味千(中国)(00538) - 2024 - 中期财报

Company Overview Company Profile Ajisen (China) is a leading fast-casual restaurant chain in China and Hong Kong, operating 575 restaurants as of June 30, 2024, and listed on the HKEX in 2007 - Ajisen (China) is a leading fast-casual restaurant chain operator in China and Hong Kong, combining elements of fast-food and traditional full-service restaurants[3] - As of June 30, 2024, the Group operates 575 restaurants across over 129 cities in 29 provinces and municipalities in China, with 23 in Hong Kong and 2 in Europe[3] - The Group listed on the Main Board of the Hong Kong Stock Exchange on March 30, 2007, becoming the first domestic catering chain to list overseas[3] Company Information Company Information This section details the company's fundamental information, including its board of directors, committees, and key professional advisors - Ms. Pan Wei serves as the Company's Chairwoman and Chief Executive Officer[7] - The Company's auditor is Deloitte Touche Tohmatsu[8][9] Financial Highlights Financial Highlights For H1 2024, turnover decreased by 6.6% to RMB 827 million, resulting in a net loss of RMB 7.2 million attributable to shareholders, a reversal from prior year's profit Metric (For the six months ended June 30) | Metric (For the six months ended June 30) | 2024 (RMB Million) | 2023 (RMB Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Turnover | 826.8 | 884.8 | (6.6) | | Gross Profit | 636.3 | 665.0 | (4.3) | | (Loss) Profit Before Tax | (15.6) | 181.3 | Not Applicable | | (Loss) Profit Attributable to Company Shareholders | (7.2) | 133.1 | Not Applicable | | (Loss) Earnings Per Share - Basic (RMB) | (0.01) | 0.12 | Not Applicable | Management Discussion and Analysis Industry Review In H1 2024, China's catering industry saw intense competition and 7.9% revenue growth, driven by digitalization and online-offline integration - In H1 2024, China's catering industry faced intense competition, with national catering revenue growing by 7.9%, exceeding the 3.7% growth of total retail sales of consumer goods[14] - Digital transformation and online-offline integration are key trends in the catering industry, helping companies expand channels, reduce costs, foster innovation, and enhance food safety[14] Business Review Group turnover declined 6.6% to RMB 827 million due to economic slowdown, yet the company expanded its restaurant network to 575 outlets and optimized operations - Turnover for the period decreased by 6.6% to approximately RMB 827 million, impacted by an unsustainable post-pandemic economic recovery and consumption downgrade[16] - The Group implemented measures such as store upgrades, launching new retail packaged products, and optimizing the supply chain to adapt to market changes[16] Number of Restaurants | Number of Restaurants | June 30, 2024 | June 30, 2023 | Net Change | | :--- | :--- | :--- | :--- | | Total | 575 | 569 | +6 | Retail Chain Restaurant Business Retail chain restaurants, the core business, generated RMB 792 million, a 6.0% decrease, while the total restaurant count increased to 575, with regional shifts Revenue by Business Segment | Business Segment | Revenue (RMB) | % of Total Revenue | | :--- | :--- | :--- | | Restaurant Business (2024 H1) | 792,194,000 | 95.8% | | Restaurant Business (2023 H1) | 842,594,000 | 95.2% | Restaurant Count by Region | Region | June 30, 2024 | June 30, 2023 | Net Change | | :--- | :--- | :--- | :--- | | North China | 96 | 105 | -9 | | East China | 245 | 242 | +3 | | South China | 152 | 141 | +11 | | Central China | 80 | 79 | +1 | | Europe | 2 | 2 | – | | Total | 575 | 569 | +6 | Financial Review Despite a 6.6% turnover decrease and improved gross margin to 77.0%, significant losses from investment and asset revaluations led to a pre-tax loss of RMB 15.57 million - Turnover decreased by 6.6% to RMB 827 million, primarily due to reduced store traffic[20] - Gross margin increased from 75.1% in the prior period to 77.0%, mainly due to enhanced supply chain management and optimized production processes[21][22] - Other income and losses recorded a net loss of approximately RMB 61.76 million (compared to a net gain of RMB 70.08 million in the prior period), primarily due to unfavorable economic conditions leading to a decline in investment property and financial asset