Core Viewpoint - The commercial landscape in Zhongmu New District is evolving with diverse experiences, integrating shopping with family activities, and driving significant consumer engagement and sales growth [1][3]. Group 1: Commercial Development - Zhongmu New District is actively integrating commercial resources, establishing a commercial matrix led by Shanshan Outlets, which connects various shopping centers [3]. - Shanshan Outlets alone sees daily foot traffic exceeding 120,000, indicating strong consumer interest [3]. - The retail sales in Zhongmu New District reached 9.95 billion yuan from January to May 2025, showcasing a robust growth trajectory [5]. Group 2: Consumer Engagement and Events - The district employs a strategy of monthly themes and weekly events to enhance consumer attraction, with activities like "Kunpeng Art Week" and "Jurassic Adventure" planned to stimulate summer consumption [4]. - The management emphasizes transforming shopping into thematic experiences, catering to various age groups and emotional needs of consumers [3]. Group 3: Economic Impact - The overall retail sales growth in Zhongmu New District is notable, with a year-on-year increase of 7.4% in the first five months of 2025 [3]. - Specific sectors show impressive growth rates, including home appliance sales up by 51%, and department store sales increasing by 27% [4].

Remuneration - The company has not paid any remuneration to supervisors as rewards for joining the group or as severance compensation from 2018 to 2024[14]. - Total remuneration for Ms. Zhou Danna in 2022 was RMB 233,507, which includes salary and allowances of RMB 198,000 and contributions of RMB 20,246[10]. - Mr. Wang Yijun received a total remuneration of RMB 235,967 in 2022, comprising salary and allowances of RMB 189,742 and contributions of RMB 20,246[10]. - The total remuneration for Ms. Yang Yi in 2022 was RMB 181,850, including salary and allowances of RMB 135,625 and contributions of RMB 20,246[10]. - For the year ending December 31, 2024, Ms. Zhou Danna's total remuneration is projected to be RMB 273,968, with salary and allowances of RMB 226,368[13]. - Mr. Wang Yijun's projected total remuneration for 2024 is RMB 266,552, including salary and allowances of RMB 218,952[13]. - Ms. Yang Yi's projected total remuneration for 2024 is RMB 211,447, with salary and allowances of RMB 163,848[13]. Reporting and Governance - The company has published annual reports for the years ending from 2018 to 2024, indicating a consistent reporting schedule[3]. - The company has not disclosed any additional information that would affect the contents of the annual reports apart from what is stated in the announcement[14]. - The board of directors includes both executive and independent non-executive members, ensuring a diverse governance structure[15].

Group 1 - As of May 14, 78 stocks reached a 52-week high, with Chang'an Renheng (08139), Hengchang Group International (01421), and Lehua Entertainment (02306) leading the high rate at 65.38%, 42.59%, and 38.52% respectively [1] - The closing price of Chang'an Renheng was 1.370, with a peak price of 2.580, indicating a significant increase [1] - Hengchang Group International closed at 0.690, reaching a high of 0.770, reflecting a 42.59% increase [1] Group 2 - Lehua Entertainment's closing price was 1.510, with a maximum price of 1.690, showing a 38.52% rise [1] - XL Ernan CO (07711) and XL Ernan CO-U had increases of 27.75% and 26.89% respectively, with closing prices of 125.000 and 15.960 [1] - Other notable stocks include Madison Holdings (08057) with a 25.00% increase and Du Fu Wine Group (00986) with a 17.48% increase [1] Group 3 - The report also highlights stocks that reached 52-week lows, with XI Ernan CO (07311) dropping by 36.46% to a closing price of 26.500 [3] - XI Ernan CO-U saw a decrease of 35.53%, closing at 3.386 [3] - Other stocks with significant declines include Touyun Biotechnology (01332) at -22.46% and Aoweiholdings (01370) at -16.67% [3]

Financial Performance - For the fiscal year 2024, the company's revenue was RMB 1,006.6 million, a decrease of approximately 5.0% compared to RMB 1,060.0 million in fiscal year 2023[11] - The net profit for fiscal year 2024 increased by approximately 5.0% to RMB 33.2 million, up from RMB 31.6 million in fiscal year 2023[11] - The gross profit margin for fiscal year 2024 was 37.7%, slightly up from 37.5% in fiscal year 2023[8] - The operating profit margin for fiscal year 2024 was 3.3%, compared to 3.0% in fiscal year 2023[8] - The total revenue for the fiscal year 2024 was RMB 1,006.6 million, a slight decline of about 5.0% compared to RMB 1,060.0 million in fiscal year 2023[25] - Profit increased from RMB 31.6 million in fiscal year 2023 to RMB 33.2 million in fiscal year 2024, marking an increase of approximately 5.0%[43] - Gross profit decreased by approximately 4.5% from RMB 397.2 million in fiscal year 2023 to RMB 379.2 million in fiscal year 2024[29] Assets and Liabilities - Non-current assets increased to RMB 164.2 million in fiscal year 2024 from RMB 103.0 million in fiscal year 2023[8] - Current assets rose to RMB 655.4 million in fiscal year 2024, compared to RMB 623.4 million in fiscal year 2023[8] - The total assets of the company reached RMB 819.6 million in fiscal year 2024, up from RMB 726.4 million in fiscal year 2023[8] - The total liabilities increased to RMB 543.3 million in fiscal year 2024 from RMB 472.6 million in fiscal year 2023[8] - The company's cash and cash equivalents decreased from RMB 143.2 million to RMB 106.5 million, while pledged deposits increased from RMB 4.2 million to RMB 8.5 million[46] - The debt-to-asset ratio was approximately 17.7% as of December 31, 2024, compared to 18.6% as of December 31, 2023[46] Market Strategy and Development - In 2024, the company focused on "high-quality development" strategies, with a commitment to enhancing operational efficiency and brand value, resulting in a 0.3% growth in clothing, footwear, and textile sales in the national market[20] - The company launched a new industrial park project in Ningbo, Zhejiang, aimed at integrating clothing R&D, design, and smart manufacturing, with the main construction completed, highlighting a focus on technological innovation[21] - The company signed a new brand ambassador, Hu Bing, to enhance brand recognition and cultural influence, aiming to strengthen the market presence of the Shanshan brand[21] - The company emphasized a dual-channel strategy, investing in both online and offline sales to optimize store performance and market layout, ensuring balanced growth across channels[14] - The company plans to expand its core national brands, FIRS and SHANSHAN, through diversified and cooperative business models, targeting steady growth in operating profits for 2025[17] - The company is committed to continuous product innovation, focusing on high-cost performance products, particularly in the suit category, to meet market demands[14] - The company aims to enhance its management system and digital capabilities, establishing a process operation warning mechanism to improve overall management efficiency[16] - The company