Group 1 - The article reports on share buybacks conducted by various companies on May 12, 2025, with AIA Group (01299) having the largest buyback amount of 1.25 billion, purchasing 2 million shares [1][2] - Other notable buybacks include China COSCO Shipping Holdings (01919) with 4.21 million shares bought back for 53.77 million, and Times Electric (03898) with 1.43 million shares for 47.22 million [2][3] - The total number of shares repurchased by AIA Group in the year reached 5.93 billion, accounting for 5.276% of its total share capital [2] Group 2 - China Hongqiao Group (01378) repurchased 1.13 million shares for 15.96 million, representing only 0.380% of its total share capital [2] - Swire Properties (00019) bought back 181,000 shares for 12.67 million, with a total annual repurchase of 5.56 million shares, which is 6.652% of its total [2] - The buyback activity reflects a trend among companies to utilize excess cash for share repurchases, potentially signaling confidence in their financial health [1][2]

Group 1 - The article reports on share buybacks conducted by various companies on April 30, 2025, highlighting the total amounts and quantities repurchased [1][2][3] - AIA Group (01299) had the largest buyback amount, repurchasing 3.7736 million shares for a total of 217 million [1][2] - China Merchants Industry Holdings (01919) and China Hongqiao Group (01378) also had significant buybacks, with 12.9715 million shares for 151 million and 4.6665 million shares for approximately 64.83 million respectively [2][3] Group 2 - The cumulative buyback amounts for the year show that AIA Group has repurchased a total of 584 million shares, representing 5.198% of its total share capital [2] - China Merchants Industry Holdings has repurchased 241 million shares, accounting for 7.530% of its total share capital [2] - Other notable companies include Times Electric (03898) with 8.016% of its total shares repurchased and Swire Properties (01972) with 1.530% [2][3] Group 3 - The buyback activities reflect a trend among companies to return capital to shareholders, with varying percentages of total share capital being repurchased across different firms [1][2] - Companies like FOSUN Pharma (02196) and Jitu Express (01519) have lower buyback percentages, at 1.800% and 0.645% respectively, indicating a more conservative approach [2][3] - The data suggests a strategic move by companies to enhance shareholder value amidst market conditions [1][2]

Financial Performance - For the fiscal year ending December 31, 2024, the company's revenue was RMB 1,562,648,000, a decrease of 9.9% compared to RMB 1,734,061,000 in 2023[16] - The gross profit for 2024 was RMB 806,334,000, resulting in a gross margin of 51.6%, down from 54.2% in 2023[16] - The profit attributable to shareholders for 2024 was RMB 138,875,000, reflecting a decline of 34.9% from RMB 213,238,000 in 2023[16] - Revenue for the year ended December 31, 2024, decreased by 9.9% to RMB 1,562.6 million from RMB 1,734.1 million in 2023[18] - Gross profit for the year ended December 31, 2024, decreased by 14.3% to RMB 806.3 million, with a gross margin decline from 54.2% in 2023 to 51.6%[18] - Profit attributable to shareholders for the year ended December 31, 2024, decreased by 34.9% to RMB 138.9 million, with a net profit margin decline from 12.3% in 2023 to 8.9%[18] - Basic earnings per share for the year ended December 31, 2024, decreased by 35.0% to RMB 0.13 from RMB 0.20 in 2023[18] - The group's net profit decreased by 34.9% from RMB 213.2 million to RMB 138.9 million, with the net profit margin declining from 12.3% to 8.9% due to reduced revenue[60] Assets and Equity - Total assets as of December 31, 2024, were RMB 2,973,619,000, a slight decrease from RMB 3,001,844,000 in 2023[17] - The total equity for 2024 was RMB 1,765,426,000, compared to RMB 1,785,712,000 in 2023[17] - Cash and cash equivalents increased by 23.8% from RMB 275.1 million to RMB 340.5 million as of December 31, 2024[61] - The total bank borrowings increased from RMB 521.1 million to RMB 571.4 million, with a weighted average effective interest rate of 2.76%[62] Operational Strategy - The company aims to achieve total revenue of RMB 1.56 billion in 2024, despite a challenging economic environment[27] - The company plans to expand its sales network and develop new products, including traditional foods and milk tea, to meet diverse consumer demands[28] - The company will continue to enhance its marketing strategies and customer service to improve operational efficiency and reduce costs[27] - The company is focusing on e-commerce expansion and optimizing its membership system to adapt to changing consumer behaviors[31] - The company intends to strengthen its brand image and competitive advantages through various marketing activities, especially in the digital economy[31] Market Position and Brand Recognition - The company has been recognized as one of the top 10 tea brands in China for 2024, enhancing its brand value and market presence[7] - The company continues to implement a multi-brand strategy to capture various segments of the traditional Chinese tea market[9] - Revenue from tea sales accounted for 69.2% of total revenue, amounting to RMB 1,080.8 million, down from 72.4% in the previous year[46] Product Development and Quality Control - The company has established a food research and development department to diversify its product line, including traditional foods such as pork floss, snow fungus soup, and ready-to-eat bird's nest[37] - The company emphasizes product quality and safety, implementing multiple quality testing procedures to comply with applicable quality regulations[37] - The company is actively developing new products and improving packaging to meet the needs of mid-to-low-end consumers[34] - The company is committed to maintaining compliance with strict regulations in the tea and food industry, including food safety laws and environmental regulations[37] Employee and Governance - As of December 31, 2024, the group had a total of 3,354 employees, with employee costs amounting to RMB 319.6 million, a decrease from RMB 337.5 million for the year ending December 31, 2023[75] - The group conducts annual performance evaluations for employees, which influence salary reviews and promotions, ensuring alignment with local market compensation standards and inflation[75] - The company emphasizes high standards of corporate governance to enhance shareholder value and protect shareholder rights[88] - The board of directors is responsible for leading and controlling the company, overseeing business strategies and performance[91] Risk Management and Compliance - The company employs a three-line defense model for risk management, with operational management as the first line, risk management oversight as the