Investment Rating - The report assigns a rating of "Buy" for the company [2][13]. Core Insights - The company reported a significant increase in profitability for 2023, with total revenue reaching 1.616 billion RMB, a growth of 11.7% year-on-year. Gross profit was 718 million RMB, up 19.4%, and net profit attributable to shareholders was 175 million RMB, reflecting a remarkable increase of 164.8% [11]. - The second half of 2023 saw accelerated revenue growth, with 483 million RMB in revenue, a 23.3% increase, and a net profit turnaround from a loss in the previous year [11]. - The company has raised its EPS forecasts for 2024 and 2025 to 0.14 RMB, with a new forecast for 2026 at 0.15 RMB. The target price has been adjusted to 2.10 RMB based on comparable company valuations [11][13]. Financial Summary - Revenue for 2023 was 1,616 million RMB, with a year-on-year growth of 12.0%. The gross profit margin improved to 51.88%, up 4.4 percentage points, driven by the introduction of differentiated high-end products [11][5]. - The company achieved a net profit margin of 7.98% in the second half of 2023, an increase of 13.5 percentage points, primarily due to a reduction in sales and distribution expenses [11]. - The company’s financial metrics indicate a PE ratio of 39.46 for 2023, which is expected to decrease to 10.37 by 2026, reflecting improved profitability [5]. Business Performance - The company’s revenue from home care products was 428 million RMB, up 20.6%, while the pet business generated 32 million RMB, down 28.6%. The personal care segment saw a slight decline of 5.9% [11]. - Offline sales channels showed significant growth, with revenue of 274 million RMB, a 37.3% increase, while online sales decreased by 6.8% [11]. - The company has expanded its offline presence in the pet business, opening 15 stores under the "爪爪喵星球" brand and 14 stores under "米乐乖乖" by February 2024, enhancing its market coverage [11].

Financial Performance - Revenue increased by 11.7% to RMB 1,615.6 million for the year ended December 31, 2023, compared to RMB 1,446.6 million for the year ended December 31, 2022[10]. - Gross profit rose by 19.4% to RMB 718.3 million, with a gross margin increase of 2.9 percentage points due to ongoing product mix optimization and supply chain reforms[11]. - Net profit surged by 164.0% to RMB 172.8 million, up from RMB 65.5 million in the previous year[10]. - Basic and diluted earnings per share increased by 164.7% to RMB 13.13, compared to RMB 4.96 for the previous year[10]. - Total revenue for the year ended December 31, 2023, was RMB 1,615,585 thousand, an increase of 11.7% from RMB 1,446,638 thousand in 2022[54]. - The company reported a profit attributable to owners of RMB 175,016 thousand for the year ended December 31, 2023, compared to RMB 66,101 thousand for the year ended December 31, 2022[93]. - The company's profit increased by 164.0% from RMB 65.5 million for the year ended December 31, 2022, to RMB 172.8 million for the year ended December 31, 2023[193]. - The net profit margin improved from 4.5% for the year ended December 31, 2022, to 10.7% for the year ended December 31, 2023[193]. Revenue Breakdown - Offline sales channels generated revenue of RMB 1,065.9 million, reflecting a 12.2% increase year-on-year[14]. - Online sales channels also saw growth, with revenue increasing by 10.7% year-on-year, driven by platforms like Douyin and various direct sales channels[11]. - Revenue for the pet and pet product category for the year ended December 31, 2023, was RMB 773 million, an increase of 0.5% compared to the year ended December 31, 2022[29]. - Revenue from online channels for the year ended December 31, 2023, was RMB 5,496 million, representing a growth of 10.7% compared to the previous year[29]. - Revenue from home care products reached RMB 1,471,917 thousand, up from RMB 1,296,901 thousand, reflecting a growth of 13.5%[54]. - Revenue from home care products was RMB 1,471,917,000, accounting for 91.1% of total revenue, up from RMB 1,296,901,000 (89.6%) in the previous year[126]. Dividends and Shareholder Returns - The board declared a final dividend of RMB 0.0640 per share, with a total dividend payout for the year amounting to RMB 0.1050 per share, representing a payout ratio of approximately 80.0%[11]. - The total interim dividend declared for the six months ended June 30, 2023, was approximately RMB 54,667,000, compared to RMB 22,400,000 for the same period in 2022[92]. - The board has resolved to declare a final dividend of RMB 0.0640 per share to shareholders listed on June 26, 2024[181]. Cash and Liquidity - As of December 31, 2023, the company held cash and cash equivalents totaling RMB 2,901.3 million, indicating strong liquidity[11]. - Cash and cash equivalents, including time deposits, amounted to RMB 3,142,059 thousand, compared to RMB 2,364,700 thousand in the previous