Financial Performance - Revenue for 2020 reached RMB 5,325,107 thousand, an increase of 28.36% compared to RMB 4,148,421 thousand in 2019[12] - Gross profit for 2020 was RMB 3,910,252 thousand, reflecting a growth of 29.86% from RMB 3,011,224 thousand in 2019[12] - Net profit for 2020 amounted to RMB 439,374 thousand, up by 11.54% from RMB 393,921 thousand in 2019[12] - Basic earnings per share for 2020 were RMB 67, a slight decrease from RMB 69 in 2019[12] - The operating cash flow for 2020 was RMB 1,416,417 thousand, representing a significant increase of 102.50% from RMB 699,446 thousand in 2019[12] - The gross profit margin improved to 73.43% in 2020, up from 72.59% in 2019[12] - The net profit margin decreased to 8.25% in 2020, down from 9.50% in 2019[12] - Shareholders' profit attributable to the company was RMB 452.84 million, up 11.64% from the previous year[18] - Net profit attributable to shareholders for the year ended December 31, 2020, was RMB 452.84 million, an increase of 11.64% from RMB 405.61 million in 2019, with a net profit margin of 8.25%[32] Revenue Sources - The main brands "Koradior" and "NAERSI" recorded retail sales of RMB 1,970.43 million and RMB 1,202.06 million, respectively[18] - E-commerce revenue for the year ended December 31, 2020, was RMB 612.39 million, a 52.88% increase from RMB 400.57 million in the previous year, driven by increased online sales[25] - Direct retail stores generated revenue of RMB 4,385.06 million, a 34.37% increase from RMB 3,263.38 million in 2019, with 1,422 direct retail stores as of December 31, 2020[45] - The brand "Koradior" generated revenue of RMB 1,970.43 million, representing 37.00% of total revenue, while "NAERSI" contributed RMB 1,202.06 million, or 22.57%[42] - The company's e-commerce sales from EEKA Fashion Mall amounted to RMB 32.67 million, representing 5.34% of total e-commerce revenue[46] Retail Network and Expansion - As of December 31, 2020, the company operated 1,836 retail stores across 32 provinces, municipalities, and autonomous regions in China[18] - The company aims to expand its retail network primarily through increasing the number of directly operated retail stores, which accounted for approximately 82.35% of total revenue in 2020[25] - The total number of retail stores increased by 139, with 512 new stores opened and 373 closed, resulting in a total of 1,836 stores as of December 31, 2020[54] Cost and Expenses - Selling and distribution expenses increased by 31.76% to RMB 2,930.05 million, attributed to higher sales and expansion of retail stores[28] - Administrative expenses increased by 68.05% to RMB 519.11 million, mainly due to the acquisition of Keen Reach and increased personnel costs[29] - Financing costs rose by 79.47% to RMB 46.77 million, primarily due to increased lease liabilities and borrowings[30] - Salary and benefits expenses totaled RMB 1,090.30 million, accounting for 20.47% of total revenue, a 32.62% increase from RMB 822.12 million (19.82% of total revenue) in 2019[60] Supply Chain and Procurement - The company improved its supply chain capabilities significantly in 2020, leading to a decrease in procurement prices for various fabrics[20] - The company implemented a supplier relationship management system to enhance supply chain efficiency, resulting in improved procurement concentration and reduced procurement prices for silk, wool, and acetate fabrics[63] - The company aims to enhance its supply chain management through centralized procurement and flexible production to improve efficiency and reduce costs[71] Corporate Governance - The company has adopted and complied with the corporate governance code based on the Stock Exchange Listing Rules, except for the provision that the roles of Chairman and CEO should be separate[83] - The board consists of six directors, including three executive directors and three independent non-executive directors, ensuring a balanced decision-making process[84] - The company has adopted a board diversity policy, considering factors such as gender, age, cultural background, and professional experience in board member selection[97] - The company provides monthly updates on performance and encourages continuous professional development for all directors[92] Environmental and Social Responsibility - The company is committed to environmental sustainability, implementing green practices and promoting recycling and waste reduction in its operations[122] - The total greenhouse gas emissions for the year ended December 31, 2020, amounted to 33,394.05 tons of CO2 equivalent, representing an increase of 18.89% or 5,307.01 tons compared to 28,087.04 tons in 2019[176] - The company emphasizes energy conservation and emission reduction across all processes from design and product planning to sales and distribution[174] - The