will participate in the 2024 Autumn/Winter China International Fashion Week, launching a trend release show for Chinese suits, reinforcing its position as a leading brand in the suit category[20] Employee and Management - Employee costs for the year were approximately RMB 42.4 million, an increase from RMB 36.2 million in 2023, with a total of 265 employees as of December 31, 2024[51] - The company employed 265 staff members as of December 31, 2024, down from 311 in 2023, with a gender ratio of 49% male to 51% female[110] - The board consists of two female members, representing approximately 25% of the board[110] - The management team has extensive experience, with over 20 years in the apparel industry collectively[62] - The management team has extensive experience in the apparel industry, with key personnel having over 30 years of experience[81] Corporate Governance - The company emphasizes the importance of good corporate governance to enhance shareholder value[83] - The company has adopted the corporate governance code as per the listing rules, ensuring compliance with all provisions except for the separation of the roles of Chairman and CEO[84] - The board is responsible for overseeing the management and overall performance of the group, ensuring necessary financial and human resources are in place[88] - The board consists of nine directors, including three independent non-executive directors, meeting the requirement of at least one-third independence[89] - The company has received annual independence confirmation letters from all independent non-executive directors, affirming their independence throughout the year[94] - The board has established committees to monitor operational and financial performance, ensuring proper internal controls and risk management[88] - The company has established a risk management policy to address potential operational risks, including strategic, operational, legal compliance, and environmental risks[132] - The Board is responsible for maintaining an effective risk management and internal control system, ensuring compliance with relevant legislation and regulations[132] Environmental, Social, and Governance (ESG) - The company is committed to corporate social responsibility and sustainable development, focusing on ESG issues[164] - The ESG report for the fiscal year 2024 will cover policies and performance in environmental protection, labor practices, and community engagement[165] - The ESG report highlights the company's progress in creating sustainable value for shareholders and stakeholders[166] - The total air pollutant emissions for the fiscal year 2024 amounted to approximately 13.7 kg, representing an increase of about 30.5% compared to 10.5 kg in fiscal year 2023[198] - The average air pollutant emissions per vehicle increased to 3.4 kg in fiscal year 2024 from 2.6 kg in fiscal year 2023, marking a rise of approximately 30.8%[198] - The company has implemented measures to reduce air pollution, including optimizing vehicle usage and encouraging employees to plan routes in advance[198] - The board of directors is committed to monitoring ESG governance matters and ensuring compliance with the latest ESG disclosure requirements from the Hong Kong Stock Exchange[192] - The company emphasizes the importance of a healthy environment for sustainable development and aims to be a leader in environmental protection[193]

Financial Performance - Total revenue for the fiscal year 2024 was RMB 1,006,620,320, a decrease of 5.1% compared to RMB 1,060,045,974 in 2023[4] - Gross profit for 2024 was RMB 379,198,540, down from RMB 397,239,138 in 2023, reflecting a gross margin of approximately 37.6%[4] - Net profit attributable to shareholders for 2024 was RMB 33,173,528, an increase of 5.0% from RMB 31,605,378 in 2023[4] - Earnings per share for 2024 increased to RMB 0.25, compared to RMB 0.24 in 2023[4] - Revenue from the apparel trade segment was RMB 902,236,232, down from RMB 946,051,210 in the previous year, representing a decline of 4.6%[22] - The brand FIRS generated revenue of RMB 710,004,551, an increase of 17.7% compared to RMB 602,902,487 in 2023[19] - Other income decreased by approximately 31.3% to RMB 1.1 million from RMB 1.6 million in 2023, mainly due to a reduction in raw material sales[58] - Selling and distribution expenses decreased by approximately 8.6% to RMB 281.8 million from RMB 308.2 million in 2023, attributed to a decline in sales through cooperative arrangements[60] - Administrative expenses increased by approximately 3.7% to RMB 41.9 million from RMB 40.4 million in 2023, mainly due to increased costs related to the Autumn/Winter China International Fashion Week[61] Assets and Liabilities - Total assets as of December 31, 2024, amounted to RMB 655,385,875, up from RMB 623,352,417 in 2023[5] - Current liabilities increased to RMB 525,604,168 in 2024, compared to RMB 450,911,497 in 2023, indicating a rise of 16.5%[6] - Trade receivables increased to RMB 239,725,926 in 2024 from RMB 222,132,260 in 2023, representing a growth of 7.9%[28] - Trade payables rose to RMB 199,080,405 in 2024, a significant increase of 35.2% from RMB 147,363,421 in 2023[37] - Contract liabilities from customer advances decreased to RMB 31,810,323 in 2024 from RMB 35,243,048 in 2023, a decline of 9.3%[40] - Other payables and accrued expenses totaled RMB 122,871,616 in 2024, down from RMB 133,463,028 in 2023, reflecting a decrease of 7.5%[40] - The company's asset-liability ratio was approximately 17.7% as of December 31, 2024, compared to 18.6% in 2023[71] Inventory and Expenses - The company reported a significant increase in inventory, reaching RMB 278,221,780 in 2024, compared to RMB 230,363,770 in 2023, representing a growth of 20.8%[5] - The total depreciation and amortization expenses amounted to RMB 32,562,952, down from RMB 37,800,117 in the previous year, a reduction of 13.8%[24] - Impairment losses totaled RMB 3,806,841, slightly up from RMB 3,636,449 in 2023[24] - The company reported a decrease in financial expenses to RMB 5,634,254 in 2024 from RMB 6,549,299 in 2023, reflecting improved cost management[4] Market Strategy and Growth - The company plans to expand its market presence and enhance its product offerings in the men's business formal and casual wear segments[9] - The company has been focusing on e-commerce as a distribution channel, which is expected to drive future growth[10] - E-commerce platform sales increased to RMB 367,749,686, up 14.0% from RMB 322,834,314 in 2023[22] - The company experienced a reduction in distributor sales channel revenue by RMB 18.6 million due to channel optimization and marketing policy adjustments[55] - The number of retail stores decreased from 709 on December 31, 2023, to 662 on December 31, 2024, representing a year-on-year reduction of approximately 6.6%[53] Corporate Governance and Compliance - The company is currently evaluating the impact of new and revised Hong Kong Financial Reporting Standards on its financial statements[12] - The company has adopted new accounting standards related to lease liabilities and financial instruments, which will take effect in future reporting