Store Expansion and Retail Network - The company's total number of stores reached 6,093 in 2023, with a net increase of 443 stores, covering more than 170 cities in 22 provinces and municipalities[5] - The company's retail network includes self-operated APP, WeChat Mini-program, and third-party platforms like Douyin, Meituan, and Ele.me[5] - The company's retail business unit expanded its store network by 443 stores, reaching a total of 6,093 stores across more than 170 cities in 22 provinces and municipalities[36][37] - Total number of retail stores increased by 7.8% to 6,093 as of December 31, 2023, compared to 5,650 in 2022[54][55] - Revenue from franchised stores supervised by the Group accounted for 99.4% of total revenue, amounting to RMB 8,495,143 thousand in 2023[58] - The Group established a franchisee committee and organized six exchange and learning activities in 2023 to enhance franchisee satisfaction[59] - Revenue from franchised stores decreased by 4.0% from RMB8,851.5 million in 2022 to RMB8,499.8 million in 2023, despite a 5.3% increase in the number of stores to 4,818[92][94] - Average annual revenue per franchised store decreased by 9.8% from RMB2.0 million in 2022 to RMB1.8 million in 2023[94][96] Online Sales and Digital Channels - Online orders accounted for approximately 27.6% of total sales in 2023[5] - Cumulative number of users of the WeChat mini-program reached 68 million, a 26% increase compared to 2022[60] - Total number of store-based WeChat groups increased to 27,455 with over 16.2 million followers, a 25.6% year-on-year increase[60] - Orders placed through online channels accounted for 27.6% of total orders in 2023[60] - Total number of customers purchasing through Douyin increased by 190% in 2023 compared to 2022[62] - Retail sales of fruits and fruit products through Douyin ranked first among all fruits and fruit products traded on the platform in 2023[62] - The Group's Tasty Fruit Festival in October 2023 attracted over 120 million online views and trended nationally on Weibo[62] Business Unit Performance - The 2B business unit grew by approximately 42.5% year-on-year in 2023[6] - The 2B business unit achieved a year-on-year revenue growth rate of 42.5% in 2023[38] - Revenue from direct sales (2B business) increased by 42.5% from RMB723.8 million in 2022 to RMB1,031.5 million in 2023[92] - Overseas 2B sales grew by 62.0% from RMB154.4 million in 2022 to RMB250.0 million in 2023, driven by increased demand for quality fruits[92][93] - Domestic 2B sales increased by 37.2% from RMB569.4 million in 2022 to RMB781.5 million in 2023, due to favorable pricing strategies[92][93] - The company restructured into three business units: retail, 2B, and category business units to align with long-term growth goals[48] Financial Performance - Revenue for the year ended December 31, 2023 was RMB11,390.6 million, an increase of 0.7% compared to 2022[32][33] - Gross profit for 2023 was RMB1,314.8 million, a slight increase of 0.04% compared to 2022[32][33] - Profit attributable to owners of the company for 2023 was RMB361.7 million, an increase of 11.9% compared to 2022[32][33] - The company's revenue increased by 0.7% from RMB 11,312.0 million in 2022 to RMB 11,390.6 million in 2023[47] - The company's gross profit slightly increased by 0.04% from RMB 1,314.3 million in 2022 to RMB 1,314.8 million in 2023[47] - The company's profit attributable to owners increased by 11.9% from RMB 323.3 million in 2022 to RMB 361.7 million in 2023[47] - Total revenue increased by 0.7% from RMB11,312.0 million in 2022 to RMB11,390.6 million in 2023[88] - Revenue from sales of fruits and other food products accounted for 97.2% of total revenue in 2023, up from 97.1% in 2022[88] - Direct sales revenue increased by 42.5% from RMB723.8 million in 2022 to RMB1,031.5 million in 2023[91] - Franchised stores revenue decreased by 4.0% from RMB8,851.5 million in 2022 to RMB8,499.8 million in 2023[91] - Operating profit increased from RMB384.998 million in 2022 to RMB416.612 million in 2023[85] - Net profit attributable to owners of the Company rose from RMB323.297 million in 2022 to RMB361.717 million in 2023[85] - Revenue from regional dealers increased by 15.4% from RMB1,072.740 million in 2022 to RMB1,238.641 million in 2023[91] - Royalty and franchising income decreased from RMB168.844 million in 2022 to RMB144.582 million in 2023[88] - Membership income increased from RMB90.132 million in 2022 to RMB95.345 million in 2023[88] - Gross profit margin slightly decreased from 11.6% in 2022 to 11.5% in 2023, with gross profit increasing by only 0.04% to RMB1,314.8 million[96][98] - Other income decreased by 9.8% from RMB40.8 million in 2022 to RMB36.8 million in 2023, mainly due to reduced government grants and franchisee penalty income[99][100] - Net other gains increased by 16.7% from RMB25.4 million in 2022 to RMB29.6 million in 2023, driven by foreign exchange gains from overseas direct sales[101][103] - Selling expenses decreased by 3.4% to RMB482.0 million in 2023, partly due to a 4.7% reduction in transportation costs to RMB204.6 million[102][104] - Administrative expenses decreased by 2.5% to RMB313.5 million in 2023, as administrative