company has established a comprehensive mechanism to monitor suppliers to ensure compliance with environmental laws and regulations, aiming to reduce greenhouse gas emissions during production[175] Employee Development and Well-being - Total employees as of December 31, 2020, reached 9,916, an increase from 9,631 in 2019, with a 2.96% growth[192] - The company promotes employee well-being through various cultural, social, and sports activities, enhancing work-life balance[195] - Average training hours per employee increased to 28.03 hours in 2020 from 27.21 hours in 2019[198] - The company has implemented a health and safety policy tailored for retail and operational employees, ensuring compliance with relevant laws and regulations[194] Market Outlook and Strategy - The company anticipates a strong recovery in the Chinese economy in 2021, driven by stimulus policies, with continued growth in mid-to-high-end consumer spending[64] - The company plans to maintain a steady yet progressive approach in 2021, actively assessing and responding to market changes[65] - The company aims to steadily expand its market share and enhance its position as a leading player in the mid-to-high-end women's apparel market in China[66] Risk Factors - The company faces significant fashion risk, as it must accurately predict and respond to changing consumer preferences to avoid lower sales and profit margins[112] - Economic fluctuations can impact consumer spending on non-essential items like women's apparel, potentially leading to increased inventory and decreased revenue and profit[114] - Climate change poses operational risks, with potential impacts on sales due to seasonal weather variations affecting inventory suitability[188]

Financial Performance - Revenue for the six months ended June 30, 2020, was RMB 2,003,349 thousand, representing a 49.79% increase from RMB 1,337,445 thousand in the same period of 2019[10] - Gross profit for the same period was RMB 1,476,080 thousand, up 52.62% from RMB 967,140 thousand in 2019[10] - Net profit decreased by 18.53% to RMB 119,436 thousand compared to RMB 146,613 thousand in the previous year[11] - Basic earnings per share for the six months ended June 30, 2020, was RMB 19.18, down 38.13% from RMB 31.00 in 2019[12] - The gross profit margin improved to 73.68% from 72.31% in the previous year[13] - Operating profit margin decreased to 6.80% from 12.93% in 2019[13] - The net profit margin also declined to 5.96% from 10.96% in the previous year[13] - Total comprehensive income for the period was RMB 106,052 thousand, compared to RMB 146,900 thousand in the previous year, a decrease of 27.8%[60] Cash Flow and Assets - Cash flows from operating activities increased significantly to RMB 633,778 thousand from RMB 251,446 thousand in 2019[13] - The company's net cash inflow from operating activities for the period was RMB 633.78 million, representing a 152.05% increase compared to RMB 251.45 million for the six months ended June 30, 2019[39] - As of June 30, 2020, total current assets of the group amounted to RMB 2,409.53 million, an increase from RMB 1,558.94 million as of June 30, 2019[37] - Cash and cash equivalents decreased to RMB 532,850 thousand from RMB 691,327 thousand, a decline of approximately 23.0%[61] - Current assets increased to RMB 2,409,525 thousand from RMB 2,131,836 thousand, marking an increase of about 13.0%[61] Retail and E-commerce Performance - E-commerce revenue surged by 107.40% to RMB 272 million during the reporting period[19] - Direct retail store revenue increased by 62.54% to RMB 1,679.70 million from RMB 1,033.38 million in the first half of 2019[24] - Revenue from e-commerce platforms rose by 107.40% to RMB 272.40 million, up from RMB 131.34 million in the first half of 2019[24] - The retail sales of consumer goods in China fell by 11.4% year-on-year in the first half of 2020, with a decline of 7.6% in the first quarter[18] Operational Changes and COVID-19 Response - The company implemented various measures to enhance its operational capabilities and cost efficiency in response to the COVID-19 pandemic[19] - The company donated RMB 2 million and 1,500 sets of protective clothing to support epidemic prevention efforts in Hubei Province[20] - The group anticipates significant growth in consumer revenue in the second half of 2020, exceeding the industry average due to recovering consumer confidence post-pandemic[43] Employee and Shareholder Information - The group’s employee count increased to 9,205 as of June 30, 2020, up from 4,866 as of June 30, 2019, with total employee costs amounting to RMB 538.37 million, which is 26.87% of revenue[41] - The company issued a total of 40,973,000 share options in May 2020 as employee incentives[20] - The company has granted a total of 7,460,000 stock options, which