FF305 翌日披露報表 (股份發行人 ── 已發行股份或庫存股份變動、股份購回及/或在場内出售庫存股份) 表格類別： 股票 狀態： 新提交 公司名稱： 有贊科技有限公司 呈交日期： 2024年11月1日 如上市發行人的已發行股份或庫存股份出現變動而須根據《香港聯合交易所有限公司（「香港聯交所」）證券上市規則》(「《主板上市規則》」)第13.25A條 / 《香港聯合交易所有限公司GEM證券 上市規則》(「《GEM上市規則》」)第17.27A條作出披露，必須填妥第一章節 。 | 第一章節 | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | 1. 股份分類 | 普通股 | 股份類別 不適用 | | 於香港聯交所上市 | 是 | | | 證券代號 (如上市) | 08083 | 說明 | | | | | | A. 已發行股份或庫存股份變動 | | | | | | | | | | 已發行股份（不包括庫存股份）變動 | | 庫存股份變動 | | | | | 事件 | 已發行股份（不包括庫存股份）數 目 | 佔有關事件前的現有已發 行股份（不包括庫存股 ...

表格類別： 股票 狀態： 新提交 公司名稱： 有贊科技有限公司 呈交日期： 2024年10月31日 如上市發行人的已發行股份或庫存股份出現變動而須根據《香港聯合交易所有限公司（「香港聯交所」）證券上市規則》(「《主板上市規則》」)第13.25A條 / 《香港聯合交易所有限公司GEM證券 上市規則》(「《GEM上市規則》」)第17.27A條作出披露，必須填妥第一章節 。 | 第一章節 | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 | 是 | | | 證券代號 (如上市) | 08083 | 說明 | | | | | | | A. 已發行股份或庫存股份變動 | | | | | | | | | | | 已發行股份（不包括庫存股份）變動 | | | 庫存股份變動 | | | | | 事件 | 已發行股份（不包括庫存股份）數 目 | | 佔有關事件前的現有已發 行股份（不包括庫存股 份）數目百分比 (註3) | 庫存股份數目 | 每股發行/出售價 (註 ...

FF305 翌日披露報表 (股份發行人 ── 已發行股份或庫存股份變動、股份購回及/或在場内出售庫存股份) 表格類別： 股票 狀態： 新提交 公司名稱： 有贊科技有限公司 呈交日期： 2024年10月24日 如上市發行人的已發行股份或庫存股份出現變動而須根據《香港聯合交易所有限公司（「香港聯交所」）證券上市規則》(「《主板上市規則》」)第13.25A條 / 《香港聯合交易所有限公司GEM證券 上市規則》(「《GEM上市規則》」)第17.27A條作出披露，必須填妥第一章節 。 | 第一章節 | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 | 是 | | | 證券代號 (如上市) | 08083 | 說明 | | | | | | | A. 已發行股份或庫存股份變動 | | | | | | | | | | | 已發行股份（不包括庫存股份）變動 | | | 庫存股份變動 | | | | | 事件 | 已發行股份（不包括庫存股份）數 目 | | 佔有關事 ...

Revenue and Profitability - Revenue for the six months ended June 30, 2024, was RMB 686.3 million, a decrease of 5.2% compared to the same period last year[2] - Subscription solution revenue decreased by 10.6% to RMB 377.5 million, while merchant solution revenue increased by 2.2% to RMB 306.6 million[2] - Gross profit decreased by 6.4% to RMB 469.1 million, with subscription solution gross profit down 14.2% to RMB 295.6 million and merchant solution gross profit up to RMB 173.6 million[2] - Gross margin decreased from 69.2% to 68.4%, with subscription solution margin dropping from 81.5% to 78.3% and merchant solution margin increasing from 52.1% to 56.2%[3] - Operating profit for the period was RMB 2.6 million, a significant improvement from an operating loss of RMB 11.3 million in the same period last year[3] - Net loss for the period was RMB 4.3 million, compared to a net loss of RMB 18.4 million in the same period last year[5] - Total comprehensive loss for the period was RMB 7.1 million, an improvement from RMB 12.8 million in the same period last year[9] - Total revenue for the first half of 2024 was RMB 686,329 thousand, a decrease from RMB 724,294 thousand in the same period of 2023[20][24] - Revenue from subscription solutions decreased to RMB 377,489 thousand in 2024 from RMB 422,266 thousand in 2023[24] - Revenue from merchant solutions increased slightly to RMB 306,639 thousand in 2024 from RMB 300,029 thousand in 2023[24] - Other revenue remained relatively stable at RMB 2,201 thousand in 2024 compared to RMB 1,999 thousand in 2023[24] - The company reported a pre-tax loss of RMB 6,764 thousand for the first half of 2024[20] - Total investment and other income decreased to RMB 19.636 million in the first half of 2024, down from RMB 30.429 million in the same period of 2023[27] - The company's total revenue for the first half of 2024 was approximately RMB 686.329 million, a decrease of 5.2% compared to the same period in 2023[54] - Subscription solution revenue decreased by 10.6% to RMB 377.489 million, primarily due to a reduction in the number of paying merchants[56] - Merchant solution revenue increased by 2.2% to RMB 306.639 million, consistent with the growth rate of GMV[56] - Other business revenue increased by 10.1% to RMB 2.201 million[56] - Gross profit decreased by 6.4% to RMB 469,149 thousand, with gross margin dropping from 69.2% to 68.4%, mainly due to a decline in subscription solution gross profit[59] - Subscription solution gross profit decreased by 14.2% to RMB 295,593 thousand, with gross margin dropping from 81.5% to 78.3%[60] - Merchant solution gross profit increased by 10.1% to RMB 172,258 thousand, with gross margin rising from 52.1% to 56.2% due to optimized cost structure[61] - Adjusted EBITDA increased significantly to RMB 51,219 thousand from RMB 6,321 thousand in the previous year[63] - Adjusted non-HKFRS profit rose to RMB 57,017 thousand from RMB 22,515 thousand in the previous year[64] Cash Flow and Financial Position - Cash and cash equivalents totaled RMB 839.5 million as of June 30, 2024, with a current ratio of 1.07[3] - Net cash used in operating activities was RMB 68,244 thousand for the six months ended June 30, 2024, compared to RMB 7,317 thousand for the same period in 2023[15] - Net cash used in financing activities was RMB 13,082 thousand for the six months ended June 30, 2024, down from RMB 43,487 thousand for the same period in 2023[15] - Cash and cash equivalents decreased by RMB 82,467 thousand for the six months ended June 30, 2024, compared to a decrease of RMB 51,244 thousand for the same period in 2023[15] - Cash and cash equivalents stood at RMB 839,499 thousand as of June 30, 2024, down from RMB 924,998 thousand at the end of 2023[65] Assets and Liabilities - Total assets