year[37]. - Operating cash inflow for the year ended December 31, 2023, was RMB 326.9 million, compared to RMB 71.7 million for the year ended December 31, 2022[141]. Strategic Plans and Investments - The company plans to enhance its home care product lineup and expand distribution in the high-end market, focusing on pest control product upgrades and marketing across both online and offline channels[19]. - The company aims to strengthen cost management through supply chain optimization and strategic partnerships to enhance cost competitiveness[19]. - The company plans to continue strengthening its multi-brand and multi-category channel development strategy in 2024[33]. - The company aims to expand its pet business through strategic investments and optimizing mergers and acquisitions[33]. - The company plans to establish and optimize its overseas online and offline sales networks, with an investment of 5.0% of the net proceeds, totaling RMB 120.9 million[178]. - The company is expected to fully utilize the funds for various strategic initiatives by the end of 2026[178]. Acquisitions - The company acquired 100% equity of Guangdong Zhongke Research Cosmetics Technology Co., Ltd. for RMB 5,036,000 thousand, completed on April 6, 2023[43]. - The company also acquired 75.0% of Shenzhen Mile Cloud Information Technology Co., Ltd. on September 21, 2023, focusing on pet products and services[173]. Cost Management and Efficiency - The company aims to deepen its digital strategy with an investment of RMB 241.9 million, anticipated to be fully utilized by the end of 2026[1]. - Continuous supply chain reforms are being implemented to enhance operational performance and profitability[31]. - The company is focused on product innovation and upgrading to improve the proportion of high-margin products[30]. Employee and Operational Metrics - The total employee count rose to 1,040 as of December 31, 2023, from 919 as of December 31, 2022, with total employee costs increasing to RMB 173.5 million from RMB 158.8 million year-over-year[176]. - The company reported a total employee cost of RMB 173,485,000 for the year ended December 31, 2023, compared to RMB 158,762,000 in 2022, reflecting an increase of approximately 9.3%[114]. Financial Position and Assets - Non-current assets totaled RMB 694,086 thousand, an increase of 66.1% from RMB 417,855 thousand in the previous year[37]. - Current assets net value was RMB 2,274,316 thousand, down from RMB 2,425,395 thousand, a decrease of 6.2%[37]. - The company’s total liabilities were RMB 3,160,304 thousand, reflecting a significant increase compared to the previous year[37]. - The company's goodwill increased to RMB 6,280 thousand from RMB 3,925 thousand, a growth of 60.0%[37]. - The company's reserves increased to RMB 2,927,363 thousand from RMB 2,817,269 thousand, an increase of 3.9%[39]. - The group's net asset value as of December 31, 2023, is RMB 2,937,472,000, an increase from RMB 2,824,568,000 in 2022, representing a growth of approximately 4%[63].

Investment Rating - The report maintains a "Buy" rating for the company [3][4]. Core Views - The company is expected to achieve a net profit of no less than 144 million yuan for the fiscal year 2023, representing a growth of over 120% compared to the same period in 2022. Revenue is projected to be no less than 1.591 billion yuan, reflecting a growth of over 10% year-on-year [3][4]. - The company has successfully transitioned to profitability in the second half of the year, a significant improvement compared to previous years when it typically reported losses during this period [3]. - The company plans to maintain a dividend payout ratio of no less than 80% for the fiscal year 2023, with interim and final dividends already distributed [3]. Financial Summary - The company’s total revenue for 2023 is estimated at 1.610 billion yuan, with a year-on-year growth rate of 11.6%. The net profit is projected to be 146 million yuan, showing a substantial increase of 125.1% compared to 2022 [12]. - The company’s earnings per share (EPS) is expected to grow from 0.05 yuan in 2023 to 0.15 yuan by 2025, indicating a positive trend in profitability [12]. - The price-to-earnings (P/E) ratio is projected to decrease from 26.4 in 2022 to 11.7 in 2023, suggesting an improvement in valuation metrics [12]. Strategic Developments - The company is expanding its service offerings by acquiring pet retail brands, enhancing its multi-channel strategy. This includes the opening of 29 physical stores by early 2024, which will provide various pet-related services [3][4]. - The company has optimized its product structure by launching high-margin products in response to consumer demand, which has been well-received in the market [4]. - The company continues to strengthen its online presence through partnerships with major e-commerce platforms and engaging marketing campaigns [4].

