Summary of the Conference Call for Zhou Li Fu Company Overview - **Company**: Zhou Li Fu - **Industry**: Jewelry and E-commerce Key Points and Arguments Financial Performance - In the first half of 2025, Zhou Li Fu's revenue reached **3.2 billion** yuan, a year-on-year increase of **5%** [3] - Gross profit was over **800 million** yuan, with a year-on-year growth of nearly **10%** [3] - Net profit was **415 million** yuan, reflecting a year-on-year increase of **12%** [3] - For Q3, the growth trend continued, with same-store sales during the National Day holiday increasing by approximately **10%** for direct stores [2][3] E-commerce Growth - E-commerce business saw a significant surge, with GMV during the National Day period increasing by about **70%** year-on-year [2] - For Q3, e-commerce revenue grew by **30%-40%** year-on-year [2] - As of September 2025, the gross margin for e-commerce was maintained at around **21%**, with a net profit margin of approximately **8%** [2][9] Market Position and Strategy - Zhou Li Fu's pricing strategy is slightly lower than competitors like Chow Tai Fook and Chow Sang Sang, but higher than brands like Lao Miao and Da Sheng [2][8] - The company has established long-term partnerships with major platforms like JD and Tmall, with JD accounting for over **50%** of online sales and Tmall close to **30%** [5] - The e-commerce team operates independently, focusing on fast-moving consumer goods strategies rather than merely maintaining brand identity [6] Customer Demographics - Online customers are predominantly younger, with an age cap of **40 years** and a female representation of about **60%** [12] - Offline customers are older, with an age cap above **40 years**, and female representation of **70%-80%** [12] - Average transaction value online is around **1,500-1,600** yuan, while offline it is approximately **4,000** yuan [12] Impact of Gold Prices - Rising gold prices have impacted sales, with self-operated store sales declining by about **10%** and franchise stores remaining stable [7][11] - The company is closely monitoring the market due to external factors affecting sales during the holiday season [7] Future Outlook - Zhou Li Fu anticipates a net profit of **800 million to 850 million** yuan for 2025, with revenue and net profit expected to grow by **10%-15%** in 2026 [4][24] - The company plans to maintain e-commerce net profit margins between **7%-9%** without sacrificing pricing [23] Franchise and Store Development - New franchise stores require an initial investment of approximately **8 million to 10 million** yuan, with a payback period of **3 to 5 years** [20] - The average franchisee operates about **three stores**, and the company has a flexible policy to attract and empower franchisees [19][18] Competitive Advantages - Zhou Li Fu's flexible franchise policies and lower service fees compared to competitors provide a competitive edge [19] - The company has a strong brand presence and trust among consumers, bolstered by its extensive offline store network [13][14] Conclusion - Zhou Li Fu is positioned for continued growth in both its direct and e-commerce channels, with strategic pricing, strong partnerships, and a focus on customer demographics driving its success in the competitive jewelry market.

Core Viewpoint - Huaxin Securities reports that Zhou Shifu (06168), as a leading jewelry enterprise, is continuously optimizing its business model and adjusting product structure according to market demand, while steadily developing the lower-tier market and attempting high-end market strategies, which is expected to drive profit release as brand momentum deepens [1] Industry Overview - The scale of China's jewelry market has increased from 610 billion yuan in 2019 to an estimated 728 billion yuan in 2024, with a CAGR of 3.6%, and is projected to reach 937 billion yuan by 2029, with gold jewelry dominating the market [1] - The industry is experiencing new trends such as "Guochao" (national trend) and IP co-branded products, with companies primarily opening stores to directly face consumers while rapidly expanding online channels [1] - The e-commerce channel for gold jewelry is expected to reach 42.2 billion yuan in 2024, reflecting a 19% year-on-year growth [1] - The current industry concentration remains low, with the CR5 for gold jewelry products at 41%, allowing leading companies to continue gaining market share through brand effects and terminal occupation [1] Company Strategy - The company is located in the core gold jewelry production area of Shuibei, leveraging supply chain advantages at the processing end [2] - The company primarily operates through franchise stores, starting from lower-tier markets and expanding into high-tier cities post-pandemic by opening high-end stores to strengthen brand power [2] - As of the first half of 2025, the company has a total of 3,857 stores, with the number of stores in first and second-tier cities accounting for 50% of the total [2] - The company is effectively capturing traffic from interest e-commerce platforms like Douyin and Xiaohongshu for brand exposure, with online channel revenue reaching 1.63 billion yuan in the first half of 2025, a 34% year-on-year increase [2] - The product strategy includes a full-category and full-scenario coverage approach, launching diverse product series such as Xigu Gold, Yihe Wonderland, and Yixin Yiai, focusing on the core demographic of young women and enhancing the youthful brand image through Guochao IP collaborations [2]

Core Viewpoint - Huaxin Securities reports that Zhou Li Fu (06168), as a leading jewelry enterprise, is continuously optimizing its business model and adjusting product structure according to market demand, while steadily developing the lower-tier market and attempting high-end market strategies, thereby enhancing online channel layouts to capture e-commerce traffic benefits, which is expected to drive profit release as brand momentum deepens [1] Industry Summary - The scale of China's jewelry market has increased from 610 billion yuan in 2019 to an estimated 728 billion yuan in 2024, with a CAGR of 3.6%, and is projected to reach 937 billion yuan by 2029, with gold jewelry dominating the market. The "Guochao" trend and IP co-branded products are emerging as new industry hotspots [1] - The industry remains relatively fragmented, with the CR5 for gold jewelry products at 41%, indicating that leading enterprises can continue to gain market share through brand effects and terminal occupation [1] Company Summary - The company is located in the core gold jewelry production area of Shuibei, leveraging supply chain advantages at the processing end. The channel strategy primarily focuses on franchise stores, starting from lower-tier markets and expanding into high-tier cities post-pandemic by opening high-end stores to strengthen brand building [2] - As of the first half of 2025, the company operates 3,857 stores, with the number of stores in first and second-tier cities accounting for 50% of the total. With the optimization of the store model, single-store efficiency is expected to improve further [2] - The company is effectively capturing traffic benefits from interest e-commerce platforms like Douyin and Xiaohongshu for brand exposure, with online channel revenue reaching 1.63 billion yuan in the first half of 2025, representing a 34% year-on-year increase [2] - The product strategy implements a full-category and full-scenario coverage approach, launching diversified product series such as Xi Gu Jin, Yi He Xian Jing, and Yi Xin Yi Ai, focusing on the core demographic of young women and enhancing the youthful brand image through Guochao IP collaborations [2]

Group 1 - The core point of the article highlights the increase in precious metal prices, with gold priced at 1115 CNY per gram, platinum at 613 CNY per gram, and gold bars at 1010 CNY per gram, all showing significant daily increases [1][2] - Gold price increased by 31 CNY per gram compared to the previous trading day, while platinum rose by 15 CNY per gram, and gold bars also saw a rise of 31 CNY per gram [1][2] - The previous day's prices were 1084 CNY for gold, 598 CNY for platinum, and 979 CNY for gold bars, indicating a notable upward trend in the market [2] Group 2 - The article mentions ongoing political developments in the U.S., specifically the failure of a Democratic proposal to end the government shutdown, which may have implications for market stability and investor sentiment [3]

Investment Rating - The report maintains a "Buy" investment rating for the company [5] Core Insights - The company, Zhouliufu, is a leading brand in the gold and jewelry industry, with a focus on both online and offline channels for growth [1][3] - The Chinese jewelry market is expected to grow from 728 billion yuan in 2024 to 937 billion yuan by 2029, with gold jewelry maintaining a dominant position [2][32] - The company has a total of 3,857 stores as of mid-2025, ranking fifth in the country, and is expanding its presence in high-end markets while optimizing its store model [3][4] Summary by Sections Company Overview - Zhouliufu was founded in 2004 and has established a strong presence in the gold and jewelry sector, focusing on cost-effective products for the lower-tier markets [17] - The company operates primarily through a franchise model, which has facilitated rapid expansion, with 3,857 stores nationwide by mid-2025 [17][25] Industry Analysis - The jewelry market in China is expanding, driven by consumer demand for gold, which accounted for 73% of the market retail sales value in 2024 [32][34] - The market is characterized by low concentration, with the top five brands holding a combined market share of 41% in gold jewelry [36] Business Model and Strategy - Zhouliufu leverages a dual-channel strategy, with significant growth in online sales, which accounted for 53% of total revenue by mid-2025 [25][45] - The company is focusing on product diversification and targeting young female consumers, with 80% of online users being women aged 18-35 [57] Financial Performance - The company forecasts steady revenue growth, with projected revenues of 64.11 billion yuan in 2025, reflecting a year-on-year increase of 12.11% [11] - The earnings per share (EPS) for 2025 is estimated at 1.82 yuan, with a price-to-earnings (PE) ratio of 23 times [4][11] Market Position - Zhouliufu's market strategy includes expanding into high-end markets while maintaining a strong foothold in lower-tier cities, with a significant number of stores in these areas [50] - The company is actively enhancing its brand image through various marketing initiatives and collaborations, aiming to strengthen its market position [55][56]

Group 1 - The gold market is experiencing a surge in consumer demand ahead of the National Day holiday, with promotional activities such as cashback and gifts being offered by retailers [1] - Analysts note that the period from September to October is a peak season for gold consumption, particularly for wedding and self-gifting jewelry, as related products are being launched [1] - Dongwu Securities has initiated coverage on Zhou Li Fu, giving it an "Accumulate" rating, citing strong online growth and significant expansion potential for offline stores [1] Group 2 - Zhou Li Fu's online business is rapidly expanding and is currently leading the industry, while the company is also focusing on differentiated strategies and multi-channel development [1] - The company is expected to benefit from the expanding gold jewelry market and its potential growth in the North and East China markets, indicating long-term revenue growth prospects [1]

致：香港交易及結算所有限公司 公司名稱: 周六福珠宝股份有限公司 呈交日期: 2025年10月2日 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年9月30日 狀態: 新提交 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | H | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 06168 | 說明 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | 法定/註冊股本 | | | 上月底結存 | | | 273,688,883 | RMB | | 1 RMB | | 273,688,883 | | 增加 / 減少 (-) | | | 0 | | | RMB | | 0 | | 本月底結存 | | | 273,688,883 | RMB | | 1 RMB | | 273,688,883 | | 2. 股份分類 | 普通股 | 股份類別 | 其他類別 (請 ...

