Share Incentive Plan - A total of 310,801,640 shares were granted under the incentive plan for the year ended December 31, 2022[11]. - The fair value of the shares granted on April 1, 2022, and December 1, 2022, was HKD 0.157 and HKD 0.184 per share, respectively[10]. - As of December 31, 2022, the number of unvested shares available for grant was 139,734,843 shares, representing 0.89% of the total issued shares[11]. - The weighted average closing price of the shares prior to the vesting date was HKD 0.17 for the year ended December 31, 2022[10]. - The total number of shares available for issuance under the plan as of the annual report date was 163,581,243 shares[11]. - The first grant under the incentive plan was divided into three tranches, with 50% vesting after two years of continuous service[5]. - The second grant was divided into four tranches, with 25% vesting after each year of continuous service[6]. - The total number of shares granted in the second grant was 12,614,800, with 5,057,800 and 7,557,000 shares forfeited[7]. - The fourth grant had a total of 30,545,100 shares, with 7,800,500 and 8,978,600 shares forfeited[8]. - The plan does not impose any performance targets for the granted shares[10]. Plan A Details - The total number of shares available for issuance under Plan A is 106,428,391 shares as of January 1, 2022, and December 31, 2022[17]. - There is no set cap on the benefits that can be granted to each eligible participant under Plan A[17]. - The plan is effective for a period of 10 years from May 31, 2018, to May 30, 2028, with approximately 5 years and 2 months remaining as of the 2022 annual report date[4]. - No shares have been granted under Plan A since its adoption date[19]. - There is no purchase price applicable for the shares under Plan A[19]. - Eligible participants include any employee of the Youzan Technology Group, including directors and senior management[16]. - There is no specified vesting period for the share rewards granted under Plan A[18]. - No payment is required from selected participants upon acceptance of the reward shares[18]. Announcement and Confirmation - The announcement provides supplementary information that does not affect other disclosures in the 2022 annual report[20]. - The board of directors confirms the accuracy and completeness of the information provided in the announcement[20].

Financial Performance - For the nine months ended September 30, 2023, the group recorded revenue of approximately RMB 1,082,492,000, a decrease of 1.5% compared to the same period last year [3]. - The gross profit for the same period was approximately RMB 748,329,000, an increase of 8.3% year-on-year, with a gross margin of 69.1% [4]. - The operating loss for the nine months was approximately RMB 31,735,000, a significant reduction of 93.8% compared to the operating loss of RMB 510,487,000 in the previous year [4]. - For the three months ended September 30, 2023, the group recorded revenue of approximately RMB 358,198,000, a decrease of 3.1% year-on-year [4]. - The gross margin for the three months increased to 68.9%, up from 67.5% in the same period last year [4]. - The operating loss for the three months was approximately RMB 20,470,000, a decrease of 43.7% compared to the operating loss of RMB 36,375,000 in the previous year [4]. - The total comprehensive loss for the nine months was approximately RMB 41,349,000, compared to RMB 508,450,000 in the previous year [8]. - The company reported a profit of approximately RMB 16,162,000 for the nine months ending September 30, 2023, compared to a loss of RMB 265,612,000 for the same period in 2022 [25]. - The company reported a net loss of RMB 414,000 for the nine months ending September 30, 2023, compared to a net loss of RMB 1,397,000 for the same period in 2022 [28]. Revenue Breakdown - The revenue from merchant solutions for the nine months ended September 30, 2023, was RMB 447.873 million, an increase of 4.0% from RMB 430.513 million for the same period in 2022 [15]. - For the three months ended September 30, 2023, the revenue from subscription solutions was RMB 209.665 million, a decrease of 5.0% compared to RMB 221.777 million for the same period in 2022 [14]. - Subscription solutions revenue for the nine months ended September 30, 2023, was RMB 631,931 thousand, down 4.4% from RMB 660,974 thousand in the same period of 2022 [37]. - Merchant solutions revenue increased by 4.0% to RMB 447,873 thousand for the nine months ended September 30, 2023, compared to RMB 430,513 thousand in the same period of 2022 [37]. Expenses and Costs - Total sales cost for the reporting period was approximately RMB 334,163 thousand, a decrease of 18.1% from RMB 408,049 thousand, mainly due to a 25.8% reduction in labor costs [40]. - Selling expenses decreased by 23.6% to approximately RMB 496,466 thousand, primarily due to a reduction in sales personnel [45]. - Administrative expenses decreased by 53.6% to approximately RMB 115,825 thousand, mainly due to a reduction in administrative staff and one-time severance payments [45]. - Research and development expenses for Q3 2023 were RMB 50,432 thousand, down from RMB 57,869 thousand in Q3 2022, indicating a reduction of about 12.5% [20]. Shareholder Information - The total number of issued shares as of September 30, 2023, was 18,421,642,097 [27]. - The company reported a basic earnings per share attributable to the owners of the company for the nine months ended September 30, 2023, was RMB 0.0009, compared to a loss per share of RMB 0.0151 for the same period in 2022 [12]. - The company did not recommend any dividend payment for the nine months ended September 30, 2023 [4]. - The company’s accumulated losses reached RMB 4,495,355,000 as of September 30, 2023, an increase from RMB 4,511,049,000 [28]. Corporate Governance - The company has complied with the GEM Listing Rules regarding corporate governance, except for a deviation concerning the separation of the roles of Chairman and CEO [61]. - The Audit Committee, consisting of three independent non-executive directors, reviewed the unaudited consolidated results for the nine months ending September 30, 2023, confirming compliance with applicable accounting standards [62]. - The company has maintained a high level of corporate governance to protect shareholder interests [61]. Strategic Initiatives - The company has plans to expand its market presence and enhance product offerings in the upcoming quarters, focusing on technological advancements and strategic partnerships [16]. - The company is actively exploring the integration of artificial intelligence technology with its SaaS products to lower the learning curve for merchants and enhance operational efficiency [35]. - In the third quarter of 2023, the company established a "Key Account Service Department" to enhance service for top clients and improve operational efficiency [35].