second line, and internal audit as the third line[117] - The internal control system is based on the COSO framework, focusing on monitoring environment, risk assessment, control activities, information and communication, and monitoring activities[119] - The company has established a policy for handling and communicating insider information, ensuring accuracy and compliance before disclosure[120] - The company has mechanisms in place for directors to seek independent professional advice at the company's expense[111] Shareholder Communication and Dividends - The company emphasizes effective communication with shareholders, utilizing financial reports and annual general meetings to enhance investor relations[127] - The company plans to distribute a final dividend of HKD 0.08 per ordinary share, equivalent to RMB 0.07 per share, subject to shareholder approval at the annual general meeting[153] - The company aims to declare dividends of no less than 20% of the consolidated net profit after tax for each financial year, contingent on financial and operational conditions[157] Challenges and Economic Environment - The company has identified macroeconomic risks, including global economic slowdown and geopolitical tensions, which may impact its financial performance[144] - Consumer spending is expected to decline as disposable income is impacted by the unstable macroeconomic environment, particularly affecting high-end and gift tea sales[146] - The company is facing risks from a downturn in the real estate market, which is affecting consumer wealth and spending capacity[145] Related Party Transactions - The company has implemented internal controls to ensure related party transactions are conducted on normal commercial terms, including regular monitoring and reporting by management[198] - The group paid RMB 1,722,857 in rent for properties leased from related parties during the fiscal year ending December 31, 2024[183]

Financial Performance - For the year ending December 31, 2024, revenue decreased by 9.9% to RMB 1,562.6 million from RMB 1,734.1 million in 2023[5] - Gross profit for the year ending December 31, 2024, fell by 14.3% to RMB 806.3 million, with a gross margin of 51.6%, down from 54.2% in 2023[5] - Profit attributable to shareholders decreased by 34.9% to RMB 138.9 million, resulting in a net profit margin of 8.9%, down from 12.3% in 2023[5] - Basic earnings per share for the year ending December 31, 2024, were RMB 0.13, a decrease of 35.0% compared to RMB 0.20 in 2023[5] - The company reported a net profit of RMB 138,875,000 for the year ended December 31, 2024, down from RMB 213,238,000 in 2023, representing a decrease of 34.9%[21][24] - Revenue from tea sales was RMB 1,080,770,000 in 2024, down 13.8% from RMB 1,254,692,000 in 2023[21] - Adjusted operating profit for the tea segment was RMB 155,308,000, compared to RMB 254,139,000 in 2023, reflecting a decline of 38.8%[21][23] Dividends - The board proposed a final dividend of HKD 0.08 per share (equivalent to RMB 0.07), a reduction of 33.3% from RMB 0.12 per share in 2023[5] - Total declared interim dividend for 2024 was RMB 29,326,000, down 42% from RMB 50,196,000 in 2023[36] - Proposed final dividend for 2024 is RMB 80,270,000, a decrease of 32% compared to RMB 118,633,000 in 2023[35] Assets and Liabilities - Total assets as of December 31, 2024, amounted to RMB 2,973.6 million, a slight decrease from RMB 3,001.8 million in 2023[7] - Current assets increased to RMB 1,682.6 million from RMB 1,606.5 million in 2023, primarily driven by cash and cash equivalents rising to RMB 340.5 million[7] - Total liabilities decreased marginally to RMB 1,208.2 million from RMB 1,216.1 million in 2023[9] - Trade and other receivables totalled RMB 245,488,000 as of December 31, 2024, a slight decrease from RMB 248,268,000 in 2023[40] - The total cash outflow for leases in 2024 was RMB 72,485,000, down from RMB 78,712,000 in 2023[39] - The total borrowings increased to RMB 571,380,000 in 2024 from RMB 521,060,000 in 2023, reflecting a rise of about 10%[50] Operational Efficiency - The company plans to continue focusing on the tea segment while exploring opportunities for market expansion and new product development[18] - The company has implemented an integrated ERP system since 2012 to improve efficiency in processing and distribution operations[63] - The distribution costs decreased by 5.8% to RMB 343.1 million, attributed to a reduction in self-owned retail outlets and cost control measures[68] - The company plans to continue optimizing its retail network by establishing new retail outlets in densely populated commercial areas and expanding into third- and fourth-tier cities[60] Market Conditions - The overall economic conditions have led to a soft consumer market, impacting the company's performance[54] - Revenue from tea sales dropped by 13.9% to RMB 1,080.8 million, while tea food sales increased by 1.3% to RMB 247.6 million, and tea utensils sales rose by 2.4% to RMB 179.5 million[65] Corporate Governance - The audit committee reviewed the annual performance for the year ending December 31, 2024, which was approved by the company's auditor, PwC[107] - The board consists of nine members, including executive and independent non-executive directors, ensuring diverse oversight[109] - The company plans to propose the reappointment of PwC as its auditor at the annual general meeting[108] Share Buybacks - The company repurchased 2,447,000 shares at a total value of approximately HKD 9,370,000 during 2024, with a corresponding payment of RMB 8,639,000[44] - The company has not purchased, sold, or redeemed any of its listed securities during the fiscal year ending December 31, 2024, apart from the disclosed buybacks[104] - The board believes that the current trading price of the shares does not reflect their intrinsic value, indicating confidence in the long-term business outlook[103] Recognition and Awards - The company has received multiple awards, including being named "2024 China's Tea Industry 'Enterprise of the Year'" by Forbes and ranking among the "Top 10 Tea Brands" in China[54] - The company has been recognized for its ESG efforts, receiving the "Best Practice Award" in the daily consumer goods sector for 2022[59]

