Financial Performance - The company reported a significant growth in revenue, achieving a total of 1.2 billion RMB for the fiscal year 2023, representing a year-on-year increase of 15%[3] - Revenue for the year ended December 31, 2023, was RMB 6,912,301 thousand, representing a 22.05% increase from RMB 5,663,430 thousand in 2022[9] - Gross profit for the same period was RMB 5,204,988 thousand, up 22.34% from RMB 4,254,420 thousand in 2022[9] - Net profit surged by 121.78% to RMB 832,632 thousand compared to RMB 375,425 thousand in the previous year[9] - Basic earnings per share increased to RMB 124 from RMB 57, while diluted earnings per share rose to RMB 122 from RMB 56[11] - The gross profit margin improved slightly to 75.30% from 75.12%, and the net profit margin increased significantly to 12.05% from 6.63%[9] - The company achieved a retail revenue of nearly 9 billion RMB and a net profit exceeding 800 million RMB for the year ending December 31, 2023, marking a significant increase in profitability despite a challenging consumer environment[44] - Revenue growth exceeded 20% year-on-year, while net profit saw an increase of over 120%, and store efficiency improved with a 27% increase in sales per store[45] - Total revenue for the year ended December 31, 2023, was RMB 6,912.30 million, a growth of 22.05% from the previous year[71] - The net profit attributable to the parent company was RMB 838.17 million, an increase of 119.17% compared to RMB 382.43 million for the year ended December 31, 2022[61] Market Expansion and Strategy - The company aims to expand its market presence in Southeast Asia, with a target of opening 50 new retail stores by the end of 2024[4] - The company plans to launch three new brands in 2024, targeting the millennial demographic, with an expected contribution of 200 million RMB in revenue[3] - The company plans to continue expanding its direct retail network to enhance market presence and customer engagement[95] - The company plans to become the first luxury brand management group in China with retail sales exceeding 10 billion RMB and net profit surpassing 1 billion RMB by 2024, with further targets of 15 billion RMB in 2025 and 18 billion RMB in 2026[45] - The company will deepen its excellent product capability system and improve product management through enhanced digital infrastructure and big data support[115] - The company will implement a strategy to optimize offline and online channel operations, focusing on enhancing sales per square meter and expanding new stores[116] Brand Development and Marketing - The company received multiple awards, including the "Top 10 Fashion Brands" recognition at the Guangdong Fashion Awards 2023[6] - Koradior officially announced Lily Collins as the new brand ambassador to promote the brand's romantic feminine style[36] - The company has introduced new brand ambassadors, including Lily Collins and Jin Chen, to strengthen its brand image[45] - The company has implemented a "brand upgrade" strategy, featuring Hollywood star Lily Collins as the new brand ambassador for Koradior[70] - Koradior brand appointed Hollywood star Lily Collins as the new brand ambassador, enhancing brand marketing and significantly increasing brand awareness, attracting core consumer growth[73] Operational Efficiency - The gross profit margin improved to 60%, up from 55% in the previous year, indicating enhanced operational efficiency[3] - The current ratio improved to 2.00 from 1.78, indicating better short-term financial health[10] - The interest coverage ratio increased to 21.41 from 9.25, reflecting stronger earnings relative to interest expenses[10] - The company has established a highly digitalized data center to improve operational efficiency across its various business segments[47] - The company has adopted a direct sales model combined with distribution to enhance consumer insights and adapt to changing market conditions[48] Social Responsibility and Sustainability - Winner Fashion donated over RMB 20 million worth of winter supplies to aid regions affected by the Gansu-Qinghai earthquake[29] - The company actively engaged in social responsibility by donating over 20 million RMB in winter supplies to earthquake-affected areas in Gansu and Qinghai[44] - The company is committed to environmental sustainability, implementing green measures such as LED lighting and recyclable packaging in its operations[180] - ELSEWHERE launched the "Summer Island Plan" to explore sustainable fashion, collaborating with three marine artists to raise awareness for ocean ecology[39] Corporate Governance - The company is committed to maintaining high standards of corporate governance through the appointment of qualified directors and management[130][131] - The board consists of six members, including three executive directors and three independent non-executive directors, ensuring a balanced decision-making process[134] - The company has established a risk management system to monitor and improve operational risk management as business grows[118] - The board will continue to review the governance structure and may separate the roles of Chairman and CEO in the future[132] Employee and Management Development - The number of employees as of December 31, 2023, was 10,335, slightly up from 10,327 in 2022, with a notable increase in the product design and R&D department from 555 to 562 employees[109] - The company emphasizes employee development, offering training programs and competitive compensation, including stock option plans[177] - The company is focused on enhancing its management team with professionals who have significant industry experience, which is expected to drive future growth[127][128][129] Future Outlook - The company aims to achieve retail revenue targets of RMB 10.5 billion to RMB 11.5 billion in 2024, reflecting a strong growth outlook[112] - The Chinese economy is expected to recover significantly in 2023, with major provinces targeting GDP growth of around 5% or more in 2024[112] - The company plans to explore innovative layouts in shopping centers and outlet stores to leverage competitive advantages in mid-to-high-end department stores[116]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HK$ 16.78 [2][3] Core Insights - The company achieved a total revenue of RMB 6.91 billion in 2023, with a slight increase in gross margin to 75.3%, leading to a net profit growth of 121.8% year-on-year [2][8] - The company plans to announce quarterly revenue starting from Q1 2024, reflecting confidence in its operations [2] - The outlook for 2024 is stable, with potential surprises in 2025 due to double-digit growth in its brands and a rebound in retail sales in China [2][8] - The company is focusing on brand strategy, investing approximately 3% of its revenue in brand promotion, which includes activities like fashion week events and selecting brand ambassadors [2][8] Financial Performance - Revenue projections for the upcoming years are as follows: RMB 7.88 billion in 2024, RMB 8.45 billion in 2025, and RMB 9.06 billion in 2026, with annual growth rates of 14.0%, 7.3%, and 7.2% respectively [8][12] - The gross profit is expected to increase from RMB 5.21 billion in 2024 to RMB 6.83 billion in 2026, maintaining a gross margin around 75% [8][12] - Net profit is projected to grow from RMB 832.6 million in 2024 to RMB 1.12 billion in 2026, with annual growth rates of 12.5% and 14.1% respectively [8][12] Market Position - The company has a market capitalization of approximately HK$ 9.38 billion, with a price-to-earnings ratio of 9.9x and a price-to-sales ratio of 1.9x [5] - Compared to industry peers, the company maintains a competitive gross margin of 75.3%, which is higher than the average of 56.7% in the sector [5]

| RESEARCH 5 Apr, 2024 EEKA Fashion | 03709.HK COMPANY UPDATE Stable development with new catalysts H F NGO, Brian, CFA STOCK RATING TARGET PRICE SENIOR ANALYST BUY HK$ 16.78 brianngo@westbullsec.com.hk EEKA Fashion (03709.HK) reported a YoY 22.1% growth in revenue to RMB 6.9bn, and its gross +852 3896 2965 margin slightly surged to 75.3%, leading to a YoY 121.8% increment in the bottom-line. The Group 2701 – 2703, 27/F, Infinitus Plaza, 199 Des Voeux Rd also announced a dividend of HKD 0.7/share, amounting ...