periods[11] - The company has maintained compliance with financial covenants, with no violations reported during the fiscal year[44] - The company has adopted corporate governance practices to enhance management efficiency and protect shareholder interests, although the roles of chairman and CEO are currently held by the same individual[87] - The board of directors includes executive, non-executive, and independent non-executive members, ensuring a diverse governance structure[100] Future Outlook and Projects - The company plans to build a comprehensive building on newly acquired land, which will include a product R&D center and a high-end digital smart manufacturing plant[47] - The company has initiated a 5G new production capacity industrial park project in Ningbo, focusing on garment R&D, design, and smart manufacturing[53] - The group aims to establish 100 "China Shanshan" brand experience centers to enhance consumer satisfaction and explore brand consumption growth potential[82] - The group plans to implement a "one body, two wings" development model, focusing on both online and offline growth, leveraging product innovation and digital marketing strategies[82] - The group is committed to building a modern intelligent industrial park that integrates smart production, intelligent warehousing, and new retail live broadcasting bases[85] - The group maintains a positive outlook for future development, focusing on the "high-quality development" theme and enhancing its core assets in talent, brand, and capital[83] Shareholder Information - The proposed final dividend per share for 2024 is RMB 0.08, unchanged from 2023, pending shareholder approval at the annual general meeting[25] - The board proposed a final dividend of RMB 0.08 per share for 133,400,000 shares, totaling RMB 10,672,000 before tax, subject to shareholder approval at the 2025 annual general meeting[91] - The company will withhold a 10% corporate income tax on dividends distributed to non-resident corporate shareholders listed on the H-share register[92] - H-share individual shareholders from countries with a tax treaty with China will have a 10% withholding tax applied on dividends, while those from countries with lower rates may also be subject to the same[94] - The company will assist in refunding any excess withholding tax after approval from the tax authorities for H-share individual shareholders from countries with tax treaties specifying rates between 10% and 20%[95] Audit and Reporting - The independent auditor confirmed that the financial figures for the year align with the consolidated financial statements approved by the board, although no verification was issued for the preliminary performance announcement[90] - The audit committee, composed of three independent non-executive directors, reviewed the accounting standards and internal controls for the year[89] - The full-year results announcement is available on the Hong Kong Stock Exchange website and the company's website[98] - The 2024 annual report will be published at an appropriate time on the aforementioned websites and sent to shareholders upon request[98]

[Financial Highlights](index=2&type=section&id=Financial%20Highlights) [Consolidated Income Statement](index=2&type=section&id=Consolidated%20Income%20Statement) In H1 2024, the company's revenue was RMB 476 million, a 4.8% year-on-year decrease; however, profit for the period reached RMB 13.21 million, a 16.8% year-on-year increase, with basic earnings per share at 9.90 cents 2024 H1 Key Performance Indicators | Metric | 2024 H1 (Unaudited) | 2023 H1 (Unaudited) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | RMB 475,669,316 | RMB 499,457,556 | -4.8% | | **Gross Profit** | RMB 196,230,128 | RMB 202,843,031 | -3.3% | | **Profit before Income Tax** | RMB 19,602,851 | RMB 12,716,684 | +54.1% | | **Profit for the Period** | RMB 13,209,852 | RMB 11,299,408 | +16.9% | | **Basic Earnings Per Share** | 9.90 cents | 8.47 cents | +16.9% | [Consolidated Balance Sheet](index=3&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2024, the company's total assets were RMB 661 million, total liabilities RMB 404 million, and net assets RMB 256 million, maintaining a stable overall financial position, with net current assets at RMB 165 million Key Balance Sheet Items (As of June 30, 2024) | Metric | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | RMB 660,687,986 | RMB 726,389,551 | -9.0% | | **Total Liabilities** | RMB 404,375,213 | RMB 472,614,630 | -14.4% | | **Net Assets** | RMB 256,312,773 | RMB 253,774,921 | +1.0% | | **Cash and Cash Equivalents** | RMB 76,061,479 | RMB 143,224,055 | -46.9% | | **Interest-bearing Bank Borrowings** | RMB 135,000,000 | RMB 135,000,000 | 0.0% | [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=20&type=section&id=Business%20Review) In H1 2024, the company maintained stable performance with slight revenue decline but profit growth, focusing on core brands, initiating a digital transformation industrial park project, and optimizing its omnichannel marketing network - In H1 2024, the company's operating revenue was **RMB 475.7 million**, a **4.8% year-on-year decrease**; profit was **RMB 13.2 million**, a **16.8% year-on-year increase**[44](index=44&type=chunk) - Initiated the SHANSHAN Brand 5G New Quality Productivity Industrial Park project, aiming to create a benchmark industrial park integrating R&D, design, new retail, intelligent manufacturing, and warehousing[45](index=45&type=chunk) - Continuously optimized channels, reducing offline store count from 709 to 677, a **4.5% decrease**, while increasing investment in online e-commerce such as live streaming and social commerce[45](index=45&type=chunk) [Financial Review](index=22&type=section&id=Financial%20Review) This period's financial performance shows a trend of slight revenue decrease and profit growth, with total revenue down 4.8% mainly due to reduced SHANSHAN brand franchisee revenue, while a 7.9% decrease in sales and distribution expenses was the primary driver of profit growth [Revenue Analysis](index=22&type=section&id=Revenue%20Analysis) Total revenue decreased 4.8% year-on-year to RMB 476 million, primarily due to reduced SHANSHAN brand franchisee revenue, with e-commerce platform revenue significantly growing to 36.0% of total, and FIRS brand revenue increasing 20.6% as a key growth driver Revenue by Sales Channel | Sales Channel | 2024 H1 (RMB thousands) | % of Total | 2023 H1 (RMB thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | E-commerce Platforms | 171,230 | 36.0% | 144,324 | 28.9% | | Franchisee Sales | 94,390 | 19.8% | 145,154 | 29.1% | | Self-operated Retail Stores | 74,109 | 15.6% | 73,690 | 14.7% | | Trademark Licensing Income | 53,791 | 11.4% | 43,390 | 8.7% | | Distributor Sales | 47,316 | 9.9% | 52,606 | 10.5% | | Professional Wear | 34,833 | 7.3% | 40,293 | 8.1% | | **Total** | **475,669** | **100%** | **499,457** | **100%** | Revenue by Brand | Brand | 2024 H1 (RMB thousands) | % of Total | 2023 H1 (RMB thousands) | % of Total | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | FIRS | 339,122 | 71.3% | 281,140 | 56.3% | +20.6% | | SHANSHAN | 133,170 | 28.0% | 