Investment Rating - The report assigns a "Buy" rating to the company [1][2]. Core Insights - The company is positioned as a leading one-stop multi-category platform for home care, personal care, and pet products in China, with a solid foundation in home care and promising growth in the pet segment, supported by a dividend yield of approximately 7%-8% [1][10]. - The company achieved a revenue of 1.249 billion RMB in H1 2024, representing a year-on-year growth of 10.3%, and a net profit of 179 million RMB, reflecting a year-on-year increase of 31.5% [1][15]. - The company has established a strong market presence in various segments, including pest control, home cleaning, and air care, and is actively expanding its pet business through offline store services [1][10][11]. Summary by Sections Overview - The company offers a comprehensive range of home care, personal care, and pet products, covering various categories such as insect repellent, home cleaning, air care, hand sanitizers, and pet food [1][10]. - It has maintained the leading market share in the insect repellent sector for nine consecutive years and ranks second in home cleaning and air care markets [1][10]. Pet Business - The company has significantly invested in the pet segment, launching brands like "Stubborn Tail" for pet care products and "Stubborn Mouth" for high-end pet food, establishing a dual-track strategy in pet supplies and food [1][11]. - The pet business has shown remarkable growth, with revenue increasing from 0.02 billion RMB in 2019 to 0.77 billion RMB in 2023, achieving a CAGR of 158.1% [15][17]. Home Care Business - The home care segment remains the core revenue driver, contributing 93.1% of total revenue in H1 2024, with a year-on-year growth of 11.5% [15][17]. - The company has optimized its product structure and enhanced its online and offline sales channels to boost profitability [1][10]. Financial Forecast and Investment Recommendations - Revenue projections for 2024-2026 are estimated at 1.813 billion RMB, 2.002 billion RMB, and 2.194 billion RMB, with respective year-on-year growth rates of 12%, 10%, and 10% [1][2]. - Net profit forecasts for the same period are 213 million RMB, 237 million RMB, and 262 million RMB, with year-on-year growth rates of 22%, 11%, and 11% [2][15].

Financial Performance - For the six months ended June 30, 2024, Cheerwin Group reported revenue of RMB 1,249.1 million, a 10.3% increase from RMB 1,132.8 million in the same period of 2023[4] - Gross profit for the same period was RMB 579.0 million, reflecting a 23.8% increase compared to RMB 467.8 million in the prior year[4] - The company achieved a profit before tax of RMB 220.1 million, up 26.4% from RMB 174.1 million year-on-year[4] - Net profit for the period was RMB 175.9 million, representing a 29.6% increase from RMB 135.7 million in the previous year[4] - Basic earnings per share increased to RMB 13.46, compared to RMB 10.24 for the same period last year, reflecting a growth of 31.8%[68] - The company reported a total comprehensive income of RMB 184,113 thousand for the period, compared to RMB 174,976 thousand in the previous year, an increase of 5.0%[68] Revenue Breakdown - Revenue from home care products reached RMB 1,163.6 million, an 11.5% increase compared to the same period last year[5] - Revenue from pet and pet products was RMB 47.6 million, a 5.3% increase year-on-year[5] - Revenue from personal care products decreased by 18.4% to RMB 34.8 million compared to the same period in 2023[5] - Online sales revenue was RMB 405.9 million, marking an 18.9% increase from the previous year[5] - Offline sales revenue reached RMB 843.3 million, a 6.5% increase compared to the same period last year[5] Asset and Equity Position - The total assets of the company as of June 30, 2024, were RMB 3,670.2 million, down from RMB 3,836.1 million at the end of 2023[4] - The company’s equity attributable to owners increased to RMB 3,023,302 thousand from RMB 2,927,365 thousand, a rise of 3.3%[69] - The company’s total equity as of June 30, 2024, was RMB 3,027,292 thousand, an increase from RMB 2,969,594 thousand as of June 30, 2023, reflecting a growth of 1.9%[71] Cost and Expenses - Employee costs rose to RMB 112.1 million from RMB 95.3 million, driven by the expansion of the pet offline store business and increased performance bonuses[34] - Sales and distribution expenses totaled RMB 317,747,000, up 20% from RMB 264,799,000 in the previous year[85] - The company’s administrative expenses for the six months ended June 30, 2024, were RMB 41,629,000, slightly up from RMB 40,779,000 in the previous year, indicating a