股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 本月底法定/註冊股本總額： HKD 100,000,000 第 1 頁 共 10 頁 v 1.1.1 FF301 公司名稱: 慕尚集團控股有限公司 呈交日期: 2025年8月6日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01817 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 10,000,000,000 | HKD | | 0.01 | HKD | | 100,000,000 | | 增加 / 減少 (-) | | | 0 | | | | HKD | | 0 | | 本月底結存 | | | ...

Core Insights - The Fujian Provincial Market Supervision Administration has released the results of the 2025 textile product quality provincial supervision inspection, indicating a compliance rate of 96.30% with only 1 out of 27 batches failing the inspection [1][2]. Group 1: Inspection Results - A total of 22 companies were inspected, with 27 batches of products tested, resulting in 26 compliant batches and 1 non-compliant batch, leading to a non-compliance rate of 3.70% [1]. - For knitted wool products, 5 companies were inspected with a 100% compliance rate [1]. - In the inspection of down products, 21 companies were tested, with 1 non-compliant batch, resulting in a non-compliance rate of 4.76% [2]. - The inspection of silk quilts involved 1 company and 1 batch, which achieved a 100% compliance rate [2]. Group 2: Actions Taken - The provincial market supervision bureau has mandated local market supervision authorities to take legal action against the non-compliant products and their manufacturers [3]. Group 3: Detailed Inspection Results - The inspection results for knitted wool products showed that companies like Fujian Qipilang Industrial Co., Ltd. and Fujian Qipai Fashion Technology Co., Ltd. had compliant products [5]. - The down products inspection included various brands such as SEPTWOLVES and LILANZ, all of which passed the quality checks [6][7]. - The only non-compliant product was from Saint Giao (China) Co., Ltd., which failed the inspection for a down jacket [7].

Core Insights - The importance of ESG (Environmental, Social, and Governance) is increasingly recognized as a core value dimension for companies, leading to enhanced disclosure standards and proactive integration of ESG principles into business operations [1][4][17] - The fashion industry, particularly companies like GXG's parent company, Moshang Group, is leveraging ESG practices to create competitive advantages and respond to consumer demand for sustainable products [4][18] Group 1: ESG as a Competitive Arena - ESG has become a critical focus for apparel companies, transcending traditional social responsibility to encompass deeper value creation [4] - The global sustainable apparel market is projected to reach $9.26 billion in 2024, with a compound annual growth rate (CAGR) of approximately 13.11% from 2024 to 2032, indicating a significant shift towards sustainability in consumer preferences [4] - Companies excelling in ESG practices are positioned to capture market opportunities and enhance their competitive edge [4][6] Group 2: Moshang Group's ESG Practices - Moshang Group's ESG initiatives span the entire product lifecycle and supply chain, with a clear strategy for short, medium, and long-term green development [7][15] - The company emphasizes product innovation that balances environmental sustainability, such as the use of SOLOTEX® fabric, which incorporates 37% recycled materials, reducing reliance on new petrochemical resources [8][9] - Moshang Group is adopting clean production methods, including the use of renewable energy and recycled materials, to enhance resource efficiency and minimize waste [9][10] Group 3: Service Quality and Efficiency - Moshang Group has introduced innovative service models, such as the "Zero Pressure Borrowing Station," which promotes a circular economy by addressing common business travel challenges [10][14] - The company is committed to improving service efficiency through technology, aiming for a customer satisfaction rate of over 95% and rapid resolution of complaints [14] - Moshang Group is also fostering green collaboration within its supply chain, encouraging suppliers to adopt sustainable practices and providing training on environmental and labor standards [14][15] Group 4: Future Outlook - Moshang Group plans to continue its focus on renewable energy, green materials, and employee training related to climate issues, aiming for carbon neutrality through various innovative strategies [15][16] - The company's approach to green fashion is structured and quantifiable, allowing for strategic consistency while maintaining flexibility in implementation [16] - Moshang Group's successful ESG practices position it as a valuable asset in the capital market, likely attracting long-term investment interest [18]

Group 1 - The core viewpoint of the news highlights the recent performance of Moshang Group Holdings, which saw a significant stock price increase of 25.81% on May 30, despite a cumulative decline of 20.51% over the past month and 29.55% year-to-date, underperforming the Hang Seng Index by 17.51% [1] - Financial data indicates that for the fiscal year ending December 31, 2024, Moshang Group Holdings reported total revenue of 2.27 billion yuan, a year-on-year decrease of 2.55%, and a net profit attributable to shareholders of 30.95 million yuan, down 21.77% year-on-year, with a gross margin of 52.82% and a debt-to-asset ratio of 71.83% [1] - Currently, there are no institutional investment ratings for Moshang Group Holdings, and its price-to-earnings ratio stands at 8.81 times, ranking 13th in the professional retail industry, which has an average TTM P/E ratio of 5.27 times [1] Group 2 - Moshang Group Holdings is recognized as a leading multi-brand operator in the leisure fashion apparel sector in China, driven by a new retail model, with a core philosophy centered around love, youth, innovation, trust, and vitality [2] - The company specializes in men's fashion and also covers the sportswear market and other fashion areas, leveraging its experience in the fashion industry and multi-brand development strategy to seize future market opportunities [2] - Moshang Group Holdings was officially listed on the Hong Kong Stock Exchange on May 27, 2019, under the stock code 1817.HK [2]