证券研究报告 | 公司点评 朝云集团（06601.HK） 2023 年业绩良好，大力布局宠物线下门店服务业态 公司布局宠物线下实体门店服务业态，建立护城河。公司持续推动宠物业务 发展及变革，线下门店快速扩张，通过战略收购爪爪、米乐两个品牌将线下 实体门店服务业态战略快速落地，两个品牌旗下的线下门店数持续拓展，截 至 2024 年 2 月，爪爪喵星球/米乐乖乖分别有 15/14 家门店，主打购物中心 /生活社区消费业态。公司针对外部收购的团队多维度赋能，驱动业绩稳健 增长的同时对费率进行优化，从而提升盈利能力。针对自有品牌"倔强的尾 巴"、"倔强嘴巴"，公司重点布局淘宝、抖音、京东等线上渠道，重推核 心品类，基于数字化工具开展个性化、全渠道营销。通过自有品牌孵化加资 本投资运作的方式，公司已初步形成了涵盖宠物食品、宠物清洁用品、宠物 保健品的产业布局版图，宠物业务有望持续稳步发展提供业绩驱动力。 投资建议：公司作为家居护理细分龙头，持续推进多品牌多品类全渠道战略， 稳步推进宠物业务布局，渠道布局兼具线上高增平台及线下下沉拓展。公司 业绩稳健、现金流强劲，基于公司 2023 年业绩预告表现良好，我们维持"增 持" ...

Financial Reporting - Cheerwin Group Limited reported no changes to the content of the 2022 annual report as of December 31, 2022[2] Governance Structure - The board of directors includes executive directors and independent non-executive directors, ensuring a diverse governance structure[4] Share Award Scheme - The company provided additional information regarding the "Restricted Share Award Scheme" indicating no purchase price applies under this scheme[5]

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 1,132,761 thousand, an increase of 10.7% compared to RMB 1,023,180 thousand for the same period in 2022[64]. - Gross profit for the same period was RMB 467,781 thousand, representing a gross margin of approximately 41.3%, up from RMB 400,511 thousand in 2022[64]. - The company reported a net profit of RMB 135,700 thousand for the six months ended June 30, 2023, compared to RMB 89,427 thousand in the prior year, reflecting a growth of 51.7%[64]. - The total comprehensive income for the six months ended June 30, 2023, was RMB 174,976,000, compared to RMB 143,642,000 for the same period in 2022, representing an increase of approximately 21.8%[89]. - The profit attributable to the owners of the company for the six months ended June 30, 2023, was RMB 136,502,000, up from RMB 89,658,000 in the prior year, reflecting a growth of about 52.1%[89]. - Basic earnings per share for the six months ended June 30, 2023, was RMB 10.24, compared to RMB 6.72 for the same period in 2022, indicating an increase of approximately 52.5%[89]. Revenue Breakdown - Revenue from home care products was RMB 1,043.9 million, up 10.8% compared to the same period in 2022[140]. - Revenue from the pet and pet products category reached RMB 452 million, representing a growth of 41.1% compared to the six months ended June 30, 2022[128]. - Revenue from offline channels was RMB 791.5 million, an increase of 5.5% compared to the same period last year[128]. - Online channel revenue grew by 25.0% to RMB 341.3 million, accounting for 30.1% of total revenue[141][151]. - Personal care product revenue decreased by 3.9% from RMB 44.3 million to RMB 42.6 million[169]. Cost and Expenses - Administrative expenses increased by 16.3% from RMB 72.7 million for the six months ended June 30, 2022, to RMB 84.6 million for the six months ended June 30, 2023, primarily due to compliance and personnel costs[4]. - Operating expenses, including sales and distribution costs, were RMB 264,799 thousand, up from RMB 238,532 thousand in the previous year[64]. - The actual tax rate decreased from 27.3% for the six months ended June 30, 2022, to 22.0% for the six months ended June 30, 2023, due to a subsidiary qualifying for a preferential tax rate of 15%[6]. Investments and Capital Expenditures - Capital expenditures increased from RMB 13.0 million for the six months ended June 30, 2022, to RMB 14.4 million for the six months ended June 30, 2023, primarily for the acquisition of property, plant, and equipment[8]. - The company plans to fully utilize the proceeds from the global offering by December 31, 2023[35]. - The company plans to fully utilize the proceeds from the global offering by the end of 2026, with specific allocations for R&D and distribution channel development[50]. - 7.1% of the net proceeds from the global offering, amounting to RMB 171.8 million, has been allocated for new product R&D and upgrades[50]. - 10.2% of the net proceeds, amounting to RMB 246.7 million, is designated for the construction and upgrading of relevant R&D centers[50]. Share Options and Awards - The total number of share options potentially granted under the share option scheme is 128,533,350, representing approximately 9.64% of the total issued shares[19]. - The maximum number of shares that can be granted under the Restricted Share Award Scheme is capped at 25,000,000 shares, representing 1.87% of the total issued shares as of the report date[43]. - The total number of options granted but not exercised shall not exceed 30% of the total issued shares at any time[199]. - The company approved the Restricted Share Award Scheme on June 3, 2021, allowing the board to grant shares to selected key management personnel based on various factors[27]. - If the performance score is below 80, the personal allocation ratio for the participants will be 0%, meaning no shares will vest for that year[31]. Cash Flow and Assets - As of June 30, 2023, cash and cash equivalents and time deposits amounted to RMB 2,465.6 million, with most denominated in RMB[9]. - The company's total assets as of June 30, 2023, were RMB 2,962,991,000, an increase from RMB 