remain unexercised, accounting for 1.1% of the issued share capital[47] - The company did not declare any interim dividends for the reporting period[45] Liabilities and Financial Ratios - The asset-liability ratio increased to 16.21% from 8.25% in the previous year[13] - The group’s debt-to-equity ratio as of June 30, 2020, was 16.21%, compared to 8.25% as of December 31, 2019[39] - Total liabilities increased to RMB 1,867,325 thousand from RMB 1,796,373 thousand, reflecting an increase of approximately 3.9%[62] Other Financial Metrics - Operating expenses rose by 69.65% to RMB 1,375.77 million from RMB 810.96 million in the first half of 2019[33] - The company reported a sales and distribution expense of RMB 1,143,077 thousand, significantly higher than RMB 719,605 thousand in 2019, reflecting increased operational costs[58] - The company experienced a foreign exchange loss of RMB 13,384 thousand during the period, contrasting with a gain of RMB 287 thousand in 2019[60] - The company recorded a net foreign exchange loss of RMB 2,972,000 for the six months ended June 30, 2020, compared to a gain of RMB 458,000 in the same period of 2019[77]

Financial Performance - Revenue for the year ended December 31, 2019, was RMB 4,148,421 thousand, representing a 64.56% increase from RMB 2,520,906 thousand in 2018[29] - Gross profit for the same period was RMB 3,011,224 thousand, with a growth of 67.02% compared to RMB 1,802,960 thousand in 2018[29] - Operating profit increased by 59.19% to RMB 515,320 thousand from RMB 323,711 thousand in the previous year[29] - Net profit rose by 44.66% to RMB 393,921 thousand, up from RMB 272,314 thousand in 2018[29] - Cash flow from operating activities reached RMB 699,446 thousand, a 74.84% increase from RMB 400,045 thousand in 2018[29] - The gross profit margin improved to 72.59% from 71.52%, an increase of 1.07 percentage points[29] - The net profit attributable to shareholders for the same period was RMB 405.61 million, an increase of 48.71% from 2018[34] - Total revenue for the year ended December 31, 2019, was RMB 4,148.42 million, an increase of 64.56% or RMB 1,627.51 million compared to RMB 2,520.91 million for the year ended December 31, 2018[42] - E-commerce revenue for the year ended December 31, 2019, was RMB 400.57 million, a 92.55% increase from RMB 208.03 million for the year ended December 31, 2018[42] - The company’s total sales and distribution expenses for the year ended December 31, 2019, were RMB 2,223.81 million, a 62.60% increase from RMB 1,367.66 million for the year ended December 31, 2018[45] - The total cost of sales for the year ended December 31, 2019, was RMB 1,137.20 million, an increase of 58.40% or RMB 419.25 million from RMB 717.95 million for the year ended December 31, 2018[43] - Operating cash inflow for the year ended December 31, 2019, was RMB 699.45 million, a 74.84% increase from RMB 400.05 million for the year ended December 31, 2018[51] - The company’s administrative expenses for the year ended December 31, 2019, were RMB 308.91 million, a 106.10% increase from RMB 149.88 million for the year ended December 31, 2018[46] Acquisitions and Expansion - The company acquired 100% of Keen Reach Holdings Limited on July 3, 2019, expanding its brand portfolio to include NAERSI, NEXY.CO, and NAERSILING[22] - The company completed the acquisition of Keen Reach Holdings Limited for a total consideration of HKD 2.4 billion, enhancing its market share and leading position[34] - In September 2019, the company acquired 100% equity of Shenzhen Haowei Flat Panel Display Materials Co., Ltd. for approximately RMB 570 million to meet growing logistics needs[35] - The company opened 231 new retail stores in 2019, including 131 direct-operated stores, while closing 93 stores, resulting in a net increase of 138 stores[71] - As of December 31, 2019, the company operated a total of 1,697 retail stores across various regions in China[72] Brand Performance - The main brands "Koradior" and "NAERSI" achieved retail sales of RMB 1,874.38 million and RMB 743.53 million, respectively[34] - The Koradior brand generated revenue of RMB 1,874.38 million, accounting for 45.18% of total revenue, with a year-on-year increase of 14.58%[59] - The NAERSI brand contributed RMB 743.53 million, representing 17.92% of total revenue, with a 100% ownership after acquisition on July 3, 2019[60] - The company has established a diversified brand matrix, including ten brands catering to various customer needs in the mid-to-high-end women's fashion sector[57] E-commerce and Sales Channels - E-commerce revenue reached RMB 400.57 million, accounting for 9.66% of total revenue, primarily from platforms like Tmall and Vipshop[58] - Revenue from wholesale to distributors reached RMB 475.18 million, an increase of 84.59% from RMB 257.42 