Financial Performance - For the fiscal year ending December 31, 2024, Mulsanne Group achieved a revenue of RMB 2.27 billion and a net profit of RMB 30.93 million, with a gross margin of 52.8%, an increase of approximately 0.8 percentage points year-on-year[11]. - The main brand GXG generated revenue of RMB 2.079 billion, reflecting a year-on-year growth of 3%, while its gross profit was RMB 1.114 billion, up 2.1% year-on-year, with a gross margin of 53.6%[11]. - The Mode Commuter brand continued its high growth trajectory, with sales revenue and gross profit increasing by 11% and 16.8% year-on-year, respectively[11]. - Total sales revenue for the year ended December 31, 2024, was RMB 2,269.8 million, a slight decrease of 2.5% or RMB 59.2 million compared to RMB 2,329.0 million in 2023[20]. - The main brand GXG's sales revenue increased by 3.0% or RMB 61.5 million to RMB 2,078.5 million, driven by successful brand promotion initiatives[23]. - Gross profit for the period was RMB 1,199.0 million, a slight decrease of 1.1% or RMB 13.2 million from RMB 1,212.2 million in 2023, while gross margin increased to 52.8% from 52.0%[31]. - The net profit for the period decreased by 16.9% or RMB 6.3 million to RMB 30.9 million[46]. Store Operations - The total number of offline stores decreased by 26 to 996, yet GXG recorded steady growth in revenue, gross profit, and store efficiency[11]. - The number of offline stores decreased from 1,022 at the end of 2023 to 996 at the end of 2024, reflecting strategic adjustments in brand positioning and marketing[29]. - The number of GXG stores increased to 927, representing 93.1% of total stores, while gxg.kids stores were eliminated[29]. Strategic Initiatives - Mulsanne Group is actively exploring AI and other technological innovations, with its digital factory accounting for nearly 10% of all suppliers, and is currently implementing AI sampling to enhance product development efficiency and reduce costs[14]. - The company has successfully transitioned to a business-financial integration model in 2023, following the launch of BI visualization tools in 2022[14]. - Mulsanne Group plans to enhance brand competitiveness and accelerate brand momentum release to pave the way for sustainable growth in 2025[15]. - The company plans to enhance product design and brand promotion integration to increase brand awareness and influence[20]. Financial Management - The pre-tax profit decreased by 5.2% or RMB 2.7 million to RMB 49.1 million, primarily due to a reduction in gross profit[44]. - Operating cash inflow decreased by RMB 126.1 million to RMB 171.7 million, attributed to a significant reduction in inventory levels in 2023[47]. - Capital expenditures increased by 54.8% or RMB 47.0 million to RMB 132.8 million, mainly due to increased construction and renovation costs of the headquarters office building[48]. - The debt-to-asset ratio decreased to 34.6% from 44.1% in 2023, primarily due to a reduction in pledged borrowings[50]. Employee Information - As of December 31, 2024, the total number of employees in the group was 467, down from 508 in 2023[60]. - Total employee costs for the period amounted to RMB 84.9 million, compared to RMB 100.0 million in 2023, representing a decrease attributed to improved work efficiency[60]. - Employee costs accounted for 3.7% of the group's revenue during the period, down from 4.3% in 2023[60]. Corporate Governance - The company has adopted the corporate governance code as its own governance framework, ensuring high standards of accountability[157]. - The board consists of nine members, including one executive director and three independent non-executive directors, ensuring compliance with listing rules[159]. - The company has established a robust risk management and internal control system covering procurement, quality control, marketing, finance, treasury activities, and human resources management[182]. - The company is committed to maintaining a transparent process for handling and disseminating inside information, ensuring compliance with disclosure policies[184]. Shareholder Information - The company did not recommend any final dividend for the year ending December 31, 2024[95]. - The total net proceeds from the global offering amounted to approximately RMB 704.9 million (equivalent to about HKD 802.7 million), fully utilized by December 31, 2024[100]. - The company allocated 45% of the proceeds (RMB 317 million) for debt repayment, which has been fully utilized[100]. Audit and Compliance - The independent auditor's report confirms that the consolidated financial statements fairly present the group's financial position as of December 31, 2024, in accordance with International Financial Reporting Standards[195]. - The financial statements were audited by Ernst & Young, which is eligible and willing to be reappointed at the upcoming annual general meeting[154]. - The auditor issued an unqualified opinion regarding the disclosed related transactions, confirming compliance with the relevant listing rules[144].

Core Viewpoint - The article highlights the investment opportunities arising from the intersection of AI technology and consumer sectors, particularly focusing on the "AI+" concept in the context of the retail industry, exemplified by the performance of GXG under the parent company, Moshang Group [1]. Financial Performance - In 2024, Moshang Group achieved a revenue of 2.27 billion RMB, showing a slight year-on-year decline but maintaining profitability, with a gross margin of 52.8% [2]. - GXG generated a revenue of 2.08 billion RMB, a 3.0% increase year-on-year, with a gross profit of 1.11 billion RMB, reflecting a 2.1% growth and a gross margin of 53.6% [2][3]. - The Mode Commuter brand also demonstrated strong growth, with sales revenue and gross profit increasing by 11.0% and 16.8%, respectively [3]. Market Position and Trends - Moshang Group's store count reached 996 by the end of 2024, with a net decrease of 26 stores, while GXG's store count increased by 24 to 927, indicating improved single-store efficiency [4]. - The men's footwear and apparel market is projected to grow steadily, with Moshang Group maintaining its market position to benefit from industry growth and concentration [5][6]. - Moshang Group remains among the top 15 companies in the men's apparel industry, capitalizing on the trend of quality-price ratio in consumer preferences [8]. Brand Strategy and Innovation - GXG is focusing on product innovation and has launched a series of high-quality, aesthetically pleasing products, such as the "Zero Pressure" series, to meet the evolving consumer demands [8][9]. - The brand's recent fashion show emphasized a connection with younger consumers through themes of relaxation and cultural integration, enhancing its brand value [9]. Digital Transformation and AI Integration - Moshang Group has been proactive in digital transformation, having established a comprehensive digital ecosystem that integrates data across various business functions [12][13]. - The company is exploring AI applications to enhance product development processes, aiming to reduce development time and costs significantly [14][15]. - The integration of AI is expected to drive efficiency and reshape the competitive landscape for Moshang Group, positioning it for future growth [15][16]. Growth Outlook - Moshang Group is building a growth model centered on demand insights, commuting positioning, and technology empowerment, which is anticipated to attract more market attention and drive value re-evaluation [17].