Financial Performance - For the nine months ended September 30, 2023, the group recorded revenue of approximately RMB 1,082,492,000, a decrease of 1.5% compared to the same period last year[3]. - The gross profit for the nine months ended September 30, 2023, was approximately RMB 748,329,000, an increase of 8.3% year-on-year[4]. - The gross margin increased to 69.1% for the nine months ended September 30, 2023, compared to 67.5% in the same period last year[4]. - The operating loss for the nine months ended September 30, 2023, was approximately RMB 31,735,000, a significant reduction of 93.8% from the operating loss of RMB 510,487,000 in the previous year[4]. - For the three months ended September 30, 2023, the group recorded revenue of approximately RMB 358,198,000, a decrease of 3.1% year-on-year[4]. - The gross profit margin for the three months ended September 30, 2023, improved to 68.9%, up from 67.5% in the same period last year[4]. - The operating loss for the three months ended September 30, 2023, was approximately RMB 20,470,000, a decrease of 43.7% from the operating loss of RMB 36,375,000 in the previous year[4]. - The total comprehensive loss for the nine months ended September 30, 2023, was RMB 41,349,000, compared to RMB 508,450,000 for the same period in 2022, indicating a significant reduction in losses[8]. - The company reported a profit of approximately RMB 16,162,000 for the nine months ended September 30, 2023, compared to a loss of RMB 265,612,000 for the same period in 2022[25]. - The company reported a total comprehensive loss of RMB (28,531,000) for the three months ended September 30, 2023, compared to RMB (31,775,000) for the same period in 2022, showing a 7% decrease in losses[8]. Revenue Breakdown - Subscription solutions revenue for the nine months ended September 30, 2023, was RMB 631,931 thousand, down 4.4% from RMB 660,974 thousand in the same period of 2022[15]. - The total revenue from merchant solutions for the nine months ended September 30, 2023, was RMB 447,873 thousand, an increase of 4.0% from RMB 430,513 thousand in the same period of 2022[15]. - Merchant solutions revenue increased by 4.0% to RMB 447,873 thousand for the nine months ended September 30, 2023, compared to RMB 430,513 thousand in the same period of 2022[37]. - Subscription solutions revenue decreased by 4.4% to approximately RMB 631,931 thousand from RMB 660,974 thousand due to a decline in the number of paying merchants[38]. Expenses and Costs - Research and development expenses for the nine months ended September 30, 2023, were RMB 156,272 thousand, a decrease of 42.4% from RMB 271,086 thousand in the same period of 2022[20]. - Total sales cost decreased by 18.1% to approximately RMB 334,163 thousand from RMB 408,049 thousand, mainly due to a 25.8% reduction in labor costs[40]. - Selling expenses decreased by 23.6% to approximately RMB 496,466 thousand, primarily due to a reduction in sales personnel[45]. - Administrative expenses decreased by 53.6% to approximately RMB 115,825 thousand, mainly due to a reduction in administrative staff and one-time severance payments[45]. - Other operating expenses decreased by 42.8% to approximately RMB 156,341 thousand, attributed to optimized R&D spending and organizational restructuring[45]. Assets and Liabilities - The company’s total assets as of September 30, 2023, were RMB 1,305,858,000, compared to RMB 1,258,694,000 as of December 31, 2022, indicating growth in asset base[12]. - The company’s total liabilities as of September 30, 2023, were RMB 128,090,000, compared to RMB 140,069,000 as of December 31, 2022, showing a decrease in liabilities[12]. Shareholder Information - The total number of issued shares as of September 30, 2023, was 18,421,642,097 shares[27]. - The company did not recommend any dividend payment for the nine months ended September 30, 2023, consistent with the previous year[27]. - As of September 30, 2023, Whitecrow Investment holds 1,440,601,703 shares, representing 7.82% of the company's equity[59]. - Poyang Lake Investment Limited, a wholly-owned subsidiary of Tencent Holdings, holds 1,036,766,038 shares, accounting for 5.63% of the company's equity[60]. Corporate Governance and Compliance - The company has adhered to the GEM Listing Rules regarding corporate governance, except for a deviation concerning the roles of the Chairman and CEO[61]. - The Audit Committee, consisting of three independent non-executive directors, reviewed the unaudited consolidated results for the nine months ending September 30, 2023, confirming compliance with applicable accounting standards[62]. Strategic Initiatives - The company plans to continue its market expansion and product development strategies to enhance revenue growth in the upcoming quarters[18]. - The company established a "Key Account Service Department" to enhance service for top clients and improve operational efficiency[35]. - The company is actively exploring the integration of artificial intelligence technology with its SaaS products to enhance user experience and operational efficiency[35]. - The company aims to continue focusing on core customer groups for market expansion and improving customer retention rates to optimize operational results[36].

Financial Performance - For the six months ended June 30, 2023, the group recorded revenue of approximately RMB 724,294,000, a decrease of 0.7% compared to the same period last year[3]. - Subscription solutions revenue was approximately RMB 422,266,000, down 3.9% year-on-year, while merchant solutions revenue increased by 5.7% to approximately RMB 300,029,000[3]. - The gross profit for the six months was approximately RMB 501,396,000, representing a 13.6% increase year-on-year, with a gross margin rising from 60.5% to 69.2%[4]. - The operating loss for the six months was approximately RMB 11,265,000, a significant reduction of 97.6% compared to the operating loss of RMB 474,112,000 in the same period last year[4]. - The net loss for the six months was RMB 18,416,000, compared to a net loss of RMB 485,088,000 in the same period last year[8]. - The total comprehensive loss for the period was RMB (1,819,000), compared to RMB (121,554,000) in the same period last year[9]. - Total revenue for the six months ended June 30, 2023, was RMB 724,294,000, a slight decrease from RMB 729,275,000 in the same period of 2022[46]. - The company reported a segment profit of RMB 2,813,000 for the six months ended June 30, 2023, compared to a segment loss of RMB 460,696,000 in the same period of 2022[46]. - The company incurred a comprehensive loss before tax of RMB 22,519,000 for the six months ended June 30, 2023, significantly improved from a loss of RMB 487,575,000 in the same period of 2022[44]. Cash Flow and Assets - The cash and cash equivalents totaled approximately RMB 840,299,000, with a current ratio of 1.05[4]. - The company reported a net cash outflow from operating activities of RMB (7,317) thousand for the six months ended June 30, 2023, compared to RMB (558,568) thousand for the same period in 2022, indicating a significant improvement[17]. - Cash and cash equivalents at the end of the period were RMB 840,299 thousand, slightly up from RMB 831,809 thousand at the end of June 2022[17]. - As of June 30, 2023, total assets amounted to RMB 4,335,018 thousand, a decrease from RMB 4,951,702 thousand as of December 31, 2022, representing a decline of approximately 12.4%[10]. - The company’s total assets as of June 30, 2023, were RMB 1,301,997,000, showing a slight increase from RMB 1,258,782,000 as of December 31, 2022[20]. - The company’s total liabilities as of June 30, 2023, were RMB 133,015,000, compared to RMB 142,558,000 as of December 31, 2022, indicating a reduction in liabilities[20]. - The total assets of the company as of June 30, 2023, amounted to RMB 5,721,920,000, with significant contributions from various segments[46]. Revenue Segmentation - The total revenue from external customers in the merchant services segment was RMB 568,147 thousand for the six months ended June 30, 2023, compared to RMB 573,882 thousand in the same period of 2022, reflecting a decrease of 1.0%[35]. - Subscription solutions generated revenue of RMB 216,547 thousand for the three months ended June 30, 2023, compared to RMB 219,283 thousand in the same period of 2022, reflecting a decrease of 1.0%[34]. - Merchant solutions revenue increased to RMB 151,857 thousand for the three months ended June 30, 2023, up from RMB 144,468 thousand in the same period of 2022, marking a growth of 5.0%[34]. - The company reported external customer revenue of RMB 729,275,000, with notable contributions from third-party payment services and merchant services[46]. Expenses and Cost Management - The company’s total operating expenses for the six months ended June 30, 2023, were RMB 30,429 thousand, compared to RMB 26,965 thousand in the same period of 2022, indicating an increase of 12.3%[39]. - Selling expenses decreased by 30.2% to approximately RMB 331,075,000, down from RMB 474,620,000, mainly due to a reduction in sales personnel and channel commission expenses[80]. - Administrative expenses decreased by 64.2% to approximately RMB 69,869,000, down from RMB 195,039,000, primarily due to a one-time severance payment in the previous year[80]. - Other operating expenses decreased by 50.3% to approximately RMB 105,909,000, down from RMB 213,310,000, attributed to optimized R&D spending and organizational restructuring[80]. Shareholder and Corporate Governance - The total issued share capital of the company remained at 18,421,642,097 shares as of June 30, 2023[63]. - Major shareholders include Whitecrow Investment Ltd. with a 7.82% stake and Poyang Lake Investment Limited, a subsidiary of Tencent Holdings, with a 5.63% stake[91][92]. - The company reported that as of June 30, 2023, the total equity held by directors and senior management was approximately 1,932,771,804 shares, representing 10.49% of total equity[87]. - The audit committee reviewed the unaudited interim results announcement for the six months ended June 30, 2023, and found it compliant with applicable accounting standards and GEM listing rules[101]. - The company has adhered to the corporate governance code except for a deviation regarding the separation of the roles of chairman and CEO, which is deemed appropriate under the circumstances[101]. Strategic Initiatives and Future Outlook - The company aims to enhance operational efficiency and improve cash flow for sustainable long-term development in 2023[71]. - The company launched its first AI product "Jia Wo Intelligent," which supports promotional content generation and event planning[70]. - The group reported a decrease in related party revenue from RMB 3,134,000 in the first half of 2022 to RMB 1,546,000 in the first half of 2023[67]. - The company has allocated approximately HKD 30.9 million for potential strategic investments and acquisitions, which has also been fully utilized[84]. - The company has not reported any significant events after the reporting period[85].