Financial Performance - In the first half of 2024, the company achieved revenue of RMB 811.3 million, a decrease of 3.7% compared to the same period in 2023, and recorded a profit of RMB 69.1 million, down 30.1% year-on-year[17]. - The company's revenue decreased by 3.7% from RMB 842.8 million in the six months ended June 30, 2023, to RMB 811.3 million in the same period of 2024[30]. - The group's tea sales revenue decreased by 6.4% from RMB 611.1 million for the six months ended June 30, 2023, to RMB 571.8 million for the six months ending June 30, 2024[33]. - Gross profit decreased by 8.3% from RMB 462.4 million to RMB 424.1 million, with the gross margin declining from 54.9% to 52.3% due to adjustments in tea product categories and a decrease in retail proportion[34]. - The group's net profit decreased by 30.1% from RMB 98.9 million to RMB 69.1 million, with the net profit margin dropping from 11.7% to 8.5% due to reduced revenue and gross margin[40]. - Basic and diluted earnings per share were both RMB 0.06, down from RMB 0.09 in the same period last year[80]. - The interim dividend declared is HKD 0.03 per share (equivalent to RMB 0.027), compared to HKD 0.05 per share (equivalent to RMB 0.046) for the same period last year[52]. - The total dividends paid for the six months ended June 30, 2024, amounted to RMB 120,669,000, compared to RMB 126,232,000 for the same period in 2023, representing a decrease of 4.5%[162]. Sales and Revenue Breakdown - Sales of tea accounted for 70.5% of total revenue in the first half of 2024, down from 72.5% in the same period of 2023, with revenue of RMB 571.8 million[31]. - Sales of tea food increased to RMB 110.1 million, representing 13.6% of total revenue, compared to RMB 107.8 million and 12.8% in the previous year[31]. - Revenue from tea food sales increased to RMB 110,100,000, up 2.4% from RMB 107,771,000 in the previous year[108]. - Revenue from tea utensils rose to RMB 101,728,000, an increase of 9.4% compared to RMB 93,020,000 in the same period last year[108]. Operational Developments - The company is actively expanding its customer loyalty programs and enhancing marketing strategies to improve operational efficiency and customer retention[17]. - The company is focusing on optimizing its sales network in China to enhance the coverage of its tea product sales[19]. - The company plans to expand its retail network in China, focusing on high-traffic areas in selected cities and increasing penetration in third- and fourth-tier cities[24]. - The company has established a food R&D department to develop diverse traditional foods, including pork crisps and instant bird's nest[22]. - The company is expanding its production capacity by increasing the number of processing bases, with existing facilities in Fujian, Sichuan, Zhejiang, Guangxi, and Guizhou provinces[27]. - The company continues to develop new tea-related products to meet changing consumer preferences and trends, including tea beverages under the "放牛斑" brand[24]. Cost Management and Financial Health - The company has implemented measures to control costs while improving employee welfare and training[17]. - Administrative expenses increased by 4.0% from RMB 137.7 million to RMB 143.2 million, primarily due to rising labor and depreciation costs[35]. - Cash and cash equivalents increased by 25.8% from RMB 275.1 million to RMB 346.1 million, primarily due to increased cash generated from operations and borrowings[40]. - Total bank borrowings rose from RMB 521.1 million to RMB 585.7 million, with the capital debt ratio increasing from 22.6% to 25.3% due to higher total borrowings and the inclusion of lease liabilities in total debt[41]. - The company has sufficient working capital and financial resources to support daily operations as of June 30, 2024[46]. Market Conditions and Future Outlook - The macroeconomic environment remains challenging with rising inflation and geopolitical tensions, impacting overall consumer spending[17]. - The company anticipates a gradual recovery in consumer demand driven by government policies aimed at boosting domestic consumption[17]. - The company expects the Chinese retail market to gradually recover from COVID-19 disruptions in the second half of 2024, aiming to maintain market share[22]. Shareholder Information - As of June 30, 2024, the total issued shares amounted to 1,086,130,460, including 35,000 shares repurchased for cancellation but not yet cancelled[64]. - The major shareholder, 周楠楠女士, holds 455,199,028 shares, which is 41.91% of the total shares[63]. - Discerning Group Limited holds 188,789,000 shares, representing 17.38% of the total shares[63]. - UBS TC (Jersey) Ltd. is the trustee for KCL Trust, which holds 378,273,000 shares, accounting for 34.83% of the total shares[63]. - The company has confirmed compliance with the standard code for securities trading by all directors for the six months ending June 30, 2024[67]. Corporate Governance - The company maintains high corporate governance standards and has complied with the corporate governance code as of June 30, 2024[66]. - The audit committee has reviewed the interim financial results for the six months ended June 30, 2024[74]. - The interim report will be available on the Hong Kong Stock Exchange and the company's website for public access[75].

[Cover and Financial Highlights](index=1&type=section&id=Cover%20and%20Financial%20Highlights) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) In H1 2024, key financial metrics declined, with revenue down 3.7%, gross profit down 8.3%, gross margin at 52.3%, and net profit decreasing 30.1% to RMB 69.1 million, with an interim dividend of HKD 0.03 per share H1 2024 Financial Highlights | Metric | H1 2024 | H1 2023 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | approx. RMB 811.3 million | approx. RMB 842.8 million | -3.7% | | Gross Profit | RMB 424.1 million | RMB 462.4 million | -8.3% | | Gross Margin | 52.3% | 54.9% | -2.6pp | | Profit | RMB 69.1 million | RMB 98.9 million | -30.1% | | Basic Earnings Per Share | RMB 0.06 | - | - | | Interim Dividend | HKD 0.03 per share | - | - | [Financial Statements](index=2&type=section&id=Financial%20Statements) [Interim Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) H1 2024 revenue was RMB 811 million, down 3.7%; gross profit RMB 424 million, down 8.3%; operating profit decreased 22.6%, with profit for the period at RMB 69.1 million, down 30.1%, and basic EPS falling from RMB 0.09 to RMB 0.06 Key Items from Consolidated Statement of Comprehensive Income (Six Months Ended June 30) | Item (RMB thousand) | 2024 (Unaudited) | 2023 (Unaudited) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 811,278 | 842,760 | -3.7% | | Gross Profit | 424,050 | 462,360 | -8.3% | | Operating Profit | 110,767 | 143,154 | -22.6% | | Profit Before Income Tax | 99,819 | 137,571 | -27.4% | | Profit for the Period | 69,114 | 98,910 | -30.1% | | Basic Earnings Per Share (RMB) | 0.06 | 0.09 | -33.3% | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, total assets were RMB 2.956 billion, slightly down from RMB 3.002 billion at year-end 2023; total liabilities increased to RMB 1.223 billion, and total equity decreased to RMB 1.733 billion, maintaining a stable asset structure Key Items from Consolidated Statement of Financial Position (RMB thousand) | Item | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 