staff headcount reduced from 538 to 525[105][107] - Net impairment losses on financial assets increased from RMB2.2 million in 2022 to RMB23.5 million in 2023, primarily due to defaults and insolvency of 2B business customers[108] - Research and development expenses decreased by 15.8% from RMB173.0 million in 2022 to RMB145.6 million in 2023, driven by a reduction in R&D staff from 491 to 361[109][110] - Finance income increased by 28.7% from RMB31.8 million in 2022 to RMB40.9 million in 2023, mainly due to higher interest income from bank deposits[111][113] - Finance costs decreased by 9.5% from RMB83.7 million in 2022 to RMB75.8 million in 2023, primarily due to lower interest expenses on bank borrowings and lease liabilities[111][113] - Share of losses from associates and joint ventures was RMB0.7 million in 2023, compared to a profit of RMB13.3 million in 2022, mainly due to losses in avocado and pitaya cultivation ventures[112][114] - Profit before income tax increased by 10.0% from RMB346.4 million in 2022 to RMB381.0 million in 2023[115][118] - Income tax expense increased by 2.0% from RMB40.2 million in 2022 to RMB41.0 million in 2023, driven by higher taxable income[116][119] - Net profit increased by 11.1% from RMB306.1 million in 2022 to RMB340.0 million in 2023, with net profit margin rising from 2.71% to 2.98%[117][120] - Adjusted net profit and adjusted net profit margin are presented as non-HKFRS measures, excluding listing expenses related to the Group's global offering and listing in January 2023[121] - The Group uses non-HKFRS measures to evaluate financial performance by excluding non-recurring items, though these measures have limitations and should not replace HKFRS-based analysis[122][123] - Net profit for the year 2023 was RMB 339,992 thousand, an increase from RMB 306,137 thousand in 2022[126] - Adjusted net profit for 2023 was RMB 342,184 thousand, with an adjusted net profit margin of 3.00%, compared to 2.99% in 2022[126] Supply Chain and Logistics - The company operates 29 warehouses and distribution centers, supporting its expansion into new cities[5] - The company gained control over Shenzhen Banguo in 2023, enhancing supply chain advantages and expanding market share[6] - In November 2023, the company gained control over Shenzhen Banguo to expand its B2B integrated procurement service platform[38] - The Group operates 29 warehouses across China, with a total floor area of over 207,000 sq.m., including 16 self-operated preliminary processing and distribution centers[72] - Transportation costs decreased by approximately 4.7% in 2023 compared to 2022 due to the upgraded transportation management system (TMS)[73] - The purchase amount from suppliers provided with agricultural technology and related services increased from 35.0% in 2022 to 41.0% in 2023[73] - The Group completed the construction of 16 warehouses in 16 production areas, covering 10 types of fruits across 11 provinces and cities in China[73] - The Group will upgrade its warehousing and transportation management systems to improve efficiency and reduce costs[79][81] - The Group will continue to expand and upgrade its network of preliminary processing and distribution centers to support the growth of its 2B fruit business and fresh grocery business[79][81] Product Development and Branding - The company successfully introduced 37 category brands to the market by the end of 2023, accounting for approximately 14% of total retail sales[9] - The company has developed 37 product brands, with Excellent products contributing approximately 14% of the total retail volume of its stores[39] - The Group introduced six new Excellent fruit product brands in 2023, bringing the total to 37 self-owned product brands, which accounted for 14.0% of total store retail sales[69][70] - Sales of Fruit Corn increased by 3,076% and Golden Venus Apple sales grew by 515% in 2023 compared to 2022[71] - Aggregate sales of fruits under Excellent and Grade A categories accounted for 66.5% of the total store retail sales of Pagoda stores in 2023[66][68] Strategic Goals and Future Plans - The company's strategy focuses on becoming an expert and leader in the high-quality fruit industry[10] - The company's vision is to become a world-leading fruit eco-technology company[11] - The company's mission is to offer delicious fruits and an enjoyable lifestyle to people[12] - The company plans to focus on enhancing store profitability and expanding the "healthy fruit gift" market in 2024[40][42] - The company aims to improve supply chain efficiency and market share through synergy with Shenzhen Banguo[40][42] - The Group aims to improve retail store profitability by increasing the sales proportion of Excellent fruits and creating high-quality fruit gift boxes[75][77] - The Group plans to expand its OMO distribution network by penetrating low-tier cities and expanding stores in existing cities[75][77] - The Group will strengthen its 2B business by developing customized fruit gift boxes and expanding its 2B customer base through omni-channel strategies[78][80] - The Group plans to invest in IT research and development, leveraging AI and deep learning to improve data processing