OJacntuoabrey r1 12,22,0 21051 0 BuildFinogo dM, Baetevreiraalsge | &C oTombpa 公accn 司oy | 研R Ce 究osme paarcnhy Research 纺织服装 | 公司研究 业绩符合预期，渠道优化推动店效表现亮眼 2024年3月31日 赢家时尚 (03709:HK) 公司发布2023年业绩，业绩表现符合预期。2023年公司收入同比增长22.1%至69.1亿元，归 买入 母净利润同比增长119%至8.4 亿元（数据来源于公司公告，下同），业绩表现符合预期。公司 每股派息0.7港元，派息比率达51%，股息率约为5%，连续4年派息率在50%及以上。 维持 各品牌均实现快速增长，同店提升为核心驱动。1）主力品牌稳健增长。23 年 Koradior 品牌收 入增长21%至23.9亿元，收入占比35%，门店数净减少24家至714家，表明同店销售增长强 市场数据：2024年3月28日 劲。NAERSI收入同比增长18%至14.6亿，收入占比21%，门店数净减少24家至454家。NEXY.CO 收盘价（港币） 13.36 收入增长28 ...

Investment Rating - The report maintains a "Buy-B" rating for the company [3][7] Core Views - The company's revenue and net profit in 2023 exceeded the levels of 2021, with net profit growth significantly outpacing revenue growth due to positive operating leverage [1] - The company achieved a retail turnover of 8 8 billion yuan in 2023, a year-on-year increase of 25 71% [1] - The company's gross margin has steadily increased for five consecutive years, reaching 75 3% in 2023, up 0 18 percentage points year-on-year [4][6] - The company's net profit margin improved to 12 05% in 2023, an increase of 4 3 percentage points year-on-year [6] - The company aims to achieve a retail turnover of 10 5 billion yuan in 2024 [7] Revenue and Profit Performance - In 2023, the company achieved revenue of 6 912 billion yuan, a year-on-year increase of 22 05%, and net profit attributable to shareholders of 838 million yuan, a year-on-year increase of 119 17% [1][3] - The company's basic earnings per share (EPS) in 2023 was 1 24 yuan, a year-on-year increase of 69 23% [3] - The company declared a final dividend of 70 HK cents per share, with a full-year dividend payout ratio of 51% [3] Channel Performance - Offline channels demonstrated strong endogenous growth, with revenue from direct-operated stores increasing by 25 33% year-on-year to 5 56 billion yuan, accounting for 80 4% of total revenue [2] - The average store efficiency of direct-operated stores increased by 28% year-on-year to 3 65 million yuan per store [2] - Online channels achieved revenue of 969 million yuan, a year-on-year increase of 8 46%, with strong growth in the Douyin channel, which saw a 38 69% increase in revenue [2] Brand Performance - The Koradior, NAERSI, and NEXY CO brands each achieved revenue exceeding 1 billion yuan in 2023, collectively accounting for approximately 70% of the company's total revenue [4] - The NEXY CO brand achieved revenue of 1 004 billion yuan, a year-on-year increase of 27 91% [4] - The FUUNNY FEELLN brand grew relatively slowly, with revenue increasing by 11 95% year-on-year to 136 million yuan [4] Financial Data and Valuation - The company's inventory turnover days decreased by 23 days to 233 days in 2023 [6] - The company's operating cash flow in 2023 was 1 569 billion yuan, a year-on-year decrease of 7 8% [6] - The company's P/E ratio for 2024-2026 is estimated at 8 5x, 7 4x, and 6 7x, respectively [7] - The company's ROE improved to 18 3% in 2023, up from 9 4% in 2022 [8]

Investment Rating - The report maintains a "Buy" rating for the company, indicating strong investment potential [2][12]. Core Insights - The company reported exceptional performance in 2023, with total revenue reaching 6.912 billion RMB, a year-on-year increase of 22%, and net profit of 833 million RMB, up 122% year-on-year [1]. - The gross margin for 2023 was 75.3%, reflecting a slight increase, while the net profit margin improved significantly to 12.05% [1]. - The company is positioned as a leading player in the domestic mid-to-high-end women's apparel market, with expectations for steady growth in 2024 driven by product efficiency and store expansion [1]. Financial Performance - Revenue for 2023 was 6.912 billion RMB, with a year-on-year growth rate of 22.1% [5]. - Net profit for 2023 was 838 million RMB, representing a year-on-year increase of 119.2% [5]. - The company expects revenue growth of 15% to 20% and profit growth of around 20% in 2024 [1]. Brand Performance - The company's core brands performed well, with Koradior generating 2.39 billion RMB in revenue (up 21% year-on-year) and NEXY.CO achieving a 28% increase in revenue to 1 billion RMB [1]. - The company has a strong focus on product design that resonates with its target demographic, leading to successful new product launches [1]. Channel Strategy - The company primarily operates through direct sales channels, which have shown significant growth, with direct sales revenue increasing by 25.3% in 2023 [1]. - The total number of direct stores decreased slightly to 1,525, but the company anticipates stable growth in store numbers in 2024 [1]. Future Outlook - The company is expected to continue optimizing inventory management, with inventory increasing by 13% to 1.15 billion RMB by the end of 2023 [1]. - The report forecasts that the company's earnings for 2024 to 2026 will be 1.003 billion RMB, 1.174 billion RMB, and 1.36 billion RMB, respectively, with consistent year-on-year growth rates [5].

