中国顺客隆(00974) - 2024 - 中期财报

Company Information This section provides essential corporate details for China Shun Ke Long Holdings Company Limited, including board members, principal places of business, and stock code Company Basic Information This chapter provides fundamental corporate information, including board members, principal business locations, and key identifiers, establishing context for the report - The company's principal place of business is located in Lecong Town, Shunde District, Foshan City, Guangdong Province, China, with its principal place of business in Hong Kong at 5/F, Lincoln House, 979 King's Road, Taikoo Place[9] - Executive Directors include Mr. Wang Rengang (Chairman) and Ms. Wang Hui (Chief Executive Officer)[9] - The company's stock code is 974[9] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Report period revenue decreased by 4.6% year-on-year to RMB308,164 thousand, with gross profit falling to RMB38,783 thousand, and net loss attributable to owners of the company expanding to RMB18,596 thousand 2024 H1 Key Profit or Loss Data | Indicator | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 308,164 | 323,177 | | Cost of inventories sold | (269,381) | (277,113) | | Gross profit | 38,783 | 46,064 | | Other operating income | 8,589 | 13,360 | | Selling and distribution costs | (56,311) | (60,278) | | Administrative expenses | (6,891) | (9,406) | | Finance costs | (2,264) | (2,478) | | Loss before tax | (18,677) | (12,747) | | Loss for the period | (18,747) | (12,751) | | Loss for the period attributable to owners of the Company | (18,596) | (12,622) | | Loss per share – basic and diluted (RMB) | (0.06) | (0.04) | Condensed Consolidated Statement of Financial Position As of June 30, 2024, total non-current assets were RMB122,128 thousand, total current assets were RMB206,080 thousand, and net current assets decreased to RMB46,843 thousand, reflecting a reduction in net assets and total equity Key Financial Position Data as of June 30, 2024 | Indicator | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Non-current assets | 122,128 | 131,072 | | Current assets | 206,080 | 234,434 | | Total current liabilities | 159,237 | 170,265 | | Net current assets | 46,843 | 64,169 | | Total assets less current liabilities | 168,971 | 195,241 | | Non-current liabilities | 37,036 | 44,826 | | Net assets | 131,935 | 150,415 | | Total equity | 131,935 | 150,415 | Condensed Consolidated Statement of Changes in Equity Total equity attributable to owners of the company decreased from approximately RMB149,181 thousand at the beginning of the period to RMB130,852 thousand at the end of June 30, 2024, primarily due to the loss and total comprehensive expense for the period Overview of Changes in Equity for 2024 H1 | Indicator | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Equity attributable to owners of the Company at beginning of period | 149,181 (December 31, 2023) | 161,502 (December 31, 2022) | | Total comprehensive expense for the period | (18,329) | (12,321) | | Equity attributable to owners of the Company at end of period | 130,852 | 149,181 | - Consolidated reserves arose from reorganization, including deemed distributions upon acquisition of subsidiaries from the controlling shareholder[14] Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2024, cash flow from operating activities turned into a net outflow of RMB3,855 thousand, while cash and cash equivalents significantly decreased to RMB25,118 thousand at period-end Overview of Cash Flows for 2024 H1 | Indicator | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Net cash (used in) generated from operating activities | (3,855) | 6,526 | | Net cash used in investing activities | (4,349) | (1,415) | | Net cash used in financing activities | (15,633) | (22,996) | | Net decrease in cash and cash equivalents | (23,837) | (17,885) | | Cash and cash equivalents at June 30 | 25,118 | 31,438 | Notes to the Condensed Consolidated Interim Financial Statements This section details the basis of preparation, accounting policies, segment information, revenue, expenses, asset and liability composition, and related party transactions, providing in-depth context for the financial statements 1. General Information and Basis of Preparation The company, incorporated in the Cayman Islands and listed