Financial Performance - For the six months ended June 30, 2023, the group recorded revenue of approximately RMB 724,294,000, a decrease of 0.7% compared to the same period last year[3]. - Subscription solutions revenue was approximately RMB 422,266,000, a decrease of 3.9% year-on-year, while merchant solutions revenue increased by 5.7% to approximately RMB 300,029,000[3]. - The group's gross profit for the six months was approximately RMB 501,396,000, an increase of 13.6% compared to the previous year, with a gross profit margin rising from 60.5% to 69.2%[4]. - For the three months ended June 30, 2023, the group recorded revenue of approximately RMB 369,477,000, an increase of 0.8% year-on-year[4]. - Total revenue for the six months ended June 30, 2023, was RMB 724,294,000, a slight decrease from RMB 729,275,000 in the same period of 2022[7]. - The company reported a total comprehensive loss of RMB 1,819,000 for the three months ended June 30, 2023, compared to a loss of RMB 121,554,000 for the same period in 2022[9]. - For the six months ended June 30, 2023, the earnings per share attributable to the company's owners was RMB 0.0010, compared to a loss per share of RMB 0.0153 for the same period in 2022[21]. - The company reported a profit of approximately RMB 18,114,000 for the six months ended June 30, 2023, compared to a loss of RMB 264,287,000 for the same period in 2022[52]. Operating Expenses - Operating loss for the six months was approximately RMB 11,265,000, a significant reduction of 97.6% compared to an operating loss of RMB 474,112,000 in the same period last year[4]. - The company’s operating expenses for the six months ended June 30, 2023, were RMB 331,075,000, compared to RMB 474,620,000 in the same period of 2022, showing a reduction of approximately 30.2%[7]. - Administrative expenses decreased by 64.2% to approximately RMB 69,869,000, down from RMB 195,039,000, mainly due to one-time severance payments and a reduction in administrative staff[80]. - Other operating expenses decreased by 50.3% to approximately RMB 105,909,000, down from RMB 213,310,000, attributed to optimized R&D spending and organizational restructuring[80]. Cash and Liquidity - As of June 30, 2023, the group had cash and cash equivalents totaling approximately RMB 840,299,000, with a current ratio of 1.05[4]. - The company’s cash and cash equivalents decreased to RMB 3,045,717,000 as of June 30, 2023, from RMB 3,592,688,000 at the end of 2022[10]. - The company reported a decrease in cash and bank balances to RMB 602,574,000 as of June 30, 2023, down from RMB 865,497,000 as of December 31, 2022[59]. - The total cash and cash equivalents at the end of June 2023 amounted to RMB 840,299,000, slightly up from RMB 831,809,000 at the end of June 2022[17]. Assets and Liabilities - The company's total assets decreased to RMB 4,335,018,000 as of June 30, 2023, from RMB 4,951,702,000 as of December 31, 2022[10]. - The total liabilities as of June 30, 2023, were RMB 1,301,997,000, showing a slight increase from RMB 1,258,782,000 as of December 31, 2022[20]. - The company’s total equity as of June 30, 2023, was RMB 1,136,566,000, down from RMB 1,336,823,000 at the beginning of the year[16]. Revenue Sources - The company generated external customer revenue of RMB 724,294,000, with the merchant services segment contributing RMB 573,882,000[42]. - The total revenue from external customers in China (excluding Hong Kong) was RMB 568,147,000 for the six months ended June 30, 2023, down from RMB 573,882,000 in 2022, a decrease of about 1%[35]. - The company’s other revenue sources totaled RMB 1,999,000 for the six months ended June 30, 2023, down from RMB 6,226,000 in 2022, reflecting a significant decline of approximately 67.9%[34]. Strategic Initiatives - The company aims to enhance its market position through ongoing product development and strategic initiatives[2]. - The company plans to enhance its market expansion strategies and invest in new product development to drive future growth[32]. - The company continues to focus on providing online and offline e-commerce solutions, indicating a strategic emphasis on SaaS and payment services[18]. Shareholder Information - Major shareholder Whitecrow Investment Ltd. holds 1,440,601,703 shares, representing 7.82% of the total equity[91]. - Tencent Holdings Limited, a major shareholder, also holds 1,036,766,038 shares, equivalent to 5.63% of the total equity[92]. Corporate Governance - The board confirmed that the information provided in the report is accurate and complete, with no misleading elements[2]. - The audit committee reviewed the interim results for the six months ending June 30, 2023, confirming compliance with applicable accounting standards[101]. - The company has adhered to the corporate governance code, except for a deviation regarding the roles of chairman and CEO[100].