as of June 30, 2024, were RMB 5.76 billion, with current assets of RMB 4.29 billion and non-current assets of RMB 1.47 billion[10] - Total current liabilities increased to RMB 4,017,118 thousand as of June 30, 2024, compared to RMB 3,664,103 thousand as of December 31, 2023[11] - Contract liabilities decreased to RMB 571,046 thousand as of June 30, 2024, from RMB 585,578 thousand as of December 31, 2023[11] - Net current assets stood at RMB 1,743,277 thousand as of June 30, 2024, slightly up from RMB 1,730,911 thousand as of December 31, 2023[11] - Total non-current liabilities decreased to RMB 719,756 thousand as of June 30, 2024, from RMB 722,021 thousand as of December 31, 2023[11] - Net assets increased to RMB 1,023,521 thousand as of June 30, 2024, compared to RMB 1,008,890 thousand as of December 31, 2023[11] - The company's equity attributable to owners of the parent was RMB 1,023,032 thousand as of June 30, 2024, up from RMB 1,021,330 thousand as of December 31, 2023[11] - The company's total equity increased to RMB 1,023,521 thousand as of June 30, 2024, from RMB 1,008,890 thousand as of December 31, 2023[11] - The company's total assets increased to RMB 4,759,842 thousand as of June 30, 2024, from RMB 4,417,029 thousand as of December 31, 2023[21] - Total liabilities increased to RMB 4,440,831 thousand as of June 30, 2024, from RMB 4,059,388 thousand as of December 31, 2023[23] - The company's asset-to-liability ratio decreased to 8.1% from 8.7% at the end of 2023, primarily due to an increase in total assets[65] Business Performance and Strategy - The total GMV generated by merchants through the company's solutions reached approximately RMB 49.9 billion, a year-on-year increase of 2%[53] - Store SaaS business GMV was approximately RMB 25 billion, accounting for 50% of the total GMV, with a year-on-year growth of 7%[53] - The average sales per merchant in the first half of 2024 was approximately RMB 840,000, a year-on-year increase of 25%[53] - As of June 30, 2024, the company had 59,541 paying merchants, with 66% subscribing to e-commerce SaaS and 34% subscribing to store SaaS[53] - The company added 9,116 new paying merchants in the first half of 2024, with 62% subscribing to e-commerce SaaS and 38% subscribing to store SaaS[53] - Business strategy: The company has evolved from providing "digital software" for small and medium-sized merchants to offering "intelligent consumer operation systems" for brand retailers, covering the entire business process from public to private domains and final sales conversion[51] Expenses and Costs - Research and development expenses decreased to RMB 93.828 million in the first half of 2024, compared to RMB 105.840 million in the same period of 2023[28] - Intangible assets amortization remained stable at RMB 40.467 million in the first half of 2024, slightly down from RMB 40.563 million in 2023[29] - Total sales cost decreased by 2.6% to RMB 217,180 thousand, primarily due to a 12.4% reduction in labor costs to RMB 52,510 thousand and a 10.3% decrease in transaction costs to RMB 77,146 thousand[58] - Sales and distribution expenses decreased by 19.7% to RMB 265,763 thousand, mainly due to reduced sales personnel costs and channel commission expenses[62] Taxation and Dividends - The company's effective tax rate in Hong Kong remained at 16.5% for both 2024 and 2023[30] - Two subsidiaries of the company maintained a preferential income tax rate of 15% due to their high-tech enterprise status[31] - The company did not recommend an interim dividend for the first half of 2024, consistent with the same period in 2023[32] - No dividend was recommended for the six months ended June 30, 2024, consistent with the previous year[65] Shareholder and Equity Information - The company's basic loss per share was RMB 17.224 million in the first half of 2024, compared to a profit of RMB 18.114 million in the same period of 2023[34] - Zhu Ning, the company's director, holds a 22.54% equity interest in the company through various entities[69] - Cui Yusong, another director, holds a 2.25% equity interest in the company[69] - Whitecrow Investment Ltd., a company wholly owned by Zhu Ning, holds a 17.42% equity interest in the company[72] - The company's major shareholders include Whitecrow Investment Ltd., Double Peace Limited, and Tricor Equity Trustee Limited, each holding a 17.42% equity interest[72] - Other significant shareholders include Qima Teamwork Inc. (5.78%) and Tembusu HZ II Limited (5.21%)[72] Share Options and Rewards - The company terminated its 2019 Share Option Plan on June 29, 2023, but existing options remain valid and exercisable under the plan's terms[73] - The total number of shares available for issuance under the 2019 Share Option Plan as of June 30, 2024, is 254,852,000 shares, representing 0.77% of the total issued shares (excluding treasury shares)[75] - The weighted average closing price of shares immediately before the vesting date of share options during the six months ended June 30, 2024, was HKD 0.089 per share[75] - The Seventh Reward granted on January 15, 2023, includes 2,195,488 reward shares fully vested on January 14, 2024, and 3,132,000 reward shares divided into three batches, with 50% vesting