in Hong Kong, primarily operates retail stores and wholesale distribution in China and Macau, with its ultimate controlling shareholder being the All China Federation of Supply and Marketing Cooperatives - The company primarily engages in retail store operations and management and wholesale distribution of goods in China and Macau[17] - The controlling shareholder is Supply and Marketing Grand Bazaar Group, with the ultimate controlling party being the All China Federation of Supply and Marketing Cooperatives[17] - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and Appendix D2 of the Listing Rules of the Stock Exchange of Hong Kong[17] 2. Principal Accounting Policies The condensed consolidated financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value, and new IFRS standards had no significant impact - The financial statements are primarily prepared on a historical cost basis, with certain financial instruments measured at fair value[19] - The new and revised International Financial Reporting Standards applied in the current period had no significant impact on financial performance and position[20] 3. Operating Segment Information The Group has two reportable segments: retail store operations and wholesale distribution, with all external customer revenue derived from China - The Group has two reportable segments: retail store operations and wholesale distribution[21] Segment Revenue and Results (2024 H1 vs 2023 H1) | Segment | 2024 H1 Revenue (RMB thousands) | 2023 H1 Revenue (RMB thousands) | 2024 H1 Segment (Loss) Profit (RMB thousands) | 2023 H1 Segment Loss (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Retail store operations | 231,307 | 255,292 | (16,839) | (10,829) | | Wholesale distribution | 76,857 | 67,885 | 25 | (38) | | Total | 308,164 | 323,177 | (16,814) | (10,867) | - All the Group's revenue from external customers is derived from China[26] 4. Revenue and Other Operating Income Total revenue for 2024 H1 was RMB308,164 thousand, with other operating income decreasing by 35.7% year-on-year, mainly due to reduced supplier promotion income and government grants Revenue Sources (2024 H1 vs 2023 H1) | Revenue Source | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | General retail sales under retail store operations | 135,950 | 158,856 | | Bulk sales under retail store operations | 84,856 | 94,088 | | Integrated wholesale under wholesale distribution | 76,857 | 62,561 | | Commission income from concessionaire sales under retail store operations | 6,292 | 2,374 | | Rental income from subleasing certain retail areas | 4,209 | 5,298 | | Total Revenue | 308,164 | 323,177 | Other Operating Income Sources (2024 H1 vs 2023 H1) | Other Operating Income Source | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Gain on expiry of leases | 183 | 806 | | Gain on disposal of property, plant and equipment | 89 | 387 | | Government grants | 8 | 323 | | Interest income from bank deposits | 130 | 192 | | Promotion income from suppliers | 5,299 | 6,990 | | Net rental income from investment properties | 1,371 | 1,313 | | Others | 1,509 | 3,349 | | Total | 8,589 | 13,360 | - Other operating income decreased by 35.7% year-on-year, primarily due to reduced supplier promotion income and government grants[30] 5. Loss Before Tax The Group's operating loss is primarily influenced by depreciation expenses for property, plant and equipment and right-of-use assets, as well as employee benefit expenses Key Operating Expenses (2024 H1 vs 2023 H1) | Expense Item | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 3,571 | 3,721 | | Depreciation of right-of-use assets | 14,303 | 16,019 | | Total employee benefit expenses | 29,846 | 31,947 | 6. Finance Costs Total finance costs for 2024 H1 amounted to RMB2,264 thousand, mainly comprising interest on bank borrowings and lease liabilities, showing a slight year-on-year decrease Composition of Finance Costs (2024 H1 vs 2023 H1) | Finance Cost Source | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank borrowings | 562 | 223 | | Interest on lease liabilities | 1,702 | 2,255 | | Total | 2,264 | 2,478 | 7. Income Tax Expense Income tax expense for 2024 H1 was RMB70 thousand, with certain Chinese subsidiaries, including Guangdong Shun Ke Long Commercial Chain Co., Ltd., enjoying preferential tax rates - Income