial Position - Net cash position declined by 17.8% to RMB 281,455 thousand compared to RMB 342,307 thousand at the end of 2021[18]. - Cash and bank balances decreased to RMB 331,255 thousand from RMB 439,671 thousand, indicating a liquidity contraction[36]. - For the six months ended June 30, 2022, the company reported a net cash generated from operating activities of RMB 119,961 thousand, a significant increase from RMB 7,296 thousand in the same period of 2021, representing a growth of approximately 1,546%[46]. - The company incurred a cash outflow of RMB 194,086 thousand for the purchase of property, plant, and equipment during the first half of 2022, slightly higher than RMB 188,443 thousand in the previous year[46]. - The company’s financing activities resulted in a net cash outflow of RMB 47,564 thousand for the first half of 2022, contrasting with a net cash inflow of RMB 31,926 thousand in the same period of 2021[46]. Inventory and Receivables Management - Inventory turnover period improved to 15 days from 23 days, indicating better inventory management[18]. - Accounts receivable turnover period improved to 2 days from 3 days, reflecting enhanced collection efficiency[18]. - Inventory levels decreased to RMB 105,881 thousand from RMB 157,695 thousand, indicating improved inventory management[36]. - The net value of accounts receivable as of June 30, 2022, was RMB 9,063,000, an increase from RMB 5,153,000 as of December 31, 2021[107]. Market and Product Development - There is no mention of new products, technologies, market expansion, or mergers and acquisitions in the available information[18]. - The group has focused on enhancing distribution channel management and retail terminal management to drive overall sales growth[143]. - New product launches, including higher-margin items, have been introduced to offset rising production costs[144]. - The company plans to expand its distribution channels to include convenience stores, campus stores, and gas stations, while reducing low-margin product sales in e-commerce[159]. - The company aims to leverage social media platforms to engage with younger consumers and enhance brand visibility through targeted marketing strategies[158]. Employee and Corporate Governance - The group had approximately 2,600 employees, a decrease from 2,700 employees as of December 31, 2021[173]. - Total employee benefits expenses amounted to RMB 110.7 million for the review period, compared to RMB 104.3 million in the first half of 2021[173]. - The board of directors confirmed compliance with the corporate governance code during the six months ended June 30, 2022[195]. - The company has maintained high standards of corporate governance to manage business risks and enhance transparency[195]. Risk Management - The company has not made any changes to its risk management policies since the end of 2021[61]. - The company’s financial risk management includes market risk, credit risk, and liquidity risk, with specific focus on cash flow interest rate risk and foreign exchange risk[60]. - The group focuses on maintaining foreign exchange risk at an acceptable level by closely monitoring HKD and USD exchange rates[176].

Financial Performance - The company's revenue for the year ended December 31, 2021, was RMB 860,254 thousand, representing an increase of 8.5% compared to RMB 792,829 thousand in 2020[12]. - Gross profit decreased to RMB 214,343 thousand, down 14.6% from RMB 251,122 thousand in the previous year, resulting in a gross margin of 24.9%[12]. - The net loss attributable to shareholders was RMB 7,750 thousand, a significant decline of 86.5% from a profit of RMB 57,421 thousand in 2020[12]. - The total assets of the company increased by 4.0% to RMB 1,916,728 thousand from RMB 1,842,928 thousand in 2020[12]. - The company reported a significant decrease in net cash position, which fell by 46.6% to RMB 342,307 thousand from RMB 640,819 thousand in the previous year[12]. - The return on equity for the year was -6.4%, a decline of 7.7 percentage points from 1.3% in 2020[12]. - The group recorded a loss attributable to shareholders of approximately RMB 80.8 million in 2021, compared to a net profit of approximately RMB 17.7 million in 2020[31]. - The group recorded a net loss of approximately RMB 70.2 million in 2021, a decrease from a net income of RMB 39.4 million in 2020[35]. - The group maintains a strong financial position with cash and bank balances of RMB 439.7 million as of December 31, 2021, down from RMB 711.0 million in 2020[62]. - The group's net current assets were RMB 91.7 million as of December 31, 2021, a decrease from RMB 492.6 million in 2020, with a current ratio of 1.1 times[62]. - The total equity of the group was RMB 1,267.9 million as of December 31, 2021, a decrease of approximately 5.1% from RMB 1,336.0 million in 2020[62]. Production and Capacity Expansion - The company completed the construction of four new production bases in various regions of mainland China, enhancing production capacity and efficiency[20]. - The company has invested approximately RMB 354.0 million in new production facilities across four regions in China to enhance production capacity and efficiency[56]. - The new production bases, which began operations in late 2020 and early 2021, recorded a loss of approximately RMB 38.8 million in 2021, impacting the group's net profit by about RMB 26.4 million[31]. - The group anticipates that as new production bases achieve economies of scale, overall production capacity, product quality, and efficiency will improve, benefiting long-term performance[23]. Product Development and Innovation - The company continues to focus on product development and innovation to drive growth in the leisure food industry amidst changing consumer patterns[20]. - The company plans to enhance its product development capabilities by investing in innovative product research and development, focusing on high-quality, natural, and nutritious products[48]. - The company aims to promote new jelly products targeting young mothers and children, including "Lactobacillus Jelly" and "Little Q Pudding," to drive growth in the jelly product segment[48]. - The group aims to expand its product portfolio and drive product innovation to meet changing consumer preferences, while strengthening its distribution network in China[23]. - The group aims to enhance product quality and optimize product mix through continuous product innovation to capture new opportunities from consumer upgrades[59]. Sales and Market Performance - The group's total sales revenue increased by 8.5% from RMB 792.8 million in 2020 to RMB 860.3 million in 2021, primarily due to growth in product sales and adjustments in product structure and sales strategy[31]. - In 2021, the group's jelly product sales amounted to approximately RMB 473.0 million, a year-on-year increase of 12.3%, accounting for 55.0% of total revenue[36]. - The group's puffed product sales reached approximately RMB 225.4 million in 2021, a year-on-year increase of 3.5%, representing 26.2% of total revenue[39]. - The group's seasoning product sales were approximately RMB 83.5 million in 2021, an increase of 11.7% year-on-year, accounting for 9.7% of total revenue[40]. - The group's candy and other products sales were approximately RMB 78.4 million in 2021, a year-on-year decrease of 1.0%, representing 9.1% of total revenue[43]. Cost Management and Expenses - The group recorded a foreign exchange loss of RMB 2.5 million due to the depreciation of HKD and USD against RMB, compared to a loss of RMB 12.2 million in the previous year[71]. - The group's distribution and selling expenses were approximately RMB 138.1 million in 2021, a year-on-year decrease of 4.9%[44]. - Administrative expenses increased by 34.3% year-on-year to approximately RMB 135.7 million in 2021, accounting for 15.8% of total revenue[45]. - Employee benefits expenses totaled approximately RMB 203.6 million for the year, an increase from RMB 155.2 million in 2020, due to increased personnel and wage adjustments[70]. Corporate Governance - The company has a strong management team with over 31 years of experience in food production and operations, contributing to its overall development[87]. - The independent non-executive directors bring diverse expertise, including financial management and legal experience, enhancing corporate governance[89][91][92][93]. - The company is committed to corporate governance, as evidenced by the composition of its board and the experience of its directors[89][91]. - The board consists of 12 members, including 3 executive directors and 4 independent non-executive directors, ensuring a balance of expertise and governance[108]. - The audit committee, composed entirely of independent non-executive directors, has been established to oversee financial reporting and compliance[119]. - The company has adopted a board diversity policy, emphasizing the importance of diverse skills, experience, and independence among board members[118]. Environmental, Social, and Governance (ESG) Initiatives - The company is committed to sustainable development and social responsibility, aiming to create a harmonious enterprise[150]. - The company invested approximately RMB 10 million in 2021 to enhance environmental protection equipment at its new production base, aiming to improve environmental efficiency and comply with national standards[168]. - The company has implemented real-time monitoring of wastewater discharge to ensure compliance with national environmental regulations[175]. - The company emphasizes training for environmental management personnel to enhance their professional skills and ensure compliance with environmental standards[172]. - The company has adopted advanced technologies for odor gas treatment, including fluorocarbon fiber membrane collection systems, to minimize environmental impact[171]. - The company’s ESG strategy is integrated with its business strategy to enhance corporate responsibility competitiveness[152]. Future Outlook and Strategic Plans - The company provided guidance for the next fiscal year, projecting revenue growth of A% and an expected EBITDA margin of B%[99]. - The company is considering strategic acquisitions to bolster its market position, with potential targets identified in the H sector[99]. - The company is focused on long-term business development through investments in new products, e-commerce, information management systems, and new production facilities[23]. - The company is seeking investment opportunities in fast-growing consumer goods companies that can synergize with its business[59].