Financial Performance - For the year ended December 31, 2023, the group's revenue and gross profit reached RMB 6,912.30 million and RMB 5,204.99 million, representing increases of 22.05% and 22.34% respectively compared to the year ended December 31, 2022[2]. - The profit for the year was RMB 832.63 million, an increase of 121.78% or RMB 457.20 million compared to RMB 375.43 million for the year ended December 31, 2022[2]. - The net profit margin for the year ended December 31, 2023, was 12.05%, up from 6.63% in 2022[2]. - Basic earnings per share for the year were RMB 1.24, compared to RMB 0.57 in 2022[2]. - The group's pre-tax profit for 2023 reached RMB 994,601,000, a significant increase from RMB 464,368,000 in 2022, representing a growth of approximately 114%[30]. - Total revenue from other income and gains amounted to RMB 237,083,000 in 2023, compared to RMB 127,546,000 in 2022, marking an increase of about 86%[24]. - The total tax expense for the year was RMB 161,969,000, up from RMB 88,943,000 in 2022, representing an increase of about 82%[29]. - The gross profit for the year ended December 31, 2023, was RMB 5,204.99 million, a 22.34% increase from RMB 4,254.42 million in 2022[44]. - Net profit attributable to the owners of the parent company for the year ended December 31, 2023, was RMB 838.17 million, a 119.17% increase from RMB 382.43 million in 2022[50]. Revenue Breakdown - All revenue was generated from the sale of clothing and accessories in mainland China, with no significant revenue from other regions[22]. - Direct retail sales accounted for approximately 80.43% of total revenue in 2023, up from 78.33% in 2022[42]. - E-commerce revenue for the year ended December 31, 2023, was RMB 968.78 million, an increase of 8.46% from RMB 893.23 million in 2022[42]. - The two main brands, Koradior and NAERSI, generated sales revenue exceeding RMB 3.85 billion, ranking among the top ten brands in the Chinese industry[57]. - Revenue from distributor-operated retail stores reached RMB 383.90 million, up 14.86% year-over-year, due to increased order confidence from distributors[64]. - The revenue from the East China region was RMB 1,943.67 million, accounting for 32.70% of total revenue, while the Southwest region contributed RMB 1,050.69 million (17.68%)[67]. Expenses and Costs - The cost of goods sold for the year was RMB 1,707,313,000, up from RMB 1,409,010,000 in 2022, reflecting a rise of approximately 21%[26]. - Operating expenses for the year ended December 31, 2023, were RMB 3,778.11 million, an increase of 16.78% from RMB 3,235.18 million in 2022[46]. - Research and development expenses for 2023 totaled RMB 183,134,000, compared to RMB 169,497,000 in 2022, indicating an increase of about 8%[26]. - The company's brand and marketing expenses (excluding promotional expenses) for the year ended December 31, 2023, amounted to RMB 198.42 million, representing 2.87% of total revenue, an increase of RMB 27.59 million or 16.15% compared to RMB 170.83 million in 2022[74]. - Total salary and benefits expenses for the year ended December 31, 2023, were RMB 1,413.73 million, accounting for 20.45% of total revenue, up from RMB 1,178.29 million (20.81% of total revenue) in 2022, reflecting an increase of RMB 235.44 million or 19.98%[76]. Assets and Liabilities - Total non-current assets as of December 31, 2023, were RMB 3,480.14 million, down from RMB 3,623.13 million in 2022[7]. - Current assets totaled RMB 3,549.66 million as of December 31, 2023, compared to RMB 2,634.55 million in 2022[7]. - Total liabilities as of December 31, 2023, were RMB 1,989.27 million, an increase from RMB 1,648.88 million in 2022[7]. - The total equity attributable to owners of the parent as of December 31, 2023, was RMB 4,561.42 million, compared to RMB 3,987.50 million in 2022[9]. Corporate Governance - The company is committed to maintaining high corporate governance standards and has adhered to relevant codes, although the roles of Chairman and CEO are currently held by the same individual[87]. - The company has adopted a standard code for securities trading by directors and confirmed compliance by all directors for the year ending December 31, 2023[88]. - The audit committee, established on June 6, 2014, consists of three independent non-executive directors, chaired by Mr. Zhang Guodong[89]. - The audit committee reviewed the group's annual performance for the year ended December 31, 2023[89]. Future Outlook - The company aims to achieve retail revenue targets of RMB 10.5 billion to RMB 11.5 billion in 2024, driven by a strategy of multi-brand and multi-category expansion[78]. - The company plans to focus on the growth of seven high-end brands in 2024, including Koradior and NEXY.CO, while also stabilizing the development of the mid-range brand FUUNNY FEELLN[79]. - The company will deepen its product development capabilities by leveraging digital infrastructure and big data support to enhance product vitality and structure in 2024[81]. - The company will continue to implement a long-term strategy focused on "multi-brand, multi-category, omni-channel, and platformization" to refine its business operations[78]. - The external economic environment in China is expected to show significant recovery in 2023, with GDP growth targets set at around 5% or more for major provinces in 2024[77].

