Financial Performance - The pre-tax profit for the period was RMB 51.8 million, an increase of 139.8% or RMB 30.2 million compared to RMB 21.6 million in 2022, primarily due to increased gross profit[9] - The net profit for the period was RMB 37.2 million, representing a 295.7% increase or RMB 27.8 million from RMB 9.4 million in 2022[12] - Total 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 for the year ended December 31, 2022[54] - The total gross profit for the period was RMB 1,212.2 million, an increase of 6.5% or RMB 74.3 million compared to RMB 1,137.9 million in 2022, with a gross margin rising to 52.0% from 48.9%[38] - The company's profit before tax for 2023 was RMB 51,809,000, an increase of 139.8% compared to RMB 21,630,000 in 2022[81] Revenue Breakdown - Revenue from offline sales channel was RMB 1,485.8 million, online sales channel was RMB 834.3 million, and other sales amounted to RMB 9.0 million, totaling RMB 2,329.0 million[68] - The main brand GXG saw a revenue increase of 9.2% or RMB 169.6 million compared to 2022, driven by a recovery in offline consumer spending[120] - Revenue from gxg.kids decreased by 55.3% or RMB 110.3 million due to strategic adjustments focusing on the main brand GXG[121] - 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[124] - Sales revenue from partner stores decreased by 11.0% or RMB 16.5 million to RMB 134.1 million, mainly due to brand strategy adjustments and the sale of higher discount older inventory[123] Cost Management - The total cost of goods sold decreased to RMB 1,142,806,000 in 2023 from RMB 1,206,962,000 in 2022, reflecting a reduction of approximately 5.3%[6] - Selling and distribution expenses increased by 4.2% or RMB 37.3 million to RMB 920.8 million, accounting for 39.5% of total revenue, up from 38.0% in 2022[28] - Employee benefits expenses, excluding directors and key management personnel, totaled RMB 101,849,000 in 2023, down from RMB 131,902,000 in 2022, a reduction of about 22.8%[6] - The company reduced its total employee costs to RMB 100.0 million in 2023, down from RMB 132.6 million in 2022, representing 4.3% of total revenue[171] Asset and Liability Management - The debt-to-asset ratio improved to 44.1% as of December 31, 2023, down from 50.3% in 2022, mainly due to reduced pledged borrowings[17] - Non-current liabilities decreased from RMB 716.2 million in 2022 to RMB 526.8 million in 2023, with interest-bearing bank and other borrowings reducing from RMB 588.2 million to RMB 442.4 million[61] - The company's total liabilities decreased to RMB 1,329,811,000 in 2023 from RMB 1,772,240,000 in 2022, a reduction of approximately 25.0%[86] - Total assets less current liabilities amounted to RMB 1,238.4 million as of December 31, 2023, down from RMB 1,404.7 million as of December 31, 2022[61] Store Operations - The number of offline stores decreased from 1,122 as of December 31, 2022, to 1,022 as of December 31, 2023, due to the closure of underperforming stores[7] - The total number of stores decreased from 1,122 at the end of 2022 to 1,022 by December 31, 2023, as part of a strategy to improve store efficiency[36] - The sales revenue of gxg jeans decreased by 17.1% or RMB 37.4 million, mainly due to a reduction in the number of stores to enhance efficiency[141] Strategic Initiatives - The company did not engage in any significant investments or acquisitions during the period and continues to seek new business development opportunities[19] - The company aims to enhance operational efficiency by reforming its organizational structure and business model, integrating online and offline sales channels[139] - The group aims to enhance gross margins by strengthening omnichannel management and leveraging new retail technologies[116] Governance and Compliance - The company aims to continue reviewing and monitoring its corporate governance practices to ensure compliance with the corporate governance code[155] - The audit committee has been established and consists of three independent non-executive directors, with Mr. Gu Jiong as the chairman, responsible for reviewing the company's financial information and overseeing the financial reporting system, risk management, and internal control systems[175] Miscellaneous - The company did not have any single customer contributing 10% or more to total revenue during the year[70] - The company will not declare any final dividend for the year ending December 31, 2023[155] - The company has not proposed any final dividend for the year, consistent with 2022[81] - The annual report for the fiscal year ending December 31, 2023, will be sent to shareholders in a timely manner and will be published on the stock exchange and the company's website[176]

Revenue and Profit Performance - Revenue for the first half of 2023 reached RMB 1,085,343 thousand, a 3.5% increase compared to RMB 1,048,628 thousand in the same period of 2022[1] - Net profit attributable to owners of the parent company surged to RMB 29,899 thousand, a significant increase from RMB 5,754 thousand in the first half of 2022[1] - The company reported a net profit of RMB 29,899 thousand for the six months ended June 30, 2023, compared to a net profit of RMB 5,754 thousand for the same period in 2022[18][19] - Pre-tax profit increased by RMB 13.8 million to RMB 30.6 million, driven by higher gross profit[53] - Net profit for the period increased by RMB 23.5 million to RMB 27.7 million[55] - The company's pre-tax profit for the six months ended June 30, 2023, was RMB 30,569 thousand[135] - Basic earnings per share for the six months ended June 30, 2023, were calculated based on a profit attributable to ordinary shareholders of RMB 29,899 thousand and 912,500,000 ordinary shares issued[163] Gross Profit and Margin - Gross profit increased by 7.7% to RMB 577,711 thousand, with gross margin rising from 51.2% to 53.2%[11] - GXG brand's gross profit increased by 16.0% to RMB 520,955 thousand, with gross margin improving by 2.6 percentage points to 56.5%[14] - Mode Commuter's gross profit surged by 61.3% to RMB 9,963 thousand, with gross margin increasing by 12.8 percentage points to 53.8%[15] - gxg.kids' gross profit decreased by 83.9% to RMB 6,132 thousand, with gross margin dropping by 32.1 percentage points to 10.9%[15] - The gross profit from self-operated stores increased by RMB 73.9 million or 29.4% year-over-year to RMB 325,478 thousand, with a gross margin increase of 4.2 percentage points to 73.4%[26] - The gross profit from online channels decreased to RMB 156,670 thousand with a gross margin of 36.7%, compared to RMB 194,950 thousand and a gross margin of 41.0% in the same period of 2022[26] - The total gross profit for the six months ended June 30, 2023, was RMB 577,711 thousand, with a gross margin of 53.2%, compared to RMB 536,486 thousand and a gross margin of 51.2% in the same period of 2022[26] - Partnership stores' gross profit decreased by RMB 10.6 million or 30.8% YoY, with gross margin dropping 11.2 percentage points to 29.8% due to subsidies and product supply adjustments[27] - Distributor stores' gross profit increased by RMB 16.7 million or 30.8% YoY, with gross margin rising 8.5 percentage points to 53.9% due to reduced product costs[27] - Online channel gross profit decreased by RMB 38.3 million or 19.6% YoY to RMB 156.7 million, with gross margin dropping 4.3 percentage points to 36.7% due to increased sales of discounted seasonal products[27] Store Performance and Optimization - The number of offline stores decreased from 1,122 at the end of 2022 to 1,047 as of June 30, 2023, due to store network optimization[10] - Partner stores experienced a 15.1% decrease in number, dropping from 184 to 158 stores[98] - The total number of stores decreased from 1,122 to 1,047, with self-operated stores making up 35.5% of the total[98] - The total number of offline stores decreased from 1,122 at the end of 2022 to 1,047 as of June 30, 2023, as the company adjusted brand positioning and marketing strategies to improve store efficiency[119] - The company's self-operated stores saw a 22.0% increase in sales, reaching RMB 443.6 million, compared to the same period in 2022[106] - The company's offline channel sales increased, with self-operated stores contributing 40.8% of total revenue[106] - Partnership store sales decreased by 4.8% or RMB 4.0 million to RMB 79.9 million compared to the same period in 2022, mainly due to subsidies provided to partners[107] Online Channel Performance - The company's online channel sales accounted for 39.3% of total revenue, amounting to RMB 426.8 million[106] - Online channel sales decreased by 10.2% or RMB 48.5 million to RMB 426.8 million compared to the same period in 2022, primarily due to the reduction of non-core brand business scale in online channels[107] - The company's income from online channel sales of clothing products for the six months ended June 30, 2023, was RMB 426,767 thousand, compared to RMB 475,318 thousand for the same period in 2022[149] Financial Position and Cash Flow - Total assets decreased to RMB 1,476,636 thousand as of June 30, 2023, compared to RMB 1,404,673 thousand at the end of 2022[6] - Total liabilities decreased to RMB 785,334 thousand as of June 30, 2023, from RMB 716,195 thousand at the end of 2022[8] - The company's cash and cash equivalents stood at RMB 220,912 thousand as of June 30, 2023, compared to RMB 252,194 thousand at the end of 2022[6] - The company's total equity as of June 30, 2023, was RMB 691,302 thousand, compared to RMB 712,953 thousand as of June 30, 2022[18][19] - The company's cash and cash equivalents decreased by RMB 31,582 thousand to RMB 220,912 thousand as of June 30, 2023, from RMB 252,194 thousand at the beginning of the period[24] - The company's operating cash flow for the six months ended June 30, 2023, was a net outflow of RMB 33,282 thousand, compared to a net outflow of RMB 347,176 thousand in the same period of 2022[22] - The company's net cash used in investing activities was RMB 58,209 thousand for the six months ended June 30, 2023, compared to RMB 95,482 thousand in the same period of 2022[24] - The company's net cash from financing activities was RMB 59,909 thousand for the six months ended June 30, 2023, compared to RMB 298,278 thousand in the same period of 2022[24] - Net operating cash outflow was RMB 33.3 million, a decrease of RMB 313.9 million from the same period in 2022, mainly due to reduced inventory[57] - Cash and cash equivalents decreased by 21.0% or RMB 290.7 million to RMB 1,095.1 million[59] - Asset-liability ratio increased to 53.0% from 50.3%, mainly due to seasonal borrowing for prepayment of winter goods[60] Expenses and Costs - Sales and distribution expenses increased by 5.1% or RMB 21.5 million YoY to RMB 439.3 million, primarily due to increased advertising costs[35] - Administrative expenses increased by 4.8% or RMB 4.9 million YoY to RMB 106.4 million, mainly due to higher professional service costs[37] - Financial assets impairment loss net amount was RMB 4.9 million, compared to a reversal of RMB 12.6 million in the same period of 2022, mainly due to increased trade receivables from some customers and higher expected credit loss rates[50] - Other expenses increased by 45.2% or RMB 1.9 million to RMB 6.1 million, primarily due to higher decoration costs from closed stores[51] - Financial costs increased by 5.3% or RMB 1.6 million to RMB 31.7 million, mainly due to higher bank loan interest[52] - Income tax expenses decreased by RMB 9.7 million to RMB 2.9 million[54] - The company's total financial costs for the six months ended June 30, 2023, were RMB 31,675 thousand, including bank and other borrowing interest of RMB 31,783 thousand and lease liability interest of RMB 3,216 thousand[153] - The company's total tax expense for the six months ended June 30, 2023, was RMB 2,904 thousand, compared to RMB 12,636 thousand for the same period in 2022[156] Strategic Initiatives and Future Plans - The company plans to use the remaining RMB 19.8 million of IPO proceeds within the next 18 months for strategic purposes[47] - The company aims to enhance its leading position in the fashion industry through innovative marketing, retail technology, and optimized store management[38] - The company's integrated omni-channel business model leverages both online and offline advantages to enhance inventory and supply chain management[90] - The company's restricted stock unit plan aims to incentivize and retain skilled personnel for future development and expansion[86] - The company's restricted stock unit plan has a remaining term of approximately 5 years and 10 months as of