2,956,451 | 3,001,844 | -1.5% | | Total Liabilities | 1,223,253 | 1,216,132 | +0.6% | | Total Equity | 1,733,198 | 1,785,712 | -3.0% | [Notes to Financial Information](index=6&type=section&id=Notes%20to%20Financial%20Information) [Company Information and Accounting Policies](index=6&type=section&id=Company%20Information%20and%20Accounting%20Policies) The Group primarily produces and sells tea, tea food, and tea ware in China; financial information is prepared under HKAS 34, with consistent accounting policies and adoption of new and revised standards - The Group's principal activities are the classification, packaging, production, and sale of tea, tea food, tea ware, and pre-packaged food, with production facilities and major customers located in China[9](index=9&type=chunk) - The interim financial information is prepared in accordance with HKAS 34, with accounting policies consistent with those used in the 2023 annual financial statements, and several new and revised accounting standards adopted from January 1, 2024[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) [Revenue and Segment Information](index=8&type=section&id=Revenue%20and%20Segment%20Information) Group revenue primarily comes from tea, tea food, and tea ware segments; H1 2024 tea segment revenue decreased 6.4% to RMB 572 million, driving overall decline, while tea food and tea ware grew 2.1% and 9.4% respectively; tea segment profit contribution was largest but also significantly declined Revenue by Segment (Six Months Ended June 30) | Segment (RMB thousand) | 2024 | 2023 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Sales of Tea | 571,793 | 611,059 | -6.4% | | Sales of Tea Food | 110,100 | 107,771 | +2.2% | | Sales of Tea Ware | 101,728 | 93,020 | +9.4% | | Others | 27,657 | 30,910 | -10.5% | | **Total** | **811,278** | **842,760** | **-3.7%** | Segment Results (Six Months Ended June 30) | Segment (RMB thousand) | 2024 | 2023 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Tea | 91,056 | 127,038 | -28.3% | | Tea Food | 11,463 | 14,741 | -22.2% | | Tea Ware | 8,717 | 7,788 | +11.9% | | Other Segments | (1,778) | 552 | N/A | | **Total** | **109,458** | **150,119** | **-27.1%** | [Analysis of Key Profit and Loss Items](index=11&type=section&id=Analysis%20of%20Key%20Profit%20and%20Loss%20Items) Other income significantly increased by 95.6% due to higher government subsidies; net other losses narrowed considerably due to reduced losses from asset disposals; income tax expense decreased by 20.6% in line with lower profit before tax - Other income increased from **RMB 7.5 million** to **RMB 14.7 million**, a year-on-year growth of **95.6%**, primarily due to government subsidies increasing from **RMB 2.3 million** to **RMB 6.6 million**[21](index=21&type=chunk) - Net other losses significantly decreased from **RMB 2.0 million** to **RMB 0.2 million**, mainly due to reduced net losses from the disposal of property, plant, and equipment[22](index=22&type=chunk) - Income tax expense decreased from **RMB 38.7 million** to **RMB 30.7 million**, a year-on-year reduction of **20.6%**, consistent with the decline in profit before income tax[23](index=23&type=chunk) [Earnings Per Share and Dividends](index=13&type=section&id=Earnings%20Per%20Share%20and%20Dividends) Affected by declining net profit, H1 2024 basic earnings per share decreased to RMB 0.06, down from RMB 0.09 in the prior year; the Board declared an interim dividend of HKD 0.03 per share, totaling approximately RMB 29.3 million Basic Earnings Per Share Calculation | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit Attributable to Shareholders (RMB thousand) | 69,114 | 98,910 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 1,086,241 | 1,091,242 | | **Basic Earnings Per Share (RMB)** | **0.06** | **0.09** | - The Board declared an interim dividend of **HKD 0.03** per share (approximately **RMB 0.027**) for 2024 on August 19, 2024, totaling approximately **RMB 29.3 million**[28](index=28&type=chunk) [Analysis of Key Balance Sheet Items](index=14&type=section&id=Analysis%20of%20Key%20Balance%20Sheet%20Items) During the period, the company repurchased and cancelled shares, impacting share capital and other reserves; trade receivables and payables both decreased; total bank borrowings increased from RMB 521 million to RMB 586 million, mainly due to increased short-term borrowings - As of June 30, 2024, the company cancelled **2,247,000** repurchased shares, resulting in a decrease of **RMB 0.184 million** in share capital and **RMB 9.74 million** in other reserves[36](index=36&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - Net trade receivables decreased from **RMB 241 million** to **RMB 171 million**, and total trade payables decreased from **RMB 117 million** to **RMB 81 million**, indicating changes in receivables and payables management[33](index=33&type=chunk)[40](index=40&type=chunk) - Total bank borrowings increased from **RMB 521 million** to **RMB 586 million**, with short-term borrowings increasing from **RMB 481 million** to **RMB 516 million**, and long-term borrowings from **RMB 40 million** to **RMB 70 million**[42](index=42&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=20&type=section&id=Business%20Review%20and%20Outlook) In H1 2024, Group revenue and profit declined due to weak consumer markets; the company responded by optimizing its sales network (net reduction of 9 stores) and product structure; future plans include further retail network optimization, brand enhancement, new product development, and capacity expansion - H1 2024 revenue decreased by **3.7%** and profit by **30.1%**, primarily due to a weak consumer market and overall economic conditions affected by multiple global factors[45](index=45&type=chunk) - The company continued to adjust and optimize its sales network, with a total of **1,368** retail stores and specialty counters as of June 30, 2024, a net decrease of **9** from year-end 2023[46](index=46&type=chunk) - Future strategies include: continuing to adjust the retail network and penetrate third and fourth-tier cities; enhancing brand reputation through marketing activities; developing new tea-related products; and expanding production capacity (e.g., building white tea packaging facilities) while strengthening quality control[48](index=48&type=chunk)[49](index=49&type=chunk) [Financial Review](index=23&type=section&id=Financial%20Review) Total revenue decreased by 3.7%, mainly due to a 6.4% decline in tea sales, which accounted for 70.5% of total revenue, while tea food and tea ware sales grew 2.1% and 9.4% respectively; gross margin fell from 54.9% to 52.3% due to product mix and lower retail contribution; net profit margin decreased from 11.7% to 8.5% Revenue by Product Category (Six Months Ended June 30) | Product Category | 