214,554 | 43.0% | -37.9% | | Others | 3,377 | 0.7% | 3,763 | 0.7% | -10.3% | | **Total** | **475,669** | **100%** | **499,457** | **100%** | **-4.8%** | [Gross Profit Analysis](index=23&type=section&id=Gross%20Profit%20Analysis) Gross profit slightly decreased by 3.3% to RMB 196 million from RMB 203 million in the prior period, primarily due to the reduction in total revenue - Gross profit decreased by **3.3%** from **RMB 202.8 million** to **RMB 196.2 million**, primarily due to reduced revenue in the current period[48](index=48&type=chunk) [Expense Analysis](index=24&type=section&id=Expense%20Analysis) Sales and distribution expenses decreased 7.9% year-on-year to RMB 152 million due to lower franchisee commissions, while administrative expenses increased 7.9% to RMB 21.8 million due to higher staff remuneration, and finance costs decreased 5.4% due to lower interest on lease liabilities - Sales and distribution expenses decreased by **7.9%** from **RMB 164.7 million** in the prior period to **RMB 151.7 million**, primarily due to lower franchisee commissions from reduced revenue in cooperative arrangements[51](index=51&type=chunk) - Administrative expenses increased by **7.9%** from **RMB 20.2 million** in the prior period to **RMB 21.8 million**, mainly due to increased staff salaries and bonuses[52](index=52&type=chunk) - Finance costs decreased by **5.4%** from **RMB 3.7 million** in the prior period to **RMB 3.5 million**, primarily due to reduced interest expenses on lease liabilities[54](index=54&type=chunk) [Profit for the Period](index=25&type=section&id=Profit%20for%20the%20Period) Profit for the period increased 16.8% year-on-year to RMB 13.2 million, primarily driven by effective control over sales and distribution expenses - Profit for the period increased by **16.8%** from **RMB 11.3 million** for the six months ended June 30, 2023, to **RMB 13.2 million** in the current period, primarily due to reduced sales and distribution expenses[56](index=56&type=chunk) [Working Capital Management](index=25&type=section&id=Working%20Capital%20Management) The company's working capital efficiency remained largely stable, with average inventory and trade receivables turnover days slightly increasing to 152 and 77 days respectively, while average trade payables turnover days remained at 85 days Average Turnover Days | Metric | 2024 H1 | 2023 Full Year | | :--- | :--- | :--- | | Average Inventory Turnover Days | 152 days | 149 days | | Average Trade Receivables Turnover Days | 77 days | 74 days | | Average Trade Payables Turnover Days | 85 days | 85 days | [Liquidity and Financial Resources](index=26&type=section&id=Liquidity%20and%20Financial%20Resources) The company's financial position is stable, but cash and cash equivalents significantly decreased from RMB 143 million at the beginning of the period to RMB 76.1 million at the end, while total bank borrowings remained at RMB 135 million, and the gearing ratio slightly increased from 18.6% to 20.4% - Cash and cash equivalents decreased from approximately **RMB 143.2 million** as of December 31, 2023, to approximately **RMB 76.1 million** as of June 30, 2024[58](index=58&type=chunk) - Total bank borrowings remained at approximately **RMB 135 million**. The gearing ratio (total borrowings/total assets) increased from **18.6%** at the end of 2023 to **20.4%**[58](index=58&type=chunk) [Major Investments and Future Plans](index=28&type=section&id=Major%20Investments%20and%20Future%20Plans) The company is advancing an industrial park project with an estimated total cost of RMB 280 million, to be funded by internal resources and bank borrowings, with approximately RMB 110 million in construction contracts signed as of the reporting period end - The total estimated cost for the industrial park project is **RMB 280 million**, to be funded by the Group's existing internal resources and bank borrowings[65](index=65&type=chunk) - As of June 30, 2024, construction contracts for the industrial park project totaling **RMB 109,576,462** have been signed[65](index=65&type=chunk) [Prospects and Plans](index=29&type=section&id=Prospects%20and%20Plans) In H2 2024, the company will continue to focus on its suit single-product strategy, enhance product technology innovation, upgrade brand image, and drive digital transformation, optimize channel structure, expand core markets, and deepen engagement in emerging e-commerce - Future plans include continuing to focus on the suit single-product strategy, centered on 'fit + technology' as the creative essence, to drive continuous advancement and upgrading of product technology[69](index=69&type=chunk) - The company will continue to advance enterprise digital transformation, optimizing aspects such as product design, supply chain management, and marketing, while actively optimizing channel structure and deepening engagement in emerging areas like live streaming and social e-commerce[69](index=69&type=chunk) [Notes to Financial Statements Summary](index=5&type=section&id=Notes%20to%20Financial%20Statements%20Summary) [Revenue and Segment Information](index=6&type=section&id=Revenue%20and%20Segment%20Information) The company operates a single reportable segment in China, engaged in apparel trading, with revenue primarily from apparel transactions and trademark licensing, and e-commerce platforms being the largest sales channel, accounting for 36% - The company has only one single reportable segment engaged in apparel trading in China, with all operations and non-current assets located in China[11](index=11&type=chunk)[14](index=14&type=chunk) Revenue by Major Product/Service | Product/Service | 2024 H1 (RMB) | 2023 H1 (RMB) | | :--- | :--- | :--- | | Apparel Trading | 421,878,831 | 456,067,663 | | Trademark Licensing Income | 53,790,485 | 43,389,893 | [Dividend Policy](index=10&type=section&id=Dividend%20Policy) The Board resolved not to declare an interim dividend for 2024. The company paid a final dividend of RMB 8 cents per share for the year ended December 31, 2023, totaling approximately RMB 10.67 million, on August 2, 2024 - The Board resolved not to declare an interim dividend for the six months ended June 30, 2024[19](index=19&type=chunk)[62](index=62&type=chunk) - The 2023 final dividend of **RMB 8 cents** per ordinary share, totaling approximately **RMB 10,672,000**, was approved and paid on August 2, 2024[18](index=18&type=chunk) [Key Asset and Liability Items](index=11&type=section&id=Key%20Asset%20and%20Liability%20Items) As of the reporting period end, net trade receivables decreased to RMB 177 million from the beginning of the period, with most within three months. Total interest-bearing bank borrowings were RMB 135 million, all short-term and due within one year, guaranteed by major shareholders and directors - Net trade receivables decreased from **RMB 222 million** at the end of 2023 to **RMB 177 million**, with the highest proportion of accounts within three months[23](index=23&type=chunk)[24](index=24&type=chunk) - Total interest-bearing bank borrowings amounted to **RMB 135 million**, all due within one year. Of this, **RMB 75 million** is guaranteed by the major shareholder