2,812,473,000 as of December 31, 2022[89]. - The company's cash and cash equivalents were RMB 769,326 thousand, down from RMB 908,714 thousand, indicating a decrease of about 15.3%[91]. - The net cash generated from investing activities was RMB 250,358 thousand, a significant improvement compared to a net cash outflow of RMB 872,412 thousand in the previous period[104]. Strategic Initiatives - The company plans to enhance its multi-brand and multi-category channel development strategy in the second half of 2023, focusing on product innovation and upgrading[130]. - The company aims to strengthen its online sales channels, particularly on platforms like Douyin, JD.com, Pinduoduo, and Kuaishou, to enhance profitability in e-commerce[131]. - The company is focusing on digital strategy enhancement, allocating 10.0% of net proceeds, or RMB 241.9 million, to strengthen IT infrastructure and develop data-driven business platforms[52]. - The company aims to enhance market penetration in lower-tier cities, with an investment of RMB 120.9 million, which is 5.0% of the total net proceeds[52]. - The company plans to expand its pet business through strategic investments and acquisitions to build a competitive edge[145]. Compliance and Governance - The company has maintained compliance with all applicable corporate governance codes during the reporting period[74]. - The company’s independent auditor has reviewed the interim financial statements in accordance with the relevant standards[82]. - There were no significant post-reporting period events after June 30, 2023[80].

Financial Performance - For the six months ended June 30, 2023, the company's revenue increased by 10.7% to RMB 1,132.8 million, compared to RMB 1,023.2 million for the same period in 2022[3]. - Gross profit for the same period was RMB 467.8 million, representing a 16.8% increase from RMB 400.5 million year-on-year[2]. - Net profit rose by 51.7% to RMB 135.7 million, up from RMB 89.4 million in the previous year[3]. - The overall gross margin improved by 2.2 percentage points to 41.3% due to ongoing optimization of product mix and supply chain cost management[5]. - The total comprehensive income for the six months ended June 30, 2023, was RMB 174,976,000, compared to RMB 143,642,000 in 2022, showing an increase of about 21.8%[49]. - The basic earnings per share for the six months ended June 30, 2023, was RMB 10.24, compared to RMB 6.72 in 2022, marking a significant increase of approximately 52.5%[49]. - The company reported a net profit of RMB 136,502,000 for the six months ended June 30, 2023, compared to RMB 89,658,000 for the same period in 2022, representing a growth of approximately 52.2%[73]. - Adjusted net profit for the six months ended June 30, 2023, was RMB 135.9 million, compared to RMB 91.8 million for the same period in 2022[130]. Revenue Breakdown - Revenue from home care products reached RMB 1,043.9 million, a 10.8% increase year-on-year[6]. - Online channel revenue grew by 25.0% to RMB 341.3 million, compared to the same period last year[7]. - Revenue from offline channels amounted to RMB 791.5 million, showing a growth of 5.5% compared to the six months ending June 30, 2022[22]. - Revenue from pet and pet products increased by 41.1%, rising from RMB 32.1 million for the six months ended June 30, 2022, to RMB 45.2 million for the same period in 2023[84]. - Home care products generated revenue of RMB 1,043.9 million, accounting for 92.1% of total revenue, while personal care products decreased by 3.9% to RMB 42.6 million[136][137]. Dividends and Shareholder Returns - The company declared an interim dividend of RMB 0.0410 per share, with a payout ratio increasing to 40.0% from 25.0% in the previous year[3]. - The company declared a final dividend of RMB 0.0220 per ordinary share, totaling approximately RMB 29,333,000, compared to RMB 73,733,000 for the previous year, which reflects a decrease of about 60.3%[72]. - The company maintains a high and stable annual dividend policy to maximize shareholder returns[48]. Cost and Expenses - Employee costs, including director remuneration, increased to RMB 95,340,000 for the six months ended June 30, 2023, up from RMB 77,243,000 in the previous year, reflecting a rise of about 23.4%[70]. - The total depreciation expense for the period was RMB 17,500,000, compared to RMB 15,726,000 for the same period in 2022, indicating an increase of approximately 11.3%[70]. - Total sales and distribution expenses for the six months ended June 30, 2023, were RMB 264,799,000, an increase from RMB 238,532,000 in the same period of 2022, reflecting a rise of approximately 11%[92]. - The cost of inventory recognized as an expense during the period was RMB 663,194,000, compared to RMB 622,665,000 in the previous year, representing an increase of approximately 6.5%[70]. Assets and Liabilities - As of June 30, 2023, total assets amounted to RMB 3,053,401 thousand, a decrease from RMB 3,160,304 thousand as of December 31, 2022, representing a decline of approximately 3.4%[50]. - Current liabilities decreased to RMB 493,785 thousand from RMB 734,909 thousand, a reduction of about 32.8%[50]. - The