Group 1 - The core viewpoint of the article highlights the continued upward trend of gold stocks in the Hong Kong market, specifically noting the significant increase in the stock price of Chow Tai Fook (06168.HK) by nearly 7% [1] - Chow Tai Fook's stock price reached 48.6 HKD, indicating strong market performance [1] - The trading volume exceeded 98 million HKD, reflecting robust investor interest and activity in the gold sector [1]

Group 1 - The core viewpoint of the article highlights the surge in gold consumption ahead of the National Day holiday, with a notable increase in sales for investment gold and promotional activities driving consumer interest [1] - The stock price of Chow Tai Fook (06168) rose nearly 7%, reaching 48.5 HKD, with a trading volume of 96.14 million HKD, indicating strong market interest [1] - Analysts suggest that the upcoming peak season for gold consumption, particularly for wedding and self-gifting jewelry, is contributing to the positive market sentiment [1] Group 2 - Dongwu Securities' report indicates that Chow Tai Fook's online sales are experiencing high growth, while there remains significant expansion potential for offline stores, suggesting a promising long-term growth outlook [1] - The company is recognized as a leading domestic gold jewelry brand, leveraging a combined online and offline sales model to penetrate lower-tier markets and achieve differentiated positioning [1] - The continuous expansion of the gold jewelry market and Chow Tai Fook's potential developments in North and East China markets provide a strong revenue growth impetus and broad future prospects [1]

[Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides an overview of the company's governance structure, key personnel, advisors, and operational locations [Board and Committees](index=3&type=section&id=Board%20and%20Committees) The company's board comprises executive, non-executive, and independent non-executive directors, supported by a supervisory committee, audit committee, remuneration and appraisal committee, and nomination committee, ensuring robust corporate governance - The Board of Directors includes **Li Weizhu (Chairman)**, **Li Weipeng (Vice Chairman)**, Xie Mingyu, Zhong Xipeng (Executive Directors), Zhong Yingqin (Non-executive Director), and Liu Guoxun, Yang Lan, Guo Qiuquan (Independent Non-executive Directors)[7](index=7&type=chunk)[8](index=8&type=chunk) - The Supervisory Committee members include Lin Liuzhi, Li Caiping, and Ni Xuepeng[7](index=7&type=chunk)[8](index=8&type=chunk) - The Audit Committee Chairman is **Yang Lan**, the Remuneration and Appraisal Committee Chairman is **Guo Qiuquan**, and the Nomination Committee Chairman is **Li Weizhu**[7](index=7&type=chunk)[8](index=8&type=chunk) [Key Personnel and Advisors](index=4&type=section&id=Key%20Personnel%20and%20Advisors) The company has authorized representatives, joint company secretaries, and engages Ernst & Young as auditors, Paul Hastings (Hong Kong) as Hong Kong legal counsel, and Fosun International Capital Co., Ltd. as compliance advisor - Authorized representatives are **Xie Mingyu** and **Weng Meiyi**, and joint company secretaries are **Wu Yang** and **Weng Meiyi**[10](index=10&type=chunk) - The auditor is **Ernst & Young**, legal counsel is **Paul Hastings (Hong Kong)**, and compliance advisor is **Fosun International Capital Co., Ltd.**[10](index=10&type=chunk) [Company Locations and Information](index=4&type=section&id=Company%20Locations%20and%20Information) The company's registered office and principal place of business in China are in Luohu District, Shenzhen, Guangdong Province, with its principal place of business in Hong Kong in Wan Chai; H Share registrar is Hong Kong Registrars Limited, and principal bank is Bank of China - Registered office and principal place of business in China: 2301–2409, Zhongguan Business Building, No. 3031 Taibai Road, Dongxiao Community, Dongxiao Street, Luohu District, Shenzhen, Guangdong Province, China[11](index=11&type=chunk)[12](index=12&type=chunk) - Principal place of business in Hong Kong: 40/F, Dah Sing Financial Centre, 248 Queen's Road East, Wan Chai, Hong Kong[12](index=12&type=chunk) - Company website is **www.zlf.cn**, and stock code is **6168**[13](index=13&type=chunk) [Results Highlights](index=6&type=section&id=Results%20Highlights) For the six months ended June 30, 2025, Zhouliufu Jewelry Co., Ltd. achieved growth in revenue, gross profit, and net profit, with net profit increasing by 11.9% year-on-year 2025 H1 Performance Highlights | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,150.4 | 2,993.9 | 5.2% | | Gross Profit | 827.2 | 761.1 | 8.7% | | Net Profit | 415.3 | 371.2 | 11.9% | [Management Discussion And Analysis](index=7&type=section&id=Management%20Discussion%20And%20Analysis) This section provides a comprehensive review of the company's business performance, financial results, and future strategic outlook [Business Review](index=7&type=section&id=Business%20Review) As a Chinese jewelry enterprise, the company leverages online and offline networks to offer gold, diamond-set, and other jewelry products; during the reporting period, total revenue grew by 5.2% and gross profit by 8.7%, driven by the growth of the self-operated model, especially strong online sales, despite a reduction in offline franchised stores - The company's business model integrates jewelry product development, design, procurement, supply, franchising, and brand operation[20](index=20&type=chunk) - Revenue primarily derives from franchised stores, self-operated stores, and online sales channels[20](index=20&type=chunk) 2025 H1 Revenue and Gross Profit Overview | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,150.4 | 2,993.9 | 5.2% | | Gross Profit | 827.2 | 761.1 | 8.7% | [Online Revenue Growth](index=7&type=section&id=Online%20Revenue%20Growth) In H1 2025, online sales channel revenue reached RMB 1.6319 billion, a year-on-year increase of approximately 34%, becoming a significant contributor to the group's revenue, driven by optimized operations, enhanced online capabilities, and deep collaboration with e-commerce platforms Online Sales Channel Revenue | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Online Sales Channel Revenue | 1,631.9 | 1,215.4 | 34% | - During the 2025 '6.18' shopping festival, the Group's online self-operated GMV across all platforms exceeded **RMB 700 million**, a **36% year-on-year increase**, marking two consecutive years of over 30% growth[27](index=27&type=chunk)[29](index=29&type=chunk) - The company maintained its **fourth-place ranking** in the gold category on Tmall during the 6.18 event[27](index=27&type=chunk)[29](index=29&type=chunk) [Fixed-Price Products Sales Increase](index=8&type=section&id=Fixed-Price%20Products%20Sales%20Increase) Amid rising gold prices and evolving consumer preferences, the company is exploring lightweight and fashionable product designs through IP collaborations and material combinations, enhancing product versatility; during the reporting period, offline retail sales of fixed-price products saw significant growth in volume and value, with an improved gross profit margin - The company explores lightweight and fashionable product designs through strategies such as **IP collaborations** and **combinations of gold with other materials**[28](index=28&type=chunk)[30](index=30&type=chunk) Offline Retail Fixed-Price Product Growth | Metric | YoY Growth (%) | | :--- | :--- | | Fixed-price product sales volume | 73.2% | | Fixed-price product sales value | 44.4% | | Offline retail gross profit margin | Increased by 12.2 percentage points to 41.7% | [Offline Store Adjustments](index=9&type=section&id=Offline%20Store%20Adjustments) Due to rising gold prices and macroeconomic uncertainties, consumer spending faced pressure, leading the company to encourage store layout optimization, resulting in a net closure of 272 stores during the reporting period; as of June 30, 2025, the company operated 3,760 franchised stores and 97 self-operated stores, with optimized city tiers, location strategies, and average store sizes - During the reporting period, the Group **net closed 272 stores**, primarily due to rapidly rising gold prices and macroeconomic uncertainties impacting consumer spending[31](index=31&type=chunk)[32](index=32&type=chunk) Store Network Overview (As of June 30, 2025) | Model | December 31, 2024 | Net Change | June 30, 2025 | | :--- | :--- | :--- | :--- | | Franchised Stores | 4,038 | -278 | 3,760 | | Self-operated Stores | 91 | 6 | 97 | | **Total** | **4,129** | **-272** | **3,857** | - Store structure optimization: **First and second-tier city stores accounted for nearly 50%**; shopping mall and department store locations exceeded **55%**; average single-store area