SHANSHAN Group and individual directors, and **RMB 60 million** by a subsidiary[31](index=31&type=chunk) - The company is constructing a comprehensive building including an R&D center, intelligent manufacturing plant, and warehouse, with approximately **RMB 5.58 million** paid for construction in progress during the reporting period[22](index=22&type=chunk) [Related Party Disclosures](index=16&type=section&id=Related%20Party%20Disclosures) The company's related party transactions primarily include sales to subsidiaries of major shareholders, payment of rent and utilities, and trademark licensing agreements with major shareholder SHANSHAN Group. Additionally, some bank borrowings are guaranteed by major shareholders and directors - Related party transactions with major shareholders include sales, leases, and utilities[33](index=33&type=chunk) - Signed trademark licensing agreements with major shareholder SHANSHAN Group and made related payments[36](index=36&type=chunk)[37](index=37&type=chunk) - Bank borrowings of **RMB 75 million** are guaranteed by major shareholder SHANSHAN Group Co., Ltd., individual directors, and a property charge held by a director[31](index=31&type=chunk) [Corporate Governance and Other Information](index=30&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Compliance with Corporate Governance Code](index=30&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company complied with most provisions of the Corporate Governance Code during the period, with one deviation: the roles of Chairman and CEO are combined in Mr. Luo Yefei, which the Board believes aids business strategy execution with sufficient checks and balances - There is a deviation from Corporate Governance Code provision C.2.1, where the roles of Chairman and Chief Executive Officer are not separate, both held by Executive Director and Chairman Mr. Luo Yefei[70](index=70&type=chunk) [Dividends and Share Repurchase](index=27&type=section&id=Dividends%20and%20Share%20Repurchase) The Board did not recommend an interim dividend. During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - The Board resolved not to declare any interim dividend for the current period[62](index=62&type=chunk) - During the period, the company did not redeem any of its H shares listed on the Stock Exchange, nor did the company or any of its subsidiaries purchase or sell any such H shares[72](index=72&type=chunk)

Employee Management and Welfare - As of December 31, 2023, the company employed 311 staff members, a decrease from 352 in 2022, with a gender ratio of approximately 50% male to 50% female, improving from 39% male to 61% female in 2022[9] - The average monthly employee turnover rate was successfully reduced to approximately 2.6% in the 2023 fiscal year, down from 4.0% in 2022[11] - The company has implemented a scholarship program called "Shan Miao Plan" to reward employees' children who excel academically, with the first scholarship awarded in November 2023[15] - 35% of employees have served the company for over five years, an increase from 29% in 2022, indicating a strengthening relationship between the company and its employees[9] - The company maintains a competitive compensation package, including performance evaluations every quarter and half-year, to encourage employee development[10] - The employee demographic includes 26% on indefinite contracts and 72% on fixed-term contracts, with 2% being retirees rehired[9] - The company adheres to labor laws and regulations to ensure employee welfare and benefits[10] - The average turnover rate by age group is approximately 4.0% (18–25 years), 3.0% (26–35 years), 1.9% (36–45 years), 2.4% (46–55 years), and 1.8% (56–65 years)[11] - The company has established a standard working hours system, limiting daily work to a maximum of eight hours and weekly work to an average of 44 hours[11] - The company emphasizes diversity and inclusion in hiring practices, focusing on candidates' experience and competencies rather than personal characteristics[9] - In the fiscal year 2023, the number of trained employees reached 133, representing approximately 43% of the total workforce, compared to 80 employees or about 23% in 2022[23] - The total training hours in 2023 amounted to 1,064 hours, slightly down from 1,200 hours in 2022, with an average of about 8 hours of training per employee[23] - The average training time for male employees was approximately 4.5 hours, while female employees received about 2.3 hours of training[23] - The company had no recorded workplace injuries in the fiscal year 2023, a significant improvement from 2 injuries resulting in a loss of 105 workdays in 2022[19] - The company provided sufficient workers' compensation leave for employees injured on the job, ensuring compliance with national regulations[19] Financial Performance - The company's revenue for the fiscal year 2023 reached RMB 1,060,046,000, representing an increase from RMB 881,200,000 in 2022[47] - The net profit attributable to the company's owners for 2023 was RMB 31,605,000, compared to RMB 16,006,000 in 2022, indicating a significant improvement[47] - The gross profit margin for 2023 was 37.5%, a decrease from 43.8% in the previous year[47] - The operating profit margin for 2023 was 3.0%, up from 1.8% in 2022, reflecting improved operational efficiency[47] - The basic and diluted earnings per share for 2023 were RMB 24, compared to RMB 12 in 2022, showing a strong growth in profitability[47] - The company declared a final dividend of RMB 0.08 per share for 2023, an increase from RMB 0.04 in 2022[47] - The total number of customer complaints received in 2023 was 8, down from 12 in 2022, indicating improved customer satisfaction[36] - The company has implemented a structured after-sales service management system to enhance customer relations and address complaints effectively[36] - The company emphasizes the importance of quality assurance, with no product recalls due to safety and health reasons in 2023[34] - The company's total assets amounted to RMB 726,389 thousand in 2023, a decrease from RMB 758,577 thousand in 2022[48] - Current liabilities decreased to RMB 450,911 thousand in 2023 from RMB 511,195 thousand in 2022[48] - Sales and distribution expenses as a percentage of revenue decreased to 29.1%, down approximately 8 percentage points from the previous fiscal year[57] - The company implemented various cost control measures, resulting in a year-on-year reduction of approximately 5.8% in sales and distribution expenses[52] - The company reported a trademark licensing income increase of RMB 41.5 million due to ongoing support for quality online distributors[68] Environmental Impact - Total air pollution emissions decreased from 12.8 kg in FY 2022 to 10.5 kg in FY 2023, representing a reduction of approximately 17.95%[84] - Total greenhouse gas emissions increased from 441.0 tons in FY 2022 to 496.5 tons in FY 2023, an increase of about 12.59%[84] - Total energy consumption rose from 734.5 MWh in FY 2022 to 831.8 MWh in FY 2023, marking an increase of approximately 13.24%[84] - Total water resource consumption decreased significantly from 2,608.2 cubic meters in FY 2022 