Financial Performance - For the three months ended March 31, 2023, the group recorded a gross profit of approximately RMB 246,230,000, an increase of 11.7% compared to RMB 220,477,000 in the same period last year[3]. - The gross profit margin increased from 60.8% in the same period last year to 69.4% in the current year[4]. - The operating loss for the three months ended March 31, 2023, was approximately RMB 1,667,000, a significant decrease of 99.5% compared to an operating loss of RMB 344,007,000 in the same period last year[4]. - The company reported a net loss of RMB 9,256,000 for the three months ended March 31, 2023, compared to a net loss of RMB 348,280,000 in the same period last year[5]. - The total comprehensive loss for the period was RMB 10,999,000, down from RMB 355,121,000 in the previous year[7]. - The group’s revenue for the period was RMB 354,817,000, compared to RMB 362,802,000 in the same period last year[6]. - The company’s basic earnings per share for the period was RMB 0.0004, compared to a loss per share of RMB 0.0106 in the same period last year[5]. - The group reported a loss of approximately RMB 9,256,000 for the three months ended March 31, 2023, indicating significant uncertainty regarding its ability to continue as a going concern[9]. - Revenue from customer contracts for the three months ended March 31, 2023, was RMB 354,817,000, a decrease of 2.7% compared to RMB 362,802,000 for the same period in 2022[11]. - The total revenue for the group in Q1 2023 was approximately RMB 354.8 million, a decrease of about 2.2% from RMB 362.8 million in the same period last year[31]. Revenue Breakdown - Subscription solutions generated revenue of RMB 205,719,000, while merchant solutions brought in RMB 148,172,000 for the three months ended March 31, 2023[11]. - In Q1 2023, the revenue from subscription solutions was approximately RMB 205.7 million, a decrease of 6.5% compared to RMB 219.9 million in the same period last year[32]. - Revenue from merchant solutions increased by 6.3% year-on-year to approximately RMB 148.2 million, up from RMB 139.4 million[33]. Cost and Expenses - The company reported a decrease in the cost of goods sold to RMB 487,000 for the three months ended March 31, 2023, down from RMB 1,573,000 in the same period of 2022[18]. - The total cost of sales decreased by 23.7% year-on-year to approximately RMB 108.6 million, primarily due to a significant reduction in server and SMS costs[36]. - Sales expenses decreased by 38.6% to approximately RMB 157,128,000 from RMB 255,966,000 year-on-year[41]. - Administrative expenses decreased by 73.0% to approximately RMB 33,338,000 from RMB 123,324,000 year-on-year[41]. - Other operating expenses decreased by 67.5% to approximately RMB 56,026,000 from RMB 172,251,000 year-on-year[41]. - Research and development expenses for the three months ended March 31, 2023, were RMB 55,999,000, significantly lower than RMB 172,195,000 in the same period of 2022, reflecting a reduction in investment in R&D[14]. Financial Position - As of March 31, 2023, cash and cash equivalents amounted to approximately RMB 842,118,000, down from RMB 889,944,000 as of December 31, 2022[42]. - Total borrowings as of March 31, 2023, were approximately RMB 481,377,000, slightly up from RMB 480,986,000 as of December 31, 2022[42]. - The total equity attributable to the owners of the company as of March 31, 2023, was RMB 1,044,995,000, a decrease of RMB 8,337,000 from the previous period[22]. Corporate Governance - The company has adhered to the corporate governance code, except for a deviation regarding the separation of roles between the chairman and CEO, which is deemed appropriate by the board[52]. - The company is committed to maintaining high standards of corporate governance to protect shareholder interests[52]. - The audit committee, consisting of three independent non-executive directors, reviewed the unaudited financial results for the three months ending March 31, 2023, and found them compliant with applicable accounting standards[53]. - The company’s board of directors includes four executive directors and three independent non-executive directors as of the report date[54]. Shareholder Information - As of March 31, 2023, Whitecrow Investment holds 1,440,601,703 shares, representing 7.82% of the company's equity[50]. - Poyang Lake Investment Limited, a wholly-owned subsidiary of Tencent Holdings Limited, holds 1,036,766,038 shares, accounting for 5.63% of the company's equity[51]. - The company’s major shareholders have no other interests in the company's shares or related securities as of March 31, 2023[49]. Events and Developments - The company held a spring launch event on April 10, 2023, in Hangzhou, where it upgraded its private domain operation solutions and launched the data integration platform "Youzan iPaaS" and its first AI product "Add Me Smart"[28]. - The company provided a range of SaaS products through its subscription solutions, including Youzan WeMall and Youzan Retail, to help merchants enhance operational efficiency[28]. - The company’s management discussed the importance of personalized services and cloud business solutions to support merchants in expanding their customer base and improving operational efficiency[28]. - In Q1 2023, the total GMV generated through Youzan's solutions reached approximately RMB 23.4 billion, a year-on-year increase of about 2%[29]. - The total GMV from store SaaS business was approximately RMB 11.3 billion, accounting for 48% of the total GMV, with a year-on-year growth of about 26%[29]. - The average sales per merchant in Q1 2023 was approximately RMB 300,000, representing a year-on-year increase of about 16%[29]. - As of March 31, 2023, the number of paying merchants was 78,389, with 64% subscribing to e-commerce SaaS and 36% to store SaaS[29]. Stock Options - The company has granted stock options under a new stock option plan, with an exercise price of HKD 0.385, valid until January 19, 2028[6]. - The stock options granted in 2019 have an exercise price of HKD 1.00 and are valid until June 30, 2024[4].