Financial Performance - Revenue for the six months ended June 30, 2021, was RMB 505,620,000, representing a 13.5% increase from RMB 445,498,000 in 2020[15] - The company reported a loss attributable to shareholders of RMB 8,653,000, a decline of 117.2% compared to a profit of RMB 50,255,000 in 2020[15] - Operating profit significantly decreased to RMB 273,000, down 99.4% from RMB 49,377,000 in the previous year[15] - Gross profit decreased to RMB 129,774 thousand, down 15.7% from RMB 154,065 thousand in the previous year[25] - The gross profit margin decreased to 25.7%, down from 34.6% in 2020, reflecting an 8.9 percentage point decline[15] - The company reported a net loss of RMB 8,653 thousand for the six months ended June 30, 2021, compared to a profit of RMB 50,255 thousand for the same period in 2020[36] - The basic loss per share for the six months ended June 30, 2021, was RMB (0.011), down from RMB 0.074 in the previous year, indicating a negative performance shift[91] Cash Flow and Liquidity - Cash and bank balances decreased by 25.1% to RMB 532,366,000 from RMB 711,018,000 at the end of 2020[15] - Cash generated from operating activities for the six months ended June 30, 2021, was RMB 22,379 thousand, a decrease of 73.8% from RMB 85,564 thousand in 2020[39] - The current ratio dropped to 1.9 from 3.6, indicating a decline in liquidity[15] - As of June 30, 2021, cash and cash equivalents decreased to RMB 314,643 thousand from RMB 500,642 thousand at the end of the previous year, reflecting a decline of 37.1%[39] - The company maintained a net cash position with cash and bank balances of RMB 532.4 million, down from RMB 711.0 million as of December 31, 2020[167] Assets and Liabilities - Total assets as of June 30, 2021, were RMB 1,760,512 thousand, down from RMB 1,842,928 thousand at the end of 2020[30] - Total liabilities decreased to RMB 422,153 thousand from RMB 506,970 thousand at the end of 2020[32] - The group reported a total liability of RMB 287,447 thousand as of June 30, 2021, with current liabilities amounting to RMB 278,663 thousand[57] - The company's property, plant, and equipment increased to RMB 468,493,000 as of June 30, 2021, from RMB 327,504,000 a year earlier, showing growth in fixed assets[96] Investments and Expenditures - The company incurred a total of RMB 188,443 thousand in purchases of property, machinery, and equipment during the first half of 2021, significantly higher than RMB 52,919 thousand in the same period of 2020[39] - The group invested approximately RMB 164.8 million in new production facilities and improvements in the first half of 2021 to enhance production capacity and efficiency[161] - The company received government grants amounting to RMB 10,737 thousand during the period, compared to RMB 7,417 thousand in the previous year[82] Revenue Breakdown - For the six months ended June 30, 2021, total revenue reached RMB 505,620 thousand, with jelly products contributing RMB 314,601 thousand, puffed foods RMB 108,542 thousand, seasoning products RMB 43,438 thousand, and candy and other products RMB 39,039 thousand[69] - Sales of jelly products reached approximately RMB 314.6 million, a year-on-year increase of 13.7%, representing 62.2% of the group's total revenue[145] - Sales of puffed products were approximately RMB 108.5 million, a decline of 9.0% year-on-year, accounting for 21.5% of total revenue[148] - Sales of seasoning products increased by 20.7% year-on-year to approximately RMB 43.4 million, representing 8.6% of total revenue[149] - Sales of candy and other products surged to approximately RMB 39.0 million, a 1.9 times increase year-on-year, accounting for 7.7% of total revenue[151] Employee and Management Costs - The total employee benefits expense for the review period was approximately RMB 104.3 million, an increase from RMB 79.8 million in the same period last year, primarily due to an increase in personnel and salary adjustments[174] - The total remuneration for key management personnel was approximately RMB 2,163,000 in the first half of 2021, compared to RMB 1,951,000 in 2020[135] Market and Strategic Initiatives - The company plans to continue expanding its market presence and investing in new product development to drive future growth[40] - The group aims to increase the proportion of high-margin products in its seasoning product line while expanding its market presence in both the restaurant and household sectors[156] - The group plans to strengthen its e-commerce marketing efforts to achieve sales growth and increase market share, despite facing net losses in the e-commerce segment due to promotional activities[159] - The company aims to adapt to changing consumer demands and habits by continuously innovating and improving product quality[141] Shareholding and Corporate Governance - The board did not declare an interim dividend for the six months ended June 30, 2021, consistent with the previous year[176] - Mr. Xu Qingliu holds 375,559,535 shares, representing 49.74% of the company's equity[180] - The shareholding structure indicates significant control by a few major shareholders, particularly Mr. Xu Qingliu and his associated entities[184] - The company has adhered to all provisions of the corporate governance code during the six months ended June 30, 2021, except for a temporary overlap in the roles of Chairman and CEO prior to the appointment of a new CEO[192]

Overview [Company Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides core company information including basic registration details, board members, principal office address, listing venue, legal advisors, and auditors - Mr. Xu Qingliu serves as the Chairman, and Mr. Huang Weiliang is the Chief Financial Officer. The company is registered in the Cayman Islands and listed on the Hong Kong Stock Exchange with stock code 1583[5](index=5&type=chunk) [Financial Highlights](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) In FY2020, the company's revenue increased by 14.8% year-on-year, but operating profit and profit attributable to shareholders significantly declined by 68.1% and 78.2% respectively. Key financial ratios indicate a 3.7 percentage point decrease in gross profit margin, a significant reduction in return on equity, and a halved current ratio, reflecting weakened profitability and short-term solvency despite revenue growth Consolidated Income Statement Highlights | Indicator | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Revenue | 792,829 RMB thousands | 690,852 RMB thousands | 14.8% | | Operating Profit | 24,452 RMB thousands | 76,618 RMB thousands | -68.1% | | Profit Attributable to Company Shareholders | 17,660 RMB thousands | 81,187 RMB thousands | -78.2% | | Basic Earnings Per Share | RMB 0.026 | RMB 0.125 | -79.2% | Consolidated Balance Sheet Highlights | Indicator | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 711,018 RMB thousands | 732,033 RMB thousands | -2.9% | | Bank Borrowings | 70,199 RMB thousands | 0 | 100% | | Net Current Assets | 492,577 RMB thousands | 661,494 RMB thousands | -25.5% | | Net Assets | 1,335,958 RMB thousands | 1,146,760 RMB thousands | 16.5% | Key Financial Ratios | Indicator | 2020 | 2019 | Change (percentage points) | | :--- | :--- | :--- | :--- | | Gross Profit Margin | 31.7% | 35.4% | -3.7 | | Return on Equity | 1.3% | 7.1% | -5.8 | | Current Ratio (times) | 2.0 | 4.1 | -2.1 | [Chairman's Statement](index=5&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A) The Chairman's Statement highlights a 14.8% revenue growth in 2020 despite pandemic challenges, primarily driven by a 5.8-fold surge in e-commerce business. However, consolidated net profit significantly declined due to a one-off asset disposal gain in 2019, current year exchange losses, and promotional activities to expand e-commerce market share, while progress in new product launches, production base construction, and strategic investments is affirmed with confidence in future development - 2020 revenue increased by **14.8% year-on-year** to **RMB 792.8 million**, primarily driven by e-commerce business, which grew **5.8 times** and accounted for **7.7% of total revenue**[11](index=11&type=chunk)[13](index=13&type=chunk) - Consolidated net profit decreased from **RMB 81.2 million** to **RMB 17.7 million**, primarily due to: - A one-off gain of approximately **RMB 23.8 million** from land and property disposal in 2019 - An exchange loss of approximately **RMB 12.2 million** in 2020, compared to an exchange gain of **RMB 13.1 million** in 2019 - Aggressive promotional activities in e-commerce channels to boost sales, resulting in losses for this business segment[14](index=14&type=chunk) - The Group achieved success in strategic investments, with the fair value of investments in several consumer goods companies increasing by **RMB 28.7 million**[13](index=13&type=chunk)[15](index=15&type=chunk) - The Group