tax expense for 2024 H1 was RMB70 thousand, a significant increase from RMB4 thousand in 2023 H1[10][33] - Chinese subsidiaries are subject to a 25% corporate income tax rate, with some small-profit enterprises and high-tech enterprises, such as Guangdong Shun Ke Long Commercial Chain Co., Ltd., enjoying preferential rates of 15%[34] 8. Dividends For the six months ended June 30, 2024, the company neither paid nor proposed any dividends - No dividends were paid or proposed for 2024 H1 and 2023 H1[36] 9. Loss Per Share Basic and diluted loss per share for 2024 H1 expanded to RMB0.06, consistent with diluted loss per share due to the absence of potential dilutive ordinary shares Loss Per Share (2024 H1 vs 2023 H1) | Indicator | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Loss per share – basic and diluted (RMB) | (0.06) | (0.04) | | Weighted average number of ordinary shares | 290,457,000 | 290,457,000 | - Diluted loss per share is the same as basic loss per share as there were no outstanding potential dilutive ordinary shares for both periods[37] 10. Capital Expenditure In 2024 H1, the Group added RMB4,916 thousand in property, plant and equipment, with certain buildings and investment properties pledged to banks Changes in Carrying Amounts of Property, Plant and Equipment and Investment Properties (2024 H1) | Asset Category | Carrying Amount as of January 1, 2024 (RMB thousands) | Additions (RMB thousands) | Depreciation/Amortization (RMB thousands) | Carrying Amount as of June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Property, plant and equipment | 28,095 | 4,916 | (3,571) | 29,092 | | Investment properties | 8,697 | – | (163) | 8,534 | - As of June 30, 2024, buildings with a carrying amount of approximately RMB10,768 thousand and investment properties of approximately RMB8,533 thousand were pledged to banks[39] 11. Leases As of June 30, 2024, total right-of-use assets amounted to RMB77,628 thousand and total lease liabilities were RMB60,329 thousand, with new additions primarily for retail store, warehouse, and office property leases Overview of Lease Assets and Liabilities (June 30, 2024 vs December 31, 2023) | Lease Asset/Liability | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Total right-of-use assets | 77,628 | 87,204 | | Total lease liabilities | 60,329 | 69,162 | | Current lease liabilities | 23,293 | 24,336 | | Non-current lease liabilities | 37,036 | 44,826 | - Additions to right-of-use assets amounted to RMB11,364 thousand in 2024 H1, mainly due to new leases and renewals of existing retail store, warehouse, and office property leases[40] - The Group recognized rental income of RMB4,209 thousand from subleasing right-of-use assets in 2024 H1[41] 12. Trade and Bills Receivables As of June 30, 2024, total trade and bills receivables were RMB33,345 thousand, including an impairment allowance of RMB1,820 thousand for trade receivables, with an average credit period of 0 to 180 days Trade and Bills Receivables (June 30, 2024 vs December 31, 2023) | Indicator | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 35,163 | 37,975 | | Less: Impairment allowance for trade receivables | (1,820) | (1,237) | | Bills receivable | 2 | 233 | | Total | 33,345 | 36,971 | - The average credit period for trade receivables generally ranges from 0 to 180 days from the invoice date[46] 13. Trade Payables As of June 30, 2024, total trade payables decreased to RMB69,544 thousand from RMB78,384 thousand at the end of 2023, with the Group generally obtaining credit terms of 0 to 360 days from suppliers Aging Analysis of Trade Payables (June 30, 2024 vs December 31, 2023) | Aging | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Current to 30 days | 19,261 | 34,168 | | 31 to 60 days | 18,292 | 15,128 | | 61 to 180 days | 17,877 | 12,113 | | 181 to 365 days | 5,773 | 8,506 | | Over 1 year | 8,341 | 8,469 | | Total | 69,544 | 78,384 | - The Group generally obtains credit terms of 0 to 360 days from its suppliers[47] 14. Amounts Due from Related Companies As of June 30, 2024, amounts due from related companies were trade-related, unsecured, interest-free, and repayable on demand, with a carrying amount including an accumulated impairment loss of RMB370 thousand - Amounts due from related companies are trade-related, unsecured, interest-free, and