Financial Performance - For the three months ended March 31, 2023, the group recorded a gross profit of approximately RMB 246,230,000, representing a year-on-year increase of 11.7% from RMB 220,477,000[3]. - The gross profit margin increased from 60.8% in the same period last year to 69.4% this year[4]. - The operating loss for the period was approximately RMB 1,667,000, a significant decrease of 99.5% compared to the operating loss of RMB 344,007,000 in the same period last year[4]. - The company reported a net loss of RMB 9,256,000 for the period, compared to a net loss of RMB 348,280,000 in the previous year[5]. - The total comprehensive loss for the period was RMB 10,999,000, compared to RMB 355,121,000 in the previous year[7]. - The basic and diluted loss per share was RMB 0.0004, compared to a loss of RMB 0.0106 per share in the previous year[5]. - For the three months ended March 31, 2023, the company reported a basic earnings loss of approximately RMB 6,519,000, compared to a loss of RMB 182,687,000 for the same period in 2022[19]. - The company’s accumulated losses as of March 31, 2023, were RMB 4,504,618,000, reflecting an increase in losses of RMB 6,519,000 during the period[23]. Revenue Breakdown - Revenue from customer contracts for the three months ended March 31, 2023, was RMB 354,817,000, a decrease of 2.7% compared to RMB 362,802,000 for the same period in 2022[11]. - Subscription solutions generated revenue of RMB 205,719,000, while merchant solutions brought in RMB 148,172,000 for the first quarter of 2023[11]. - Subscription solutions revenue decreased by 6.5% to approximately RMB 205,719 thousand, primarily due to a reduction in the number of paid merchants[33]. - Merchant solutions revenue increased by 6.3% to approximately RMB 148,172 thousand, driven by growth in private domain operation services[33]. - The total gross merchandise volume (GMV) generated by merchants through the company's solutions reached approximately RMB 23.4 billion, representing a year-on-year growth of about 2%[29]. Cost Management - The financing costs for the period were RMB 6,895,000, compared to RMB 5,459,000 in the previous year[5]. - Research and development expenses amounted to RMB 55,999,000 for the first quarter of 2023, significantly lower than RMB 172,195,000 in the same period of 2022, reflecting a reduction of 67.5%[14]. - The company's sales cost for the reporting period was approximately RMB 108,587 thousand, a year-on-year decrease of 23.7% from RMB 142,325 thousand[36]. - Total sales expenses decreased by 38.6% to approximately RMB 157,128 thousand from RMB 255,966 thousand in the same period last year[41]. - Administrative expenses decreased by 73.0% to approximately RMB 33,338 thousand, primarily due to a reduction in personnel costs[41]. - Other operating expenses decreased by 67.5% to approximately RMB 56,026 thousand, attributed to optimized R&D spending[41]. Shareholder Information - The total equity attributable to the company's owners as of March 31, 2023, was RMB 1,044,995,000, a decrease of RMB 8,337,000 from the previous period[22]. - The total equity held by Mr. Zhu Ning is 1,932,771,804 shares, representing 10.49% of the total equity[47]. - The total equity held by major shareholder Whitecrow Investment is 1,440,601,703 shares, accounting for 7.82% of the total equity[50]. - Tencent Holdings Limited is a major shareholder, holding 1,036,766,038 shares, which is 5.63% of the total equity[51]. Corporate Governance - The company has complied with the corporate governance code, except for a deviation regarding the roles of Chairman and CEO held by Mr. Zhu Ning since February 19, 2021[52]. - The audit committee, consisting of three independent non-executive directors, has reviewed the unaudited financial results for the three months ending March 31, 2023[53]. - The board of directors includes executive directors Zhu Ning, Cui Yusong, Yu Tao, and Ying Hangyan, as well as independent non-executive directors Fang Zhi Hua, Deng Tao, and Li Shaojie[54]. Future Outlook - The company has prepared cash flow forecasts indicating sufficient financial resources to meet its obligations for the foreseeable future[9]. - The company aims to enhance operational efficiency and improve cash flow while focusing on market expansion and customer retention strategies[31]. - The company plans to control operational costs, including employee costs and advertising expenses, as part of its strategy to improve financial performance[9]. New Initiatives - The company launched the data integration platform "Youzan iPaaS" and the first AI product "Jiawo Intelligent" to enhance merchant operations and efficiency[29]. - The number of new paid merchants added in the first quarter of 2023 was 5,015, with store SaaS accounting for 38% of the total[29]. Other Financial Information - The company received government subsidies totaling RMB 4,832,000 during the first quarter of 2023, which was not reported in the same period of the previous year[13]. - The company recognized a deferred tax expense of RMB 4,258,000 for the three months ended March 31, 2023, compared to RMB 1,901,000 for the same period in 2022[16]. - The company’s intangible asset amortization for the three months ended March 31, 2023, was RMB 19,986,000, slightly down from RMB 20,077,000 in the previous year[18]. - The company’s capitalized contract costs amortization decreased to RMB 43,808,000 from RMB 58,572,000 year-over-year[18]. - As of March 31, 2023, the company had cash and cash equivalents of approximately RMB 842,118 thousand[42]. - The company has not purchased, sold, or redeemed any of its listed securities as of March 31, 2023[52]. - The report will be published on the Hong Kong Stock Exchange website and the company's website for at least seven days from the publication date[54].

Financial Performance - Revenue for 2022 decreased by 4.7% to RMB 1,496,977 thousand compared to RMB 1,569,991 thousand in 2021[11] - Gross profit increased by 1.0% to RMB 961,922 thousand in 2022 from RMB 952,263 thousand in 2021[11] - Gross profit margin improved to 64.3% in 2022 from 60.7% in 2021[11] - Loss before tax significantly reduced by 79.8% to RMB (658,407) thousand in 2022 from RMB (3,251,782) thousand in 2021[11] - Loss for the year attributable to owners of the company decreased by 80.4% to RMB (645,760) thousand in 2022 from RMB (3,293,020) thousand in 2021[11] - Adjusted loss before interest, tax, depreciation, and amortization (unaudited) decreased by 87.9% to RMB (303,089) thousand in 2022 from RMB (2,509,498) thousand in 2021[11] - Adjusted non-HKFRS loss for the year (unaudited) decreased by 61.3% to RMB (339,537) thousand in 2022 from RMB (876,549) thousand in 2021[11] - Total assets decreased by 4.6% to RMB6,559,725,000 in 2022 compared to RMB6,872,975,000 in 2021[12] - Non-current liabilities decreased significantly by 40.1% to RMB262,833,000 in 2022 from RMB438,828,000 in 2021[12] - Adjusted EBITDA in Q4 2022 was approximately RMB7.15 million[18] - Adjusted EBITDA in Q4 2022 was approximately RMB7.15 million[33] - Sales expense ratio decreased quarter-on-quarter, and R&D expenses decreased year-on-year in 2022[33] - Cash balances achieved consecutive quarterly growth in Q3 and Q4 2022[33] - Net cash balance showed consecutive growth in Q3 and Q4 2022[18] - The company's revenue in 2022 was approximately RMB1,496,977,000, a 4.7% decrease year-on-year, primarily due to a decline in subscription solutions revenue[54][57] - Revenue from subscription solutions decreased by 8.6% year-on-year to RMB890,223,000, driven by a decline in cloud service fees and SaaS subscription fees[55][58] - Revenue from merchant solutions increased by 2.2% year-on-year to RMB597,780,000, in line with GMV growth[59][61] - Revenue from other businesses decreased by 21.3% year-on-year to RMB8,974,000, mainly due to the cessation of catering services[60][62] - Total cost of sales decreased by 13.4% year-on-year to RMB535,055,000 in 2022, primarily due to a 15.1% reduction in transaction costs, a 9.3% decrease in staff costs, and a 22.0% drop in server and SMS costs[65][66] - Gross profit increased by 1.0% year-on-year to RMB961,922,000 in 2022, with the gross profit margin rising from 60.7% in 2021 to 64.3% in 2022[67][68] - Subscription