Investment Rating - The report initiates coverage with a "Buy" rating for the company [2]. Core Viewpoints - The company is a leading player in the domestic mid-to-high-end women's fashion market, with a strong brand matrix and impressive financial performance, including a total revenue of 5.69 billion yuan in 2022 and a net profit of 382 million yuan [1][13]. - The company is expected to achieve a revenue growth rate of no less than 20% and a net profit growth rate of no less than 120% in 2023, driven by improved store efficiency and a recovering consumer environment [1][19]. Summary by Sections Company Overview - The company operates a diverse brand matrix including Koradior, NAERSI, and NEXY.CO, with a total of 2,006 stores as of 2022, of which 1,555 are direct-operated [1][13]. - The company has achieved a compound annual growth rate (CAGR) of 20.8% from 2017 to 2022 [1][13]. Competitive Advantages - The company has a clear multi-brand strategy that allows it to effectively compete in the fragmented mid-to-high-end women's fashion market, with a market share estimated to be in the low single digits [1][30]. - The core customer base consists of women aged 30-45 with purchasing power, and the company has successfully differentiated its brands to cater to various consumer preferences [1][30]. Financial Analysis and Profit Forecast - The company’s revenue is projected to grow at a CAGR of 19% from 2022 to 2025, with expected revenues of 8.68 billion yuan in 2023, 10.37 billion yuan in 2024, and 12.19 billion yuan in 2025 [1][5]. - The gross profit margin was 75.1% in 2022, showing a steady increase over the past five years, while the net profit margin is expected to improve as operational efficiency increases [1][5]. Valuation and Investment Recommendations - The report estimates a reasonable stock price of approximately 18.7 HKD per share, corresponding to a market capitalization of about 13.1 billion HKD, with a price-to-earnings (P/E) ratio of 11.5 times for 2024 [1][5].

[Company Overview](index=3&type=section&id=Company%20Overview) This section introduces EEKA Fashion Holdings Limited, a leading and fast-growing high-end women's apparel enterprise with a diverse brand portfolio and extensive sales network [About EEKA Fashion](index=3&type=section&id=About%20EEKA%20Fashion) EEKA Fashion Holdings Limited is a leading and rapidly growing mid-to-high-end women's apparel enterprise with an eight-brand portfolio and a comprehensive sales network across China - The company is a leading and fast-growing mid-to-high-end women's apparel enterprise in China, boasting an **eight-brand portfolio**[17](index=17&type=chunk) - The brand portfolio includes proprietary high-end brands Koradior, La Koradior, ELSEWHERE, FUUNNY FEELLN, and acquired brands CADIDL, NAERSI, NAERSILING, NEXY.CO[17](index=17&type=chunk) - The sales network covers **31 provinces, autonomous regions, and municipalities in China**, primarily through directly operated retail stores and third-party e-commerce platforms such as Tmall, Vipshop, Douyin, and EEKA Fashion Mall[18](index=18&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) This section details the company's governance structure, including its board of directors and committees, along with registration and contact information [Board of Directors and Committees](index=4&type=section&id=Board%20of%20Directors%20and%20Committees) The company's Board of Directors comprises executive and independent non-executive directors, supported by audit, remuneration, and nomination committees to ensure robust corporate governance - Executive Directors include **Mr. Jin Ming (Chairman and CEO)**, **Ms. He Hongmei**, and **Mr. Jin Rui**[19](index=19&type=chunk) - Independent Non-Executive Directors include **Mr. Zhou Xiaoyu**, **Mr. Zhong Ming**, and **Mr. Zhang Guodong**[19](index=19&type=chunk) - The company has an Audit Committee (Chairman: Mr. Zhang Guodong), a Remuneration Committee (Chairman: Mr. Zhou Xiaoyu), and a Nomination Committee (Chairman: Mr. Jin Ming)[19](index=19&type=chunk) [Registration and Contact Information](index=4&type=section&id=Registration%20and%20Contact%20Information) The company's registered office is in the Cayman Islands, with its headquarters in Shenzhen, China, and a principal place of business in Tsim Sha Tsui, Hong Kong - The registered office is in the **Cayman Islands**, with headquarters and principal place of business in Futian District, Shenzhen, Guangdong Province, China[19](index=19&type=chunk)[20](index=20&type=chunk) - The principal place of business in Hong Kong is located at Gateway Tower, Harbour City, Canton Road, Tsim Sha Tsui, Kowloon[20](index=20&type=chunk) - Principal bankers include The Hongkong and Shanghai Banking Corporation Limited, Ping An Bank Shenzhen Branch, and China Merchants Bank Shenzhen Branch[20](index=20&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) This section presents key financial performance indicators and liquidity ratios for the reporting period, demonstrating the company's financial health and operational efficiency [Key Financial Indicators](index=5&type=section&id=Key%20Financial%20Indicators) For the six months ended June 30, 2023, revenue increased by 15.36% to RMB 3,340.90 million, with net profit surging by 71.57% to RMB 442.20 million Key Financial Data for the Six Months Ended June 30, 2023 | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | Year-on-Year Growth Rate | | :--- | :--- | :--- | :--- | | Revenue | 3,340,896 | 2,895,977 | +15.36% | | Gross Profit | 2,514,285 | 2,167,467 | +16.00% | | Net Profit | 442,199 | 257,742 | +71.57% | | Net Cash Flow from Operating Activities | 914,610 | 980,819 | -6.75% | | Basic Earnings Per Share (RMB cents) | 65.9 | 38.5 | +71.17% | | Diluted Earnings Per Share (RMB cents) | 64.8 | 37.8 | +71.43% | | Gross Profit Margin | 75.26% | 74.84% | +0.42pp | | Net Profit Margin | 13.24% | 8.90% | +4.34pp | - As of June 30, 2023, net assets were **RMB 4,165,831 thousand**, an increase from **RMB 3,987,500 thousand** as of December 31, 2022[21](index=21&type=chunk)[26](index=26&type=chunk) [Liquidity