increased to approximately **110 square meters** at period-end[31](index=31&type=chunk)[32](index=32&type=chunk) [Operating Revenue by Sales Channels](index=10&type=section&id=Operating%20Revenue%20by%20Sales%20Channels) In H1 2025, the Group's total revenue was RMB 3.1504 billion, a 5.2% year-on-year increase; online sales channel revenue's share rose to 52%, growing by 34% year-on-year, becoming the primary growth engine, while franchised and self-operated store revenues declined, though self-operated stores saw a 13.5% quarter-on-quarter increase in same-store revenue in Q2 Operating Revenue by Sales Channels (RMB thousand) | Channel | 2025 (RMB thousand) | Share (%) | 2024 (RMB thousand) | Share (%) | YoY Change (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Franchised Model | 1,228,695 | 39 | 1,481,487 | 49 | -252,792 | -17 | | Online Sales Channels | 1,631,931 | 52 | 1,215,410 | 41 | 416,521 | 34 | | Self-operated Stores | 213,091 | 7 | 250,948 | 8 | -37,857 | -15 | | Others | 76,705 | 2 | 46,071 | 2 | 30,634 | 66 | | **Total** | **3,150,422** | **100** | **2,993,916** | **100** | **156,506** | **5** | - Online business saw both volume and price increases, benefiting from rapidly rising gold prices and a divergence in online and offline consumption, with its share of Group revenue increasing to **52%**[38](index=38&type=chunk)[40](index=40&type=chunk) - Although self-operated store same-store revenue declined in Q1, it has achieved a **13.5% year-on-year increase** since Q2[41](index=41&type=chunk)[43](index=43&type=chunk) [Revenue by Products and Services](index=12&type=section&id=Revenue%20by%20Products%20and%20Services) During the reporting period, gold jewelry revenue increased by approximately 9% year-on-year to RMB 2.534 billion, primarily driven by online contributions, with significant growth in fixed-price gold; diamond-set jewelry and other revenue slightly declined by 4% to RMB 235.2 million, while service fee revenue decreased by 11% to RMB 381.3 million, mainly due to structural adjustments and closures of retail stores Operating Revenue by Products and Services (RMB thousand) | Product/Service | 2025 (RMB thousand) | Share (%) | 2024 (RMB thousand) | Share (%) | YoY Change (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Gold Jewelry | 2,533,982 | 81 | 2,319,784 | 78 | 214,198 | 9 | | Diamond-set Jewelry and Others | 235,182 | 7 | 244,769 | 8 | -9,587 | -4 | | Service Fees | 381,258 | 12 | 429,363 | 14 | -48,105 | -11 | | **Total** | **3,150,422** | **100** | **2,993,916** | **100** | **156,506** | **5** | - The growth in gold jewelry revenue is primarily attributed to **online revenue contributions**, with significant growth in **fixed-price gold sales**, though rising gold prices constrained sales of weight-based gold[47](index=47&type=chunk)[50](index=50&type=chunk) - The decrease in service fee revenue is mainly due to a reduction in brand usage fees collected from franchisees, resulting from **structural adjustments and closures of retail stores** in H1 2025[49](index=49&type=chunk)[51](index=51&type=chunk) [Outlook and Prospects](index=13&type=section&id=Outlook%20and%20Prospects) Facing high gold prices, changing consumer psychology, and intensified industry competition, the company plans to seize market opportunities and upgrade brand development by strengthening product R&D, deepening marketing to young consumers, expanding offline stores across multiple ecosystems, and enhancing the competitive advantages of its online e-commerce business - The gold jewelry industry has entered a period of adjustment and integration, with overall growth slowing, competition intensifying, and **young consumer groups becoming a key battleground**[52](index=52&type=chunk)[54](index=54&type=chunk) [Product R&D and Innovation](index=13&type=section&id=Product%20R%26D%20and%20Innovation) The Group will collaborate with leading industry suppliers to increase investment in product innovation and R&D, including popular IP styles and trendy manufacturing processes, planning to launch upgraded versions of signature product series like "Jiuhua Dayuan" and "Yihe Xianjing," and reserving new series such as point-drilling and filigree to promote Oriental culture and national trends - Increase investment in **product innovation and R&D**, covering popular IP styles and trendy manufacturing processes[53](index=53&type=chunk)[55](index=55&type=chunk) - Will successively launch upgraded versions of signature product series such as **'Jiuhua Dayuan'** and **'Yihe Xianjing'**, highlighting Oriental culture and national trends[53](index=53&type=chunk)[55](index=55&type=chunk) - Reserve several newly developed series, emphasizing popular craftsmanship like **point-drilling and filigree**[53](index=53&type=chunk)[55](index=55&type=chunk) [Brand Marketing for Young Consumers](index=14&type=section&id=Brand%20Marketing%20for%20Young%20Consumers) The company will draw on the new media marketing experience of other renowned consumer brands, utilizing IPO proceeds to increase investment in new media channels like Xiaohongshu and Douyin, to boost online e-commerce performance and drive traffic to offline stores - Increase effective investment in new media channels such as **Xiaohongshu and Douyin** to empower online e-commerce and drive traffic to offline stores[57](index=57&type=chunk)[60](index=60&type=chunk) [Offline Store Expansion and Quality Improvement](index=14&type=section&id=Offline%20Store%20Expansion%20and%20Quality%20Improvement) The Group will expand its offline store network through various models, including enhancing franchised store competitiveness, expanding self-operated stores to approximately 200 within three years, co-investing with franchisees in joint venture stores, and promoting the "Zhouliufu Ji Culture Museum" high-end flagship store to premium malls nationwide; concurrently, it will actively expand into Southeast Asian overseas markets, aiming for 10 overseas stores within the year, and strengthen international e-commerce collaborations - Franchised stores: Enhance competitiveness through **product R&D, marketing traffic generation, store site selection, image upgrades, and operational empowerment**[58](index=58&type=chunk)[61](index=61&type=chunk) - Self-operated stores: Plan to increase the number of self-operated stores to approximately **200 within three years**, enhancing brand presence and reputation in mid-to-high-end shopping malls[59](index=59&type=chunk)[61](index=61&type=chunk) - High-end stores: The first high-end flagship store, **'Zhouliufu Ji Culture Museum'**, opened in Beijing China World Mall, with future plans to cover mainstream high-end malls nationwide[63](index=63&type=chunk)[65](index=65&type=chunk) - Overseas stores: Plan to increase stores in Southeast Asia to **10 within the year**, and strengthen cooperation with e-commerce platforms like Amazon and Lazada to boost overseas online revenue[64](index=64&type=chunk)[65](index=65&type=chunk) [Strengthen Online E-commerce Operations](index=16&type=section&id=Strengthen%20Online%20E-commerce%20Operations) The Group will utilize IPO proceeds to continuously increase resource investment in its e-commerce subsidiary across product, marketing, operations, and logistics, maintaining the agility, versatility, cost-effectiveness, and rapid turnover advantages of its online business, thereby solidifying its leading position on mainstream e-commerce platforms like Tmall and JD.com - Utilize IPO proceeds to continuously increase resource investment in the e-commerce subsidiary across **product, marketing, operations, and logistics**[67](index=67&type=chunk)[71](index=71&type=chunk) - Maintain the advantages of online business operations in terms of **agility, versatility, high cost-effectiveness, and rapid turnover**, solidifying its leading position on mainstream e-commerce platforms like Tmall and JD.com[67](index=67&type=chunk)[71](index=71&type=chunk) [Financial Review](index=16&type=section&id=Financial%20Review) During the reporting period, the Group's revenue, gross profit, and net profit all increased; cost of sales grew with revenue, and gross profit margin improved; selling and marketing expenses and R&D expenses rose due to increased personnel and e-commerce platform fees, while other net expenses significantly increased due to gold lease losses and other factors; income tax expense grew with higher profit before tax 2025 H1 Key Financial Metrics Changes | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Change (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 3,150.4 | 2,993.9 | 156.5 | 5.2% | | Cost of Sales | 2,323.2 | 2,232.8 | 90.4 | 4.0% | | Gross Profit | 827.2 | 761.1 | 66.1 | 8.7% | | Gross Profit Margin | 26.3% | 25.4% | +0.9 percentage points | - | | Other Income