solutions gross profit decreased by 5.3% year-on-year to RMB660,006,000 in 2022, but the gross profit margin improved from 71.5% to 74.1%[69] - Merchant solutions gross profit increased by 17.0% year-on-year to RMB298,902,000 in 2022, with the gross profit margin rising from 43.7% to 50.0%[70] - Other gross profit surged to RMB3,014,000 in 2022 from RMB59,000 in 2021, with the gross profit margin jumping from 0.5% to 33.6%[70] - Selling expenses decreased by 13.4% year-on-year to RMB830,816,000 in 2022, mainly due to reductions in promotion, advertising, and sales staff costs[70] - Administrative expenses decreased by 12.6% year-on-year to RMB293,043,000 in 2022, partially offset by one-off severance packages of RMB92,211,000[70] - Other operating expenses decreased by 48.7% year-on-year to RMB312,268,000 in 2022, primarily due to reduced research and development expenses[71] - Equity-settled share-based payments increased by 65.8% year-on-year to approximately RMB88,068,000 in 2022[72] - Investment and other income decreased by 22.4% year-on-year to approximately RMB49,517,000 in 2022, mainly due to reduced super deduction of value-added tax and bank interest income[72] - Other net gains of approximately RMB36,100,000 were recorded in 2022, compared to net losses of approximately RMB2,186,924,000 in 2021, primarily due to the absence of impairment losses[72] - Finance costs increased by 13.2% year-on-year to approximately RMB25,631,000 in 2022, driven by higher interest expenses from new bank loans[72] - Adjusted loss before interest, tax, depreciation, and amortization (unaudited) improved to RMB339,537,000 in 2022 from RMB876,549,000 in 2021[74] - Adjusted non-HKFRS loss for the year (unaudited) was RMB394,791,000 in 2022, compared to RMB904,037,000 in 2021[75] Merchant Performance and GMV - The company helped merchants achieve GMV of approximately RMB101.4 billion, with non-Kuaishou channel GMV increasing by 19% year-on-year[15] - Average annual sales per merchant exceeded RMB1.2 million in 2022, representing a 9% year-on-year increase[15] - The proportion of targeted merchants increased to 47%, with a renewal rate exceeding 75%[15] - The gross merchandise volume (GMV) generated by merchants through Youzan's solutions reached approximately RMB101.4 billion in 2022, with non-Kuaishou channels growing by 19% year-on-year[47][48] - The GMV of store SaaS business was approximately RMB42.5 billion, accounting for 42% of total GMV, representing a 53% year-on-year increase[47][48] - The average annual sales of a single merchant exceeded RMB1.2 million in 2022, up 9% year-on-year[47][48] - The company had 83,439 paying merchants as of December 31, 2022, with 63% subscribing to e-commerce SaaS and 37% to store SaaS[49] - In 2022, the company added 40,443 new paying merchants, with store SaaS accounting for 50% of new merchants[49][50] Business Model and Strategy - The company aims to transition from SaaS-based system services to comprehensive solution services, focusing on increasing private domain business proportion in customer portfolios[22] - The company upgraded its business model from "store opening marketing solutions" to "private domain operation solutions" in H1 2022[35] - The company focuses on three core customer categories: content monetization, brand DTC, and store digitization[36] - The company provides e-commerce private domain operation solutions focusing on distribution, community, membership, and live streaming scenarios[36] - The company offers "Youzan customer operation solutions" to help merchants connect consumer information and perform precision marketing[36] - Youzan upgraded its business from "store marketing solutions" to "private domain operation solutions," focusing on consumer-centric strategies to enhance online and offline integration and improve end-to-end consumer experience[37] - The company segmented its core customer base into three categories: content monetization, brand DTC, and store digitization, providing tailored solutions for each group[37] - Youzan's product matrix includes Youzan CRM, Youzan WeCom Assistant, Youzan Salespeople Assistant, Youzan Chain, Marketing Canvas, and New Retail Integration Module, aimed at improving marketing and sales capabilities[38] - In 2022, Youzan conducted in-depth annual cooperation with nearly 100 large enterprises across industries such as liquor, FMCG, vehicles, department stores, and beauty products[39] - Youzan Cloud platform has over 3,000 active developers, more than 800 apps launched, and an average of over 500 million daily API visits, with 34 third-party systems integrated[43] - In June 2022, Youzan launched Youzan Jarvis, an AI engine product with five core capabilities (machine learning, NLP, computer vision, deep learning, and knowledge graph) for private domain scenarios[45] - Youzan collaborated with over 300 agents nationwide to promote and sell its products and services in 2022[43] - The company provided customized system services to nearly 300 merchants, focusing on system integration, transaction and marketing expansion, and personalized page display[43] - In early 2023, Youzan adjusted its mall products, upgrading the flagship version to a solution version and launching a supreme version with in-depth private domain operation services[46] - Youzan's service teams improved merchant delivery rates and activity, contributing to higher merchant renewal rates and commercial success[42] Organizational and Operational Changes - The company restructured its organizational structure in early 2022 to optimize business development and collaboration efficiency[33] - 80% of the company's employees are frontline workers directly facing merchants[19] - The Group's employee count decreased to 1,952 as of 31 December 2022, down from 4,494 in 2021, due to rationalization of R&D investment and organizational optimization[122] Cash Flow and Financial Position - The Group's cash and cash equivalents increased to approximately RMB889,944,000 as of 31 December 2022, up from RMB711,527,000 in 2021[113] - The Group's borrowings stood at approximately RMB480,986,000 as of 31 December 2022, compared to no borrowings in 2021[113] - The company successfully placed 810,792,000 shares at HK$0.385 per share, raising net proceeds of approximately HK$309.01 million, which will be used for system upgrades, product development, marketing, strategic investments, and general working capital[139] - Net proceeds from the Placing of New Shares amounted to approximately HK$309.01 million after deducting related costs, fees, expenses, and commission[177] - Approximately HK$211.46 million of the net proceeds was used for system upgrades, product development, and marketing expenses as of December 31, 2022[180] - Approximately HK$23.23 million of the net proceeds was used for potential strategic investments and acquisitions as of December 31, 2022[180] - Approximately HK$23.50 million of the net proceeds was used for the Group's general working capital as of December 31, 2022[180] - The remaining balance of approximately HK$35.75 million is expected to be used for system upgrades, product development, and marketing expenses[180] - The remaining balance of approximately HK$7.67 million is expected to be used for potential strategic investments and acquisitions by June 30, 2023[180] - The remaining balance of approximately HK$7.40 million is expected to be used for the Group's general working capital[180] Impairment and Goodwill - The recoverable amounts of cash-generating units (CGUs) were determined using discounted cash flow method, with a pre-tax discount rate of 20.35% for CGU A and 19.67% for CGU B[79] - The budgeted revenue CAGR for both CGU A and CGU B in the 5-year forecast is 6.37%, with a terminal growth rate of 2.08%[79] - Goodwill allocated to CGU A remains unchanged at approximately RMB341,326,000 (2021: RMB341,326,000)[81] - The recoverable amount for CGU A exceeded its carrying value by approximately RMB211 million (2021: RMB125 million), with no impairment charge deemed necessary[82] - CGU B recorded operating losses of RMB596 million for the year ended 31 December 2022[83] - The recoverable amount for CGU B exceeded its carrying value by approximately RMB161 million, with no impairment charge