[Important Notice](index=3&type=section&id=I.%20Important%20Notice) The company's board of directors, supervisory board, and all directors, supervisors, and senior management guarantee the truthfulness, accuracy, and completeness of this quarterly report, with no false records, misleading statements, or major omissions - The company's responsible person, the person in charge of accounting work, and the head of the accounting department guarantee the truthfulness, accuracy, and completeness of the financial statements[3](index=3&type=chunk) - This company's 2020 first-quarter report has not been audited[3](index=3&type=chunk) [Company Overview](index=3&type=section&id=II.%20Company%20Overview) This section provides an overview of the company's key financial performance and shareholder structure for the first quarter of 2020, highlighting strong growth and ownership details [Key Financial Data and Shareholder Information](index=3&type=section&id=2.1%20Key%20Financial%20Data) In Q1 2020, the company demonstrated strong financial performance with operating revenue up **10.67%**, net profit attributable to shareholders up **35.85%**, and operating cash flow surging **85.20%**, while total shareholders reached **37,827** with concentrated ownership among the top three 2020 First Quarter Key Financial Data | Indicator | Current Period | Prior Year Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | **Operating Revenue (RMB)** | 3,707,545,947.93 | 3,350,187,757.99 | 10.67% | | **Net Profit Attributable to Shareholders (RMB)** | 65,654,082.09 | 48,329,003.06 | 35.85% | | **Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (RMB)** | 69,229,822.82 | 46,407,859.86 | 49.18% | | **Net Cash Flow from Operating Activities (RMB)** | 609,490,005.08 | 329,101,036.32 | 85.20% | | **Basic Earnings Per Share (RMB/share)** | 0.10 | 0.07 | 42.86% | | **Weighted Average Return on Net Assets (%)** | 2.36% | 1.77% | Increased by 0.59 percentage points | - During the reporting period, the company's non-recurring gains and losses totaled **-3.58 million RMB**, primarily due to fair value changes in financial assets and disposal losses of non-current assets[5](index=5&type=chunk)[6](index=6&type=chunk) Top Three Shareholders' Holdings | Shareholder Name | Number of Shares Held | Shareholding Ratio (%) | | :--- | :--- | :--- | | Beijing Hualian Group Investment Holding Co., Ltd. | 194,195,951 | 29.17% | | Hainan Yixiong Commercial Investment Management Co., Ltd. | 90,248,350 | 13.55% | | Yangpu Wanlitong Technology Co., Ltd. | 78,063,470 | 11.72% | [Significant Matters](index=6&type=section&id=III.%20Significant%20Matters) This section details significant changes in key financial statement items and outlines the company's operational and financing activities during the reporting period [Analysis of Major Changes in Key Financial Items](index=6&type=section&id=3.1%20Major%20Changes%20in%20Key%20Financial%20Items%20and%20Reasons) During the reporting period, several financial statement items experienced significant changes, including a **221.86%** increase in construction in progress due to new projects, the full repayment of ultra-short-term financing bonds, and a **521.59%** surge in other income driven by increased government subsidies, all contributing to a **35.85%** rise in net profit attributable to shareholders Major Changes and Reasons in Balance Sheet and Income Statement Items | Item | Period-end/Current Period Amount (RMB) | Change from Period-start/Prior Period (%) | Reason for Change | | :--- | :--- | :--- | :--- | | Construction in Progress | 21,910,454.82 | 221.86% | Increase in projects under construction | | Short-term Borrowings | 2,525,350,727.23 | 33.37% | Increase in short-term borrowings | | Other Current Liabilities | 0.00 | -100.00% | Repayment of ultra-short-term financing bonds | | Other Income | 5,180,102.78 | 521.59% | Increase in government subsidies | | Fair Value Change Gains | -6,801,191.72 | -459.70% | Fair value changes in financial assets | | Non-operating Income | 506,551.02 | -86.87% | Decrease in fines and compensation received | - Net profit