2024 Revenue (RMB thousand) | Proportion | 2023 Revenue (RMB thousand) | Proportion | | :--- | :--- | :--- | :--- | :--- | | Sales of Tea | 571,793 | 70.5% | 611,059 | 72.5% | | Sales of Tea Food | 110,100 | 13.6% | 107,771 | 12.8% | | Sales of Tea Ware | 101,728 | 12.5% | 93,020 | 11.0% | | Others | 27,657 | 3.4% | 30,910 | 3.7% | | **Total** | **811,278** | **100.0%** | **842,760** | **100.0%** | - The **6.4%** decrease in tea sales revenue was the primary reason for the overall revenue decline, attributed to a weak consumer market; tea food and tea ware sales revenue grew by **2.1%** and **9.4%** respectively, benefiting from changes in product structure and successful promotional activities[53](index=53&type=chunk) - Gross margin decreased from **54.9%** to **52.3%**, primarily due to adjustments in tea product categories and a reduced proportion of retail business[55](index=55&type=chunk) - Affected by declining revenue and gross margin, the Group's net profit margin decreased from **11.7%** in the prior period to **8.5%**[63](index=63&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and cash equivalents increased to RMB 346 million; total bank borrowings rose to RMB 586 million, increasing the capital gearing ratio from 22.6% to 25.3%; trade receivables turnover days improved from 80 to 67 days, while inventory turnover days remained high at 471 days - Cash and cash equivalents increased from **RMB 275 million** to **RMB 346 million**, primarily due to cash inflows from operating activities and increased borrowings[64](index=64&type=chunk) - The capital gearing ratio (total debt/total capital) increased from **22.6%** to **25.3%**, mainly due to an increase in total borrowings[65](index=65&type=chunk) Working Capital Turnover Days | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Trade Receivables Turnover Days | 67 | 80 | | Trade Payables Turnover Days | 46 | 55 | | Inventory Turnover Days | 471 | 472 | [Risk Management and Human Resources](index=29&type=section&id=Risk%20Management%20and%20Human%20Resources) The Group's business is primarily conducted in RMB, with no significant foreign exchange risk identified; as of period-end, the Group had 3,509 employees, and staff costs slightly increased year-on-year, indicating a stable human resources situation - The Group's business is primarily conducted in RMB, and the Directors believe the Group is not exposed to significant foreign exchange risk, with no hedging activities currently undertaken[69](index=69&type=chunk) - As of June 30, 2024, the Group had **3,509** employees, with staff costs for the first half of the year totaling **RMB 163 million**, a year-on-year increase of **1.4%**[69](index=69&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) [Share Repurchases](index=30&type=section&id=Share%20Repurchases) In H1 2024, the company repurchased 248,000 shares on the Stock Exchange for a total consideration of approximately HKD 1.05 million; the Board believes the current share price does not reflect its intrinsic value, and repurchases aim to create shareholder value H1 2024 Share Repurchase Details | Month | Total Shares Repurchased | Price Range Per Share (HKD) | Total Consideration (HKD) | | :--- | :--- | :--- | :--- | | January | 13,000 | 4.60 - 4.79 | 60,970 | | March | 89,000 | 3.65 - 3.90 | 335,790 | | April | 68,000 | 4.00 - 4.60 | 293,480 | | May | 39,000 | 4.55 - 4.70 | 179,180 | | June | 39,000 | 4.50 - 4.61 | 179,030 | | **Total** | **248,000** | | **1,048,450** | - The Board believes that share repurchases reflect the company's confidence in its long-term business prospects and that the current share price does not reflect its intrinsic value[71](index=71&type=chunk) [Corporate Governance and Dividend Distribution](index=31&type=section&id=Corporate%20Governance%20and%20Dividend%20Distribution) The company complied with the Corporate Governance Code during the reporting period; the Board resolved to declare an interim dividend of HKD 0.03 per share, with relevant record and payment dates announced - The company complied with the Corporate Governance Code as set out in the Listing Rules for the six months ended June 30, 2024[73](index=73&type=chunk) - The Board resolved to declare an interim dividend of **HKD 0.03** per share, with the record date set for September 9, 2024, and payment expected on or about September 30, 2024[75](index=75&type=chunk)[76](index=76&type=chunk) [Review of Accounts](index=32&type=section&id=Review%20of%20Accounts) The company's Audit Committee reviewed the unaudited interim results, and external auditor PwC also conducted a review of the interim financial information in accordance with relevant standards - The Group's unaudited interim results for the six months ended June 30, 2024, have been reviewed by the company's Audit Committee and by external auditor PricewaterhouseCoopers in accordance with Hong Kong Standard on Review Engagements 2410[77](index=77&type=chunk)

Financial Performance - For the fiscal year ending December 31, 2023, revenue increased by 1.1% to RMB 1,734.1 million from RMB 1,715.4 million in 2022[7]. - Gross profit rose by 2.2% to RMB 940.4 million, with a gross margin improvement from 53.6% in 2022 to 54.2% in 2023[7]. - Profit attributable to shareholders increased by 3.2% to RMB 213.2 million, with a net profit margin rising from 12.0% in 2022 to 12.3% in 2023[7]. - Basic earnings per share for the year were RMB 0.20, and the board proposed a final dividend of HKD 0.12 per share, equivalent to RMB 0.11[7]. - Total revenue for 2023 is expected to reach RMB 1.7 billion, despite challenges in the retail market due to post-pandemic effects and economic slowdowns[10]. - In 2023, the company achieved revenue of RMB 1,734.1 million, an increase of 1.1% compared to 2022, and recorded annual profit of RMB 213.2 million, up 3.2% year-on-year[17]. - The company's net profit margin increased from 12.0% in 2022 to 12.3% in 2023, primarily due to the increase in revenue[19]. - Revenue from tea sales amounted to RMB 1,254.7 million, representing 72.4% of total revenue, with a 0.9% increase from RMB 1,243.8 million in 2022[25]. - Revenue from tea food sales was RMB 244.5 million, accounting for 14.1% of total revenue, reflecting a 0.3% increase from RMB 243.7 million in 2022[25]. - Revenue from tea utensils increased by 3.5% to RMB 175.2 million, making up 10.1% of total revenue[25]. Retail and Market Presence - The company operates over 1,377 retail outlets and specialty stores across 31 provinces, regions, and municipalities in China as of December 31, 2023[3]. - The company has maintained a strong brand presence, being ranked first in the 2019 Chinese Tea Chain Brand Power Index[3]. - As of December 31, 2023, the company owned a total of 1,377 retail outlets and specialty stores, up from 1,332 as