deemed necessary[83] - The pre-tax discount rate for CGU A decreased to 20.35% (2021: 20.7%)[82] - The pre-tax discount rate for CGU B is 19.67% as of the end of the reporting period[83] - A 10.47% increase in the pre-tax discount rate for CGU A would reduce the headroom to zero[82] - A 3.83% increase in the pre-tax discount rate for CGU B would reduce the headroom to zero[83] - Impairment losses for CGU B in 2021 included RMB1,622,083,000 for goodwill and RMB459,553,000 for intangible assets[86] - The pre-tax discount rate for CGU B in 2021 was 19.16%[86] Management and Board - Ms. Ying Hangyan, aged 41, joined the Company in April 2018 and was appointed as an executive Director and the chief service officer in May 2018, responsible for management of the help center, talent development, and organization operation[92] - Mr. Yu Tao, aged 35, joined the Company in April 2018 and was appointed as an executive Director and CFO in May 2018, responsible for financial planning, management, and investor relations[93] - Dr. Fong Chi Wah, aged 60, has served as an independent non-executive director since December 2003, with over 26 years of experience in the financial industry, including roles at KPMG, AIG, and ING Group[95] - Dr. Fong has been the CFO of Citychamp Watch & Jewellery Group Limited since September 2004 and served as a Non-independent Non-executive Director of Cordlife Group Limited from January 2019 to November 2021[96] - Dr. Fong holds a Bachelor's degree in Management Sciences (Economics) from Lancaster University, three Master's degrees, and a Doctorate in Business Administration from Hong Kong Polytechnic University[97] - Mr. Deng Tao, aged 68, has served as an independent non-executive director since May 2018, with over 27 years of experience in human resources management, including roles at Hewlett-Packard, Maersk Line, and Google[99] - Mr. Li Shaojie, aged 45, has served as an independent non-executive director since March 2022, with about 21 years of experience in internet brand marketing and is the chairman of Rich Flag Sci & Tech Group Co., Ltd[99] - Mr. Huan Fang, aged 34, joined Youzan Group in September 2018 as the chief operating officer, responsible for business data assessment, product commercialization, and market investment, with prior experience at Hillhouse Capital Group[99] - Executive directors Zhu Ning, Cui Yusong, Yu Tao, and Ying Hangyan renewed their service agreements for three years starting from May 2021[186][190] - Independent non-executive director Dr. Fong Chi Wah renewed his appointment for three years starting from 19 December 2021 and has served on the board for over 10 years[191] - Independent non-executive director Deng Tao renewed his appointment for three years starting from 8 May 2021[192] - Independent non-executive director Li Shaojie entered into a three-year appointment starting from 18 March 2022[192] - Directors Zhu Ning, Cui Yusong, Yu Tao, and Ying Hangyan will retire at the forthcoming AGM and are eligible for re-election[192] - The company maintained directors and officers liability insurance during the year[182] Shareholding and Equity - Mr. Zhu Ning holds a total interest of 1,931,771,804 shares, representing 10.49% of the company's shareholding[197] - Mr. Cui Yusong holds a total interest of 270,785,127 shares, representing 1.47% of the company's shareholding[197] - Mr. Yu Tao holds a total interest of 28,848,000 shares, representing 0.16% of the company's shareholding[197] - Ms. Ying Hangyan holds a total interest of 15,852,000 shares, representing 0.09% of the company's shareholding[197] - Dr. Fong Chi Wah and Mr. Li Shaojie each hold 1,000,000 shares, representing 0.01% of the company's shareholding[197] - Whitecrow Investment Ltd., owned by Mr. Zhu Ning, holds 1,440,601,703 shares[198] - Youzan Teamwork Inc., partially owned by Mr. Zhu Ning and Whitecrow, holds 363,170,101 shares[198] - V5.Cui Investment Ltd., owned by Mr. Cui Yusong, holds 241,885,127 shares[198] - Share options granted under the New Share Option Scheme have an exercise price of HK$1.00 and are valid until 30 June 2024[198] - Share options granted under the New Share Option Scheme have an exercise price of HK$0.90 and are valid until 30 June 2024[198] - The company granted 14,450,000 share options to 36 eligible participants at an exercise price of HK$0.385 per share on 20 January 2023[184] - Share Option Scheme 2019 details: Mr. Zhu Ning holds 100,000,000 options at HK$1.00, exercisable from 1 July 2021 to 30 June 2024[132] - Share Award Scheme adopted on 31 May 2018, valid for 10 years, aimed at retaining and attracting talent[134][136] - Company's share premium account amounted to approximately RMB6,420,355,000 as of 31 December 2022, up from RMB6,098,424,000 in 2021[135][137] - No reserves available for distribution to shareholders as of 31 December 2022[135][137] - No purchase, sale, or redemption of listed securities by the company or its subsidiaries during the year[138] Supplier and Customer Relationships - The Group's five largest suppliers accounted for approximately 52.2% of total purchases in 2022, down from 54.3% in 2021, with the largest supplier accounting for 24.0% of total purchases, up from 18.9%

Financial Performance - Revenue for 2022 was RMB 1,496,977, a decrease of 4.7% compared to RMB 1,569,991 in 2021[11]. - Gross profit increased to RMB 961,922, with a gross profit margin of 64.3%, up from 60.7% in the previous year[11]. - Loss before tax improved significantly to RMB (658,407), a reduction of 79.8% from RMB (3,251,782) in 2021[11]. - Revenue from subscription solutions decreased by 8.6% year-on-year to approximately RMB 890,223,000, primarily due to a decline in cloud service fees[55]. - Revenue from merchant solutions increased by 2.2% year-on-year to approximately RMB 597,780,000[56]. - The group's cost of sales decreased by 13.4% to approximately RMB 535,055,000 in 2022 from RMB 617,728,000 in 2021, driven by a 15.1% reduction in transaction costs[66]. - Gross profit for 2022 was approximately RMB 961,922,000, representing a year-on-year increase of 1.0% from RMB 952,263,000 in 2021, with a gross profit margin rising from 60.7% to 64.3%[67]. - The gross profit from subscription solutions was approximately RMB 660,006,000 in 2022, a decrease of 5.3% from RMB 696,684,000 in 2021, while the gross profit margin increased from 71.5% to 74.1%[69]. - The gross profit from merchant solutions was approximately RMB 298,902,000 in 2022, an increase from RMB 255,520,000 in 2021, with the gross profit margin rising from 43.7% to 50.0%[68]. Business Strategy and Development - The company aims to enhance its service offerings and transition from a SaaS-based system to a more comprehensive solution service in 2023[22]. - Youzan aims to achieve small-scale operating profitability in 2023 while maintaining steady business growth[24]. - The company plans to enhance knowledge accumulation and transmission to improve collaboration efficiency and increase annual per capita output[25]. - Youzan is transitioning from providing primarily SaaS systems to offering comprehensive solution services to merchants[33]. - The company intends to expand its operational services and value-added services to help merchants increase GMV and boost its own revenue[33]. - Youzan Technology plans to spend approximately RMB 620 million on research and development to widen its product range and enhance infrastructure, and RMB 260 million on marketing to increase advertising and distribution agents[146]. - The company aims to enhance its competitive edge in the e-commerce platform industry, which faces challenges from ongoing COVID-19 impacts[147]. Corporate Governance - The board of directors collectively accepts full responsibility for the accuracy and completeness of the report[6]. - The company has a risk committee and an audit committee to oversee financial practices and risk management[9]. - The leadership team has a diverse educational background, with degrees from prestigious universities and professional certifications in finance and accounting[97]. - The company emphasizes innovation in technology and user experience, leveraging the expertise of its executives from leading tech firms[89]. - The management team is committed to driving growth