Financial Performance - For the year ended December 31, 2024, the gross profit margin increased to 52.8% from 52.0% for the year ended December 31, 2023, due to optimized product mix and improved operational efficiency[4] - The main brand GXG achieved sales revenue of RMB 615 million, a year-on-year increase of 3.0% compared to RMB 2,017 million for the year ended December 31, 2023[4] - The net profit for the year ended December 31, 2024, was RMB 30.925 million, down from RMB 37.245 million for the year ended December 31, 2023, representing a decrease of 17.5%[5] - The total revenue for the year ended December 31, 2024, was RMB 2,269.76 million, compared to RMB 2,329.049 million for the previous year, reflecting a decline of 2.5%[5] - The company reported a basic and diluted earnings per share of RMB 3.39 for the year ended December 31, 2024, down from RMB 4.34 for the previous year[5] - The total comprehensive income for the year ended December 31, 2024, was RMB 24.514 million, compared to RMB 23.094 million for the previous year, indicating an increase of 6.1%[6] - Total revenue for the year ended December 31, 2024, was RMB 2,269,760,000, a decrease of 2.55% from RMB 2,329,049,000 in 2023[16] - The gross profit for the apparel segment was RMB 1,198,950,000, compared to RMB 1,212,183,000 in the previous year, reflecting a slight decline[14] - The group's pre-tax profit for 2024 was RMB 49,078 thousand, down from RMB 51,809 thousand in 2023, a decrease of 5.3%[27] - Basic earnings per share for 2024 were RMB 30,954 thousand, compared to RMB 39,567 thousand in 2023, indicating a decline of 21.8%[30] - Profit before tax was RMB 49.1 million, a decrease of 5.2% from RMB 51.8 million in 2023, mainly attributed to a reduction in gross profit[57] - Net profit for the period was RMB 30.9 million, down 16.9% from RMB 37.2 million in 2023[59] Assets and Liabilities - The company’s non-current assets totaled RMB 892.793 million as of December 31, 2024, down from RMB 1,224.634 million in the previous year[7] - The total liabilities decreased from RMB 1,775.864 million in 2023 to RMB 1,745.959 million in 2024, a reduction of 1.7%[8] - The company’s total equity increased to RMB 735.486 million as of December 31, 2024, compared to RMB 711.572 million in the previous year, reflecting a growth of 3.3%[8] - Trade receivables decreased to RMB 653,854 thousand in 2024 from RMB 726,788 thousand in 2023, a reduction of 10%[30] - Total bank loans and other borrowings due within one year amounted to RMB 903.5 million, up from RMB 887.5 million in 2023, representing an increase of 1.2%[35] - Total bank and other borrowings decreased to RMB 903.5 million from RMB 1,329.8 million in 2023, resulting in a debt-to-asset ratio of 34.6% compared to 44.1% in 2023[62][63] Revenue Sources - Revenue from offline channels was RMB 1,441,185,000, while online channels generated RMB 819,633,000 for 2024[14] - The revenue from external customers in mainland China decreased to RMB 2,269,760,000 in 2024 from RMB 2,329,049,000 in 2023, indicating a decline of 2.55%[16] - Self-operated store sales decreased by 1.6% or RMB 14.9 million to RMB 912.5 million, primarily due to macroeconomic factors[41] - Partner store sales decreased by 41.3% or RMB 55.4 million to RMB 78.7 million, mainly due to the termination of the gxg.kids business and a reduction in the number of partner stores[41] - Online channel sales decreased by 1.8% or RMB 14.7 million to RMB 819.6 million, attributed to product structure adjustments and a focus on maintaining brand pricing strategies[41] Expenses - The company’s total sales and distribution expenses were RMB 934,095,000 for 2024, compared to RMB 920,769,000 in 2023[14] - The company’s administrative expenses were RMB 210,457,000 in 2024, slightly up from RMB 207,434,000 in 2023[14] - Selling and distribution expenses increased by 1.4% or RMB 13.3 million to RMB 934.1 million, with the percentage of total revenue rising from 39.5% in 2023 to 41.2% in 2024[51] - Administrative expenses increased by 1.5% or RMB 3.1 million to RMB 210.5 million, primarily due to increased R&D spending and one-time costs related to warehouse relocation[52] - Total employee costs were RMB 84.9 million, down from RMB 100.0 million in 2023, representing 3.7% of total revenue compared to 4.3% in 2023[71] Strategic Initiatives - The company plans to enhance product development by introducing a professional design team to capture market trends and improve product quality[4] - The company plans to enhance product design and brand promotion to improve brand awareness and influence[37] - The company aims to strengthen supply chain management to ensure quality control from design to production[37] Cash Flow and Investments - Operating cash inflow was RMB 171.7 million, a decrease of RMB 126.1 million from RMB 297.8 million in 2023, with inventory turnover days improving by 7 days[60] - Capital expenditures increased by 54.8% to RMB 132.8 million from RMB 85.8 million in 2023, mainly due to increased construction and renovation costs of the headquarters[61] - No significant investments or acquisitions were made during the period, and the company continues to seek new business development opportunities[66] Dividend and Shareholder Information - The company did not recommend any final dividend for the year, consistent with 2023[28] - The company did not recommend any final dividend for the year ending December 31, 2024[72] - The annual report for the year ending December 31, 2024, will be sent to shareholders and published on the stock exchange and the company's website[79] Audit and Compliance - The audit committee, consisting of three independent non-executive directors, oversees the company's financial reporting and internal control systems[77] - The financial information for the year ending December 31, 2024, has been reviewed by the audit committee and complies with applicable accounting principles and regulations[78]