of December 31, 2022[18]. - The company plans to expand its sales network and optimize store locations, particularly in tier 3 and tier 4 cities, to enhance market presence[11]. - The company is focusing on building private traffic pools through WeChat and enhancing offline store presence to adapt to changing consumer market trends[99]. Financial Stability and Liabilities - The total assets as of December 31, 2023, are RMB 3,001,844 thousand, a decrease from RMB 3,139,492 thousand in 2022[9]. - The total liabilities decreased to RMB 1,216,132 thousand in 2023, down from RMB 1,369,426 thousand in 2022, indicating improved financial stability[9]. - The capital-to-debt ratio improved to 22.6% in 2023 from 27.7% in 2022, reflecting better management of liabilities[9]. - Cash and cash equivalents decreased by RMB 73.3 million or 21.0% from RMB 348.4 million as of December 31, 2022, to RMB 275.1 million as of December 31, 2023[37]. - Total bank borrowings decreased from RMB 678.1 million as of December 31, 2022, to RMB 521.1 million as of December 31, 2023[38]. Product Development and Strategy - The company has a multi-brand strategy to capture various segments of the traditional Chinese tea market, with its most recognized brand being "Tenfu"[3]. - New product development initiatives include the establishment of a culinary R&D department to diversify offerings, such as traditional delicacies and milk tea products[11]. - The company aims to develop new tea-related products to maintain its market leadership and adapt to changing consumer preferences[22]. - The company has adjusted its product mix, with a higher proportion of mid-to-high-end products to meet customer needs, and saw an increase in green tea sales revenue during the year[18]. - The company is planning to expand its product offerings to include health supplements such as bird's nest, sea cucumber, and ginseng to attract different customer segments[102]. Operational Efficiency and Cost Management - The company emphasizes cost management and operational efficiency to maintain profitability amid rising raw material costs[10]. - Inventory turnover days improved to 472 days in 2023 from 481 days in 2022, indicating better inventory management[9]. - Distribution costs decreased by 4.2% from RMB 380.3 million for the year ended December 31, 2022, to RMB 364.2 million for the year ended December 31, 2023, primarily due to cost control measures and a reduction in self-operated retail stores[29]. - Administrative expenses increased by 3.8% from RMB 272.6 million for the year ended December 31, 2022, to RMB 283.0 million for the year ended December 31, 2023, mainly due to increased labor costs and travel expenses[30]. Corporate Governance and Management - The company has established a strong governance framework with independent non-executive directors overseeing audit and remuneration committees, ensuring transparency and accountability[53][54]. - The board consists of nine members, including five executive directors, one non-executive director, and three independent non-executive directors, complying with the requirement that at least one-third of the board members are independent[59]. - The company emphasizes the importance of high-quality governance to enhance shareholder value and ensure long-term sustainable growth[56]. - The board is responsible for overseeing environmental, social, and governance (ESG) matters, assessing and managing significant risks[56]. - The company has established a whistleblowing policy for employees and stakeholders to report suspected misconduct confidentially[84]. Shareholder Engagement and Dividends - The company aims to declare dividends of no less than 20% of the group's after-tax consolidated profit for each financial year[106]. - The company plans to distribute a final dividend of HKD 0.12 per ordinary share, equivalent to RMB 0.11 per share, subject to shareholder approval at the annual general meeting on May 10, 2024[103]. - The company encourages shareholder participation in meetings and activities, promoting effective communication and engagement with stakeholders[90]. - The company has implemented a shareholder communication policy, which was reviewed for effectiveness as of December 31, 2023[89]. Risk Management - The company has established a three-tier risk management framework, with operational management responsible for identifying and managing daily operational risks[78]. - The board has reviewed the effectiveness of the mechanisms in place for risk management and internal controls as of December 31, 2023[73]. - The internal audit department provides reasonable assurance regarding governance, risk management, and internal control effectiveness, conducting risk-oriented audits regularly[82]. - The group employs a three-line defense model for risk management, with operational management as the first line, risk management oversight as the second, and internal audit as the third[80]. Market Challenges and Consumer Trends - The external environment remains complex and severe, with the global economy showing weak recovery and domestic economic challenges, leading to insufficient market confidence[97]. - Domestic economic recovery is characterized by a wave-like and tortuous process, with consumer market recovery momentum being weaker than expected[97]. - The tea industry faces intensified competition, with market share increasingly concentrated among brands with advantages in branding, channels, and product quality[99]. - The health-conscious consumer trend is driving demand for health-related products, with nearly 90% of consumers considering health attributes when purchasing gifts[102]. Related Party Transactions - The group has established ongoing related party transactions since 2009, primarily involving property leases[124]. - The company has entered into a renewed purchasing agreement with Lu Yu for tea sets, with annual purchase limits of RMB 20 million, RMB 22 million, and RMB 24 million for the years ending December 31, 2023, 2024, and 2025 respectively[126]. - The company has renewed a processing agreement with Samoa Group for tea leaf processing services, with annual limits of RMB 1 million, RMB 1.5 million, and RMB 2 million for the years ending December 31, 2023, 2024, and 2025 respectively[128]. Employee and Workforce Management - As of December 31, 2023, the company employed a total of 3,596 full-time employees, with compensation based on corporate performance and individual contributions[134]. - The company has established a mandatory provident fund scheme for employees in Hong Kong, with contributions set at 5% of relevant income, capped at HKD 30,000 per month[134]. - The company has not encountered any significant difficulties in recruitment or experienced major employee turnover during the reporting period[49].

