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].

[Company Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides fundamental details about the company [Management Discussion and Analysis](index=5&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section reviews the company's operational performance, financial results, and future strategies [Business Review](index=5&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The company's business performance significantly improved in the first half of 2021, driven by strategic optimization of channels, focus on store efficiency, and advancement of new retail initiatives Key Business Performance Indicators | Indicator | H1 2021 | H1 2020 | Growth Rate | | :--- | :--- | :--- | :--- | | Total Revenue | RMB 521.1 million | RMB 324.6 million | +60.5% | - The retail network was optimized, with the total number of stores decreasing by approximately **8.9%** from 1,003 at the end of 2020 to 914 as of June 30, 2021[10](index=10&type=chunk) - The company's operating strategy focuses on "developing new businesses and deepening existing ones," refining traditional retail management while vigorously promoting new retail to empower offline channels[11](index=11&type=chunk) - Multiple management measures were implemented to enhance operational efficiency, including strengthening performance appraisal, optimizing product-supply chain collaboration, implementing information management, and building talent pipelines and corporate culture[12](index=12&type=chunk) [Financial Review](index=6&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The company's financial performance rebounded strongly, with total revenue increasing by 60.5% and gross profit by 54.0%, leading to a turnaround from loss to a net profit attributable to owners of RMB 6.3 million [Revenue Analysis](index=6&type=section&id=%E6%94%B6%E5%85%A5) Total revenue increased by 60.5% to RMB 521.1 million, primarily due to the recovery of offline channels and successful development of online e-commerce and new retail businesses Revenue by Sales Channel | Sales Channel | H1 2021 (RMB thousand) | Share | H1 2020 (RMB thousand) | Share | | :--- | :--- | :--- | :--- | :--- | | Sales to distributors | 39,703 | 7.6% | 17,849 | 5.5% | | E-commerce platforms | 97,610 | 18.7% | 49,148 | 15.1% | | Self-operated retail stores | 99,676 | 19.1% | 59,349 | 18.3% | | Cooperative arrangements | 221,756 | 42.6% | 181,107 | 55.8% | | Professional wear | 53,982 | 10.4% | 8,657 | 2.7% | | Others | 8,363 | 1.6% | 8,450 | 2.6% | | **Total** | **521,090** | **100%** | **324,560** | **100%** | Revenue by Brand | Brand | H1 2021 (RMB thousand) | Share | H1 2020 (RMB thousand) | Share | | :--- | :--- | :--- | :--- | :--- | | FIRS | 241,731 | 46.4% | 108,690 | 33.5% | | SHANSHAN | 267,556 | 51.3% | 203,299 | 62.6% | | LUBIAM | 4,611 | 0.9% | 5,826 | 1.8% | | Others | 7,192 | 1.4% | 6,745 | 2.1% | | **Total** | **521,090** | **100%** | **324,560** | **100%** | [Gross Profit and Expense Analysis](index=7&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E9%96%8B%E6%94%AF) Gross profit increased by 54.0% to RMB 260.5 million, driven by revenue growth, while selling and distribution expenses slightly increased and finance costs decreased - Gross profit increased by **54.0%** from RMB 169.2 million to **RMB 260.5 million** year-over-year[22](index=22&type=chunk) - Selling and distribution expenses slightly increased by **3.2%** from RMB 218.8 million to **RMB 225.7 million**[27](index=27&type=chunk) - Finance costs decreased by **26.6%** from RMB 7.9 million to **RMB 5.8 million**[31](index=31&type=chunk) [Profit and Loss](index=9&type=section&id=%E5%88%A9%E6%BD%A4%E8%88%87%E8%99%A7%E6%90%8D) The company achieved a significant turnaround, reporting a profit attributable to owners of RMB 6.3 million compared to a loss of RMB 70.6 million in the prior period Profit/Loss Attributable to Owners | Indicator | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Profit/(Loss) attributable to owners of the Company | Profit RMB 6.3 million | Loss RMB 70.6 million | [Working Capital Management](index=9&type=section&id=%E7%87%9F%E9%81%8B%E8%B3%87%E6%9C%AC%E7%AE%A1%E7%90%86) The company significantly improved its working capital management efficiency, notably reducing average inventory turnover days Working Capital Turnover Days | Indicator | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Average inventory turnover days | 286 days | 357 days | | Average trade receivables turnover days | 63 days | 71 days | | Average trade payables turnover days | 108 days | 153 days | [Liquidity and Financial Resources](index=10&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The Group maintained a sound financial position, with cash and cash equivalents decreasing due to repayment of bank borrowings and reduced trade payables Liquidity and Financial Position | Indicator | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | RMB 49.0 million | RMB 111.3 million | | Total bank borrowings | RMB 176.9 million | RMB 202.2 million | | Gearing ratio | 21.4% | 22.8% | [Use of Proceeds from Share Offer](index=11&type=section&id=%E8%82%A1%E4%BB%BD%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) As of June 30, 2021, RMB 51.8 million of the RMB 55.2 million net proceeds from the 2018 share offer has been utilized, with the remaining RMB 3.4 million allocated for IT system upgrades - The remaining **RMB 3.4 million** from the share offer proceeds is designated for information technology system upgrades, expected to be utilized in the fourth quarter of 2021[45](index=45&type=chunk) [Interim Dividend](index=11&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors resolved not to declare any interim dividend for the period - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2021[46](index=46&type=chunk) [Employees and Remuneration Policy](index=12&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) The Group's employee count decreased to 448 as of June 30, 2021, while employee costs for the period increased to approximately RMB 48.3 million - Employee count decreased from 523 at the end of 2020 to **448** as of June 30, 2021[49](index=49&type=chunk) - Employee costs for the period were approximately **RMB 48.3 million**, an increase of approximately **19.3%** year-over-year[49](index=49&type=chunk) [Outlook and Plans](index=13&type=section&id=%E5%89%8D%E6%99%AF%E5%8F%8A%E8%A8%88%E5%8A%83) For the second half of 2021, the Group plans to enhance the competitiveness of its core brands, FIRS and SHANSHAN, by deepening reforms, strengthening channel management, and optimizing product and supply chain collaboration - The Group will continue to focus on "innovation-driven and intrinsic development" to enhance the competitiveness of its two core brands, FIRS and SHANSHAN[58](index=58&type=chunk) - Operational priorities include strengthening distributor and direct sales systems, improving supply chain responsiveness, optimizing supplier structure, increasing