net current asset value increased to RMB 2,559,616 thousand, up from RMB 2,425,395 thousand, reflecting an increase of approximately 5.5%[50]. - Trade payables decreased from RMB 177.2 million as of December 31, 2022, to RMB 117.5 million as of June 30, 2023[107]. Strategic Initiatives - The company plans to enhance its home cleaning product offerings and accelerate marketing efforts across online and offline channels[12]. - The company aims to strengthen its upstream supply chain and optimize production costs to improve cost competitiveness[12]. - The company is actively pursuing acquisition opportunities in the domestic and international pet and fast-moving consumer goods sectors[12]. - The group plans to strengthen its multi-brand and multi-category channel development strategy in the second half of 2023, focusing on product innovation and enhancing channel profitability[24]. - The company plans to enhance its online distribution channels with an investment of RMB 241.9 million, representing 10.0% of the total funds raised[1]. - The company aims to strengthen its offline distribution network with an investment of RMB 120.9 million, accounting for 5.0% of the total funds raised[1]. - The establishment of a supply chain base in Shanghai, including a warehouse and logistics center, is projected to require an investment of RMB 169.3 million, which is 7.0% of the total funds raised[1]. Market Position and Growth - The group has maintained a strong market presence by enhancing the distribution of high-margin products and optimizing the quality of distribution points[23]. - The group's pest control products have ranked first in market share among similar products in China for eight consecutive years from 2015 to 2023, according to NielsenIQ retail market data[24]. - The company is focused on increasing market penetration in lower-tier cities with an investment of RMB 120.9 million, representing 5.0% of the total funds raised[1]. - The company is committed to developing new markets and optimizing its overseas online and offline sales networks with an investment of RMB 120.9 million, which is 5.0% of the total funds raised[1]. Research and Development - The company has integrated its R&D and product testing capabilities through the acquisition of Guangdong Zhongke Research Cosmetics Technology Co., Ltd., enhancing its technological development[48]. - The company’s research and development costs included in administrative expenses were RMB 14,081,000 for the period, up from RMB 9,925,000 in the previous year, indicating a growth of about 41.5%[70]. Taxation - The company’s tax rate for eligible group entities is structured at 8.25% for the first RMB 2,000,000 of profits and 16.5% for profits exceeding that threshold[68]. - The company’s income tax expense for the six months ended June 30, 2023, was RMB 50,328,000, compared to RMB 48,988,000 in the same period of 2022, reflecting an increase of approximately 2.7%[93]. - The actual tax rate decreased from 27.3% for the six months ended June 30, 2022, to 22.0% for the six months ended June 30, 2023, due to a subsidiary qualifying for a reduced tax rate of 15%[167].

Financial Performance - The company recorded a revenue of RMB 1,442.2 million in 2022, a decrease of 18.5% compared to the previous year[8] - Net profit for the year was RMB 64.1 million, representing a decline of 29.4%[8] - The total revenue for 2022 was RMB 1,442.2 million, a decline from RMB 1,769.2 million in 2021[30] - The adjusted net profit for 2022 was RMB 67.6 million, significantly lower than RMB 103.8 million in 2021[24] - The company's revenue decreased by 18.5% from RMB 1,769.2 million in the year ended December 31, 2021, to RMB 1,442.2 million in the year ended December 31, 2022, due to adverse impacts from the COVID-19 pandemic and extreme weather[44] Revenue Breakdown - Revenue from home care products, including pest control, cleaning, and air care products, was RMB 1,296.9 million, a decrease of 19.4% year-on-year[9] - In 2022, the company's revenue from pet products reached RMB 769 million, an increase of 46.1% compared to the previous year[19] - Online channel revenue for 2022 was RMB 496.5 million, a 16.4% increase from RMB 426.6 million in 2021[20] - Offline channel revenue decreased by 29.6% to RMB 945.7 million in 2022, down from RMB 1,342.5 million in 2021[37] Profitability Metrics - Gross profit margin was 41.6%, down by 2.9 percentage points from the previous year[8] - The gross profit for 2022 was RMB 599.8 million, with a gross margin of approximately 41.6%[30] - The overall gross profit decreased by 23.8% from RMB 787.4 million in the year ended December 31, 2021, to RMB 599.8 million in the year ended December 31, 2022, with a slight decline in gross margin from 44.5% to 41.6%[56] - The gross profit for home care products was RMB 542.9 million with a gross margin of 41.9%, down from 43.9% in the previous year[58] - The gross profit for personal care products was RMB 23.4 million, with a gross margin declining from 48.1% to 36.4%[50] - The gross profit for pet products was RMB 34.0 million, with a gross margin decreasing from 58.0% to 