and Gains | 20.0 | 18.7 | 1.3 | 6.9% | | Selling and Marketing Expenses | 241.6 | 236.5 | 5.1 | 2.2% | | Administrative Expenses | 65.1 | 64.8 | 0.3 | 0.5% | | Research and Development Expenses | 6.3 | 5.6 | 0.7 | 13.3% | | Other Net Expenses | 12.8 | 2.3 | 10.6 | 466.9% | | Finance Costs | 6.7 | 5.9 | 0.8 | 13.5% | | Income Tax Expense | 99.4 | 93.6 | 5.8 | 6.2% | - Changes in gross profit margin were primarily influenced by **rising gold prices, channel structure, and product mix changes** during the year[74](index=74&type=chunk)[78](index=78&type=chunk) - The significant increase in other net expenses was mainly due to **gold lease losses and other increased expenditures**[84](index=84&type=chunk)[89](index=89&type=chunk) [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company's cash and cash equivalents significantly increased to RMB 1.5883 billion, primarily due to proceeds from the global offering; the company adopts a prudent capital management approach to maintain adequate liquidity Cash and Cash Equivalents | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,588.3 | 177.0 | +1,411.3 | - The increase in cash and cash equivalents was primarily due to **proceeds from the global offering** received during the reporting period[93](index=93&type=chunk)[95](index=95&type=chunk) - The company adopts a **prudent capital management approach** to its treasury policy to maintain appropriate and adequate liquidity[94](index=94&type=chunk)[95](index=95&type=chunk) [Indebtedness and Borrowings](index=19&type=section&id=Indebtedness%20and%20Borrowings) As of June 30, 2025, the company's interest-bearing bank and other borrowings decreased to RMB 411.6 million, mainly due to repayment of borrowings; total lease liabilities also declined, and the gearing ratio decreased from 34.9% at the end of 2024 to 23.1% Indebtedness and Borrowings Overview | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Interest-bearing bank and other borrowings | 411.6 | 641.1 | -229.5 | | Total outstanding contractual lease payments | 34.1 | 45.7 | -11.6 | | Gearing ratio | 23.1% | 34.9% | -11.8 percentage points | - The primary reason for the decrease in interest-bearing bank and other borrowings was **repayment of borrowings**[96](index=96&type=chunk)[99](index=99&type=chunk) - The gearing ratio is calculated as total liabilities divided by total assets, multiplied by 100%[98](index=98&type=chunk)[99](index=99&type=chunk) [Other Financial and Operational Information](index=20&type=section&id=Other%20Financial%20and%20Operational%20Information) The company has no significant contingent liabilities and insignificant foreign exchange risk; as of June 30, 2025, total pledged assets were approximately RMB 139.2 million as collateral for bank borrowings; capital expenditure during the reporting period was about RMB 172.7 million, mainly for property, plant, and equipment; the total number of employees was 1,737, and an employee share incentive scheme was implemented; there were no significant investments, acquisitions, or disposals during the reporting period - As of June 30, 2025, the company had **no significant contingent liabilities**[101](index=101&type=chunk)[107](index=107&type=chunk) - Foreign exchange risk is **insignificant**, as most business transactions are conducted in mainland China and denominated in RMB[102](index=102&type=chunk)[108](index=108&type=chunk) Asset Pledges and Capital Expenditure | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total pledged assets | 139.2 | 398.3 | | Capital expenditure | 172.7 | - | | Capital commitments | 121.4 | 162.4 | - As of June 30, 2025, the company had **1,737 full-time employees**, all located in China[105](index=105&type=chunk)[111](index=111&type=chunk) - The company implemented a **Pre-IPO Employee Share Option Plan (ESOP)** in December 2017 to incentivize and retain talent[113](index=113&type=chunk)[116](index=116&type=chunk) - During the reporting period, the company had **no significant investments, acquisitions, or disposals** of subsidiaries, associates, or joint ventures[115](index=115&type=chunk)[117](index=117&type=chunk) [Future Plans and Use of Proceeds](index=22&type=section&id=Future%20Plans%20and%20Use%20of%20Proceeds) The company will continue to seek strategic investment and acquisition opportunities for long-term growth; net proceeds from the IPO, approximately HKD 1.42948 billion, will be used to expand the sales network, strengthen brand building, enhance product portfolio and R&D capabilities, and for working capital and general corporate purposes, with all funds expected to be fully utilized by December 31, 2028 - The company will continue to seek new opportunities for **strategic investments and/or acquisitions** to achieve its long-term growth strategy[118](index=118&type=chunk)[121](index=121&type=chunk) Use of Net Proceeds from IPO (HKD million) | Purpose | Percentage of Total Net Proceeds | Allocation of Net Proceeds (HKD million) | Unutilized Amount as of June 30, 2025 (HKD million) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | | Expand and strengthen sales network | 50% | 714.74 | 714.74 | On or before December 31, 2028 | | Strengthen brand building | 20% | 285.90 | 285.90 | On or before December 31, 2028 | | Enhance product portfolio and R&D capabilities | 20% | 285.90 | 285.90 | On or before December 31, 2028 | | Working capital and general corporate purposes | 10% | 142.95 | 142.95 | On or before December 31, 2028 | | **Total** | **100%** | **1,429.48** | **1,429.48** | **On or before December 31, 2028** | - As of June 30, 2025, the **net proceeds from the IPO remained unutilized**[135](index=135&type=chunk)[138](index=138&type=chunk) [Subsequent Events After The Reporting Period](index=22&type=section&id=Subsequent%20Events%20After%20The%20Reporting%20Period) Subsequent to the reporting period, the company exercised its over-allotment option, increasing the total number of H shares, consequently changing the registered capital and share capital structure, and amending the articles of association; additionally, the Board recommended an interim dividend of RMB 0.45 per share - On July 23, 2025, the **over-allotment option was fully exercised**, involving **8,074,300 H shares**, representing approximately **15%** of the total shares offered in the global offering[119](index=119&type=chunk)[122](index=122&type=chunk) - Following the exercise of the over-allotment option, the company's registered capital and total number of shares changed to **RMB 440,616,028** and **440,616,028 shares**, respectively, with the articles of association amended on July 29, 2025[124](index=124&type=chunk)[128](index=128&type=chunk) - The Board recommended an **interim dividend of RMB 0.45 per ordinary share** for the six months ended June 30, 2025[126](index=126&type=chunk)[130](index=130&type=chunk)[136](index=136&type=chunk)[139](index=139&type=chunk) [Interim Dividend](index=25&type=section&id=Interim%20Dividend) The Board recommended an interim dividend of RMB 0.45 per ordinary share (tax inclusive) for the six months ended June 30, 2025, totaling approximately RMB 198.28 million; H share shareholders will be paid in HKD, with the exchange rate determined by the average RMB to HKD exchange rate published by the People's Bank of China five business days prior to the date of approval at the extraordinary general meeting; the dividend is expected to be paid on October 31, 2025 - A proposed interim dividend of **RMB 0.45 per ordinary share (tax inclusive)**, totaling approximately **RMB 198,277,212.60**, is recommended[136](index=136&type=chunk)[139](index=139&type=chunk) - H share shareholders will be paid in **HKD**, with the exchange rate determined by the average RMB to HKD exchange rate published by the People's Bank of China five business days prior to the date of approval at the extraordinary general meeting[137](index=137&type=chunk)[140](index=140&type=chunk) - The interim dividend is expected to be paid on **October 31, 2025**, to shareholders whose names appear on the register of members on September 30, 2025[142](index=142&type=chunk)[143](index=143&type=chunk) [Other Information](index=27&type=section&id=Other%20Information) This section covers the company's corporate governance practices, disclosure of interests, share schemes, and the review of interim results [Corporate Governance](index=27&type=section&id=Corporate%20Governance) The company has complied with all applicable provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules since its listing date and will continue to review and monitor its corporate governance practices; directors and supervisors also confirmed compliance with the standard code for securities transactions - From the listing date to the date of this report, the company has **complied with all applicable code provisions** set out in Part 2 of the Corporate Governance Code[144](index=144&type=chunk)[146](index=146&type=chunk) - The company has adopted the **Model Code for Securities Transactions by Directors of Listed Issuers** as set out in Appendix C3 of the Listing Rules, and all directors and supervisors have confirmed compliance[149](index=149&type=chunk)[152](index=152&type=chunk) [Disclosure of Interests](index=28&type=section&id=Disclosure%20of%20Interests) As of June 30, 2025, the company disclosed the interests of directors, supervisors, chief executives, and their associated corporations in the company's shares, as well as the interests of substantial shareholders; Mr. Li Weizhu and Mr. Li Weipeng, as ultimate controlling shareholders, hold significant shares through controlled corporations and acting-in-concert agreements Share Interests of Directors, Supervisors, and Chief Executives (As of June 30, 2025) | Name | Position | Nature of Interest | Number and Class of Shares | Approximate Percentage of Total Issued Share Capital of the Company | Approximate Percentage of Relevant Class of Shares | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Li Weizhu | Chairman and Executive Director | Interest in controlled corporations and joint interest with other parties | 166,927,145 unlisted shares | 38.59% | 100.00% | | | | | 193,364,925 H shares | 44.70% | 72.80% | | Mr. Li Weipeng | Executive Director, Vice Chairman and General Manager | Interest in controlled corporations and joint interest with other parties | 166,927,145 unlisted shares | 38.59% | 100.00% | | | | | 193,364,925 H shares | 44.70% | 72.80% | | Ms. Zhong Yingqin | Non-executive Director | Spouse's interest | 166,927,145 unlisted shares | 38.59% | 100.00% | | | | | 193,364,925 H shares | 44.70% | 72.80% | Share Interests of Substantial Shareholders (As of June 30, 2025) | Name/Entity | Nature of Interest | Number and Class of Shares | Approximate Percentage of Total Issued Share Capital of the Company | Approximate Percentage of Relevant Class of Shares | | :--- | :--- | :--- | :--- | :--- | | Ruoshui United | Beneficial owner | 67,951,853 unlisted shares | 15.71% | 40.71% | | | | 70,725,500 H shares | 16.35% | 26.63% | | Shangshan United | Beneficial owner | 50,963,914 unlisted shares | 11.78% | 30.53% | | | | 53,044,100 H shares | 12.26% | 19.97% | | Shenzhen Zhouliufu | Interest in controlled corporations | 118,915,767 unlisted shares | 27.49% | 71.24% | | | | 123,769,600 H shares | 28.61% | 46.60% | | Qiankun United | Beneficial owner | 48,011,378 unlisted shares | 11.10% | 28.76% | | | | 54,140,600 H shares | 12.52% | 20.38% | - Mr. Li Weizhu and Mr. Li Weipeng are each deemed to be interested in the shares held by the other pursuant to the **acting-in-concert agreement**[159](index=159&type=chunk)[160](index=160&type=chunk) [Share Schemes and Equity Issuance](index=36&type=section&id=Share%20Schemes%20and%20Equity%20Issuance) The company implemented a Pre-IPO Employee Share Option Plan (ESOP) in December 2017 but has not implemented any other share schemes requiring disclosure under Chapter 17 of the Listing Rules since its listing; during the reporting period, no new equity securities were issued or treasury shares sold, except for the global offering related to the IPO - The company implemented a **Pre-IPO Employee Share Option Plan (ESOP)** in December 2017, which does not involve the granting of awards or issuance of new shares post-listing[177](index=177&type=chunk)[181](index=181&type=chunk) - From the listing date to the date of this interim report, the company has **not implemented any share schemes requiring disclosure** under Chapter 17 of the Listing Rules[178](index=178&type=chunk)[181](index=181&type=chunk) - During the reporting period, the company **did not issue any new equity securities or sell any treasury shares for cash**, except for the global offering related to the IPO[180](index=180&type=chunk)[183](index=183&type=chunk) [Review of Interim Results](index=37&type=section&id=Review%20of%20Interim%20Results) The Audit Committee has reviewed the accounting principles and practices adopted by the Group and the interim results for the reporting period, concluding that the interim financial results comply with relevant accounting standards, rules, and regulations, with appropriate disclosures made in a timely manner - The Audit Committee, comprising three independent non-executive directors, has **reviewed the Group's accounting principles, practices, and interim results**[185](index=185&type=chunk)[187](index=187&type=chunk) - The Audit Committee believes that the interim financial results **comply with relevant accounting standards, rules, and regulations**, and appropriate disclosures have been made in a timely manner[185](index=185&type=chunk)[187](index=187&type=chunk) [Interim Condensed Consolidated Financial Statements](index=38&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the company's interim condensed consolidated financial statements, including the profit or loss, comprehensive income, financial position, changes in equity, and cash flows [Interim condensed consolidated statement of profit or loss](index=38&type=section&id=Interim%20condensed%20consolidated%20statement%20of%20profit%20or%20loss) For the six months ended June 30, 2025, the company reported revenue of RMB 3.1504 billion, net profit of RMB 415.3 million, and basic and diluted earnings per share of RMB 1.09 Interim Condensed Consolidated Statement of Profit or Loss Summary | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 3,150,422 | 2,993,916 | | Cost of Sales | (2,323,173) | (2,232,774) | | Gross Profit | 827,249 | 761,142 | | Profit Before Tax | 514,680 | 464,845 | | Income Tax Expense | (99,386) | (93,598) | | Profit for the Period | 415,294 | 371,247 | | Basic and Diluted Earnings Per Share (RMB) | 1.09 | 1.01 | [Interim condensed consolidated statement of comprehensive income](index=39&type=section&id=Interim%20condensed%20consolidated%20statement%20of%20comprehensive%20income) For the six months ended June 30, 2025, the company's profit for the period was RMB 415.3 million; considering the negative impact of exchange differences on translation of foreign operations, total comprehensive income for the period was RMB 413.7 million Interim Condensed Consolidated Statement of Comprehensive Income Summary | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period | 415,294 | 371,247 | | Exchange differences on translation of foreign operations | (1,593) | 703 | | Total Comprehensive Income for the Period | 413,701 | 371,950 | [Interim condensed consolidated statement of financial position](index=40&type=section&id=Interim%20condensed%20consolidated%20statement%20of%20financial%20position) As of June 30, 2025, the company's total non-current assets were RMB 709.3 million, total current assets were RMB 4.3781 billion, and total current liabilities were RMB 1.102 billion; net assets significantly increased to RMB 3.9137 billion compared to the end of 2024 Interim Condensed Consolidated Statement of Financial Position Summary (RMB thousand) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 709,325 | 655,820 | | Total Current Assets | 4,378,118 | 3,301,751 | | Total Current Liabilities | 1,101,955 | 1,330,486 | | Net Current Assets | 3,276,163 | 1,971,265 | | Net Assets | 3,913,654 | 2,577,606 | - Cash and bank balances significantly increased from **RMB 561.7 million** at the end of 2024 to **RMB 1.6746 billion** as of June 30, 2025[193](index=193&type=chunk) - Trade payables and bills increased from **RMB 37.806 million** at the end of 2024 to **RMB 172.7 million** as of June 30, 2025[194](index=194&type=chunk) [Interim condensed consolidated statement of changes in equity](index=43&type=section&id=Interim%20condensed%20consolidated%20statement%20of%20changes%20in%20equity) For the six months ended June 30, 2025, the company's total equity increased to RMB 3.9137 billion, primarily due to profit for the period and an increase in share capital and share premium from the issuance of shares Interim Condensed Consolidated Statement of Changes in Equity Summary (RMB thousand) | Metric | January 1, 2025 | Profit for the Period | Issuance of Shares | Dividends Declared | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Share Capital | 378,713 | - | 53,829 | - | 432,542 | | Share Premium | 291,101 | - | 1,063,174 | - | 1,354,275 | | Retained Earnings | 1,679,957 | 415,294 | - | (196,931) | 1,898,320 | | **Total Equity** | **2,577,606** | **415,294** | **1,117,003** | **(196,931)** | **3,913,654** | - Issuance of shares resulted in an equity increase of **RMB 1.117 billion**, while dividends declared reduced equity by **RMB 196.9 million**[197](index=197&type=chunk) [Interim