gross profit margin, controlling expenses, reducing inventory, and seeking new business growth points[58](index=58&type=chunk) [Corporate Governance and Other Information](index=14&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section details the company's corporate governance practices, including shareholding structures and compliance with relevant codes [Directors, Supervisors, and Major Shareholders' Shareholding](index=14&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%8C%81%E8%82%A1) The report details the shareholding of directors, supervisors, and major shareholders, with Chairman Mr. Luo Yefei and his spouse holding 27.996% and Shanshan Co., Ltd. and its associates holding 70.463% - Chairman Mr. Luo Yefei and his spouse Ms. Zhou Yumei (Non-executive Director) collectively hold **27.996%** of the total issued shares through controlled corporations[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - Major shareholder Shanshan Co., Ltd. and its concert parties (Shanshan Group, Shanshan Holdings, etc.) collectively hold **70.463%** of the total issued shares[66](index=66&type=chunk)[70](index=70&type=chunk) [Compliance with Corporate Governance Code](index=18&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The company generally complied with the Corporate Governance Code, with two noted deviations regarding the separation of Chairman and CEO roles and the Chairman's attendance at the AGM - There was a deviation from Code Provision A.2.1: the roles of Chairman and Chief Executive Officer were not separated, both held by Mr. Luo Yefei[80](index=80&type=chunk) - There was a deviation from Code Provision E.1.2: Chairman Mr. Luo Yefei was unable to attend the Annual General Meeting held on June 4, 2021[81](index=81&type=chunk) [Condensed Consolidated Interim Financial Statements](index=19&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the condensed consolidated interim financial statements, including the statement of profit or loss, financial position, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=20&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E8%A1%A8) For the six months ended June 30, 2021, the company reported revenue of RMB 521 million and gross profit of RMB 260 million, successfully turning around from a loss to a profit of RMB 3.5 million Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB) | Item (RMB) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Revenue | 521,090,457 | 324,560,034 | | Gross profit | 260,467,996 | 169,189,343 | | Profit/(Loss) before income tax | 4,377,709 | (76,503,473) | | Profit/(Loss) for the period | 3,538,782 | (72,791,415) | | Profit/(Loss) attributable to owners of the Company | 6,282,208 | (70,615,112) | | Basic earnings/(loss) per share | 0.05 | (0.53) | [Condensed Consolidated Statement of Financial Position](index=21&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2021, the company's total assets were RMB 826 million, total liabilities RMB 616 million, and net assets RMB 210 million, with net current assets of RMB 113 million Condensed Consolidated Statement of Financial Position (RMB) | Item (RMB) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 116,990,585 | 130,185,908 | | Current assets | 709,442,724 | 758,427,567 | | **Total assets** | **826,433,309** | **888,613,475** | | **Liabilities and Equity** | | | | Current liabilities | 596,652,465 | 658,432,693 | | Non-current liabilities | 19,566,433 | 23,505,153 | | **Total liabilities** | **616,218,898** | **681,937,846** | | **Net assets** | **210,214,411** | **206,675,629** | | **Total equity** | **210,214,411** | **206,675,629** | [Condensed Consolidated Statement of Cash Flows](index=24&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2021, the company experienced net cash outflows from operating, investing, and financing activities, resulting in a net decrease of RMB 62.3 million in cash and cash equivalents Condensed Consolidated Statement of Cash Flows (RMB) | Item (RMB) | Six Months Ended June 30, 2021 | | :--- | :--- | | Net cash used in operating activities | (12,177,470) | | Net cash used in investing activities | (7,070,652) | | Net cash used in financing activities | (43,091,266) | | **Net decrease in cash and cash equivalents** | **(62,339,388)** | | Cash and cash equivalents at beginning of period | 111,326,251 | | **Cash and cash equivalents at end of period** | **48,986,863** | [Notes to the Financial Statements (Summary)](index=25&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) The notes provide detailed explanations of financial statement items, including the single reporting segment, trade receivables, bank borrowings, and a post-reporting period event regarding a subsidiary's voluntary liquidation - The Group operates in a single reportable segment, clothing trading in China, with all revenue derived from China[114](index=114&type=chunk)[120](index=120&type=chunk) - Total bank borrowings amount to **RMB 177 million**, consisting of USD, EUR, and RMB borrowings, all unsecured and due within one year, but guaranteed by the Company's shares held by non-controlling shareholders[151](index=151&type=chunk)[152](index=152&type=chunk) - Post-reporting period event: The voluntary liquidation of subsidiary Ningbo Lubiam Garment Co., Ltd. is in progress and expected to be completed by the end of 2021, which may negatively impact the Group's operating results for the year[167](index=167&type=chunk)

杉杉品牌運營股份有限公司 Shanshan Brand Management Co., Ltd. (a joint stock company incorporated in the People's Republic of China with limited liability) Stock Code : 1749 年報 2020 | ANNUAL REPORT （於中華人民共和國註冊成立的股份有限公司） 股份代號 : 1749 2020 | 年 報 目錄 | --- | |----------------------------| | | | 公司簡介 | | 公司資料 | | 財務概要 | | 主席報告 | | 管理層討論 及分析 | | 董事、監事及高級管理層履歷 | | 企業管治報告 | | 董事會報告 | | 監事會報告 | | 獨立核數師報告 | | 綜合損益及其他全面收入表 | | 綜合財務狀況表 | | 綜合權益變動表 | | 綜合現金流量表 | | 綜合財務報表附註 | | 財務資料概要 | 148 頁次 2 3 5 7 9 18 26 45 60 62 68 69 71 72 74 公 ...

杉杉品牌運營股份有限公司 Shanshan Brand Management Co., Ltd. (於中華人民共和國註冊成立的股份有限公司) 股份代號：1749 2 0 2 0 中 期 報 告 目錄 公司資料 2 管理層討論及分析 4 企業管治及其他資料 13 簡明綜合損益及其他全面收益表 18 簡明綜合財務狀況表 19 簡明綜合權益變動表 21 簡明綜合現金流量表 22 簡明綜合中期財務報表附註 23 頁次 公司資料 | --- | --- | |----------------------------------------------------------|----------------------------------------------------| | | | | 上市資料 | 董事委員會 | | 上市地點：香港聯合交易所有限公司（「 聯交所 」）主板 | 審核委員會 | | 股票代碼： 1749 | 歐陽寶豐先生（主席） | | | 王亞山先生 | | 董事會 執行董事 | 武學凱先生 | | 駱葉飛先生（主席） （於 2020 年 6 月 26 日獲委任為主席） | 薪酬委員會 | ...

杉杉品牌運營股份有限公司 Shanshan Brand Management Co., Ltd. (於中華人民共和國註冊成立的股份有限公司) 股份代號：1749 2019 # # 目錄 頁次 公司簡介 2 公司資料 3 財務概要 5 主席報告 7 管理層討論及分析 9 董事、監事及高級管理層履歷 17 企業管治報告 25 環境、社會及管治報告 44 董事會報告 62 監事會報告 78 獨立核數師報告 80 綜合損益及其他全面收入表 85 綜合財務狀況表 86 綜合權益變動表 88 綜合現金流量表 89 綜合財務報表附註 91 財務資料概要 158 公司 簡介 杉杉品牌運營股份有限公司（「本公司」）的前身寧波杉杉服裝品牌經 營有限公司（「杉杉服裝品牌」）於2011年8月23日在中華人民共和國 （「中國」）成立為有限公司。於2016年5月18日，杉杉服裝品牌改制為 股份有限公司，並更名為杉杉品牌運營股份有限公司。其註冊辦事 處及總部地點的地址為中國浙江省寧波市望春工業園區雲林中路 238號。本公司境外上市外資股（「H股」）自2018年6月27日（「上市日 期」）起在香港聯合交易所有限公司（「聯交所」）上市（「上市 ...

