Economic Environment - In the first half of 2023, China's GDP grew by 5.5% year-on-year, and retail sales increased by 8.2% year-on-year, indicating a recovering macroeconomic environment[6] Product Development and Innovation - The company launched a new product, "Shangpin Bazhen," which combines traditional Chinese dietary formulas with modern nutritional science, enhancing brand vitality while maintaining classic offerings[8] - The company established the "Modern Dietary Research and Development Center" in collaboration with the Chinese Nutrition Society to enhance product scientific accuracy and precision[9] - The establishment of the "Dietary Black Sesame Research Center" aims to innovate and improve the nutritional value of black sesame products[11] - The company emphasizes the importance of a flexible supply chain and professional R&D to continuously innovate and meet diverse health needs[12] Market Performance - The "Xiaotianzai" product contributed 11.4% of e-commerce channel revenue for the six months ending June 30, 2023, showcasing strong growth potential[12] - E-commerce revenue reached RMB 359.3 million, a year-on-year increase of 10.0%, with social media platforms like Douyin and Kuaishou contributing approximately 43.0% of this revenue[14] - New channel business revenue increased by 34.9% to RMB 110.8 million, with a 65.0% growth in the number of sales outlets[15] - Total revenue for the six months ended June 30, 2023, was RMB 873.9 million, up from RMB 840.4 million in the same period of 2022, reflecting a growth of approximately 4.2%[19] - Offline channel sales accounted for approximately 58.9% of total revenue, down from 61.1% in the previous year, while online channel sales increased to about 41.1% from 38.9%[19] Financial Performance - Gross profit rose from approximately RMB 542.8 million to RMB 558.5 million, but the gross margin decreased from about 64.6% to 63.9% due to a higher percentage of revenue from online channels[22] - The group's pre-tax profit for the period was approximately RMB 101.0 million, an increase from RMB 68.0 million for the six months ended June 30, 2022, representing a growth of about 48.5%[33] - The net profit for the period was approximately RMB 83.2 million, compared to RMB 52.4 million for the six months ended June 30, 2022, indicating a rise of approximately 58.7%[35] - The company's cash and cash equivalents increased to RMB 880.4 million as of June 30, 2023, up approximately 12.7% from RMB 781.3 million as of December 31, 2022[42] - The net current assets of the group were RMB 950.3 million as of June 30, 2023, compared to RMB 839.2 million as of December 31, 2022, reflecting an increase of approximately 13.2%[42] Shareholder Information - As of June 30, 2023, the company’s major shareholders include 恒泰信託（香港）有限公司, holding 930,000,000 shares, representing 42.49% of the total shares[55] - PepsiCo, Inc. is a significant shareholder with 566,506,000 shares, accounting for 25.88% of the total shares[55] - The total number of shares held by the major shareholders indicates a concentrated ownership structure, with the top two shareholders holding over 68% of the total shares[55] Corporate Governance - The board of directors confirmed compliance with the corporate governance code throughout the six months ending June 30, 2023[61] - The company has implemented a share option scheme approved by shareholders on November 19, 2018, to incentivize eligible participants[65] - The company’s directors have adhered to the standard code of conduct for securities trading during the reporting period[62] Stock Options and Incentive Plans - The total number of shares available for issuance under the stock option plan is capped at 222,100,000 shares, representing 10% of the total shares issued at the time of listing[68] - The stock option plan allows for the issuance of options without a minimum holding period prior to exercise, unless otherwise specified by the board[73] - The stock incentive plan was adopted by the board on March 28, 2022, to reward and retain employees[83] - The maximum number of reward shares under the stock incentive plan cannot exceed 10% of the company's issued share capital[86] Cash Flow and Investments - The company made investments in financial assets amounting to RMB 423,000 thousand during the six months ended June 30, 2023, compared to RMB 309,200 thousand in the same period of 2022[122] - The company recorded a net cash inflow from investing activities of RMB 428,635 thousand for the six months ended June 30, 2023, compared to RMB 312,405 thousand in the same period of 2022[122] Other Financial Metrics - The average revenue per store in the specialty store segment increased by 6.3%, despite a 6.5% decline in total revenue from this segment due to a reduction in the number of stores[15] - The company reported a decrease in inventory to RMB 64,448,000 from RMB 81,865,000 as of December 31, 2022, representing a reduction of about 21.4%[153] - The company reported no impairment losses recognized for the six months ended June 30, 2023, consistent with the previous year[152]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表聲明，並明確表示概不就因本公告全部或任何部分內 容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 Natural Food International Holding Limited 五谷磨房食品國際控股有限公司 （以存續方式於開曼群島註冊的有限公司） 1837 （股份代號： ） 2023 6 30 截至 年 月 日止六個月 中期業績 五谷磨房食品國際控股有限公司（「本公司」，連同其附屬公司統稱「本集團」）董事 2023 6 30 （「董事」）會（「董事會」）欣然公佈本集團截至 年 月 日止六個月（「本期間」）的 2022 綜合業績連同 年同期的比較數字如下。 財務摘要 6 30 截至 月 日止六個月 2023 2022 年 年 按期變動 人民幣千元 人民幣千元 增加 873,853 840,411 4.0% 收入 ...