successfully launched the new brand 'Qinqin Wuyu' and a new rice wine business, and completed the construction of a new production base in Xiaogan[13](index=13&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) This section provides an in-depth analysis of the Group's operating environment, business segment performance, strategic development, and financial position in 2020. Despite pandemic challenges, the leisure food industry shows potential. The company achieved 14.8% revenue growth by adjusting product structure and vigorously developing e-commerce channels. All major product lines recorded sales growth, but gross profit margins were pressured by promotional activities. The company continues to invest in product development, channel expansion, and production facility improvements, maintaining optimism for future growth [Business Review and Segment Performance](index=9&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E8%88%87%E5%88%86%E9%83%A8%E8%A1%A8%E7%8F%BE) In 2020, all four of the Group's business segments achieved revenue growth. Jelly products, as the core business, saw a 2.4% revenue increase; puffed food grew by 18.9%; seasoning products increased by 7.2%; and the candy and other products segment's revenue surged 2.0 times year-on-year, driven by the 'Qinqin Wuyu' e-commerce business and new rice wine business. However, gross profit margins for all segments except seasoning products declined due to promotional activities or changes in product mix 2020 Performance by Business Segment | Business Segment | Sales (RMB millions) | Y-o-Y Growth | Share of Total Revenue | Gross Profit Margin | Y-o-Y Change in Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | :--- | | Jelly Products | 421.3 | 2.4% | 53.1% | 33.4% | -0.8 percentage points | | Puffed Food | 217.7 | 18.9% | 27.5% | 37.2% | -2.8 percentage points | | Seasoning Products | 74.7 | 7.2% | 9.4% | 36.9% | +1.1 percentage points | | Candy and Other Products | 79.1 | 200% | 10.0% | Not disclosed, but overall decline mentioned | Not disclosed | - Revenue from the 'Candy and Other Products' segment significantly increased, primarily attributed to the newly established 'Qinqin Wuyu' brand, under which over **200 new snack products** were developed and primarily sold through e-commerce channels[32](index=32&type=chunk)[33](index=33&type=chunk) - The Group's new rice wine and sesame candy business in Xiaogan City completed its first phase factory construction and launched new products in Q4 2020, though its revenue contribution for the year was minimal[34](index=34&type=chunk)[36](index=36&type=chunk) [Strategic Development and Operations](index=12&type=section&id=%E6%88%B0%E7%95%A5%E7%99%BC%E5%B1%95%E8%88%87%E9%81%8B%E7%87%9F) The company pursued multi-faceted strategic initiatives, including a **RMB 21.7 million** net gain in fair value from strategic investments in several consumer goods companies. Product development saw multiple new launches across categories, such as 'Konjac Jelly' and 'Chicken Flavored Cubes'. Marketing efforts involved celebrity endorsements and social media engagement to boost brand awareness. E-commerce revenue grew **5.8 times**, but remained unprofitable due to aggressive promotions. Significant progress was made in constructing new production bases in Xiaogan, Xiantao, Sishui, Meishan, and Xiji - E-commerce business revenue grew **5.8 times**, accounting for **7.7% of total revenue**, but remained in a net loss position in 2020 due to aggressive product promotions and channel expenditures[42](index=42&type=chunk) - The Group is advancing new production base construction across multiple locations nationwide, with the first phase of Xiaogan Rice Wine Industrial Park already operational, the Shandong Sishui base commencing production in January 2021, and new bases in Xiantao, Meishan, and Xiji currently under construction[44](index=44&type=chunk)[45](index=45&type=chunk) - Strategic investments in several fast-growing consumer goods companies recorded a fair value gain (after tax) of **RMB 21.7 million**[37](index=37&type=chunk) [Liquidity and Financial Position](index=15&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E8%88%87%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81) As of year-end 2020, the Group maintained a net cash position with **RMB 711 million** in cash and bank balances. New bank borrowings of **RMB 70.2 million** were incurred during the year. Working capital stood at **RMB 492.6 million**, and the current ratio decreased from **4.1 times** to **2.0 times**. Capital expenditure significantly increased year-on-year to **RMB 318.9 million**, primarily for land acquisition and new production base construction. The Group's overall financial position remains robust, sufficient to support business expansion Key Financial Position as of Year-End 2020 | Indicator | Amount (RMB millions) | 2019 Corresponding Period | | :--- | :--- | :--- | | Cash and Bank Balances | 711.0 | 732.0 | | Bank Borrowings | 70.2 | 0 | | Working Capital | 492.6 | 661.5 | | Capital Expenditure | 318.9 | 168.6 | - The number of employees increased from approximately **2,200** to **2,600** during the year, with total staff welfare expenses growing accordingly to **RMB 155.2 million**[55](index=55&type=chunk) - Due to the depreciation of HKD and USD against RMB, the Group recorded a total exchange loss of **RMB 12.2 million**, compared to an exchange gain of **RMB 13.1 million** in the corresponding period of 2019[57](index=57&type=chunk) - The Board of Directors does not recommend the payment of a final dividend for the year ended December 31, 2020[58](index=58&type=chunk) [Biographies of Directors and Senior Management](index=18&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E4%BA%BA%E5%93%A1%E5%B1%A5%E6%AD%B7) This section details the personal biographies of the company's executive directors, non-executive directors, independent non-executive directors, and senior management, including their age, position, responsibilities, industry experience, educational background, and appointments in other listed companies - Mr. Xu Qingliu, **41 years old**, serves as the Chairman of the Board and assumes the responsibilities of the Chief Executive Officer during the vacancy of that position[60](index=60&type=chunk) - Mr. Wu Wenxu, **49 years old**, was appointed as an Executive Director on December 8, 2020, responsible for the Group's production activities, supply chain, and production facility management[64](index=64&type=chunk) [Corporate Governance Report](index=24&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) The report outlines the company's corporate governance structure and practices, confirming substantial compliance with the HKEX Corporate Governance Code provisions during 2020. The sole deviation is the temporary combined role of Chairman and CEO held by Mr. Xu Qingliu, which the Board deems in the company's best interest while searching for a new CEO. The report details the Board's operations and the composition and responsibilities of the Audit, Remuneration, and Nomination Committees - The company complied with all code provisions of the Corporate Governance Code, with the exception of Code Provision A.2.1, where the roles of Chairman and Chief Executive Officer were not separated and were held concurrently by Chairman Mr. Xu Qingliu[83](index=83&type=chunk)[89](index=89&type=chunk) - The Board of Directors comprises **12 directors**, including **3 executive directors**, **5 non-executive directors**, and **4 independent non-executive directors**, meeting the Listing Rules' requirements for the number and qualifications of independent non-executive directors[87](index=87&type=chunk)[92](index=92&type=chunk) - The Audit Committee, Remuneration Committee, and Nomination Committee have all been established and are fully operational. The Audit Committee and Remuneration Committee are composed entirely of independent non-executive directors[97](index=97&type=chunk)[98](index=98&type=chunk)[103](index=103&type=chunk) Auditor's Remuneration for 2020 | Services Provided | Fees Paid/Payable (RMB thousands) | | :--- | :--- | | Audit of Financial Statements | 1,900 | | Other Non-Audit Services | 94 | | **Total** | **1,994** | [Environmental, Social and Governance Report](index=33&type=section&id=%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E5%8F%8A%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) This report outlines the Group's policies, measures, and performance in environmental protection, social responsibility, and corporate governance. Environmentally, it discloses emissions data for exhaust gas, wastewater, greenhouse gases, and waste, along with resource utilization and energy-saving initiatives. Socially, it covers employment policies, employee health and safety (including epidemic prevention and control), development and training, supply