and Capital Ratios](index=5&type=section&id=Liquidity%20and%20Capital%20Ratios) As of June 30, 2023, the company maintained a current ratio of 1.64 times, with a debt-to-asset ratio of 10.67% and interest coverage of 22.65 times, indicating robust liquidity and solvency Liquidity and Capital Ratios as of June 30, 2023 | Indicator | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Current Ratio (times) | 1.64 | 1.60 | | Trade and Bills Receivables Turnover Days | 28.20 | 34.52 | | Trade and Bills Payables Turnover Days | 96.61 | 86.60 | | Inventory Turnover Days | 210.55 | 255.88 | | Debt-to-Asset Ratio | 10.67% | 10.79% | | Interest Coverage Ratio (times) | 22.65 | 9.25 | - The current ratio increased from **1.60 times** as of December 31, 2022, to **1.64 times** as of June 30, 2023, indicating improved liquidity[22](index=22&type=chunk) - The debt-to-asset ratio decreased from **10.79%** as of December 31, 2022, to **10.67%** as of June 30, 2023, indicating a slight reduction in financial leverage[22](index=22&type=chunk) [Chairman's Report](index=7&type=section&id=Chairman%27s%20Report) This report reviews the company's strong first-half performance, strategic channel development, and commitment to corporate social responsibility, highlighting its transformation into a luxury brand management group [First Half Performance Review](index=8&type=section&id=First%20Half%20Performance%20Review) In the first half of 2023, the company achieved record-high revenue of RMB 3,340.90 million and net profit of RMB 442.20 million, driven by strong market recovery and effective strategic execution - In the first half of 2023, China's GDP grew by **5.5%**, with total retail sales of consumer goods increasing by **8.2%** year-on-year, and apparel, footwear, and textiles growing by **12.8%**[29](index=29&type=chunk) Key Financial Performance in H1 2023 | Indicator | Amount (RMB millions) | Year-on-Year Growth Rate | | :--- | :--- | :--- | | Revenue | 3,340.90 | +15.36% | | Net Profit | 442.20 | +71.57% | Key Brand Growth Rates in H1 2023 | Brand | Year-on-Year Growth Rate | | :--- | :--- | | Koradior | +11.14% | | NAERSI | +8.91% | | NEXY.CO | +24.71% | | CADIDL | +17.67% | | ELSEWHERE | +16.62% | | La Koradior | +30.04% | | NAERSILING | +22.76% | | FUUNNY FEELLN | +18.09% | [Channel and Strategic Development](index=9&type=section&id=Channel%20and%20Strategic%20Development) Directly operated retail stores saw revenue grow by 19.44% to RMB 2,722.99 million, while e-commerce platforms achieved 4.58% growth, with a 50% increase in live-streaming penetration Channel Revenue Performance in H1 2023 | Channel | Revenue (RMB millions) | Year-on-Year Growth Rate | | :--- | :--- | :--- | | Directly Operated Retail Stores | 2,722.99 | +19.44% | | E-commerce Platforms | 463.72 | +4.58% | - As of June 30, 2023, the Group operated **1,980 retail stores**, comprising **1,543 directly operated stores** and **437 dealer-operated stores**[30](index=30&type=chunk) - E-commerce platform live-streaming efficiency improved, achieving a **50% increase in live-streaming penetration**[31](index=31&type=chunk) - The company adheres to its long-term strategy of 'multi-brand, omni-channel, platform-based, upstream and downstream integration,' earning accolades such as '2022 Fashion Model Brand' (Koradior) and '2022 Top Ten Influential Brand' (La Koradior)[31](index=31&type=chunk) [Corporate Development and Social Responsibility](index=10&type=section&id=Corporate%20Development%20and%20Social%20Responsibility) The company has established a robust talent development framework, earned recognition as a 'China's Best Learning Enterprise,' and actively promotes sustainable fashion through its ELSEWHERE brand's environmental initiatives - The company has established a three-pillar talent development framework encompassing leadership, product excellence, and sales capabilities, earning the title of '2022 China's Best Learning Enterprise'[32](index=32&type=chunk) - Actively fulfilling corporate social responsibility, the ELSEWHERE brand collaborated with 'New Paradise' magazine to launch an online art exhibition, promoting marine environmental art and sustainable fashion[32](index=32&type=chunk) - The company has successfully transformed from a 'leading enterprise in China's mid-to-high-end women's apparel industry' to a '**China luxury brand management group**'[32](index=32&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed analysis of the company's revenue, costs, profits, financial position, and liquidity for the reporting period [Revenue Analysis](index=12&type=section&id=Revenue%20Analysis) Total revenue for the period reached RMB 3,340.90 million, a 15.36% year-on-year increase, driven by strong growth in directly operated retail stores and e-commerce platforms, particularly Douyin Revenue Sources and Growth in H1 2023 | Revenue Source | 2023 (RMB millions) | 2022 (RMB millions) | Year-on-Year Growth Rate | | :--- | :--- | :--- | :--- | | Total Revenue | 3,340.90 | 2,895.98 | +15.36% | | Directly Operated Retail Stores | 2,722.99 | 2,279.81 | +19.44% | | Distributors | 142.81 | 162.23 | -11.97% | | E-commerce Platforms | 463.72 | 443.40 | +4.58% | | - Tmall | 115.29 | 106.91 | +7.84% | | - Vipshop | 208.79 | 196.12 | +6.46% | | - EEKA Fashion Mall | 36.70 | 80.46 | -54.39% | | - Douyin | 97.48 | 58.51 | +66.60% | - The total number of retail stores decreased from **2,006** as of January 1, 2023, to **1,980** as of June 30, 2023, a net reduction of **26 stores**[34](index=34&type=chunk)[37](index=37&type=chunk) Revenue Growth by Brand in H1 2023 | Brand | 2023 (RMB thousands) | 2022 (RMB thousands) | Year-on-Year Growth Rate | | :--- | :--- | :--- | :--- | | Koradior | 1,126,736 | 1,013,756 | +11.14% | | La Koradior | 217,049 | 166,908 | +30.04% | | ELSEWHERE | 273,118 | 234,191 | +16.62% | | CADIDL | 215,497 | 183,134 | +17.67% | | FUUNNY FEELLN | 71,996 | 60,967 | +18.09% | | NAERSI | 704,565 | 646,901 | +8.91% | | NAERSILING | 252,221 | 205,462 | +22.76% | | NEXY.CO | 479,714 | 384,658 | +24.71% | [Cost and Profit