[Corporate Introduction](index=2&type=section&id=Corporate%20Introduction) MuShang Group Holding Co., Ltd. is a leading Chinese fashion menswear company, also covering unisex fashion, with brands like GXG, gxg jeans, and MODE COMMUTER - MuShang Group Holding Co., Ltd. is a leading fashion menswear company based in China, also covering unisex fashion, with distinct design images for its brands including GXG, gxg jeans, and MODE COMMUTER[2](index=2&type=chunk)[4](index=4&type=chunk) - The company adopts an integrated omni-channel business model, combining online and offline advantages to offer unified products, prices, and shared inventory, and optimizes inventory and supply chain management through big data analysis, positioning itself as a leader in China's new retail integration[3](index=3&type=chunk)[4](index=4&type=chunk) [Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides core corporate information including board members, committee structures, principal offices, share registrars, and main banks - The report lists core company information such as board members, committee composition, principal office addresses, share registrars, principal banks, and the company website[5](index=5&type=chunk)[6](index=6&type=chunk) Key Corporate Personnel | Role | Name/Institution | | :--- | :--- | | **Chairman** | Mr. Deng Shunlin | | **Chief Executive Officer** | Mr. Yu Yong | | **Auditor** | Ernst & Young | | **Stock Code** | 1817 | [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed analysis of the group's financial performance, operational highlights, and strategic outlook for the reporting period [BUSINESS OVERVIEW AND OUTLOOK](index=6&type=section&id=BUSINESS%20OVERVIEW%20AND%20OUTLOOK) During the reporting period, the group's total revenue was RMB 1.088 billion, a slight increase of 0.3% year-on-year, primarily driven by the successful promotion of its main brand GXG Total Sales Revenue | Indicator | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Sales Revenue** | 1,088.4 RMB million | 1,085.3 RMB million | +0.3% | - The group plans to focus on three key strategies: 1) leading brand positioning to explore potential consumer groups; 2) reforming organizational structure and deepening omni-channel integration to enhance operational efficiency; and 3) continuous investment in R&D to improve products and consumer experience[8](index=8&type=chunk) [REVENUE](index=6&type=section&id=REVENUE) The group's total revenue slightly increased by 0.3% year-on-year, primarily driven by a 6.2% revenue growth from its main brand GXG, while gxg jeans and gxg.kids saw declines due to strategic adjustments and business termination [Revenue by brand](index=7&type=section&id=Revenue%20by%20brand) The main brand GXG's revenue grew by 6.2% to RMB 979 million, becoming the core driver of growth, while gxg jeans revenue decreased by 8.7% and gxg.kids revenue sharply declined by 86.9% due to business termination Revenue by Brand | Brand | H1 2024 Revenue (RMB thousand) | H1 2023 Revenue (RMB thousand) | YoY Change | | :--- | :--- | :--- | :--- | | **GXG** | 978,670 | 921,898 | +6.2% | | **gxg jeans** | 79,025 | 86,532 | -8.7% | | **gxg.kids** | 7,414 | 56,343 | -86.9% | | **Mode Commuter** | 20,479 | 18,526 | +10.8% | | **Total** | 1,088,424 | 1,085,343 | +0.3% | - gxg.kids business was strategically terminated, with its significant revenue decline attributed to brand positioning adjustments and clearance of old inventory[10](index=10&type=chunk)[11](index=11&type=chunk) [Revenue by sales channel](index=8&type=section&id=Revenue%20by%20sales%20channel) Offline channels, specifically self-operated and distribution stores, saw revenue growth of 2.9% and 11.2% respectively, while partner stores experienced a significant 40.1% decline due to the termination of the gxg.kids business Revenue by Sales Channel | Sales Channel | H1 2024 Revenue (RMB thousand) | H1 2023 Revenue (RMB thousand) | YoY Change | | :--- | :--- | :--- | :--- | | **Self-operated Stores** | 456,549 | 443,558 | +2.9% | | **Partner Stores** | 47,929 | 79,918 | -40.1% | | **Distribution Stores** | 146,393 | 131,650 | +11.2% | | **Online Channels** | 434,004 | 426,767 | +1.7% | [Number of stores](index=9&type=section&id=Number%20of%20stores) The group adjusted its store network to enhance efficiency, reducing the total number of offline stores from 1,022 at the end of 2023 to 958, with all gxg.kids stores closed and their business authorized to third parties Number of Stores | Sales Channel | Number of Stores as of June 30, 2024 | Number of Stores as of Dec 31, 2023 | Change in Number | | :--- | :--- | :--- | :--- | | **Self-operated Stores** | 373 | 380 | -7 | | **Partner Stores** | 61 | 139 | -78 | | **Distribution Stores** | 524 | 503 | +21 | | **Total** | 958 | 1,022 | -64 | - The group terminated the gxg.kids business and licensed it to an independent third party, leading to the closure of all its offline stores[15](index=15&type=chunk)[16](index=16&type=chunk) [GROSS PROFIT AND GROSS PROFIT MARGIN](index=10&type=section&id=GROSS%20PROFIT%20AND%20GROSS%20PROFIT%20MARGIN) The group's overall gross profit slightly increased by 1.0% to RMB 583 million, with the gross profit margin improving from 53.2% to 53.6%, primarily due to controlled product retail discounts [Gross profit and gross profit margin by brand](index=10&type=section&id=Gross%20profit%20and%20gross%20profit%20margin%20by%20brand) GXG brand's gross profit increased by 2.4%, but its gross profit margin slightly decreased by 2.0 percentage points due to clearing old inventory for new warehouse relocation, while gxg jeans and Mode Commuter saw margin improvements Gross Profit and Gross Profit Margin by Brand | Brand | H1 2024 Gross Profit (RMB thousand) | H1 2024 Gross Profit Margin | H1 2023 Gross Profit (RMB thousand) | H1 2023 Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | **GXG** | 533,557 | 54.5% | 520,955 | 56.5% | | **gxg jeans** | 37,179 | 47.0% | 40,177 | 46.4% | | **gxg.kids** | 787 | 10.6% | 6,132 | 10.9% | | **Mode Commuter** | 11,460 | 56.0% | 9,963 | 53.8% | | **Total** | 583,317 | 53.6% | 577,711 | 