九毛九(09922) - 2021 - 中期财报

Definitions and Corporate Information Definitions This chapter defines specific terms used in the report, including company entities, associated brands, and financial and legal terminology, providing a foundation for understanding the report content - The report defines the Group's main restaurant brands, including Jiu Mao Jiu, Tai Er, Double Eggs, Song, and Uncle Chef[3][4][6][9] Corporate Information This chapter provides core corporate governance and operational support information, including basic registration details, headquarters, board members, committee structures, legal advisors, independent auditors, and principal bankers - The Chairman of the Board and Chief Executive Officer is Mr. Guan Yihong[10] - The company's independent auditor is KPMG[15] Chairman's Statement Financial and Operational Highlights In the first half of 2021, the company achieved a strong performance rebound, turning losses into profits with total revenue growing by 112.9% to RMB 2.02 billion, driven by the strong performance of its core brand Tai Er Key Financial Data for H1 2021 | Indicator | H1 2021 (RMB in thousands) | H1 2020 (RMB in thousands) | | :--- | :--- | :--- | | Revenue | 2,021,485 | 949,507 | | Store-level Operating Profit | 404,762 | 23,448 | | Profit/(Loss) for the Period | 205,158 | (88,696) | | Adjusted Net Profit/(Loss) | 208,352 | (114,840) | Key Operational Data for H1 2021 | Indicator | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Number of Restaurants | 419 | 321 | | Table Turnover Rate (Tai Er) | 3.7 | 3.4 | | Table Turnover Rate (Jiu Mao Jiu) | 1.8 | 1.3 | | Average Spending Per Customer (Tai Er, RMB) | 79 | 77 | | Average Spending Per Customer (Jiu Mao Jiu, RMB) | 59 | 61 | Business Review and Outlook In H1 2021, the company recovered from the pandemic, accelerating expansion to 419 restaurants and achieving profitability, primarily driven by the Tai Er brand's growth and increased operating days, while maintaining robust liquidity and planning future expansion - The company's performance shifted from a loss of RMB 88.7 million in H1 2020 to a profit of RMB 205.2 million, primarily due to the continuous expansion of the Tai Er restaurant network from 161 to 286 stores and increased total restaurant operating days post-pandemic recovery[33] - In H1 2021, the company opened 58 new restaurants, with 55 under the Tai Er brand, while closing 13 underperforming self-operated restaurants[37] - Future development strategies include continuous expansion focusing on the Tai Er brand network, adhering to a multi-brand strategy, enhancing supply chain capabilities with a planned South China center, and exploring global markets, prioritizing regions with large Chinese populations like Singapore, the US, and Canada[45][47] Management Discussion and Analysis Revenue Analysis Total revenue increased by 112.9% to RMB 2.02 billion in H1 2021, primarily driven by Tai Er's 138.6% revenue growth to RMB 1.60 billion, increasing its contribution to 79.3% of total revenue, while restaurant operations revenue grew 137.5% to 84.3% of total Revenue by Brand (RMB in thousands) | Brand | H1 2021 | % of Total | H1 2020 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Jiu Mao Jiu | 381,687 | 18.9% | 266,828 | 28.1% | | Tai Er | 1,602,726 | 79.3% | 671,718 | 70.7% | | Others | 37,072 | 1.8% | 10,961 | 1.2% | | Total | 2,021,485 | 100.0% | 949,507 | 100.0% | Revenue by Service Type (RMB in thousands) | Service Type | H1 2021 | % of Total | H1 2020 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Restaurant Operations | 1,703,797 | 84.3% | 717,510 | 75.6% | | Takeaway Business | 302,489 | 15.0% | 219,778 | 23.1% | | Specialty Product Sales | 5,408 | 0.3% | 1,273 | 0.1% | | Others | 9,791 | 0.4% | 10,946 | 1.2% | | Total | 2,021,485 | 100.0% | 949,507 | 100.0% | Cost and Expense Analysis In H1 2021, key cost and expense ratios significantly decreased, reflecting operating leverage, with raw materials and staff costs declining as a percentage of revenue, while other rental expenses increased due to reduced pandemic-related rent concessions - Raw materials and consumables costs as a percentage of revenue decreased from 39.2% to 37.2%, primarily due to lower procurement costs for key ingredients like perch and pickled vegetables[66] - Staff costs as a percentage of revenue significantly decreased from 34.5% to 25.1%, mainly due to expanded revenue base as restaurant operations recovered from the pandemic[66] - Other rental and related expenses as a percentage of revenue increased from 1.5% to 2.5%, primarily due to reduced pandemic-related rental concessions[67][68] Profitability Analysis (Non-IFRS) The company uses Non-IFRS metrics to assess core operating performance, with store-level operating profit margin significantly improving to 20.0% and adjusted net profit turning positive at RMB 208 million, demonstrating