after one year of continuous service[78] - The Eighth Reward granted on April 1, 2023, includes 2,747,800 reward shares fully vested on March 31, 2024, and 12,131,000 reward shares divided into four batches, with 20% vesting after one year of continuous service[78] - The Ninth Reward granted on July 1, 2023, is divided into four batches, with 25% vesting after one year of continuous service[78] - The weighted average closing price of reward shares immediately before the vesting date during the six months ended June 30, 2024, was HKD 0.08 per share[79] - No share rewards were granted during the six months ended June 30, 2024, under the Share Reward Plan[79] - The number of share rewards available for grant under the Share Reward Plan was zero as of both January 1, 2024, and June 30, 2024[79] - The 2023 Share Option Plan was adopted on June 29, 2023, and no options were granted, exercised, canceled, or lapsed under this plan as of June 30, 2024[76] - The number of options available for grant or issuance under the 2023 Share Option Plan was zero as of both January 1, 2024, and June 30, 2024[76] - The company completed the acquisition of approximately 48.10% equity in Youzan Technology Group on December 29, 2023, resulting in the conversion of Plan A incentive shares into 1,906,330,379 shares[81] - Plan A incentive shares totaling 272,771,297 were granted during the period, with a fair value of HK$0.077 per share as of June 30, 2024[82] - The weighted average closing price of Plan A incentive shares before the vesting date was HK$0.08 during the six months ended June 30, 2024[83] - The number of shares available for grant under Plan A was 1,906,330,379 as of January 1, 2024, and 1,633,559,082 as of June 30, 2024[83] Corporate Governance and Compliance - The company deviated from the Code Provision C.2.1 of the Corporate Governance Code by appointing Mr. Zhu Ning as both Chairman and CEO since February 19, 2021[85] - The Audit Committee reviewed the unaudited condensed interim results for the six months ended June 30, 2024, and found them in compliance with applicable accounting standards and GEM Listing Rules[85] Related Party Transactions - Outstanding balances with related parties: As of June 30, 2024, the receivables from related companies were RMB 55k (Company A), RMB 18k (Company B), and RMB 518k (Company C), compared to RMB 187k (Company B) and RMB 151k (Company C) as of December 31, 2023[41] - Payables to related parties: As of June 30, 2024, the payables to related companies were RMB 377k (Company A and C), compared to RMB 127k as of December 31, 2023[42] - Total compensation for key management personnel: RMB 8,122k for the six months ended June 30, 2024, compared to RMB 8,979k for the same period in 2023[43] Financial Instruments and Fair Value - Fair value of financial instruments: The fair value of financial assets measured at fair value through profit or loss was RMB 282,494k, and through other comprehensive income was RMB 66,367k as of June 30, 2024[45] Contingent Liabilities and Penalties - The company had no significant contingent liabilities as of June 30, 2024[39] - Administrative penalty: A subsidiary, Beijing Gaohuitong Commercial Management Co., Ltd., was fined RMB 27,874k for违规开展相关支付业务, expected to negatively impact the company's net profit for the year ending December 31, 2024[50] Employee Information - The company's employee count as of June 30, 2024, was 1,582[53] - The company employs approximately 1,582 employees as of June 30, 2024, a decrease from 1,750 employees as of December 31, 2023[66] Investments and Acquisitions - The company has no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures during the six months ended June 30, 2024[67] - The company has no specific plans for significant investments or capital asset purchases as of June 30, 2024[67] - The company did not purchase, sell, or redeem any listed securities during the six months ended June 30, 2024[83] Accounts Receivable and Payable - Accounts receivable within 3 months decreased to RMB 13.200 million as of June 30, 2024, down from RMB 21.549 million as of December 31, 2023[36] - Total accounts payable increased significantly to RMB 7.873 million as of June 30, 2024, up from RMB 2.571 million as of December 31, 2023[37] Geographic Revenue Distribution - The majority of revenue came from Mainland China, contributing RMB 682,692 thousand in 2024[25] - Revenue from Japan and North America was minimal, contributing RMB 210 thousand and RMB 3,427 thousand respectively in 2024[25]

Stock Options - As of January 1, 2023, the number of stock options available for grant under the 2019 Stock Option Plan was 1,682,580,761 shares[3] - As of December 31, 2023, there were no stock options available for grant under the new stock option plan[3] - The total number of shares available for issuance under the 2019 Stock Option Plan was 255,052,000 shares, representing 0.77% of the total issued shares[3] - The stock options granted do not have performance targets attached[3] - The closing price of the company's shares immediately prior to the grant of stock options was HKD 0.250[3] - The offer to grant stock options will remain open for acceptance for 28 days from the date of the offer, with a nominal price of HKD 1[3] Board's Perspective - The board believes that granting stock options without additional performance targets aligns the interests of the grantees with those of the company and its shareholders[3] - The company aims to incentivize and retain grantees to contribute to the group's performance and sustainable development[3] Compliance and Accuracy - The announcement is in compliance with GEM listing rules and aims to provide information about the company[4] - The board confirms that the information provided is accurate and complete, with no misleading or fraudulent elements[4]