attributable to parent company shareholders increased by **35.85%**, primarily due to the company maintaining operations during the pandemic and increasing commodity supply, which boosted operating revenue and gross profit[11](index=11&type=chunk) [Progress of Company Operations and Financing Activities](index=8&type=section&id=3.2%20Progress%20of%20Significant%20Matters%20and%20Analysis%20of%20Impact%20and%20Solutions) During the reporting period, the company made significant strides in capital operations and business expansion, including the repayment of **600 million RMB** in ultra-short-term financing bonds and strategic investments in new subsidiaries in Beijing, Guizhou, Sichuan, Hubei, and Henan - The company completed the repayment of **600 million RMB** in ultra-short-term financing bonds on January 20, 2020[13](index=13&type=chunk) - The company invested **300 million RMB** to establish a wholly-owned subsidiary in Beijing for commercial projects, which has been completed[13](index=13&type=chunk) - The board of directors approved multiple expansion plans: a **100 million RMB** capital increase for the Guizhou subsidiary; and the establishment of wholly-owned subsidiaries in Panzhihua, Sichuan, Hubei, and Henan, each with an investment of **20 million RMB**[13](index=13&type=chunk) [Appendix](index=10&type=section&id=IV.%20Appendix) This section includes the company's consolidated financial statements and details the impact of new accounting standards adopted in 2020 [Financial Statements](index=10&type=section&id=4.1%20Financial%20Statements) As of Q1 2020, total assets grew **4.74%** to **9.99 billion RMB**, operating revenue reached **3.71 billion RMB** with a **10.67%** increase, and net profit attributable to shareholders was **65.65 million RMB**, up **35.85%**, while operating cash flow surged **85.20%** to **609.49 million RMB**, reflecting strong cash generation and improved operational efficiency [Consolidated Balance Sheet](index=10&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2020, total assets were **9.99 billion RMB**, up **4.74%** from the beginning of the year, total liabilities were **7.17 billion RMB**, up **5.74%**, and net assets attributable to shareholders were **2.81 billion RMB**, up **2.30%**, indicating business expansion Consolidated Balance Sheet Key Items | Item | March 31, 2020 (RMB) | December 31, 2019 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 9,989,402,875.44 | 9,537,094,751.39 | 4.74% | | Total Liabilities | 7,171,310,381.20 | 6,782,101,022.07 | 5.74% | | Total Equity Attributable to Parent Company Owners | 2,814,824,698.35 | 2,751,629,235.31 | 2.30% | [Consolidated Income Statement](index=14&type=section&id=Consolidated%20Income%20Statement) In Q1 2020, the company achieved total operating revenue of **3.71 billion RMB**, a **10.67%** increase, with total operating costs at **3.65 billion RMB**, up **10.07%**, demonstrating effective cost control and a significant **35.85%** rise in net profit attributable to parent company shareholders to **65.65 million RMB** Consolidated Income Statement Key Items | Item | Q1 2020 (RMB) | Q1 2019 (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 3,707,545,947.93 | 3,350,187,757.99 | 10.67% | | Total Operating Costs | 3,649,365,845.41 | 3,315,335,885.51 | 10.07% | | Operating Profit | 70,811,862.10 | 51,079,417.29 | 38.63% | | Net Profit Attributable to Parent Company Shareholders | 65,654,082.09 | 48,329,003.06 | 35.85% | [Consolidated Cash Flow Statement](index=18&type=section&id=Consolidated%20Cash%20Flow%20Statement) During the reporting period, net cash flow from operating activities significantly increased by **85.20%** to **609.49 million RMB**, driven by higher cash receipts from sales, while net cash flow from investing activities turned positive at **4.83 million RMB**, and net cash outflow from financing activities narrowed substantially to **24.50 million RMB** Consolidated Cash Flow Statement Key Items | Item | Q1 2020 (RMB) | Q1 2019 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 609,490,005.08 | 329,101,036.32 | Increased by 85.20% | | Net