Financial Performance - Total revenue for the year ended December 31, 2022, was approximately RMB 1,719.1 million, an increase from RMB 1,610.3 million in 2021[26]. - The group recorded a profit of approximately RMB 116.5 million for the year ended December 31, 2022, compared to RMB 86.5 million in 2021, representing a year-on-year increase of 34.7%[34]. - The company's gross profit decreased to approximately RMB 1,098.4 million in 2022, with a gross margin of 63.9%, down from RMB 1,138.4 million and 70.7% in 2021[51]. - The company recorded a pre-tax profit of approximately RMB 137.3 million for the year ended December 31, 2022, compared to RMB 113.7 million in 2021[56]. - Financial asset impairment for the year ended December 31, 2022, was approximately RMB 6.0 million, compared to a reversal of impairment losses of RMB 3.5 million in 2021, primarily due to an increase in overdue trade receivables[31]. - The financing cost decreased from approximately RMB 0.8 million in 2021 to RMB 0.6 million in 2022, attributed to reduced interest expenses on lease liabilities[32]. Sales Channels - Offline channel sales revenue as a percentage of total revenue decreased from 63.5% in 2021 to 57.8% in 2022, while online channel sales revenue increased from 36.5% to 42.2%[27]. - Online channel sales increased to RMB 725.6 million, representing 42.2% of total sales, up from RMB 587.4 million or 36.5% in 2021[50]. - New channel business revenue surged to RMB 179.5 million, accounting for 10.4% of total sales, compared to RMB 24.9 million or 1.5% in 2021[50]. - The group believes that offline retail channels will continue to play a significant role in connecting with consumers despite the challenges posed by the COVID-19 pandemic[20]. Brand and Market Strategy - The brand "五谷磨房" contributed a GMV of approximately RMB 670.0 million in 2022, representing a year-on-year growth of 63.4%[42]. - The group aims to focus on health grain foods and adopt a multi-brand and omnichannel strategy to capture diverse consumer demands and retail opportunities[38]. - The group plans to enhance brand communication targeting new generation consumers through social media platforms like Douyin and Xiaohongshu, promoting product attributes of health, convenience, and fashion[18]. Operational Efficiency - Operating expenses for sales and distribution decreased to approximately RMB 891.0 million in 2022 from RMB 954.4 million in 2021[53]. - Trade payables turnover days remained stable at approximately 43 days as of December 31, 2022[36]. - The company maintained a stable trade receivables turnover period of approximately 39 days as of December 31, 2022[59]. - As of December 31, 2022, the company's inventory remained stable at approximately RMB 819 million, with a decrease in inventory turnover days due to strict inventory control measures[83]. Human Resources - Employee costs (excluding director remuneration) totaled RMB 1,563 million for the year ended December 31, 2022, an increase of approximately 0.3% compared to RMB 1,558 million in 2021[87]. - As of December 31, 2022, the company employed 697 staff, a decrease from 713 staff as of December 31, 2021[87]. - The total number of employees in the group was 697, with a gender ratio of approximately 1:2 (227 male and 470 female employees)[116]. - The company has maintained a stable employee gender ratio over the past five years, which is deemed appropriate for its business in natural health food manufacturing and sales[116]. Corporate Governance - The board is responsible for overseeing the management of the company's business affairs and overall performance[79]. - The company is committed to fulfilling its responsibilities to shareholders and enhancing shareholder value through good corporate governance[101]. - The board of directors will continue to review and monitor the company's corporate governance in accordance with the corporate governance code[102]. - The board consists of 7 members, including 2 executive directors, 2 non-executive directors, and 3 independent non-executive directors[106]. - The company has adopted a share option plan to provide incentives to directors, eligible employees, and third-party service providers[88]. - The board has established three committees: the audit committee, remuneration committee, and nomination committee, each with defined terms of reference[161]. Risk Management - The company has implemented strict internal control and risk management measures to ensure operational and financial performance[79]. - The board is responsible for assessing the nature and extent of risks acceptable to the company while ensuring effective risk management and internal control systems are in place[156]. - The group’s risk management and internal control systems include annual plans based on significant potential risks related to financial reporting, operations, and compliance[192]. - The audit committee is responsible for monitoring the integrity of the company's financial statements and reviewing significant judgments made in financial reporting[163]. Shareholder Engagement - The company has established procedures for shareholders to propose matters at general meetings, ensuring transparency and shareholder engagement[177]. - Shareholders can request the board to convene a special general meeting if they hold at least 10% of the paid-up capital with voting rights[196]. - The company encourages feedback from shareholders and the public, welcoming inquiries and suggestions through designated communication channels[183].

Financial Performance - Total revenue for the year ended December 31, 2022, was RMB 1,719,074 thousand, representing a 7% increase from RMB 1,610,322 thousand in 2021[27] - Gross profit decreased by 4% to RMB 1,098,384 thousand compared to RMB 1,138,446 thousand in the previous year[27] - Profit attributable to owners of the company increased by 35% to RMB 116,462 thousand from RMB 86,531 thousand in 2021[27] - Basic earnings per share rose to RMB 0.054 from RMB 0.039, while diluted earnings per share increased to RMB 0.053 from RMB 0.039[27] - The company reported a pre-tax profit of RMB 137,253 thousand, an increase of 21% from RMB 113,682 thousand in the previous year[28] - The company reported a net profit of RMB 116,462,000 for the year ended December 31, 2022, compared to RMB 86,531,000 in 2021, representing a year-over-year increase of approximately 34.5%[38] - The total other income and gains increased to RMB 16,525,000 in 2022 from RMB 12,266,000 in 2021, marking an increase of approximately 34.5%[52] - The income tax expense for 2022 totaled RMB 20,791,000, down from RMB 27,151,000 in 2021, which is a decrease of approximately 23.3%[63] - The basic earnings attributable to equity holders of the parent company for 2022 were RMB 116,462,000, compared to RMB 86,531,000 in 2021, representing an increase of approximately 34.5%[69] - The company did not declare any interim dividend for 2022, while it paid RMB 35,016,000 in dividends in 2021[66] - The group reported a net profit of approximately RMB 116.5 million for the year ended December 31, 2022, up