[Performance Highlights](index=2&type=section&id=Performance%20Highlights) [Performance Highlights](index=2&type=section&id=Performance%20Highlights) In H1 2024, the Group's total revenue decreased by 5.2% to RMB 686 million, yet achieved an operating profit of RMB 2.59 million by optimizing costs, turning profitable from a prior-year loss | Metric | H1 2024 (RMB million) | H1 2023 (RMB million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **686** | 724 | **-5.2%** | | Subscription Solutions Revenue | 377 | 422 | -10.6% | | Merchant Solutions Revenue | 307 | 300 | +2.2% | | **Gross Profit** | **469** | 501 | **-6.4%** | | Gross Margin | 68.4% | 69.2% | -0.8pp | | **Operating Profit/(Loss)** | **2.59** | (11.27) | **+123.0%** | | **Loss for the Period** | **(4.30)** | (18.42) | **Narrowed 76.7%** | - As of June 30, 2024, the Group held cash and cash equivalents of approximately **RMB 839 million**, with a current ratio of **1.07 times**, indicating a **strong financial position**[4](index=4&type=chunk) - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024[4](index=4&type=chunk)[28](index=28&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's total revenue was RMB 686 million, down 5.2%, but effective cost control led to an operating profit of RMB 2.59 million and a significantly narrowed net loss of RMB 4.30 million | Item (RMB thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 686,329 | 724,294 | | Gross Profit | 469,149 | 501,396 | | Selling and Distribution Expenses | (265,763) | (331,075) | | **Operating Profit/(Loss)** | **2,586** | **(11,265)** | | Loss Before Tax | (6,764) | (22,519) | | **Loss for the Period** | **(4,295)** | **(18,416)** | | (Loss) Attributable to Owners of the Parent | (17,224) | 18,114 | | (Loss)/Earnings Per Share (RMB) | (0.0005) | 0.0010 | [Consolidated Statement of Financial Position](index=5&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's total assets were RMB 5.76 billion, with net assets of RMB 1.02 billion and cash and cash equivalents of RMB 839 million, demonstrating improved liquidity | Item (RMB thousand) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Non-Current Assets** | **1,468,153** | **1,507,983** | | **Current Assets** | **4,292,242** | **3,887,031** | | Of which: Cash and Cash Equivalents | 839,499 | 924,998 | | **Total Assets** | **5,760,395** | **5,394,014** | | **Current Liabilities** | **4,017,118** | **3,664,103** | | **Non-Current Liabilities** | **719,756** | **722,021** | | **Total Liabilities** | **4,736,874** | **4,386,124** | | **Net Assets** | **1,023,521** | **1,008,890** | [Notes to the Financial Statements](index=7&type=section&id=Notes%20to%20the%20Financial%20Statements) [Company Information and Business Overview](index=7&type=section&id=Company%20Information%20and%20Business%20Overview) The Company, a Bermuda-registered investment holding company listed on HKEX GEM, primarily offers online and offline e-commerce SaaS solutions and payment services to merchants, with financials presented in RMB - The Group's principal business is providing **e-commerce solutions** in the form of **SaaS (Software as a Service)** and **payment services** to merchants[11](index=11&type=chunk) [Operating Segment Information](index=9&type=section&id=Operating%20Segment%20Information) The Group's three segments are third-party payment services, merchant services, and others, with merchant services being the largest revenue source at 77.2% of external revenue, and third-party payment services contributing the highest operating results | Segment (H1 2024) | External Revenue (RMB thousand) | Segment Results (RMB thousand) | | :--- | :--- | :--- | | Third-Party Payment Services | 152,565 | 67,111 | | Merchant Services | 530,075 | (41,826) | | Others | 3,689 | 3,641 | | **Total** | **686,329** | **28,926** | [Revenue Analysis](index=11&type=section&id=Revenue%20Analysis) Subscription solutions revenue decreased by 10.6% to RMB 377 million, while merchant solutions revenue grew 2.2% to RMB 307 million, with most revenue from mainland China | Business Line (RMB thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Subscription Solutions | 377,489 | 422,266 | | Merchant Solutions | 306,639 | 300,029 | | Others | 2,201 | 1,999 | | **Total** | **686,329** | **724,294** | - By geographical market, revenue from mainland China in H1 2024 was **RMB 683 million**, accounting for **99.5%** of total revenue[21](index=21&type=chunk) [Operating Expenses and Other Income/Expenses](index=12&type=section&id=Operating%20Expenses%20and%20Other%20Income%2FExpenses) The Group continued to