Economic Environment - In 2019, China's GDP growth was recorded at 6.1%, the lowest since 1991, impacting consumer sentiment and retail sales[10]. - The retail environment is increasingly competitive due to new large shopping malls and the rise of online shopping channels[10]. - The retail sector is facing uncertainties due to worsening epidemic situations in Europe and the United States, complicating recovery predictions for the Chinese retail market[16][21]. - The Chinese government implemented measures to reduce taxes and stimulate domestic consumption in response to the economic slowdown[31]. Company Operations - The Group operates two Jiuguang department stores in Shanghai and Suzhou, targeting the mid to high-end market segments[3]. - The Group is developing a new commercial complex in Daning, Shanghai, which will house its second Jiuguang department store, enhancing market presence[4]. - The Group's strategic stake in Beiren Group diversifies its operations within the retail sector[3]. - The Group's promotional efforts have reduced the loss in foot traffic to competitors, maintaining its customer base[10]. - The Group is prepared to seize new investment opportunities to facilitate long-term sustainable growth[4]. Financial Performance - For the year ended 31 December 2019, the Group's sales revenue increased by 1.7% to RMB1,204.1 million, with department stores in Shanghai and Suzhou recording sales growth of 6.2% and 4.1% respectively[11][14]. - The Group reported a net loss of RMB83.5 million for 2019, a significant decline from a net profit of RMB338.1 million in 2018, primarily due to a share of loss from Beiren Group amounting to RMB294.7 million[11][14]. - Loss per share for 2019 was RMB0.057, compared to earnings per share of RMB0.222 in 2018, with the board deciding not to declare any dividend for the year[11][14]. - Total sales proceeds rose by 3.2% to RMB3,332.1 million in 2019 from RMB3,228.7 million in 2018[32]. - The Group's gross profit amounted to RMB791.4 million in 2019, with a gross profit margin of approximately 23.8%, down from 25.0% in 2018[33]. - The average concessionaire rate decreased to approximately 21.6% from 22.1% recorded in 2018 due to intensifying market competition[33]. Impact of COVID-19 - The COVID-19 outbreak has severely impacted economic activities, leading to adjustments in business hours and enhanced hygiene measures at the Group's department stores[12][15]. - The construction of the complex has been delayed due to the COVID-19 outbreak, affecting tenant recruitment and leasing processes[18][22]. - The COVID-19 pandemic has significantly impacted the business of both Shanghai Jiuguang and Suzhou Jiuguang since February 2020, leading to store closures and reduced operating hours[59]. - The management holds a pessimistic view on economic growth and retail consumption outlook for 2020 due to COVID-19 impacts and potential rise in unemployment[65]. Customer Engagement and Marketing - The Group has adjusted its product assortment towards mid-range and high-end goods to cater to middle-class families, enhancing customer loyalty[10]. - The Group is focusing on targeting middle-class customers and enhancing customer engagement through improved product assortment and digital management systems[17][21]. - Omni-channel marketing initiatives have been implemented since September 2019, allowing customers to share reward points and enjoy shopping convenience across locations[65]. - The mobile internet-enabled application will facilitate functions such as converting reward points into coupons for partner businesses, enabling precision marketing based on customer data[65]. Environmental Responsibility - The total emissions for the financial year 2019 amounted to 422,713.06 tonnes, with an intensity of 1.38 tonnes/sq.m[86]. - The total greenhouse gas emissions of carbon dioxide for the financial year 2019 were 49,975.04 tonnes, corresponding to an intensity of 0.16 tonnes/sq.m[86]. - The Group focuses on waste prevention and management as a key part of its environmental policy, ensuring compliance with government regulations[93]. - The Group's environmental strategy includes adopting effective environmental-friendly operating solutions and setting measurable environmental protection targets[82]. - The Group is committed to minimizing the use of scarce resources and energy in its operations[82]. Employee Management - As of December 31, 2019, the Group employed 1,162 employees, promoting a non-discriminatory work environment[124]. - The Group's performance appraisal management system ensures transparency and fairness in employee evaluations and promotions[125]. - The Group provides comprehensive insurance coverage for work injury and employer liability, along with annual health checks for employees[139][145]. - The Group emphasizes maintaining a safe and healthy work environment, including proper lighting, ventilation, and regular safety training for employees[140][141]. Community Engagement - The Group actively invests in community services, focusing on education and support for underprivileged groups[184]. - The Group donated approximately RMB370,000 to less privileged groups and teenagers in the financial year 2019[193]. - The Suzhou store donated RMB200,000 to support educational activities for students from less privileged families[190]. - The Shanghai store donated RMB60,000 for a charity activity focused on popular science in August 2019[193]. Governance and Compliance - No instances of corruption were reported among employees during the financial year 2019, reflecting the Group's commitment to integrity[183]. - The Group's anti-corruption policy is outlined in the Employees' Handbook, promoting transparency and accountability[182]. - The Group's supply chain management optimizes resource allocation to deliver high-quality products and services, while encouraging business partners to adhere to similar environmental and social standards[158].
利福中国(02136) - 2019 - 年度财报