from approximately RMB 86.5 million for the year ended December 31, 2021[118] Revenue and Sales - Revenue from sales of goods reached RMB 1,719,074,000 in 2022, up from RMB 1,610,322,000 in 2021, indicating a growth of about 6.7%[51] - Online channel revenue accounted for 42.2% of total revenue, an increase of 5.7 percentage points from the previous year, totaling RMB 725.6 million, a 23.5% year-on-year growth[84] - The brand "Black Nourishment" contributed approximately RMB 670.0 million in GMV in 2022, marking a 63.4% increase year-on-year[80] - The newly launched brand "Little Genius" achieved GMV of RMB 20.0 million in Q4 2022, showcasing promising growth potential[81] - The company's new channel business achieved revenue of RMB 179.5 million in 2022, a significant increase of 620.5% year-on-year, accounting for approximately 10.4% of total revenue[89] - Offline channel revenue recorded RMB 993.5 million for the year ended December 31, 2022, a decrease of 2.9% year-on-year, while online channel revenue increased to RMB 725.6 million, representing 42.2% of total revenue[92][102] Assets and Liabilities - Cash and cash equivalents increased to RMB 781,337 thousand from RMB 646,015 thousand year-on-year[15] - Total current assets grew to RMB 1,105,315 thousand from RMB 965,495 thousand, reflecting a strong liquidity position[15] - Total assets less current liabilities amounted to RMB 1,252,763 thousand, up from RMB 1,142,469 thousand in the previous year[15] - Non-current assets totaled RMB 413,539 thousand, a decrease from RMB 432,548 thousand in 2021[15] - Trade receivables amounted to RMB 195.7 million in 2022, up from RMB 174.0 million in 2021, indicating a growth of 12.5%[71] - Trade payables reached RMB 84.9 million in 2022, up from RMB 59.7 million in 2021, reflecting a growth of 42.2%[74] - The net current assets increased from RMB 709.9 million as of December 31, 2021, to RMB 839.2 million as of December 31, 2022[125] Costs and Expenses - The cost of goods sold increased significantly to RMB 620,690,000 in 2022 from RMB 471,876,000 in 2021, which is an increase of approximately 31.4%[60] - Sales and distribution expenses decreased from approximately RMB 954.4 million for the year ended December 31, 2021, to approximately RMB 891.0 million for the year ended December 31, 2022, primarily due to reduced transportation costs and a decrease in commission expenses[109] - Administrative expenses decreased from approximately RMB 81.6 million for the year ended December 31, 2021, to approximately RMB 79.0 million for the year ended December 31, 2022, mainly due to the reclassification of certain salary and employee benefits expenses[110] Research and Development - Research and development costs rose to RMB 11,456,000 in 2022 from RMB 8,864,000 in 2021, reflecting an increase of approximately 29.9%[60] Corporate Governance and Compliance - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, with values presented in thousands of RMB[33] - The company has adopted revised Hong Kong Financial Reporting Standards, which did not have any impact on its financial position or performance for the year[44][45][47] - The company has confirmed compliance with the standard code of conduct for securities trading by its directors for the year ended December 31, 2022[153] - The audit committee, composed of three independent non-executive directors, reviewed the company's corporate governance policies and compliance with governance codes[143] Future Outlook and Strategy - The company plans to continue its "multi-brand, all-channel" development strategy to expand consumer reach and capitalize on market opportunities in the health food sector[100] - The company remains optimistic about the consumer goods market in 2023, anticipating a recovery in demand following the lifting of pandemic measures[100] Employee and Operational Metrics - As of December 31, 2022, the group had 697 employees, a decrease from 713 employees in 2021, with employee costs totaling RMB 156.3 million, a slight increase of approximately 0.3% from RMB 155.8 million in 2021[136] - The number of direct-operated counters decreased by 18.3% to 2,012, with revenue from this segment declining by 18.4% to RMB 814.0 million[97] Environmental and Social Responsibility - The company has a dedicated team for environmental compliance and implements strict waste management procedures at its manufacturing base[144]

Financial Performance - In the first half of 2022, the company's revenue increased by approximately 11.5% to RMB 840.4 million, while net profit rose by about 37.7% to RMB 52.4 million[13]. - Total revenue increased from RMB 753.9 million in the six months ended June 30, 2021, to RMB 840.4 million in the same period of 2022, representing an increase of approximately 11.5%[31]. - The group's pre-tax profit for the period was approximately RMB 68 million, an increase from RMB 48 million for the six months ended June 30, 2021, representing a growth of about 41.67%[42]. - The group's profit for the period was approximately RMB 52.4 million, compared to RMB 38 million for the six months ended June 30, 2021, indicating a growth of approximately 38.42%[44]. - Revenue for the six months ended June 30, 2022, was RMB 840,411,000, an increase of 11.5% compared to RMB 753,899,000 for the same period in 2021[140]. - Gross profit for the same period was RMB 542,809,000, slightly up from RMB 534,881,000, resulting in a gross margin of approximately 64.5%[140]. - Net profit for the six months ended June 30, 2022, was RMB 52,355,000, representing a 37.7% increase from RMB 38,032,000 in the prior year[142]. - Total comprehensive income for the period was RMB 57,653,000, compared to RMB 36,158,000 in the same period last year, reflecting a significant growth[142]. Revenue Sources - E-commerce channels generated revenue of RMB 326.6 million, representing a year-on-year growth of approximately 36.6%[15]. - Offline channel revenue decreased from 68.3% of total revenue in 2021 to 61.1% in 2022, while online channel revenue increased from 31.7% to 38.9%[32]. - The core product "Walnut Sesame Black Bean Powder" recorded a GMV growth of approximately 36% in e-commerce channels, maintaining its position as the top natural powder product[22]. - The company has successfully expanded its social media e-commerce presence, with sales from platforms like Douyin and Kuaishou accounting for about 37% of total e-commerce revenue[15]. Cost and Expenses - Sales cost rose approximately 35.9% from RMB 219 million in 2021 to RMB 297.6 million in 2022, primarily due to increased raw material costs and transportation expenses[33]. - Gross profit increased from approximately RMB 534.9 million in 2021 to RMB 542.8 million in 2022, but gross margin decreased from about 71% to 64.6%[33]. - Selling and distribution expenses decreased from approximately RMB 455.1 million in 2021 to RMB 440.9 million in 2022, influenced by increased advertising costs and reduced transportation expenses[36]. - Administrative expenses increased from approximately RMB 38.4 million in 2021 to RMB 41.2 million in 