[Company Information](index=3&type=section&id=Company%20Information) This chapter provides basic company information for Shanshan Brand Management Co., Ltd., including its name, listing details, board and committee composition, registered office, principal place of business, key management personnel, independent auditor, legal advisors, and principal bankers - The company name is Shanshan Brand Management Co., Ltd., listed on the Main Board of The Stock Exchange of Hong Kong Limited, stock code 1749[5](index=5&type=chunk) - The Board of Directors comprises executive directors, non-executive directors (Chairman Mr. Zhuang Wei), and independent non-executive directors, with audit, remuneration, and nomination committees[5](index=5&type=chunk)[6](index=6&type=chunk) - The company's registered office and China headquarters are in Ningbo, Zhejiang Province, with its principal place of business in Hong Kong located in Electric Road, North Point[6](index=6&type=chunk) - The independent auditor is BDO Limited, and legal advisors include Sidley Austin (Hong Kong law) and Guangdong Cinda Law Firm (PRC law)[6](index=6&type=chunk)[8](index=8&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This chapter reviews Shanshan Brand Management Co., Ltd.'s business operations and financial performance for the first half of 2019, including revenue, costs, profits, working capital, liquidity, IPO proceeds usage, and future plans, addressing macroeconomic challenges and strategies [Business Review](index=5&type=section&id=Business%20Review) Despite a complex external environment and domestic economic slowdown, the Group focused on its core brands FIRS and SHANSHAN, achieving steady retail network growth through channel optimization, brand enhancement, and improved logistics efficiency - Strategic focus: Concentrating on **FIRS** and **SHANSHAN** as two core proprietary brands, driving performance growth through differentiated competition[10](index=10&type=chunk) - Channel optimization: Optimizing sales channels and diversifying layouts to enhance brand influence[10](index=10&type=chunk) - Logistics efficiency: Establishing a warehousing and logistics center in Suqian, Jiangsu Province, China, to continuously improve logistics efficiency and market responsiveness[10](index=10&type=chunk) Retail Network Store Count Changes | Indicator | June 30, 2019 (stores) | December 31, 2018 (stores) | Growth Rate | | :--- | :--- | :--- | :--- | | FIRS | 699 | - | - | | SHANSHAN | 527 | - | - | | LUBIAM | 15 | - | - | | **Total** | **1,241** | **1,226** | **1.2%** | [Financial Review](index=5&type=section&id=Financial%20Review) The Group's total revenue increased by 6.8% year-on-year in the first half of 2019, mainly due to the growth of the SHANSHAN brand; gross profit and other income increased, but selling and distribution expenses and finance costs rose, leading to a 5.5% year-on-year decrease in profit attributable to owners of the company [Revenue](index=5&type=section&id=Revenue) The Group's total revenue increased by approximately 6.8% from RMB499.7 million in the first half of 2018 to RMB533.8 million in the first half of 2019, primarily due to increased revenue from the SHANSHAN brand Total Revenue Comparison | Indicator | H1 2019 (RMB million) | H1 2018 (RMB million) | Y-o-Y Growth | | :--- | :--- | :--- | :--- | | Total Revenue | 533.8 | 499.7 | 6.8% | - Revenue growth primarily driven by the contribution of the **SHANSHAN** brand[11](index=11&type=chunk) [Revenue by Sales Channel](index=6&type=section&id=Revenue%20by%20Sales%20Channel) The Group's revenue primarily comes from sales to distributors, direct sales (e-commerce platforms and self-operated retail stores), and franchisee sales (cooperative arrangements, professional wear, etc.), with cooperative arrangements accounting for the largest share and professional wear sales growing significantly Revenue Breakdown by Sales Channel | Sales Channel | H1 2019 (RMB thousand) | Share (%) | H1 2018 (RMB thousand) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Sales to distributors | 56,284 | 10.5 | 89,365 | 17.9 | | E-commerce platforms | 52,482 | 9.8 | 64,844 | 13.0 | | Self-operated retail stores | 86,201 | 16.2 | 84,018 | 16.8 | | Cooperative arrangements | 275,515 | 51.6 | 227,099 | 45.4 | | MARCO AZZALI and LUBIAM franchisees | 3,356 | 0.6 | 7,453 | 1.5 | | Professional wear | 53,156 | 10.0 | 18,055 | 3.6 | | Trademark licensing income | 6,764 | 1.3 | 8,868 | 1.8 | | **Total** | **533,758** | **100** | **499,702** | **100** | - Professional wear sales revenue significantly increased from **RMB18,055 thousand** in H1 2018 to **RMB53,156 thousand** in H1 2019, with its share rising from 3.6% to 10.0%[13](index=13&type=chunk) [Revenue by Brand](index=7&type=section&id=Revenue%20by%20Brand) SHANSHAN brand contributed the most revenue and grew significantly, FIRS brand also saw revenue growth, while MARCO AZZALI no longer contributed revenue due to business divestiture Revenue Breakdown by Brand | Brand | H1 2019 (RMB thousand) | Share (%) | H1 2018 (RMB thousand) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | FIRS | 221,341 | 41.5 | 215,790 | 43.2 | | SHANSHAN | 294,175 | 55.1 | 250,975 | 50.2 | | MARCO AZZALI | — | — | 7,241 | 1.4 | | LUBIAM | 11,478 | 2.1 | 16,828 | 3.4 | | Other | 6,764 | 1.3 | 8,868 | 1.8 | | **Total** | **533,758** | **100** | **499,702** | **100** | - **SHANSHAN** brand revenue increased from **RMB250,975 thousand** in H1 2018 to **RMB294,175 thousand** in H1 2019, with its share rising from 50.2% to 55.1%[15](index=15&type=chunk) - **MARCO AZZALI** brand business was sold in March 2018, contributing no revenue in the current period[15](index=15&type=chunk) [Gross Profit](index=7&type=section&id=Gross%20Profit) The Group's gross profit increased by 1.9% year-on-year to RMB299.7 million, primarily due to the increase in total revenue Gross Profit Comparison | Indicator | H1 2019 (RMB million) | H1 2018 (RMB million) | Y-o-Y Growth | | :--- | :--- | :--- | :--- | | Gross Profit | 299.7 | 294.0 | 1.9% | [Other Income](index=7&type=section&id=Other%20Income) Other income decreased by 33.3% year-on-year to RMB0.8 million, mainly due to a reduction in miscellaneous income collected from franchisees Other Income Comparison | Indicator | H1 2019 (RMB million) | H1 2018 (RMB million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Other Income | 0.8 | 1.2 | -33.3% | [Other Gains and Losses](index=7&type=section&id=Other%20Gains%20and%20Losses) Other gains and losses turned from a loss of RMB2.9 million in the prior period to a gain of RMB0.1 million in the current period, primarily benefiting from government grants Other Gains and Losses Comparison | Indicator | H1 2019 (RMB million) | H1 2018 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Other Gains and Losses | 0.1 (Gain) | (2.9) (Loss) | Turnaround to gain | - Main reason: Receipt of **government grants**[18](index=18&type=chunk) [Selling and Distribution Expenses](index=8&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses increased by 9.2% year-on-year to RMB266.6 million, mainly due to increased revenue sharing fees to franchisees and depreciation expenses for renovations, driven by increased sales of SHANSHAN brand products Selling and Distribution Expenses Comparison | Indicator | H1 2019 (RMB million) | H1 2018 (RMB million) | Y-o-Y Growth | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 266.6 | 244.2 | 9.2% | - Reasons for increase: (1) Increased revenue sharing fees paid to franchisees due to increased sales of **SHANSHAN** brand products; (2) Increased renovation expenses and equipment depreciation[20](index=20&type=chunk) [Administrative Expenses](index=8&type=section&id=Administrative%20Expenses) Administrative expenses increased by 3.5% year-on-year to RMB20.6 million, remaining relatively stable Administrative Expenses Comparison | Indicator | H1 2019 (RMB million) | H1 2018 (RMB million) | Y-o-Y Growth | | :--- | :--- | :--- | :--- | | Administrative Expenses | 20.6 | 19.9 | 3.5% | [Finance Costs](index=8&type=section&id=Finance%20Costs) Finance costs increased by 13.5% year-on-year to RMB8.4 million, primarily due to the adoption of Hong Kong Financial Reporting Standard 16 "Leases" Finance Costs Comparison | Indicator | H1 2019 (RMB million) | H1 2018 (RMB million) | Y-o-Y Growth | | :--- | :--- | :--- | :--- | | Finance Costs | 8.4 | 7.4 | 13.5% | - Reason for increase: Primarily due to the impact of adopting **Hong Kong Financial