repayable on demand[48] - The carrying amount includes an accumulated impairment loss of RMB370 thousand[48] 15. Bank Borrowings As of June 30, 2024, bank borrowings totaled RMB28,000 thousand, bearing a fixed annual interest rate of 3.95% and secured by certain buildings, right-of-use assets, and investment properties, all repayable within one year Overview of Bank Borrowings (June 30, 2024 vs December 31, 2023) | Indicator | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Secured bank borrowings | 28,000 | 28,000 | - Bank borrowings bear a fixed annual interest rate of 3.95% and are secured by buildings, right-of-use assets, and investment properties[49] - All bank borrowings are repayable within one year[49] 16. Share Capital As of June 30, 2024, authorized share capital comprised 2,000,000,000 ordinary shares of HK$0.01 each, with 290,457,000 issued and fully paid ordinary shares amounting to RMB2,387 thousand Share Capital Structure (June 30, 2024 vs December 31, 2023) | Share Capital Type | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Authorised share capital | 15,826 | 15,826 | | Issued and fully paid share capital | 2,387 | 2,387 | - Issued and fully paid share capital consists of 290,457,000 ordinary shares of HK$0.01 each[50] 17. Operating Lease Arrangements The Group acts as a lessor, subleasing internal retail store areas and leasing investment properties for terms ranging from 1 to 10 years, with RMB12,036 thousand in undiscounted lease payments receivable within one year Operating Lease Payments Receivable within One Year (June 30, 2024 vs December 31, 2023) | Lease Payment Term | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Within one year | 12,036 | 15,767 | - The Group acts as a lessor, subleasing internal retail store areas and leasing investment properties, with lease terms ranging from 1 to 10 years[51] 18. Major Non-Cash Transactions In 2024 H1, the Group experienced non-cash increases in right-of-use assets and lease liabilities of RMB11,364 thousand due to retail store lease arrangements, alongside non-cash decreases from early lease terminations - In 2024 H1, non-cash increases in right-of-use assets and lease liabilities of RMB11,364 thousand arose from retail store lease arrangements[52] - In 2024 H1, non-cash decreases in right-of-use assets of RMB6,637 thousand and lease liabilities of RMB6,820 thousand resulted from early lease terminations[52] 19. Related Party Transactions In 2024 H1, the Group engaged in sales of goods transactions of RMB4 thousand and purchases of goods transactions of RMB17 thousand with related companies, with key management personnel remuneration totaling RMB1,402 thousand Related Party Transactions (2024 H1 vs 2023 H1) | Transaction Nature | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Sales of goods (Related companies) | 4 | 36 | | Purchases of goods (Related companies) | 17 | – | Key Management Personnel Remuneration (2024 H1 vs 2023 H1) | Key Management Personnel Remuneration | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 1,305 | 1,205 | | Pension scheme contributions | 97 | 92 | | Total | 1,402 | 1,297 | Management Discussion and Analysis This section reviews the Group's business operations, retail and wholesale channels, and franchise performance in 2024 H1, outlining strategies for market challenges, future outlook, and detailed financial analysis of revenue, gross margin, costs, and net loss Business Review The Group, a supermarket chain operator primarily in Guangdong, China, maintained its retail and wholesale distribution channels, adding 4 new retail stores and expanding its franchise network to 1,180 stores - The Group primarily operates supermarket chain stores in Guangdong Province, China, maintaining both retail and wholesale distribution channels[55] Changes in Number of Retail Stores (2024 H1 vs 2023) | Retail Store Count | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Beginning of period/year | 61 | 67 | | Increase | 4 | 4 | | Decrease | (3) | (10) | | End of period/year | 62 | 61 | - As of June 30, 2024, the Group had a total of 62 retail stores, with 61 in Guangdong Province, China, and 1 in Macau[56] - The wholesale distribution business retains exclusive distribution rights for 24 brands and focuses more on attracting distributor clients[58] Changes