53.2% | [Gross profit and gross profit margin by sales channel](index=11&type=section&id=Gross%20profit%20and%20gross%20profit%20margin%20by%20sales%20channel) Self-operated and online channels maintained stable gross profit margins, while partner stores' gross profit margin significantly increased from 29.8% to 43.0% due to the termination of the low-margin gxg.kids business Gross Profit and Gross Profit Margin by Sales Channel | Sales Channel | H1 2024 Gross Profit (RMB thousand) | H1 2024 Gross Profit Margin | H1 2023 Gross Profit (RMB thousand) | H1 2023 Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | **Self-operated Stores** | 329,061 | 72.1% | 325,478 | 73.4% | | **Partner Stores** | 20,611 | 43.0% | 23,781 | 29.8% | | **Distribution Stores** | 74,610 | 51.0% | 70,938 | 53.9% | | **Online Channels** | 158,383 | 36.5% | 156,670 | 36.7% | [Operating Expenses and Profitability](index=12&type=section&id=Operating%20Expenses%20and%20Profitability) During the period, selling and distribution expenses increased by 2.7% due to higher advertising investment, and administrative expenses rose by 5.3% due to increased depreciation of the headquarters building, leading to a significant 75.2% drop in profit before tax Financial Performance Indicators | Financial Indicator | H1 2024 (RMB million) | H1 2023 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | **Other Income and Gains** | 19.9 | 41.3 | -51.8% | | **Selling and Distribution Expenses** | 451.2 | 439.3 | +2.7% | | **Administrative Expenses** | 112.0 | 106.4 | +5.3% | | **Other Expenses** | 1.7 | 6.1 | -72.1% | | **Finance Costs** | 29.8 | 31.7 | -6.0% | | **Profit Before Tax** | 7.6 | 30.6 | -75.2% | | **Profit for the Period** | 6.8 | 27.7 | -75.5% | - The significant decrease in profit before tax was primarily due to reduced foreign exchange gains and increased depreciation of the group's headquarters office building[32](index=32&type=chunk)[34](index=34&type=chunk) [Cash Flows and Capital Expenditures](index=14&type=section&id=Cash%20Flows%20and%20Capital%20Expenditures) Net cash outflow from operating activities increased to RMB 60.4 million, primarily due to higher advertising expenses and rental payments, while capital expenditures rose by 18.0% to RMB 69.6 million, mainly for the headquarters building construction Cash Flow and Capital Expenditure Summary | Indicator | H1 2024 (RMB million) | H1 2023 (RMB million) | Change | | :--- | :--- | :--- | :--- | | **Net Cash Flows from Operating Activities** | (60.4) | (33.3) | Outflow increased by 27.1 | | **Capital Expenditures** | 69.6 | 59.0 | +18.0% | [FINANCIAL POSITION](index=15&type=section&id=FINANCIAL%20POSITION) As of June 30, 2024, the group's gearing ratio increased to 54.7% from 44.1% at the beginning of the year, mainly due to increased seasonal borrowings for winter goods procurement, with total borrowings at RMB 1.698 billion and cash and equivalents at RMB 1.297 billion Financial Position Summary | Indicator | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Bank and Other Borrowings** | 1,697.7 RMB million | 827.8 RMB million | | **Cash and Cash Equivalents and Pledged Deposits** | 1,297.4 RMB million | 1,035.4 RMB million | | **Gearing Ratio** | 54.7% | 44.1% | - The increase in the gearing ratio was primarily due to increased seasonal borrowings for prepayment of winter goods procurement[38](index=38&type=chunk) - As of June 30, 2024, the group's pledged deposits secured bank loans of **RMB 624 million**, discounted letters of credit of **RMB 33 million**, and discounted notes receivable of **RMB 472 million**[41](index=41&type=chunk)[46](index=46&type=chunk) [HUMAN RESOURCES](index=17&type=section&id=HUMAN%20RESOURCES) As of June 30, 2024, the group's employee count was 500, a slight decrease from the beginning of the year, with total staff costs decreasing by 19.3% to RMB 49.6 million due to strategic personnel restructuring Employee Count | Indicator | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Number of Employees** | 500 | 508 | Staff Costs | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | **Total Staff Costs** | 49.6 RMB million | 61.5 RMB million | | **Staff Costs as % of Revenue** | 4.6% | 5.7% | [Other Information](index=17&type=section&id=Other%20Information) This section covers additional disclosures including directors' and substantial shareholders' interests, restricted share unit schemes, and global offering proceeds utilization [DIRECTORS'%20AND%20CHIEF%20EXECUTIVE'S%20INTERESTS](index=18&type=section&id=DIRECTORS%27%20AND%20CHIEF%20EXECUTIVE%27S%20INTERESTS) The report discloses the interests of the company's directors and chief executive in the company's shares as of June 30, 2024, with Executive Director and CEO Mr. Yu Yong holding 215,750,000 shares (22.71%) and Non-executive Director Mr. Yang Herong holding 213,750,000 shares (22.50%) Directors' and Chief Executive's Interests | Director Name | Nature of Interest | Number of Shares | Approximate % of Interest | | :--- | :--- | :--- | :--- | | **Mr. Yu Yong** | Controlled Corporation Interest & Beneficial Owner | 215,750,000 (L) | 22.71% | | **Mr. Yang Herong** | Controlled Corporation Interest | 213,750,000 (L) | 22.50% | [SUBSTANTIAL%20SHAREHOLDERS'%20INTERESTS](index=20&type=section&id=SUBSTANTIAL%20SHAREHOLDERS%27%20INTERESTS) As of June 30, 2024, major shareholders include Great World Glory Pte. Ltd. holding 363,579,785 shares (38.27%), Crescent Glory Singapore Pte. Ltd. holding 134,474,715 shares (14.15%), and GXG Trading Limited holding 213,750,000 shares (22.50%) Substantial Shareholders' Interests | Shareholder Name | Number of Shares | Approximate % of Interest | | :--- | :--- | :--- | | **Great World Glory Pte. Ltd.** | 363,579,785 (L) | 38.27% | | **Crescent Glory Singapore Pte. Ltd.