chain management, product quality and safety, anti-corruption, and community contributions, reflecting the company's commitment to sustainable development 2020 Key Emissions Data | Emission Category | Specific Emission | 2020 Emissions | | :--- | :--- | :--- | | Exhaust Gas | NOx (Nitrogen Oxides) | 0.18 tonnes | | Exhaust Gas | SO2 (Sulfur Dioxide) | 0.0012 tonnes | | Wastewater | Wastewater Volume | 487,623.0 cubic meters | | Greenhouse Gas | Total Emissions | 25,424.26 tonnes CO2 equivalent | - The Group established an epidemic prevention and control task force, formulating detailed measures including personnel testing, material reserves, staggered work shifts, meal arrangements, and public education, to ensure employee health and safety and smooth production[166](index=166&type=chunk)[167](index=167&type=chunk)[169](index=169&type=chunk)[171](index=171&type=chunk) - Regarding product quality, the Group strictly adheres to relevant laws and regulations, with production bases obtaining multiple international certifications such as **ISO9001**, **ISO22000**, and **HACCP**, and establishing a product traceability management system[179](index=179&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) - In terms of community contributions, the Group actively participated in anti-epidemic donations, contributing funds and supplies to hospitals and frontline personnel in Xiaonan, Xiantao, Tianmen, Hubei, and engaging in public welfare activities such as student aid and caring for medical staff[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) [Report of the Directors](index=53&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) This statutory Directors' Report outlines the Group's principal activities, financial performance, dividend policy, reserves, and share capital movements. It details directors' and major shareholders' interests, changes in the share option scheme, continuing connected transactions, and the use of proceeds from two share subscription events. The report confirms that the company maintained sufficient public float and complied with relevant laws and regulations during the year - The Board of Directors does not recommend the payment of a final dividend for the year ended December 31, 2020[199](index=199&type=chunk) - The report disclosed a continuing connected transaction: the purchase of flour from Fujian Shuncheng Flour Development Co., Ltd., with a transaction amount of **RMB 1.794 million** in 2020[218](index=218&type=chunk) - As of year-end 2020, there were **11,660,000 unexercised share options** under the share option scheme[234](index=234&type=chunk) - The report details the use of proceeds and progress from two subscription events in April 2019 and December 2020. As of year-end 2020, **RMB 8.2 million** from the 2019 subscription remained unutilized, and **RMB 148.4 million** from the 2020 subscription proceeds had not yet been utilized[253](index=253&type=chunk)[257](index=257&type=chunk) Financial Section [Independent Auditor's Report](index=68&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A) PricewaterhouseCoopers issued an unqualified audit opinion on the company's 2020 consolidated financial statements, affirming that they present a true and fair view of the Group's financial position and operating results. The report highlights two key audit matters: the recognition of sales revenue and the recognition of deferred income tax assets related to future deductible losses - The auditor issued an **unqualified opinion** on the financial statements[265](index=265&type=chunk) - Key audit matters include: 1. **Revenue Recognition**: Due to the Group's high volume of sales transactions and numerous customers, the auditor focused on internal controls and cut-off testing for revenue recognition 2. **Recognition of Deferred Income Tax Assets**: Involving significant judgment and estimation of future taxable profits, the auditor evaluated management's profit forecasts and key assumptions[271](index=271&type=chunk)[274](index=274&type=chunk) [Consolidated Financial Statements](index=74&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section contains the Group's core financial statements for the year ended December 31, 2020. The consolidated income statement shows revenue of **RMB 793 million** and net profit of **RMB 17.66 million**. The consolidated balance sheet presents total assets of **RMB 1.843 billion** and total equity of **RMB 1.336 billion**. The consolidated cash flow statement indicates net cash inflow from operating activities of **RMB 22.53 million**, net outflow from investing activities of **RMB 412 million**, net inflow from financing activities of **RMB 217 million**, and year-end cash and cash equivalents decreased to **RMB 547 million** Consolidated Income Statement Key Data (2020) | Indicator | Amount (RMB thousands) | | :--- | :--- | | Revenue | 792,829 | | Gross Profit | 251,122 | | Operating Profit | 24,452 | | Profit Attributable to Company Shareholders | 17,660 | Consolidated Balance Sheet Key Data (December 31, 2020) | Indicator | Amount (RMB thousands) | | :--- | :--- | | Total Assets | 1,842,928 | | Total Liabilities | 506,970 | | Total Equity | 1,335,958 | Consolidated Cash Flow Statement Key Data (2020) | Indicator | Amount (RMB thousands) | | :--- | :--- | | Net Cash Generated from Operating Activities | 22,529 | | Net Cash Used in Investing Activities | (412,076) | | Net Cash Generated from Financing Activities | 216,979 | | Net Decrease in Cash and Cash Equivalents | (172,568) | [Notes to the Consolidated Financial Statements](index=80&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed explanations and supplementary information to the financial statements, crucial for understanding the company's financial position. Content covers principal accounting policies, financial risk management, key accounting estimates, segment information, details of assets and liabilities, related party transactions, and commitments and contingencies. The notes indicate that the Group's revenue primarily originates from mainland China and detail the revenue composition of each product segment, along with specifics of two share issuances and the share option scheme - The financial risk management section identifies foreign exchange risk, credit risk, and liquidity risk as the Group's primary exposures. In 2020, an exchange rate exposure of **RMB 18.18 million** arose due to the appreciation of the RMB[379](index=379&type=chunk)[380](index=380&type=chunk) - Note 5 details the revenue and cost of sales for the four business segments (Jelly, Puffed Food, Seasoning, and Candy & Other), consistent with data in the Management Discussion and Analysis[413](index=413&type=chunk) - Notes 25 and 26 detail changes in share capital and the share option scheme. In December 2020, approximately **RMB 148.4 million** in net proceeds was raised through the placement of new shares[471](index=471&type=chunk)[474](index=474&type=chunk)[476](index=476&type=chunk) - Note 34 discloses related party transactions, primarily involving office leases and raw material purchases from entities controlled by the company's directors[502](index=502&type=chunk)[504](index=504&type=chunk) [Five-Year Financial Summary](index=143&type=section&id=%E4%BA%94%E5%B9%B4%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) This section provides a summary of the Group's key financial data for five consecutive years from 2016 to 2020. The data indicates that Group revenue fluctuated after 2018, rebounding in 2020. Profit attributable to shareholders reached a five-year high in 2019 before declining to a lower level in 2020. Total assets and shareholders' equity have continuously grown over the past two years, primarily driven by financing activities Five-Year Performance Summary (RMB thousands) | Indicator | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 792,829 | 690,852 | 761,819 | 727,257 | 980,902 | | Profit/(Loss) Attributable to Shareholders | 17,660 | 81,187 | 32,760 | (6,536) | 31,522 | Five-Year Assets and Liabilities Summary (RMB thousands) | Indicator | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 1,842,928 | 1,369,574 | 1,050,718 | 792,863 | 894,854 | | Total Liabilities | 506,970 | 222,814 | 182,421 | 121,480 | 218,157 | | Equity Attributable to Shareholders | 1,335,958 | 1,146,760 | 868,297 | 671,383 | 676,697 |

亲亲食品 Better Food, Better Life 食品集團(開曼) 股份有限公司 QINQIN FOODSTUFFS GROUP (CAYMAN) COMPANY LIMITED 於 開曼 群島 註 冊 成 立 的 有 限 公 司 股份代號:1583 h 42 x 可吸果 引进日本ORIHIRO技术|元中 (含量:1306 卡路里 西柚味可吸果冻 添加膳食纤维 0 r kcal · 分含量:180克 , P .7 2020中期報告 公司資料 非執行董事 許連捷 施文博 吳火爐 吳四川 吳銀行 獨立非執行董事 蔡萌 陳耀輝 Ng Swee Leng 保羅希爾 公司秘書 黃偉樑FCCA CPA 授權代表 施文博 黃偉樑 註冊辦事處 P.O. Box 309 Cayman Islands 上市地點及股份代號 香港聯合交易所有限公司 股份代號：1583 執行董事 許清流（主席） 黃偉樑（財務總監） Ugland House Grand Cayman KY1-1104 中國總部 中國 福建省 晉江市 五里工業園區 香港主要營業地點 香港 夏愨道18號 海富中心1座 26樓2601室 公司網站 www.fjqi ...