in Number of Franchise Retail Stores (2024 H1 vs 2023) | Franchise Retail Store Count | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Beginning of period/year | 1,008 | 823 | | Increase | 172 | 185 | | End of period/year | 1,180 | 1,008 | Recent Developments and Outlook Facing online competition and weak consumer confidence, the Group implemented measures like "Supply and Marketing Discount Stores" and "24-hour AI Smart Unattended Stores," focusing on supply chain reform, new media marketing, and exploring international business - Facing the impact of online channels and weak consumer confidence, the Group implemented various measures, including establishing "Supply and Marketing Discount Stores," optimizing stores, and expanding "Shun Ke Long Fresh Food Community" and "24-hour AI Smart Unattended Stores"[61] - Actively developing "Douyin Hourly Delivery" business and continuously expanding proprietary e-commerce platforms "Shun Ke Long Premium Selection" and "Yubanghang Mini Program" to achieve online-offline integration[61] - The future will continue to focus on the supermarket chain business, adhering to a "retail + wholesale + franchise operation + centralized procurement and distribution + online-offline integration + community marketing" sales model, and exploring international business[61] - Key tasks for the second half of the year include optimizing the supply chain, expanding AI smart unattended stores and fresh food communities, developing supply and marketing discount stores and centralized procurement and distribution businesses, upgrading old stores, new media marketing, and international business expansion[62] Financial Review In 2024 H1, the Group's revenue decreased by 4.6% to RMB308.2 million, gross margin fell by 1.7% to 12.6%, and net loss attributable to owners of the company increased by 47.6% to RMB18.6 million Key Financial Indicators Changes (2024 H1 vs 2023 H1) | Indicator | 2024 H1 (RMB millions) | 2023 H1 (RMB millions) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 308.2 | 323.2 | -4.6% | | Revenue from retail store operations | 231.3 | 255.3 | -9.4% | | Revenue from wholesale distribution business | 76.9 | 67.9 | +13.3% | | Gross profit margin | 12.6% | 14.3% | -1.7% | | Other operating income | 8.6 | 13.4 | -35.7% | | Selling and distribution costs | 56.3 | 60.3 | -6.6% | | Administrative expenses | 6.9 | 9.4 | -26.7% | | Finance costs | 2.3 | 2.5 | -8.6% | | Net loss attributable to owners of the Company | 18.6 | 12.6 | +47.6% | - The decrease in revenue was mainly due to reduced retail store sales and lower demand for group-buying business from some customers[63] - The increase in net loss was primarily due to reduced gross profit from lower sales, as well as decreased rental income, supplier promotion service fees, and government grants[69] Capital Expenditure The Group's capital expenditure primarily focused on acquiring property, plant and equipment for new store openings and existing store renovations, with approximately RMB4.9 million spent during the period - Approximately RMB4.9 million was spent on property, plant and equipment during the period[71] Use of Proceeds Net proceeds from the global offering were approximately RMB155.0 million, with RMB142.5 million utilized as of June 30, 2024, and the remaining RMB12.5 million reallocated for existing retail store renovations - Net proceeds from the global offering were approximately RMB155.0 million[72] - As of June 30, 2024, RMB142.5 million of the net proceeds had been utilized, with RMB12.5 million remaining[73] - The use of the remaining RMB12.5 million has been reallocated to "renovation of existing retail stores" and is expected to be utilized by December 31, 2026[73] Liquidity and Financial Resources As of June 30, 2024, cash and cash equivalents were approximately RMB25.1 million, net current assets were RMB46.8 million, and unutilized bank facilities amounted to RMB62.0 million Overview of Liquidity and Financial Resources (June 30, 2024 vs December 31, 2023) | Indicator | June 30, 2024 (RMB millions) | December 31, 2023 (RMB millions) | | :--- | :--- | :--- | | Cash and cash equivalents | 25.1 | 48.7 | | Net current assets | 46.8 | 64.2 | | Net assets | 131.9 | 150.4 | - Unutilized bank facilities amounted to RMB62.0 million[74] - Total trade receivables