Financial Performance - For the three months ended March 31, 2022, the group recorded revenue of approximately RMB 362,802,000, a decrease of 13.1% year-on-year[3]. - The group reported a gross profit of approximately RMB 220,477,000, down 10.1% year-on-year, with subscription solutions gross profit decreasing by 20.0%[3][4]. - The operating loss for the three months ended March 31, 2022, was approximately RMB 344,007,000, an increase of 76.6% compared to the operating loss of RMB 194,821,000 in the same period last year[4][5]. - The net loss for the period was RMB 348,280,000, compared to a net loss of RMB 168,176,000 in the previous year[5][7]. - Basic loss per share was RMB 0.0106, compared to RMB 0.0053 in the previous year[5]. - The company reported a net loss of RMB 171,767,000 for the three months ended March 31, 2022, compared to RMB 138,401,000 in the same period of 2021[25]. - The group recorded a foreign exchange loss of RMB 6,841,000 for the period, compared to a gain of RMB 1,582,000 in the previous year[7]. - Total interest income decreased to RMB 6,220,000, down 32.1% from RMB 9,190,000 in the same quarter last year[21]. - The total gross merchandise volume generated by merchants through Youzan's solutions reached approximately RMB 23 billion, with a year-on-year growth of over 25% from non-Kuaishou channels[35]. - The total gross merchandise volume from the store SaaS business was approximately RMB 9 billion, accounting for 39% of the total, with a year-on-year growth of about 70%[35]. Cost and Expenses - Research and development expenses increased to RMB 172,195,000, up 27.8% from RMB 134,742,000 in the previous year[22]. - Sales expenses increased by 21.9% year-on-year to approximately RMB 255,966 thousand, driven by an increase in sales personnel and travel expenses[44]. - Administrative expenses rose by 74.7% year-on-year to approximately RMB 123,324 thousand, primarily due to one-time severance payments of approximately RMB 61,181 thousand[44]. - Other operating expenses increased by 26.1% year-on-year to approximately RMB 172,251 thousand, mainly due to increased research and development expenditures[45]. - Investment and other income decreased by 45.3% year-on-year to approximately RMB 11,360 thousand, attributed to reduced VAT deductions and bank interest income[45]. Equity and Shares - Total equity as of March 31, 2022, was RMB 4,481,704,000, a decrease of RMB 148,395,000 from the previous period[31]. - The company reported a cumulative loss of RMB 4,391,368,000 as of March 31, 2022, reflecting an increase of RMB 180,318,000 during the period[30]. - The total number of shares issued as of March 31, 2022, was 18,421,642,097 shares, unchanged from the report date[29]. - The total number of shares held by Mr. Cui Yusong is 265,085,127, representing 1.44% of the total equity[52]. - Whitecrow Investment holds 1,440,601,703 shares, representing 7.82% of the total equity[55]. - Poyang Lake Investment Limited and Tencent Holdings Limited each hold 1,036,766,038 shares, accounting for 5.63% of the total equity[55]. Governance and Compliance - The audit committee, consisting of three independent non-executive directors, reviewed the financial performance for the three months ending March 31, 2022, ensuring compliance with applicable accounting standards[58]. - The company adopted the corporate governance code as per GEM Listing Rules Appendix 15 during the three months ending March 31, 2022[57]. - The company confirmed full compliance with the trading code for directors during the period ending March 31, 2022[56]. - The company’s board of directors includes both executive and independent non-executive members, ensuring a diverse governance structure[58]. Operational Strategy - The company plans to control operational costs, including employee costs and advertising expenses, to improve financial performance[9]. - The company aims to enhance operational cash flow and improve results by optimizing sales and R&D investments and focusing on customer needs[35]. - Organizational restructuring was implemented to improve operational efficiency and focus on strategic development across five core sectors: social e-commerce, new retail, beauty industry, education, and international markets[34]. - The company emphasized cost control measures to enhance per capita output and improve cash flow and operational results[34]. Dividend and Financial Health - The board of directors did not recommend the payment of an interim dividend for the three months ended March 31, 2022[4]. - No interim dividend was recommended for the three months ended March 31, 2022, consistent with the previous year[29]. - The company has sufficient financial resources to meet its obligations for the foreseeable future, as indicated by cash flow forecasts[9]. - The company has no bank borrowings as of March 31, 2022[45]. Market Conditions - The impact of COVID-19 continues to affect the group's business operations, and the company is monitoring the situation closely[50]. - The company has not made any hedging arrangements to offset foreign exchange risks as of March 31, 2022[48]. - The company has not adopted any new accounting standards or amendments that are expected to be issued in the near future[10]. - The company adopted new and revised Hong Kong Financial Reporting Standards effective from January 1, 2022, with no significant impact on financial statements[10].