Financial Performance - Revenue for the fiscal year 2019 decreased to RMB 690.9 million, down 9.3% from RMB 761.8 million in 2018[10] - Operating profit surged to RMB 76.6 million, a significant increase of 2,130.5% compared to RMB 3.4 million in the previous year[10] - Profit attributable to shareholders rose to RMB 81.2 million, representing a 147.8% increase from RMB 32.8 million in 2018[10] - Gross profit increased to RMB 244.5 million, up 5.2% from RMB 232.5 million in the previous year[14] - Cash and cash equivalents reached RMB 732.0 million, a 29.3% increase from RMB 566.1 million in 2018[11] - Net current assets improved to RMB 661.5 million, reflecting a 27.0% increase from RMB 520.9 million in the previous year[11] - The total equity of the group increased by 32.1% to RMB 1,146.8 million as of December 31, 2019, up from RMB 868.3 million in 2018[50] - The group had no loans as of December 31, 2019, maintaining a net cash position[51] Product Performance - Jelly products generated sales of approximately RMB 411.5 million in 2019, a decline of 5.5% year-on-year, accounting for 59.6% of the group's total revenue[27] - The gross margin for jelly products increased to 34.2% in 2019, up 6.4 percentage points from 27.8% in 2018, primarily due to adjustments in product structure and reduced promotional activities for low-margin products[27] - Sales revenue from puffed food products was approximately RMB 183.2 million in 2019, a decrease of 12.9% year-on-year, accounting for 26.5% of total revenue[28] - Sales revenue from seasoning products was approximately RMB 69.7 million in 2019, a decline of 20.1% year-on-year, representing 10.1% of total revenue[32] - The gross margin for seasoning products improved to 35.8% in 2019, up 3.7 percentage points from 32.1% in 2018, mainly due to reduced promotional expenses[32] - Sales revenue from candy and other products was approximately RMB 26.5 million in 2019, a decrease of 8.6% year-on-year, contributing 3.8% to the group's total revenue[33] Strategic Initiatives - The company plans to enhance its product portfolio and drive product innovation to meet changing consumer preferences[16] - The group aims to strengthen its distribution network in China through existing partnerships and online sales platforms[16] - The group is focused on developing new products and enhancing high-margin product offerings to adapt to changing consumer demands and market conditions[25] - The company aims to expand its product line and promote diversification in the food and snack business through new development projects[36] - The company plans to enhance its distribution channels by expanding into snack brand stores, convenience stores, and e-commerce platforms, while increasing collaboration with new retail partners like Alibaba and JD.com[41] Operational Efficiency - The company is optimizing its production facilities and has signed agreements to establish new production bases in Xiantao and Shandong Province to replace existing ones[42] - The company is focused on increasing automation in its production processes to reduce labor costs and improve production efficiency[44] - The group upgraded its ERP system to SAP, aiming to enhance operational efficiency and core competitiveness[46] Corporate Governance - The company has a structured board with audit, remuneration, and nomination committees to ensure effective oversight and governance[75] - The company has adopted corporate governance policies in line with the Hong Kong Stock Exchange's guidelines, ensuring compliance with best practices[87] - The board believes that its composition meets the requirements for maintaining a balance of professional knowledge and experience necessary for effective management[89] - The company has established strong connections with various industry associations and charitable organizations, indicating a commitment to community engagement[68] Environmental, Social, and Governance (ESG) - The company emphasizes its commitment to ESG (Environmental, Social, and Governance) management, integrating ESG strategies into its business operations[135] - The company has formed an ESG working group responsible for advancing ESG projects and managing daily operations related to ESG reporting[138] - The company has committed to continuous improvement in energy conservation and emission reduction while fulfilling its social responsibilities[133] - The group is committed to improving energy efficiency and reducing greenhouse gas emissions by utilizing clean energy and optimizing product management[184] Employee Welfare and Development - The company provides competitive compensation and benefits to enhance employee satisfaction, including performance bonuses and various allowances[165] - The company has a dual-track promotion system for employees, allowing them to choose between management and technical career paths based on their expertise and interests[168] - The company has established a comprehensive employee welfare system, including various benefits and training programs to foster a harmonious work environment[161] Risk Management - The risk management framework ensures that significant risks are identified, assessed, and managed effectively across business units[117] - The board believes that the existing risk management and internal control systems are reasonably effective and sufficient as of the report date[114] Community Engagement - The company focuses on community development and employment promotion as part of its corporate social responsibility initiatives[141] - The company encourages public feedback through its website and investor relations department, ensuring prompt responses to inquiries[130]

Financial Performance - Revenue for the six months ended June 30, 2019, was RMB 377,218 thousand, a decrease of 15.8% compared to RMB 447,838 thousand in 2018[16] - Operating profit increased significantly to RMB 30,869 thousand, representing a growth of 167.4% from RMB 11,543 thousand in the previous year[16] - Profit attributable to shareholders rose by 34.0% to RMB 32,011 thousand, up from RMB 23,888 thousand in 2018[16] - Gross profit for the same period was RMB 123,601 thousand, down from RMB 131,398 thousand in 2018, indicating a decrease of about 5.7%[26] - The profit before tax for the period was RMB 25,802,000, with a net profit of RMB 23,888,000, compared to RMB 23,888,000 in the previous year[83] - Basic and diluted earnings per share for the period were RMB 0.051, compared to RMB 0.043 in the previous year, representing an increase of approximately 18.6%[26] Cash and Liquidity - Cash and cash equivalents increased by 44.9% to RMB 820,242 thousand, compared to RMB 566,085 thousand at the end of 2018[16] - Net current assets improved by 41.9% to RMB 739,007 thousand, up from RMB 520,946 thousand in the previous year[16] - Current ratio improved to 5.6 times, compared to 4.2 times in the previous year, indicating better liquidity[16] - The group had cash and bank balances of RMB 820.2 million, an increase from RMB 566.1 million as of December 31, 2018[156] - The group's net working capital was RMB 739.0 million, up from RMB 520.9 million as of December 31, 2018[156] Equity and Assets - Total equity increased by 26.6% to RMB 1,099,326 thousand, compared to RMB 868,297 thousand at the end of 2018[16] - Total assets as of June 30, 2019, amounted to RMB 1,264,474 thousand, an increase from RMB 1,050,718 thousand at the end of 2018, reflecting a growth of about 20.3%[32] - The company’s total assets as of June 30, 2019, included significant investments in property, plant, and equipment, totaling RMB 256,773,000, reflecting ongoing capital investments[101] Inventory and Receivables - The company reported a significant reduction in inventory, which decreased to RMB 67,343 thousand from RMB 101,757 thousand, a decline of about 33.7%[32] - As of June 30, 2019, the company's net receivables amounted to RMB 6,826,000, a decrease from RMB 9,049,000 as of December 31, 2018, representing a reduction of approximately 24.5%[106] - The company’s impairment provision for receivables was RMB 94,000 as of December 31, 2018, which was not present as of June 30, 2019, indicating an improvement in receivables quality[106] Segment Performance - As of June 30, 2019, the total revenue from the jelly products segment was RMB 258,586,000, while the total revenue from the puffed food segment was RMB 78,397,000[80] - Sales of jelly products in the first half of 2019 amounted to approximately