and deposits paid, prepayments, and other receivables decreased by approximately RMB3.4 million, mainly due to the recovery of receivables from customer merchandise sales and a reduction in supplier prepayments[75] Significant Investments The Group held no significant investments during the period - The Group held no significant investments during the period[76] Material Acquisitions and Disposals The Group did not undertake any material acquisitions or disposals of subsidiaries or associated companies during the period - The Group did not undertake any material acquisitions or disposals of subsidiaries or associated companies during the period[76] Indebtedness and Charges on Assets As of June 30, 2024, the Group's bank borrowings of RMB28.0 million were secured by buildings, right-of-use assets, and investment properties with carrying amounts of approximately RMB10.8 million, RMB18.9 million, and RMB8.5 million, respectively - Bank borrowings of RMB28.0 million are secured by buildings, right-of-use assets, and investment properties[77] - All loans bear a fixed annual interest rate of 3.95% and are repayable within one year[77] Gearing Ratio As of June 30, 2024, the Group's gearing ratio was approximately 21.2%, an increase from 18.6% at the end of 2023 Gearing Ratio (June 30, 2024 vs December 31, 2023) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Gearing ratio | 21.2% | 18.6% | Foreign Exchange Risk The Group's assets, liabilities, and cash flows are primarily denominated in RMB, and management believes exchange rate fluctuations will not significantly impact financial position or performance, with no current hedging intentions - The majority of the Group's assets, liabilities, and cash flows are denominated in RMB[80] - Management believes exchange rate fluctuations will not have a significant impact and currently has no intention to engage in hedging activities[80] Contingent Liabilities As of June 30, 2024, the Group had not provided any guarantees to third parties and had no significant contingent liabilities - The Group had not provided any guarantees to third parties and had no significant contingent liabilities[81] Employees As of June 30, 2024, the Group had 904 employees, with 895 in mainland China and 9 in Hong Kong, offering competitive salaries and internal training - As of June 30, 2024, the Group had a total of 904 employees, with 895 based in mainland China and 9 in Hong Kong[82] - Employee salaries are maintained at a competitive level, with internal training and bonuses provided[82] Other Information This section covers interim dividend policy, trading of listed securities, directors' and major shareholders' interests, share option scheme, compliance with securities dealing code, public float, changes in directors' information, corporate governance, post-reporting period events, and the audit committee's composition and responsibilities Interim Dividends The Board has resolved not to declare any interim dividend for the period - The Board has resolved not to declare any interim dividend for the period[83] Purchase, Sale or Redemption of the Company's Listed Securities During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[83] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures As of June 30, 2024, Executive Director Ms. Wang Hui and Non-executive Director Ms. Du Jing held minor long positions in ordinary shares of associated corporation Supply and Marketing Grand Bazaar Group Co., Ltd Directors' Long Positions in Ordinary Shares of Associated Corporations (June 30, 2024) | Director's Name | Name of Associated Corporation | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Ms. Wang Hui | Supply and Marketing Grand Bazaar Group Co., Ltd. | Beneficial owner | 215,812 | 0.00% | | Ms. Du Jing | Supply and Marketing Grand Bazaar Group Co., Ltd. | Beneficial owner | 99,100 | 0.00% | - Save as disclosed above, no director or chief executive had any disclosable interests in shares[84] Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares As of June 30, 2024, Supply and Marketing Grand Bazaar International Holdings Co., Ltd. held 70.42% of the company's shares as beneficial owner, with the All China Federation of Supply and Marketing Cooperatives indirectly holding the same percentage Substantial Shareholders' Interests in Shares