** | 134,474,715 (L) | 14.15% | | **GXG Trading Limited** | 213,750,000 (L) | 22.50% | [RESTRICTED%20SHARE%20UNIT%20SCHEME](index=23&type=section&id=RESTRICTED%20SHARE%20UNIT%20SCHEME) The company adopted an RSU scheme in 2019 with a ten-year validity, under which 26,100,000 shares are held by the trustee for granting, and 10,500,000 RSUs have been granted to 10 participants, representing 1.1% of issued shares as of the reporting date - As of June 30, 2024, a total of **10,500,000** RSUs had been granted but not yet exercised, including **2,000,000** shares granted to Executive Director Mr. Yu Yong[66](index=66&type=chunk) - There were no changes (no new grants, exercises, cancellations, or forfeitures) in the RSU scheme during the reporting period[66](index=66&type=chunk) [USE%20OF%20PROCEEDS%20FROM%20THE%20GLOBAL%20OFFERING](index=26&type=section&id=USE%20OF%20PROCEEDS%20FROM%20THE%20GLOBAL%20OFFERING) The company's net proceeds of approximately RMB 705 million from its 2019 listing have been fully utilized as of June 30, 2024, for debt repayment, brand expansion, smart store upgrades, warehouse upgrades, and working capital - As of June 30, 2024, the net proceeds of approximately **RMB 705 million** from the global offering have been fully utilized[69](index=69&type=chunk)[71](index=71&type=chunk)[73](index=73&type=chunk) [INTERIM%20DIVIDEND](index=27&type=section&id=INTERIM%20DIVIDEND) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for 2024[74](index=74&type=chunk)[76](index=76&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=28&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the group's financial performance, including revenue, gross profit, and net profit, for the interim period Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator (RMB thousand) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | 1,088,424 | 1,085,343 | +0.3% | | **Gross Profit** | 583,317 | 577,711 | +1.0% | | **Profit Before Tax** | 7,575 | 30,569 | -75.2% | | **Profit for the Period** | 6,791 | 27,665 | -75.5% | | **Profit Attributable to Owners of the Parent** | 6,820 | 29,899 | -77.2% | | **Basic EPS** | RMB 0.75 cents | RMB 3.28 cents | -77.1% | | **Total Comprehensive Income for the Period** | 4,206 | 2,824 | +49.0% | [Interim Condensed Consolidated Statement of Financial Position](index=30&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the group's assets, liabilities, and equity at the end of the reporting period Interim Condensed Consolidated Statement of Financial Position | Assets (RMB thousand) | June 30, 2024 (Unaudited) | Dec 31, 2023 (Audited) | | :--- | :--- | :--- | | **Total Non-current Assets** | 974,431 | 1,224,634 | | **Total Current Assets** | 2,129,401 | 1,789,634 | | **Total Assets** | **3,103,832** | **3,014,268** | | **Liabilities and Equity (RMB thousand)** | | | | **Total Current Liabilities** | 2,102,747 | 1,775,864 | | **Total Non-current Liabilities** | 285,307 | 526,832 | | **Total Liabilities** | **2,388,054** | **2,302,696** | | **Total Equity** | 715,778 | 711,572 | | **Total Liabilities and Equity** | **3,103,832** | **3,014,268** | [Interim Condensed Consolidated Statement of Changes in Equity](index=32&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement details the changes in the group's equity over the interim period, reflecting profit, other comprehensive income, and transactions with owners - As of June 30, 2024, total equity attributable to owners of the parent was **RMB 715 million**, a slight increase from **RMB 711 million** at the end of 2023, primarily due to profit contribution partially offset by losses from exchange rate fluctuations[90](index=90&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=34&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities during the interim period Interim Condensed Consolidated Statement of Cash Flows | Cash Flow (RMB thousand) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | (60,375) | (33,282) | | **Net Cash Used in Investing Activities** | (42,373) | (58,209) | | **Net Cash From Financing Activities** | 109,924 | 59,909 | | **Net Increase in Cash and Cash Equivalents** | 7,176 | (31,582) | | **Cash and Cash Equivalents at End of Period** | 196,530 | 220,912 | [Notes to Interim Condensed Consolidated Financial Information](index=36&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed explanatory notes to the interim condensed consolidated financial statements, offering further insights into specific accounts and transactions [Note%204%20OPERATING%20SEGMENT%20INFORMATION](index=40&type=section&id=Note%204%20OPERATING%20SEGMENT%20INFORMATION) The group's business is divided into two operating segments by sales channel: offline and online, with all revenue in H1 2024 derived from mainland China Operating Segment Information | Operating Segment | H1 2024 Revenue (RMB thousand) | H1 2024 Segment Results (Gross Profit) (RMB thousand) | | :--- | :--- | :--- | | **Offline Channels** | 650,871 | 424,282 | | **Online Channels** | 434,004 | 158,383 | | **Other** | 3,549 | 652 | [Note%2014%20TRADE%20AND%20NOTES%20RECEIVABLES](index=50&type=section&id=Note%2014%20TRADE%20AND%20NOTES%20RECEIVABLES) As of June 30, 2024, the net book value of trade and notes receivables was RMB 186 million, a significant decrease from RMB 335 million at the end of 2023, with RMB 90.46 million of trade receivables net due within 3 months Trade and Notes Receivables | Indicator (RMB thousand) | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Net Trade and Notes Receivables** | 186,063 | 334,525 | [Note%2019%20INTEREST-BEARING%20BANK%20AND%20OTHER%20BORROWINGS](index=56&type=section&id=Note%2019%20INTEREST-BEARING%20BANK%20AND%20OTHER%20BORROWINGS) As of June 30, 2024, the group's total interest-bearing borrowings significantly increased to RMB 1.698 billion from RMB 1.330 billion at the end of 2023, primarily to support operations and inventory procurement Interest-Bearing Bank and Other Borrowings | Borrowing Category (RMB thousand) | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Current Borrowings** | 1,496,842 | 887,459 | | **Non-current Borrowings** | 200,881 | 442,352 | | **Total** | 1,697,723 | 1,329,811 | [Note%2021%20RELATED%20PARTY%20TRANSACTIONS](index=59&type=section&id=Note%2021%20RELATED%20PARTY%20TRANSACTIONS) During the reporting period, the group engaged in several related party transactions, including product purchases of RMB 21.72 million from Zhongzhe Apparel and office rental payments of RMB 2.515 million to Songhe Garment, with total remuneration for key management personnel at RMB 6.558 million - Total product purchases from related parties amounted to **RMB 21.716 million**[163](index=163&type=chunk) - Total remuneration paid to key management personnel was **RMB 6.558 million**, a slight increase from **RMB 6.345 million** in the prior period[165](index=165&type=chunk)