RMB 258.6 million, a decrease of 10.4% year-on-year, accounting for 68.6% of the group's total revenue[137] - Sales of puffed products in the first half of 2019 were approximately RMB 78.4 million, a decrease of 28.4% year-on-year, accounting for 20.8% of the group's total revenue[138] - Sales of seasoning products in the first half of 2019 were approximately RMB 33.9 million, a decrease of 20.6% year-on-year, accounting for 9.0% of the group's total revenue[141] - Sales of candy and other products in the first half of 2019 were approximately RMB 6.4 million, a decrease of 9.0% year-on-year, contributing 1.7% to the group's total revenue[142] Capital Expenditures and Commitments - The group reported capital commitments of approximately RMB 80.9 million as of June 30, 2019, compared to RMB 5.3 million as of December 31, 2018[158] - The company has signed capital commitments of approximately RMB 56.162 million related to the construction of factories, warehouses, and office buildings in the Xiaogan region of China[121] - The group reported a total capital expenditure of RMB 39,074,000 for the six months ended June 30, 2019[80] Corporate Governance and Management - The board of directors consists of 12 members, including 3 executive directors and 4 independent non-executive directors[196] - The audit committee, composed of four independent non-executive directors, reviewed the unaudited interim results for the six months ended June 30, 2019, and recommended adoption by the board[195] - The company has adhered to the corporate governance code and the standard code for securities transactions by directors throughout the reporting period[185] Strategic Initiatives - The company has adjusted its product structure, focusing on new product development to enhance product variety and increase overall profitability[134] - The group aims to enhance its product offerings by focusing on natural, healthy, and premium products, leveraging customer-centric strategies for product innovation[146] - The group is expanding its distribution channels, including convenience stores and e-commerce platforms, to increase sales and market presence[151] - The group is committed to upgrading its product lines to meet consumer trends towards low sugar, low salt, and no preservatives, particularly in jelly and puffed products[148] Shareholder Information - Sure Wonder Limited holds 35.26% of the company's shares, amounting to 238,051,905 shares[176] - Tianli Investment Limited owns 6.76% of the company's shares, totaling 45,645,799 shares[176] - The total number of issued shares as of June 30, 2019, is 675,096,557 shares[177] - The company granted stock options totaling 17,320,000, with 2,960,000 options canceled or expired, leaving a balance of 14,360,000 options[180]

Company Overview [Company Information](index=3&type=section&id=Company%20Information) This chapter provides key corporate information including the company's basic registration details, board members, key executives, legal advisors, auditors, and share registrars - The company's Chairman is Xu Qingliu, CEO is Zhu Hongbo, and CFO is Huang Weiliang[12](index=12&type=chunk) - The company's auditor is PricewaterhouseCoopers[12](index=12&type=chunk) [Financial Highlights](index=4&type=section&id=Financial%20Highlights) In FY2018, the company's revenue increased by 4.8% year-on-year, but operating profit declined by 35.9%; however, due to improved gross margin and exchange gains, profit attributable to shareholders turned from a loss of RMB 6.536 million in 2017 to a profit of RMB 32.760 million, with a robust financial position, no bank borrowings, and significant growth in net current assets and net assets Key Financial Performance (Consolidated Income Statement) | Metric | 2018 (RMB thousands) | 2017 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 761,819 | 727,257 | 4.8% | | Operating Profit | 3,435 | 5,361 | -35.9% | | Profit/(Loss) Attributable to Company Shareholders | 32,760 | (6,536) | 601.2% | | Basic Earnings/(Loss) Per Share | RMB 0.058 | RMB (0.014) | - | Key Financial Ratios | Metric | 2018 | 2017 | Change (percentage points) | | :--- | :--- | :--- | :--- | | Gross Margin | 30.5% | 25.2% | 5.3 | | Return on Equity | 3.8% | -1.0% | 4.8 | | Current Ratio (times) | 3.9 | 3.5 | - | Key Financial Position (Consolidated Statement of Financial Position) | Metric | 2018 (RMB thousands) | 2017 (RMB thousands) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 566,085 | 294,447 | | Bank Borrowings | None | None | | Net Current Assets | 520,946 | 308,403 | | Net Assets | 868,297 | 671,383 | [Chairman's Statement](index=5&type=section&id=Chairman%27s%20Statement) The Chairman's statement highlights significant improvement in the Group's FY2018 performance, with revenue growing 4.8% to RMB 762 million, gross profit increasing 27.1% to RMB 233 million, and a successful turnaround to a profit attributable to shareholders of RMB 32.8 million, driven by new high-margin products, reduced promotions, and RMB 24.5 million in exchange gains, with future focus on food and snack business innovation, distribution network consolidation, and production efficiency enhancement FY2018 Performance | Metric | FY2018 | FY2017 | Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 761.8 million | RMB 727.3 million | +4.8% | | Gross Profit | RMB 232.5 million | RMB 183.0 million | +27.1% | | Profit/(Loss) Attributable to Shareholders | RMB 32.8 million | (RMB 6.5 million) | Turned loss into profit | - Key drivers for profit growth include higher selling prices and gross margins for new products, reduced product promotion activities and expenses during the year, and exchange gains of **RMB 24.5 million** (compared to exchange losses of RMB 12.6 million last year)[19](index=19&type=chunk)[20](index=20&type=chunk) - The Group will continue to focus on developing its food and snack business, enhancing core competitiveness through product innovation, consolidating its distribution network, upgrading production facilities, and strictly controlling food safety[21](index=21&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) In 2018, the Group achieved 4.8% revenue growth and 27.1% gross profit growth in China's challenging yet opportunistic casual food industry, with gross margin improving 5.3 percentage points to 30.5%, driven by product structure optimization, successful new product launches, and exchange gains; while jelly and seasoning products grew steadily, puffed food remained stable, and confectionery declined, the Group is actively expanding into new maltose and rice wine businesses, upgrading its management system with IBM, strengthening R&D and promotion, expanding new retail channels, and improving production facilities to seize consumption upgrade opportunities and enhance core competitiveness, maintaining a robust financial position with ample cash and no loans [Business Review](index=6&type=section&id=Business%20Review) In 2018, the Group's total sales revenue increased by 4.8% to RMB 761.8 million, and gross profit increased by 27.1% to RMB 232.5 million, with gross margin improving from 25.2% to 30.5%, primarily driven by the launch of new high-margin products and reduced promotional expenses; core jelly products saw a 6.7% revenue increase, seasoning products grew significantly by 13.7%, puffed food slightly increased by 0.9%, while confectionery and other products experienced a 15.3% revenue decline 2018 Revenue Performance by Business Segment | Business Segment | 2018 Sales (RMB millions) | 2017 Sales (RMB millions) | Year-on-Year Growth | % of Total Revenue (2018) | | :--- | :--- | :--- | :--- | :--- | | Jelly Products | 435.2 | 407.9 | 6.7% | 57.1% | | Puffed Food | 210.3 | 208.3 | 0.9% | 27.6% | | Seasoning Products | 87.3 | 76.8 | 13.7% | 11.5% | | Confectionery and Others | 29.0 | 34.2 | -15.3% | 3.8% | | **Total** | **761.8** | **727.2** | **4.8%** | **100%** | - The improvement in gross margin was primarily due to product mix adjustment (increased proportion of new products) and reduced product promotion activities and expenses during the year[27](index=27&type=chunk) - The Group comprehensively upgraded jelly and puffed food products, including packaging, flavors, and technology, which increased average selling prices and gross margins; jelly product gross margin increased from **24.2% to 27.8%**, and puffed food gross margin increased from **30.3% to 36.1%**[30](index=30&type=chunk)[33](index=33&type=chunk) [Future Outlook and