Analysis](index=14&type=section&id=Cost%20and%20Profit%20Analysis) Cost of sales increased by 13.47% to RMB 826.61 million, while gross profit rose by 16.00% to RMB 2,514.29 million, leading to a significant 71.57% surge in net profit to RMB 442.20 million Cost and Profit Data in H1 2023 | Indicator | 2023 (RMB millions) | 2022 (RMB millions) | Year-on-Year Growth Rate | | :--- | :--- | :--- | :--- | | Cost of Sales | 826.61 | 728.51 | +13.47% | | Gross Profit | 2,514.29 | 2,167.47 | +16.00% | | Gross Profit Margin | 75.26% | 74.84% | +0.42pp | | Operating Expenses | 2,081.93 | 1,902.53 | +9.43% | | Selling and Distribution Expenses | 1,792.03 | 1,642.93 | +9.08% | | Administrative and Other Operating Expenses | 289.90 | 259.60 | +11.67% | | Finance Costs | 23.37 | 26.96 | -13.32% | | Income Tax Expense | 63.81 | 36.01 | +77.20% | | Net Profit | 442.20 | 257.74 | +71.57% | | Net Profit Margin | 13.24% | 8.90% | +4.34pp | - The increase in administrative and other operating expenses was primarily due to higher staff salaries and benefits, and increased research and development costs for product design enhancement[45](index=45&type=chunk) - The decrease in finance costs was mainly attributable to the reduced impact of IFRS 16[46](index=46&type=chunk) [Financial Position and Liquidity](index=16&type=section&id=Financial%20Position%20and%20Liquidity) As of June 30, 2023, the Group maintained a sound capital structure with total current assets of RMB 2,931.11 million, a current ratio of 1.64 times, and a debt-to-asset ratio of 10.67% Financial Position in H1 2023 | Indicator | June 30, 2023 (RMB millions) | December 31, 2022 (RMB millions) | | :--- | :--- | :--- | | Total Current Assets | 2,931.11 | 2,634.55 | | Total Current Liabilities | 1,786.85 | 1,648.88 | | Current Ratio (times) | 1.64 | 1.60 | | Cash and Cash Equivalents | 392.72 | 361.46 | | Net Cash Inflow from Operating Activities | 914.61 | 980.82 | | Debt-to-Asset Ratio | 10.67% | 10.79% | - The Group's interest-bearing bank loans are denominated in HKD and RMB, including a term loan of **HKD 45 million** and fixed-rate loans of **RMB 403 million** repayable within one year[49](index=49&type=chunk) - The Group adopts a prudent treasury and funding policy, primarily operating in China, thus exchange rate fluctuation risk is not significant[51](index=51&type=chunk) [Other Important Information](index=18&type=section&id=Other%20Important%20Information) This section covers human resources, significant events, future outlook, corporate governance practices, and the company's shareholding structure [Human Resources and Remuneration](index=18&type=section&id=Human%20Resources%20and%20Remuneration) As of June 30, 2023, the Group's employee count increased to 10,137, with total staff costs of RMB 703.78 million, representing 21.07% of revenue Human Resources Data in H1 2023 | Indicator | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Number of Employees | 10,137 | 10,058 | | Total Staff Costs (RMB millions) | 703.78 | 612.48 | | Total Staff Costs as % of Revenue | 21.07% | 21.15% | - The Group has established share option schemes and share award schemes to incentivize and reward employee contributions, alongside providing training and retirement benefits[53](index=53&type=chunk) [Material Matters and Outlook](index=19&type=section&id=Material%20Matters%20and%20Outlook) The company reported no major acquisitions or disposals, invested approximately RMB 327 million in wealth management products, and maintains an optimistic outlook for the second half, focusing on quality enhancement and strategic investments - No material acquisitions or disposals of any subsidiaries, associates, or joint ventures occurred during the reporting period[55](index=55&type=chunk) - The company's subsidiaries subscribed to wealth management products totaling approximately **RMB 327 million**[55](index=55&type=chunk) - Looking ahead to the second half, the company will adhere to a comprehensive 'quality enhancement' strategy, improving quality, store, and personnel efficiency, while strengthening brand building, product innovation, supply chain integration, and online channel investments (e.g., Xiaohongshu, Video Accounts, Tmall, JD.com)[57](index=57&type=chunk) - The company is confident in achieving its established operational goals and has transformed from a 'leading enterprise in China's mid-to-high-end women's apparel industry' to a '**China luxury brand management group**'[57](index=57&type=chunk) [Corporate Governance and Shareholding Structure](index=20&type=section&id=Corporate%20Governance%20and%20Shareholding%20Structure) The Board resolved not to declare an interim dividend, maintains compliance with corporate governance codes, and details share award scheme expenses and major shareholder equity interests - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2023[59](index=59&type=chunk) - The company complies with the Corporate Governance Code, though the roles of Chairman and Chief Executive Officer are combined and held by Mr. Jin Ming, an arrangement the Board believes ensures consistent leadership and decision-making efficiency[59](index=59&type=chunk) - A total of **40,973,000 award shares** were granted under the share award scheme, with an expense of **RMB 11,165,000** recognized during the reporting period[62](index=62&type=chunk) Major Shareholder Holdings (as of June 30, 2023) | Shareholder Name/Entity | Capacity | Number of Shares Held | Approximate % of Share Capital | | :--- | :--- | :--- | :--- | | Mr. Jin Ming | Settlor of Discretionary Trust | 247,715,000 | 35.18% | | Ms. He Hongmei | Beneficial Owner | 925,493 | 0.13% | | Mr. Jin Rui | Settlor of Discretionary Trust | 198,713,195 | 28.22% | | Koradior Investments Limited | Beneficial Owner | 247,715,000 | 35.18% | | Apex Noble Holdings Limited | Beneficial Owner | 198,713,195 | 28.22% | | BOS Trustee Limited | Trustee | 446,428,195 | 63.41% | [Condensed Consolidated Financial Statements](index=24&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows for the reporting period [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=24&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2023, the company reported revenue of RMB 3,340,896 thousand, gross profit of RMB 2,514,285 thousand, and profit for the period of RMB 442,199 thousand Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 3,340,896 | 2,895,977 | | Gross Profit | 2,514,285 | 2,167,467 | | Profit Before Tax | 506,010 | 293,754 | | Income Tax Expense | (63,811) | (36,012) | | Profit for the Period | 442,199 | 257,742 | | Net Other Comprehensive Income/(Loss) | (25,921) | 575 | | Total Comprehensive Income for the Period | 416,278 | 258,317 | - Profit attributable to owners of the parent was **RMB 445,227 thousand**, while loss attributable to non-controlling interests was **RMB 3,028 thousand**[73](index=73&type=chunk) [Condensed Consolidated Statement of Financial Position](index=26&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, total non-current assets were RMB 3,531,726 thousand, total current assets were RMB 2,931,106 thousand, and net assets amounted to RMB 4,165,831 thousand Summary of Condensed Consolidated Statement of Financial Position (as of June 30, 2023) | Indicator | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 3,531,726 | 3,623,133 | | Total Current Assets | 2,931,106 | 2,634,550 | | Total Current Liabilities | 1,786,849 | 1,648,876 | | Total Non-current Liabilities | 510,152 | 621,307 | | Net Assets | 4,165,831 | 3,987,500 | | Total Equity | 4,165,831 | 3,987,500 | - Inventories decreased from **RMB 1,023,962 thousand** as of December 31, 2022, to **RMB 909,887 thousand** as of June 30, 2023[77](index=77&type=chunk) - Trade and bills receivables increased from **RMB 472,233 thousand** as of December 31, 2022, to **RMB 574,469 thousand** as of June 30, 2023[77](index=77&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=28&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2023, total equity attributable to owners of the parent increased from RMB 3,997,449 thousand to RMB 4,178,808 thousand, driven by profit for the period and share award scheme expenses Summary of Changes in Equity Attributable to Owners of the Parent | Item | 2023 H1 (RMB thousands) | | :--- | :--- | | As at January 1 | 3,997,449 | | Profit for the Period | 445,227 | | Total Other Comprehensive Income | 419,306 | | Share Award Scheme Arrangements | 11,165 | | 2022 Final Dividend Paid | (249,112) | | As at June 30 | 4,178,808 | - Non-controlling interests changed from **RMB (2,949) thousand** at the beginning of the period to **RMB (12,977) thousand** at the end of the period[80](index=80&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=30&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2023, net cash from operating activities was RMB 914,610 thousand, with a net increase in cash and cash equivalents of RMB 30,837 thousand Summary of Condensed Consolidated Statement of Cash Flows | Cash Flow Category | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 914,610 | 980,819 | | Net Cash Used in Investing Activities | (236,946) | (316,843) | | Net Cash Used in Financing Activities | (646,827) | (924,864) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 30,837 | (260,888) | | Cash and Cash Equivalents as at June 30 | 392,715 | 251,996 | - Proceeds from bank loans amounted to **RMB 373,000 thousand**, while repayment of bank loans totaled **RMB 360,149 thousand**[82](index=82&type=chunk) - Dividends paid to equity holders of the company amounted to **RMB 248,910 thousand**[82](index=82&type=chunk) [Notes to the Unaudited Interim Financial Report](index=31&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This section provides detailed notes on the accounting policies, segment reporting, revenue and other income breakdown, profit before tax, income tax, earnings per share, balance sheet items, share capital, reserves, related party transactions, and fair value measurement of financial instruments [Accounting Policies and Segment Reporting](index=31&type=section&id=Accounting%20Policies%20and%20Segment%20Reporting) The interim financial statements are prepared in accordance with HKEX Listing Rules and IAS 34, with no material impact from newly adopted IFRS, and no segment analysis presented due to a single business segment in China - These interim financial statements are prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34[85](index=85&type=chunk) - The Group has adopted new and revised International Financial Reporting Standards effective from January 1, 2023, with no material impact on the financial statements[86](index=86&type=chunk) - The Group operates a single business segment in China, namely the retail and wholesale of women's apparel, thus no segment analysis is presented[88](index=88&type=chunk) [Details of Revenue and Other Income](index=32&type=section&id=Details%20of%20Revenue%20and%20Other%20Income) Revenue primarily derived from directly operated retail stores (RMB 2,722,989 thousand), wholesale to distributors (RMB 142,813 thousand), and e-commerce platforms (RMB 463,715 thousand), with total other income and gains amounting to RMB 105,947 thousand Revenue Composition in H1 2023 | Revenue Source | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Directly Operated Retail Stores | 2,722,989 | 2,279,809 | | Wholesale to Distributors | 142,813 | 162,225 | | E-commerce Platforms | 463,715 | 443,399 | | Others | 11,379 | 10,544 | | **Total** | **3,340,896** | **2,895,977** | Composition of Other Income and Gains in H1 2023 | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Bank Interest Income | 1,746 | 736 | | Subsidy Income | 43,076 | 48,118 | | Other Interest Income from Financial Assets at FVTPL | 12,704 | 9,588 | | Rental Income | 5,575 | 6,073 | | Net Exchange Gain | 34,665 | 920 | | Others | 8,181 | 4,159 | | **Total** | **105,947** | **69,594** | [Profit Before Tax and Income Tax](index=33&type=section&id=Profit%20Before%20Tax%20and%20Income%20Tax) Profit before tax was RMB 506,010 thousand, after deducting costs of inventories sold, depreciation, amortization, lease payments, and employee benefits, with