Financial Performance - Total revenue for the six months ended June 30, 2024, was RMB 1,088.4 million, a slight increase of 0.3% or RMB 3.1 million compared to RMB 1,085.3 million for the same period in 2023[1] - Gross profit for the same period was RMB 583.3 million, up 1.0% or RMB 5.6 million from RMB 577.7 million in 2023, with a gross margin increase to 53.6% from 53.2%[1] - Profit before tax decreased to RMB 7.6 million from RMB 30.6 million in the same period last year[2] - Net profit for the period was RMB 6.8 million, down from RMB 27.7 million in 2023[2] - Basic and diluted earnings per share were RMB 0.75, compared to RMB 3.28 in the previous year[2] - Other income and gains totaled RMB 19,898 thousand, significantly down from RMB 41,266 thousand in the previous year, a decrease of about 51.8%[16] - The pre-tax profit for the period was RMB 7.6 million, a decrease of RMB 23.0 million compared to RMB 30.6 million in the same period of 2023[45] Revenue Breakdown - Sales revenue growth of the main brand GXG was RMB 56.8 million, representing a 6.2% increase, contributing to overall revenue and gross profit growth[1] - Total revenue for the six months ended June 30, 2024, reached RMB 1,088,424 thousand, with offline channel sales contributing RMB 650,871 thousand and online channel sales contributing RMB 434,004 thousand[14] - Online channel sales of apparel products reached RMB 434,004 thousand, up from RMB 426,767 thousand in the previous year, indicating a growth of about 1.4%[17] - Offline channel sales from self-operated stores amounted to RMB 456,549 thousand, compared to RMB 443,558 thousand in the prior year, reflecting an increase of approximately 2.9%[17] - The sales revenue from the gxg.kids brand decreased by 86.9% or RMB 48.9 million, primarily due to the strategic decision to terminate the gxg.kids business[33] - The Mode Commuter brand's sales revenue increased by 10.8% or RMB 2.0 million, attributed to an increase in the number of offline stores[33] Expenses and Costs - The cost of goods sold for the period was RMB 524,162 thousand, compared to RMB 516,382 thousand in the same period of 2023, indicating an increase of approximately 1.5%[19] - Selling and distribution expenses increased by 2.7% or RMB 11.9 million to RMB 451.2 million, accounting for 41.5% of total revenue, up from 40.5% in 2023[42] - The company incurred administrative expenses of RMB 112,024 thousand during the reporting period[14] - The group reported a total of RMB 29,803 thousand in finance costs for the six months ended June 30, 2024, down from RMB 31,675 thousand in the previous year, a decrease of about 5.9%[19] Assets and Liabilities - Total assets less current liabilities as of June 30, 2024, were RMB 1,001.1 million, down from RMB 1,238.4 million at the end of 2023[5] - Non-current liabilities decreased to RMB 285.3 million from RMB 526.8 million at the end of 2023[5] - Cash and cash equivalents at the end of June 30, 2024, totaled RMB 196,530 thousand, down from RMB 220,912 thousand at the end of 2023[7] - The total liabilities as of June 30, 2024, amount to RMB 1,697,723,000, up from RMB 1,329,811,000 as of December 31, 2023, indicating an increase of about 27.7%[29] - The total amount of bank loans and other borrowings due within one year is RMB 1,496,842,000 as of June 30, 2024, compared to RMB 887,459,000 as of December 31, 2023, representing an increase of approximately 68.8%[29] - The debt-to-asset ratio increased to 54.7% as of June 30, 2024, compared to 44.1% at the end of 2023, primarily due to seasonal borrowing[48] Cash Flow - Cash flow from operating activities showed a net outflow of RMB 60.4 million, compared to an outflow of RMB 33.3 million in the same period last year[6] - The company reported a net cash outflow from investing activities of RMB 42,373 thousand for the six months ended June 30, 2024, compared to RMB 58,209 thousand in the same period of 2023[7] - Net cash flow from financing activities for the six months ended June 30, 2024, was RMB 109,924 thousand, a significant increase from RMB 59,909 thousand in the same period of 2023[7] Strategic Initiatives - The company successfully implemented brand promotion initiatives and enhanced product R&D to improve consumer experience[1] - The company has no supplier financing arrangements, which indicates no impact from the recent amendments to the International Financial Reporting Standards on its financial statements[12] - The company did not engage in any significant investments or acquisitions during the period and continues to seek new business development opportunities[50] Employee and Operational Metrics - As of June 30, 2024, the total number of employees in the group was 500, down from 508 as of December 31, 2023[54] - Total employee costs for the period amounted to RMB 49.6 million, compared to RMB 61.5 million in the same period of 2023, representing a decrease from 5.7% to 4.6% of total revenue[54] - The number of offline stores decreased from 1,022 as of December 31, 2023, to 958 as of June 30, 2024, due to strategic adjustments in brand positioning and marketing strategies[35] - The number of self-operated stores was 373, accounting for 38.9% of total stores, while the number of franchise stores decreased significantly to 61, representing 6.4%[36] Dividend and Shareholder Information - The group did not declare an interim dividend for the six months ended June 30, 2024, consistent with the previous year[22] - The company did not recommend any interim dividend for the period[54] Fundraising and Utilization - The company raised approximately RMB 704.9 million from its global offering, with all funds utilized as of June 30, 2024[57] - 45% of the raised funds (RMB 317 million) were allocated for repaying existing debts and reducing financial costs[57] - 15% of the funds (RMB 106 million) were designated for brand acquisitions and strategic alliances[57] - 10% of the funds (RMB 70 million) were allocated for upgrading offline retail stores to smart stores[57] Compliance and Reporting - The company has established an audit committee to oversee financial reporting and compliance with applicable accounting principles[58] - The interim results for the six months ending June 30, 2024, will be published on the Hong Kong Stock Exchange and the company's website[59]