2022, primarily due to salary increases and new office rental costs[37]. - The company incurred a loss of RMB 7,000,000 from the sale of property, plant, and equipment during the six months ended June 30, 2022, compared to a loss of RMB 3,056,000 in the same period of 2021[170]. Assets and Liabilities - As of June 30, 2022, the group's cash and cash equivalents were RMB 660.9 million, a 2.3% increase from RMB 646 million as of December 31, 2021[51]. - The net current assets of the group as of June 30, 2022, were RMB 778.2 million, up from RMB 709.9 million as of December 31, 2021[51]. - Trade receivables increased to RMB 211.4 million from RMB 176.6 million, attributed to increased revenue[47]. - The inventory turnover days decreased from 67 days to 46 days, reflecting improved inventory control measures[50]. - The capital debt ratio as of June 30, 2022, was approximately 1.0%, down from 1.2% as of December 31, 2021[56]. Shareholder Information - As of June 30, 2022, the major shareholders include 恒泰信託（香港）有限公司 with 930,000,000 shares, representing 42.49% of the issued share capital[74]. - PepsiCo, Inc. holds 566,506,000 shares, accounting for 25.88% of the total shares[74]. - The company purchased a total of 18,126,000 shares at a total cost of approximately HKD 7,975,000 (approximately RMB 6,862,000) under the share incentive plan[80]. Corporate Governance - The company has complied with all provisions of the corporate governance code during the six months ending June 30, 2022[82]. - The board of directors has adopted the standard code for securities transactions since the company's listing on December 12, 2018, and confirmed compliance during the reporting period[83]. - The audit committee consists of independent non-executive directors, ensuring proper governance and oversight[130]. Stock Options and Incentives - The company aims to align the interests of eligible participants with its own through the share option plan, incentivizing contributions to the group[86]. - The company granted 74,018,823 stock options on June 12, 2019, with an exercise price of HKD 1.468 per share, valid until December 11, 2028[99]. - The total number of stock options granted is subject to shareholder approval, but the options already granted do not require such approval[99]. - The company has a structured vesting schedule for stock options, with percentages allocated over specific periods[105]. Taxation and Compliance - The corporate income tax rate for the group's subsidiaries operating in China remains at 25% for both the six months ended June 30, 2022, and 2021[199]. - No income tax was incurred in the British Virgin Islands and the Cayman Islands for the period, consistent with the previous year[199]. Miscellaneous - There were no significant acquisitions, disposals, or investments during the period[58]. - The company has not identified any contingent assets or liabilities arising from business combinations that occurred after January 1, 2022[184]. - The company operates entirely within China, generating 100% of its revenue and holding all non-current assets in the region[188].

Financial Performance - In 2021, the company's revenue increased by 11.9% year-on-year to RMB 1,610.3 million, while net profit turned from a loss of RMB 14.5 million in 2020 to a profit of RMB 86.5 million[35]. - The company achieved a profit before tax of approximately RMB 113.7 million in 2021, a significant turnaround from a loss of RMB 53.1 million in 2020[67]. - The group recorded a profit of approximately RMB 86.5 million for the year ended December 31, 2021, compared to a loss of approximately RMB 14.5 million for the year ended December 31, 2020, indicating a significant turnaround in performance[70]. - Gross profit rose to approximately RMB 1,138.4 million in 2021, up from RMB 1,006.6 million in 2020, with a gross margin improvement from 70% to 70.7%[58]. - The company recorded a net reversal of financial asset impairment of approximately RMB 3.5 million in 2021, compared to a loss of RMB 9.6 million in 2020[64]. - The net cash flow from operating activities for 2021 was RMB 130.8 million, up from RMB 86.9 million in 2020, reflecting improved operational efficiency[79]. - As of December 31, 2021, the group's cash and cash equivalents increased by approximately 14.5% to RMB 646 million from RMB 564.2 million as of December 31, 2020[78]. - The company has established a comprehensive financial accounting system to ensure compliance with various performance measurement indicators[164]. - The company’s financial performance and position as of December 31, 2021, are detailed in the annual report, specifically in the financial statements[189]. Revenue Channels - Online channel revenue accounted for 36.5% of total revenue, an increase of 7.8 percentage points compared to 2020, while offline revenue decreased to 63.5% from 71.3% in the previous year[36]. - The e-commerce channel achieved revenue of RMB 587.4 million in 2021, representing a growth of 42.1% year-on-year[38]. - Sales from social e-commerce channels, including Douyin and Kuaishou, reached approximately RMB 130 million, showcasing the company's successful adaptation to emerging platforms[39]. - Offline channel sales accounted for 63.5% of total revenue in 2021, down from 71.3% in 2020, while online channel sales increased to 36.5% from 28.7%[56]. Strategic Initiatives - The company plans to continue focusing on natural, healthy, and additive-free food products, while expanding e-commerce and diversifying sales channels[31]. - The company aims to deepen its multi-brand strategy to explore potential single products further[31]. - The strategic focus for 2022 includes strengthening core product categories, expanding channels, and exploring new product opportunities[52]. - The company plans to enhance its online presence and capture new customer segments through social e-commerce platforms[56]. - The company is investing heavily in R&D, with a budget increase of 15% aimed at developing healthier snack options and sustainable packaging solutions[92]. - Future outlook includes a projected revenue growth of 10% for 2022, supported by new product launches and market expansion initiatives[92]. Brand Development - The company maintained its position as the top brand in the Tmall natural powder category for several consecutive years, benefiting from strong partnerships with e-commerce platforms[27]. - The brand's awareness and reputation have improved significantly during the year[26]. - The launch of the "Heizhi Yang" brand in the e-commerce channel aims to leverage the popularity of black foods, with products like "Walnut Sesame Black Bean Powder" and "Black Sesame Balls" planned for future expansion[48]. - The company aims to reshape the "Wugu Mofang" brand image, emphasizing "good ingredients, no additives, and professionalism" through diverse content marketing across social and e-commerce platforms[50]. - The brand ambassador, actress Guan Xiaotong, was appointed to enhance the brand's image and appeal to younger consumers[51]. Cost Management - Sales and distribution expenses decreased