million in the previous year[62] - The company emphasized the importance of direct retail channels for stable growth amid market uncertainties[62] Employee and Compensation - The company employed 9,631 full-time employees as of December 31, 2019, compared to 4,933 in 2018[77] - Total salary and benefits expenses reached RMB 822.12 million in 2019, accounting for 19.82% of total revenue, up from RMB 481.71 million (19.11% of total revenue) in 2018, marking a 70.67% increase[77] - A share incentive plan was introduced in December 2019, allowing for a maximum of 10% of issued shares to be granted, aligning interests among shareholders, the company, and employees[36] Corporate Governance - The company is committed to maintaining high standards of corporate governance and has adopted relevant code provisions[101] - The board believes that the current arrangement of roles does not impair the balance of power and authority[101] - The company has established three board committees: Audit Committee, Remuneration Committee, and Nomination Committee, with the chairs of the first two being independent non-executive directors[106] - The company has complied with the standard code for securities trading by directors, confirming adherence to the relevant regulations[111] Risk Management and Compliance - The company is committed to establishing a risk management system to monitor and improve operational risk management effectiveness[91] - Compliance with environmental laws and regulations is maintained, with no significant compliance costs expected due to outsourcing production processes[92] - The company has not encountered any significant legal or regulatory violations affecting its business as of December 31, 2019[150] Future Outlook and Strategy - The group expects only short-term impacts on business due to the pandemic, with a stable long-term growth outlook for the Chinese economy and consumer demand[83] - The group plans to optimize channel construction and expand new business formats, focusing on direct sales and enhancing market presence[89] - The company has set a revenue guidance of $500 million for the next fiscal year, representing a 10% increase from the current year[96] - New product launches are expected to contribute an additional $50 million in revenue, driven by innovative designs and marketing strategies[97] Environmental and Social Responsibility - The environmental, social, and governance (ESG) report covers the overall performance, commitments, and methods related to workplace quality, environmental protection, operational practices, and community engagement for the fiscal year ending December 31, 2019[199] - The company has implemented various green office measures, including the use of LED lighting in retail stores to enhance environmental sustainability[149] Shareholder Information - The company plans to declare a final dividend of HKD 0.16 per share for the year ended December 31, 2019, down from HKD 0.32 per share in 2018, subject to shareholder approval[155] - The company has established a shareholder communication policy to encourage ongoing dialogue with shareholders[132]

Financial Performance - Revenue for the six months ended June 30, 2019, was RMB 1,337,445,000, representing a 10.57% increase from RMB 1,209,634,000 in 2018[22] - Gross profit for the same period was RMB 967,140,000, with a gross margin of 72.31%, up from 70.38% in 2018[22] - Operating profit increased to RMB 172,992,000, with an operating profit margin of 12.93%[22] - Net profit for the six months was RMB 146,613,000, reflecting a net profit margin of 10.96%[22] - Basic earnings per share rose to RMB 31.00, compared to RMB 27.32 in the previous year[22] - The net profit for the first half of 2019 was RMB 146.61 million, reflecting a growth of 10.90% year-on-year[28] - The company reported a net profit of RMB 150,741,000 for the period, compared to RMB 146,613,000, a growth of 2.3%[73] - The total comprehensive income for the period was RMB 146,900,000, compared to RMB 131,171,000 in the previous year, indicating an increase of 12.5%[70] Liquidity and Financial Ratios - The current ratio decreased to 2.28 from 3.03 in December 2018, indicating a tighter liquidity position[23] - The company's current assets totaled RMB 1,558.94 million, up from RMB 1,363.24 million year-on-year, with a current ratio of 2.28[49] - The debt-to-equity ratio was 24.77%, significantly up from 7.92% at the end of the previous year[50] - The debt-to-asset ratio rose to 39.47% as of June 30, 2019, compared to 29.39% as of December 31, 2018, reflecting increased leverage[122] Inventory and Management - Inventory turnover days improved to 194.55 days from 233.27 days in the previous year, suggesting better inventory management[23] - The company’s inventory decreased to RMB 339,844,000 from RMB 