Cash Flow from Investing Activities | 4,832,132.54 | -7,429,057.54 | Turned positive | | Net Cash Flow from Financing Activities | -24,497,019.58 | -175,669,604.44 | Net outflow decreased by 86.05% | | Period-end Cash and Cash Equivalents Balance | 4,470,071,839.39 | 4,800,588,422.08 | Decreased by 6.88% | [Impact of Accounting Standard Changes](index=21&type=section&id=4.2%20Adjustments%20to%20Financial%20Statements%20at%20the%20Beginning%20of%20the%20First%20Year%20of%20Initial%20Application%20of%20New%20Revenue%20and%20Lease%20Standards%20from%202020) The company adopted new revenue and lease standards effective January 1, 2020, with the report indicating no adjustments were made to the consolidated and parent company financial statements at the beginning of the period due to these changes - The report explicitly states that adjustments for the initial application of new revenue and lease standards are not applicable, indicating no adjustments to the opening financial statements[33](index=33&type=chunk)[36](index=36&type=chunk)

Financial Performance - The net profit attributable to the parent company's shareholders for 2018 was CNY 83,398,691.90, with undistributed profits at CNY 217,309,605.97 by the end of the year[5]. - The company's adjusted revenue for 2018 was approximately ¥11.60 billion, a decrease of 1.47% compared to ¥12.37 billion in 2017[20]. - Net profit attributable to shareholders for 2018 was approximately ¥83.40 million, an increase of 6.18% from ¥78.54 million in 2017[20]. - Basic earnings per share for 2018 was ¥0.13, reflecting an increase of 8.33% from ¥0.12 in 2017[21]. - The weighted average return on equity for 2018 was 2.91%, up from 2.74% in 2017[21]. - The company generated a net cash flow from operating activities of approximately ¥726.45 million in 2018, an increase of 12.84% from ¥643.76 million in 2017[20]. - Total assets at the end of 2018 were approximately ¥10.22 billion, an increase of 3.92% from ¥9.84 billion at the end of 2017[20]. - The net profit after deducting non-recurring gains and losses for 2018 was approximately ¥78.11 million, a significant increase from ¥4.85 million in 2017[20]. - The company reported a net loss from non-recurring items of approximately ¥6.12 million in 2018, compared to a gain of ¥91.96 million in 2017[26]. - Operating revenue decreased by 1.47% to CNY 11,595,335,895.56 from CNY 11,768,499,201.87 in the same period last year[45]. - Operating costs decreased by 2.12% to CNY 9,022,828,739.79 from CNY 9,217,865,142.59[45]. - Financial expenses increased by 7.11% to CNY 143,435,495.18 due to higher interest expenses[45]. - Investment income decreased by 82.33% to CNY 63,450,540.82 from CNY 358,994,263.55[45]. - The company reported a significant reduction in asset impairment losses, decreasing by 112.87% to CNY -1,207,870.82 from CNY 9,387,601.57[45]. - The total amount of cash flow from financing activities improved by 99.71% to CNY -3,323,925.26 from CNY -1,141,243,667.08[55]. Profit Distribution - The profit distribution plan for 2018 proposes a cash dividend of CNY 0.7 per 10 shares, totaling CNY 46,606,554.26, with the remaining undistributed profits carried forward to the next year[5]. - The company has a cash dividend policy that mandates at least 50% of distributable profits to be allocated as cash dividends when profits are available[102]. - The company distributed a cash dividend of 0.6 RMB per 10 shares for the year 2017, totaling 39,948,475.08 RMB, completed on July 4, 2018[104]. - The cash dividends distributed in 2018 represent 55.88% of the net profit attributable to ordinary shareholders, compared to 51.05% in 2017[106]. - The company has established multiple channels for daily communication with minority shareholders regarding profit distribution and policy changes[105]. - The company's profit distribution policy complies with its articles of association and decision-making procedures, ensuring that minority shareholders have ample opportunity to express their opinions[105]. Acquisitions and Investments - The company completed the acquisition of 100% equity in Jiangsu