Financial Performance - For the year ended December 31, 2023, revenue increased by 1.1% to RMB 1,734.1 million from RMB 1,715.4 million in 2022[2] - Gross profit rose by 2.2% to RMB 940.4 million, with a gross margin improvement from 53.6% in 2022 to 54.2% in 2023[2] - Profit attributable to shareholders increased by 3.2% to RMB 213.2 million, with a net profit margin rising from 12.0% in 2022 to 12.3% in 2023[2] - Basic earnings per share for the year were RMB 0.20, compared to RMB 0.19 in the previous year[3] - The net profit for the year was RMB 213,238 thousand, compared to RMB 206,452 thousand in 2022, representing a growth of 3.6%[15] - Net profit attributable to shareholders increased by RMB 6.7 million or 3.2% from RMB 206.5 million for the year ended December 31, 2022, to RMB 213.2 million for the year ended December 31, 2023, with a net profit margin increase from 12.0% to 12.3%[67] Revenue Breakdown - Revenue from tea sales reached RMB 1,254,692 thousand, up 0.3% from RMB 1,243,753 thousand in the previous year[14] - Revenue from tea food sales was RMB 244,518 thousand, showing a marginal increase from RMB 243,747 thousand in 2022[14] - Revenue from tea utensils sales increased to RMB 175,240 thousand, compared to RMB 169,225 thousand in 2022, reflecting a growth of 3.6%[14] - Revenue from tea sales rose by 0.9% to RMB 1,254.7 million, while tea food sales increased by 0.3% to RMB 244.5 million, and tea utensils sales grew by 3.5% to RMB 175.2 million[56] Assets and Liabilities - Total assets as of December 31, 2023, amounted to RMB 3,001.8 million, a decrease from RMB 3,139.5 million in 2022[5] - Current liabilities decreased to RMB 945.6 million from RMB 1,117.1 million in 2022[6] - Non-current liabilities increased to RMB 270.5 million from RMB 252.3 million in 2022[6] - The total equity attributable to shareholders rose to RMB 1,785.7 million from RMB 1,770.1 million in 2022[6] - Total liabilities as of December 31, 2023, were RMB 1,216,132 thousand, with tea segment liabilities at RMB 571,480 thousand[17] Dividends and Share Repurchases - The board proposed a final dividend of HKD 0.12 per share, equivalent to RMB 0.11 per share[2] - The company declared a total dividend of RMB 168,829,000 for the year ended December 31, 2023, compared to RMB 161,691,000 in 2022[28] - The company repurchased 5,022,000 ordinary shares in 2023 at a total value of approximately HKD 23,331,000, equivalent to RMB 21,282,000[39] - The company repurchased a total of 2,643,000 shares in November 2023 at a maximum price of HKD 4.57 per share, totaling HKD 11,617,710[82] - In December 2023, the company repurchased 2,036,000 shares at a maximum price of HKD 5.10 per share, totaling HKD 10,016,010[82] Operational Highlights - The company operates in tea classification, packaging, sales, and related sectors primarily in China[7] - The company has approximately 166 self-owned retail stores and about 1,211 distributor stores in mainland China, accounting for 34.5% and 62.1% of total revenue, respectively[56] - The company plans to expand its retail network in third and fourth-tier cities and enhance online sales through its subsidiary, Xiamen Tianyu Trading Co., Ltd[52] - The company plans to continue optimizing its retail network in 2024, focusing on enhancing profitability and maximizing the engagement of third-party retailers[51] Cost Management - Distribution costs decreased by 4.2% from RMB 380.3 million in 2022 to RMB 364.2 million in 2023, attributed to cost control measures[59] - Administrative expenses increased by 3.8% from RMB 272.6 million for the year ended December 31, 2022, to RMB 283.0 million for the year ended December 31, 2023, primarily due to increased labor costs and travel expenses[60] - Financing costs decreased by 12.5% from RMB 29.6 million for the year ended December 31, 2022, to RMB 25.9 million for the year ended December 31, 2023, reflecting reduced interest expenses on bank borrowings[64] Government Grants and Financing - Government grants received in 2023 were RMB 4,472,000, down from RMB 19,101,000 in 2022[21] - The company received government grants totaling RMB 42,882,000 as of December 31, 2023, compared to RMB 42,484,000 in 2022, showing a slight increase of 0.9%[47] - The net financing cost for the year ended December 31, 2023, was RMB (18,998,000), an increase from RMB (10,022,000) in 2022[23] Compliance and Governance - The audit committee has reviewed the annual performance for the year ending December 31, 2023, which has been approved by the company's auditor[85] - The company has adopted the standard code of conduct for securities trading by directors, confirming compliance for the year ending December 31, 2023[84] - The company plans to propose the reappointment of PwC as its auditor at the annual general meeting[85] Future Outlook - The company aims to develop new tea-related products to maintain its leading brand position and meet changing consumer preferences[53] - The company emphasizes enhancing brand reputation and customer awareness through targeted marketing and promotional activities[52] - The company plans to increase processing facilities to meet future demand for tea and related products[53]

Financial Performance - The company achieved a revenue of RMB 842.8 million in the first half of 2023, an increase of 5.0% compared to the same period in 2022[14]. - Net profit for the first half of 2023 was RMB 98.9 million, representing a 31.7% increase year-on-year[14]. - The gross profit margin improved from 9.4% in the first half of 2022 to 11.7% in the first half of 2023 due to increased sales and cost control measures[19]. - The company's revenue increased by 5.0% from RMB 802.4 million in the six months ended June 30, 2022, to RMB 842.8 million in the six months ended June 30, 2023[31]. - Revenue from tea sales rose by 4.5% from RMB 584.7 million to RMB 611.1 million during the same period[33]. - Revenue from tea food sales increased by 5.8% from RMB 101.9 million to RMB 107.8 million[33]. - The group's gross profit increased by 4.6% from RMB 441.9 million for the six months ended June 30, 2022, to RMB 462.4 million for the six months ended June 30, 2023, while the gross margin decreased from 55.1% to 54.9%[38]. - The group's profit attributable to shareholders increased by RMB 23.8 million or 31.7% from RMB 75.1 million for the six months ended June 30, 2022, to RMB 98.9 million for the six months ended June 30, 2023, with a net profit margin rising from 9.4% to 11.7%[46]. - Operating profit increased to RMB 143,154 thousand, up 40.5% from RMB 101,691 thousand in the previous year[90]. - The net profit for the six months ended June 30, 2023, was RMB 98,910 thousand, representing a 31.6% increase from RMB 75,065 thousand in the same period last year[90]. Cost Management - The company has implemented cost control measures, resulting in a reduction of distribution costs and administrative expenses compared to the same period in 2022[19]. - The company's cost of sales increased by 5.5% from RMB 360.5 million to RMB 380.4 million, primarily due to increased sales volume[37]. - Distribution costs decreased by 8.1% from RMB 203.4 million for the six months ended June 30, 2022, to RMB 187.0 million for the six months ended June 30, 2023, primarily due to cost control measures[38]. - Administrative expenses decreased by 3.2% from RMB 142.3 million for the six months ended June 30, 2022, to RMB 137.7 million for the six months ended June 30, 2023, mainly due to reduced employee benefits expenses[39]. Market Expansion and Product Development - The company expanded its retail network to a total of 1,340 self-owned and third-party retail outlets as of June 30, 2023, up from 1,332 at the end of 2022[19]. - The company has diversified its product line, increasing the sales proportion of mid-to-high-end tea products to meet customer demand[19]. - The company plans to expand its retail network, focusing on densely populated commercial areas and smaller cities[22]. - The company continues to develop new tea-related products to meet market demand and adapt to changing consumer preferences[24]. - The company is expanding production capacity by increasing the number of processing bases, with plans for a new white tea packaging factory in Fujian[24]. Financial Position and Liquidity - Cash and cash equivalents decreased by RMB 59.3 million or 17.0% from RMB 348.4 million as of December 31, 2022, to RMB 289.1 million as of June 30, 2023, mainly due to cash outflows from investing and financing activities[46]. - The total bank borrowings decreased from RMB 678.1 million as of December 31, 2022, to RMB 639.6 million as of June 30, 2023, with a weighted average effective interest rate of 3.17%[46]. - The capital debt ratio decreased from 27.7% as of December 31, 2022, to 26.9% as of June 30, 2023, primarily due to a reduction in total borrowings[48]. - The company has sufficient working capital and financial resources to support daily operations as of June 30, 2023[54]. - The company reported a basic and diluted earnings per share of RMB 0.09 for the six months ended June 30, 2023, compared to RMB 0.07 for the same period in 2022[90]. Shareholder Returns and Dividends - The interim dividend of HKD 0.05 per share (equivalent to RMB 0.046) will be paid on September 27, 2023, representing 50% of the after-tax consolidated net profit for the six months ended June 30, 2023[61]. - The interim dividend declared was RMB 50,196,000, compared to RMB 37,182,000 in the previous year, reflecting a growth in shareholder returns[174]. Corporate Governance and Compliance - The company is committed to high corporate governance standards and has complied with the corporate governance code[75]. - The audit committee reviewed the group's unaudited interim results for the six months ended June 30, 2023[84]. - The interim report will be sent to shareholders and is available on the company's website[85]. Related Party Transactions - The group purchased goods and services from related parties amounting to RMB 56,567,000 in the first half of 2023, a slight increase of 3.7% from RMB 54,549,000 in the same period of 2022[178]. - The group reported a total of RMB 15,347,000 in right-of-use assets from related parties for the first half of 2023, up from RMB 14,412,000 in the same period of 2022, reflecting a growth of 6.5%[178]. - The group’s transactions with subsidiaries of the controlling shareholder included purchases from Samoa's subsidiaries amounting to RMB 50,702,000 in the first half of 2023, an increase from RMB 43,624,000 in the same period of 2022[178].