June 30, 2023[96] Corporate Governance and Compliance - The company has applied the principles of the Corporate Governance Code and complied with all applicable code provisions to maintain high standards of corporate governance[110] - The Audit Committee reviewed the unaudited interim results for the six months ended June 30, 2023, and confirmed compliance with applicable accounting principles, standards, and regulations[113] - The company has adopted the Model Code for Securities Transactions by Directors and confirmed that all directors have complied with the code's provisions during the period[111] - The company did not purchase, sell, or redeem any of its listed securities during the period[112] - The company has applied the amendments to IAS 1, which require the disclosure of material accounting policy information, effective from January 1, 2023, and expects it to impact the annual financial statements[131] Shareholding and Ownership - The company has 950,000,000 issued ordinary shares as of June 30, 2023[78] - Great World Glory Pte. Ltd. holds a 38.27% beneficial ownership stake with 363,579,785 shares[80] - L Capital Asia 2 Pte. Ltd. and related entities collectively hold a 38.27% controlled interest with 363,579,785 shares[80] - Crescent Glory Singapore Pte. Ltd. holds a 14.15% beneficial ownership stake with 134,474,715 shares[80] - GXG Trading Limited holds a 22.50% beneficial ownership stake with 213,750,000 shares[80] - Yu Yong holds 2,000,000 restricted stock units, equivalent to shares held in trust[77] - Madison International Limited controls 22.50% of the company's shares through GXG Trading Limited[80] Asset and Liability Details - Inventory decreased to RMB 556,644 thousand as of June 30, 2023, compared to RMB 683,493 thousand at the end of 2022, with finished goods accounting for the majority at RMB 546,749 thousand[173] - Trade receivables decreased to RMB 703,057 thousand as of June 30, 2023, from RMB 755,334 thousand at the end of 2022, with a significant portion (56.7%) aged over 2 years[169] - Trade payables and notes payable decreased to RMB 279,100 thousand as of June 30, 2023, from RMB 439,366 thousand at the end of 2022, with a significant portion (30.2%) aged over 2 years[184] - Property, plant, and equipment increased to RMB 337,183 thousand as of June 30, 2023, from RMB 311,239 thousand at the end of 2022, with additions of RMB 58,476 thousand during the period[165] - Intangible assets decreased to RMB 35,782 thousand as of June 30, 2023, from RMB 38,591 thousand at the end of 2022, with amortization of RMB 2,669 thousand during the period[172] - Other receivables and prepayments decreased to RMB 340,679 thousand as of June 30, 2023, from RMB 389,733 thousand at the end of 2022, with a significant portion (79.7%) related to other receivables[176] - The company's credit terms with customers (excluding retail customers) generally range from one to three months, with some extending up to one year[174] - The company has no collateral or credit enhancements for its trade receivables, which are non-interest bearing[174] - The company's trade payables are non-interest bearing and generally settled within 120 days[191] - Total interest-bearing bank and other borrowings decreased to RMB 1,602,137 thousand as of June 30, 2023, compared to RMB 1,772,240 thousand as of December 31, 2022[195] - Bank loans of USD 29,600,000 are secured by fixed deposits amounting to RMB 231,216,000 as of June 30, 2023, down from RMB 236,832,000 as of December 31, 2022[195] - Discounted letters of credit decreased to RMB 87,981,000 as of June 30, 2023, from RMB 100,000,000 as of December 31, 2022, secured by fixed deposits of RMB 28,895,000[196] - Other payables decreased to RMB 185,052 thousand as of June 30, 2023, from RMB 203,789 thousand as of December 31, 2022[198] - Short-term secured bank loans with a five-year loan base rate amounted to RMB 25,805 thousand as of June 30, 2023, up from RMB 22,450 thousand as of December 31, 2022[200] - Secured bank loans with a three-month LIBOR plus 1.14% rate amounted to RMB 21,655 thousand as of June 30, 2023[200] - Secured bank loans with a rate of -3.40% decreased to RMB 193,086 thousand as of June 30, 2023, from RMB 387,194 thousand as of December 31, 2022[200] - Discounted bills receivable secured decreased to RMB 127,980 thousand as of June 30, 2023, from RMB 215,980 thousand as of December 31, 2022[200] - Unsecured bank loans decreased to RMB 160,000 thousand as of June 30, 2023, from RMB 262,841 thousand as of December 31, 2022[200] - Non-current secured bank loans with a three-month LIBOR plus 1.14% rate amounted to RMB 181,801 thousand as of June 30, 2023, down from RMB 185,573 thousand as of December 31, 2022[200] Other Income and Gains - Other income and gains increased by 93.0% or RMB 19.9 million YoY to RMB 41.3 million, driven by higher investment income from fixed deposits and foreign exchange gains[28] - The company's other income and gains for the six months ended June 30, 2023, totaled RMB 41,266 thousand, including foreign exchange gains, government grants, and bank interest income[147] Sales Revenue by Brand - GXG Jeans sales revenue decreased by 13.2% or RMB 13.2 million YoY due to store optimization efforts[43] - The company's main brand GXG sales revenue increased by 10.6% or RMB 88.1 million compared to the same period in 2022, driven by the recovery of offline consumer spending and improved operational efficiency in offline retail channels[115] - gxg.kids sales revenue decreased by 36.4% or RMB 32.2 million due to the company's reduction in business scale[104] - Mode Commuter sales revenue increased by 22.5% or RMB 3.4 million, driven by improved management and optimized product offerings[104] Dividend and Financial Statements - The company did not recommend the payment of any interim dividend for the period[108] - The company did not declare any interim dividend for the six months ended June 30, 2023[157] - The company's income from external customers for the six months ended June 30, 2023, was RMB 1,085,343 thousand, with RMB 1,084,959 thousand from goods transferred at a point in time and RMB 384 thousand from services transferred at a point in time[147] - Total revenue for the six months ended June 30, 2023, was RMB 1,085,343 thousand, with offline channels contributing RMB 655,126 thousand and online channels contributing RMB 426,767 thousand[135] Non-Current Assets and Liabilities - Non-current assets in Mainland China decreased from RMB 565,877 thousand as of December 31, 2022, to RMB 522,893 thousand as of June 30, 2023[145] - Capital expenditures decreased by 38.4% or RMB 36.8 million to RMB 59.0 million, primarily due to lower decoration costs for the headquarters office[58]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Performance Overview](index=1&type=section&id=Performance%20Overview) For the six months ended June 30, 2023, the Group achieved double-digit growth in total revenue and net profit, driven by offline consumption recovery, improved retail channel efficiency, successful brand promotion, and effective control over retail discounts and product costs Key Financial Indicators | Indicator | H1 2023 (RMB Million) | H1 2022 (RMB Million) | Growth | | :--- | :--- | :--- | :--- | | **Total Revenue** | 1,085.3 | 1,048.6 | +3.5% | | **Net Profit** | 27.7 | 4.2 | +559.5% | - Key drivers for performance growth include (i) offline consumption recovery and improved retail channel efficiency, (ii) successful brand promotion initiatives, and (iii) effective control over retail discount rates and product costs[7](index=7&type=chunk) [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company achieved significant net profit growth from RMB 4.2 million to RMB 27.7 million, driven by increased gross profit and effective cost control, despite higher selling and administrative expenses, with basic earnings per share rising from RMB 0.63 cents to RMB 3.28 cents Key Figures from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item (RMB Thousand) | H1 2023 (Unaudited) | H1 2022 (Unaudited) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | 1,085,343 | 1,048,628 | +3.5% | | **Gross Profit** | 577,711 | 536,486 | +7.7% | | **Profit Before Tax** | 30,569 | 16,844 | +81.5% | | **Profit for the Period** | 27,665 | 4,208 | +557.4% | | **Profit Attributable to Owners of the Parent** | 29,899 | 5,754 | +419.6% | - Basic earnings per share significantly increased to **RMB 3.28 cents** from **RMB 0.63 cents** in the prior period[76](index=76&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets were RMB 3.02 billion, slightly down from year-end 2022, while net assets remained stable at RMB 691 million, and net current assets significantly increased from RMB 84.2 million to RMB 188 million, indicating improved short-term solvency Key Figures from Consolidated Statement of Financial Position | Item (RMB Thousand) | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | | :--- | :--- | :--- | | **Total Non-current Assets** | 1,288,904 | 1,320,467 | | **Total Current Assets** | 1,731,563 | 2,199,693 | | **Total Current Liabilities** | 1,543,831 | 2,115,487 | | **Net Assets** | 691,302 | 688,478 | | **Total Equity** | 691,302 | 688,478 | [Consolidated Statement of Cash Flows](index=6&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Net cash used in operating activities significantly improved to RMB 33.3 million from a net outflow of RMB 347 million in the prior period, primarily due to effective inventory reduction, while net cash used in investing activities decreased and net cash from financing activities declined Key Figures from Consolidated Statement of Cash Flows | Item (RMB Thousand) | H1 2023 (Unaudited) | H1 2022 (Unaudited) | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | (33,282) | (347,176) | | **Net Cash Used in Investing Activities** | (58,209) | (95,482) | | **Net Cash From Financing Activities** | 59,909 | 298,278 | | **Net Decrease in Cash and Cash Equivalents** | (31,582) | (144,380) | [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) [Business Overview and Outlook](index=20&type=section&id=Business%20Overview%20and%20Outlook) In H1 2023, the Group's business, particularly offline retail channels, recovered from the pandemic and is expected to continue improving in H2, with confidence in its prospects as a leading fashion company in China and commitment to implementing growth strategies to strengthen market position - The Group remains confident in the prospects of increased consumer spending driven by China's domestic economic development and its omnichannel strategy[25](index=25&type=chunk) - Future growth strategies include reforming organizational structure to deepen online-offline channel integration and improve operational efficiency, adopting innovative marketing initiatives to tap into potential consumer groups and enhance member experience, and optimizing self-operated store management to control discount rates and costs for increased gross margins[25](index=25&type=chunk)[68](index=68&type=chunk) [Financial Analysis](index=20&type=section&id=Financial%20Analysis) This section details the Group's financial performance, with total revenue growing 3.5% driven by the offline recovery of the GXG brand, gross margin improving to 53.2% due to discount and cost control, and significant increases in both profit before tax and profit for the period despite some expense increases [Revenue Analysis](index=20&type=section&id=Revenue%20Analysis) Total revenue increased by 3.5% year-on-year to RMB 1.085 billion, primarily driven by a 10.6% growth in the GXG brand, while gxg.kids declined due to business scale reduction, and offline self-operated and dealer stores grew, but online channels decreased by 10.2% due to non-core brand business reduction Revenue by Brand (RMB Thousand) | Brand | H1 2023 | Share | H1 2022 | Share | Y-o-Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **GXG** | 921,898 | 84.9% | 833,834 | 79.6% | +10.6% | | **gxg jeans** | 86,532 | 8.0% | 99,728 | 9.5% | -13.2% | | **gxg.kids** | 56,343 | 5.2% | 88,474 | 8.4% | -36.4% | | **Mode Commuter** | 18,526 | 1.7% | 15,070 | 1.4% | +22.5% | | **Other** | 2,044 | 0.2% | 11,522 | 1.1% | -82.3% | | **Total** | **1,085,343** | **100.0%** | **1,048,628** | **100.0%** | **+3.5%** | Revenue by Sales Channel (RMB Thousand) | Channel | H1 2023 | Share | H1 2022 | Share | Y-o-Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Offline - Self-operated Stores** | 443,558 | 40.8% | 363,688 | 34.7% | +22.0% | | **Offline - Partner Stores** | 79,918 | 7.4% | 83,857 | 8.0% | -4.8% | | **Offline - Dealer Stores** | 