Zijin Hualian Commercial Facilities Operation Co., Ltd. on July 25, 2018[22]. - The company acquired 100% equity of Jiangsu Zijin Hualian Commercial Facilities Operation Co. for CNY 235.67 million, with the transfer completed on September 29, 2018[128]. - The company purchased 100% equity of Beijing Baihaoji Community Department Store Co. for RMB 208 million, with the transfer completed on December 14, 2018[129]. - The company holds a 70% equity stake in Shaanxi Shinan Fruit Products Co., with an investment amount of 14 million CNY[81]. - The company has invested 23.57 million CNY in Jiangsu Zijin Hualian Commercial Facilities Operation Co., which operates in property leasing[81]. - The company transferred 70% equity of Shaanxi Shiren Fruit Co. for RMB 1.23 million, completing the equity transfer on August 24, 2018[127]. Risks and Compliance - The company faces various risks including policy, market, operational, management, and financial risks, which are detailed in the report[7]. - The company emphasizes the importance of risk awareness in future plans and strategic developments[6]. - The company has not engaged in non-operational fund occupation by controlling shareholders or related parties[7]. - The company has not violated decision-making procedures for external guarantees[7]. - The company has not faced any risks of suspension of listing during the reporting period[119]. - The company is actively working on compliance with regulatory commitments and shareholder agreements[109][110]. Operational Strategy - The company operates multiple wholly-owned subsidiaries across various regions, enhancing its market presence[11]. - The company's main business model is self-operated, which allows for greater autonomy in procurement and sales, focusing on food, daily necessities, and small appliances[32]. - The company continues to focus on fresh food as a core competency, which is crucial for enhancing its competitive advantage in the retail sector[41]. - The company implemented a dual procurement system, combining national and regional purchasing strategies to lower operating costs[32]. - The company plans to negotiate lease renewals for the Lanzhou Hongxing store, with the current lease expiring on December 26, 2019[67]. - The company plans to open 10-20 new stores in 2019, with an investment of approximately ¥20 million per store, funded through self-owned funds, bond issuance, and bank loans[77]. - The company will implement a fresh food self-operated strategy to enhance self-operation capabilities and ensure the quality, freshness, and price image of fresh products[90]. - The company intends to increase store density in advantageous regions while ensuring a high success rate for new stores through incentive mechanisms[90]. Governance and Management - The company has a diverse board with members holding various positions, including independent directors and supervisors[167]. - The total remuneration for all directors, supervisors, and senior management at the end of the reporting period was 3.254 million yuan[172]. - The company has a structured decision-making process for determining the remuneration of directors and senior management, requiring approval from the shareholders' meeting[172]. - The company has maintained a stable management team with no significant changes in the past reporting period[173]. - The company’s financial management practices are overseen by experienced professionals with backgrounds in banking and finance[171]. - The company has undergone a leadership change with the departure of former Chairman Luo Zhiwei and the election of new directors[173]. Market Trends - The retail industry in China saw a 9.0% growth in total retail sales of consumer goods, reaching approximately CNY 38.10 trillion in 2018[36]. - Online retail sales in China grew by 23.9% in 2018, with physical goods online retail sales increasing by 25.4%, indicating a shift in consumer purchasing behavior[37]. - The retail sales of supermarkets and convenience stores increased by 6.8% and 11.5% respectively, outperforming the average growth rate of the retail sector[88].