control expenses, with R&D expenditure decreasing by 11.4% to RMB 93.83 million, while investment and other income fell 35.5% due to lower interest income and reduced government subsidies - Research and development expenditure decreased by **11.4%** year-on-year from **RMB 106 million** in the prior period to **RMB 93.83 million**[24](index=24&type=chunk) - Investment and other income was **RMB 19.64 million**, a **35.5%** decrease from **RMB 30.43 million** in the prior period, primarily due to lower interest income and the non-applicability of the VAT super deduction policy[23](index=23&type=chunk)[58](index=58&type=chunk) [Earnings/(Loss) Per Share](index=15&type=section&id=Earnings%2F%28Loss%29%20Per%20Share) Loss attributable to owners of the parent was RMB 17.22 million, resulting in basic and diluted loss per share of RMB 0.0005, a reversal from the prior year's profit of RMB 18.11 million | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | (Loss)/Profit attributable to owners of the parent (RMB thousand) | (17,224) | 18,114 | | Weighted average number of ordinary shares in issue | 32,916,593,000 | 18,340,560,000 | | Basic and diluted (loss)/earnings per share (RMB) | (0.0005) | 0.0010 | [Management Discussion and Analysis](index=21&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=21&type=section&id=Business%20Review) In H1 2024, Youzan upgraded its strategy to an "Intelligent Consumer Operations System" leveraging AGI, achieving 2% GMV growth to RMB 49.9 billion and a 25% increase in average sales per merchant, despite fewer paying merchants - The company's strategy upgraded from providing "digital software" to an "**Intelligent Consumer Operations System**," fully embracing **AGI** and launching the "**Jiawo Smart**" product to empower merchant operations[45](index=45&type=chunk)[46](index=46&type=chunk) Operating Metrics | Operating Metric | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | | Gross Merchandise Volume (GMV) | Approx. RMB 49.9 billion | +2% | | Store SaaS Business GMV | Approx. RMB 25.0 billion | +7% | | Average Sales Per Merchant | Approx. RMB 0.84 million | +25% | | Existing Paying Merchants (Period-end) | 59,541 | - | | New Paying Merchants | 9,116 | - | - The company actively expanded its market presence, holding nearly a **hundred events** in **19 cities** nationwide to enhance brand influence and optimize sales lead acquisition and conversion efficiency[46](index=46&type=chunk) [Business Development Strategy](index=24&type=section&id=Business%20Development%20Strategy) The company's core strategies involve fully embracing AGI to build an "Intelligent Consumer Operations System" for merchant profit enhancement, while also pursuing sustained and stable company profit growth - Core Strategy One: Fully embrace **AGI** to build an "**Intelligent Consumer Operations System**" to help merchants achieve **profit growth**[49](index=49&type=chunk) - Core Strategy Two: Achieve **sustained and stable profit growth** for the company itself[49](index=49&type=chunk) [Financial Review](index=24&type=section&id=Financial%20Review) Total revenue decreased by 5.2% due to lower subscription solutions income, but merchant solutions revenue grew 2.2%; optimized costs and reduced expenses led to operating profit turning profitable and adjusted net profit reaching RMB 57.02 million, up 153.2% [Revenue](index=24&type=section&id=Financial%20Review-Revenue) | Business Line (RMB thousand) | H1 2024 | H1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Subscription Solutions | 377,489 | 422,266 | (10.6%) | | Merchant Solutions | 306,639 | 300,029 | 2.2% | | **Total** | **686,329** | **724,294** | **(5.2%)** | - The decrease in subscription solutions revenue was primarily due to a **reduction in the number of paying merchants**[51](index=51&type=chunk) - The increase in merchant solutions revenue was consistent with the trend of **increased GMV growth**[52](index=52&type=chunk) [Costs, Gross Profit, and Gross Margin](index=26&type=section&id=Financial%20Review-Costs%2C%20Gross%20Profit%2C%20and%20Gross%20Margin) - Cost of sales decreased by **2.6%** year-on-year, primarily due to **lower staff costs** from personnel optimization and **optimized transaction cost structure**[53](index=53&type=chunk) Gross Margin by Business Line | Business Line | H1 2024 Gross Margin (%) | H1 2023 Gross Margin (%) | | :--- | :--- | :--- | | Subscription Solutions | 78.3% | 81.5% | | Merchant Solutions | 56.2% | 52.1% | | **Total** | **68.4%** | **69.2%** | - Merchant solutions gross margin improved from **52.1%** to **56.2%**, primarily due to **optimized cost structure** for transaction services[57](index=57&type=chunk) [Operating Expenses and Other Items](index=28&type=section&id=Financial%20Review-Operating%20Expenses%20and%20Other%20Items) - Selling and distribution expenses decreased by **19.7%** year-on-year, primarily due to a **reduction in sales headcount** and **lower channel commissions**[58](index=58&type=chunk) - Other operating expenses (primarily R&D) decreased by **11.4%** year-on-year, mainly due to **lower R&D personnel costs**[58](index=58&type=chunk) [Non-HKFRS Measures](index=29&type=section&id=Financial%20Review-Non-HKFRS%20Measures) | Non-HKFRS