44.2%[59] Expenses and Cost Management - Sales and distribution expenses amounted to RMB 435.3 million, down by 17.3%[8] - Administrative expenses were RMB 163.8 million, a reduction of 8.5%[8] Strategic Initiatives - The company plans to expand its pet business and enhance its offline sales channels to increase market share and profitability[24] - Strategic investments in Wuhan Zhongbo Green Asia Biotechnology Co., Ltd. aim to strengthen the supply chain and R&D in the pet pharmaceutical sector[22] - The company is actively pursuing acquisition opportunities in the domestic and international pet and fast-moving consumer goods sectors[25] - The company plans to enhance its multi-brand and multi-category omnichannel development strategy, focusing on product innovation and high-margin product distribution[40] - The company aims to expand into upstream R&D business through acquisitions to strengthen its product development capabilities in cosmetics, maternal and infant care, personal care, and pet categories[43] Challenges and Market Conditions - The company faced challenges in online shipping due to pandemic-related regulatory measures affecting delivery times[8] - Extreme weather conditions negatively impacted the sales of pest control products, which are a leading category for the company[8] Corporate Governance - The company has complied with the environmental, social, and governance (ESG) reporting guidelines as per the listing rules for the fiscal year ending December 31, 2022[119] - The company is committed to maintaining high standards of corporate governance, with regular reviews of governance policies and practices[149] - The company has adopted a board diversity policy, considering various factors such as professional experience, gender, and age to enhance board effectiveness[156] - The board consists of three executive directors, one non-executive director, and three independent non-executive directors, ensuring a diverse skill set and experience[153] Assets and Liabilities - The company’s total assets as of December 31, 2022, amounted to RMB 3,155,075 thousand, compared to RMB 3,103,683 thousand in 2021, reflecting a slight increase of approximately 1.65%[93] - Non-current liabilities were reported at RMB 8,270 thousand in 2022, with no previous year comparison provided[68] - The net asset value increased to RMB 2,819,770 thousand in 2022 from RMB 2,735,259 thousand in 2021, representing a growth of about 3.09%[69] - The total current liabilities were RMB 734,476 thousand in 2022, slightly down from RMB 677,999 thousand in 2021, indicating a decrease of approximately 8.33%[93] Stock Options and Share Awards - The total number of stock options potentially granted under the stock option plan is 128,533,350, which constitutes approximately 9.64% of the total issued shares of 1,333,333,500[72] - The company has a remaining term of approximately 8.5 years for the restricted share award plan, which allows for a maximum of 25,000,000 shares to be granted, equivalent to 1.87% of the total issued shares[91] - A total of 19,800,000 restricted shares were granted under the restricted share award scheme, representing approximately 1.48% of the issued shares[96] Board and Committee Activities - The Audit Committee held two meetings during the fiscal year ending December 31, 2022, to review the company's 2021 annual performance announcement and 2022 interim results[191] - The Nomination Committee considered and reviewed the resignation of Dr. Yu Dechao as an independent non-executive director and appointed Dr. Yu Rong as an independent non-executive director effective from October 14, 2022[175] - The Audit Committee consists of four members, including one non-executive director and three independent non-executive directors, ensuring adequate independent opinions to protect the interests of the company and its shareholders[190] - The Remuneration Committee reviewed the remuneration policy and structure for directors and senior management for the fiscal year 2022[178] Compliance and Risk Management - The company has implemented a strict insider trading policy to regulate employees with access to insider information, ensuring compliance with the standard code of conduct[185] - The company’s governance report indicates compliance with legal and regulatory requirements, ensuring transparency and accountability[189]

Revenue Performance - Total revenue for the year ended December 31, 2022, was RMB 1,442,194,000, a decrease of 18.5% from RMB 1,769,157,000 in 2021[29]. - Home care products accounted for 89.9% of total revenue in 2022, generating RMB 1,296,901,000, down from RMB 1,608,309,000 in 2021[29]. - The revenue from offline channels decreased by 29.6% to RMB 945.7 million in 2022[32]. - The company's revenue from pet products increased by 46.1% from RMB 527 million in 2021 to RMB 769 million in 2022[40]. - Online channel revenue rose by 16.4% from RMB 426.6 million in 2021 to RMB 496.5 million in 2022, accounting for 34.4% of total revenue[42][41]. - Revenue for home care products, including pest control and cleaning products, was RMB 1,296.9 million for the year ended December 31, 