460,634,000, a decline of 26.1%[71] - The total inventory as of June 30, 2019, was RMB 339,844,000, a decrease of 26.1% from RMB 460,634,000 as of December 31, 2018[108] - The cost of goods sold for the six months ended June 30, 2019, was RMB 370,130,000, which is an increase of 3.9% compared to RMB 357,295,000 for the same period in 2018[109] Brand and Market Expansion - The company launched a new brand "FUUNNY FEELLN" in January 2019, focusing on high cost-performance products for women[16] - The company aims to strengthen its brand image and expand market reach through innovative marketing strategies and direct sales[30] - The company aims to expand its business in mainland China and other overseas markets while maintaining long-term profitability through strategic investments and opportunities[56] - The retail sales of the main brand "Koradior" reached RMB 902 million, positioning it among the largest single-brand retailers in China[28] Acquisitions and Investments - The company completed the acquisition of Keen Reach Holdings Limited on July 3, 2019, for a total consideration of HKD 2,387,775,349, which included HKD 500 million in cash and the issuance of 198,713,195 new shares at HKD 9.50 per share[53] - The company acquired 65% of Shenzhen Mengdaili Industrial Co., Ltd. in June 2016, expanding its brand portfolio[16] - The acquisition of Keen Reach Holdings Limited was completed for a total consideration of HKD 2,387,775,349, enhancing the group's multi-brand strategy[29] Employee and Corporate Governance - As of June 30, 2019, the total number of employees increased to 4,866, up from 4,752 on June 30, 2018, with total employee costs amounting to RMB 275.15 million, representing 20.57% of revenue[52] - The company is committed to maintaining high standards of corporate governance and has complied with relevant codes during the reporting period[58] Accounting and Financial Reporting - The company adopted IFRS 16 Leases effective January 1, 2019, which requires capitalization of all leases, impacting financial reporting significantly[80] - The initial recognition of lease liabilities was based on the present value of remaining lease payments as of January 1, 2019, using the incremental borrowing rate[87] - The company has chosen to present right-of-use assets separately in the balance sheet following the adoption of IFRS 16[87] - The impact of adopting IFRS 16 includes recognizing lease liabilities and corresponding right-of-use assets, which may affect financial ratios and metrics[84] Dividends and Share Capital - The board has decided not to declare any interim dividend for the reporting period[58] - The company did not declare any interim dividend for the six months ended June 30, 2019, consistent with the previous year[102] - The total issued share capital remained at 486,337,000 shares as of June 30, 2019, with a par value of RMB 11,948,000[118]

Financial Performance - Total revenue for 2018 reached RMB 2,520,906 thousand, representing a 14.39% increase from RMB 2,203,726 thousand in 2017[9] - Gross profit for 2018 was RMB 1,802,960 thousand, up 15.50% from RMB 1,561,023 thousand in 2017[9] - Net profit for 2018 increased by 12.26% to RMB 272,314 thousand, compared to RMB 242,583 thousand in 2017[9] - Operating profit for 2018 was RMB 323,711 thousand, reflecting a 5.59% increase from RMB 306,561 thousand in 2017[9] - Basic earnings per share for 2018 were RMB 56, up from RMB 52 in 2017[9] - Cash flow from operating activities for 2018 was RMB 400,045 thousand, a significant increase of 167.45% from RMB 149,578 thousand in 2017[9] - The gross margin for 2018 was 71.52%, compared to 70.84% in 2017, indicating a slight improvement[9] - The company's revenue for the year ended December 31, 2018, reached RMB 2,520.91 million, representing a growth of 14.39% compared to 2017[15] - The net profit attributable to shareholders for 2018 was RMB 272.31 million, an increase of 12.26% from the previous year[15] - Total revenue for the year ended December 31, 2018, was RMB 2,520.91 million, an increase of 14.39% or RMB 317.18 million compared to RMB 2,203.73 million for the year ended December 31, 2017[26] Retail Operations - The company operated 862 retail stores as of December 31, 2018, including 641 directly operated stores and 221 operated by distributors[3] - The company operated 862 retail stores across 31 provinces and municipalities in China, with 641 directly operated and 221 operated by distributors[15] - Directly operated retail stores generated revenue of RMB 2,044.02 million, accounting for 81.08% of total revenue, with a 10.90% increase from RMB 1,843.04 million in 2017[46] - The company expanded its distribution network, adding 74 new retail stores operated by distributors in 2018, which generated RMB 257.42 million in revenue, a 