Measures (RMB thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Adjusted EBITDA | 51,219 | 6,321 | | Adjusted Profit for the Period | 57,017 | 22,515 | - Both Adjusted EBITDA and Adjusted Profit for the Period achieved **substantial growth**, reflecting a **significant improvement in core business profitability**[59](index=59&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) As of period-end, the Group held RMB 839 million in cash and equivalents and RMB 470 million in borrowings, with the debt-to-asset ratio decreasing from 8.7% to 8.1%, indicating a sound financial structure - As of June 30, 2024, the Group's cash and cash equivalents were approximately **RMB 839 million**[61](index=61&type=chunk) - The debt-to-asset ratio (total debt/total assets) decreased from **8.7%** at the end of 2023 to **8.1%**[60](index=60&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) [Dividend Policy](index=30&type=section&id=Dividend%20Policy) The Board does not recommend any interim dividend for the six months ended June 30, 2024 - The Board **does not recommend the payment of a dividend** for the six months ended June 30, 2024[60](index=60&type=chunk) [Employee Information](index=30&type=section&id=Employee%20Information) As of June 30, 2024, the Group had 1,582 employees, a reduction from 1,750 at 2023 year-end, reflecting ongoing organizational structure optimization - As of June 30, 2024, the Group employed approximately **1,582 staff**, a decrease from **1,750** at the end of 2023[62](index=62&type=chunk) [Corporate Governance](index=32&type=section&id=Corporate%20Governance) The company largely complied with the Corporate Governance Code, with one deviation where Mr. Zhu Ning holds both Chairman and CEO roles, an arrangement the Board deems in the company's and shareholders' best interests - The company has a **deviation** from the Corporate Governance Code, as the **roles of Chairman and Chief Executive Officer (CEO) are not separated**, both held by Mr. Zhu Ning[65](index=65&type=chunk) - The company has established an **Audit Committee**, comprising **three independent non-executive directors**, which has reviewed the current period's results announcement[66](index=66&type=chunk)[67](index=67&type=chunk)

Summary of the Conference Call for China Youzan Company Overview - **Company**: China Youzan - **Industry**: E-commerce and SaaS (Software as a Service) for merchants Key Points and Arguments 1. **Business Model**: China Youzan primarily provides SaaS solutions to merchants for e-commerce operations, particularly within the WeChat ecosystem, enabling merchants to set up online stores and manage sales effectively [3][4][5]. 2. **Financial Reporting Changes**: Starting from 2023, the company will no longer issue quarterly reports but will focus on semi-annual and annual reports, with the next report expected in August 2024 [2]. 3. **2023 Performance**: The company reported a GMV (Gross Merchandise Volume) of 102.5 billion yuan for 2023, reflecting an increase of 11 billion yuan year-on-year [8][47]. 4. **Profitability**: In 2023, China Youzan achieved an adjusted profit of 35.52 million yuan, marking a significant turnaround from previous losses [10][15]. 5. **Cash Flow**: The company reported a net cash inflow from operating activities of approximately 77 million yuan, with a cash balance of 930 million yuan at the end of 2023 [16][10]. 6. **Customer Base**: The focus is on upgrading the merchant structure to serve more medium to large-sized merchants, with the average sales per merchant increasing by 33% year-on-year [9][50]. 7. **Sales Efficiency**: The company reported a 35% increase in per capita productivity, indicating improved operational efficiency [10]. 8. **Market Strategy**: China Youzan aims to enhance its service offerings by integrating AI technologies into its consumer operation systems, targeting better customer retention and sales conversion [34][58]. Additional Important Insights 1. **Target Merchant Segments**: The company categorizes its target merchants into three groups: content monetization merchants, brand DTC (Direct to Consumer) merchants, and new retail merchants with physical stores [19][32]. 2. **CRM Development**: China Youzan has invested in developing a robust CRM (Customer Relationship Management) system to help merchants understand and engage with their customers better, which is crucial in the current economy focused on customer retention [27][29]. 3. **SaaS Product Growth**: The company’s SaaS products for both e-commerce and retail have shown significant growth, with the retail SaaS GMV increasing by 19% year-on-year [49]. 4. **Long-term Goals**: For 2024, the company aims to double its adjusted profit target to 70 million yuan and maintain positive operating cash flow [17][58]. 5. **Customer Retention**: The retention rate for larger merchants is significantly higher (84%) compared to smaller merchants, indicating a strategic focus on retaining and growing relationships with larger clients [60][61]. This summary encapsulates the key insights from the conference call, highlighting the company's strategic direction, financial performance, and market positioning within the e-commerce industry.