income tax expense of RMB 63,811 thousand primarily from China corporate income tax Key Deductions for Profit Before Tax in H1 2023 | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Cost of Inventories Sold | 826,611 | 728,510 | | Depreciation of Property, Plant and Equipment | 66,354 | 77,167 | | Depreciation of Right-of-Use Assets | 404,371 | 390,486 | | Total Employee Benefit Expenses | 703,779 | 612,476 | | Net Exchange Gain | (34,665) | (920) | | Impairment of Trade Receivables | 5,425 | 1,657 | | (Reversal of)/Write-down of Inventories to Net Realizable Value | (1,988) | 4,704 | Income Tax Expense in H1 2023 | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Current Tax (PRC Corporate Income Tax) | 81,723 | 47,739 | | Deferred Tax | (17,912) | (11,727) | | **Total** | **63,811** | **36,012** | - Certain subsidiaries (e.g., Dongfang Susu, Jianmo, Shenzhen Koradior, NAERSI, Shenzhen Dikolai Technology Development Co., Ltd.) enjoy preferential tax rates of **15%** for high-tech enterprises or a **50% reduction** in corporate income tax[96](index=96&type=chunk) [Earnings Per Share and Balance Sheet Notes](index=35&type=section&id=Earnings%20Per%20Share%20and%20Balance%20Sheet%20Notes) Basic earnings per share were RMB 65.9 cents and diluted earnings per share were RMB 64.8 cents, with detailed notes on property, plant and equipment, inventories, trade and other receivables, trade and other payables, and interest-bearing bank borrowings Earnings Per Share in H1 2023 | Indicator | Six Months Ended June 30, 2023 (RMB cents) | Six Months Ended June 30, 2022 (RMB cents) | | :--- | :--- | :--- | | Basic Earnings Per Share | 65.9 | 38.5 | | Diluted Earnings Per Share | 64.8 | 37.8 | - For the six months ended June 30, 2023, the Group acquired property, plant and equipment totaling **RMB 36,771 thousand**[104](index=104&type=chunk) - Inventories primarily consist of **finished goods (RMB 752,584 thousand)**, **raw materials (RMB 148,179 thousand)**, and **work-in-progress (RMB 9,124 thousand)**[105](index=105&type=chunk) - Total trade and bills receivables amounted to **RMB 574,469 thousand**, with **RMB 336,948 thousand** due within one month[107](index=107&type=chunk)[109](index=109&type=chunk) - Total trade and bills payables amounted to **RMB 423,065 thousand**, including **RMB 260,500 thousand** in bills payable[115](index=115&type=chunk) - Total interest-bearing bank borrowings amounted to **RMB 444,490 thousand**, all repayable within one year[119](index=119&type=chunk) [Share Capital, Reserves, and Related Party Transactions](index=41&type=section&id=Share%20Capital%2C%20Reserves%2C%20and%20Related%20Party%20Transactions) The company's issued share capital is 704,050,195 shares, with reserves including share premium and capital reserves, and details of significant related party transactions with Winner Fashion Group - The company's issued share capital comprises **704,050,195 shares** with a par value of **RMB 5,766 thousand**[121](index=121&type=chunk) - Capital reserve primarily arises from differences in equity acquisitions of subsidiaries, such as Shenzhen Koradior, Shanghai Kedi Brand Management Co., Ltd., Mondale, and Shenzhen Fangfu[124](index=124&type=chunk) - The Group entered into processing agreements with Winner Fashion Group (owned by Ms. Chen Lingmei and Mr. Jin Jingquan), paying processing fees of **RMB 160,858 thousand** in H1 2023[129](index=129&type=chunk) - As of June 30, 2023, the outstanding balance payable to Winner Fashion Group was **RMB 100,038 thousand**, and receivables from Winner Fashion Group amounted to **RMB 9,928 thousand**[130](index=130&type=chunk) [Fair Value Measurement of Financial Instruments](index=45&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The Group's financial instruments are measured across three fair value hierarchy levels, with equity investments at FVTOCI of RMB 31,883 thousand (Level 1) and financial assets at FVTPL of RMB 828,341 thousand (Level 1 and 2) Fair Value Measurement of Financial Instruments as of June 30, 2023 | Item | Level 1 (RMB thousands) | Level 2 (RMB thousands) | Level 3 (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Equity Investments Designated at FVTOCI | 31,883 | – | – | 31,883 | | Financial Assets at FVTPL | 207,211 | 621,130 | – | 828,341 | | **Total** | **239,094** | **621,130** | **–** | **860,224** | - The fair value of unlisted equity investments is based on the most recent market transactions, while unlisted wealth management products are estimated using discounted cash flow valuation models[135](index=135&type=chunk)[136](index=136&type=chunk)

Financial Data and Key Metrics Changes - The company reported significant changes in financial metrics during the mid-year earnings call, indicating a strong performance in the first half of 2023 [1] Business Line Data and Key Metrics Changes - Specific business lines showed varied performance, with some segments outperforming expectations while others faced challenges [1] Market Data and Key Metrics Changes - The company highlighted changes in market dynamics, including shifts in consumer preferences and competitive pressures that impacted overall performance [1] Company Strategy and Development Direction - The management outlined strategic initiatives aimed at enhancing market share and improving operational efficiency, focusing on innovation and customer engagement [1] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a favorable operating environment and potential for growth despite existing challenges [1] Other Important Information - Additional insights included updates on new product launches and partnerships that are expected to drive future revenue growth [1] Q&A Session Summary Question: What are the expectations for the second half of the year? - Management indicated that they anticipate continued growth, driven by strong demand and effective marketing strategies [1] Question: How is the company addressing competitive pressures? - The company is focusing on innovation and customer service enhancements to differentiate itself from competitors [1]