Financial Performance - Operating income for the first nine months was ¥9,241,172,851.94, reflecting a slight increase of 0.66% year-on-year[7] - Net profit attributable to shareholders for the first nine months was ¥71,805,884.47, a significant increase of 730.44% compared to the same period last year[7] - Net cash flow from operating activities for the first nine months was ¥365,656,569.10, up 26.28% year-on-year[7] - The company reported a basic earnings per share of ¥0.10, down 9.09% from the previous year[8] - Total revenue for Q3 2018 reached ¥3,108,993,684.98, an increase of 10.2% compared to ¥2,821,451,829.46 in Q3 2017[37] - The company's operating revenue for Q3 2023 reached ¥2,701,512,420.62, an increase of 6.6% compared to ¥2,534,095,909.93 in Q3 2022[41] - The net profit for the period was a loss of ¥3,481,527.91, compared to a loss of ¥35,166,052.84 in the same period last year, showing a significant improvement[41] - The total profit for the period was ¥436,781.08, contrasting with a loss of ¥35,209,674.45 in Q3 2022, indicating a recovery in profitability[41] Assets and Liabilities - Total assets at the end of the reporting period reached ¥9,776,153,963.37, an increase of 1.81% compared to the end of the previous year[7] - The company's current liabilities totaled approximately 6.297 billion RMB, compared to 6.138 billion RMB at the beginning of the year[30] - Total liabilities increased to ¥7,022,108,368.24 from ¥6,558,317,275.14, marking a rise of 7.1%[35] - The company's total equity reached ¥2,526,232,328.15, a slight increase from ¥2,522,928,490.07 at the beginning of the year, showing a growth of 0.1%[35] - Short-term borrowings increased by 130.57% to RMB 1,251,977,243.20 from RMB 543,000,000.00 at the beginning of the year[16] - The company's total assets amounted to 9.776 billion RMB, an increase from 9.602 billion RMB at the beginning of the year[30] Cash Flow - The cash flow from operating activities generated a net amount of ¥365,656,569.10, up from ¥289,551,840.34 in the previous year, reflecting improved cash generation[45] - The net cash flow from operating activities for the first nine months of 2018 was ¥727,463,664.54, a decrease from ¥789,552,488.26 in the same period last year, reflecting a decline of approximately 7.9%[48] - Total cash inflow from investment activities was ¥1,597,598,065.99, down from ¥2,051,064,336.64 year-over-year, indicating a decrease of about 22.1%[49] - The total cash and cash equivalents at the end of the period was ¥2,109,182,586.30, down from ¥2,391,983,642.01 at the end of the same period last year, a decrease of about 11.8%[49] Investment and Financing - Investment income decreased significantly by 85.53% to RMB 50,402,548.91, down from RMB 348,232,649.94 in the previous year, primarily due to the sale of Hualian Premium last year[16] - The company plans to issue up to RMB 17 billion in non-financial corporate debt financing tools, with a short-term financing bond registration of RMB 7 billion already accepted[17][18] - The company received ¥932,487,243.20 from borrowings, significantly higher than the ¥350,000,000.00 received in the previous year, marking an increase of approximately 166%[49] - The company recorded investment income of ¥40,741,216.15 for the first nine months, a decrease from ¥265,581,683.91 in the previous year, highlighting challenges in investment performance[41] Shareholder Information - The number of shareholders at the end of the reporting period was 32,054[11] - The largest shareholder, Beijing Hualian Group Investment Holding Co., Ltd., holds 29.17% of the shares[11] - The company has completed the release of share pledges, with no shares currently pledged by major shareholders[12][13] Operational Costs - The operating cost for the same period was RMB 7,276,724,975.00, which is a 0.67% increase from RMB 7,228,462,163.23 year-on-year[16] - The company reported a total operating cost of ¥2,133,905,224.15 for Q3 2023, which is an increase of 5.9% from ¥2,015,464,510.91 in Q3 2022[41] - Sales expenses for Q3 2018 were approximately $526.36 million, a slight increase from $504.91 million in Q3 2017[38] - The company paid ¥607,881,398.86 in employee compensation, which is an increase of approximately 22% compared to ¥498,880,022.61 in the previous year[48]