marginal increase of about 2.1%[90] Dividend and Shareholder Information - The interim dividend declared is RMB 0.0538 per share, equivalent to HKD 0.0588, maintaining a stable payout ratio of 40.0%[35] - The company will suspend share transfer registration from September 13 to September 17, 2024, to determine eligibility for the interim dividend[36] - Major shareholders, including Ma Huizhen and Li Ruohong, each hold 990,000,000 shares, accounting for 74.25% of the company's equity[40] Strategic Initiatives - The company aims to enhance brand strength and product capabilities while expanding distribution channels in the second half of 2024[8] - The focus will be on increasing the sales proportion of high-margin products and optimizing supply costs to achieve cost reduction and efficiency goals[8] - The company plans to actively pursue acquisition opportunities in the domestic and international pet and fast-moving consumer goods sectors[8] Stock Options and Restricted Shares - The total number of stock options available for grant under the stock option plan as of January 1, 2024, and June 30, 2024, is 128,533,350 options each, representing approximately 9.64% of the issued share capital of 1,333,333,500 shares[44] - The maximum number of restricted shares that can be granted under the Restricted Share Award Scheme is capped at 25,000,000 shares, equivalent to 1.87% of the total issued shares as of the report date[48] - A total of 9,600,000 restricted shares have been granted under the scheme, with various executives and employees as participants[50] Financial Health and Cash Flow - Operating cash outflow for the six months ended June 30, 2024, was RMB 159.7 million, compared to RMB 74.0 million in the same period of 2023[24] - Cash and cash equivalents at the end of the period on June 30, 2024, amounted to RMB 842,328 thousand, compared to RMB 769,326 thousand at the end of June 30, 2023, showing an increase of 9.5%[72] - The company’s financing activities resulted in a net cash outflow of RMB 18,465 thousand for the six months ended June 30, 2024, compared to RMB 5,150 thousand for the same period in 2023[72] Market Position and Competitive Advantage - The company has maintained its leading market share in insect repellent products in China for ten consecutive years, according to NielsenIQ data[6] - The company continues to innovate in product development, focusing on differentiated and effective products to enhance overall profitability[6] Compliance and Governance - The company has adopted a corporate governance code and has complied with all applicable provisions during the reporting period[58] - The board of directors consists of eight members, including three independent non-executive directors, ensuring sufficient independent opinions to protect the interests of the company and its shareholders[58]

Investment Rating - The report maintains a "Buy" rating for the company [4]. Core Views - The company has shown steady growth with a revenue increase of 10.3% and a net profit increase of 31.5% in the first half of 2024, achieving revenues of 1.25 billion and net profits of 180 million [1]. - The company continues to focus on high dividend payouts, with a dividend per share of 0.0538 RMB, corresponding to a payout ratio of 40% [1]. - The home care segment has solidified its market position, while the pet business is developing with a focus on high-quality products [2]. - The company is actively expanding its online and offline channels, with online revenue growing by 18.9% to 410 million, accounting for 32.5% of total revenue [1]. Summary by Sections Financial Performance - In the first half of 2024, the company achieved a revenue of 1.25 billion, up 10.3%, and a net profit of 180 million, up 31.5% [1]. - The gross margin improved by 5.1 percentage points to 46.4%, and the net profit margin increased by 2.1 percentage points to 14.07% [1]. - The company expects revenues of 1.805 billion, 1.990 billion, and 2.181 billion for 2024, 2025, and 2026, respectively, with growth rates of 11.7%, 10.3%, and 9.6% [2]. Business Segments - Home care products generated 1.16 billion in revenue, up 11.5%, with significant growth in mosquito repellent products [1]. - The pet segment generated 48 million, up 5.3%, with a focus on developing functional pet snacks and fresh food [1]. - Personal care products saw a decline in revenue, down 18.4% to 35 million [1]. Channel Strategy - Online sales increased by 18.9% to 410 million, with a strong performance on platforms like Douyin [1]. - Offline sales reached 840 million, up 6.5%, with efforts to expand into new retail channels [1].