Reporting Standard 16 "Leases"** effective January 1, 2019[22](index=22&type=chunk) [Income Tax Expense](index=8&type=section&id=Income%20Tax%20Expense) Income tax expense significantly decreased by 82.4% year-on-year to RMB0.6 million, mainly because IPO expenses in the prior year could not be offset against taxable income Income Tax Expense Comparison | Indicator | H1 2019 (RMB million) | H1 2018 (RMB million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Income Tax Expense | 0.6 | 3.4 | -82.4% | - Main reason: IPO expenses in the prior year could not be offset against taxable income[23](index=23&type=chunk) [Profit Attributable to Owners of the Company](index=8&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Company) Profit attributable to owners of the company decreased by 5.5% year-on-year to RMB8.6 million Profit Attributable to Owners of the Company Comparison | Indicator | H1 2019 (RMB million) | H1 2018 (RMB million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 8.6 | 9.1 | -5.5% | [Working Capital Management](index=9&type=section&id=Working%20Capital%20Management) The Group's average inventory turnover days increased, while accounts receivable and accounts payable turnover days remained relatively stable Working Capital Turnover Days | Indicator | June 30, 2019 (days) | December 31, 2018 (days) | Change | | :--- | :--- | :--- | :--- | | Average inventory turnover days | 366 | 339 | Increase of 27 days | | Average accounts receivable turnover days | 68 | 62 | Increase of 6 days | | Average accounts payable turnover days | 167 | 171 | Decrease of 4 days | - Increase in inventory turnover days primarily due to purchasing **SHANSHAN** brand products to support its retail store expansion and meet demand[26](index=26&type=chunk) [Liquidity and Financial Resources](index=9&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's financial position remained sound, but cash and cash equivalents decreased, total bank borrowings increased, and the gearing ratio slightly rose - Cash and cash equivalents decreased from **RMB145.4 million** as of December 31, 2018, to **RMB102.1 million** as of June 30, 2019[29](index=29&type=chunk) - Total bank borrowings increased from **RMB260.0 million** as of December 31, 2018, to **RMB285.0 million** as of June 30, 2019[29](index=29&type=chunk) - Gearing ratio increased from **24.6%** as of December 31, 2018, to **25.5%** as of June 30, 2019[29](index=29&type=chunk) [Treasury Policy](index=10&type=section&id=Treasury%20Policy) The Group adopts a prudent financial management approach, closely monitoring its liquidity position to ensure it can meet funding needs and appropriately investing surplus cash - The Group adopts a prudent financial management approach to maintain a **sound liquidity position**[31](index=31&type=chunk) - The Board closely monitors the liquidity position to ensure the liquidity structure of assets, liabilities, and other commitments can meet funding needs[31](index=31&type=chunk) [Foreign Exchange Risk and Hedging](index=10&type=section&id=Foreign%20Exchange%20Risk%20and%20Hedging) The Group faces minimal currency risk as most transactions are conducted in RMB, and therefore, no foreign currency hedging policy has been implemented - The Group faces **minimal currency risk**, with most transactions conducted in RMB[32](index=32&type=chunk) - The Group has **not implemented any foreign currency hedging policy**[32](index=32&type=chunk) [Use of Proceeds from Initial Public Offering](index=10&type=section&id=Use%20of%20Proceeds%20from%20Initial%20Public%20Offering) The net proceeds from the Company's IPO amounted to RMB55.2 million, of which RMB39.0 million had been utilized as of June 30, 2019, primarily for retail network, brand promotion, and warehousing logistics center - Total net proceeds from the initial public offering were approximately **RMB55.2 million**[33](index=33&type=chunk) Use of Share Offer Proceeds | Planned Use of Proceeds | Planned Amount (RMB million) | Actual Amount Used as of June 30, 2019 (RMB million) | Actual Amount Used During the Period (RMB million) | Actual Unused Amount as of June 30, 2019 (RMB million) | | :--- | :--- | :--- | :--- | :--- | | Retail network | 20.9 | 18.5 | 14.6 | 2.4 | | Brand promotion and marketing | 13.6 | 9.3 | 3.4 | 4.3 | | Information technology systems | 10.7 | 1.2 | 0.9 | 9.5 | | Warehousing and logistics center | 4.5 | 4.5 | 1.1 | 0 | | General working capital | 5.5 | 5.5 | 0 | 0 | | **Total** | **55.2** | **39.0** | **20.0** | **16.2** | [Interim Dividend](index=10&type=section&id=Interim%20Dividend) The Board has resolved not to declare any interim dividend for the current period - The Board has resolved **not to declare any interim dividend** for the current period (six months ended June 30, 2018: nil)[35](index=35&type=chunk) [Employees and Remuneration Policy](index=11&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2019, the Group's employee count slightly decreased, employee costs remained stable, and remuneration policy is linked to performance - As of June 30, 2019, the Group had **658 employees** (December 31, 2018: 701 employees)[37](index=37&type=chunk) - Employee costs (including directors' emoluments) for the period were approximately **RMB47.7 million** (six months ended June 30, 2018: RMB47.3 million)[37](index=37&type=chunk) - Remuneration policy for directors and senior management is determined based on experience, level of responsibility, market conditions, Group profit performance, and individual performance[37](index=37&type=chunk) [Significant Investments, Material Acquisitions and Disposals](index=11&type=section&id=Significant%20Investments%2C%20Material%20Acquisitions%20and%20Disposals) The Group had no significant investments, material acquisitions, or disposals of assets, subsidiaries, associates, or joint ventures during the period - The Group had **no significant investments, material acquisitions, or disposals** of assets, subsidiaries, associates, or joint ventures during the period[38](index=38&type=chunk) [Future Plans for Material Investments or Capital Assets](index=11&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2019, the Company had no plans for material investments or capital assets, with future funding expected to come from existing internal resources and bank borrowings - As of June 30, 2019, there were **no plans for any material investments or capital assets**[39](index=39&type=chunk) - Expected funding sources for the coming year will temporarily be from the Group's existing internal resources and bank borrowings[39](index=39&type=chunk) [Capital Structure](index=11&type=section&id=Capital%20Structure) The Company's capital structure as of June 30, 2019, remained unchanged compared to December 31, 2018 - The Company's capital structure as of June 30, 2019, remained **unchanged** compared to December 31, 2018[40](index=40&type=chunk) [Pledge of Assets](index=11&type=section&id=Pledge%20of%20Assets) As of June 30, 2019, the Group pledged RMB26.4 million in deposits as security for outstanding bank acceptance bills, with no other assets pledged - As of June 30, 2019, the Group pledged deposits of **RMB26,400,000** (December 31, 2018: RMB31,540,000) as security for outstanding bank acceptance bills[41](index=41&type=chunk) - Other than the pledged deposits, the Group has **not pledged any other assets** as security for outstanding bank acceptance bills[41](index=41&type=chunk) [Contingent Liabilities](index=11&type=section&id=Contingent%20Liabilities) As of June 30, 2019, the Group had no significant contingent liabilities - As of June 30, 2019, the Group had **no significant contingent liabilities** (December 31, 2018: nil)[42](index=42&type=chunk) [Events After the Reporting Period](index=11&type=section&id=Events%20After%20the%20Reporting%20Period) After the reporting period, the Company entered into new lease agreements with its controlling shareholder, Shanshan Co., Ltd., to renew property leases for one year, constituting connected transactions under the Listing Rules - The Company entered into New Lease Agreement I and New Lease Agreement III with its controlling shareholder, Shanshan Co., Ltd., and its non-wholly owned subsidiary Lubiam Apparel entered into New Lease Agreement II with Shanshan Co., Ltd., to **renew property leases for one year**[46](index=46&type=chunk) - The transactions contemplated under the new lease agreements constitute **connected transactions** under Chapter 14A of