and management capabilities[83] Subsidiaries and Corporate Structure - Baiguo Digital Industrial Park Co., Ltd. is a wholly-owned subsidiary established in the PRC on March 12, 2020[22] - Baiguo Technology (Shenzhen) Co., Ltd. is a wholly-owned subsidiary established in the PRC on November 18, 2014[23] - Baihui Life Technology Co., Ltd. is a wholly-owned subsidiary established in the PRC on November 16, 2020[23] - Baixin Investment Development Co., Ltd. is a wholly-owned subsidiary established in the PRC on September 10, 2021[23] - Beijing Aoxiang Technology Co., Ltd. is a wholly-owned subsidiary established in the PRC on August 20, 2013[23] - Hainan Pagoda Supply Chain Management Service Co., Ltd. established on September 18, 2020, as a wholly-owned subsidiary[25] - Shenzhen Jinnong Supply Chain Management Co., Ltd. established on May 12, 2021, with 75% ownership by Pagoda Investment and 25% by an independent third party[26] - Shenzhen Pagoda Brand Management Co., Ltd. established on January 18, 2019, as a wholly-owned subsidiary[26] - Jiangxi Wangpin Agricultural Technology Development Co., Ltd. established on May 13, 2003, as a wholly-owned subsidiary[25] - Shenzhen Hengyili Investment Development Center Limited Partnership established on December 1, 2015, as an employee shareholding platform and controlling shareholder[25] - Shenzhen Hongyuan Shanguo Investment Development Limited Partnership established on April 13, 2015, as an employee shareholding platform and controlling shareholder[24] - Hainan Tiantu Xingzhou Venture Capital Partnership established on September 14, 2021, as a connected person of the company[24] - Shenzhen Guodao Yunxin Education Consulting Co., Ltd. established on May 24, 2017, as a connected person of the company[24] - Pagoda Seeds is a non-wholly owned subsidiary, with 60.24% ownership by Pagoda Investment, 5.48% by Youguolian, and 34.28% by Guangxi Zhencheng Agriculture Co., Ltd.[27] - Shenzhen Banguo is a non-wholly owned subsidiary, with 51.00% ownership by Pagoda Investment, 15.00% by Mr. XU Yusheng, 23.93% by Ms. WU Weixin, and 10.07% by Beijing Banguo Yuhuoban Technology Development Center[28] - Shenzhen Sangeling is a non-wholly owned subsidiary, indirectly controlled by the Company (56.53%), Zhixin Bainong (25.44%), and Hainan Tiantu (18.03%)[29] - Shenzhen Youxian is a non-wholly owned subsidiary, with 65% ownership by Baiguo Technology and 35% by Tanlian Information Technology (Beijing) Co., Ltd.[29] Market and Industry Trends - China's total fruit imports reached US6,720 million in 2023, a year-on-year increase of 66.0%[46] Corporate Governance and Leadership - The company's 2023 Share Award Scheme was approved by shareholders at the first extraordinary general meeting held on September 28, 2023[22] - The Annual General Meeting (AGM) is scheduled to be held on Thursday, June 6, 2024[22] - Mr. TIAN Xiqiu, aged 50, is an executive Director and vice-chairman, responsible for assisting in formulating the overall development strategies of the company[169] - Mr. JIAO Yue, aged 37, is an executive Director and executive deputy general manager, overseeing the day-to-day business operation of the company[169] - Mr. ZHU Qidong, aged 49, is an executive Director and deputy general manager, responsible for overseeing the procurement, wholesale, and sales of the company[170] - Mr. ZHU Qidong has been an executive director of several subsidiaries, including Pagoda Investment, Pagoda Supply Chain, and Shenzhen Yimiaotong since August 2019[171] - Mr. ZHU Qidong has been the chairman of the board of Pagoda Seeds and Jinnong Supply Chain since July 2020 and May 2021, respectively[171] - Mr. ZHU Qidong has been a director of Hainan Shengjie Agricultural Development Co., Ltd. since October 2019, a company engaged in the production, sales, and transportation of agricultural products[172] - Mr. ZHU Qidong attended courses in business administration at Peking University from April 2016 to July 2018[172] - Dr. JIANG Yanbo, aged 57, is an independent non-executive director, responsible for providing independent opinions on the company's operations and management[173] - Dr. Jiang Yanbo has been an independent non-executive director of BYD Company Limited from September 2020 to September 2023, a company engaged in rechargeable batteries and photovoltaic business[176] - Dr. Jiang Yanbo has been serving as an independent non-executive director of Mubang High-tech Co., Ltd. since November 2021, a company listed on the Shanghai Stock Exchange (stock code: 603398)[175] - Dr. Jiang Yanbo has been an independent non-executive director of Shenzhen Minkave Technology Co., Ltd. since September 2021, a company listed on the Shenzhen Stock Exchange (stock code: 300506)[175] - Dr. Jiang Yanbo has been an independent director of Guangdong Yingde Rural Commercial Bank Company Limited since April 2023[175] - Dr. Jiang Yanbo was an independent non-executive director of Guangdong Dowstone Technology Co., Ltd. from April 2017 to April 2023, a technology company listed on the Shenzhen Stock Exchange[176] - Dr. Jiang Yanbo served as an independent non-executive director of Kangda New Materials (Group) Co.,
百果园集团(02411) - 2023 - 年度财报