to 1,713.6 cubic meters in FY 2023, a reduction of about 34.19%[84] Corporate Governance and Social Responsibility - The company maintains a zero-tolerance policy towards intellectual property infringement and has established anti-corruption measures to ensure ethical business practices[38][39] - The company has not faced any legal cases related to corruption, bribery, extortion, fraud, or money laundering during the fiscal year 2023[75] - The company emphasizes social responsibility while striving to achieve its corporate goals, aiming for long-term sustainable development[185] - The company has adopted the Corporate Governance Code and has complied with all provisions except for the separation of the roles of Chairman and CEO[189] - The company emphasizes transparency and responsible business practices to align with the long-term interests of the enterprise and its shareholders[189] - The board will periodically review the governance structure to ensure appropriate actions are taken when necessary[190] Market Position and Strategy - The company is focused on maintaining its leadership position in the design, marketing, and sales of men's business and casual wear in China[185] - The company plans to continue focusing on its core brands FIRS and SHANSHAN while activating dormant brands and product categories through a diversified operational model[64] - The company aims to enhance its overall profitability and market share by optimizing its terminal market layout and focusing on key markets and core areas[66] - The company adopted a multi-dimensional market research approach to refine product positioning and enhance market competitiveness[58] - The company has strengthened its collaboration with e-commerce platforms, which played a crucial role in business growth for fiscal year 2023[108] - The company implemented various strategic measures to enhance brand image and optimize channel networks, focusing on market expansion[106] Financial Management - The company maintains a prudent financial management policy, ensuring a stable liquidity position throughout the year[174] - The company closely monitors its liquidity status to meet its funding needs effectively[174] - The company reported a net cash increase of RMB 28,535,890 for the year 2023, compared to RMB 30,422,839 in 2022[163] - The total cash and cash equivalents at the end of 2023 amounted to RMB 143,224,055, up from RMB 114,688,165 at the end of 2022[163] - The company incurred a net cash outflow from investing activities of RMB 51,605,393 in 2023, significantly higher than RMB 3,693,181 in 2022[163] - The company borrowed RMB 255,000,000 in 2023, an increase from RMB 192,500,000 in 2022[163] - The company repaid RMB 277,500,000 in borrowings, compared to RMB 217,218,960 in the previous year[163] - The company made a payment of RMB 40,118,400 for land use rights acquisition in 2023, which was not present in 2022[163] - The asset-liability ratio of the company was approximately 18.6% as of December 31, 2023, compared to 20.8% as of December 31, 2022, showing an improvement of 2.2 percentage points[173]

Revenue Growth - For the fiscal year ending December 31, 2023, total revenue reached RMB 1,060,045,974, a significant increase of 20.4% compared to RMB 881,199,661 in 2022[18] - The apparel trade segment generated revenue of RMB 946,051,210, up from RMB 808,662,717 in the previous year, reflecting a growth of 16.9%[18] - Trademark licensing income increased to RMB 113,994,764, representing a growth of 57.2% from RMB 72,536,944 in 2022[18] - Revenue from e-commerce platforms reached RMB 322,834,314 in 2023, up from RMB 190,371,255 in 2022, representing a growth of approximately 69.5%[38] - The company's total revenue increased by approximately 20.3% from RMB 881.2 million in FY2022 to RMB 1,060.0 million in FY2023[123] Profitability - The company reported a net profit attributable to shareholders of RMB 31,605,378 for 2023, up from RMB 16,006,327 in 2022, reflecting a growth of approximately 97.5%[20] - Earnings per share for 2023 were RMB 0.24, doubling from RMB 0.12 in 2022[20] - The company's profit surged by approximately 97.5%, increasing from RMB 16.0 million in FY2022 to RMB 31.6 million in FY2023[123] - The company's gross profit increased by approximately 2.9% from RMB 385.9 million in the 2022 fiscal year to RMB 397.2 million, primarily due to a revenue growth of 20.3%[159] Assets and Liabilities - Total current liabilities decreased to RMB 450,911,497 from RMB 511,194,583, a reduction of 11.8%[4] - The net asset value increased to RMB 253,774,921, compared to RMB 227,505,543 in 2022, marking an increase of 11.6%[4] - Non-current liabilities rose to RMB 21,703,133 from RMB 19,877,043, an increase of 9.2%[4] - The company reported a total asset value minus current liabilities of RMB 275,478,054, up from RMB 247,382,586, indicating a growth of 11.4%[4] - The company's non-current assets increased to RMB 103,037,134 in 2023 from RMB 76,832,082 in 2022, marking an increase of about 34.2%[21] Cash Flow and Receivables - Cash and cash equivalents rose to RMB 143,224,055 in 2023, compared to RMB 114,688,165 in 2022, an increase of approximately 24.9%[21] - Trade receivables increased to RMB 223,122,076 in 2023 from RMB 205,408,626 in 2022, showing a growth of about 8.5%[39] - The expected credit loss provision for trade receivables was RMB 1,070,535 in 2023, down from RMB 2,423,478 in 2022, showing a reduction of about 55.7%[84] Inventory Management - The total inventory write-down for 2023 was RMB 7,606,974, significantly reduced from RMB 18,352,733 in 2022, indicating improved inventory management[59] - The inventory balance decreased by about 26.2% year-on-year, indicating improved inventory turnover[103] - The average inventory turnover days improved from 259 days as of December 31, 2022, to 149 days as of December 31, 2023, due to efficient inventory management through cloud warehousing[171] Expenses - Total depreciation and amortization expenses for 2023 amounted to RMB 37,800,117, down from RMB 51,390,606 in 2022, reflecting a decrease of approximately 26.4%[59] - Sales and distribution expenses decreased by approximately 5.8% year-on-year, representing 29.1% of total revenue, down from 37.1% in FY2022[103] - Administrative expenses increased by approximately 9.8% from RMB 36.8 million in FY2022 to RMB 40.4 million in the current year, primarily due to increased depreciation of fixed assets and legal consulting fees[164] Dividends - The company proposed a final dividend of RMB 0.08 per share for 2023, compared to RMB 0.04 per share in 2022, marking a 100% increase in dividend payout[61] - The proposed final dividend is RMB 0.08 per share, totaling RMB 10,672,000 before tax, which is an increase from RMB 5,336,000 in the previous year[136] - The final dividend will be subject to approval at the annual general meeting on June 3, 2024, and is expected to be paid by August 2, 2024[136] Strategic Initiatives - The company plans to continue expanding its market presence and investing in new product development to drive future growth[20] - The company is focusing on high-quality development and optimizing market layout to enhance profitability and market share[104] - The company plans to establish 100 "China Shanshan" brand experience centers to enhance customer engagement and implement a "Hundred Cities, Thousand Stores" strategy[157] - The company aims to create a multi-channel marketing network that integrates traditional, social, live-streaming, and private domain platforms for sustainable development[157] Future Outlook - The company maintains a positive outlook for future development, focusing on core brands FIRS and SHANSHAN, and aims to enhance market share and sustainable growth[148] - The company is committed to deepening the management of user assets to unlock user value[129] - The company will enhance its offline consumer shopping experience to strengthen brand loyalty[129]