valuations[28] - The Group shifted from a pre-tax profit of RMB 181 million in the prior period to a pre-tax loss of RMB 15.57 million this period[30] Key Operating Expenses Staff costs rose to 27.2% of turnover, while other operating expenses increased by 15.1% to RMB 244 million, driven by higher utilities and delivery fees - Staff costs as a percentage of turnover increased from 25.7% to 27.2%, mainly due to a decrease in average revenue per store[23] Key Operating Expenses (RMB Million) | Key Operating Expenses | 2024 H1 (RMB Million) | 2023 H1 (RMB Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Utilities | 43.0 | 36.7 | +17.2% | | Food Delivery Platform Service Fees | 28.4 | 24.4 | +16.4% | | Store and Factory Management Fees | 28.2 | 25.4 | +11.0% | | Consulting Fees | 9.3 | 0.5 | +1,760% | | Advertising and Promotion | 7.6 | 4.9 | +55.1% | Other Income/Losses and Finance Costs Other income decreased by 15.0%, while other income and losses shifted to a net loss of RMB 61.76 million, primarily due to investment property and financial asset revaluations - Other income and losses recorded a net loss of RMB 61.76 million, primarily due to a RMB 36.79 million decrease in investment property valuation and a RMB 12.40 million decrease in fair value through profit or loss investments[28] - Finance costs increased by 11.6% year-on-year to RMB 10.68 million, mainly due to increased interest on lease liabilities from a higher number of restaurants[29] Risk Management and Liquidity The Group maintains a robust financial position with RMB 1.666 billion in cash, a 3.6 current ratio, and low gearing, while generating RMB 192 million in operating cash flow Liquidity Metrics | Liquidity Metrics | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Bank Balances and Cash (RMB) | 1.666 billion | 1.608 billion | | Current Ratio | 3.6 | 4.1 | | Gearing Ratio | 0.009 | 0.009 | - The Group's exposure to currency, interest rate, and credit risks remains low, with no hedging policies in place[34][35][36] - Net cash inflow from operating activities was RMB 192 million. Capital expenditure was approximately RMB 47.55 million, a 69.6% year-on-year increase, primarily for expanding the restaurant network under controllable risks[40][41] - Post-balance sheet event: On July 12, 2024, the Company granted a total of 1,000,000 share options[42][141] Condensed Consolidated Financial Statements Review Report on Financial Statements Deloitte Touche Tohmatsu reviewed the H1 2024 condensed consolidated financial statements, concluding no material non-compliance with HKAS 34 - The auditor, Deloitte Touche Tohmatsu, issued a review conclusion stating that nothing came to their attention indicating the condensed consolidated financial statements were not prepared in material respects according to Hong Kong Accounting Standard 34[44] Consolidated Statement of Profit or Loss For H1 2024, revenue decreased 6.6% to RMB 827 million, resulting in a net loss of RMB 4.26 million, with a basic loss per share of RMB 0.01 Item (RMB Thousand) | Item (RMB Thousand) | 2024 H1 (Unaudited) | 2023 H1 (Unaudited) | | :--- | :--- | :--- | | Revenue | 826,790 | 884,847 | | Operating Profit | 11,121 | 65,251 | | (Loss) Profit Before Tax | (15,566) | 181,256 | | (Loss) Profit for the Period | (4,261) | 139,596 | | (Loss) Profit Attributable to Company Shareholders | (7,157) | 133,095 | | (Loss) Earnings Per Share (RMB) | (0.01) | 0.12 | Consolidated Statement of Financial Position As of June 30, 2024, total assets were RMB 3.986 billion, with net assets at RMB 2.968 billion, and bank balances and cash comprising RMB 1.666 billion Item (RMB Thousand) | Item (RMB Thousand) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Total Assets | 3,986,334 | 3,961,511 | | Non-current Assets | 2,066,322 | 2,059,582 | | Current Assets | 1,920,012 | 1,901,929 | | Total Liabilities | 1,018,125 | 903,585 | | Current Liabilities | 537,426 | 467,202 | | Non-current Liabilities | 480,699 | 436,383 | | Net Assets | 2,968,209 | 3,057,926 | | Total Equity Attributable to Owners of the Company | 2,968,209 | 3,057,926 | Consolidated Statement of Cash Flows For H1 2024, operating cash flow was RMB 192 million, while investing activities used RMB 354 million, resulting in period-end cash and equivalents of RMB 857 million Item (RMB