Investment Rating - The investment rating for the company is "Outperform the Market" [1] Core Views - The company reported a revenue of 1.249 billion RMB for the first half of 2024, representing a year-on-year growth of 10.3%, and a net profit of 179 million RMB, which is a 31.5% increase year-on-year [4] - Multiple business segments are showing steady growth, with home care products, pet products, and personal care products achieving revenues of 1.164 billion RMB, 47.63 million RMB, and 34.75 million RMB respectively, with year-on-year growth rates of +11.5%, +5.3%, and -18.4% [4] - The company's product innovation strategy has proven effective, enhancing brand strength and market share in pest control and home cleaning products [4] - Online sales channels are rapidly developing, with online revenue reaching 406 million RMB, a year-on-year increase of 18.9% [4] - The company's profitability has significantly improved, with a net profit margin of 14.37%, up by 2.32 percentage points year-on-year, and a gross profit margin of 46.35%, up by 5.05 percentage points year-on-year [4] Financial Summary - The company expects net profits for 2024, 2025, and 2026 to be 190 million RMB, 208 million RMB, and 227 million RMB, reflecting year-on-year growth rates of 8.8%, 9.1%, and 9.1% respectively [4] - The current closing price corresponds to a PE ratio of 13 and 12 times for 2024 and 2025, respectively [4] - The estimated reasonable value range for the company is between 2.14 to 2.29 RMB, or 2.36 to 2.51 HKD, based on a PE valuation of 15 to 16 times for 2024 [4]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 2.94 [3][7]. Core Insights - The company achieved a total revenue of RMB 1.25 billion in the first half of 2024, representing a year-on-year growth of 10.3% [1]. - The overall gross margin improved by 5.1 percentage points to 46.4%, exceeding expectations due to the successful launch of popular products and a decrease in raw material costs [1]. - Net profit for the first half of 2024 reached RMB 180 million, a year-on-year increase of 31.5%, with a net profit margin rising by 2.3 percentage points to 14.4% [1]. - The company aims to expand its pet product line, targeting 65 stores by the end of the year, with a gross margin increase from 45.4% to 49.5% in the pet category [1][2]. Financial Performance - The company’s revenue is projected to grow from RMB 1.79 billion in 2024 to RMB 2.23 billion in 2026, with a compound annual growth rate (CAGR) of approximately 12% [2][5]. - The net profit is expected to increase from RMB 194 million in 2024 to RMB 241 million in 2026, reflecting a growth rate of 13.9% [2][5]. - The company maintains a high dividend payout ratio, with a projected dividend yield of approximately 7% [2][3]. Market Position - The home care segment remains strong, with significant market share in insect repellent and home cleaning products, indicating high brand loyalty and customer retention [1][2]. - Online sales grew by 18.9%, while offline sales increased by 6.5%, demonstrating effective multi-channel strategies [2].

Investment Rating - The report maintains a "Buy" rating for the company [3]. Core Views - The company reported a robust revenue growth of 10.27% year-on-year, achieving a total revenue of 1.249 billion yuan for the first half of 2024, with a net profit increase of 29.60% to 176 million yuan [3]. - The company has a strong cash position with 2.665 billion yuan in cash and equivalents as of June 30, 2024, and maintains a high dividend payout ratio of 40% [3]. - The home care segment shows steady growth, with online sales channels increasing their contribution to 32.49%, up 2.36 percentage points year-on-year [3]. - Profitability improved with gross and net profit margins rising to 46.35% and 14.08%, respectively, benefiting from product mix optimization and supply chain reforms [3]. - The company is expanding its pet product offerings and has successfully transformed its pet stores, increasing the number of locations to 46 in major cities [3]. Summary by Sections Financial Performance - For the first half of 2024, the company achieved revenues of 1.164 billion yuan in home care, 35 million yuan in personal care, and 48 million yuan in pet products, with respective year-on-year changes of +11.47%, -18.41%, and +5.28% [3]. - Online sales generated 406 million yuan, growing by 18.92%, while offline sales reached 843 million yuan, up 6.55% [3]. Profitability - The gross profit margin for home care, personal care, and pet products stood at 46.42%, 42.35%, and 49.55%, with year-on-year changes of +5.23, -0.29, and +4.12 percentage points, respectively [3]. - Selling and distribution expenses accounted for 25.44% of revenue, while administrative expenses were 6.95%, reflecting a year-on-year increase of 2.06 and a decrease of 0.52 percentage points, respectively [3]. Growth Strategy - The company is focusing on creating blockbuster products in the home care segment while expanding its pet business through investments in technology and store renovations [3]. - The revenue projections for 2024-2026 are estimated at 1.788 billion, 1.980 billion, and 2.196 billion yuan, with net profits of 186 million, 206 million, and 229 million yuan, respectively [3].