to approximately RMB 954.4 million in 2021 from RMB 967.2 million in 2020, attributed to reduced personnel costs and promotional activities[60]. - Administrative expenses slightly increased to approximately RMB 81.6 million in 2021 from RMB 81 million in 2020, mainly due to salary adjustments and increased R&D spending[63]. - Employee costs for the year ended December 31, 2021, totaled RMB 155.8 million, a decrease of approximately 7.5% from RMB 168.5 million in 2020, indicating cost management efforts[86]. Corporate Governance - The board of directors consists of seven members, including two executive directors, two non-executive directors, and three independent non-executive directors[112]. - The company has established a high standard of corporate governance, adhering to the applicable provisions of the corporate governance code[107]. - Independent non-executive directors constitute at least one-third of the board, ensuring compliance with listing rules[116]. - The company provided training for directors on their duties and responsibilities, as well as updates on relevant laws and regulations[117]. - The board plans to hold four regular meetings annually, approximately once per quarter, with at least 14 days' notice given[123]. - The company has appropriate insurance arrangements for legal actions against directors[115]. - The board is responsible for overseeing the management of the group's business affairs and overall performance[111]. - The company has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with clearly defined responsibilities[128]. Risk Management - The company emphasizes the importance of internal controls and risk management systems, ensuring management fulfills its responsibilities[131]. - The company has implemented a risk management system to identify, assess, and control operational risks associated with its business growth and expansion[197]. - The internal audit department evaluates the adequacy and effectiveness of the risk management and internal control systems, reporting findings to the board at least annually[163]. - The board believes that the risk management and internal control systems are adequate and effective, with annual reviews planned[165]. Environmental Compliance - The company has a dedicated team for environmental compliance and implements strict waste management procedures at its manufacturing base[195]. - The company aims to reduce its carbon footprint by 30% by 2025, aligning with global sustainability goals[92]. Shareholder Engagement - Shareholders can propose resolutions at general meetings, with voting results published on the company's and stock exchange's websites[170]. - Qualified shareholders can request the board to convene a special general meeting to present proposals[172]. - The company maintains a communication policy to ensure shareholders receive timely information, allowing them to participate actively in company affairs[181].

Financial Performance - For the first half of 2021, the company reported revenue of RMB 753.9 million, an increase of 23.5% compared to the same period last year[11]. - The profit attributable to shareholders was RMB 38.0 million, a significant recovery from a loss of RMB 52.3 million in the same period of 2020[11]. - Total revenue for the six months ended June 30, 2021, was RMB 753.9 million, an increase of 23.4% from RMB 610.3 million for the same period in 2020[28]. - Gross profit rose to approximately RMB 534.9 million, with a gross margin of 71%, up from 67.7% in the same period last year[31]. - The group achieved a profit before tax of approximately RMB 480 million, a significant improvement from a loss of RMB 832 million in the same period last year[39]. - The group reported a profit of approximately RMB 380 million, compared to a loss of RMB 523 million in the previous period[43]. - The company reported a pre-tax profit of RMB 48.0 million, a turnaround from a pre-tax loss of RMB 83.2 million in the previous year[107]. - Total comprehensive income for the six months ended June 30, 2021, was RMB 36,158,000, compared to a loss of RMB 48,691,000 in the same period of 2020[109]. - Basic earnings per share for the period was RMB 0.02, an improvement from a loss of RMB 0.02 per share in the previous year[109]. Revenue Breakdown - Online channel revenue reached RMB 275.2 million, marking a growth of 38.2% year-on-year[12]. - Offline channel revenue amounted to RMB 478.7 million, reflecting a 16.4% increase compared to the previous year[15]. - Revenue from offline channels accounted for 63.5% of total revenue, down from 67.4% in the previous year, while online channel revenue increased to 36.5% from 32.6%[28]. - Revenue from customer contracts for the six months ended June 30, 2021, was RMB 753,899,000, an increase of 23.5% from RMB 610,330,000 for the same period in 2020[143]. Cost Management - Sales and distribution expenses decreased slightly to approximately RMB 455.1 million from RMB 457.4 million, primarily due to reduced labor costs and promotional activities[33]. - The company reported a decrease in selling and distribution expenses to RMB 455.1 million from RMB 457.4 million, indicating improved cost management[107]. - The group reported a decrease in financing costs, with interest on lease liabilities at RMB 401,000 for the six months ended June 30, 2021, down from RMB 443,000 in 2020[148]. Operational Efficiency - The company operated 2,706 directly-operated counters nationwide as of June 30, 2021, despite closing 535 counters to control costs and improve operational efficiency[15][17]. - As of June 30, 2021, the total number of direct-operated counters was 2,706, down from 3,171 as of December 31, 2020, reflecting a net decrease of 465 counters[18]. - The company reduced its inventory by RMB 32,862,000, compared to a reduction of RMB 35,881,000 in the previous year, indicating effective inventory management[125]. Investments and Future Plans - The company plans to enhance its integrated distribution platform and optimize channel mix, with a total investment of RMB 636.8 million allocated for various initiatives[92]. - A new production base is being established in Nansha, Guangzhou, with an investment of RMB 382.1 million for machinery and equipment procurement[92]. - The company aims to expand its online business through further development of its technology platform, with an investment of RMB 22.3 million[92]. - The company is actively exploring new sales channels and opportunities, including emerging social e-commerce platforms[14]. - The company aims to strengthen its core product category of grain nutrition powder while actively exploring new channels and product opportunities as part of its mid-to-long-term development strategy[24]. Shareholder Information - The interim dividend declared on August 26, 2021, is RMB 0.016 per ordinary share, totaling approximately RMB 35,016,224, which represents about 92.07% of the net profit for the six months ended June 30, 2021[87]. - As of June 30, 2021, the company had significant shareholdings, with Zhang Zejun and Gui Changqing each holding 930,000,000 