condensed consolidated statement of cash flows](index=45&type=section&id=Interim%20condensed%20consolidated%20statement%20of%20cash%20flows) For the six months ended June 30, 2025, net cash flow from operating activities was RMB 469.4 million; net cash flow from investing activities was RMB 272.5 million; net cash flow from financing activities was RMB 671.0 million, primarily from share issuance; cash and cash equivalents at period-end significantly increased to RMB 1.5883 billion compared to the beginning of the period Interim Condensed Consolidated Statement of Cash Flows Summary (RMB thousand) | Activity Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash flows from operating activities | 469,428 | 360,206 | | Net cash flows from investing activities | 272,505 | 54,911 | | Net cash flows from financing activities | 670,955 | 33,710 | | Net increase in cash and cash equivalents | 1,412,888 | 448,827 | | Cash and cash equivalents at end of period | 1,588,279 | 627,509 | - Net cash flow from financing activities significantly increased, primarily due to **RMB 1.117 billion in proceeds from share issuance**[203](index=203&type=chunk) - Net cash flow from investing activities significantly increased, mainly from **proceeds from the disposal of certificates of deposit and time deposits**[203](index=203&type=chunk) [Notes to interim condensed consolidated financial information](index=48&type=section&id=Notes%20to%20interim%20condensed%20consolidated%20financial%20information) This section provides detailed notes to the interim condensed consolidated financial information, covering corporate and group details, accounting policies, segment information, revenue breakdown, financial costs, profit before tax, income tax, dividends, earnings per share, property, plant and equipment, leases, inventories, trade receivables, cash and bank balances, trade and bills payables, other payables and accruals, interest-bearing bank borrowings, share capital, share-based payments, reserves, commitments, related party transactions, and financial instruments [Corporate and Group Information](index=48&type=section&id=Corporate%20and%20Group%20Information) Zhouliufu Jewelry Co., Ltd. was incorporated in China, and its shares have been listed on the Main Board of the Hong Kong Stock Exchange since June 26, 2025; the Group's principal activities are the design, manufacture, and sale of jewelry, as well as the provision of franchising and related services - The company was incorporated in the People's Republic of China, and its shares have been **listed on the Main Board of The Stock Exchange of Hong Kong Limited since June 26, 2025**[205](index=205&type=chunk)[209](index=209&type=chunk) - The Group's principal activities are the **design, manufacture, and sale of jewelry**, and the provision of **franchising and related services**[206](index=206&type=chunk)[210](index=210&type=chunk) [Basis of Preparation and Changes in Accounting Policies](index=48&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 and should be read in conjunction with the company's annual financial statements in the prospectus; newly adopted revised IFRS accounting standards in this period had no significant impact on the financial information - The interim condensed consolidated financial information has been prepared in accordance with **International Accounting Standard 34 'Interim Financial Reporting'**[207](index=207&type=chunk)[211](index=211&type=chunk) - The revised International Financial Reporting Standards accounting standards adopted for the first time in this period had **no significant financial impact** on the interim condensed consolidated financial information[213](index=213&type=chunk)[214](index=214&type=chunk)[219](index=219&type=chunk) [Operating Segment Information](index=49&type=section&id=Operating%20Segment%20Information) For management purposes, the Group has only one reportable operating segment, with the Board reviewing financial performance on an overall basis; no geographical information is presented as the principal operating entities and the majority of revenue and assets are located within China - The Group has **only one reportable operating segment**, and the Board reviews financial performance on an overall basis[215](index=215&type=chunk)[216](index=216&type=chunk)[220](index=220&type=chunk) - No geographical information is presented as the principal operating entities, and the majority of revenue and assets are located **within China**[217](index=217&type=chunk)[221](index=221&type=chunk) - For the six months ended June 30, 2025, approximately **RMB 490.9 million in revenue** was derived from sales to a single customer[218](index=218&type=chunk)[222](index=222&type=chunk) [Revenue, Other Income and Gains](index=50&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) The Group's revenue primarily derives from the sale of goods (gold jewelry, diamond-set jewelry, and others) and the provision of services; performance obligations for goods sales are satisfied upon product delivery, while service obligations are met over time or upon service completion; other income and gains mainly include government grants, interest income, and default compensation Revenue Disaggregation Information (RMB thousand) | Category of Goods or Services | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Gold Jewelry | 2,533,982 | 2,319,784 | | Diamond-set Jewelry and Other Products | 235,182 | 244,769 | | Provision of Services | 381,258 | 429,363 | | **Total Revenue from Contracts with Customers** | **3,150,422** | **2,993,916** | | Timing of revenue recognition: | | | | Transfer of goods at a point in time | 2,769,164 | 2,564,553 | | Transfer of services at a point in time | 61,208 | 69,499 | | Transfer of services over time | 320,050 | 359,864 | Other Income and Gains (RMB thousand) | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest income | 5,121 | 2,964 | | Government grants | 9,645 | 12,799 | | Investment income | 465 | - | | Default compensation | 3,265 | 1,694 | | **Total** | **20,014** | **18,734** | - Performance obligations for goods sales are satisfied upon **customer pickup or product delivery at self-operated retail stores and online shops**, or upon delivery to franchisees and e-commerce platforms[227](index=227&type=chunk)[229](index=229&type=chunk) - Performance obligations for **franchising services and product access services are satisfied over time**, while supply chain management fees are satisfied upon product certification and transfer to franchisees[232](index=232&type=chunk)[234](index=234&type=chunk) [Finance Costs](index=54&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, the company's total finance costs amounted to RMB 6.703 million, primarily comprising interest on bank loans and lease liabilities Finance Costs (RMB thousand) | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank loans | 5,546 | 4,818 | | Interest on lease liabilities | 983 | 1,098 | | Interest on gold loans | 174 | - | | **Total** | **6,703** | **5,916** | [Profit Before Tax](index=55&type=section&id=Profit%20Before%20Tax) For the six months ended June 30, 2025, the company's profit before tax was RMB 514.7 million; key costs and expenses included cost of inventories sold, depreciation and amortization, employee benefit expenses, and listing expenses Profit Before Tax Components (RMB thousand) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 2,312,924 | 2,216,376 | | Cost of services provided | 10,249 | 16,398 | | Depreciation of property, plant and equipment | 14,876 | 10,938 | | Depreciation of right-of-use assets | 14,852 | 16,602 | | Amortization of intangible assets and other non-current assets | 4,067 | 4,117 | | Listing expenses | 12,208 | 17,165 | | Employee benefit expenses (excluding directors' and supervisors' emoluments) | 104,048 | 105,328 | | Net impairment losses/(reversal of impairment losses) on trade receivables | 1,558 | (322) | - Cost of inventories sold includes **write-downs of inventories to net realizable value**[253](index=253&type=chunk) - Depreciation and amortization expenses are recognized in 'Selling and marketing expenses', 'Administrative expenses', and 'Research and development expenses' in the statement of profit or loss, respectively[253](index=253&type=chunk) [Income Tax Expense](index=56&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, the company's income tax expense was RMB 99.4 million; mainland China subsidiaries generally apply a 25% corporate income tax rate, but some enjoy preferential rates of 15% or 5% due to specific qualifications (e.g., enterprises in Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, Western Development enterprises, high-tech enterprises, small and micro enterprises); Hong Kong subsidiaries apply a 