Investment Rating - The report maintains a "Recommended" rating for the company [1][2] Core Views - The company achieved a revenue of 1.25 billion HKD in the first half of 2024, representing a year-on-year growth of 10.3%, and a net profit of 180 million HKD, up 31.5% year-on-year [1] - The company plans to declare an interim dividend of 0.0538 HKD per share, with a stable payout ratio of 40% [1] - The home care segment showed steady growth, with revenue of 1.16 billion HKD, a year-on-year increase of 11.5%, and a gross margin of 46.4%, up 5.2 percentage points year-on-year [1] - The pet segment generated revenue of 48 million HKD, growing 5.3% year-on-year, with a gross margin of 49.5%, an increase of 4.1 percentage points year-on-year [1] - The company has opened 46 new pet stores across major cities, enhancing its service offerings [1] - Online sales grew significantly, with revenue of 410 million HKD, an 18.9% year-on-year increase, and a gross margin of 54.4%, up 6.3 percentage points year-on-year [1] - The company is focused on maintaining its market share in the home care industry and plans to accelerate mergers and acquisitions in the pet and fast-moving consumer goods sectors [1] - The revenue forecasts for 2024-2025 have been adjusted to 1.78 billion HKD and 1.97 billion HKD respectively, with a new forecast for 2026 set at 2.18 billion HKD [1] Financial Summary - Total revenue for 2023 is projected at 1.616 billion HKD, with a growth rate of 12.0% [3] - The net profit for 2023 is estimated at 175 million HKD, with a significant growth rate of 170.4% [3] - The earnings per share (EPS) for 2024 is projected at 0.14 HKD, with a price-to-earnings (P/E) ratio of 12.7 [3]

Investment Rating - The report maintains an "Accumulate" rating for the company [2][9]. Core Insights - The company has achieved a revenue of 1.25 billion CNY in H1 2024, representing a year-on-year growth of 10.28%, and a net profit of 179 million CNY, up 31.47% year-on-year [3]. - The company is focusing on technological innovation to create a high-margin product matrix, particularly in home care products, which saw a revenue increase of 11.5% year-on-year [4]. - The online sales channel has grown significantly, with a revenue increase of 18.9% year-on-year, while offline sales also showed a growth of 6.5% year-on-year [4]. - The company has a strong pipeline of innovative products, with a total of over 149 patents as of H1 2024, enhancing its competitive edge [4]. Financial Performance - In H1 2024, the company achieved a gross profit margin of 46.35%, an increase of 5.06 percentage points year-on-year, and a net profit margin of 14.07%, up 2.10 percentage points year-on-year [5]. - The company is expected to generate revenues of 1.78 billion CNY, 1.97 billion CNY, and 2.20 billion CNY for the years 2024, 2025, and 2026 respectively, with corresponding net profits of 184 million CNY, 194 million CNY, and 206 million CNY [7][8]. Market Position - The company has outperformed the Hang Seng Index with a 1-month return of 7.3%, a 3-month return of 5.3%, and a 12-month return of 24.8% [4]. - The company's current stock price is 1.92 HKD, with a market capitalization of 2.56 billion HKD [4].