131,650 | 12.1% | 119,391 | 11.4% | +10.3% | | **Online Channels** | 426,767 | 39.3% | 475,318 | 45.3% | -10.2% | | **Total** | **1,085,343** | **100.0%** | **1,048,628** | **100.0%** | **+3.5%** | [Store Network](index=22&type=section&id=Store%20Network) To enhance store efficiency, the Group adjusted its offline store network, reducing the total number of offline stores from 1,122 at year-end 2022 to 1,047 as of June 30, 2023, by closing stores that did not meet sales targets Changes in Number of Stores | Channel/Brand | June 30, 2023 | December 31, 2022 | Net Change | | :--- | :--- | :--- | :--- | | **Total** | **1,047** | **1,122** | **-75** | | Self-operated Stores | 372 | 393 | -21 | | Partner Stores | 158 | 184 | -26 | | Dealer Stores | 517 | 545 | -28 | [Gross Profit and Gross Margin](index=23&type=section&id=Gross%20Profit%20and%20Gross%20Margin) The Group's overall gross profit increased by 7.7% year-on-year to RMB 578 million, with gross margin improving from 51.2% to 53.2%, primarily due to effective control over retail discounts and product costs, and an increased sales contribution from higher-margin offline channels - Overall gross margin increased from **51.2%** in the prior period to **53.2%**[56](index=56&type=chunk)[57](index=57&type=chunk) - Gross margins for GXG, gxg jeans, and Mode Commuter brands all improved due to lower retail discount rates and effective cost control, while gxg.kids saw significant declines in both gross profit and gross margin due to reduced business scale[58](index=58&type=chunk) - Gross margins for offline self-operated and dealer stores improved, while those for partner stores and online channels decreased due to increased subsidies and sales of off-season products[60](index=60&type=chunk)[61](index=61&type=chunk) [Other Income and Expenses](index=25&type=section&id=Other%20Income%20and%20Expenses) Other income and gains surged by 93.0% year-on-year, primarily from fixed deposit investment income and foreign exchange gains, while selling and distribution expenses rose 5.1% due to increased brand promotion, administrative expenses increased 4.8% due to higher professional service fees, and a net impairment loss of RMB 4.9 million on financial assets was recorded, compared to a reversal in the prior period - Other income and gains amounted to **RMB 41.3 million**, a **93.0% year-on-year increase**, primarily due to higher fixed deposit investment income and foreign exchange gains[63](index=63&type=chunk) - Selling and distribution expenses increased by **5.1%** year-on-year to **RMB 439 million**, mainly due to higher advertising expenses[64](index=64&type=chunk) - A net impairment loss on financial assets of **RMB 4.9 million** was recorded, compared to a reversal of **RMB 12.6 million** in the prior period, primarily due to an increase in aged trade receivables[66](index=66&type=chunk) [Profit Analysis](index=26&type=section&id=Profit%20Analysis) Profit before tax increased year-on-year to RMB 30.6 million, driven by higher gross profit, while a significant reduction in income tax expense contributed to the profit for the period rising from RMB 4.2 million to RMB 27.7 million in the prior period Profit Analysis (RMB Million) | Item (RMB Million) | H1 2023 | H1 2022 | Change | | :--- | :--- | :--- | :--- | | **Profit Before Tax** | 30.6 | 16.8 | +82.1% | | **Income Tax Expense** | 2.9 | 12.6 | -77.0% | | **Profit for the Period** | 27.7 | 4.2 | +559.5% | [Liquidity and Financial Resources](index=26&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's net cash outflow from operating activities significantly decreased year-on-year, capital expenditure reduced due to lower headquarters renovation costs, and the gearing ratio slightly increased from 50.3% to 53.0% mainly due to seasonal borrowings for winter goods, while the Group primarily faces foreign exchange risk from USD-denominated debt - Net cash outflow from operating activities was **RMB 33.3 million**, a significant reduction from **RMB 347 million** in the prior period, primarily due to inventory reduction[13](index=13&type=chunk) - Capital expenditure was **RMB 59 million**, a **38.4% year-on-year decrease**, mainly due to lower headquarters office renovation costs[14](index=14&type=chunk) - As of June 30, 2023, the gearing ratio was **53.0%**, a slight increase from **50.3%** at year-end 2022, primarily due to seasonal borrowings for prepayment of winter goods[18](index=18&type=chunk) - The Group faces foreign exchange risk primarily arising from USD-denominated debt and did not use any financial instruments for hedging during the period[22](index=22&type=chunk) [Other Information](index=28&type=section&id=Other%20Information) [Human Resources](index=28&type=section&id=Human%20Resources) To control costs, the Group streamlined its workforce during the period, reducing the number of employees from 603 to 516 as of June 30, 2023, and total staff costs decreased from RMB 68.1 million to RMB 61.5 million in the prior period - Number of employees decreased from **603** at year-end 2022 to **516** as of June 30, 2023[38](index=38&type=chunk) - Total staff costs decreased by **9.7%** year-on-year to **RMB 61.5 million**, with its proportion of total revenue decreasing from **6.5%** to **5.7%**[38](index=38&type=chunk) [Interim Dividend](index=29&type=section&id=Interim%20Dividend) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2023 - The Board does not recommend the payment of an interim dividend for the current period[40](index=40&type=chunk)[119](index=119&type=chunk) [Use of Proceeds from Global Offering](index=29&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) Since its 2019 listing, the company has utilized approximately RMB 685 million of net proceeds, representing 97.2% of the total, with the remaining RMB 19.8 million expected to be fully utilized within the next 18 months as planned Overview of Use of Proceeds (As of June 30, 2023) | Item | Planned Use (RMB Million) | Actual Use (RMB Million) | Unused (RMB Million) | | :--- | :--- | :--- | :--- | | Debt Repayment | 317 | 317 | – | | Brand Acquisitions or Strategic Alliances | 106 | 106 | – | | Upgrading Smart Stores | 70 | 70 | – | | Upgrading Warehouses | 141 | 121 | 20 | | Working Capital and Others | 71 | 71 | – | | **Total** | **705** | **685** | **20** | - As of June 30, 2023, out of approximately **RMB 705 million** in net proceeds from the listing, **RMB 685 million** has been utilized, with approximately **RMB 19.8 million** remaining unused[44](index=44&type=chunk)[45](index=45&type=chunk)

Financial Performance - Total sales for 2022 amounted to RMB 2,326.3 million, a decrease of 13.7% from RMB 2,695.2 million in 2021[2] - Gross profit for the period was RMB 1,137.9 million, down 14.3% from RMB 1,327.9 million in 2021, with a stable gross margin of 48.9%[9] - Gross profit for 2022 was RMB 1,137.9 million with a gross margin of 48.9%, down from RMB 1,327.9 million and a gross margin of 49.3% in 2021[22] - Profit before tax rose to RMB 21.6 million from a loss of RMB 104.4 million in 2021, an increase of RMB 126.0 million[24] - Net profit for the period was RMB 9.4 million, a turnaround from a loss of RMB 91.3 million in 2021, representing an increase of RMB 100.7 million[25] - The main brand GXG's sales revenue decreased by 14.1% to RMB 1,847.4 million due to fluctuating COVID-19 conditions affecting product demand[77] - The sales revenue of gxg.kids increased by 10.5% or RMB 189 million compared to 2021, primarily due to increased online sales[57] - The sales revenue of gxg jeans and Yatlas decreased by 22.0% or RMB 616 million and 53.4% or RMB 117 million respectively, mainly due to recurring COVID-19 impacts and brand repositioning[59] Revenue Channels - Online channel sales decreased by 10.6% or RMB 122.8 million to RMB 1,036.2 million, accounting for 44.5% of total revenue[3] - The total number of offline stores decreased from 1,198 at the end of 2021 to 1,122 by December 31, 2022, reflecting a strategic adjustment in brand positioning and marketing[5] - The number of self-operated stores decreased to 393, while the number of partner stores and distributor stores also saw reductions, indicating a consolidation strategy[6] Expenses and Costs - Selling and distribution expenses decreased by 4.8% to RMB 883.5 million, while the percentage of total revenue increased from 34.5% in 2021 to 38.0% in 2022[18] - Administrative expenses decreased by 7.8% to RMB 205.1 million from RMB 222.5 million in 2021, representing 8.8% of total revenue compared to 8.3% in 2021[19] - Other expenses increased by 33.6% to RMB 20.3 million from RMB 15.2 million in 2021, primarily due to increased impairment of right-of-use assets and renovations[21] - Total employee costs for the period amounted to RMB 132.6 million, compared to RMB 146.4 million in 2021, representing a decrease of approximately 9.5%[123] - Employee costs accounted for 5.7% of the group's revenue during the period, slightly up from 5.4% in 2021[123] Cash Flow and Capital Expenditures - Operating cash inflow increased by RMB 67.0 million to RMB 244.7 million from RMB 177.7 million in 2021, driven by improved sales and inventory management[27] - Capital expenditures decreased by 25.8% to RMB 126.1 million from RMB 169.9 million in 2021, attributed to lower renovation costs[28] - Cash and cash equivalents increased by 101.1% to RMB 1,385.8 million from RMB 689.2 million in 2021[29] Debt and Liabilities - The debt-to-asset ratio increased to 50.3% from 35.0% in 2021, primarily due to changes in collateral for borrowings[30] - As of December 31, 2022, the group had no significant or contingent liabilities, consistent with the previous year[113] Strategic Initiatives - The company is implementing a series of effective growth strategies to stabilize performance in 2023, following the easing of COVID-19 restrictions in China[53] - The company aims to enhance internal management and cost control to mitigate the impacts of recurring COVID-19[54] - The integrated omnichannel business model aims to provide a seamless shopping experience, improving inventory and supply chain management[46] - The launch of the digital virtual space MetaGXG aims to enhance user experience and drive demand through innovative marketing strategies[50] - The company is focused on optimizing its leading supply chain network to adapt to changing consumer preferences and market conditions[51] - The company is committed to sustainable growth by continuously innovating marketing initiatives and exploring potential consumer groups[51] Governance and Compliance - The company has complied with relevant laws and regulations without any significant violations during the reporting period[161] - The board does not recommend the payment of any final dividend for the year ended December 31, 2022, considering operational performance and cash flow[143] - The board will reassess the dividend policy based on the group's operational performance and financial condition[143] Employee and Management - As of December 31, 2022, the total number of employees in the group was 603, down from 831 in 2021[123] - The group is focused on enhancing governance, promoting employee welfare, and achieving sustainable growth[161] - The group had a total of 603 employees as of December 31, 2022, and provided various training programs for operational departments[182] Shareholder Information - The major shareholder, Great World Glory Pte. Ltd., holds a beneficial ownership of 38.27%, equivalent to 363,579,785 shares[187] - Crescent Glory Singapore Pte. Ltd. holds a beneficial ownership of 14.15%, equivalent to 134,474,715 shares[187] - GXG Trading Limited has a beneficial ownership of 22.50%, amounting to 213,750,000 shares[187] Future Outlook - The outlook for 2023 is optimistic, with expectations of increased consumer mobility and economic activity recovery in China[72] - The company is confident in its prospects as a leading fashion company in China, leveraging its omnichannel strategy and online sales advantages[53]