Summary of Conference Call Company or Industry Involved - The document does not specify a particular company or industry Core Points and Arguments - The content does not provide any core viewpoints or arguments Other Important but Possibly Overlooked Content - The document contains no additional relevant information or insights

Financial Performance - Revenue for 2023 was RMB 1,448,376, a decrease of 3.2% compared to RMB 1,496,977 in 2022[13]. - Gross profit margin improved to 69.2% in 2023 from 64.3% in 2022, an increase of 4.9 percentage points[13]. - Loss before tax significantly reduced to RMB (52,625) in 2023 from RMB (658,407) in 2022, a decrease of 92.0%[13]. - Loss attributable to owners of the Company decreased to RMB (50,475) in 2023 from RMB (645,398) in 2022, a reduction of 92.2%[13]. - Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) improved to RMB 7,429 in 2023 from RMB (302,727) in 2022, a change of 102.5%[13]. - Adjusted non-HKFRS earnings for the year were RMB 35,517 in 2023, compared to RMB (339,537) in 2022, reflecting a change of 110.5%[13]. - The Group recorded a loss from operations of RMB 21,323,000 in 2023, significantly improved from a loss of RMB 558,304,000 in 2022[76]. - The adjusted earnings before interest, tax, depreciation, and amortization improved to RMB 35,517,000 in 2023 from a loss of RMB 339,537,000 in 2022[76]. - The Group's total loss for the year was RMB 50,475,000 in 2023, a significant reduction from a loss of RMB 645,398,000 in 2022[77]. Assets and Liabilities - Current assets decreased by 21.5% to RMB 3,887,031, while total assets fell by 17.8% to RMB 5,395,014[14]. - The total liabilities decreased by 20.5% to RMB 4,386,124, while equity attributable to owners of the Company fell by 27.7% to RMB 1,021,330[14]. - As of December 31, 2023, the Group's cash and cash equivalents were approximately RMB 926,265,000, an increase from RMB 889,944,000 in 2022[102]. - The Group's borrowings as of December 31, 2023, were approximately RMB 470,444,000, down from RMB 480,986,000 in 2022[102]. - The gearing ratio as of December 31, 2023, was 8.7%, compared to 7.3% as of December 31, 2022, primarily due to a decrease in balances with the central bank[102]. Operational Efficiency - The average annual transaction volume per merchant increased by 33%, with medium-to-large merchants showing the most significant growth[17]. - The average renewal fee for the core customer group rose by 21%, particularly a 25% increase in the new retail business segment[17]. - Net cash inflow from operations was RMB 76,998,000, indicating strong operational performance despite market challenges[24]. - The company maintained high service efficiency while acquiring more medium-and large-sized offline customers, despite a wave of store closures among small and micro customers[24]. - The vibrancy rate of new customers across various segments improved, indicating positive renewal leading indicators for future revenue growth[18]. - In 2023, Youzan achieved an adjusted operating profit of RMB 35,517 thousand and a net operating cash inflow of RMB 76,998 thousand, maintaining high efficiency in sales and service despite challenges in the market[26]. Strategic Focus and Future Outlook - The Company is focusing on new product development and market expansion strategies to drive future growth[12]. - The management anticipates continued improvement in financial performance and operational efficiency in the upcoming year[12]. - The Company is exploring potential mergers and acquisitions to enhance its market position and capabilities[12]. - Future guidance indicates a commitment to achieving profitability and sustainable growth in the long term[12]. - Youzan aims to be among the first batch of profitable medium-sized enterprise service companies in China, achieving its business objectives for 2023[22]. - The company aims to exceed a manpower efficiency of 1 million per capita in 2024 through marketing innovation and better utilization of AI tools[32]. Product and Service Development - Youzan's new value positioning focuses on helping merchants with public domain content marketing, private domain operations, and intelligent solutions for sales transformation, marking the most significant upgrade in a decade[27][30]. - The retail industry in China has shifted from a traffic era to a customer operation era, with Youzan providing a comprehensive "intelligent consumer operation" system[28]. - The company plans to enhance its offerings from "digital software" for small and medium-sized merchants to "intelligent consumer operating systems" for brand retailers starting in 2024[31]. - Youzan's AI assistant (Copilot) and automation tools (Agent) are designed to improve operational efficiency and generate targeted business strategy suggestions for merchants[29]. - The company recognizes the growing need for digitalization, automation, and intelligence among enterprises, positioning itself as a key provider of these services[33]. Cost Management - Selling expenses decreased by 20.9% year-on-year, with the selling expense rate dropping to 45.4%[49][51]. - Administrative expenses went down by 47.1% year-on-year, with the administrative expense rate decreasing to 10.7%[49][51]. - The Group's cost of sales decreased by 16.6% to approximately RMB 446,231,000 in 2023 from RMB 535,055,000 in 2022, mainly due to a 15.8% reduction in transaction costs[68]. - Staff costs decreased by 24.2% to approximately RMB 119,312,000 in 2023, down from RMB 157,399,000 in 2022, due to organizational restructuring[68]. Leadership and Governance - Mr. Yu Tao has been appointed as the executive Director and CFO since May 2018, with a background in accounting and experience in financial planning and management[88]. - Ms. Ying Hangyan has served as the executive Director and chief service officer since May 2018, focusing on client services and organizational operations[88]. - The company has a strong leadership team with diverse backgrounds in finance, management, and client services, enhancing its operational capabilities[88][89][90][91]. - The management team has experience in both local and international markets, which is crucial for strategic decision-making and market expansion[88][89]. - The Board comprises seven Directors, including four executive Directors and three independent non-executive Directors, complying with GEM Listing Rules[195]. Shareholder Information - The Directors did not recommend the payment of any dividend for 2023, consistent with 2022[102]. - As of December 31, 2023, Mr. Zhu Ning holds a total interest of 7,433,532,082 shares, representing 22.54% of the company's shareholding[164]. - The total interests of directors and executives reflect a significant ownership concentration within the company[164]. - The company has a structured approach to reporting interests and positions in accordance with the Securities and Futures Ordinance[165]. Compliance and Regulations - The company has complied with the Corporate Governance Code during the year ended December 31, 2023, except for a deviation from code provision C.2.1[182]. - The Company has established five committees to assist the Board, including Audit, Risk, Nomination, Remuneration, and Inside Information Committees[192]. - The auditor issued an unqualified letter regarding the Group's continuing connected transactions, confirming compliance with relevant regulations[144].

