Financial Performance - The company reported a revenue of RMB 141.1 million for 2018, a decrease of 32.5% compared to the previous year[11]. - Total sales decreased by RMB 67.9 million or 32.5% to RMB 141.1 million in 2018 from RMB 209.0 million in 2017[25]. - Gross profit decreased by RMB 41.1 million or 34.9% to RMB 76.8 million, with gross margin slightly declining to 54.4% from 56.4%[26]. - Revenue from ELLE products decreased to RMB 95.1 million, down 27.4% from RMB 131.0 million in 2017[23]. - Jessie & Jane product sales fell to RMB 46.0 million, a decline of 41.0% from RMB 78.0 million in 2017[23]. - Online retail sales revenue dropped by 37.4%, while offline retail sales and wholesale to offline retailers decreased by 62.6% and 32.3%, respectively[11]. - Revenue declines for each quarter were approximately 26.3%, 24.9%, 24.6%, and 51.1%[11]. - Online retail sales reached RMB 88.9 million, accounting for 63.0% of total sales, down from 67.9% in 2017, with a decline of 37.4%[19][22]. - Offline retail sales dropped to RMB 5.4 million, a decrease of 62.6% from RMB 14.4 million in 2017, contributing 3.8% to total sales[21][22]. - Wholesale to online retailers increased by 25.1% to RMB 24.4 million, while wholesale to offline retailers fell by 32.3% to RMB 22.5 million[19][22]. Strategic Focus - The company plans to focus on its two brands: the licensed brand ELLE and the in-house brand Jessie & Jane, emphasizing design and quality[9]. - The company aims to reduce reliance on the leading B2C e-commerce platform and strengthen partnerships with other major online platforms in China[9]. - The company is focusing on expanding partnerships with other B2C e-commerce platforms to reduce reliance on the leading platform[13]. - The company anticipates that the online retail channel will contribute more revenue in 2019[13]. - The company has allocated RMB 14.2 million of the net proceeds from the IPO for marketing investments, product design, and store openings, with a focus on social media marketing[44]. - The company plans to enhance its market position in the Chinese women's handbag market through increased marketing efforts and product design improvements[37]. Operational Changes - The number of direct-operated stores was reduced from five to three, lowering operational risks and costs[12]. - Administrative and other operating expenses reduced by RMB 8.1 million or 22.8% to RMB 27.6 million, while post-listing operational costs increased[28]. - The group had no significant investments, acquisitions, or disposals of subsidiaries and associates during the year ended December 31, 2018[34]. - The company has implemented strict supply chain management and quality control procedures to ensure high-quality products and services[154]. - The company collaborates with online store operators to enhance the operation of its self-operated online retail points[160]. Governance and Compliance - The company has maintained compliance with the corporate governance code as per GEM listing rules since its listing date on January 16, 2018[62]. - The board consists of eight directors, including three executive directors, two non-executive directors, and three independent non-executive directors[64]. - The company has established various board committees to enhance governance and oversight functions[63]. - The independent non-executive directors play a crucial role in ensuring the board acts in the best interests of the company and its shareholders[64]. - The company has engaged external consultants to review its internal control systems, which did not reveal any significant control deficiencies[98]. - The company has established a nomination policy that considers multiple criteria for appointing directors[90]. Environmental and Social Responsibility - The company emphasizes compliance with environmental regulations, including the Water Pollution Prevention Law and the Air Pollution Prevention Law in China[138]. - Employee training on environmental, health, and safety policies was provided to enhance awareness of environmental protection[138]. - The company aims to reduce energy consumption by utilizing natural light and implementing energy-efficient practices[143]. - The company prioritizes suppliers with environmental management system certifications during procurement[145]. - The company is committed to community contributions and encourages employee participation in various charitable activities[167]. Employee Management - The company employed 88 staff in Hong Kong and China, a decrease from 100 in 2017[46]. - Total employee costs for the year ended December 31, 2018, amounted to RMB 17.6 million, slightly down from RMB 17.8 million in 2017[46]. - The company provides various employee benefits, including insurance contributions and annual leave, in compliance with local laws[151]. - The company conducted employee health checks annually to ensure workplace safety and compliance with health regulations[150]. - The company organized recreational activities for employees, including birthday parties and trips, to promote work-life balance[152]. Market Outlook - The company maintains a cautiously optimistic outlook for future performance amid signs of easing tensions in the US-China trade war and improved liquidity policies from the Chinese government[9]. - Management believes that consumer spending in China will continue to grow due to rising purchasing power and stable economic growth, expecting a return to business growth in 2019[37]. Legal and Regulatory Matters - The company adheres to data protection and privacy laws, ensuring employee confidentiality regarding sensitive information[165]. - There were no legal cases related to corruption during the year, reflecting the company's strict compliance with anti-corruption laws[166]. - The company has maintained its business nature without significant changes during the year[175].