Financial Performance - Financial performance highlights indicate significant growth in revenue, with a year-on-year increase of 25%[12] - Revenue for the year ended December 31, 2021, was RMB 1,569,991, a decrease of 13.8% from RMB 1,820,723 in 2020[13] - The company projects a revenue growth of 20% for the next fiscal year, driven by new product launches and market expansion[12] - Revenue for the fiscal year reached approximately $200 million, reflecting a 15% increase compared to the previous year[91] - Youzan's revenue for 2021 was approximately RMB 1,569,991,000, a decrease of 13.8% compared to 2020, primarily due to a decline in revenue from merchant solutions[48] User Engagement and Market Expansion - User data shows an increase in active merchants by 30%, reaching a total of 150,000[12] - The company reported a significant increase in user engagement, with a year-over-year growth of 25% in active users[90] - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years[12] - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share by 2025[92] Product Development and Innovation - Investment in R&D has increased by 15%, focusing on enhancing technology and product offerings[12] - The company has launched a new e-commerce platform, which is projected to contribute an additional $50 million in revenue[12] - New product launches are expected to contribute an additional $50 million in revenue over the next fiscal year[93] - Youzan launched WowShop in 2021, serving a total of 10,000 paying merchants, including retail and catering businesses[36] - The Group launched four new products in 2021, including WowShop and Youzan CRM, as part of its focus on new retail business[71] Financial Health and Cost Management - The gross profit margin improved to 45%, up from 40% in the previous year, reflecting better cost management[12] - Gross profit for 2021 was RMB 952,263, down 12.0% from RMB 1,082,084 in 2020, with a gross profit margin of 60.7%[13] - The Group's cost of sales decreased by 16.4% to approximately RMB 617,728,000 in 2021 from RMB 738,639,000 in 2020, mainly due to a 44.6% reduction in transaction costs[58] - The Group reported other net losses of approximately RMB 2,186,924,000 in 2021, compared to net gains of approximately RMB 1,569,000 in 2020, mainly due to impairments[74] Customer Satisfaction and Retention - Customer retention rates have improved by 12%, indicating stronger user engagement and satisfaction[12] - Customer satisfaction ratings improved to 90%, up from 85% last year, indicating better service delivery[90] Strategic Acquisitions and Partnerships - A strategic acquisition of a local tech firm is expected to enhance service capabilities and customer reach[12] - The company is exploring potential acquisitions to enhance its service offerings, with a focus on companies in the fintech sector[92] - The company has established a new partnership with a leading e-commerce platform, expected to drive additional traffic and sales[93] Operational Efficiency and Management - The company emphasizes the importance of returning to business fundamentals and improving operational efficiency through structured management principles[22] - The Company plans to focus on expanding all-industry value and deeply exploring vertical industries as part of its short-term strategy[16] - Youzan is committed to building a commercialization capability to improve marketing and sales system efficiency[22] Employee and Organizational Development - The number of employees increased to 4,494 as of December 31, 2021, up 24.8% from 3,603 in 2020[120] - The Group recognizes the importance of staff training and regularly provides internal and external training to enhance employee skills and knowledge[120] Financial Agreements and Compliance - The Company has entered into a Loan Agreement 2022 with Youzan Technology, providing an unsecured loan facility of up to HK$480 million, effective from January 1, 2022, to December 31, 2024[144] - The proposed annual caps for the Loan Agreement 2022 are set at HK$480 million for each of the financial years ending December 31, 2022, 2023, and 2024[145] - The Company expects the Loan Agreement 2022 to be beneficial and fair, having been negotiated on normal commercial terms[146] Challenges and Risks - The evolving regulatory requirements in the PRC present challenges to the market in which the Group operates[84] - The management anticipates future growth of CGU B will be subject to uncertainties, including competition and market demand changes[83]