[Financial and Business Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E8%88%87%E6%A5%AD%E5%8B%99%E6%91%98%E8%A6%81) [Financial Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The company achieved robust financial growth in H1 2024, with revenue up **10.3%** to **RMB 1.249 billion**, profit for the period increasing **29.6%** to **RMB 176 million**, and basic EPS rising **31.4%**, reflecting enhanced profitability Financial Summary for the Six Months Ended June 30, 2024 | Metric | Six Months Ended June 30, 2024 (RMB K) | Six Months Ended June 30, 2023 (RMB K) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,249,136 | 1,132,761 | +10.3% | | Gross Profit | 579,011 | 467,781 | +23.8% | | Profit Before Tax | 220,065 | 174,078 | +26.4% | | Profit for the Period | 175,873 | 135,700 | +29.6% | | Basic Earnings Per Share (cents) | 13.46 | 10.24 | +31.4% | [Business Summary](index=2&type=section&id=%E6%A5%AD%E5%8B%99%E6%91%98%E8%A6%81) In H1 2024, the Group achieved comprehensive business improvement with simultaneous growth in revenue, profit, and gross profit margin, driven by **18.9%** online and **6.5%** offline channel growth, while maintaining a stable **40.0%** interim dividend payout - Overall revenue steadily increased by **10.3%** to **RMB 1.249 billion**[2](index=2&type=chunk) - Both online and offline channels achieved growth, with online channel revenue increasing by **18.9%** year-on-year and offline channels growing by **6.5%**[2](index=2&type=chunk) - Profitability significantly improved, with profit for the period increasing by **29.6%** year-on-year and gross profit margin rising by **5.1** percentage points[2](index=2&type=chunk) - The Board resolved to declare an interim dividend of **RMB 0.0538** per share, maintaining a dividend payout ratio of **40.0%**[2](index=2&type=chunk) [Business Overview and Outlook](index=3&type=section&id=%E6%A5%AD%E5%8B%99%E6%A6%82%E8%A6%BD%E5%8F%8A%E5%B1%95%E6%9C%9B) [Business Overview](index=3&type=section&id=%E6%A5%AD%E5%8B%99%E6%A6%82%E8%A6%BD) In H1 2024, the Group achieved high-quality growth driven by **11.5%** revenue increase in home care products, rapid online channel development, and steady offline growth, with product innovation and supply chain reform enhancing profitability, and core insecticide and mosquito repellent products maintaining market leadership for ten consecutive years Revenue Breakdown by Product Category (Six Months Ended June 30, 2024) | Product Category | Revenue (RMB M) | Year-on-Year Change (%) | | :--- | :--- | :--- | | Home Care Products | 1,163.6 | +11.5% | | Pet and Pet Products | 47.6 | +5.3% | | Personal Care Products | 34.8 | -18.4% | Revenue Breakdown by Sales Channel (Six Months Ended June 30, 2024) | Sales Channel | Revenue (RMB M) | Year-on-Year Change (%) | | :--- | :--- | :--- | | Online Channels | 405.9 | +18.9% | | Offline Channels | 843.3 | +6.5% | - The Group achieved performance growth through multiple initiatives, including developing new e-commerce channels, strengthening offline distribution, product innovation to create high-margin bestsellers, and supply chain reform for cost reduction and efficiency improvement[3](index=3&type=chunk)[4](index=4&type=chunk) - According to NielsenIQ data, the Group's insecticide and mosquito repellent products have ranked first in overall market share in China for ten consecutive years[4](index=4&type=chunk) [Business Outlook](index=4&type=section&id=%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) Looking ahead to H2 2024, the company will continue its 'high-quality, sustainable, and stable profit' strategy, focusing on leveraging the peak home care season, developing new e-commerce, optimizing product and channel structures for profit, strengthening R&D, and actively seeking M&A opportunities while maintaining a high dividend payout - Revenue growth drivers include leveraging the peak season for home care products and continuing high-quality development of new e-commerce channels[5](index=5&type=chunk) - Profit growth drivers include increasing the sales proportion of high-margin products, optimizing channel investment efficiency, and reducing supply chain costs[6](index=6&type=chunk) - Strategic initiatives include strengthening technology R&D, team incentives, and actively pursuing M&A opportunities in the pet and fast-moving consumer goods industries[6](index=6&type=chunk) - Shareholder returns are prioritized through a commitment to high and stable dividend payout