and Underlying Shares (June 30, 2024) | Name of Substantial Shareholder | Capacity | Number of Shares (Long Position) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | All China Federation of Supply and Marketing Cooperatives | Interest in controlled corporation | 204,558,317 | 70.42% | | Supply and Marketing Grand Bazaar International Holdings Co., Ltd. | Beneficial owner | 204,558,317 | 70.42% | | Infini Capital Management | Beneficial owner | 27,600,000 | 9.50% | - The All China Federation of Supply and Marketing Cooperatives indirectly holds 70.42% of the company's shares through multiple layers of equity control[85][86][87] Share Option Scheme The company's share option scheme, approved on August 19, 2015, has a limit of 28,647,700 shares, representing approximately 9.86% of issued shares, with no options granted during the period - The share option scheme has a limit of 28,647,700 shares, representing approximately 9.86% of the issued shares[88] - No share options were granted before the end of the period[88] Directors' Securities Transactions The company has adopted the Model Code, and all directors confirmed compliance with its required standards during the period - All directors confirmed compliance with the required standards set out in the Model Code during the period[89] Sufficiency of Public Float The directors confirmed that the company maintained the public float required by the Listing Rules throughout the period and up to the date of this interim report - The directors confirmed that the company maintained the public float required by the Listing Rules throughout the period and up to the date of this interim report[89] Changes in Directors' Information Executive Director and CEO Ms. Wang Hui will no longer receive annual remuneration for her executive directorship from June 1, 2024, while Mr. Wang Rengang, Ms. Wang Hui, and Ms. Du Jing were appointed as Party Committee members or secretaries of Supply and Marketing Grand Bazaar from April 2024 - Executive Director and Chief Executive Officer Ms. Wang Hui will no longer receive annual remuneration for her executive directorship from June 1, 2024[90] - Mr. Wang Rengang, Ms. Wang Hui, and Ms. Du Jing were appointed as Party Committee members or secretaries of Supply and Marketing Grand Bazaar from April 2024[90] Corporate Governance Practices The company's corporate governance practices are based on the Corporate Governance Code set out in Appendix C1 of the Listing Rules - The company's corporate governance practices are based on the Corporate Governance Code set out in Appendix C1 of the Listing Rules[92] Matters of Non-Compliance with Listing Rules 3.10(1), 3.21, 3.25 and 3.27A Following Mr. Wang Yilin's resignation as an independent non-executive director, the company temporarily non-complied with Listing Rules regarding independent non-executive directors and committee compositions, but regained compliance upon Mr. Gao Jingyuan's appointment on March 27, 2024 - Following Mr. Wang Yilin's resignation, the company temporarily non-complied with Listing Rules 3.10(1), 3.21, 3.25, and 3.27A[93] - With the appointment of Mr. Gao Jingyuan as an independent non-executive director on March 27, 2024, the company has regained compliance[93] Events After Reporting Period The Board is unaware of any disclosable material events occurring after June 30, 2024, and up to the date of this interim report - The Board is unaware of any disclosable material events occurring after June 30, 2024, and up to the date of this interim report[93] Audit Committee The Audit Committee, established in compliance with Listing Rules, provides independent opinions on financial reporting, internal controls, and risk management, and has reviewed the unaudited condensed consolidated financial statements for the period - The Audit Committee was established in compliance with the Listing Rules, with primary responsibilities to provide independent opinions on financial reporting procedures, internal control procedures, and risk management systems[94] - The condensed consolidated financial statements for the period are unaudited but have been reviewed by the Audit Committee[94] - The Audit Committee members include Mr. Zheng Xueqi (Chairman), Mr. Gao Jingyuan, and Mr. Wu Kai, all of whom are independent non-executive directors[95]