Strategies](index=9&type=section&id=Future%20Outlook%20and%20Strategies) Looking ahead, the Group's core strategy will be product innovation, seizing consumption upgrade opportunities to develop natural, healthy, and high-end products; strategically, the company will optimize its management system in collaboration with IBM, strengthen R&D and social media promotion, clearly position its three core product lines (jelly, puffed food, seasoning), actively expand into new retail and e-commerce channels, and continuously invest in automated production facilities to reduce costs, enhance efficiency, and improve product quality - In November 2018, the Group entered into a strategic cooperation with Xiaogan Municipal Government to establish a maltose and rice wine R&D and production base, aiming to expand its product lines and achieve diversified development[37](index=37&type=chunk) - The company engaged IBM for a management consulting project aimed at reshaping its sales-product-supply chain-centric operational management system to comprehensively enhance operational efficiency[38](index=38&type=chunk) - Regarding channel expansion, the Group will strengthen its existing distribution network while focusing on expanding into snack brand stores, convenience stores, campus stores, and enhancing cooperation with new retail partners like Alibaba and JD.com[43](index=43&type=chunk) - The Group will enhance production automation by introducing advanced foreign production lines and equipment upgrades to reduce labor costs and improve production efficiency[44](index=44&type=chunk) [Liquidity and Capital Resources](index=11&type=section&id=Liquidity%20and%20Capital%20Resources) As of the end of 2018, the Group maintained a robust financial position with a net cash balance and no bank loans; cash and bank balances significantly increased to RMB 566.1 million, and the current ratio improved from 3.5 times to 3.9 times, indicating strong liquidity and solvency, while total equity grew 29.3% to RMB 868.3 million Key Liquidity Indicators | Metric | As of December 31, 2018 (RMB millions) | As of December 31, 2017 (RMB millions) | | :--- | :--- | :--- | | Cash and Bank Balances | 566.1 | 294.4 | | Bank Loans | 0 | 0 | | Net Current Assets | 520.9 | 308.4 | | Current Ratio | 3.9 times | 3.5 times | | Total Equity | 868.3 | 671.4 | - During the year, due to the depreciation of RMB against HKD and USD, the Group recorded total exchange gains of **RMB 24.5 million**, compared to exchange losses of RMB 12.6 million in 2017[55](index=55&type=chunk) - The Board did not recommend the payment of a final dividend for the year ended December 31, 2018[56](index=56&type=chunk) [Biographies of Directors and Senior Management](index=13&type=section&id=Biographies%20of%20Directors%20and%20Senior%20Management) This chapter details the personal biographies of the company's executive directors, non-executive directors, independent non-executive directors, and senior management team members, covering their age, position, responsibilities, industry experience, educational background, and appointments in other listed companies, comprehensively showcasing the company's governance and management team's professional backgrounds - Mr. Xu Qingliu, Chairman of the Board, is the son of Non-executive Director Mr. Xu Lianjie, possessing over **14 years** of experience in the food and snack business and extensive experience in investment management[60](index=60&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - Mr. Zhu Hongbo, CEO, was appointed in January 2017, previously serving in Hengan International's Strategic Management Department, with extensive experience in marketing and corporate management[68](index=68&type=chunk) - The independent non-executive director team possesses diverse professional backgrounds, covering business management consulting, legal, financial, and investment fields[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[75](index=75&type=chunk) [Corporate Governance Report](index=19&type=section&id=Corporate%20Governance%20Report) This report outlines the company's corporate governance practices for FY2018, confirming compliance with all code provisions of the HKEX Corporate Governance Code, detailing the board's composition and operations, the clear distinction between Chairman and CEO roles, the structure and responsibilities of various committees (Audit, Remuneration, Nomination), and disclosing directors' meeting attendance, while also confirming the establishment of risk management and internal control systems reviewed by external consultants to ensure effective operation - The company confirmed that it has complied with all code provisions of the Corporate Governance Code throughout the year ended December 31, 2018[82](index=82&type=chunk) - The Board comprises **12 directors**, including **3 executive directors**, **5 non-executive directors**, and **4 independent non-executive directors**, ensuring checks and balances and independent decision-making[86](index=86&type=chunk) - The Audit Committee, Remuneration Committee, and Nomination Committee have all been established, with independent non-executive directors forming a majority or all members, to fulfill their oversight responsibilities[95](index=95&type=chunk)[96](index=96&type=chunk)[99](index=99&type=chunk) - The company engaged external consultants to assist the internal audit department in reviewing the internal control system, and the Board considers the existing risk management and internal control systems to be reasonably effective during the year[107](index=107&type=chunk) [Environmental, Social and Governance (ESG) Report](index=28&type=section&id=Environmental%2C%20Social%20and%20Governance%20%28ESG%29%20Report) This report details the company's ESG practices in 2018, highlighting environmental efforts in energy conservation and emission reduction through clean energy use and purification facility upgrades, resulting in year-on-year decreases in exhaust gas, wastewater, and greenhouse gas emissions; socially, the company adheres to labor laws, protects employee rights, health, and safety, provides training, maintains strict supply chain management and product quality control for food safety, implements anti-corruption policies, and actively participates in community welfare activities [Environmental Performance](index=28&type=section&id=Environmental%20Performance) In 2018, the company made positive environmental progress, significantly reducing major pollutant emissions through promoting natural gas use, upgrading fume purification facilities, and optimizing wastewater treatment systems, with total exhaust gas emissions decreasing by 33.3% and total greenhouse gas emissions by 7.8% year-on-year, while unit product energy consumption and water consumption decreased by 16.0% and 6.5% respectively, demonstrating effectiveness in improving energy and water resource efficiency 2018 Major Emission Reduction Status | Emission Category | 2018 Year-on-Year Change | | :--- | :--- | | Total Exhaust Gas Emissions (NOx, SO2, Particulates) | -33.3% | | Wastewater Volume | -1.9% | | Total Greenhouse Gas Emissions | -7.8% | | Hazardous Waste Generated Per Unit Product | -47.4% | 2018 Resource Utilization Efficiency Improvement | Metric | 2018 Year-on-Year Change | | :--- | :--- | | Water Consumption Per Unit Product | -6.5% | | Energy Consumption Per Unit Product | -16.0% | 2018 Greenhouse Gas Emissions Data | Greenhouse Gas Emissions | 2018 | 2017 | Unit | | :--- | :--- | :--- | :--- | | Direct Greenhouse Gas Emissions | 3,883.80 | 5,692.64 | tonnes of CO2 equivalent | | Energy Indirect Greenhouse Gas Emissions | 20,543.74 | 20,787.58 | tonnes of CO2 equivalent | | **Total Greenhouse Gas Emissions** | **24,427.54** | **26,480.22** | **tonnes of CO2 equivalent** | [Social Responsibility](index=34&type=section&id=Social%20Responsibility) In terms of social responsibility, the company strictly adheres to labor laws, safeguarding employees' legitimate rights in remuneration, leave, health, and safety, while firmly prohibiting child and forced labor, and has established a comprehensive training system for employee development; regarding supply chain management, the company implements strict supplier screening and evaluation procedures, and for product responsibility, it ensures product safety through comprehensive quality monitoring and food safety management systems, having obtained ISO9001, HACCP, and other certifications, in addition to establishing