Financial Performance - For the six months ended June 30, 2023, revenue increased by 5.0% to approximately RMB 842.8 million from approximately RMB 802.4 million in the same period of 2022[2] - Gross profit rose by 4.6% to RMB 462.4 million, compared to RMB 441.9 million for the same period in 2022[2] - Profit for the period increased to RMB 98.9 million, up from RMB 75.1 million in the same period of 2022[2] - Basic earnings per share for the period were RMB 0.09, compared to RMB 0.07 for the same period in 2022[3] - The adjusted operating profit for the tea segment was RMB 137,571,000, compared to RMB 150,119,000 in the previous year, indicating a decrease of 8.4%[17] - The company reported a net profit before tax of RMB 98,910,000 for the six months ended June 30, 2023[17] - The company's profit attributable to shareholders increased by RMB 23.8 million or 31.7% to RMB 98.9 million for the six months ended June 30, 2023, compared to RMB 75.1 million for the same period in 2022[61] - The net profit margin improved from 9.4% for the six months ended June 30, 2022, to 11.7% for the same period in 2023, driven by increased revenue and cost control measures[61] Dividends and Share Repurchase - The board declared an interim dividend of HKD 0.05 per share, equivalent to RMB 0.046 per share[2] - The company declared an interim dividend of RMB 50,196,000, up from RMB 37,182,000 in the previous year, reflecting a 35% increase[29] - The interim dividend declared is HKD 0.05 per share, representing 50% of the after-tax consolidated profit for the six months ended June 30, 2023[73] - The interim dividend for 2022 was HKD 0.04 per share, indicating a 25% increase year-over-year[73] - The company repurchased 222,000 shares at a total value of approximately HKD 1,070,000 (about RMB 948,000) during the first half of 2023[38] - The total number of shares repurchased in 2023 was 222,000, with a total cost of HKD 1,064,520[70] - The highest repurchase price was HKD 5.15 and the lowest was HKD 4.60 during the first half of 2023[70] Assets and Liabilities - Total assets as of June 30, 2023, were RMB 3,026.2 million, a decrease from RMB 3,139.5 million as of December 31, 2022[4] - Total liabilities decreased from RMB 1,369.4 million as of December 31, 2022, to RMB 1,284.4 million as of June 30, 2023[7] - Non-current assets amounted to RMB 1,418.7 million, compared to RMB 1,361.8 million at the end of 2022[4] - Inventory as of June 30, 2023, was RMB 1,024.0 million, down from RMB 1,063.4 million at the end of 2022[4] - The total amount of borrowings as of June 30, 2023, was RMB 639.6 million, a decrease from RMB 678.1 million as of December 31, 2022[43] - The company reported short-term bank borrowings of RMB 477.4 million as of June 30, 2023, down from RMB 535.3 million at the end of 2022[43] - The debt-to-capital ratio improved to 26.9% as of June 30, 2023, down from 27.7% as of December 31, 2022, mainly due to a reduction in total borrowings[64] Revenue Breakdown - Sales of tea amounted to RMB 611,059,000, up from RMB 584,720,000, reflecting a growth of 4.7% year-over-year[16] - Sales of tea food reached RMB 107,771,000, an increase of 5.8% compared to RMB 101,919,000 in the previous year[16] - Revenue from tea sales rose by 4.5% to RMB 611.1 million, while revenue from tea food increased by 5.8% to RMB 107.8 million; however, revenue from tea utensils decreased by 2.4% to RMB 93.0 million[51] Cost Management - The cost of sales increased by 5.5% to RMB 380.4 million, primarily due to increased sales volume[53] - Distribution costs decreased by 8.1% to RMB 187.0 million, attributed to cost control measures[55] - Administrative expenses decreased by 3.2% to RMB 137.7 million, also due to cost control measures[56] - Other income increased by 11.9% to RMB 7.5 million, mainly from investment property income[57] - Income tax expense rose by 19.1% to RMB 38.7 million, driven by an increase in profit before tax from RMB 107.6 million to RMB 137.6 million[60] Operational Developments - The company has established a food research and development department to diversify its product offerings, including traditional delicacies[47] - The company plans to continue optimizing its retail network, focusing on high-traffic areas in selected cities and expanding its presence in popular shopping centers[48] - The company anticipates a gradual recovery in the Chinese retail sector in the second half of 2023, aiming to maintain market share[47] - As of June 30, 2023, the company had a total of 1,340 retail stores and specialty points, an increase of 8 from 1,332 stores as of December 31, 2022[45] - The company operates approximately 164 self-owned retail stores and 1,176 distributor stores, accounting for 37.6% and 58.7% of total revenue, respectively[52] Compliance and Governance - The company has maintained compliance with the corporate governance code as of June 30, 2023, with no deviations reported[71] - The audit committee has reviewed the accounting principles and practices for the six months ended June 30, 2023[75] - The interim financial statements have been reviewed by external auditors according to the relevant standards[75]