policies[6](index=6&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Financial Review](index=19&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) In H1 2024, Group revenue increased **10.3%** to **RMB 1.249 billion**, driven by **11.5%** growth in home care products; gross profit rose **23.8%**, with gross profit margin improving from **41.3%** to **46.4%**; selling and distribution expenses grew **20.0%**; and profit for the period increased **29.6%** to **RMB 176 million**, with net profit margin rising from **12.0%** to **14.1%** [Revenue Analysis](index=19&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) Total revenue increased **10.3%** year-on-year to **RMB 1.249 billion**, with core home care products growing **11.5%** and accounting for **93.1%** of total revenue, while online channels grew **18.9%** to **32.5%** of total revenue, and offline channels grew **6.5%** to **67.5%** Revenue by Product Category (Six Months Ended June 30) | Product Category | 2024 (RMB K) | 2023 (RMB K) | Change (%) | | :--- | :--- | :--- | :--- | | Home Care | 1,163,557 | 1,043,854 | +11.5% | | Pet and Pet Products | 47,633 | 45,243 | +5.3% | | Personal Care | 34,752 | 42,596 | -18.4% | | **Total** | **1,249,136** | **1,132,761** | **+10.3%** | Revenue by Sales Channel (Six Months Ended June 30) | Sales Channel | 2024 (RMB K) | 2023 (RMB K) | Change (%) | | :--- | :--- | :--- | :--- | | Online Channels | 405,854 | 341,297 | +18.9% | | Offline Channels | 843,282 | 791,464 | +6.5% | | **Total** | **1,249,136** | **1,132,761** | **+10.3%** | [Gross Profit and Gross Profit Margin Analysis](index=20&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87%E5%88%86%E6%9E%90) The Group's overall gross profit increased **23.8%** year-on-year to **RMB 579 million**, with gross profit margin significantly improving by **5.1** percentage points to **46.4%**, as all core business segments and channels, including home care, pet products, online, and offline, recorded margin growth - Overall gross profit margin increased from **41.3%** to **46.4%**, primarily due to enhanced brand power, optimized product category and channel structure, and improved supply chain operational efficiency[40](index=40&type=chunk) Gross Profit Margin by Product Category (Six Months Ended June 30) | Product Category | 2024 Gross Profit Margin (%) | 2023 Gross Profit Margin (%) | | :--- | :--- | :--- | | Home Care | 46.4% | 41.2% | | Pet and Pet Products | 49.5% | 45.4% | | Personal Care | 42.3% | 42.6% | Gross Profit Margin by Sales Channel (Six Months Ended June 30) | Sales Channel | 2024 Gross Profit Margin (%) | 2023 Gross Profit Margin (%) | | :--- | :--- | :--- | | Online Channels | 54.4% | 48.1% | | Offline Channels | 42.5% | 38.4% | [Operating Expenses and Other Gains/Losses Analysis](index=22&type=section&id=%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF%E5%8F%8A%E5%85%B6%E4%BB%96%E6%90%8D%E7%9B%8A%E5%88%86%E6%9E%90) Selling and distribution expenses increased **20.0%** year-on-year to **RMB 318 million** due to business growth; administrative expenses slightly increased **2.6%** to **RMB 86.8 million** due to goodwill impairment; and other gains and losses recorded a **RMB 11.7 million** loss, compared to a **RMB 3.3 million** gain in the prior period, mainly due to fair value changes in investments and exchange rate fluctuations - Selling and distribution expenses increased by **20.0%** year-on-year to **RMB 317.7 million**, consistent with business growth[46](index=46&type=chunk) - Administrative expenses increased by **2.6%** year-on-year to **RMB 86.8 million**, primarily due to a goodwill impairment loss[47](index=47&type=chunk) - Other losses of **RMB 11.7 million** were recorded (compared to a gain of **RMB 3.3 million** in the prior period), mainly related to fair value changes in investments and exchange rate fluctuations[48](index=48&type=chunk) [Profit and Cash Flow Analysis](index=22&type=section&id=%E6%BA%A2%E5%88%A9%E8%88%87%E7%8F%BE%E9%87%91%E6%B5%81%E5%88%86%E6%9E%90) Benefiting from revenue growth and improved gross profit margin, profit before tax increased **26.4%** year-on-year to **RMB 220 million**; profit for the period grew **29.6%** to **RMB 176 million**, with net profit margin rising from **12.0%** to **14.1%**; and net cash outflow from operating activities was **RMB 160 million**, compared to an outflow of **RMB 74 million** in the prior period - Profit before tax increased by **26.4%** year-on-year to **RMB 220.1 million**[50](index=50&type=chunk) - Profit