the Listing Rules of the Stock Exchange for the Company[46](index=46&type=chunk) [Outlook and Plans](index=12&type=section&id=Outlook%20and%20Plans) Facing a complex and volatile macroeconomic environment, the Group will continue to focus on its proprietary brands, enhancing core competitiveness and operational efficiency through refined retail operations, strengthened brand promotion, supply chain innovation, and optimized operating procedures - Strategic direction: Focusing on **proprietary brands**, utilizing diversified sales channel layouts, and driving refined retail operations with data[48](index=48&type=chunk) - Core capability enhancement: Increasing **brand promotion and marketing efforts**, advancing supply chain innovation and application, and accelerating supply chain responsiveness[48](index=48&type=chunk) - Operational optimization: Continuously optimizing company operating procedures, improving risk management processes, deepening cost reduction and efficiency enhancement, strengthening core competitiveness, and improving operational efficiency[48](index=48&type=chunk) [Corporate Governance and Other Information](index=13&type=section&id=Corporate%20Governance%20and%20Other%20Information) This chapter discloses equity interests of directors, supervisors, and major shareholders, explains the company's compliance with corporate governance codes and model code, and other important information such as changes in directors' information [Directors', Supervisors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=13&type=section&id=Directors'%2C%20Supervisors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) This chapter discloses the long positions of the Company's directors, supervisors, and chief executive in the Company's domestic shares and shares of associated corporations as of June 30, 2019 - Executive Director Mr. Luo Yefei holds **10,000,000 domestic shares** of the Company through his controlled corporation Shaanxi Maoye Industry and Trade Co., Ltd., representing 10% of the domestic share class and approximately 7.496% of the total shares[51](index=51&type=chunk) - Non-executive Director and Chairman of the Board Mr. Zhuang Wei holds **22,000,000 domestic shares** of Shanshan Holdings through Longhe Investment, representing approximately 2.200% of Shanshan Holdings' total shares[53](index=53&type=chunk) - Executive Director Mr. Cao Yang holds **7,300,000 domestic shares** of Shanshan Holdings through Pingren Investment, representing approximately 0.730% of Shanshan Holdings' total shares[53](index=53&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares](index=15&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares) This chapter details the interests of substantial shareholders and other persons holding 5% or more of the Company's equity as of June 30, 2019, showing Shanshan Co., Ltd. and its affiliates as the largest shareholders Substantial Shareholders' Shareholding | Name of Substantial Shareholder / Entity | Share Class | Capacity / Nature of Interest | Number of Shares Held (shares) | Percentage of Shareholding in Relevant Class | Approximate Percentage of Total Shareholding | | :--- | :--- | :--- | :--- | :--- | :--- | | Shanshan Co., Ltd. | Domestic Shares | Beneficial owner / Personal interest | 90,000,000 | 90% | 67.466% | | Shanshan Group Co., Ltd. | Domestic Shares | Interest of controlled corporation / Corporate interest | 90,000,000 | 90% | 67.466% | | Ningbo Yonggang Garment Investment Co., Ltd. | Domestic Shares | Interest of controlled corporation / Corporate interest | 90,000,000 | 90% | 67.466% | | Shanshan Holdings | Domestic Shares | Interest of controlled corporation / Corporate interest | 90,000,000 | 90% | 67.466% | | Ningbo Qinggang Investment Co., Ltd. | Domestic Shares | Interest of controlled corporation / Corporate interest | 90,000,000 | 90% | 67.466% | | Mr. Zheng Yonggang | Domestic Shares | Interest of controlled corporation / Corporate interest | 90,000,000 | 90% | 67.466% | | Ms. Zhou Jiqing | Domestic Shares | Interest of controlled corporation / Corporate interest | 90,000,000 | 90% | 67.466% | | Shaanxi Maoye | Domestic Shares | Beneficial owner / Personal interest | 10,000,000 | 10% | 7.496% | | Ms. Zhou Yumei | Domestic Shares | Spouse's interest / Family interest | 10,000,000 | 10% | 7.496% | - Shanshan Co., Ltd. is owned by Shanshan Group, Shanshan Holdings, Mr. Zheng, and other public shareholders; Shanshan Group and Shanshan Holdings control the majority of Shanshan Co., Ltd.'s board[59](index=59&type=chunk) [Compliance with Corporate Governance Code](index=17&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with all code provisions of the Corporate Governance Code during the period, with two deviations explained and rectified - The Company complied with all code provisions of the Corporate Governance Code as set out in Appendix 14 of the Listing Rules during the period[63](index=63&type=chunk) - Deviation from code provision A.4.2 (rotation of directors) was rectified after the 2019 Annual General Meeting[63](index=63&type=chunk) - Deviation from code provision E.1.2 (Chairman's attendance at AGM) was due to Chairman Mr. Zhuang Wei's official duties, with Executive Director Mr. Cao presiding instead, and shareholder feedback has been followed up[64](index=64&type=chunk) [Audit Committee](index=17&type=section&id=Audit%20Committee) The Board's Audit Committee, comprising all three independent non-executive directors, has reviewed the Company's unaudited condensed consolidated interim results and this announcement for the period - The Audit Committee comprises all three independent non-executive directors, namely Mr. Ouyang Baofeng (Chairman of the Committee), Mr. Wang Yashan, and Mr. Wu Xuekai[65](index=65&type=chunk) - The Audit Committee has reviewed the Company's unaudited condensed consolidated interim results and this announcement for the period with the Company's management team[65](index=65&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=17&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) The Company did not redeem any of its H shares listed on the Stock Exchange during the period, nor did the Company or any of its subsidiaries purchase or sell any such H shares - 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[66](index=66&type=chunk) [Compliance with Model Code](index=17&type=section&id=Compliance%20with%20Model%20Code) The Company has adopted the Model Code as its code of conduct for directors and supervisors dealing in the Company's securities, and all directors and supervisors confirmed compliance during the period - The Company has adopted the Model Code as its code of conduct for its directors and supervisors dealing in the Company's securities[67](index=67&type=chunk) - All directors and supervisors confirmed their **compliance with the Model Code** during the period[67](index=67&type=chunk) [Competing Interests](index=18&type=section&id=Competing%20Interests) As of June 30, 2019, no director, supervisor, controlling shareholder, or their respective close associates had any interests in businesses that compete or may compete with the Group's business - As of June 30, 2019, no director, supervisor of the Company, controlling shareholder, or their respective close associates had any interests in businesses that directly or indirectly compete or may compete with the Group's business[69](index=69&type=chunk) [Changes in Directors' Information](index=18&type=section&id=Changes%20in%20Directors'%20Information) During the period, Executive Director Mr. Luo Yefei's remuneration increased, and Independent Non-executive Director Mr. Ouyang Baofeng was appointed as an independent non-executive director of another listed company - Executive Director Mr. Luo Yefei's remuneration increased from **RMB450,000 per annum** to **RMB600,000 per annum**, effective April 1, 2019[70](index=70&type=chunk) - Independent Non-executive Director Mr. Ouyang Baofeng was appointed as an independent non-executive director of CIFI Holdings (Group) Co., Ltd. (stock code: 2772, a company listed on the Main Board of the Stock Exchange) on June 19, 2019[70](index=70&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This chapter provides the condensed consolidated statement of comprehensive income for the six months ended June 30, 2019, reflecting the Group's revenue, costs, expenses, and profit performance Key Indicators of Condensed Consolidated Statement of Comprehensive Income | Indicator | H1 