[Financial Summary](index=1&type=section&id=Financial%20Summary) The company achieved a net profit of RMB 9.4 million in 2022 despite the COVID-19 impact, through enhanced internal management and cost control 2022 Key Financial Data | Metric | 2022 (RMB million) | 2021 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 2,326.3 | 2,695.2 | -13.7% | | Net Profit/(Loss) | 9.4 | (91.3) | increased by 100.7 million | - COVID-19 significantly impacted business in 2022, but a net profit of **RMB 9.4 million** was successfully achieved through strengthened internal management and cost control[42](index=42&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated financial performance and position for the year ended December 31, 2022 [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended December 31, 2022, total revenue was RMB 2,326,281 thousand, a 13.7% decrease from 2021, yet the company achieved a profit of RMB 9,351 thousand, reversing the 2021 loss, due to effective cost control and reduced impairment losses Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2022 (RMB thousand) | 2021 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,326,281 | 2,695,234 | -13.7% | | Cost of Sales | (1,188,375) | (1,367,363) | -13.09% | | Gross Profit | 1,137,906 | 1,327,871 | -14.3% | | Other Income and Gains | 64,681 | 33,269 | +94.4% | | Selling and Distribution Expenses | (883,520) | (928,469) | -4.84% | | Administrative Expenses | (205,098) | (222,477) | -7.81% | | Net Impairment Loss on Financial Assets | (8,996) | (240,659) | -96.26% | | Other Expenses | (20,263) | (15,208) | +33.24% | | Finance Costs | (63,080) | (59,412) | +6.17% | | Profit/(Loss) Before Tax | 21,630 | (104,370) | turned profitable | | Income Tax (Expense)/Credit | (12,279) | 13,027 | increased tax expense | | Profit/(Loss) for the Year | 9,351 | (91,343) | turned profitable | | Basic Earnings/(Loss) Per Share Attributable to Owners of the Parent | RMB 1.36 cents | RMB (9.83) cents | turned profitable | - Total comprehensive loss for the year was **RMB (61,347) thousand**, primarily due to exchange differences on translating overseas operations[46](index=46&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2022, total current assets were RMB 2,199,693 thousand, total current liabilities were RMB 2,115,487 thousand, resulting in net current assets of RMB 84,206 thousand, with the gearing ratio increasing to 50.3% due to a shift from equity pledge to deposit pledge Key Data from Consolidated Statement of Financial Position | Metric | 2022年12月31日 (RMB thousand) | 2021年12月31日 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Inventories | 683,493 | 840,373 | -18.67% | | Trade and Bills Receivables | 361,657 | 427,072 | -15.32% | | Pledged Deposits | 603,954 | 11,920 | +4975.12% | | Cash and Cash Equivalents | 252,194 | 677,230 | -62.74% | | Total Current Assets | 2,199,693 | 2,211,697 | -0.54% | | Trade and Bills Payables | 439,366 | 474,924 | -7.49% | | Interest-bearing Bank and Other Borrowings (Current) | 1,184,004 | 971,877 | +21.83% | | Total Current Liabilities | 2,115,487 | 2,027,066 | +4.36% | | Net Current Assets | 84,206 | 184,631 | -54.39% | | Total Non-current Assets | 1,320,467 | 811,626 | +62.69% | | Total Non-current Liabilities | 716,195 | 255,783 | +179.92% | | Total Equity | 688,478 | 740,474 | -7.02% | - Cash and cash equivalents and pledged deposits totaled **RMB 1,385.8 million** as of December 31, 2022, an increase of **101.1%** from the end of 2021[14](index=14&type=chunk) - The gearing ratio increased to **50.3%** as of December 31, 2022 (2021: 35.0%), primarily due to the adjustment from equity pledge to deposit pledge[15](index=15&type=chunk) [Notes to Financial Statements](index=6&type=section&id=Notes%20to%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements [Company and Group Information](index=6&type=section&id=Company%20and%20Group%20Information) Mulsanne Group Holding Limited is an investment holding company incorporated in the Cayman Islands, primarily engaged in the design, marketing, and sale of apparel products in China through its subsidiaries, with no direct or ultimate holding company - The Company is a limited liability company incorporated in the Cayman Islands, with its principal place of business in Ningbo, Zhejiang Province, China[52](index=52&type=chunk) - The Company has no direct or ultimate holding company, with Great World Glory Pte. Ltd. and L Capital Asia 2 Pte. Ltd. as controlling shareholders[53](index=53&type=chunk) - The Company's subsidiaries are primarily engaged in the design, marketing, and sale of apparel products[59](index=59&type=chunk) [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) The financial statements are prepared in accordance with International Financial Reporting Standards, Hong Kong Generally Accepted Accounting Principles, and the disclosure requirements of the Hong Kong Companies Ordinance, using the historical cost convention and presented in RMB - The financial statements are prepared in accordance with International Financial Reporting Standards, Hong Kong Generally Accepted Accounting Principles, and the disclosure requirements of the Hong Kong Companies Ordinance[53](index=53&type=chunk) - The financial statements are prepared on the historical cost basis and presented in RMB[53](index=53&type=chunk) [Changes in Accounting Policies and Disclosures](index=6&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) The Group adopted revised International Financial Reporting Standards for the first time this year, including IAS 16, IAS 37, and Annual Improvements to IFRS 2018-2020, which had no significant impact on its financial position or performance - The Group has adopted the revised IAS 16, IAS 37, and Annual Improvements to IFRS 2018-2020 for the financial statements for the current year[54](index=54&type=chunk)[55](index=55&type=chunk) - Revised IAS 37 clarifies the cost components when assessing onerous contracts, and the Group found no onerous contracts, thus having no significant impact[57](index=57&type=chunk) - Revised IAS 16 prohibits deducting proceeds from selling items produced while bringing an asset to the location and condition necessary for it to be capable of operating as intended, and the Group did not sell such items, thus having no significant impact[63](index=63&type=chunk) [Operating Segment Information](index=8&type=section&id=Operating%20Segment%20Information) The Group primarily sells apparel products through offline and online channels, with the CEO assessing segment performance based on gross profit, but asset and liability analysis by segment is not regularly provided - The Group is primarily engaged in the sale of apparel products, categorized into offline channels (self-operated stores, partner stores, offline distributors) and online channels (Tmall, Taobao, Vipshop, Douyin, WeChat mini-programs)[66](index=66&type=chunk) - The Chief Executive Officer assesses segment performance based on gross profit, but asset and liability analysis by operating segment is not regularly provided[66](index=66&type=chunk) Segment Revenue by Sales Channel | Segment Revenue (Sales to external customers) | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Offline Channels | 1,279,192 | 1,513,716 | | Online Channels | 1,036,195 | 1,158,980 | | Other | 10,894 | 22,538 | | Total | 2,326,281 | 2,695,234 | [Revenue, Other Income and Gains](index=10&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) Total revenue for 2022 was RMB 2,326,281 thousand, primarily from apparel product sales, with online channels contributing the most, while other income and gains significantly increased by 94.3% to RMB 64,681 thousand, driven by pledged deposit investment income and government subsidies Disaggregation of Revenue from Contracts with Customers | Revenue Source | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Online Channels | 1,036,195 | 1,158,980 | | Self-operated Stores | 735,163 | 847,488 | | Partner Stores | 150,626 | 194,182 | | Distributors | 393,403 | 472,046 | | Sales of Other Products | 8,084 | 12,273 | | Consignment Services | 2,810 | 10,265 | | **Total** | **2,326,281** | **2,695,234** | - Performance obligations are typically satisfied upon transfer of control of apparel products, with payments usually due within 1 to 3 months after shipment, extendable to one year for major customers[75](index=75&type=chunk) Analysis of Other Income and Gains | Other Income and Gains | 2022 (RMB thousand) | 2021 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank Interest Income | 3,975 | 2,426 | +63.85% | | Pledged Deposit Investment Income | 28,023 | - | N/A | | Government Subsidies | 19,642 | 22,879 | -14.14% | | Net Exchange Gains | 7,859 | 1,224 | +542.08% | | Net Gain on Lease Termination | 2,407 | 1,979 | +21.63% | | **Total** | **64,681** | **33,269** | **+94.3%** | [Profit/(Loss) Before Tax](index=12&type=section&id=Profit%2F%28Loss%29%20Before%20Tax) The Group's profit before tax for 2022 was RMB 21,630 thousand, a significant improvement from the RMB 104,370 thousand loss in 2021, primarily due to changes in various expenses including cost of sales, depreciation, amortization, and impairment Components of Profit/(Loss) Before Tax | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Cost of Inventories Sold | 1,206,962 | 1,323,997 | | Depreciation of Property, Plant and Equipment | 62,837 | 54,521 | | Depreciation of Right-of-use Assets | 139,061 | 125,372 | | Amortization of Intangible Assets | 6,317 | 4,913 | | Net Impairment Loss on Trade Receivables | 7,509 | 142,098 | | Inventories (Reversal of Write-down)/Write-down to Net Realizable Value | (20,963) | 35,653 | | Employee Benefit Expenses (Excluding Directors' and Chief Executive's Emoluments) | 131,902 | 151,823 | [Income Tax Expense](index=13&type=section&id=Income%20Tax%20Expense) Income tax expense for 2022 was RMB 12,279 thousand, compared to an income tax credit of RMB 13,027 thousand in 2021, with mainland China subsidiaries enjoying preferential tax rates for small enterprises, and Hong Kong and Macau subsidiaries provisioned at local tax rates Total Income Tax Expense/(Credit) | Income Tax Expense/(Credit) | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Current Tax | 6,605 | 50,677 | | Deferred Tax | 5,674 | (63,704) | | **Total Tax Expense/(Credit) for the Year** | **12,279** | **(13,027)** | - Mainland China subsidiaries qualify as small enterprises, enjoying a preferential income tax rate of **20%**, with an **87.5%** tax reduction on the first **RMB 1,000,000** of annual taxable income and a **75%** tax reduction on income between **RMB 1,000,000** and **RMB 3,000,000**[83](index=83&type=chunk) - Hong Kong profits tax is provided at a rate of **16.5%**, and Macau profits tax at **12%**[82](index=82&type=chunk) [Dividends](index=13&type=section&id=Dividends) The Board of Directors does not recommend the payment of any final dividend for the year ended December 31, 2022 - The Board of Directors does not recommend the payment of any final dividend for the year (2021: nil)[85](index=85&type=chunk) [Earnings/(Loss) Per Share Attributable to Ordinary Equity Holders of the Parent](index=14&type=section&id=Earnings%2F%28Loss%29%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) Basic earnings per share for 2022 was RMB 1.36 cents, reversing the basic loss per share of RMB 9.83 cents in 2021, and diluted loss per share for 2021 was the same as basic loss per share due to the anti-dilutive effect of restricted share units Basic and Diluted Earnings/(Loss) Per Share Data | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Ordinary Equity Holders of the Parent (RMB thousand) | 12,429 | (89,684) | | Weighted Average Number of Ordinary Shares in Issue for Basic Earnings/(Loss) Per Share | 912,500,000 | 912,500,000 | | Dilutive Effect - Weighted Average Number of Ordinary Shares from Restricted Share Units | 4,060,126 | 6,751,461 | | Basic Earnings/(Loss) Per Share | RMB 1.36 cents | RMB (9.83) cents | - Restricted share units had an anti-dilutive effect on the basic loss per share for 2021, as their inclusion would decrease the diluted loss per share, and were therefore ignored in the calculation of diluted loss per share[88](index=88&type=chunk) [Trade and Bills Receivables](index=14&type=section&id=Trade%20and%20Bills%20Receivables) As of the end of 2022, net trade and bills receivables totaled RMB 361,657 thousand, a 15.32% decrease from 2021, with the company maintaining strict control over receivables and credit terms generally ranging from 1 to 3 months, extendable to one year for major customers Trade and Bills Receivables | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables | 755,334 | 821,195 | -8.02% | | Bills Receivable | 44,840 | 44,020 | +1.86% | | Impairment of Trade Receivables | (438,517) | (438,143) | +0.08% | | **Net Amount** | **361,657** | **427,072** | **-15.32%** | Ageing Analysis of Trade Receivables | Ageing of Trade Receivables | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Less than 3 months | 248,563 | 296,549 | | 3 to 6 months | 33,976 | 23,542 | | 6 to 12 months | 42,743 | 45,705 | | 1 to 2 years | 54,036 | 82,225 | | Over 2 years | 376,016 | 373,174 | | **Total** | **755,334** | **821,195** | - Credit terms generally range from 1 to 3 months, extendable to a maximum of one year for important customers, while new customers typically require advance payment[91](index=91&type=chunk) [Trade and Bills Payables](index=15&type=section&id=Trade%20and%20Bills%20Payables) As of the end of 2022, total trade and bills payables were RMB 439,366 thousand, a 7.49% decrease from 2021, with trade payables being non-interest bearing and generally settled within 120 days Trade and Bills Payables | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Payables | 296,666 | 356,824 | -16.86% | | Bills Payable | 142,700 | 118,100 | +20.83% | | **Total** | **439,366** | **474,924** | **-7.49%** | Ageing Analysis of Trade Payables | Ageing of Trade Payables | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 248,143 | 325,978 | | 3 to 6 months | 25,865 | 15,309 | | 6 to 12 months | 8,875 | 6,879 | | 1 to 2 years | 10,920 | 7,459 | | Over 2 years | 2,863 | 1,199 | | **Total** | **296,666** | **356,824** | - Trade payables are non-interest bearing and generally settled within 120 days, including amounts due to related parties of **RMB 1,080 thousand**[92](index=92&type=chunk)[96](index=96&type=chunk) [Interest-bearing Bank and Other Borrowings](index=16&type=section&id=Interest-bearing%20Bank%20and%20Other%20Borrowings) As of the end of 2022, total interest-bearing bank and other borrowings significantly increased to RMB 1,772,240 thousand from 2021, with most borrowings denominated in RMB and some in USD, secured by various forms including equity interests, leasehold land, and pledged deposits Total Interest-bearing Bank and Other Borrowings | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current Borrowings | 1,184,004 | 971,877 | +21.83% | | Non-current Borrowings | 588,236 | 87,683 | +571.09% | | **Total** | **1,772,240** | **1,059,560** | **+67.27%** | - Bank loans are secured by the Company's equity interests in subsidiaries, leasehold land, and pledged deposits[94](index=94&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - All loans are denominated in RMB, except for a **USD 29,600,000** bank loan denominated in USD[102](index=102&type=chunk) [Management Discussion & Analysis](index=18&type=section&id=Management%20Discussion%20%26%20Analysis) This section provides management's perspective on the Group's financial performance, position, and future outlook for the reporting period [Business Overview and Outlook](index=18&type=section&id=Business%20Overview%20and%20Outlook) The Group's business was affected by recurring COVID-19 outbreaks in 2022, but a stable recovery is expected in 2023 with policy adjustments and effective growth strategies, including innovative marketing, supply chain integration, online-offline synergy, cost control, and brand portfolio optimization - Business in 2022 was affected by recurring COVID-19 outbreaks, but a stable recovery is expected in 2023[103](index=103&type=chunk) - Growth strategies include adopting continuous innovative marketing initiatives, leveraging online advantages to integrate the supply chain, reforming organizational structure to deepen online-offline integration, strengthening internal management and cost control, and reducing underperforming brand businesses[103](index=103&type=chunk) [Revenue Analysis](index=18&type=section&id=Revenue%20Analysis) Total sales revenue for 2022 was RMB 2,326.3 million, a 13.7% decrease from 2021, primarily due to reduced product demand from recurring COVID-19 outbreaks, with online channels accounting for the largest share at 44.5% of total revenue - Total sales revenue for the period was **RMB 2,326.3 million**, a **13.7%** or **RMB 368.9 million** decrease from 2021, primarily due to reduced product demand from recurring COVID-19 outbreaks[104](index=104&type=chunk) [Revenue by Brand](index=19&type=section&id=Revenue%20by%20Brand) GXG remained the primary revenue source despite a 14.1% sales decline, while gxg jeans and Yatlas also saw decreases of 22.0% and 53.4% respectively due to the pandemic and brand repositioning, but gxg.kids and Mode Commuter grew by 10.5% and 44.8% from online old stock sales and new product development Revenue by Brand | Brand | 2022 (RMB thousand) | 2022 (%) | 2021 (RMB thousand) | 2021 (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | GXG | 1,847,359 | 79.4 | 2,150,987 | 79.8 | -14.1% | | gxg jeans | 218,728 | 9.4 | 280,265 | 10.4 | -22.0% | | gxg.kids | 199,347 | 8.6 | 180,358 | 6.7 | +10.5% | | Mode Commuter | 33,335 | 1.4 | 23,039 | 0.9 | +44.8% | | Yatlas | 10,188 | 0.4 | 21,926 | 0.8 | -53.4% | | Other | 17,324 | 0.8 | 38,659 | 1.4 | -55.2% | | **Total** | **2,326,281** | **100.0** | **2,695,234** | **100.0** | **-13.7%** | - Decreased sales revenue for GXG, gxg jeans, and Yatlas was primarily due to recurring COVID-19 outbreaks and brand repositioning[106](index=106&type=chunk)[107](index=107&type=chunk) - Increased sales revenue for gxg.kids was primarily due to increased online sales of old stock, and for Mode Commuter due to new product development[107](index=107&type=chunk) [Revenue by Sales Channel](index=19&type=section&id=Revenue%20by%20Sales%20Channel) In 2022, all offline channels (self-operated, partner, distributor stores) experienced sales declines ranging from 13.3% to 22.5% due to recurring pandemic outbreaks, and online channel sales also decreased by 10.6% due to warmer weather during promotion season affecting winter wear sales and logistics disruptions, yet still comprised 44.5% of total revenue Revenue by Sales Channel | Sales Channel | 2022 (RMB thousand) | 2022 (%) | 2021 (RMB thousand) | 2021 (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Self-operated Stores | 735,163 | 31.6 | 847,488 | 31.4 | -13.3% | | Partner Stores | 150,626 | 6.5 | 194,182 | 7.2 | -22.5% | | Distributors | 393,403 | 16.9 | 472,046 | 17.5 | -16.7% | | Online Channels | 1,036,195 | 44.5 | 1,158,980 | 43.0 | -10.6% | | Sales of Other Products | 8,084 | 0.3 | 12,273 | 0.5 | -34.1% | | Consignment Services | 2,810 | 0.2 | 10,265 | 0.4 | -72.6% | | **Total** | **2,326,281** | **100.0** | **2,695,234** | **100.0** | **-13.7%** | - Online channel sales ranked first, accounting for **44.5%** of the Group's revenue composition[110](index=110&type=chunk) - The decrease in online channel sales was primarily due to warmer weather during the November 11 promotion season leading to lower winter wear sales and logistics disruptions[110](index=110&type=chunk) [Store Count Analysis](index=20&type=section&id=Store%20Count%20Analysis) As of December 31, 2022, the total number of offline stores decreased by 6.3% to 1,122 from 1,198 at the end of 2021, mainly due to the Group's brand repositioning, marketing strategy adjustments, store network optimization, closure of underperforming stores, and distributors' reduced confidence in opening new stores amidst the pandemic - The total number of offline stores decreased by **6.3%** from **1,198** at the end of 2021 to **1,122** as of December 31, 2022[111](index=111&type=chunk)[114](index=114&type=chunk) - The decrease in store count was primarily due to adjusting brand positioning and marketing strategies to improve store efficiency, and closing offline stores that failed to meet sales targets[111](index=111&type=chunk)[114](index=114&type=chunk) - Under the impact of recurring COVID-19 outbreaks, distributors had insufficient confidence in expanding stores, resulting in fewer new distributor stores than closed ones[114](index=114&type=chunk) [Store Count by Brand](index=20&type=section&id=Store%20Count%20by%20Brand) GXG store count slightly decreased but still represented 86.8% of the total, gxg jeans and gxg.kids also saw declines, Mode Commuter slightly increased, and Yatlas no longer had independent stores Store Count by Brand | Brand | 2022年12月31日 (Number of Stores) | 2022 (%) | 2021年12月31日 (Number of Stores) | 2021 (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | GXG | 973 | 86.8 | 992 | 82.8 | -1.9% | | gxg jeans | 80 | 7.1 | 99 | 8.3 | -19.2% | | gxg.kids | 51 | 4.5 | 82 | 6.8 | -37.8% | | Mode Commuter | 18 | 1.6 | 16 | 1.3 | +12.5% | | Yatlas | 0 | 0.0 | 8 | 0.7 | -100.0% | | Other | 0 | 0.0 | 1 | 0.1 | -100.0% | | **Total** | **1,122** | **100.0** | **1,198** | **100.0** | **-6.3%** | [Store Count by Sales Channel](index=20&type=section&id=Store%20Count%20by%20Sales%20Channel) As of the end of 2022, the number of self-operated, partner, and distributor stores all decreased, with distributor stores seeing the largest reduction, reflecting the company's store network adjustments and market environment impact Store Count by Sales Channel | Sales Channel | 2022年12月31日 (Number of Stores) | 2022 (%) | 2021年12月31日 (Number of Stores) | 2021 (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Self-operated Stores | 393 | 35.0 | 398 | 33.2 | -1.3% | | Partner Stores | 133 | 11.9 | 146 | 12.2 | -8.8% | | Distributors | 596 | 53.1 | 654 | 54.6 | -8.8% | | **Total** | **1,122** | **100.0** | **1,198** | **100.0** | **-6.3%** | [Gross Profit and Gross Margin Analysis](index=21&type=section&id=Gross%20Profit%20and%20Gross%20Margin%20Analysis) Total gross profit for 2022 was RMB 1,137.9 million, a 14.3% decrease from 2021, with the overall gross margin remaining relatively stable at 48.9%, attributed to strengthened brand operation management, optimized product structure, and effective control of operating costs - Total gross profit for the period was **RMB 1,137.9 million**, a **14.3%** decrease from 2021[115](index=115&type=chunk) - The gross margin for the period remained stable at **48.9%**, compared to **49.3%** in 2021[115](index=115&type=chunk) - The overall gross margin remained relatively stable primarily due to continuous strengthening of brand operation management, optimization of product structure, and effective control of operating costs[116](index=116&type=chunk) [Gross Profit and Gross Margin by Brand](index=21&type=section&id=Gross%20Profit%20and%20Gross%20Margin%20by%20Brand) Gross profit for GXG and gxg jeans decreased due to reduced revenue, while gxg.kids and Mode Commuter saw increases from higher revenue; Yatlas gross profit significantly dropped by 69.7% mainly due to lower revenue and sales of lower-margin old stock, with gxg.kids and Yatlas gross margins declining due to increased online sales and old stock sales respectively Gross Profit and Gross Margin by Brand | Brand | 2022 Gross Profit (RMB thousand) | 2022 Gross Margin (%) | 2021 Gross Profit (RMB thousand) | 2021 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | GXG | 934,443 | 50.6 | 1,094,636 | 50.9 | | gxg jeans | 92,320 | 42.2 | 119,355 | 42.6 | | gxg.kids | 88,609 | 44.4 | 84,940 | 47.1 | | Mode Commuter | 15,733 | 47.2 | 11,062 | 48.0 | | Yatlas | 1,032 | 10.1 | 3,273 | 14.9 | | Other | 5,769 | 33.3 | 14,605 | 37.8 | | **Total** | **1,137,906** | **48.9** | **1,327,871** | **49.3** | - gxg.kids gross margin decreased by **2.7 percentage points**, primarily due to increased sales through online channels, which typically have lower gross margins[119](index=119&type=chunk) - Yatlas gross margin decreased by **4.8 percentage points**, primarily due to sales of old stock, which typically has lower gross margins[119](index=119&type=chunk) [Gross Profit and Gross Margin by Sales Channel](index=22&type=section&id=Gross%20Profit%20and%20Gross%20Margin%20by%20Sales%20Channel) Gross profit for self-operated, partner, and distributor stores all decreased due to reduced revenue, with partner stores' gross margin declining by 3.3 percentage points to 32.9% mainly from increased old stock sales, while gross margins for self-operated, distributor, and online channels remained relatively stable Gross Profit and Gross Margin by Sales Channel | Sales Channel | 2022 Gross Profit (RMB thousand) | 2022 Gross Margin (%) | 2021 Gross Profit (RMB thousand) | 2021 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Self-operated Stores | 501,848 | 68.3 | 584,781 | 69.0 | | Partner Stores | 49,492 | 32.9 | 70,205 | 36.2 | | Distributors | 180,266 | 45.8 | 215,913 | 45.7 | | Online Channels | 405,333 | 39.1 | 453,909 | 39.2 | | Sales of Other Products | 533 | 6.6 | 511 | 4.2 | | Consignment Services | 434 | 15.4 | 2,552 | 24.9 | | **Total** | **1,137,906** | **48.9** | **1,327,871** | **49.3** | - Partner stores' gross margin decreased by **3.3 percentage points** to **32.9%**, primarily due to increased sales of old stock, which typically has lower gross margins[120](index=120&type=chunk) - Gross margins for self-operated stores, distributor stores, and online channels remained relatively stable compared to 