2022, a decrease of 19.4% from RMB 1,607.5 million for the year ended December 31, 2021[144]. - Revenue for the pet products category reached RMB 769 million for the year ended December 31, 2022, an increase of 46.1% compared to RMB 526 million for the year ended December 31, 2021[144]. - Revenue from personal care products decreased by 36.2% from RMB 100.8 million for the year ended December 31, 2021, to RMB 64.3 million for the year ended December 31, 2022[196]. Profitability and Margins - Gross profit for the year was RMB 599,808,000, representing a gross margin of 41.6%, down from RMB 787,426,000 and 44.5% in 2021[33]. - The overall gross profit margin for personal care products dropped to 36.4% in 2022 from 48.1% in 2021[33]. - The gross profit for pet products was RMB 340 million in 2022, with a gross margin decline from 58.0% in 2021 to 44.2% in 2022[45]. - The gross profit for offline channels was RMB 366.3 million in 2022, with a gross margin decrease from 42.2% in 2021 to 38.7% in 2022[48]. - The company's profit decreased by 29.4% from RMB 90.8 million for the year ended December 31, 2021, to RMB 64.1 million for the year ended December 31, 2022[68]. - The net profit margin slightly decreased from 5.1% for the year ended December 31, 2021, to 4.4% for the year ended December 31, 2022[68]. Expenses and Costs - The company's administrative expenses decreased by 8.5% from RMB 179 million in 2021 to RMB 163.8 million in 2022[51]. - Sales and distribution expenses decreased by 17.3% to RMB 435.3 million, while administrative expenses decreased by 8.5% to RMB 163.8 million[126]. - Total employee costs for the year amounted to RMB 156,025,000, down from RMB 165,989,000 in the previous year, reflecting a reduction of about 6.0%[1]. - Research and development expenses, including administrative costs, significantly increased to RMB 32,318,000 from RMB 11,113,000, marking a rise of approximately 191.5%[1]. - Capital expenditures decreased from RMB 58.0 million for the year ended December 31, 2021, to RMB 24.7 million for the year ended December 31, 2022, primarily for the purchase of properties, plants, and equipment[86]. Cash Flow and Financial Position - The company's cash and cash equivalents totaled RMB 2,359.5 million as of December 31, 2022[58]. - The net operating cash inflow for the year ended December 31, 2022, was RMB 66.8 million, a significant improvement from a net cash outflow of RMB 191.9 million for the year ended December 31, 2021, driven by a pre-tax profit of RMB 85.0 million[86]. - The group maintained strong cash reserves totaling RMB 2,359.5 million as of December 31, 2022, to support business expansion[118]. - The group reported a net asset value of RMB 2,819,770,000 as of December 31, 2022, compared to RMB 2,735,259,000 in the previous year, indicating a growth of 3.1%[151]. - The total amount of unfulfilled contractual obligations as of December 31, 2022, was approximately RMB 243,719,000, an increase from RMB 169,066,000 in 2021[160]. Strategic Plans and Future Outlook - The company plans to expand its business scope into upstream technology research through acquisitions, aiming to shorten the research and development cycle for potential new products[75]. - The company plans to establish an overseas supply chain to enhance cost advantages, with an expected investment of RMB 36.3 million, projected to be fully utilized by the end of 2026[104]. - The company aims to enhance its digital infrastructure and develop technology for supply chain management, with an investment of RMB 241.9 million, anticipated to be fully utilized by the end of 2026[104]. - The group plans to strengthen multi-brand and multi-category channel development strategies and enhance product innovation to improve profitability in the long term[118]. - The group aims to capture growth opportunities in emerging channels, such as Douyin, to enhance overall profitability[148]. - The company aims to accelerate acquisition opportunities in the domestic and international pet and fast-moving consumer goods sectors, focusing on projects with stable cash flow and clear profit models[133]. Dividends and Shareholder Returns - The board has declared a final dividend of RMB 0.0220 per share, equivalent to HKD 0.0251 per share, compared to RMB 0.0553 per share for the year ended December 31, 2021, resulting in a total dividend of RMB 0.0388 per share with a payout ratio of approximately 80%[80]. - The group will implement a high ratio and stable annual dividend policy to maximize shareholder returns[150]. - The company declared an interim dividend of RMB 0.0168 per ordinary share, totaling approximately RMB 22,400,000 for the year, compared to no interim dividend in the previous year[185]. Corporate Governance and Compliance - The company has maintained compliance with corporate governance standards and best practices throughout the reporting period[108]. - The group has maintained a stable financing and treasury policy to ensure optimal financial condition and minimal financial risk[88]. - The company's public float meets the listing rules, with at least 25% of shares held by the public[111].