Financial Performance - The company reported a full-year performance for the year ending December 31, 2023, in compliance with the GEM Listing Rules[1]. - Revenue for 2023 was RMB 1,448,376, a decrease of 3.2% compared to RMB 1,496,977 in 2022[11]. - Gross profit increased by 4.2% to RMB 1,002,145, with a gross profit margin of 69.2%, up from 64.3% in the previous year[11]. - Adjusted profit before interest, tax, depreciation, and amortisation was RMB 35,517, a significant improvement from a loss of RMB 339,537 in 2022[11]. - Total assets decreased by 17.8% to RMB 5,395,014, while total liabilities also fell by 20.5% to RMB 4,386,124[12]. - The Group recorded a total loss for the year of RMB 50,475,000 in 2023, compared to a loss of RMB 645,398,000 in 2022[73]. - The Group's loss from operations improved to RMB 21,323,000 in 2023, significantly better than the loss of RMB 558,304,000 in 2022[72]. Corporate Governance - The board of directors confirmed that the information contained in the report is accurate and complete in all material respects[6]. - The company has established various committees, including an audit committee and a risk committee, to enhance corporate governance[9]. - The company is committed to transparency and has made all reasonable inquiries to ensure the accuracy of the report[6]. - The Company has complied with the Corporate Governance Code during the year ended December 31, 2023, except for a deviation from code provision C.2.1[193]. - The Board is responsible for overseeing management's efforts to promote the Company's success while operating effectively and responsibly[195]. Leadership and Management - Mr. Yu Tao has been appointed as the Chief Financial Officer and Executive Director since May 2018, with a background in accounting and experience in financial planning and management[83]. - The company has a strong leadership team with diverse expertise in finance, management, and client services, enhancing its operational capabilities[83][84][85][86]. - The management team has been with the company since 2018, indicating stability and continuity in leadership during critical growth phases[83]. - The independent non-executive directors bring valuable insights from their extensive backgrounds in finance and investment, contributing to strategic decision-making[84][86]. Operational Efficiency - Net cash inflow from operations was RMB 76,998, indicating strong operational efficiency[20]. - The company achieved a consolidated manpower efficiency of approximately 800,000, reflecting improved management efficiency without cost increases[20]. - The company plans to enhance sales efficiency and internal operational efficiency, aiming to exceed a per capita efficiency of 1 million through marketing innovation and better utilization of AI tools[28]. - Youzan's operational indicators focus on balancing transaction volume, active customers, income, and profit as part of its disciplined management approach[22]. Market Position and Strategy - The company aims to be among the first profitable medium-sized enterprise service companies in China, achieving its business objectives for 2023[19]. - Youzan's new value positioning includes providing an "intelligent consumer operation system" to help merchants improve customer repurchase rates and profitability, alongside offering solutions for store digitization and multi-channel data management[23][26]. - The retail industry in China is transitioning from a traffic era to a customer operation era, with Youzan focusing on comprehensive "intelligent consumer operation" services[24]. - Youzan aims to grow from providing digital software to small and medium-sized merchants to offering intelligent consumer operating systems to brand retailers, covering the entire operational process[27]. Financial Resources and Investments - For the year ended December 31, 2023, the Group's cash and cash equivalents were approximately RMB 926,265,000, an increase from RMB 889,944,000 in 2022[97]. - The Group's financial resources and liquidity position remain stable, with significant cash reserves as of year-end 2023[97]. - The Group had no outstanding convertible bonds or warrants as of December 31, 2023[106][107]. - The Group had no significant investments or specific plans for material investments or capital assets[103]. Share Options and Awards - The Share Option Scheme 2019 was terminated on June 29, 2023, but outstanding share options remain valid[108]. - The new Share Option Scheme was adopted at the 2023 Annual General Meeting, with no options granted, exercised, lapsed, or cancelled under this scheme as of December 31, 2023[113]. - The total outstanding options under the 2019 Share Option Scheme as of December 31, 2023, was 255,052,000[113]. - The Share Award Scheme, adopted on May 31, 2018, is valid for 10 years unless terminated early by the Board[115]. Customer and Supplier Relations - Revenue attributable to the Group's five largest customers was less than 5% for both 2023 and 2022, indicating a diversified customer base[93]. - The five largest suppliers accounted for approximately 49.2% of total purchases in 2023, down from 52.2% in 2022, with the largest supplier accounting for approximately 26.4% of total purchases[93]. Acquisitions and Corporate Actions - The Company conditionally agreed to acquire approximately 48.10% of Youzan Technology Inc. for a total consideration of HK$2,618,999,998.02, satisfied by issuing 14,549,999,989 Shares to the sellers[99]. - The completion of the acquisition of Youzan Technology took place on December 29, 2023[100]. - The Company issued 14,549,999,989 Consideration Shares at an issue price of HK$0.18 per Share for an acquisition on December 29, 2023[127]. Research and Development - Youzan Technology Group plans to spend approximately RMB620 million on research and development to widen its product range and enhance infrastructure[132]. - The marketing plan for Youzan Technology Group includes an estimated spending of RMB260 million, primarily for online advertising and engaging more distribution agents[132].