2019 (RMB) | H1 2018 (RMB) | | :--- | :--- | :--- | | Revenue | 533,757,730 | 499,702,257 | | Gross Profit | 299,701,713 | 293,952,316 | | Profit Before Income Tax | 8,052,204 | 12,179,644 | | Profit and Total Comprehensive Income for the Period | 7,486,661 | 8,760,883 | | Profit Attributable to Owners of the Company | 8,643,075 | 9,116,503 | | Basic Earnings Per Share | 0.06 | 0.09 | [Condensed Consolidated Statement of Financial Position](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This chapter provides the condensed consolidated statement of financial position as of June 30, 2019, showcasing the Group's asset, liability, and equity structure, and reflecting changes after adopting Hong Kong Financial Reporting Standard 16 Key Indicators of Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2019 (RMB) | December 31, 2018 (RMB) | | :--- | :--- | :--- | | Non-current assets | 179,214,573 | 134,035,363 | | Current assets | 940,122,663 | 921,490,782 | | Current liabilities | 786,777,736 | 745,253,740 | | Net current assets | 153,344,927 | 176,237,042 | | Net assets | 309,755,066 | 310,272,405 | | Total equity | 309,755,066 | 310,272,405 | - Right-of-use assets of **RMB42,468,789** were first recognized in non-current assets, reflecting the impact of adopting Hong Kong Financial Reporting Standard 16[75](index=75&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This chapter provides the condensed consolidated statement of changes in equity for the six months ended June 30, 2019, reflecting changes in share capital, reserves, and non-controlling interests, including profit for the period and dividends paid - As of June 30, 2019, total equity was **RMB309,755,066**, a slight decrease from RMB310,272,405 as of December 31, 2018[81](index=81&type=chunk) - Profit attributable to owners of the Company for the period was **RMB8,643,075**[81](index=81&type=chunk) - Final dividend of **RMB8,004,000** for 2018 was declared and paid[81](index=81&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=23&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This chapter provides the condensed consolidated statement of cash flows for the six months ended June 30, 2019, showing the Group's cash flows from operating, investing, and financing activities - Net cash used in operating activities was **RMB(20,273,929)**, worsening from RMB(4,461,690) in the prior period[84](index=84&type=chunk) - Net cash used in investing activities was **RMB(19,950,882)**, an improvement from RMB(29,424,078) in the prior period[84](index=84&type=chunk) - Net cash used in financing activities was **RMB(3,064,821)**, compared to net cash generated of RMB67,296,454 in the prior period[84](index=84&type=chunk) - Cash and cash equivalents at the end of the period were **RMB102,108,862**, a decrease from RMB145,398,494 at the beginning of the period[84](index=84&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=24&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This chapter provides detailed notes to the condensed consolidated interim financial statements, covering company information, accounting policies, standard changes, segment information, financial item breakdowns, and related party transactions, offering crucial supplementary information for understanding the financial statements [1. Company Information](index=24&type=section&id=1.%20Company%20Information) This note reiterates the company's basic information, including its establishment history, principal activities, and immediate and ultimate holding companies - The company, formerly Ningbo Shanshan Garment Brand Management Co., Ltd., was established on August 23, 2011, and restructured into Shanshan Brand Management Co., Ltd. on May 18, 2016[87](index=87&type=chunk) - The Group is principally engaged in the design, marketing, and sale of men's business formal wear and casual wear in China[88](index=88&type=chunk) - The Company's immediate holding company is Shanshan Co., Ltd., and its ultimate holding company is Shanshan Holdings, both incorporated in China[88](index=88&type=chunk) [2. Basis of Preparation and Presentation](index=24&type=section&id=2.%20Basis%20of%20Preparation%20and%20Presentation) This chapter clarifies the basis for preparing the condensed consolidated interim financial statements, primarily following HKAS 34 and the Listing Rules, and notes the first-time adoption of HKFRS 16 in this period - These condensed consolidated interim financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 issued by the HKICPA and the applicable disclosure provisions of the Listing Rules[89](index=89&type=chunk) - This period marks the first-time adoption of **Hong Kong Financial Reporting Standard 16 "Leases"**; apart from this, the adoption of new and revised HKFRSs had no other significant impact on the financial statements[89](index=89&type=chunk)[93](index=93&type=chunk) [3. Changes in Hong Kong Financial Reporting Standards](index=25&type=section&id=3.%20Changes%20in%20Hong%20Financial%20Reporting%20Standards) This chapter details the impact of the first-time adoption of Hong Kong Financial Reporting Standard 16 "Leases" on the financial statements, including new definitions, lessee accounting treatment, and transition arrangements [Impact of Adopting HKFRS 16](index=25&type=section&id=Impact%20of%20Adopting%20HKFRS%2016) Adoption of HKFRS 16 led lessees to recognize most leases as right-of-use assets and lease liabilities; the Group applied the cumulative effect method and did not restate 2018 comparative data - Hong Kong Financial Reporting Standard 16 significantly changed lease accounting, primarily for lessees, with most leases recognized as **right-of-use assets and lease liabilities** on the statement of financial position[94](index=94&type=chunk) - The Group applied HKFRS 16 using the **cumulative effect method**, and comparative information presented for 2018 has not been restated[96](index=96&type=chunk) Impact of Adopting HKFRS 16 on Statement of Financial Position as of January 1, 2019 | Indicator | RMB (Increase / (Decrease)) | | :--- | :--- | | Right-of-use assets | 43,818,629 | | Less: Lease prepayments | (5,901,670) | | Total assets | 37,916,959 | | Lease liabilities (non-current) | 28,313,996 | | Lease liabilities (current) | 9,602,963 | | Total liabilities | 37,916,959 | Reconciliation of Operating Lease Commitments to Lease Liabilities (January 1, 2019) | Indicator | RMB | | :--- | :--- | | Operating lease commitments as of December 31, 2018 | 64,118,520 | | Less: Short-term leases | (13,745,019) | | Less: Future interest expense | (3,561,462) | | Less: Low-value asset leases | (2,993,410) | | Less: Lease prepayments | (5,901,670) | | **Total lease liabilities as of January 1, 2019** | **37,916,959** | [New Definition of a Lease](index=27&type=section&id=New%20Definition%20of%20a%20Lease) Under HKFRS 16, a lease is defined as a contract or part of a contract that conveys the right to use an asset for a period in exchange for consideration, with clear conditions for controlling the use of an identified asset; the Group chose not to separate non-lease components - A lease is defined as a contract or part of a contract that conveys the right to use an asset for a period in exchange for consideration, where the customer has the right to obtain substantially all economic benefits and direct the use of the identified asset[100](index=100&type=chunk) - The Group has chosen **not to separate non-lease components**, accounting for each lease component and any associated non-lease components as a single lease component[100](index=100&type=chunk) [Accounting as a Lessee](index=28&type=section&id=Accounting%20as%20a%20Lessee) As a lessee, the Group capitalizes all leases (except short-term and low-value leases) as right-of-use assets and lease liabilities under HKFRS 16, measuring right-of-use assets at cost and lease liabilities at present value - Under Hong Kong Financial Reporting Standard 16, all leases (except short-term and low-value leases) are capitalized on the statement of financial position as **right-of-use assets and lease liabilities**[103](index=103&type=chunk) - Right-of-use assets are recognized at cost, including the initial amount of lease liabilities, lease payments, initial direct costs, and estimated dismantling costs, and are measured using the **cost model**[104](index=104&type=chunk) - Lease liabilities are recognized at the present value of lease payments not paid at the commencement date, discounted using the interest rate implicit in the lease or the incremental borrowing rate[106](index=106&type=chunk) [Transition Arrangements](index=29&type=section&id=Transition%20Arrangements) The Group applied HKFRS 16 using the cumulative effect method, recognizing lease liabilities and right-of-use assets on January 1, 2019, and applied several practical expedients - The Group applied Hong Kong Financial Reporting Standard 16 using the **cumulative effect method**, recognizing right-of-use assets at an amount equal to the lease liabilities, and comparative information for 2018 has not been restated[107](index=107&type=chunk) - On January 1, 2019, the Group recognized lease liabilities for leases previously classified as operating leases, measured at the present value of the remaining lease payments[111](index=111&type=chunk) - The Group applied several practical expedients, including applying a single discount rate to portfolios of leases with reasonably similar characteristics, excluding initial direct costs, and determining the lease term with hindsight[111](index=111&type=chunk)[112](index=112&type=chunk) [4. Application of Judgements and Estimates](index=30&type=section&id=4.