and expanding market presence through strategic initiatives and product development[92]. Shareholder Information - The Group did not recommend the payment of any dividend for 2022, consistent with 2021[112]. - The Company had no convertible bonds or warrants outstanding as of December 31, 2022[129]. - The Company's share premium account was approximately RMB 6,420,355,000 as of December 31, 2022, compared to RMB 6,098,424,000 in 2021, which may be distributed as fully paid bonus shares[135]. - The Group's share option scheme adopted on June 12, 2019, remains in effect, with specific options granted to selected directors[132]. - The Group has a share award scheme in place since May 31, 2018, aimed at recognizing contributions and retaining personnel[134]. Risk Management - The company emphasizes the potential investment risks associated with companies listed on GEM[4]. - The Group monitors foreign currency risks, primarily dealing in Renminbi due to its operations in the PRC[116]. - The Group monitors its foreign exchange risk and considers hedging significant currency risks when necessary[119]. Employee and Operational Metrics - The number of employees decreased to 1,952 as of December 31, 2022, from 4,494 in 2021, primarily due to rationalization of R&D investment and organizational structure optimization[122]. - In 2022, Youzan achieved an annual per capita output of approximately RMB 570,000, representing a 51% year-on-year increase[33]. - The average annual sales per merchant exceeded RMB 1.2 million, representing a year-on-year increase of approximately 9%[15]. Related Party Transactions - The company has complied with GEM Listing Rules regarding related party transactions and continuing connected transactions for the year ended December 31, 2022[141]. - The auditor confirmed that the continuing connected transactions were approved by the Board and were in accordance with the Group's pricing policies[175]. - The independent non-executive Directors confirmed that the continuing connected transactions were entered into in the ordinary course of business and on normal commercial terms[173]. Leadership and Management - Mr. Zhu Ning, the CEO and chairman, has been with the company since April 2018 and is responsible for overall development planning and business strategies[88]. - Mr. Cui Yusong, the CTO, focuses on technology reserve, artificial intelligence, and product strategic planning, having joined the company in April 2018[89]. - Mr. Yu Tao, the CFO, has been with the company since April 2018, overseeing financial planning and management, and investor relations[91]. - Ms. Ying Hangyan, the Chief Service Officer, is responsible for client services and contract compliance, having joined the company in April 2018[92]. - The company has a strong leadership team with extensive experience in technology, finance, and service management, enhancing its operational capabilities[90].

Financial Performance - For the nine months ended September 30, 2022, the group recorded revenue of approximately RMB 1,098,851,000, a decrease of 6.6% compared to the same period last year[3]. - The gross profit for the same period was approximately RMB 690,802,000, down 3.5% year-on-year[3]. - The operating loss for the nine months was approximately RMB 510,487,000, a reduction of 32.8% from the operating loss of RMB 759,120,000 in the previous year[4]. - The total comprehensive loss for the nine months was approximately RMB 505,535,000, compared to RMB 677,617,000 in the previous year[8]. - The company reported a basic loss per share of RMB 0.0152 for the nine months ended September 30, 2022[6]. - The company reported a loss of approximately RMB 518,304,000 for the nine months ended September 30, 2022, raising significant doubts about its ability to continue as a going concern[10]. - Total revenue for the nine months ended September 30, 2022, was RMB 1,098,851,000, down 6.6% from RMB 1,176,489,000 in the previous year[11]. - The company reported a net profit margin of 12% for Q3 2022, reflecting improved operational efficiency[64]. Revenue Breakdown - Revenue from subscription solutions for the nine months ended September 30, 2022, was RMB 660,974,000, a decrease of 10.3% compared to RMB 737,292,000 for the same period in 2021[11]. - Revenue from merchant solutions for the nine months ended September 30, 2022, was RMB 430,513,000, slightly up from RMB 427,420,000 in the same period of 2021[11]. - Subscription solution revenue decreased by 10.4% to approximately RMB 660.9 million, primarily due to a reduction in cloud service fees[40]. - Merchant solution revenue increased by 0.7% to approximately RMB 430.5 million, driven by higher transaction service fees[40]. Cost Management - The company has implemented cost control measures, including managing employee costs and advertising expenses, to ensure sufficient financial resources for the foreseeable future[10]. - Total sales costs for the period were approximately RMB 408.0 million, a year-on-year decrease of 11.4% from RMB 460.4 million[43]. - Sales expenses decreased by 5.5% year-over-year to approximately RMB 649,797 thousand, primarily due to reduced promotional and advertising expenses[47]. - Administrative expenses increased by 5.5% year-over-year to approximately RMB 249,872 thousand, mainly due to a one-time severance payment of approximately RMB 90,772 thousand[47]. - Other operating expenses decreased by 42.0% year-over-year to approximately RMB 273,254 thousand, attributed to optimized R&D spending and reduced personnel costs[47]. - Cost management strategies are being implemented, aiming to reduce operational expenses by 8% in the upcoming quarter[64]. Shareholder Information - The board of directors did not recommend any dividend for the nine months ended September 30, 2022[4]. - The company did not recommend any dividend for the nine months ended September 30, 2022, consistent with the same period in 2021[24]. - Shareholder returns are prioritized, with a proposed dividend increase of 20% based on the positive financial outlook[64]. Operational Highlights - The company has maintained a corporate income tax rate of 25% for the current period, consistent with the previous year[19]. - The company has established an audit committee consisting of three independent non-executive directors to oversee financial reporting and internal controls[63]. - The company has complied with the corporate governance code provisions during the nine months ending September 30, 2022[63]. - The ongoing impact of the COVID-19 pandemic continues to affect the group's business operations[55]. - The company emphasized a new "private domain operation model" focused on consumer-centric strategies to enhance customer experience and value creation[36]. - The company provided a range of SaaS products and PaaS cloud services to merchants, enhancing operational efficiency and customer engagement[35]. Future Outlook - Future outlook includes a projected revenue growth of 15% for Q4 2022, driven by new product launches and market expansion strategies[64]. - The company plans to introduce three new products in Q1 2023, expected to contribute an additional 5% to overall revenue[64]. - Market expansion efforts are underway, targeting new regions to increase market share by 10% in the next fiscal year[64]. - The board discussed potential mergers and acquisitions to strengthen competitive positioning in the market[64]. - The company is investing in new technology development, aiming to enhance its e-commerce platform capabilities[64]. Equity and Ownership - As of September 30, 2022, the total equity attributable to owners of the company was RMB 1,336,823,000, a decrease of RMB 230,315,000 from the previous year[24]. - The total number of issued shares as of September 30, 2022, was 18,421,642,097 shares, unchanged from the report date[24]. - As of September 30, 2022, the total equity held by the directors and senior management in the company amounts to 1,931,771,804 shares, representing 10.49% ownership[57]. - Whitecrow Investment Ltd. holds 1,440,601,703 shares, accounting for 7.82% of the total equity[60]. - Poyang Lake Investment Limited, a wholly-owned subsidiary of Tencent Holdings Limited, holds 1,036,766,038 shares, representing 5.63% of the total equity[61].