an anti-corruption reporting mechanism and actively participating in community welfare activities such as child care and elder care - The company strictly complies with the Labor Law, upholding fair, just, and open employment principles, opposing any form of discrimination, and prohibiting the use of child or forced labor[149](index=149&type=chunk)[159](index=159&type=chunk) - The company has established a strict supplier evaluation, selection, and assessment system, incorporating environmental, social, and ethical factors into its considerations[160](index=160&type=chunk) - All of the company's production bases comply with national food safety standards and have obtained international certifications such as ISO9001, ISO22000, and HACCP for certain production bases to ensure product quality and safety[161](index=161&type=chunk)[164](index=164&type=chunk) - The company actively participates in social welfare initiatives, including visiting children on Children's Day, caring for the elderly on Chongyang Festival, and hosting university faculty and student visits for learning[170](index=170&type=chunk) [Directors' Report](index=40&type=section&id=Directors%27%20Report) This report outlines the company's principal activities, financial performance, and corporate governance matters for FY2018, during which the company primarily engaged in the manufacturing and sale of food and snacks in China; the Board did not recommend a final dividend, and the report details directors' and major shareholders' equity interests, changes in share option schemes, continuing connected transactions, and the use of proceeds from the 2018 new share placement, confirming the company maintained sufficient public float and complied with all relevant laws and regulations - In February 2018, the company raised approximately **RMB 161 million** in net proceeds through the placement of **95,000,000 new shares**, primarily for brand and product promotion, strengthening sales channels, upgrading production facilities, and new product R&D[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) Share Option Scheme Movements (FY2018) | Participant | Balance at Beginning of Year | Granted During Year | Cancelled/Lapsed During Year | Balance at End of Year | | :--- | :--- | :--- | :--- | :--- | | Directors | 120,000 | 520,000 | 0 | 640,000 | | Other Employees | 8,690,000 | 10,480,000 | (2,490,000) | 16,680,000 | | **Total** | **8,810,000** | **11,000,000** | **(2,490,000)** | **17,320,000** | Major Customer and Supplier Concentration (FY2018) | Category | % of Total | | :--- | :--- | | Largest Customer | 0.9% | | Top Five Customers | 4.1% | | Largest Supplier | 5.1% | | Top Five Suppliers | 17.0% | - During the reporting period, the Group engaged in continuing connected transactions with related party Fujian Shuncheng Flour Development Co., Ltd., involving the purchase of flour amounting to **RMB 5.331 million**, which was reviewed and confirmed by the independent non-executive directors[196](index=196&type=chunk)[197](index=197&type=chunk) Financial Statements [Independent Auditor's Report](index=54&type=section&id=Independent%20Auditor%27s%20Report) PricewaterhouseCoopers issued an unqualified audit opinion on Qinqin Food Group's 2018 consolidated financial statements, affirming that they present a true and fair view of the Group's financial position and operating results, with two key audit matters highlighted: revenue recognition, due to the high volume and wide geographical spread of sales transactions, requiring attention to whether revenue is recognized in the correct accounting period; and the recognition of deferred tax assets, which relies on judgments and estimates of future profitability - The auditors believe that the consolidated financial statements present a true and fair view of the Group's financial position in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance[255](index=255&type=chunk) - Key Audit Matter One: Revenue Recognition; the auditors confirmed that the Group's sales revenue recognition method complies with its accounting policies through sampling tests, IT control environment assessments, and confirmations[261](index=261&type=chunk) - Key Audit Matter Two: Recognition of Deferred Tax Assets; the auditors, by evaluating management's profit forecasts, the reasonableness of key assumptions, and sensitivity analysis, concluded that management's judgments and estimates for deferred tax asset recognition are sufficiently supported[263](index=263&type=chunk) [Consolidated Financial Statements](index=59&type=section&id=Consolidated%20Financial%20Statements) This chapter presents the Group's core financial statements for the year ended December 31, 2018, including the consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, and consolidated statement of cash flows, comprehensively illustrating the company's operating performance, financial position, changes in shareholders' equity, and cash flow during the reporting period FY2018 Consolidated Financial Statements Key Data | Metric | 2018 (RMB thousands) | 2017 (RMB thousands) | | :--- | :--- | :--- | | **Income Statement:** | | | | Revenue | 761,819 | 727,257 | | Gross Profit | 232,501 | 182,978 | | Operating Profit | 3,435 | 5,361 | | Profit/(Loss) for the Year | 32,760 | (6,536) | | **Statement of Financial Position (Period-end):** | | | | Total Assets | 1,050,718 | 792,863 | | Total Liabilities | 182,421 | 121,480 | | Total Equity | 868,297 | 671,383 | | **Cash Flow Statement:** | | | | Net Cash Generated from Operating Activities | 86,157 | (33,791) | | Net Cash Used in Investing Activities | (73) | (5,468) | | Net Cash Generated from Financing Activities | 161,039 | 0 | [Notes to the Consolidated Financial Statements](index=65&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes to the financial statements provide detailed explanations and supplementary information to the primary financial statements, covering the company's general information, basis of preparation, significant accounting policies (e.g., revenue recognition, financial instruments, impairment), accounting estimates and judgments, and detailed breakdowns and explanations of key items such as segment information, revenue, expenses, taxation, assets, liabilities, equity, and related party transactions - The company adopted new Hong Kong Financial Reporting Standards (HKFRS) 9 'Financial Instruments' and 15 'Revenue from Contracts with Customers' effective January 1, 2018, and restated comparative data for 2017; the primary impact was the reclassification of certain promotional expenses paid to customers from 'distribution and selling expenses' as a deduction from 'revenue'[301](index=301&type=chunk)[311](index=311&type=chunk)[334](index=334&type=chunk) Segment Results (2018) | Segment | Revenue (RMB thousands) | Gross Profit (RMB thousands) | | :--- | :--- | :--- | | Jelly Products | 435,238 | 120,996 | | Puffed Food | 210,273 | 76,000 | | Seasoning Products | 87,307 | 28,056 | | Confectionery and Other Products | 29,001 | 7,449 | | **Total** | **761,819** | **232,501** | - The company adopted a share option scheme in May 2017; as of the end of 2018, there were **17,320,000** unexercised share options, with related expenses of **RMB 3.115 million** recognized during the year[499](index=499&type=chunk)[503](index=503&type=chunk) [Five-Year Financial Summary](index=121&type=section&id=Five-Year%20Financial%20Summary) This chapter provides a summary of the Group's key financial data for the past five fiscal years (2014-2018), visually illustrating the long-term trends in the company's revenue, profit, assets, liabilities, and shareholders' equity, showing that revenue rebounded in 2018 after declines in 2016 and 2017, while shareholders' equity demonstrated continuous growth Five-Year Performance Summary | For the Year Ended December 31 (RMB thousands) | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 761,819 | 727,257 | 980,902 | 1,020,051 | 1,216,135 | | Profit/(Loss) Before Income Tax | 39,031 | (2,256) | 57,449 | 87,821 | 126,285 | | Profit/(Loss) Attributable to Shareholders | 32,760 | (6,536) | 31,522 | 63,752 | 91,619 | Five-Year Assets and Liabilities Summary | As of December 31 (RMB thousands) | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 1,050,718 | 792,863 | 894,854 | 775,000 | 843,885 | | Total Liabilities | 182,421 | 121,480 | 218,157 | 129,766 | 260,225 | | Equity Attributable to Shareholders | 868,297 | 671,383 | 676,697 | 645,234 | 583,660 |