for the period increased by **29.6%** year-on-year to **RMB 175.9 million**, with net profit margin growing from **12.0%** to **14.1%**[52](index=52&type=chunk) - Net cash outflow from operating activities was **RMB 159.7 million**, compared to a net outflow of **RMB 74 million** in the prior period[53](index=53&type=chunk) [Financial Position and Capital Management](index=23&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%88%87%E8%B3%87%E6%9C%AC%E7%AE%A1%E7%90%86) As of June 30, 2024, the Group maintained a robust financial position with total cash, cash equivalents, and time deposits of **RMB 2.665 billion**; the gearing ratio slightly increased from **1.0%** at year-end to **1.1%**, with no significant investments, asset pledges, or material contingent liabilities, and a stable treasury policy to maintain sufficient financial resources - As of June 30, 2024, total cash, cash equivalents, and time deposits amounted to **RMB 2.6647 billion**[55](index=55&type=chunk) - The gearing ratio slightly increased from **1.0%** at the end of 2023 to **1.1%** as of June 30, 2024[56](index=56&type=chunk) - The Group primarily operates in China, with most transactions settled in RMB, and foreign exchange risk mainly arises from USD and HKD deposits[60](index=60&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) During the reporting period, the company's revenue was **RMB 1.249 billion**, gross profit was **RMB 579 million**, selling and distribution expenses were **RMB 318 million**, administrative expenses were **RMB 86.79 million**, resulting in profit before tax of **RMB 220 million**, profit for the period of **RMB 176 million**, and profit attributable to owners of the Company of **RMB 179 million** Condensed Consolidated Statement of Profit or Loss (Six Months Ended June 30) | Item (RMB K) | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 1,249,136 | 1,132,761 | | Cost of sales | (670,125) | (664,980) | | **Gross Profit** | **579,011** | **467,781** | | Selling and distribution expenses | (317,747) | (264,799) | | Administrative expenses | (86,789) | (84,581) | | **Profit before tax** | **220,065** | **174,078** | | Income tax expense | (44,192) | (38,378) | | **Profit for the period** | **175,873** | **135,700** | | **Profit attributable to owners of the Company** | **179,461** | **136,502** | [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2024, the company's total assets were **RMB 3.67 billion**, total liabilities were **RMB 643 million**, and net assets were **RMB 3.027 billion**; current assets amounted to **RMB 2.983 billion**, predominantly comprising bank balances, cash, and time deposits, with current liabilities at **RMB 612 million**, indicating a healthy current ratio Summary of Condensed Consolidated Statement of Financial Position | Item (RMB K) | As of June 30, 2024 (Unaudited) | As of December 31, 2023 (Audited) | | :--- | :--- | :--- | | Non-current assets | 686,795 | 694,086 | | Current assets | 2,983,374 | 3,142,059 | | **Total assets** | **3,670,169** | **3,836,145** | | Current liabilities | 611,931 | 867,743 | | Non-current liabilities | 30,946 | 30,930 | | **Total liabilities** | **642,877** | **898,673** | | **Net assets** | **3,027,292** | **2,937,472** | | **Total equity** | **3,027,292** | **2,937,472** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Revenue and Segment Information](index=10&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The company's revenue is recognized entirely at a point in time; home care products are the primary revenue source, accounting for over **93%**; the company primarily operates in China, with nearly all revenue and non-current assets located there; and revenue from the single largest related customer group (Customer A) was **RMB 114 million** during the reporting period - The Group identifies its business as a single operating segment, primarily conducting operations in the People's Republic of China[17](index=17&type=chunk)[18](index=18&type=chunk) - Revenue from major customer A (a group of entities under common control of the controlling shareholder) was **RMB 113.6 million**, accounting for approximately **9.1%** of total revenue[19](index=19&type=chunk) [Dividends](index=15&type=section&id=%E8%82%A1%E6%81%AF) The Board resolved to declare an interim dividend of **RMB 0.0538** per ordinary share for H1 2024, totaling approximately **RMB 71.73 million**, maintaining a dividend payout ratio of **40.0%**, consistent with the prior period - A