Financial Performance - For the six months ended June 30, 2023, the company's revenue was RMB 499.5 million, an increase of 19.1% compared to the previous year[9]. - The company's profit for the same period was RMB 11.3 million, up from RMB 0.2 million in the previous year, marking a significant increase[15]. - The group's total revenue increased by approximately 19.1% from RMB 419.3 million in the six months ended June 30, 2022, to RMB 499.5 million in the same period of 2023[29]. - Revenue for the six months ended June 30, 2023, was RMB 499,457,556, an increase of 19.1% compared to RMB 419,280,331 for the same period in 2022[189]. - Standard apparel products generated revenue of RMB 456,067,663, up 17.8% from RMB 387,088,397 in the previous year[189]. - Trademark licensing income rose to RMB 43,389,893, representing a 34.7% increase from RMB 32,191,934 in the prior period[189]. - Gross profit for the same period was RMB 202,843,031, slightly down from RMB 203,425,685, indicating a marginal decrease of 0.3%[90]. - The net profit attributable to the company's owners for the period was RMB 11,299,408, a significant increase from RMB 224,564, reflecting a growth of approximately 5000%[90]. - Basic and diluted earnings per share rose to RMB 8.47 from RMB 0.17, marking a substantial increase[90]. Sales and Distribution - Sales to distributors amounted to RMB 52.6 million, representing 10.5% of total revenue, while e-commerce platform sales reached RMB 144.3 million, accounting for 28.9%[11]. - Revenue from e-commerce platforms for the FIRS and SHANSHAN brands surged approximately 113.1%, rising from RMB 67.7 million to RMB 144.3 million[29]. - The company's sales and distribution expenses decreased by approximately 9.9% to RMB 164.7 million, primarily due to the focus on high-quality store openings and cost reduction measures[13]. - Sales and distribution expenses decreased by 9.9% year-on-year, reflecting effective cost control measures[27]. Inventory and Management - The average inventory turnover days improved to 176 days from 259 days year-on-year, indicating better inventory management[16]. - Inventory balance decreased by about 13.6% compared to December 31, 2022, effectively improving inventory turnover[27]. - The average inventory turnover days significantly reduced from 259 days to 176 days, indicating improved inventory management[38]. - The average accounts payable turnover days decreased from 116 days to 80 days, attributed to a more flexible supply chain[39]. - The company's inventory decreased to RMB 269,555,270, down 13.6% from RMB 311,939,143 as of June 30, 2022[129]. Financial Position - The group maintained a solid financial position, with cash and cash equivalents decreasing from approximately RMB 114.7 million to RMB 90.0 million[40]. - As of June 30, 2023, the total bank borrowings amounted to approximately RMB 120.0 million, down from RMB 157.5 million as of December 31, 2022[61]. - The group's debt-to-asset ratio was approximately 17.2% as of June 30, 2023, compared to 20.8% as of December 31, 2022[61]. - The company's total assets amounted to RMB 610,466,481, a decrease of 10.4% from RMB 681,745,087 as of December 31, 2022[130]. - The company's total equity increased to RMB 233,468,951 as of June 30, 2023, compared to RMB 227,505,543 as of June 30, 2022, reflecting a growth of 2.6%[116]. - The company's total liabilities decreased to RMB 439,596,114 from RMB 511,194,583, indicating a reduction of 14.0%[129]. Strategic Initiatives - The company continues to focus on high-quality development and optimizing its distribution network to enhance brand performance[6]. - The company is committed to strategic initiatives aimed at addressing external pressures of high costs and low demand, ensuring sustainable growth[6]. - The group plans to focus on product innovation and digital economy strategies, enhancing online and offline sales channels[47]. - The group aims to accelerate "high-quality development" in the second half of 2023, focusing on new consumption opportunities and leveraging the intangible value built over 30 years[74]. - The company plans to continue innovating in product development and enhance brand image through strategic store openings and cultural initiatives[93]. - The company is considering the construction of a comprehensive building, including a product R&D center and a digital smart warehouse, to further develop its clothing brand[70]. Governance and Shareholder Structure - The company has maintained a balanced board structure with independent non-executive directors providing oversight[85]. - As of June 30, 2023, major shareholders include Mr. Luo and Ms. Zhou, each holding approximately 24.674% of the company's shares[95]. - The company reported a significant ownership structure, with major shareholders including Ningbo Shanshan Group holding approximately 34.55% of the shares[100]. - The company has established a governance structure with a board of directors committed to high standards of corporate governance, ensuring compliance with relevant regulations[108]. - The company has a diverse shareholder base, with public shareholders holding approximately 49.72% of the equity[100]. Cash Flow and Expenses - The net cash generated from operating activities for the six months ended June 30, 2023, was RMB 26,892,619, down 30.8% from RMB 38,890,988 in the same period of 2022[135]. - The company reported a net cash decrease of RMB 24,659,312 in cash and cash equivalents for the six months ended June 30, 2023[135]. - The group reported a decrease in other payables and accrued expenses from RMB 158,617,606 as of December 31, 2022, to RMB 145,276,496 as of June 30, 2023[151]. - The company reported a financial cost of RMB 3,695,429, which is comparable to RMB 3,693,718 in the previous period[90]. - The group’s financial expenses for the six months ended June 30, 2023, were RMB 3.7 million, remaining stable compared to the previous period[139]. Taxation - The group's income tax expense for the period was RMB 1.4 million, compared to a tax credit of RMB 2.1 million for the six months ended June 30, 2022[57]. - Deferred tax expenses for the six months ended June 30, 2023, amounted to RMB 1,417,276, compared to a credit of RMB 2,093,941 for the same period in 2022[140]. - The effective corporate income tax rate applicable to the company is 25% in mainland China[199].