2021[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) [Other Income and Gains](index=23&type=section&id=Other%20Income%20and%20Gains_MDA) Other income and gains for 2022 were RMB 64.7 million, a significant increase of 94.3% from 2021, primarily driven by growth in pledged deposit investment income Other Income and Gains | Item | 2022 (RMB million) | 2021 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income and Gains | 64.7 | 33.3 | +94.3% | - The increase was primarily due to pledged deposit investment income[122](index=122&type=chunk) [Selling and Distribution Expenses](index=23&type=section&id=Selling%20and%20Distribution%20Expenses) Total selling and distribution expenses for 2022 were RMB 883.5 million, a 4.8% decrease from 2021, mainly due to reduced store management fees, advertising expenses, and commissions payable to department stores; however, their percentage of total revenue increased from 34.5% in 2021 to 38.0%, reflecting a greater decline in revenue than in expenses Selling and Distribution Expenses | Item | 2022 (RMB million) | 2021 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 883.5 | 928.5 | -4.8% | - The decrease was primarily due to reduced store management fees, advertising expenses, and commissions payable to department stores[123](index=123&type=chunk) - Selling and distribution expenses as a percentage of the Group's total revenue increased from **34.5%** in 2021 to **38.0%**, primarily because the decrease in total revenue exceeded the decrease in selling and distribution expenses[1](index=1&type=chunk) [Administrative Expenses](index=23&type=section&id=Administrative%20Expenses) Total administrative expenses for 2022 were RMB 205.1 million, a 7.8% decrease from 2021, mainly due to reduced employee benefit expenses, utilities, office expenses, and operating lease rentals, with administrative expenses as a percentage of total revenue remaining relatively stable at 8.8% Administrative Expenses | Item | 2022 (RMB million) | 2021 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 205.1 | 222.5 | -7.8% | - The decrease was primarily due to reduced employee benefit expenses, utilities and office expenses, and operating lease rentals[2](index=2&type=chunk) - Total administrative expenses as a percentage of the Group's total revenue remained relatively stable at **8.8%** (2021: **8.3%**)[2](index=2&type=chunk) [Impairment Loss on Financial Assets, Net](index=23&type=section&id=Impairment%20Loss%20on%20Financial%20Assets%2C%20Net) Net impairment loss on financial assets significantly decreased to RMB 9.0 million in 2022, a 96.3% reduction from RMB 240.7 million in 2021, primarily due to the Group's enhanced accounts receivable management and stricter credit control policies Net Impairment Loss on Financial Assets | Item | 2022 (RMB million) | 2021 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Net Impairment Loss on Financial Assets | 9.0 | 240.7 | -96.3% | - The decrease was primarily due to the Group strengthening its accounts receivable management and adopting stricter credit control policies for customers[3](index=3&type=chunk) [Other Expenses](index=23&type=section&id=Other%20Expenses) Other expenses increased by 33.6% to RMB 20.3 million in 2022, mainly due to increased impairment of right-of-use assets and renovation costs Other Expenses | Item | 2022 (RMB million) | 2021 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other Expenses | 20.3 | 15.2 | +33.6% | - The increase was primarily due to increased impairment of right-of-use assets and renovation costs[4](index=4&type=chunk) [Finance Costs](index=24&type=section&id=Finance%20Costs) Finance costs increased by 6.2% to RMB 63.1 million in 2022, primarily due to increased bank loan interest Finance Costs | Item | 2022 (RMB million) | 2021 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 63.1 | 59.4 | +6.2% | - The increase was primarily due to increased bank loan interest[6](index=6&type=chunk) [Profit Before Tax](index=24&type=section&id=Profit%20Before%20Tax) The Group recorded a profit before tax of RMB 21.6 million in 2022, a significant increase of RMB 126.0 million compared to a loss before tax of RMB 104.4 million in 2021, primarily driven by reduced selling and distribution expenses, administrative expenses, and net impairment loss on financial assets Profit/(Loss) Before Tax | Item | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Profit/(Loss) Before Tax | 21.6 | (104.4) | increased by 126.0 million | - The increase in profit before tax was primarily due to reduced selling and distribution expenses, administrative expenses, and net impairment loss on financial assets[7](index=7&type=chunk) [Income Tax Expense](index=24&type=section&id=Income%20Tax%20Expense_MDA) Income tax expense for 2022 was RMB 12.3 million, an increase of RMB 25.3 million compared to an income tax credit of RMB 13.0 million in 2021 Income Tax Expense/(Credit) | Item | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Income Tax Expense/(Credit) | 12.3 | (13.0) | increased by 25.3 million | [Profit for the Period](index=24&type=section&id=Profit%20for%20the%20Period) Profit for the period in 2022 was RMB 9.4 million, a net increase of RMB 100.7 million compared to a loss of RMB 91.3 million in 2021, primarily attributable to the aforementioned reductions in expenses and improved revenue Profit/(Loss) for the Period | Item | 2022 (RMB million) | 2021 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Profit/(Loss) for the Period | 9.4 | (91.3) | increased by 100.7 million | [Operating Cash Flow](index=24&type=section&id=Operating%20

Financial Performance - Total sales revenue for the six months ended June 30, 2022, was RMB 1,048.6 million, a decrease of 12.9% or RMB 155.8 million compared to RMB 1,204.4 million in the same period of 2021 due to recurring COVID-19 impacts in several cities [15]. - The total revenue for the group in the first half of 2022 was RMB 1,048.6 million, a decrease of 12.9% compared to RMB 1,204.4 million in the same period of 2021 [17]. - The main brand GXG's sales revenue decreased by 9.5% or RMB 87.9 million year-on-year, primarily due to a decline in product demand caused by COVID-19 outbreaks in several cities [17]. - Sales revenue for gxg jeans and Yatlas decreased by 32.9% or RMB 48.9 million and 58.5% or RMB 7.6 million, respectively, due to brand repositioning and store number reduction [18]. - Despite the impact of COVID-19, gxg.kids' sales revenue remained relatively stable at RMB 88.5 million, compared to RMB 88.1 million in the same period of 2021 [18]. - Mode Commuter's sales revenue increased by 65.9% or RMB 6.0 million, mainly due to new product development [18]. - The group's gross profit for the period was RMB 536.5 million, a decrease of 14.0% or RMB 87.3 million from RMB 623.8 million in the same period of 2021 [25]. - The overall gross margin remained relatively stable at 51.2%, compared to 51.8% in the same period of 2021 [25]. - Pre-tax profit decreased by RMB 55.1 million to RMB 16.8 million, primarily due to a reduction in gross profit [40]. - Net profit for the period was RMB 4.2 million, a decrease of RMB 44.0 million compared to RMB 48.2 million in the same period of 2021 [42]. - The company reported a total comprehensive loss of RMB 27,521 thousand for the period, compared to a comprehensive income of RMB 56,380 thousand in the same period last year [91]. - The profit attributable to equity holders of the parent for the six months ended June 30, 2022, was RMB 5,754,000, a significant decline of 88.2% from RMB 48,511,000 in the same period of 2021 [141]. Operational Strategies - The company aims to enhance customer experience through innovative marketing initiatives and new retail technologies, while optimizing its supply chain network to meet customer demands [13]. - The company is committed to integrating online and offline sales channels to improve operational efficiency and respond more quickly to market changes [13]. - The organization will continue to implement cost control measures to mitigate the impacts of recurring COVID-19 outbreaks [13]. - The company operates an integrated omnichannel business model, enhancing inventory management and supply chain efficiency [6]. - The company has a strong focus on data analysis from both online and offline channels to accurately gauge demand levels and adjust production plans accordingly [6]. - The management believes that performance will steadily recover in the second half of the year, supported by government policies and effective growth strategies implemented in response to COVID-19 [13]. - The company has introduced the MODE COMMUTER brand in 2020, expanding its brand portfolio to include high-quality commuter clothing [5]. Financial Position - The debt-to-asset ratio increased to 50.0% as of June 30, 2022, from 35.0% at the end of 2021, primarily due to increased borrowings [48]. - The company’s total equity attributable to owners of the parent as of June 30, 2022, was RMB 707,341,000, a decrease from RMB 814,714,000 as of June 30, 2021 [99]. - The company reported a decrease in cash and cash equivalents, with a closing balance of RMB 539,387,000 as of June 30, 2022, down from RMB 747,913,000 at the end of June 2021 [104]. - The company incurred a loss of RMB 12,570,000 related to impairment of trade and other receivables for the six months ended June 30, 2022, compared to a gain of RMB 8,331,000 in the same period of 2021 [101]. - The company’s accumulated losses reached RMB 765,498,000 as of June 30, 2022, compared to RMB 632,069,000 as of June 30, 2021, indicating a growing financial strain [99]. - The company’s total liabilities increased, with bank and other borrowings amounting to RMB 658,413,000 for the six months ended June 30, 2022, compared to RMB 500,407,000 in the same period of 2021 [104]. Employee and Management - As of June 30, 2022, the total number of employees in the group was 674, down from 831 on December 31, 2021 [59]. - Total employee costs for the period amounted to RMB 68.1 million, compared to RMB 70.2 million in the same period of 2021, representing a decrease of approximately 3% [59]. - Employee costs accounted for 6.5% of the group's revenue during the period, up from 5.8% in the same period of 2021 [59]. - The increase in employee cost percentage was primarily due to a greater decline in total revenue compared to the reduction in employee costs [59]. - The company emphasizes training and development to attract and retain employees, providing competitive compensation packages [59]. - The total remuneration for key management personnel was RMB 5,225,000 for the six months ended June 30, 2022, down from RMB 7,755,000 in the same period of 2021 [177]. Capital and Investments - The company raised approximately RMB 704.9 million (equivalent to about HKD 802.7 million) from the issuance of 200,000,000 new shares on May 27, 2019 [79]. - As of June 30, 2022, RMB 648.0 million (approximately HKD 736.2 million) of the raised funds have been utilized, with RMB 56.9 million (approximately HKD 66.5 million) remaining for future use [79]. - The company plans to allocate 45% of the raised funds (RMB 317 million) for debt repayment and brand expansion through acquisitions or strategic alliances [79]. - The company did not engage in any significant investments or acquisitions during the period, but will continue to seek new business development opportunities [51]. Market and Sales Channels - Revenue from offline channels was RMB 566,936 thousand, while online channels generated RMB 475,318 thousand, indicating a shift in sales channels [117]. - Online channel sales accounted for 45.3% of total revenue, despite a decrease of 1.8% or RMB 8.8 million compared to the previous year [22]. - The group adjusted its cooperation model with some customers from distributors to partner stores, resulting in a 5.8% increase in partner store sales to RMB 83.9 million [22]. - The company reported no single customer accounting for 10% or more of total revenue during the reporting period [120]. Compliance and Governance - The company has adhered to the principles of the Corporate Governance Code as per the listing rules during the six months ending June 30, 2022 [81]. - There were no purchases, sales, or redemptions of the company's listed securities by the company or its subsidiaries during the six months ending June 30, 2022 [84]. - The group has adopted revised International Financial Reporting Standards (IFRS) without significant impact on its financial position or performance due to the absence of relevant transactions during the reporting period [111][112][114].