strong profitability recovery Store-level Operating Profit and Margin by Brand | Brand | H1 2021 Operating Profit (RMB in thousands) | H1 2021 Margin | H1 2020 Operating Profit (RMB in thousands) | H1 2020 Margin | | :--- | :--- | :--- | :--- | :--- | | Jiu Mao Jiu | 29,627 | 7.8% | (46,016) | (17.2)% | | Tai Er | 375,445 | 23.4% | 75,626 | 11.3% | | Other Brands | (310) | (0.8)% | (6,162) | (56.2)% | | Total | 404,762 | 20.0% | 23,448 | 2.5% | Reconciliation of Adjusted Net Profit/(Loss) (RMB in thousands) | Item | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 205,158 | (88,696) | | Add: Equity-settled share-based payment expenses | 3,194 | 2,961 | | Add: Listing expenses | – | 7,344 | | Less: Interest income from IPO proceeds | – | (36,449) | | Adjusted Net Profit/(Loss) | 208,352 | (114,840) | | Adjusted Net Profit/(Loss) Margin | 10.3% | (12.1)% | Financial Position and Liquidity As of June 30, 2021, the company maintained a robust financial position with total assets increasing to RMB 5.21 billion, a stable debt-to-asset ratio of 36.2%, improved inventory turnover, and a zero capital gearing ratio after repaying all bank loans - Inventory turnover days decreased from 22.0 days at the end of 2020 to 13.8 days in H1 2021, primarily due to accelerated ingredient consumption as restaurant operations recovered post-pandemic[87] - The capital gearing ratio decreased from 1.4% at the end of 2020 to zero, as the company repaid all outstanding bank loans in H1 2021[92][93] - Total capital expenditure increased from RMB 69.3 million in the prior period to RMB 160.2 million, a 131.3% year-on-year increase, primarily for opening new restaurants and purchasing related equipment[92] Other Information Directors' and Substantial Shareholders' Interests This chapter discloses the interests of directors, senior management, and substantial shareholders in the company's shares, with Chairman Mr. Guan Yihong holding approximately 40.66% through GYH BVI, and BlackRock, Inc. holding approximately 6.82% - Company Chairman Mr. Guan Yihong holds 590,945,000 shares, representing 40.66% of the company's issued shares, through his controlled corporation GYH BVI[98][102] - BlackRock, Inc., through its controlled corporations, collectively holds 99,157,818 shares, representing 6.82% of the company's issued shares[112][113] Share Incentive Schemes The company operates Restricted Share Unit (RSU) and Share Option schemes to incentivize and retain key employees, with 7,248,603 RSUs outstanding and 1,694,600 share options granted in 2020 yet to be exercised as of June 30, 2021 - As of June 30, 2021, 7,248,603 shares remained unvested under the Restricted Share Unit (RSU) scheme, with 1,571,000 RSUs vested during the period[118] - As of June 30, 2021, 1,694,600 share options granted under the share option scheme remained unexercised, representing 0.12% of total issued shares, with an exercise price of HKD 17.98 per share[125] Corporate Governance The company maintains high corporate governance standards, complying with most code provisions, with the only deviation being the combined roles of Chairman and CEO, which the Board believes benefits group management without compromising accountability - The company complied with all applicable provisions of the Corporate Governance Code, with one deviation: the roles of Chairman and Chief Executive Officer are held by the same individual, Mr. Guan Yihong[129][130] - The Board believes that the combined roles of Chairman and Chief Executive Officer, supported by the Board's collective decision-making and composition, do not impair the balance of power and accountability and benefit the Group's management[130] Use of Proceeds This chapter details the use of net proceeds from the global offering and subscription, with HKD 2.37 billion from the global offering 46.5% utilized for restaurant network expansion, and HKD 830 million from the subscription 48.6% used for supplier investments and working capital Status of Use of Proceeds from Global Offering (As of August 15, 2021) | Intended Use | Intended Amount (HKD in millions) | % Utilized | % Unutilized Balance | | :--- | :--- | :--- | :--- | | Expansion of Restaurant Network | 1,837.9 | 34.5% | 65.5% | | Enhancement of Supply and Support Capabilities | 133.7 | 51.0% | 49.0% | | Repayment of Part of Bank Loans | 210.2 | 100.0% | – | | Working Capital and General Corporate Purposes | 191.1 | 100.0% | – | | Total | 2,372.9 | 46.5% | 53.5% | Status of Use of Proceeds from Subscription (As of August 15, 2021) | Intended Use | Intended Amount (HKD in millions) | % Utilized | % Unutilized Balance | | :--- | :--- | :--- | :--- | | Investment in Key Raw Material Suppliers | 456.5 | 15.2% | 84.8% | | General Working Capital | 249.0 | 100.0% | – | | Investment in Other Companies in the Restaurant Industry | 124.5 | 68.6% | 31.4% | | Total | 830.0 | 48.6% | 