Financial Performance - The company's revenue for the fiscal year 2022 was RMB 881.2 million, a decrease of approximately 11.3% compared to the fiscal year 2021[10]. - The net profit increased by approximately 86.0% to RMB 16.0 million from RMB 8.6 million in the previous fiscal year[10]. - Total revenue for fiscal year 2022 was RMB 881.2 million, a decline from RMB 993.0 million in fiscal year 2021[76]. - Gross profit decreased by about 20.5% to RMB 385.9 million from RMB 485.2 million in the previous fiscal year[80]. - Other income fell by approximately 46.7% to RMB 0.8 million from RMB 1.5 million in 2021[81]. - The company's profit for the year increased by approximately 86.0% from RMB 86 million in 2021 to RMB 160 million in 2022, primarily due to effective cost reduction measures[129]. - The company's basic earnings per share for the year was RMB 0.12, compared to RMB 0.09 in the previous year[172]. - The company reported a total comprehensive income of RMB 12,371,865 for the year, compared to RMB 12,371,865 in the previous year, indicating stability in overall income[180]. Cost Management - Sales and distribution expenses decreased by about 20.0% year-on-year due to effective cost control measures[10]. - Administrative expenses decreased by about 4.9% from RMB 387 million in 2021 to RMB 368 million in 2022, mainly due to a reduction in employee costs[124]. - Sales and distribution expenses accounted for 37.1% of revenue in fiscal year 2022, a decrease of approximately 4 percentage points from 41.2% in fiscal year 2021[64][72]. Employee and Organizational Changes - The total number of employees decreased from 384 in fiscal year 2021 to 352 in fiscal year 2022[13]. - The average training hours per male employee increased from 2.6 hours in fiscal year 2021 to 5.6 hours in fiscal year 2022[16]. - The company had 352 employees as of December 31, 2022, down from 384 employees in 2021, with total employee costs around RMB 690 million[134]. Strategic Initiatives - The company aims to enhance organizational flexibility to better align with strategic development requirements[11]. - The company continues to focus on platform development and high-quality growth despite challenging market conditions[10]. - The group plans to deepen its core brands FIRS and SHANSHAN and activate dormant brands and product categories in 2023[68]. - The group initiated a "brand image reshaping" project to enhance product design and quality, aiming to boost consumer recognition[65]. - The group is accelerating its digital transformation and enhancing its flexible supply chain to improve operational efficiency[66]. - The company plans to focus on market expansion and new product development in the upcoming fiscal year, although specific strategies were not detailed in the documents[100]. Inventory and Receivables Management - The group’s inventory balance decreased by about 20.0% year-on-year, reflecting effective inventory digestion measures[72]. - The average inventory turnover days improved from 294 days in 2021 to 259 days in 2022, attributed to a flexible supply chain responding quickly to market demand[130]. - The company reported a significant reduction in inventory, which decreased to RMB 311.94 million from RMB 389.73 million, a decline of 20%[175]. - The company reported a total trade receivables of RMB 256,047,886 as of December 31, 2022, with a provision for impairment of RMB 50,989,260 due to the risk of uncollectible accounts[159]. - The average accounts receivable turnover days increased from 62 days in 2021 to 79 days in 2022[130]. Compliance and Governance - The company has complied with applicable environmental laws and regulations in all significant aspects of its business[42]. - There were no significant non-compliance issues with relevant laws and regulations that impacted the company's business and operations during the year[44]. - The company is committed to compliance and has not encountered any significant legal or regulatory issues during the reporting period[149]. - The financial report for the year ended December 31, 2022, was audited by BDO Limited, which issued an unqualified opinion reflecting the company's financial position and operational results accurately[146]. Shareholder Information - Major shareholder Ningbo Qinggang Investment Co., Ltd. holds 63.182% of the total shares[99]. - The company has issued shares listed on the Shanghai Stock Exchange, with major shareholders including Shanshan Group holding approximately 34.55% of the equity[1]. - Over 25% of the company's issued shares are held by the public, complying with the listing rules[14]. - The company suggested a final dividend of RMB 5,336,000 for 2022, maintaining shareholder returns[180]. Future Outlook - The company is optimistic about future development prospects, particularly in the context of rising domestic consumption trends[186]. - The company plans to focus on "high-quality development" in 2023, emphasizing the core assets of "talent," "products," and "capital" to drive business and profit growth[141]. - The company aims to improve existing business profitability while actively expanding market share and achieving sustainable growth[186].