Financial Performance - The group's gross margin reached 49.3%, an increase of nearly 16% compared to 2020, with total revenue close to RMB 2.7 billion[15]. - The total sales revenue for the period was RMB 2,695.2 million, a decrease of 5.8% or RMB 166.3 million compared to RMB 2,861.5 million in 2020[26]. - The main brand GXG recorded a sales revenue increase of 2.1% or RMB 44.9 million, reaching RMB 2,150.99 million in 2021[27]. - The total gross profit for the period was RMB 1,327.9 million, an increase of 8.4% or RMB 103.2 million compared to RMB 1,224.7 million in 2020, with a gross margin rising from 42.8% to 49.3%[43]. - The gross profit for the GXG brand was RMB 1,094.6 million with a gross margin of 50.9%, up from RMB 942.9 million and 44.8% in 2020[44]. - The net loss for the period was RMB 91.3 million, a decrease of RMB 207.9 million compared to a loss of RMB 299.2 million in 2020[61]. Sales and Revenue Channels - Sales revenue of the GXG brand increased by 2.1% compared to 2020, with a gross margin exceeding 50%[15]. - Revenue from self-operated, partnered, and distribution channels grew by over 10% year-on-year as of December 31, 2021[15]. - Online channel sales decreased by 22.6% or RMB 338.3 million to RMB 1,159.0 million, accounting for 43.0% of total revenue[33]. - Sales from gxg jeans, gxg.kids, and Yatlas decreased by 36.9% (RMB 164.2 million), 15.1% (RMB 32.0 million), and 28.0% (RMB 8.5 million) respectively due to brand repositioning and store number reduction[30]. Strategic Initiatives - The company adopted an integrated omnichannel business model, improving inventory and supply chain management efficiency[8]. - The company aims for international expansion and continues to seek collaborations with fashion IPs to penetrate niche markets[16]. - The company plans to continue implementing an omnichannel strategy and enhance online sales channels to adapt to the post-pandemic era[23]. - The company aims to optimize its supply chain network and improve customer service capabilities to meet customer demands[23]. - The company is focused on expanding its market presence and enhancing its product offerings through strategic partnerships and investments[96]. Organizational and Management Structure - The management team includes experienced professionals with over 21 years in finance and investment, enhancing strategic decision-making capabilities[91]. - The management team includes experienced professionals with extensive backgrounds in the apparel and entertainment industries, contributing to strategic decision-making[107][108][109]. - The board includes independent directors with extensive backgrounds in finance and corporate governance, ensuring robust oversight[97]. - The board's composition reflects a commitment to diversity and a range of industry experiences, which is crucial for navigating market challenges[97]. Employee and Operational Insights - Total employee costs for the period were RMB 146.4 million, representing 5.4% of the group's revenue, compared to 4.9% in 2020[80]. - As of December 31, 2021, the group employed 832 people, a decrease from 842 in 2020, with 61.8% being female[80]. - The company reported a total of 832 employees as of December 31, 2021, and provides competitive compensation packages including salaries, bonuses, and other benefits[160]. Capital and Financial Position - The registered capital of the company increased from RMB 200,000 during the year[10]. - The group's cash and cash equivalents totaled RMB 689.2 million, a decrease of 12.2% or RMB 95.5 million from RMB 784.7 million at the end of 2020[67]. - The debt-to-asset ratio as of December 31, 2021, was 35.0%, up from 32.3% at the end of 2020[68]. - Capital expenditures increased by 26.5% to RMB 169.9 million, driven by higher costs related to office renovations and information system development[66]. Risks and Challenges - The group is facing risks related to intense competition in the apparel industry in China and uncertainties regarding brand market recognition[116]. - The group faced foreign exchange risk primarily due to debt denominated in USD, with no financial instruments used for hedging[72]. Corporate Governance and Compliance - The group has committed to compliance with relevant laws and regulations, with no significant violations reported during the period[115]. - The group aims to enhance governance, promote employee welfare and development, protect the environment, fulfill social responsibilities, and achieve sustainable growth[115]. Future Outlook and Growth Strategies - The company expresses confidence in its future prospects as a leading fashion company in China[23]. - Future growth strategies include potential mergers and acquisitions to enhance market share and operational capabilities[96]. - The company is actively pursuing new technologies and product innovations to stay competitive in the market[96].

Financial Performance - Total sales revenue for the six months ended June 30, 2021, was RMB 1,204.4 million, an increase of 10.7% or RMB 116.9 million compared to RMB 1,087.5 million in the same period of 2020[12]. - Total revenue for the period reached RMB 1,204.43 million, an increase of 10.7% compared to RMB 1,087.54 million in the same period of 2020[14]. - Revenue from the main brand GXG increased by 20.3% to RMB 921.65 million, while gxg.kids saw an 18.7% increase to RMB 88.10 million[14]. - The gross profit for the period was RMB 623.83 million, representing a 48.2% increase from RMB 421.02 million in the same period of 2020, with a gross margin rising from 38.7% to 51.8%[25]. - Net profit for the period was RMB 48.2 million, an increase of RMB 180.7 million compared to a loss of RMB 132.5 million in the previous year[42]. - Pre-tax profit recorded at RMB 71.9 million, an increase of RMB 222.4 million compared to a pre-tax loss of RMB 150.5 million in the same period last year[40]. - The company reported a total comprehensive income of RMB 56,380 thousand for the period, compared to a loss of RMB 144,416 thousand in the previous year[90]. - Basic earnings per share for the period was RMB 5.32, compared to a loss per share of RMB (14.56) in the same period last year[88]. Sales Channels and Market Strategy - The impact of COVID-19 on the company's business has significantly reduced, leading to strong growth in offline channel revenue[10]. - The company is focused on integrating online and offline sales channels to meet evolving consumer shopping behaviors[10]. - Online channel sales decreased by 26.8% to RMB 484.08 million, accounting for 40.2% of total revenue, due to reduced reliance on online sales as COVID-19 impacts lessened[19]. - Revenue from offline channels for clothing products was RMB 710,126 thousand, while online channels generated RMB 484,078 thousand, indicating a strong performance in both segments[113]. Operational Efficiency and Cost Management - The organization structure and business model will be reformed to enhance operational efficiency and enable quicker market responses[10]. - The company implemented strategic adjustments to reduce discount rates and improve overall profitability across its brands[25]. - Sales and distribution expenses increased by 4.4% or RMB 18.2 million to RMB 428.3 million, with the percentage of total revenue decreasing from 37.7% to 35.6%[34]. - Administrative expenses rose by 10.9% or RMB 10.7 million to RMB 108.9 million, maintaining a stable percentage of total revenue at 9.0%[36]. Financial Position and Liquidity - The debt-to-asset ratio increased to 44.9% as of June 30, 2021, up from 32.3% at the end of 2020[48]. - Cash and cash equivalents increased by 0.9% to RMB 791.7 million compared to RMB 784.7 million at the end of 2020[47]. - Current liabilities decreased to RMB 1,329,287 thousand from RMB 1,472,422 thousand at the end of 2020, indicating improved liquidity[93]. - The company reported a decrease in trade receivables and other receivables by RMB 230,719,000, indicating improved cash collection[100]. - The company’s total liabilities decreased from RMB 379,436,000 at the end of 2020 to RMB 340,000,000 by June 30, 2021, indicating a reduction of approximately 10.4%[153]. Investments and Capital Expenditures - Capital expenditures amounted to RMB 67.4 million, a 29.9% increase or RMB 15.5 million compared to RMB 51.9 million in the same period last year[46]. - The company raised RMB 500,407,000 from bank and other borrowings during the financing activities, compared to RMB 550,000,000 in the same period of 2020[103]. - The company plans to use the remaining funds primarily for debt repayment (45% of total), brand acquisitions or strategic alliances (15%), and upgrading offline retail stores to smart stores (10%)[77]. Corporate Governance and Compliance - The company has established an audit committee consisting of three independent non-executive directors to oversee financial reporting and risk management[83]. - The company has complied with all applicable provisions of the Corporate Governance Code during the reporting period[79]. - The company plans to conduct annual training for all directors to enhance their understanding of their responsibilities and obligations as directors of a listed company[81]. Shareholder Information - As of June 30, 2021, the company had 950,000,000 issued ordinary shares[62]. - Mr. Yu Yong and Mr. Yang He Rong each hold a beneficial interest in 213,750,000 shares, representing 22.50% of the company's equity[60]. - Great World Glory Pte. Ltd. holds a beneficial interest in 363,579,785 shares, accounting for 38.27% of the company's equity[64]. - Crescent Glory Singapore Pte. Ltd. has a beneficial interest in 134,474,715 shares, which is 14.15% of the company's equity[64]. Employee and Management Compensation - Total employee costs for the period were RMB 70.2 million, up from RMB 50.9 million in the previous year, representing 5.8% of total revenue[58]. - The total compensation for key management personnel was RMB 7,755 thousand for the six months ended June 30, 2021, compared to RMB 4,561 thousand for the same period in 2020, reflecting an increase of approximately 70.5%[179]. - The company’s short-term employee benefits and pension plan contributions amounted to RMB 7,689 thousand for the six months ended June 30, 2021, compared to RMB 4,524 thousand for the same period in 2020, an increase of approximately 70.5%[179].