Sales Performance - The main brand GXG's sales revenue increased by 9.2% to RMB 1,696 million compared to 2022, driven by the recovery of offline consumer spending and improved operational efficiency[7]. - Sales revenue for gxg.kids decreased by 55.3% to RMB 110.3 million, primarily due to a strategic shift focusing on the main brand GXG[8]. - Total revenue for 2023 reached RMB 2,329,049 thousand, a slight increase of 0.1% compared to RMB 2,326,281 thousand in 2022[24]. - Total sales revenue for the year ended December 31, 2023, was RMB 2,329.0 million, a slight increase of 0.1% or RMB 2.7 million compared to RMB 2,326.3 million in 2022[161]. - Sales revenue for Mode Commuter increased by 11.7% or RMB 3.9 million, attributed to improved management of self-operated stores and optimized product supply[163]. - Online channel sales revenue decreased by 19.5% or RMB 201.9 million to RMB 834.3 million, primarily due to negative impacts on the overall e-commerce industry and a reduction in the scale of small brand operations[164]. - Sales revenue for gxg jeans decreased by 17.1% or RMB 37.4 million compared to 2022, primarily due to a reduction in the number of stores to improve efficiency[185]. - Self-operated store sales revenue increased by 26.1% or RMB 192.2 million to RMB 927.4 million, while distributor store sales revenue rose by 7.9% or RMB 30.9 million to RMB 424.3 million compared to 2022[186]. Profitability and Margins - The group's total gross profit increased by 6.5% to RMB 1,212.2 million, with a gross margin rising to 52.0% from 48.9% in 2022[13]. - The gross profit for GXG and Mode Commuter increased by approximately 16.8% and 21.7% respectively, attributed to revenue growth[14]. - The gross profit margin for self-operated stores grew by 1.8 percentage points to 70.1%, due to lower retail discounts compared to the previous year[16]. - The overall gross margin increased to 52.0% during the period, attributed to effective control over retail discount rates and product costs[137]. - The gross profit margins for GXG, gxg jeans, and Mode Commuter increased to 54.1%, 44.5%, and 51.4% respectively, compared to 50.6%, 42.2%, and 47.2% in 2022[169]. - Gross profit for the online channel decreased by RMB 62.9 million or approximately 15.5% to RMB 342.4 million, while the gross profit margin increased by 1.9 percentage points to 41.0%[171]. Store Operations - The total number of self-operated stores decreased by 100 to 380, while the same-store sales for GXG and Mode Commuter grew by 24.3% and 25.2% respectively[11][20]. - The number of offline stores decreased from 1,122 at the end of 2022 to 1,022 by December 31, 2023, as part of a strategy to enhance store efficiency[26]. - The company has implemented strategies to improve store efficiency by reducing the number of gxg jeans stores[185]. Financial Position - The group's debt-to-asset ratio decreased to 44.1% as of December 31, 2023, down from 50.3% on December 31, 2022, primarily due to a reduction in pledged borrowings[67]. - Cash and cash equivalents decreased by 25.3% to RMB 1,035.4 million from RMB 1,385.8 million at the end of 2022[37]. - Pre-tax profit increased by 139.8% to RMB 51.8 million from RMB 21.6 million in 2022, primarily due to increased gross profit[33]. - The group reported a decrease in available reserves for distribution to shareholders, approximately RMB 331.5 million as of December 31, 2023, compared to RMB 2,527.0 million in 2022[122]. Strategic Initiatives - The company launched a new strategy for the GXG brand, focusing on casual wear suitable for commuting, with a new slogan "Just Right for Work" announced in August[20]. - The company aims to continue expanding its market presence and enhancing brand competitiveness while maintaining sustainable growth[21]. - The group plans to upgrade offline retail stores to smart stores, allocating 10% of the proceeds, which amounts to RMB 70 million[97]. - The group aims to expand its brand and product portfolio through strategic alliances or acquisitions, with 15% of the proceeds, totaling RMB 106 million, designated for this purpose[97]. Governance and Management - The board of directors includes independent members with diverse backgrounds in finance, law, and tax consultancy, enhancing governance and strategic oversight[61][64]. - The management team includes professionals with extensive experience in consumer retail, brand management, and private equity investments[56][57]. - The company is committed to enhancing governance, promoting employee welfare, and achieving sustainable growth without any significant legal or regulatory violations during the reporting period[107]. - The company is focused on enhancing brand awareness and improving member experience through successful marketing initiatives[186]. Risks and Challenges - The group faces risks related to intense competition in the apparel industry in China and uncertainties regarding the maintenance and expansion of offline and online sales networks[91]. - The group did not engage in any financial hedging instruments during the period, exposing it to foreign exchange risks primarily from USD-denominated debts[39].