%20Application%20of%20Judgements%20and%20Estimates) The significant judgments and key sources of estimation uncertainty made by management in preparing these condensed consolidated interim financial statements are the same as those applied in the 2018 annual financial statements, except for new significant judgments and estimation uncertainties related to the application of HKFRS 16 - The significant judgments and key sources of estimation uncertainty made by management in preparing these condensed consolidated interim financial statements are the same as those applied in the 2018 annual financial statements[113](index=113&type=chunk) - The exception is new significant judgments and estimation uncertainties related to the application of **Hong Kong Financial Reporting Standard 16**[113](index=113&type=chunk) [5. Segment Information and Revenue](index=31&type=section&id=5.%20Segment%20Information%20and%20Revenue) The Group has only one reportable segment, engaged in apparel trading in China, with revenue primarily from standard apparel products and trademark licensing, and all operations and non-current assets located in China [Reportable Segments](index=31&type=section&id=Reportable%20Segments) The Group is identified as having a single reportable segment engaged in apparel trading in China, with revenue classified by geography, product/service, and timing of recognition - The Group has only **one single reportable segment** engaged in apparel trading in China[116](index=116&type=chunk) Revenue Breakdown from Customer Contracts | Revenue Source | H1 2019 (RMB) | H1 2018 (RMB) | | :--- | :--- | :--- | | Apparel trading | 526,993,579 | 490,834,332 | | Trademark licensing income | 6,764,151 | 8,867,925 | | **Total** | **533,757,730** | **499,702,257** | Revenue Breakdown by Brand | Brand | H1 2019 (RMB) | H1 2018 (RMB) | | :--- | :--- | :--- | | FIRS | 221,340,708 | 215,789,443 | | Shanshan | 294,175,424 | 250,975,260 | | Marco Azzali | — | 7,241,040 | | Lubiam | 11,477,447 | 16,828,590 | | Other | 6,764,151 | 8,867,924 | | **Total** | **533,757,730** | **499,702,257** | [Geographical Information](index=32&type=section&id=Geographical%20Information) The Group's operations and non-current assets are all located in China, and all revenue is derived from China - During the period, the Group's operations and non-current assets were located in China, and all its revenue was derived from China[120](index=120&type=chunk) [Information About Major Customers](index=32&type=section&id=Information%20About%20Major%20Customers) During the period, no single customer accounted for more than 10% of the Group's revenue - During the period, no single customer accounted for **more than 10%** of the Group's revenue[121](index=121&type=chunk) [6. Profit Before Income Tax](index=33&type=section&id=6.%20Profit%20Before%20Income%20Tax) This chapter details the expenses deducted when calculating profit before income tax, including advertising, amortization, depreciation, cost of sales, and staff costs Items Deducted from Profit Before Income Tax | Expense Item | H1 2019 (RMB) | H1 2018 (RMB) | | :--- | :--- | :--- | | Advertising and promotion expenses | 14,067,693 | 12,433,238 | | Amortization of intangible assets | 187,741 | 145,732 | | Depreciation of property, plant and equipment | 23,191,245 | 12,731,598 | | Amortization of right-of-use assets | 12,979,845 | — | | Cost of inventories sold | 234,056,017 | 205,749,941 | | Lease payments under operating leases: minimum lease payments | 9,131,822 | 18,770,680 | | Lease payments under operating leases: contingent rents | 1,287,363 | 6,086,541 | | Trademark payments | 326,242 | 563,905 | | Staff costs | 47,736,285 | 47,298,654 | - Amortization of right-of-use assets of **RMB12,979,845** is a new item after adopting Hong Kong Financial Reporting Standard 16[123](index=123&type=chunk) [7. Finance Costs](index=33&type=section&id=7.%20Finance%20Costs) This chapter details the composition of the Group's finance costs, primarily including interest expense on bank borrowings and lease liabilities Composition of Finance Costs | Finance Cost Item | H1 2019 (RMB) | H1 2018 (RMB) | | :--- | :--- | :--- | | Interest expense on bank borrowings repayable within one year | 7,296,249 | 7,334,222 | | Interest expense on lease liabilities | 1,071,229 | — | | **Total** | **8,367,478** | **7,406,607** | - Interest expense on lease liabilities of **RMB1,071,229** is a new item after adopting Hong Kong Financial Reporting Standard 16[124](index=124&type=chunk) [8. Dividends](index=34&type=section&id=8.%20Dividends) This chapter discloses the final dividends paid by the Company for prior years and confirms that the Board does not recommend any interim dividend for the current period Dividend Payments | Indicator | H1 2019 (RMB) | H1 2018 (RMB) | | :--- | :--- | :--- | | Final dividend of RMB0.06 per share for prior year | 8,004,000 | — | - The Board does **not recommend any interim dividend** for the current period[126](index=126&type=chunk) [9. Income Tax Expense](index=34&type=section&id=9.%20Income%20Tax%20Expense) This chapter details the Group's income tax expense, accrued at a 25% corporate income tax rate, and lists the current period's income tax provision and deferred tax - Corporate income tax is accrued at a rate of **25%** based on the estimated taxable profits derived from China during the period[127](index=127&type=chunk) Income Tax Expense Breakdown | Income Tax Item | H1 2019 (RMB) | H1 2018 (RMB) | | :--- | :--- | :--- | | Income tax provision for the period | 2,119,178 | 5,710,028 | | Deferred tax | (1,553,635) | (2,291,267) | | **Income Tax Expense** | **565,543** | **3,418,761** | [10. Earnings Per Share](index=34&type=section&id=10.%20Earnings%20Per%20Share) This chapter presents the profit attributable to owners of the Company and basic earnings per share, confirming no potential dilutive shares for the period Basic Earnings Per Share | Indicator | H1 2019 | H1 2018 | | :--- | :--- | :--- | | Profit attributable to owners of the Company for the period (RMB) | 8,643,075 | 9,116,503 | | Weighted average number of shares outstanding for the period | 133,400,000 | 100,553,591 | | Basic earnings per share (RMB) | 0.06 | 0.09 | - As there were no potential dilutive shares outstanding during the current and prior periods, **diluted earnings per share are the same as basic earnings per share**[130](index=130&type=chunk) [11. Property, Plant and Equipment](index=35&type=section&id=11.%20Property%2C%20Plant%20and%20Equipment) During the period, the Group acquired property, plant, and equipment amounting to approximately RMB25.3 million - During the period, the Group acquired property, plant, and equipment amounting to approximately **RMB25,317,387** (six months ended June 30, 2018: RMB24,753,201)[133](index=133&type=chunk) [12. Trade and Bills Receivables](index=35&type=section&id=12.