Financial Performance - The company recorded a revenue of RMB 2.861 billion for the year, with e-commerce sales accounting for over 50% of total sales, an increase of 5% year-on-year[12]. - Total sales revenue for the year ended December 31, 2020, was RMB 2,861.5 million, a decrease of 23.1% or RMB 859.9 million compared to RMB 3,721.4 million in 2019[20]. - The main brand GXG saw a sales revenue decline of 10.6% or RMB 249.5 million compared to 2019, while gxg jeans and gxg.kids experienced declines of 31.6% or RMB 205.1 million and 64.5% or RMB 385.7 million, respectively[21]. - Online sales increased by 5.0% to RMB 1,497.3 million, accounting for 52.3% of total revenue[25]. - Gross profit for the period was RMB 1,224.7 million, down 31.9% from RMB 1,798.7 million in 2019, with a gross margin of 42.8%[31]. - The company recorded other income of RMB 27.0 million, a decline of 48.7% from RMB 52.6 million in 2019, primarily due to reduced government subsidies[38]. - The company provided higher discounts and subsidies to cope with the impact of COVID-19, leading to a decrease in gross margins across most brands[32]. - The gross profit margin for online sales decreased by 7.7 percentage points, attributed to increased promotional activities[36]. - The company recorded a pre-tax loss of RMB 291.3 million, a decrease of RMB 614.2 million compared to a pre-tax profit of RMB 322.9 million in 2019[46]. - The net loss for the period was RMB 299.2 million, down RMB 507.4 million from a profit of RMB 208.2 million in 2019[48]. Cash Flow and Financial Position - Operating cash flow increased significantly by RMB 199 million to RMB 247 million compared to the previous year, indicating strong cash flow management[13]. - The company maintains a robust cash position with cash and cash equivalents of approximately RMB 772 million as of December 31, 2020[13]. - Operating cash inflow increased by RMB 198.7 million to RMB 246.6 million, driven by cash inflow from operating profit and a reduction in working capital[49]. - Financial costs decreased by 36.5% to RMB 56.5 million, primarily due to reduced bank loan interest[45]. - The debt-to-asset ratio as of December 31, 2020, was 32.3%[56]. Store Operations and Strategy - The company closed underperforming or loss-making offline stores, leading to a significant reduction in the number of physical locations[21]. - The number of stores decreased from 1,737 in 2019 to 1,297 in 2020, reflecting a strategic closure of underperforming locations[28]. - The average store sales in the second half of the year showed growth compared to the same period in 2019, reflecting a recovery from the impact of COVID-19[12]. - The average store sales in the second half of 2020 gradually recovered to the level of the same period in 2019 due to the easing of COVID-19 in China[17]. - The company aims to optimize the offline sales channel structure by closing underperforming stores and using them to enhance brand image and customer experience[19]. Brand Development and Product Offering - The company launched new brands Free Volt and MODE COMMUTER in 2020, expanding its product offerings in the casual and commuter wear segments[6]. - The company has shifted its focus in the Yatlas brand from casual wear to high-end commuting smart menswear since early 2020[6]. - New product lines were launched, including the Free Volt brand focusing on casual wear and MODE COMMUTER for high-quality commuting apparel, expanding the brand portfolio to six major brands[19]. - The company is actively pursuing new product development initiatives to meet evolving consumer demands[78]. Marketing and E-commerce Strategy - The company adopted an integrated omnichannel business model, enhancing inventory management and supply chain efficiency[7]. - The company plans to actively expand innovative online sales channels such as Douyin and WeChat mini-programs while enhancing competitiveness in traditional online channels like Tmall and Taobao[17]. - The company is leveraging innovative marketing strategies and big data analysis to attract more followers and enhance member experiences[19]. - The company is committed to enhancing its e-commerce capabilities through its subsidiary, Ningbo Zhongzhe Moshang E-commerce Co., Ltd.[69]. Corporate Governance and Management - The company has expanded its management team with experienced professionals from various sectors, including private equity and strategic consulting[78][79]. - The board includes members with extensive backgrounds in investment banking and consumer goods, enhancing the company's strategic direction[75][79]. - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[194]. - The board consists of nine directors, including one executive director and five non-executive directors, ensuring a diverse skill set and independence[195]. - The chairman of the board and the CEO roles are separated, with the chairman providing strategic advice on business development[198]. Employee and Shareholder Information - The group provided competitive compensation packages, including salaries, bonuses, and other benefits, based on employee qualifications, experience, position, and seniority[129]. - The group’s major shareholder, Great World Glory Pte. Ltd., held 363,579,785 shares, representing 38.27% of the equity[137]. - The group’s directors and top executives held a total of 215,750,000 shares, accounting for 22.71% of the equity[132]. - The group reported a decrease in distributable reserves to approximately RMB 3,437.7 million as of December 31, 2020, down from RMB 3,719.2 million in 2019[118]. Risks and Challenges - The group faced risks related to intense competition in the apparel industry in China and uncertainties in maintaining and expanding its offline and online sales networks[99]. - The board has acknowledged the importance of risk management and has outlined potential uncertainties in the market[94].

Financial Performance - Total sales revenue for the six months ended June 30, 2020, was RMB 1,087.5 million, a decrease of 35.5% or RMB 598.6 million compared to RMB 1,686.1 million in the same period of 2019[11]. - Total revenue for the period was RMB 1,087.5 million, a decrease of 35.5% from RMB 1,686.1 million in the same period of 2019[13]. - Revenue from the main brands GXG, gxg jeans, and gxg.kids decreased by 20.1%, 36.2%, and 79.8% respectively, totaling a decline of RMB 193.0 million, RMB 109.4 million, and RMB 293.8 million[13]. - Online channel sales increased by 17.7% to RMB 661.7 million, accounting for 60.8% of total revenue[20]. - Gross profit for the period was RMB 421.0 million, down 49.8% from RMB 838.1 million in the same period of 2019, with a gross margin decline from 49.7% to 38.7%[25]. - The pre-tax loss for the period was RMB 150.5 million, a decrease of RMB 296.8 million compared to a pre-tax profit of RMB 146.3 million in 2019, primarily due to reduced gross profit[38]. - The net loss for the period was RMB 132.5 million, a decrease of RMB 220.7 million compared to a profit of RMB 88.2 million in the same period of 2019[40]. - Total comprehensive loss for the period was RMB 144,416 thousand, compared to a comprehensive income of RMB 83,327 thousand in the previous year[87]. - The company reported a basic loss attributable to equity holders of the parent of RMB (132,878) thousand for the six months ended June 30, 2020, compared to a profit of RMB 89,670 thousand for the same period in 2019[138]. Operational Changes - The company plans to actively expand online sales channels, including live streaming and WeChat mini-programs, to adapt to the shift in consumer behavior from offline to online shopping due to COVID-19[10]. - The company aims to close underperforming offline stores to optimize the offline sales channel structure and use these stores to enhance brand image and customer experience[10]. - The total number of offline stores decreased from 1,737 at the end of 2019 to 1,476 by June 30, 2020, reflecting a strategic closure of underperforming stores[21]. - The number of self-operated stores decreased from 387 to 371, while partner stores decreased from 345 to 264[22]. - The company provided higher discounts across all brands to stimulate sales in response to COVID-19, impacting overall profitability[27]. - The company operates through two main sales channels: offline and online, with significant sales through platforms like Tmall, Taobao, and Vipshop[114]. Financial Position - The debt-to-asset ratio as of June 30, 2020, was 47.0%, up from 29.2% as of December 31, 2019[46]. - The total bank borrowings as of June 30, 2020, amounted to RMB 1,642.4 million, with cash and cash equivalents totaling RMB 979.9 million, an increase of 15.2% or RMB 129.5 million from RMB 850.4 million at the end of 2019[43]. - Current assets as of June 30, 2020, totaled RMB 2,986,821 thousand, down from RMB 3,348,684 thousand as of December 31, 2019[89]. - Current liabilities decreased to RMB 1,499,703 thousand from RMB 1,750,804 thousand at the end of 2019[89]. - Net assets decreased to RMB 892,009 thousand as of June 30, 2020, from RMB 1,036,425 thousand at the end of 2019[92]. - The company’s total liabilities decreased to RMB 1,642,350 thousand as of June 30, 2020, from RMB 1,140,242 thousand as of December 31, 2019, indicating a reduction in overall debt levels[161]. Cash Flow and Investments - Operating cash outflow for the period was RMB 244.0 million, a decrease of RMB 118.3 million compared to RMB 362.3 million in the same period of 2019[41]. - Capital expenditures for the period were RMB 51.9 million, a decrease of 35.8% or RMB 29.0 million from RMB 80.9 million in 2019[42]. - The cash flow from operating activities for the six months ended June 30, 2020, was a net outflow of RMB 244,012,000, an improvement from a net outflow of RMB 362,251,000 in the same period of 2019[97]. - The company invested RMB 48,904,000 in property, plant, and equipment during the six months ended June 30, 2020, down from RMB 72,455,000 in the same period of 2019[99]. Shareholder Information - Major shareholder Great World Glory Pte. Ltd. holds 38.27% of the company's shares, totaling 363,579,785 shares[62]. - The company has a total of 950,000,000 issued ordinary shares as of June 30, 2020[60]. - The company did not recommend any interim dividend for the period[74]. - The company has adopted a Restricted Stock Unit Plan to incentivize and retain skilled personnel for future development and expansion[69]. - No Restricted Stock Units were granted or agreed to be granted during the six months ended June 30, 2020[72]. Legal and Compliance Matters - The company received a letter claiming the termination of a joint venture agreement and a demand for RMB 50 million in damages, which the company intends to vigorously contest[55]. - The company has established an audit committee consisting of three independent non-executive directors to oversee financial reporting and risk management[80]. - The company has complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2020[77]. Employee and Management - As of June 30, 2020, the total employee cost was RMB 50.9 million, down from RMB 56.8 million in the same period of 2019, representing an increase in employee cost as a percentage of revenue from 3.4% to 4.7%[56]. - The company had 797 employees, a decrease from 811 employees as of December 31, 2019[56]. - The total remuneration for key management personnel was RMB 4,561,000 (unaudited) for the six months ended June 30, 2020, compared to RMB 2,830,000 for the same period in 2019, reflecting a significant increase[171].