shares, representing 42.41% of the total shares[68]. - PepsiCo, Inc. held 566,506,000 shares, accounting for 25.83% of the company's total shares[68]. - The company has a total of 2,000,000 share options held by various directors, indicating active participation in equity incentives[68]. Governance and Compliance - The board of directors confirmed compliance with the corporate governance code during the six months ending June 30, 2021[75]. - The company has implemented the corporate governance code principles to enhance shareholder rights and corporate value[74]. - The board consists of members who have adhered to the standard code for securities trading since the company's listing on December 12, 2018[76]. Cash Flow and Financial Position - Cash and cash equivalents increased by approximately 16.8% to RMB 659 million from RMB 564.2 million as of December 31, 2020[51]. - The current asset net value rose to RMB 704.1 million from RMB 665.5 million as of December 31, 2020[51]. - The company's net asset value increased to RMB 1,113,660,000 as of June 30, 2021, up from RMB 1,075,488,000 at the end of 2020[115]. - Operating cash flow for the six months ended June 30, 2021, was RMB 101,313,000, a significant increase from RMB 34,902,000 in the same period of 2020, representing a growth of 189.5%[125]. - Net cash flow from operating activities for the six months ended June 30, 2021, was RMB 96,884,000, compared to RMB 28,972,000 in the previous year, indicating a substantial improvement[127]. Market Environment - The overall economic environment in China showed a GDP growth of 12.7% year-on-year in the first half of 2021, contributing to the recovery of the consumer market[11]. - The company continues to focus on product upgrades and channel enhancements to meet the growing health consciousness among consumers[11]. Miscellaneous - The company did not make any significant investments, acquisitions, or disposals of subsidiaries or associates during the six months ending June 30, 2021[72]. - There were no purchases, sales, or redemptions of the company's listed securities by the company or any of its subsidiaries during the six months ending June 30, 2021[73].

Brand Performance - The company maintained its position as the top brand in the natural powder category on Tmall for five consecutive years, benefiting from strong operational capabilities and brand strength [56]. - The product "Walnut Black Bean Sesame Powder" sold 600,000 cans during the Double Eleven shopping festival, becoming the top-selling item in its category on Tmall [58]. - The newly launched high-end fruit oatmeal brand "Eat a Rainbow" ranked fifth in the Tmall instant oatmeal category within just six months of its launch, recognized for its nutritional value [58]. - The brand "Eat a Rainbow" achieved over 900% increase in brand awareness, with 880 million reads and 8 million discussions on Weibo [62]. - The "Eat a Rainbow" brand sold 1.6 million bags of high-end cold cereal within six months of its launch, ranking fifth in the Tmall cold drink cereal category during the Double 11 shopping festival [72]. - The walnut, sesame, and black bean powder became a top-selling product on Tmall, recognized in multiple sales honor lists [70]. Sales and Revenue - In 2020, the company's revenue was RMB 1,438.5 million, a year-on-year decline of 19.4%, and recorded a net loss of RMB 14.5 million, a decline of 111.4% [67]. - In the second half of 2020, the revenue decline narrowed from 33.5% in the first half to 4.4% year-on-year, with a net profit of RMB 37.9 million [67]. - As of December 31, 2020, offline channel revenue accounted for 66.5% of total revenue, down from 76.4% in 2019, while online channel revenue increased to 33.5% from 23.6% [75]. - The e-commerce channel achieved revenue of RMB 481.4 million in 2020, representing a year-on-year growth of 14.2% [80]. - Total revenue for the year ended December 31, 2020, was RMB 1,438.5 million, a decrease from RMB 1,784.1 million in 2019, primarily due to a decline in offline sales [90]. - Offline sales accounted for 66.5% of total revenue in 2020, down from 76.4% in 2019, while online sales increased to 33.5% from 23.6% [90]. Product Development and Innovation - The company launched the new Y10 probiotic high-protein grain powder, which has received positive consumer feedback and enhances product convenience [70]. - The company plans to continue focusing on natural, healthy, and additive-free grain nutrition products, expanding e-commerce and offline sales channels [63]. - The company aims to capture growth opportunities by developing new product categories based on market trends [74]. - The company will continue to enhance the consumer experience with new product forms and improved product offerings in 2021 [71]. - New product development initiatives are underway, aimed at diversifying the product portfolio and meeting consumer demands [131]. - The company has a strong emphasis on research and development, particularly in the food and beverage sector, to drive innovation [132]. Marketing and Customer Engagement - The company actively engaged in e-commerce live streaming, collaborating with top influencers to enhance brand visibility [56]. - The company focused on data-driven member management to boost customer loyalty and repeat purchases [59]. - The company enhanced its brand image through targeted social media campaigns, significantly improving its ranking on platforms like Xiaohongshu [60]. - The company emphasizes brand building through multi-brand strategies and content marketing on social media platforms [82]. - The company's marketing strategies included targeted campaigns during key promotional periods, achieving significant sales performance during events like 618 and Double Eleven [80]. Financial Performance and Management - Gross profit decreased from approximately RMB 1,319.2 million in 2019 to RMB 1,006.6 million in 2020, with the gross margin declining from 73.9% to 70% [92]. - Other income and gains fell from approximately RMB 22.9 million in 2019 to RMB 9.9 million in 2020, mainly due to reduced government subsidies and lower commission income [93]. - Selling and distribution expenses decreased from approximately RMB 1,092.4 million in 2019 to RMB 967.2 million in 2020, attributed to lower commission expenses and reduced sales personnel costs [94]. - Administrative expenses decreased from approximately RMB 102.9 million in 2019 to RMB 81 million in 2020, mainly due to a reduction in administrative staff [95]. - The company recorded a pre-tax loss of approximately RMB 53.1 million for the year ended December 31, 2020, compared to a pre-tax profit of approximately RMB 140.1 million in 2019 [100]. - The company reported a net loss of approximately RMB 14.5 million for the year ended December 31, 2020, compared to a profit of approximately RMB 126.3 million in 2019 [102]. Governance and Compliance - The board of directors consists of seven members, including two executive directors, two non-executive directors, and three independent non-executive directors [143]. - The company has established