%20Trade%20and%20Bills%20Receivables) This chapter provides an aging analysis of trade and bills receivables, showing that most receivables are within three months, and explains the Group's credit period policy - As of June 30, 2019, total trade and bills receivables were **RMB214,557,507**, an increase from RMB183,246,509 as of December 31, 2018[136](index=136&type=chunk) Aging Analysis of Trade and Bills Receivables (June 30, 2019) | Aging | Amount (RMB) | | :--- | :--- | | Within three months | 113,330,728 | | Over three months but within six months | 36,289,366 | | Over six months but within one year | 53,513,983 | | Over one year | 11,423,430 | | **Total** | **214,557,507** | - The Group provides a general credit period of **30 to 240 days** for goods sold to customers[136](index=136&type=chunk) [13. Prepayments and Other Receivables](index=36&type=section&id=13.%20Prepayments%20and%20Other%20Receivables) This chapter lists the composition of the Group's prepayments and other receivables Breakdown of Prepayments and Other Receivables | Item | June 30, 2019 (RMB) | December 31, 2018 (RMB) | | :--- | :--- | :--- | | Prepayments | 75,078,492 | 64,833,190 | | Other receivables | 37,973,062 | 29,972,821 | | Less: Impairment allowance | (663,286) | (663,286) | | **Total** | **112,388,268** | **94,142,725** | [14. Trade and Bills Payables](index=36&type=section&id=14.%20Trade%20and%20Bills%20Payables) This chapter provides an aging analysis of trade and bills payables, showing that most payables are within three months - As of June 30, 2019, total trade and bills payables were **RMB209,772,417**, a decrease from RMB218,120,737 as of December 31, 2018[138](index=138&type=chunk) Aging Analysis of Trade and Bills Payables (June 30, 2019) | Aging | Amount (RMB) | | :--- | :--- | | Within three months | 104,174,847 | | Over three months but within six months | 29,982,113 | | Over six months but within one year | 7,395,478 | | Over one year | 2,219,979 | | **Total** | **143,772,417** | [15. Other Payables and Accrued Expenses](index=37&type=section&id=15.%20Other%20Payables%20and%20Accrued%20Expenses) This chapter lists the composition of the Group's other payables and accrued expenses Breakdown of Other Payables and Accrued Expenses | Item | June 30, 2019 (RMB) | December 31, 2018 (RMB) | | :--- | :--- | :--- | | Other payables and accrued expenses | 229,608,001 | 226,059,499 | | Other tax payables | 6,252,161 | 932,432 | | Sales rebates | 10,789,698 | 9,834,834 | | **Total** | **246,649,860** | **236,826,765** | [16. Interest-bearing Bank Borrowings](index=37&type=section&id=16.%20Interest-bearing%20Bank%20Borrowings) This chapter discloses the Group's interest-bearing bank borrowings, which are unsecured, fixed-rate, and repayable within one year - As of June 30, 2019, total bank borrowings were **RMB285,000,000**, an increase from RMB260,000,000 as of December 31, 2018[141](index=141&type=chunk) - Bank borrowings are **unsecured**, bear fixed annual interest rates ranging from **5.00% to 5.44%**, and are repayable within one year[141](index=141&type=chunk) [17. Share Capital](index=37&type=section&id=17.%20Share%20Capital) This chapter lists the composition of the Company's share capital, including registered domestic shares and H shares, and mentions the H share issuance in 2018 Share Capital Composition | Item | Number of Shares | RMB | | :--- | :--- | :--- | | As of January 1, 2018 | 100,000,000 | 100,000,000 | | Issuance of H shares | 33,400,000 | 33,400,000 | | As of December 31, 2018, January 1, 2019, and June 30, 2019 | 133,400,000 | 133,400,000 | - On the listing date, the Group issued a total of **33,400,000 H shares** with a par value of RMB1 each at HKD3.78 per share, raising approximately **RMB104,911,782**[143](index=143&type=chunk) [18. Related Party Disclosures](index=38&type=section&id=18.%20Related%20Party%20Disclosures) This chapter details the Group's receivables/payables and various transactions with related parties, including cooperation with controlling shareholder Shanshan Co., Ltd. on professional wear business, and compensation for key management personnel [Amounts Due from Immediate Holding Company / Fellow Subsidiaries](index=38&type=section&id=Amounts%20Due%20from%20Immediate%20Holding%20Company%20%2F%20Fellow%20Subsidiaries) This chapter discloses amounts due from the Group's immediate holding company and fellow subsidiaries, which are unsecured, interest-free, and repayable on demand - Amounts due from immediate holding company / fellow subsidiaries are **unsecured, interest-free, and repayable on demand**[145](index=145&type=chunk) Amounts Due from Immediate Holding Company / Fellow Subsidiaries (June 30, 2019) | Item | Amount (RMB) | | :--- | :--- | | Amounts due from immediate holding company (trade nature) | 1,934,233 | | Amounts due from immediate holding company (non-trade nature) | 899,189 | | Amounts due from fellow subsidiaries (trade nature) | 1,146,863 | | Amounts due from fellow subsidiaries (non-trade nature) | 231,854 | [Transactions with Related Parties](index=39&type=section&id=Transactions%20with%20Related%20Parties) This chapter lists details of the Group's transactions with related parties for product inspection, goods sales, purchases, subcontracting, rent, utilities, and commissions, and elaborates on the professional wear business cooperation with Shanshan Co., Ltd. Major Related Party Transactions (H1 2019) | Transaction Type | Related Party | Amount (RMB) | | :--- | :--- | :--- | | Re-collection of product inspection fees | Associate | 6,126 | | Sales of goods to | Fellow subsidiaries | 2,478,912 | | Purchases from | Non-controlling shareholder of a subsidiary | (539,382) | | Rental expenses received from | Immediate holding company | (2,017,574) | | Utilities expenses received from | Immediate holding company | (765,703) | | Sales commissions received from | Fellow subsidiaries | (991,402) | - The Group previously cooperated with Shanshan Co., Ltd. on professional wear business, with invoices issued to Shanshan Co., Ltd. amounting to **RMB5,717** during the period[150](index=150&type=chunk) [Compensation of Key Management Personnel](index=40&type=section&id=Compensation%20of%20Key%20Management%20Personnel) This chapter discloses the total remuneration for the Group's directors and senior management, primarily comprising short-term benefits and contributions to defined contribution retirement plans Total Compensation of Key Management Personnel | Remuneration Item | H1 2019 (RMB) | H1 2018 (RMB) | | :--- | :--- | :--- | | Short-term benefits | 1,592,861 | 1,345,795 | | Contributions to defined contribution retirement plans | 102,198 | 85,364 | | **Total** | **1,695,059** | **1,431,159** | [19. Commitments](index=41&type=section&id=19.%20Commitments) This chapter discloses the Group's operating lease commitments and confirms no significant capital commitments [Operating Lease Commitments](index=41&type=section&id=Operating%20Lease%20Commitments) This chapter lists the Group's future aggregate minimum lease payments under non-cancellable operating leases, primarily for offices, retail stores, and warehouses Future Aggregate Minimum Lease Payments Due (June 30, 2019) | Due Date | Amount (RMB) | | :--- | :--- | | Not later than one year | 4,838,427 | | Later than one year but not later than five years | — | | **Total** | **4,838,427** | - The Group leases various offices, retail stores, and warehouses under non-cancellable lease agreements with lease terms ranging from **one to four years**[154](index=154&type=chunk) - Operating leases for certain retail stores also require additional rent, but related contingent rents have not been recognized due to the inability to precisely estimate future revenue[155](index=155&type=chunk) [Capital Commitments](index=41&type=section&id=Capital%20Commitments) As of June 30, 2019, and December 31, 2018, the Group had no significant capital commitments - As of June 30, 2019, and December 31, 2018, the Group had **no significant capital commitments**[156](index=156&type=chunk) [20. Contingent Liabilities](index=41&type=section&id=20.%20Contingent%20Liabilities) This chapter confirms that the Group had no significant contingent liabilities at the end of the reporting period - As of June 30, 2019, the Group had **no significant contingent liabilities** (December 31, 2018: nil)[157](index=157&type=chunk)

２０１８ 年報 *10F y 2018 AN MOF AN 杉杉品牌運營股份有限公司 Shanshan Brand Management Co., Ltd. (於中華人民共和國註冊成立的股份有限公司) 股份代號：1749 LIGHT BUSINES | --- | --- | --- | --- | |--------------------------------|-------|-------|-------| | | | | | | CASUAL 有型有范新杉杉 2018 A | | | | ' 'GHT BUSINESS MOF IOF _8 AN MORE Ch. & EPORT SHANSHAN --------- _5S MOF ` MORE CASUAL 有型有范新杉杉 2018 AM 目錄 | --- | --- | |----------------------------|-------| | | | | | 頁次 | | 公司簡介 | 2 | | 公司資料 | 3 | | 財務概要 | 5 | | 主席報告 | 7 | | 管理層討論與分析 | 9 | | 董事、監事及高級管理層履歷 ...