31.96% increase from 2017[47] - In 2018, the company opened 172 new retail stores (98 direct-operated) and closed 99 stores (70 direct-operated), resulting in a net increase of 73 stores, bringing the total to 862 stores by December 31, 2018[55] E-commerce Performance - E-commerce revenue for 2018 reached RMB 208 million, showing a significant growth of 33.89% year-on-year[15] - E-commerce revenue for the year ended December 31, 2018, was RMB 208.03 million, a 33.89% increase from RMB 155.37 million for the year ended December 31, 2017[26] - The e-commerce platform Tmall contributed RMB 161.85 million to e-commerce revenue, representing 77.80% of total e-commerce revenue, with a 25.01% increase from RMB 129.47 million in 2017[47] Market Strategy - The company plans to optimize brand positioning and explore opportunities for new store openings in Hong Kong and Macau[18] - The company aims to enhance its product offerings and improve distribution structures to expand its market presence[16] - The company is leveraging online resources to promote an omnichannel strategy and optimize supply chain management to reduce procurement costs[16] - The company aims to continue expanding its high-end women's fashion brands to meet diverse customer needs and preferences[42] - The company plans to implement a multi-brand strategy through quality and scale acquisitions, aiming to diversify its mid-to-high-end product offerings in 2019[63] Financial Ratios and Liquidity - The current ratio for 2018 was 3.03, up from 2.80 in 2017, indicating improved liquidity[10] - The debt-to-equity ratio decreased to 7.92% in 2018 from 14.28% in 2017, reflecting a stronger financial position[10] Expenses and Costs - Selling and distribution expenses for the year ended December 31, 2018, were RMB 1,367.66 million, a 20.04% increase from RMB 1,139.34 million for the year ended December 31, 2017[31] - Administrative expenses for the year ended December 31, 2018, were RMB 149.88 million, a 14.03% increase from RMB 131.44 million for the year ended December 31, 2017[32] - Financing costs increased by 275.94% to RMB 7.97 million for the year ended December 31, 2018, compared to RMB 2.12 million for the year ended December 31, 2017[33] Corporate Governance - The board of directors is committed to maintaining high corporate governance standards, ensuring transparency and accountability in operations[77] - The board consists of members with extensive expertise in accounting, finance, and business management, ensuring balanced decision-making[81] - The audit committee, composed of three independent non-executive directors, held three meetings to review accounting principles and internal controls[89] - The company has established a risk management system reviewed by the audit committee[89] - The company believes that good corporate governance is essential for maintaining investor confidence and sustainable development[100] Environmental and Social Responsibility - The company is committed to environmental sustainability, implementing green measures such as double-sided printing and recycling initiatives to reduce waste and promote eco-awareness among employees[119] - The company emphasizes compliance with environmental laws and regulations, aiming to minimize its operational impact on the environment[171] - The company has established a mechanism to monitor suppliers to ensure compliance with environmental regulations, despite not directly controlling every aspect of the product lifecycle[171] - The company is committed to sustainable development and recognizes the importance of stakeholder feedback in its environmental, social, and governance practices[170] Employee Development - The company emphasizes employee development, providing training programs in management skills, sales, production, and quality control to enhance employee skills and motivation[116] - The total employee count increased to 4,933 as of December 31, 2018, up from 4,378 in 2017, with significant growth in product design and R&D personnel from 193 to 241[62] - The average training hours per employee was 3.13 hours, with male employees averaging 12.00 hours and female employees averaging 3.11 hours[186] Future Outlook - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[77] - New product launches are expected to contribute an additional 5% to overall revenue in the upcoming year[77] - Market expansion plans include entering two new international markets, aiming for a 15% increase in market share[77] Risk Management - The company is committed to establishing a risk management system to monitor and improve operational risk management as the business grows[64] - The company is aware of macroeconomic risks that could affect consumer spending on non-essential items, potentially leading to decreased demand for its products[111]