a board committee to monitor operational and financial performance [142]. - The company emphasizes the importance of board diversity and aims to ensure a balanced mix of skills, experience, and diverse perspectives among board members [155]. - The roles of the Chairman and CEO are clearly defined and separated, ensuring compliance with corporate governance codes [156]. - The Audit Committee is responsible for monitoring the integrity of the company's financial statements and reviewing significant financial reporting judgments [160]. - The company encourages stakeholders to report any suspected misconduct or fraud, promoting a culture of accountability [161]. Future Outlook - The company remains optimistic about the health food industry's growth prospects in China, driven by increasing disposable income and health awareness post-pandemic [55]. - The user base grew to 2 million active users, reflecting a 25% increase compared to the previous year [188]. - The company expects revenue growth to continue at a rate of 15% for the next fiscal year, driven by new product launches and market expansion strategies [188]. - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share within the next two years [188]. - A strategic acquisition of a local competitor is anticipated to be finalized by Q2 2021, expected to enhance the company's product offerings and distribution channels [188].

Financial Performance - For the six months ended June 30, 2020, the company recorded revenue of RMB 610.3 million, a decrease of 33.4% compared to RMB 917.5 million for the same period in 2019[22]. - The company reported a loss attributable to owners of the company of RMB 52.3 million, compared to a profit of RMB 105.3 million in the same period of 2019[22]. - Revenue for the six months ended June 30, 2020, was RMB 610.33 million, a decrease of 33.4% compared to RMB 917.52 million for the same period in 2019[140]. - Gross profit for the same period was RMB 413.36 million, down from RMB 700.42 million, reflecting a gross margin decline[140]. - The company reported a pre-tax loss of RMB 83.23 million, compared to a profit of RMB 119.05 million in the prior year[140]. - Net loss for the period was RMB 52.34 million, compared to a profit of RMB 105.34 million in the same period last year[140]. - Basic and diluted loss per share was RMB 0.02, compared to earnings of RMB 0.05 per share in the previous year[145]. - Total comprehensive loss for the period was RMB 48.69 million, compared to a total comprehensive income of RMB 106.04 million in the same period last year[145]. Sales and Distribution - As of June 30, 2020, offline channel revenue accounted for 67.4% of total revenue, while online channel revenue accounted for 32.6%[27]. - The company opened 125 new direct sales counters but closed 180 counters due to the impact of the COVID-19 pandemic, resulting in a total of 3,344 counters across 289 cities[27]. - Online sales channels recorded a growth of approximately 23% in the first half of 2020, driven by active participation in e-commerce live streaming and promotional activities[39]. - The revenue from offline channels fell to RMB 411,275 thousand (67.4% of total revenue) from RMB 734,419 thousand (80.0% of total revenue) in the same period of 2019, while online channel revenue increased to RMB 199,055 thousand (32.6% of total revenue) from RMB 183,101 thousand (20.0% of total revenue)[52]. - The company plans to continue optimizing its product mix and developing new core products, while accelerating online channel development and exploring new channels[47]. Product Development and Launches - The company launched the Y10 prebiotic high-protein grain powder in March 2020, enhancing convenience and expanding consumption scenarios[23]. - The company introduced the high-end fruit oatmeal sub-brand "Eat a Rainbow" in June 2020, promoting it through e-commerce channels[26]. - The launch of the new high-end fruit cereal brand "Eat a Rainbow" on June 1, 2020, generated over 700 million exposures across various social media platforms[44]. - New product launches in the health snack category contributed to a 20% increase in sales volume[200]. - The company is investing HKD 50 million in R&D for new product development in the next fiscal year[200]. Operational Efficiency - Sales cost decreased by approximately 9.3% from RMB 217.1 million to RMB 197 million, primarily due to lower raw material and packaging costs[54]. - Gross profit fell from RMB 700.4 million to RMB 413.4 million, with a gross margin decline from 76.3% to 67.7% due to increased customer discounts[54]. - Selling and distribution expenses decreased from RMB 540.9 million to RMB 457.4 million, attributed to lower commission expenses and reduced labor costs for sales personnel[58]. - Administrative expenses declined from RMB 47.1 million to RMB 39.4 million, primarily due to a reduction in salaries and employee benefits[59]. Assets and Liabilities - Cash and cash equivalents decreased by approximately 8.3% from RMB 558 million to RMB 511.6 million[75]. - Total assets decreased from RMB 1,355.4 million to RMB 1,278.7 million, while total liabilities fell from RMB 265.6 million to RMB 228.6 million, resulting in a debt-to-asset ratio decline from 19.6% to 17.9%[80]. - Trade receivables decreased from RMB 225.6 million to RMB 154.6 million, with an increase in trade receivables turnover days from 48 to 56 days[70]. - The total employee cost (excluding directors' remuneration) for the period was RMB 88.9 million, down approximately 5.7% from RMB 94.2 million in the same period of 2019[84]. - The company had 802 employees as of June 30, 2020, compared to 838 employees on December 31, 2019[84]. Strategic Initiatives - The company aims to maintain its leading market position in the natural health food sector in China, despite uncertainties due to the ongoing pandemic[47]. - The company has implemented a strategy of "Staying True and Innovating" to seek new models and opportunities while solidifying existing business[47]. - The company plans to strengthen its integrated distribution platform and optimize channel mix with a budget of HKD 222.9 million, of which HKD 163.7 million has been utilized[121]. - The company plans to enhance its online sales platform, aiming for a 40% increase in e-commerce sales by the end of 2020[200]. - Strategic partnerships with local distributors are expected to drive a 25% increase in market penetration[200]. Shareholder Information - Major shareholders included 恒泰信託（香港）有限公司 and Paddy Aroma Investment Limited, each holding 930,000,000 shares, representing 42.49% of the company[93]. - PepsiCo, Inc. held 566,506,000 shares, accounting for 25.89% of the company[93]. - The company did not purchase, sell, or redeem any of its listed securities during the six months ending June 30, 2020[100]. Compliance and Governance - The board of directors confirmed compliance with the corporate governance code during the six months ending June 30, 2020[102]. - The audit committee has reviewed the financial statements and confirmed compliance with accounting standards[127].