16.5% profits tax rate, with some eligible entities benefiting from a two-tiered profits tax regime Income Tax Expense (RMB thousand) | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current | 98,227 | 92,102 | | Deferred | 1,159 | 1,496 | | **Total** | **99,386** | **93,598** | - Mainland China subsidiaries generally apply a **25% corporate income tax rate**[246](index=246&type=chunk)[252](index=252&type=chunk) - Zhouliufu E-commerce Co., Ltd., Zhouliufu Jewelry Sales (Chongqing) Co., Ltd., Zhouliufu Jewelry (Chongqing) Co., Ltd., and Shenzhen Xiaoyudi Information Technology Co., Ltd. enjoy a **preferential corporate income tax rate of 15%**[247](index=247&type=chunk)[248](index=248&type=chunk)[254](index=254&type=chunk)[252](index=252&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) - Certain small and micro enterprise subsidiaries enjoy a **preferential income tax rate of 5%**[255](index=255&type=chunk)[258](index=258&type=chunk) - Hong Kong profits tax rate is **16.5%**, with some eligible subsidiaries under the two-tiered profits tax regime taxed at **8.25%** on the first HKD 2 million of assessable profits[256](index=256&type=chunk)[259](index=259&type=chunk) [Dividends](index=58&type=section&id=Dividends) During the reporting period, the company declared and fully paid a final dividend of RMB 0.52 per share for 2024, totaling approximately RMB 196.9 million; subsequent to the reporting period, the Board recommended an interim dividend of RMB 0.45 per share for the six months ended June 30, 2025, pending shareholder approval Dividends Declared (RMB thousand) | Period | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Dividends declared | 196,931 | 644,466 | - During the reporting period, the **2024 final dividend of RMB 0.52 per share**, totaling approximately **RMB 196.9 million**, was fully paid[263](index=263&type=chunk)[264](index=264&type=chunk) - Subsequent to the end of the reporting period, an **interim dividend of RMB 0.45 per share** for the six months ended June 30, 2025, is proposed, subject to shareholder approval at an extraordinary general meeting[265](index=265&type=chunk) [Earnings Per Share](index=59&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, the company's basic and diluted earnings per share were RMB 1.09, calculated based on profit attributable to ordinary equity holders and a weighted average of 380,199,522 ordinary shares; there were no potentially dilutive ordinary shares during the reporting period Earnings Per Share Calculation (RMB thousand) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders | 415,294 | 371,247 | | Weighted average number of ordinary shares in issue during the period | 380,199,522 | 366,866,805 | | Basic and Diluted Earnings Per Share (RMB) | 1.09 | 1.01 | - No potentially dilutive ordinary shares were issued during the reporting period, thus **basic and diluted earnings per share amounts were not adjusted**[267](index=267&type=chunk) [Property, Plant and Equipment](index=60&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group acquired assets at a cost of approximately RMB 172.7 million and disposed of assets with a net book value of approximately RMB 42 thousand, resulting in a net loss of approximately RMB 42 thousand Property, Plant and Equipment Changes (RMB thousand) | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Cost of assets acquired | 172,720 | 48,321 | | Net book value of assets disposed | 42 | 112 | | Net loss on disposal | 42 | 68 | [Leases](index=61&type=section&id=Leases) As of June 30, 2025, the Group's right-of-use assets had a carrying amount of RMB 142.3 million, and lease liabilities had a carrying amount of RMB 34.1 million; during the reporting period, new leases amounted to RMB 3.066 million, depreciation expense was RMB 14.852 million, and lease liabilities were adjusted due to changes in lease terms Right-of-Use Assets Changes (RMB thousand) | Item | December 31, 2024 | Additions | Depreciation Expense | Change in Lease Term | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Leased land | 111,213 | - | (2,000) | - | 109,213 | | Office properties, buildings and shops | 45,116 | 3,066 | (12,852) | (2,238) | 33,092 | | **Total** | **156,329** | **3,066** | **(14,852)** | **(2,238)** | **142,305** | Lease Liabilities Changes (RMB thousand) | Item | December 31, 2024 | New Leases | Interest Recognized | Change in Lease Term | Payments | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Lease liabilities | 45,742 | 3,066 | 983 | (2,497) | (13,177) | 34,117 | | Of which: Current portion | 24,762 | - | - | - | - | 21,552 | | Non-current portion | 20,980 | - | - | - | - | 12,565 | [Inventories](index=63&type=section&id=Inventories) As of June 30, 2025, the Group's total inventories amounted to RMB 2.282 billion, slightly lower than at the end of 2024; during the reporting period, the reversal of inventory write-downs to net realizable value was RMB 3.66 million Inventories Composition (RMB thousand) | Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Finished goods | 1,464,522 | 1,563,074 | | Raw materials | 390,487 | 198,447 | | Work in progress | 1,638 | 88,238 | | Goods in transit | 425,366 | 468,252 | | **Total** | **2,282,013** | **2,318,011** | - For the six months ended June 30, 2025, the **reversal of write-downs of inventories to net realizable value was RMB 3.66 million**[280](index=280&type=chunk) [Trade Receivables](index=64&type=section&id=Trade%20Receivables) As of June 30, 2025, the Group's net trade receivables amounted to RMB 224.9 million, primarily from franchisees, e-commerce platforms, and sales collected by shopping malls; receivables are mostly due within one year, and fair value approximates carrying amount; during the reporting period, net impairment loss provision for trade receivables was RMB 1.558 million Trade Receivables (RMB thousand) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 241,288 | 226,802 | | Impairment | (16,433) | (16,935) | | **Total** | **224,855** | **209,867** | Trade Receivables Ageing Analysis (RMB thousand) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 222,718 | 201,918 | | 1 to 2 years | 2,027 | 7,627 | | 2 to 3 years | 110 | 322 | | **Total** | **224,855** | **209,867** | - Net impairment loss provision for trade receivables was **RMB 1.558 million**[289](index=289&type=chunk) [Cash and Bank Balances](index=66&type=section&id=Cash%20and%20Bank%20Balances) As of June 30, 2025, the Group's total cash and bank balances amounted to RMB 1.6746 billion, of which cash and cash equivalents were RMB 1.5883 billion, primarily denominated in HKD and RMB; some bank deposits are restricted for project construction, issuance of bills payable, and as collateral for bank borrowings Cash and Bank Balances Composition (RMB thousand) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash and cash equivalents | 1,588,279 | 176,994 | | Time deposits | 30,000 | 370,000 | | Restricted deposits | 56,209 | 14,751 | | Interest receivable on bank deposits | 151 | - | | **Total** | **1,674,639** | **561,745** | | **By currency:** | | | | RMB | 496,529 | 513,114 | | HKD | 1,158,088 | 29,415 | | USD | 19,207 | 18,733 | | EUR | 463 | 316 | | GBP | 352 | 167 | - Restricted deposits include **guarantee deposits for online platforms, bank deposits restricted for project construction, and bank deposits restricted for the issuance of bills payable**[295](index=295&type=chunk) - A **RMB 30 million time deposit** is pledged as collateral for bank borrowings[296](index=296&type=chunk)[297](index=297&type=chunk) [Trade and Bills Payables](index=67&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, the Group's total trade and bills payables amounted to RMB 172.7 million, a significant increase from the end of 2024; trade payables are interest-free and typically settled within one to six months from the invoice date, with fair value approximating carrying amount Trade and Bills Payables Ageing Analysis (RMB thousand) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 172,565 | 37,806 | | 1 to 2 years | 133 | - | | **Total** | **172,698** | **37,806** | - Trade payables are **interest-free** and generally settled within a credit period of one to six months from the invoice date[300](index=300&type=chunk)[301](index=301&type=chunk) [Other Payables and Accruals](index=68&type=section&id=Other%20Payables%20and%20Accruals) As of June 30, 2025, the Group's total current other payables and accruals amounted to RMB 197.7 million, largely consistent with the end of 2024, primarily including deposits, salaries and welfare payable, other payables, and accrued expenses Other Payables and Accruals (RMB thousand) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Deposits | 113,805 | 119,652 | | Salaries and welfare payable | 20,554 | 28,728 | | Other