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 1,021,635 thousand, a decrease of 19.7% from RMB 1,271,905 thousand in 2021[7] - Gross profit for the same period was RMB 400,383 thousand, down 28.2% from RMB 557,988 thousand in 2021[7] - The adjusted profit for the period was RMB 91,706 thousand, a decline of 29.1% compared to RMB 129,477 thousand in 2021[7] - The net profit for the group was RMB 89.3 million, representing a year-on-year decrease of 25.1%[11] - Profit decreased by 25.1% from RMB 119.3 million for the six months ended June 30, 2021, to RMB 89.3 million for the same period in 2022, with a slight decline in net profit margin from 9.4% to 8.7%[36] - Basic earnings per share decreased to RMB 6.72 from RMB 9.95, a drop of 32.5% year-on-year[81] - The company reported a total comprehensive income of RMB 143,550 thousand for the period, up from RMB 119,139 thousand in the previous year, an increase of 20.5%[81] Assets and Liabilities - Total assets as of June 30, 2022, were RMB 3,242,208 thousand, a decrease from RMB 3,422,650 thousand as of December 31, 2021[8] - Current liabilities decreased to RMB 421,758 thousand from RMB 677,999 thousand at the end of 2021, a reduction of 37.8%[82] - Total liabilities decreased to RMB 299,016,000 as of June 30, 2022, from RMB 419,529,000, indicating a reduction of 28.7%[128] Revenue Breakdown - Revenue from pet products reached RMB 32.1 million, an increase of 22.6% compared to the same period in 2021[12] - Revenue from home care products was RMB 942.0 million, a decrease of 19.6% year-on-year[12] - Revenue from personal care products was RMB 44.3 million, down 38.1% year-on-year[12] - Online channel revenue was RMB 273.0 million, an increase of 6.2% year-on-year, while offline channel revenue was RMB 748.6 million, a decrease of 26.2%[12] Challenges and Market Conditions - The company faced challenges in online shipping due to pandemic-related restrictions, affecting delivery times and overall sales[10] - Offline business was hindered by reduced foot traffic and marketing activities, leading to slower expansion of distribution channels[10] - Production was limited due to raw material supply issues, particularly in the East China region, impacting the supply of key product categories[10] - The demand for pest control products decreased due to extreme weather conditions, significantly affecting sales in this leading category[10] - Rising costs of raw materials and packaging due to international turmoil and the pandemic have pressured the company's profit margins[10] Strategic Initiatives - The company plans to enhance its product layout in home cleaning and launch high-end cleaning products to improve gross margins[15] - The company aims to expand its pet food business and strengthen both online and offline channels to increase market share and profitability[15] - Strategic investment in Wuhan Zhongbo Luyia Biotechnology Co., Ltd. aims to enhance the supply chain and R&D capabilities in the pet medicine and health products sector[14] - The company will focus on cost reduction and efficiency improvement through upstream supply chain construction and strategic cooperation[18] Employee and Shareholder Information - The total employee count as of June 30, 2022, is 877, an increase from 855 as of June 30, 2021[50] - Total employee costs for the six months ended June 30, 2022, were RMB 75.8 million, down from RMB 92.3 million in the same period of 2021, primarily due to a reduction in performance bonuses[50] - Major shareholders, including Ms. Ma, Ms. Li, Mr. Chen Kai-xuan, and Mr. Chen Kai-chen, collectively hold 990,000,000 shares, representing 74.25% of the total issued shares[56] Cash Flow and Capital Expenditures - Operating cash outflow for the six months ended June 30, 2022, was RMB 172.4 million, a decrease from RMB 318.5 million for the same period in 2021, attributed to pre-tax profit adjustments and changes in working capital[39] - Capital expenditures decreased from RMB 31.9 million for the six months ended June 30, 2021, to RMB 13.0 million for the same period in 2022, primarily for the acquisition of property, plant, and equipment[40] Share-Based Payment and Dividends - The interim dividend declared is RMB 0.0168 per share, with a payout ratio of approximately 25% for the six months ended June 30, 2022[51] - The company has a stock option plan effective from July 23, 2021, with a total cost of RMB 8,000 recognized for the six months ended June 30, 2022, compared to RMB 0 for the same period in 2021[142] Compliance and Governance - The company has maintained compliance with all applicable provisions of the corporate governance code during the six-month period ending June 30, 2022[71] - The audit committee, consisting of three independent non-executive directors, has reviewed the accounting principles and practices adopted by the group for the six-month period ending June 30, 2022[76]