Financial Performance - For the year ended December 31, 2019, the company achieved revenue of RMB 1,784.1 million, a decrease of 1.9% year-on-year[42]. - The net profit for the same period reached RMB 126.3 million, representing a year-on-year increase of 20%[42]. - As of December 31, 2019, the offline sales revenue was RMB 1,362.5 million, a decrease of 7.9% compared to the same period in 2018[52]. - Online sales revenue reached RMB 421.6 million, an increase of 24.2% year-on-year, accounting for approximately 23.6% of total revenue[65]. - Total revenue for the year ended December 31, 2019, was approximately RMB 1,784.1 million, a decrease from RMB 1,818.1 million in 2018, with offline sales contributing 76.4% and online sales 23.6%[74]. - Sales cost increased by approximately 8.8% to RMB 464.9 million in 2019 from RMB 427.4 million in 2018, leading to a gross profit decrease from RMB 1,390.7 million to RMB 1,319.2 million, resulting in a gross margin decline from 76.5% to 73.9%[75]. - Profit before tax increased by 9.7% to approximately RMB 140.1 million in 2019 from RMB 127.6 million in 2018[85]. - Net profit for the year ended December 31, 2019, was approximately RMB 126.3 million, a 20% increase from RMB 105.2 million in 2018[87]. Operational Changes - The company closed 958 underperforming direct sales counters during the reporting period as part of its strategy to adjust development pace[48]. - The total number of direct-operated counters decreased to 3,399 as of December 31, 2019, down from 3,895 at the beginning of the year, with 462 new counters opened and 958 closed during the year[56]. - The company opened 462 new direct sales counters, bringing the total to 3,399 across 30 provinces and municipalities in China[40]. - The company has attracted approximately 25 million registered members as of December 31, 2019[52]. - The company has attracted approximately 7.8 million active fans on its WeChat member mall and public account[40]. Strategic Initiatives - The company aims to optimize product structure and develop new core products while enhancing existing sales channels and exploring new ones in 2020[44]. - The company plans to strengthen fan operations and enhance brand marketing to improve brand power[44]. - The company aims to optimize product structure and develop new product categories to strengthen its market position in the natural health food sector[70]. - The company reported a significant increase in offline sales strategy and channel management, with a focus on enhancing sales team performance[112]. - The digital marketing and online sales strategies have been implemented effectively, contributing to improved member relationship management[114]. Financial Management - The net cash flow from operating activities for 2019 was RMB 171.6 million, compared to RMB 133.7 million in 2018, reflecting an increase of approximately 28.3%[94]. - The group's current assets net value as of December 31, 2019, was RMB 730.0 million, down from RMB 808.2 million as of December 31, 2018[94]. - The group had no interest-bearing borrowings as of December 31, 2019, compared to RMB 70.1 million as of December 31, 2018[94]. - The company has implemented a comprehensive financial accounting system to ensure compliance with various performance measurement indicators[171]. - The board believes that the risk management and internal control systems are adequate and effective, with annual reviews planned[171]. Corporate Governance - The company has established a robust governance structure with independent non-executive directors providing oversight and strategic guidance[108]. - The board of directors consists of seven members, including two executive directors, two non-executive directors, and three independent non-executive directors[123]. - The company has adopted the standard code for securities trading by directors, confirming compliance by all directors during the reporting period[121]. - The independent non-executive directors constitute at least one-third of the board, ensuring compliance with listing rules regarding independence[126]. - The company has established a board committee to monitor operational and financial performance, ensuring appropriate internal controls and risk management measures[122]. Shareholder Communication - The company maintains a communication policy to ensure shareholders receive timely information, allowing them to exercise their rights and participate actively in company affairs[188]. - The company has adopted a general annual dividend policy, declaring dividends of approximately 20% to 40% of the group's net profit for the specific year, subject to board discretion and shareholder approval[184]. - The board has the discretion to declare dividends, considering factors such as financial performance, cash flow, business conditions, future operations, capital needs, and any contractual or regulatory restrictions[185]. Market Position and Expansion - The company is actively pursuing market expansion opportunities, leveraging its established brand presence in the food and beverage industry[112]. - The management team has a combined experience of over 20 years in the food and beverage sector, ensuring industry expertise[112]. - The company is committed to continuous improvement in product quality and production efficiency through effective management practices[115]. - The company is focused on leveraging technology to enhance operational efficiency and customer engagement[114]. - The management team is dedicated to fostering innovation in product development and exploring new market opportunities[114].