payables | 31,283 | 10,972 | | Accrued expenses | 9,074 | 15,970 | | Other taxes payable | 23,017 | 21,197 | | **Total Current** | **197,737** | **196,523** | | Non-current deferred income | 200 | 200 | [Interest-Bearing Bank Borrowings](index=69&type=section&id=Interest-Bearing%20Bank%20Borrowings) As of June 30, 2025, the Group's total interest-bearing bank borrowings amounted to RMB 411.6 million, a decrease from RMB 641.1 million at the end of 2024; all borrowings are denominated in RMB and include both unsecured and secured bank loans Interest-Bearing Bank Borrowings (RMB thousand) | Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current bank loans – unsecured | 322,504 | 242,754 | | Current bank loans – secured | 30,000 | 370,000 | | Non-current bank loans – secured | 59,069 | 28,299 | | **Total** | **411,573** | **641,053** | - All interest-bearing bank borrowings are **denominated in RMB**[307](index=307&type=chunk)[308](index=308&type=chunk) - The Group's total available bank borrowing facilities amounted to **RMB 1.88 billion**, of which **RMB 411.6 million was utilized** as of June 30, 2025[307](index=307&type=chunk)[308](index=308&type=chunk) [Share Capital](index=70&type=section&id=Share%20Capital) As of June 30, 2025, the company's authorized and paid-up share capital was RMB 432.5 million, consisting of 432,541,728 ordinary shares with a par value of RMB 1.00 each; during the reporting period, 53,829,200 ordinary shares were issued due to the initial public offering (IPO) Summary of Share Capital Changes (RMB thousand) | Item | Number of Shares Issued | Share Capital (RMB thousand) | | :--- | :--- | :--- | | January 1, 2024 | 366,174,073 | 366,174 | | Issuance of ordinary shares (Pre-IPO) | 12,538,455 | 12,538 | | December 31, 2024 and January 1, 2025 | 378,712,528 | 378,713 | | Issuance of ordinary shares (IPO) | 53,829,200 | 53,829 | | **June 30, 2025** | **432,541,728** | **432,542** | - The **Initial Public Offering (IPO) issued 53,829,200 ordinary shares** at a price of **HKD 24.00 per share**, with a total cash consideration of approximately **HKD 1.2919 billion**[316](index=316&type=chunk) [Share-Based Payments](index=71&type=section&id=Share-Based%20Payments) The Group approved and adopted equity incentive plans in December 2017 and June 2018, granting restricted share units (RSUs) to eligible employees to incentivize them; these RSUs had a fair value of RMB 9.73 per share and were subject to listing conditions; during the reporting period, share-based payment expenses of RMB 2.275 million were recognized - The Group granted **Restricted Share Units (RSUs)** to employees in December 2017 and June 2018, with a subscription price of **RMB 2.08 per share**[314](index=314&type=chunk)[315](index=315&type=chunk) - The fair value of RSUs was estimated at **RMB 9.73 per share** on the grant date and was subject to listing conditions[317](index=317&type=chunk)[318](index=318&type=chunk) Share-Based Payment Expenses and RSU Changes (RMB thousand) | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Share-based payment expenses | 2,275 | 4,103 | | **Number of RSUs** | | | | Beginning of period | 6,846,524 | 6,926,600 | | Forfeited during the period | - | (80,076) | | **End of period** | **6,846,524** | **6,846,524** | [Reserves](index=73&type=section&id=Reserves) The Group's reserves include share premium, share-based payment reserve, statutory surplus reserve, and exchange fluctuation reserve; the statutory surplus reserve is appropriated according to China's Company Law for offsetting losses or increasing share capital but cannot be distributed as cash dividends - Share premium refers to the amount paid by shareholders for capital contributions **exceeding the par value of subscribed ordinary shares**[322](index=322&type=chunk)[327](index=327&type=chunk) - Statutory surplus reserve is appropriated in accordance with the Company Law of China, used to **offset losses or convert into increased share capital**, but cannot be distributed as cash dividends[324](index=324&type=chunk)[329](index=329&type=chunk) - Exchange fluctuation reserve represents **exchange differences arising from functional currencies differing from the Group's presentation currency**[325](index=325&type=chunk)[330](index=330&type=chunk) [Commitments](index=74&type=section&id=Commitments) As of June 30, 2025, the Group's capital commitments primarily related to leases for property, plant, and equipment, with contracted but unprovided amounts totaling RMB 121.4 million Capital Commitments (RMB thousand) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Contracted but unprovided leases: property, plant and equipment | 121,431 | 162,423 | [Related Party Transactions and Balances](index=74&type=section&id=Related%20Party%20Transactions%20and%20Balances) The Group engages in goods procurement, sales, and has outstanding balances with key related parties, including controlling shareholders, directors, supervisors, and their close family members; key management personnel compensation includes salaries, allowances, pension plan contributions, and share-based payments - Key related parties include **Mr. Li Weizhu, Mr. Li Weipeng, Shenzhen Ruoshui United Investment Co., Ltd., Shenzhen Qiankun United Investment Co., Ltd., Shenzhen Shangshan United Investment Co., Ltd.**, among others[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk) Purchases of Goods from Related Parties (RMB thousand) | Related Party | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Ms. Zhou Minling | 94 | 159 | Outstanding Balances with Related Parties (RMB thousand) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables: Ms. Zhou Minling | 4 | 3 | | Other payables and accruals: Ms. Huang Xiaoxin | 4 | 4 | Key Management Personnel Compensation (RMB thousand) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 3,820 | 3,013 | | Pension scheme contributions | 225 | 155 | | Equity-settled share-based payments | 1,341 | 3,481 | | **Total Compensation** | **5,386** | **6,662** | [Financial Instruments by Category](index=78&type=section&id=Financial%20Instruments%20by%20Category) As of June 30, 2025, the Group's total financial assets were RMB 2.0436 billion, and total financial liabilities were RMB 763.5 million; financial assets primarily include trade receivables, cash and bank balances measured at amortized cost, and debt investments measured at fair value through other comprehensive income Financial Assets (RMB thousand) | Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Financial assets measured at amortized cost | | | | Trade receivables | 224,855 | 209,867 | | Cash and bank balances | 1,674,639 | 561,745 | | Debt investments | - | 20,184 | | Financial assets measured at fair value through other comprehensive income | | | | Debt investments | 120,224 | 78,667 | | Financial assets measured at fair value through profit or loss | | | | Financial assets | 4,043 | 33,530 | | **Total** | **2,043,581** | **921,804** | Financial Liabilities (RMB thousand) | Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Financial liabilities measured at amortized cost | | | | Trade payables | 172,698 | 37,806 | | Financial liabilities included in other payables and accruals | 145,092 | 130,628 | | Lease liabilities | 34,117 | 45,742 | | Interest-bearing bank and other borrowings | 411,573 | 641,053 | | Gold loans | - | 42,982 | | **Total** | **763,480** | **898,211** | [Fair Value and Fair Value Hierarchy of Financial Instruments](index=79&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) Management assesses that the fair values of most financial assets and liabilities approximate their carrying amounts, primarily due to their short-term maturities; the fair value of debt investments is calculated by discounting expected future cash flows, while listed equity investments are based on market quotations - The fair values of cash and cash equivalents, trade receivables, trade and bills payables, and interest-bearing bank and other borrowings **approximate their carrying amounts**, primarily due to their short-term maturities[350](index=350&type=chunk)[352](index=352&type=chunk) - The fair value of debt investments is derived by **discounting expected future cash flows** using current available interest rates for instruments with similar terms, credit risk, and remaining maturities[353](index=353&type=chunk)[355](index=355&type=chunk) - The fair value of listed equity investments is based on **market quotations**[353](index=353&type=chunk)[355](index=355&type=chunk) [Glossary](index=81&type=section&id=Glossary) This section provides definitions for key terms and abbreviations used in the report, covering corporate governance, financial, legal, and operational vocabulary, to ensure a clear understanding of the report's content