51.4% | Consolidated Financial Statements Consolidated Statement of Profit or Loss In H1 2021, the Group achieved a significant performance turnaround, with revenue growing 112.9% to RMB 2.02 billion, resulting in a pre-tax profit of RMB 277 million and a profit for the period of RMB 205 million, demonstrating strong recovery Summary of Consolidated Statement of Profit or Loss (RMB in thousands) | Item | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Revenue | 2,021,485 | 949,507 | | Profit/(Loss) Before Tax | 276,755 | (128,858) | | Income Tax | (71,597) | 40,162 | | Profit/(Loss) for the Period | 205,158 | (88,696) | | Profit/(Loss) Attributable to Equity Holders of the Company | 186,038 | (85,902) | | Basic Earnings/(Loss) Per Share (RMB) | 0.13 | (0.06) | Consolidated Statement of Financial Position As of June 30, 2021, the Group's financial position remained robust, with total assets increasing to RMB 5.21 billion, total equity growing to RMB 3.33 billion, and a strong current ratio of 3.70, indicating solid short-term solvency Summary of Consolidated Statement of Financial Position (RMB in thousands) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Non-current Assets | 2,471,135 | 1,944,741 | | Current Assets | 2,741,615 | 2,861,710 | | Total Assets | 5,212,750 | 4,806,451 | | Current Liabilities | 740,038 | 748,945 | | Non-current Liabilities | 1,144,801 | 997,104 | | Total Liabilities | 1,884,839 | 1,746,049 | | Total Equity | 3,327,911 | 3,060,402 | Condensed Consolidated Cash Flow Statement In H1 2021, the Group demonstrated healthy cash flow, with net cash from operating activities significantly increasing to RMB 378 million, net cash from investing activities at RMB 421 million, and cash and cash equivalents reaching RMB 2.33 billion at period-end Summary of Condensed Consolidated Cash Flow Statement (RMB in thousands) | Item | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 377,650 | 172,092 | | Net Cash from/(used in) Investing Activities | 421,302 | (989,706) | | Net Cash (used in)/from Financing Activities | (284,113) | 1,804,455 | | Net Increase in Cash and Cash Equivalents | 514,839 | 986,841 | | Cash and Cash Equivalents at Beginning of Period | 1,843,903 | 127,170 | | Cash and Cash Equivalents at End of Period | 2,333,419 | 1,170,411 | Notes to the Unaudited Interim Financial Report Note 3: Revenue and Segment Reporting This note details revenue sources and segment performance, with Tai Er being the primary contributor to revenue and profit, achieving RMB 358 million in segment profit in H1 2021, and over 90% of operating profit originating from the China market - The Group manages its business by restaurant brand, categorized into three reportable segments: Jiu Mao Jiu, Tai Er, and Others, with segment profit measured using Non-GAAP Operating Profit[206] Segment Profit/(Loss) (Non-GAAP Operating Profit, RMB in thousands) | Segment | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Jiu Mao Jiu | 13,515 | (45,174) | | Tai Er | 358,135 | 46,088 | | Others | (2,983) | (2,160) | | Total | 368,667 | (1,246) | Note 15: Equity Settled Share-Based Payments This note details the company's share incentive plans, including Restricted Share Unit (RSU) and employee share option schemes, with RMB 431 thousand and RMB 2.76 million in related expenses recognized for H1 2021, respectively, reflecting non-cash employee incentives - For the six months ended June 30, 2021, the Group recognized RMB 431 thousand in expenses for the Restricted Share Unit (RSU) scheme and RMB 2.76 million for the employee share option scheme[272][274] Note 19: Material Related Party Transactions This note discloses significant related party transactions, including the purchase of RMB 81.09 million in materials from associate company Guangdong Tai Er Agriculture, sales to the ultimate controlling shareholder's restaurant, and variable lease payments to Mr. Guan - In H1 2021, the Group purchased RMB 81,086 thousand in materials from its associate company, Guangdong Tai Er Agriculture[305] - As of June 30, 2021, amounts due from related parties totaled RMB 51,520 thousand, primarily advances to an associate company, while amounts due to related parties were RMB 6,017 thousand[311][315] Review Report Auditor's Conclusion KPMG, the independent auditor, reviewed the interim financial report and found no material non-compliance with International Accounting Standard 34, providing assurance on its reliability, though the review scope is less than a full audit - Independent auditor KPMG reviewed the interim financial report and concluded that they found no material non-compliance with International Accounting Standard 34, Interim Financial Reporting[326] - The scope of the review is substantially less than an audit conducted in accordance with Hong Kong Standards on Auditing, thus the auditor does not express an audit opinion[323][324]