Thousand) | Item (RMB Thousand) | 2024 H1 (Unaudited) | 2023 H1 (Unaudited) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 191,809 | 276,892 | | Net Cash Used in Investing Activities | (353,993) | (33,029) | | Net Cash Used in Financing Activities | (115,380) | (145,100) | | Net (Decrease) Increase in Cash and Cash Equivalents | (277,564) | 98,763 | | Total Cash and Cash Equivalents at End of Period | 857,336 | 1,578,250 | Notes to the Condensed Consolidated Financial Statements Segment Information The Group operates in restaurant operations, ramen production, and investment holding, with restaurant operations shifting to a loss and investment holding recording the largest loss 2024 H1 Segment Results (RMB Thousand) | 2024 H1 Segment Results (RMB Thousand) | Restaurant Operations | Production and Sales of Ramen and Related Products | Investment Holding | Total Segments | | :--- | :--- | :--- | :--- | :--- | | External Sales | 792,194 | 34,596 | – | 826,790 | | Segment Profit (Loss) | 4,984 | 292 | (17,905) | (12,629) | 2023 H1 Segment Results (RMB Thousand) | 2023 H1 Segment Results (RMB Thousand) | Restaurant Operations | Production and Sales of Ramen and Related Products | Investment Holding | Total Segments | | :--- | :--- | :--- | :--- | :--- | | External Sales | 842,594 | 42,253 | – | 884,847 | | Segment Profit | 97,032 | 419 | 86,950 | 184,401 | Dividends A 2023 final dividend of RMB 0.08 per share, totaling RMB 87.32 million, was recognized, but no interim dividend was declared for H1 2024 - During the period, the distribution of the 2023 final dividend of RMB 0.08 per share, totaling RMB 87,323,000, was recognized[90] - The Board resolved not to declare an interim dividend for 2024[173] Asset Impairment and Fair Value Changes The Group recognized impairment losses of RMB 3.39 million for property, plant, and equipment and RMB 10.64 million for right-of-use assets, alongside a RMB 36.79 million fair value loss on investment properties - Due to underperforming restaurants, the Group recognized impairment losses of RMB 3,391,000 for property, plant, and equipment, and RMB 10,642,000 for right-of-use assets[98] - Investment properties recorded a fair value loss of approximately RMB 36,792,000 during the period, compared to a gain of RMB 37,070,000 in the prior period[96] Related Party Transactions The Group conducted various related party transactions, including RMB 13.33 million in purchases and RMB 9.90 million in franchise fees from Shigemitsu Sangyo Co., Ltd - Purchases of food, raw materials, and supplies from Shigemitsu Sangyo Co., Ltd. totaled RMB 13,331,000, and franchise fees paid totaled RMB 9,897,000[138] - Total remuneration for directors and other key management personnel was RMB 3,277,000, largely consistent with RMB 3,221,000 in the prior period[140] Other Information Corporate Governance The Company generally complied with the Corporate Governance Code, with a noted deviation where Ms. Pan Wei holds both Chairman and CEO roles - The Company deviated from the Corporate Governance Code's provision on the separation of Chairman and Chief Executive Officer roles, with Ms. Pan Wei holding both positions[143] - The Company's Audit Committee has reviewed the unaudited interim results for the six months ended June 30, 2024[146] Directors' and Major Shareholders' Interests As of June 30, 2024, Chairwoman Pan Wei held approximately 47.55% of shares, with Favor Choice Group Limited, controlled by her trust, holding 43.99% - Chairwoman Ms. Pan Wei, through a discretionary trust and personal beneficial ownership, collectively holds approximately 47.55% of the Company's equity[148] - Major shareholder Favor Choice Group Limited holds 480,123,041 shares, representing 43.99% of the issued share capital, and is ultimately controlled by a trust established by Ms. Pan Wei[155][156] Share Option Scheme As of June 30, 2024, 29,805,000 share options remained outstanding under the Company's scheme, with RMB 0.55 million in related expenses recognized - As of June 30, 2024, a total of 29,805,000 share options remained unexercised[124] - During the period, 1,736,000 share options lapsed due to unfulfilled conditions[124][168] - For the six months ended June 30, 2024, the Group recognized an expense of approximately RMB 548,000 related to the share option scheme[126]