final dividend of **RMB 0.0640** per share, totaling approximately **RMB 85.33 million**, was declared for the year ended December 31, 2023[27](index=27&type=chunk) - The Board resolved to declare an interim dividend of **RMB 0.0538** per ordinary share for the six months ended June 30, 2024, totaling approximately **RMB 71.73 million**[27](index=27&type=chunk) [Earnings Per Share](index=15&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) For the six months ended June 30, 2024, basic earnings per share were **RMB 13.46 cents**, a **31.4%** increase from **RMB 10.24 cents** in the prior period, calculated based on profit attributable to owners of the Company of **RMB 179 million** and a weighted average of **1.333 billion** ordinary shares Basic Earnings Per Share Calculation | Item | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB K) | 179,461 | 136,502 | | Weighted average number of ordinary shares (K shares) | 1,333,334 | 1,333,334 | | **Basic Earnings Per Share (RMB cents)** | **13.46** | **10.24** | [Other Information](index=25&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Use of Proceeds from Global Offering](index=25&type=section&id=%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) The company listed in March 2021, with net proceeds from the global offering of approximately **RMB 2.419 billion**; as of June 30, 2024, **RMB 616 million** had been utilized, with **RMB 1.802 billion** remaining unutilized, primarily earmarked for R&D, R&D center upgrades, overseas network and supply chain construction, and strategic acquisitions, with most expected to be fully utilized by the end of 2026 - Net proceeds from the global offering amounted to approximately **RMB 2.4188 billion**[64](index=64&type=chunk) - As of June 30, 2024, **RMB 616.4 million** had been cumulatively utilized, with **RMB 1.8024 billion** remaining unutilized[66](index=66&type=chunk) - Most of the unutilized net proceeds are deposited in reputable banks in Hong Kong or mainland China[66](index=66&type=chunk) [Corporate Governance and Other Disclosures](index=28&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E6%8A%AB%E9%9C%B2) The company is committed to maintaining high corporate governance standards, complying with most code provisions during the reporting period, though the roles of Chairman and CEO are combined under Ms. Chen Danxia for leadership consistency and decision-making efficiency; the report also discloses post-reporting period events like director changes and confirms the audit committee's review of interim results - The roles of Chairman and Chief Executive Officer are not segregated, both held by Ms. Chen Danxia, an arrangement the Board believes ensures consistent leadership and efficient decision-making[69](index=69&type=chunk) - Changes occurred in executive directors and joint company secretaries subsequent to the reporting period[74](index=74&type=chunk) - The Audit Committee has reviewed these interim results, and the independent auditor has reviewed the interim financial information in accordance with relevant standards[75](index=75&type=chunk)

Share Award Scheme - The total number of restricted shares available for grant under the Restricted Share Award Scheme was 10,600,000 shares as of January 1, 2023, and increased to 15,400,000 shares by December 31, 2023[1] - The company is committed to transparency in accordance with the listing rules and has provided additional information regarding the share award scheme[1] - The increase in restricted shares may indicate a strategy to incentivize key personnel and align their interests with shareholders[1] Governance Structure - The board of directors consists of four executive directors and three independent non-executive directors, ensuring a diverse governance structure[1] - The executive director and chairman is Chen Danxia, highlighting leadership continuity[1] Compliance and Reporting - The announcement does not affect other information contained in the 2023 Annual Report, which remains unchanged[1] - The company adheres to the listing rules under Chapter 17, ensuring compliance with regulatory requirements[1] - The company emphasizes the importance of accurate and complete information dissemination to avoid potential liabilities[1] Communication with Stakeholders - The announcement was made on August 19, 2024, indicating ongoing communication with stakeholders[1] - The company is registered in the Cayman Islands, reflecting its international operational footprint[1]