Financial Performance - The company achieved revenue of RMB 484.3 million for the year ended December 31, 2024, a decrease of 10.8% compared to RMB 542.9 million in 2023[15]. - The total comprehensive income for 2024 was RMB 16.8 million, recovering from a total comprehensive loss of RMB 358.6 million in 2023[15]. - The revenue from the four health teas in 2024 was RMB 256.6 million, down 11.3% from RMB 289.4 million in 2023, primarily due to strategic adjustments and a reduction in settlement prices[89]. - The revenue from weight loss products in 2024 was RMB 148.0 million, a decrease of 8.5% from RMB 161.8 million in 2023, attributed to a decline in market share of the orlistat product[89]. - The gross profit margin for 2024 increased to 67.3%, up 3.5 percentage points from 63.8% in 2023, due to optimization of less competitive products and a decrease in procurement costs for weight loss products[90]. - The sales cost for 2024 was RMB 158.5 million, a decrease of 19.4% from RMB 196.7 million in 2023[90]. - The other income for 2024 was RMB 11.8 million, slightly up from RMB 11.0 million in 2023, mainly from interest income and government subsidies[91]. - In 2024, the company's sales and marketing expenses amounted to RMB 199.4 million, a decrease of 37.8% from RMB 320.7 million in 2023, representing 41.2% of total revenue[92]. - Employee benefits expenses in 2024 decreased by RMB 81.9 million compared to 2023, primarily due to strategic adjustments in the operating model and a reduction in sales personnel[93]. - Advertising expenses in 2024 decreased by RMB 41.2 million from 2023, mainly due to reduced advertising spending[94]. - Administrative expenses for 2024 were RMB 89.5 million, down 41.5% from RMB 153.1 million in 2023, accounting for 18.5% of total revenue[97]. - Research and development costs in 2024 were RMB 29.4 million, a decrease of 15.8% from RMB 34.9 million in 2023, representing 6.1% of total revenue[101]. - The company recorded a total comprehensive income of RMB 16.8 million in 2024, a significant improvement from a comprehensive loss of RMB 358.6 million in 2023[105]. - The net cash inflow from operating activities for continuing operations in 2024 was RMB 10.5 million, compared to a cash outflow of RMB 33.0 million in 2023[107]. - The net cash outflow from financing activities in 2024 was RMB 103.8 million, primarily due to dividend distributions to shareholders[107]. - The company's other net income in 2024 was RMB 6.4 million, up from RMB 0.7 million in 2023, including investment income of RMB 2.7 million[102]. - The share of profit from investments accounted for using the equity method was RMB 5.1 million in 2024, compared to RMB 1.0 million in 2023[103]. - As of December 31, 2024, the company's financial assets measured at fair value through profit or loss amounted to RMB 794 million, a decrease from RMB 901 million as of December 31, 2023[108]. - The company holds approximately RMB 698 million in receivables measured at amortized cost through the fund, along with restricted cash and cash equivalents of about RMB 135 million[109]. - The group's cash and cash equivalents, including bank balances and deposits, totaled RMB 1,478 million as of December 31, 2024, down from RMB 2,885 million a year earlier[110]. - The company's capital expenditures for 2024 were RMB 50 million, a decrease from RMB 68 million in 2023[114]. - The total inventory as of December 31, 2024, was RMB 264.11 million, an increase from RMB 235.69 million in 2023, with inventory turnover days reduced to 58 days from 123 days[116]. - The company's debt-to-asset ratio as of December 31, 2024, was 15.2%, down from 21.4% a year prior[121]. - There were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures in 2024[118]. - The company has no significant contingent liabilities or guarantees as of December 31, 2024[122]. - The company has not approved any major investments or capital asset purchases as of the report date[120]. Operational Efficiency and Strategy - The company implemented a partnership mechanism in September 2023, which was fully rolled out in 2024 across e-commerce and OTC business segments, enhancing operational efficiency[16]. - The company expanded its offline sales network to nearly 300,000 non-prescription drug stores across 31 provinces, regions, and municipalities in China by the end of 2024[6]. - The company operates 63 online stores across 18 e-commerce platforms, actively embracing new retail formats such as O2O and B2C[6]. - The company aims to continue innovating and providing high-quality health products and services, positioning itself as a leader in the health industry[7]. - The company faced multiple challenges in 2024, including external environmental changes and insufficient domestic demand, but management responded proactively to achieve satisfactory operational results[15]. - The company will enhance its partner mechanism starting September 2024, focusing on profit-oriented incentives to improve long-term market development awareness among partners[17]. - By 2025, the company aims to optimize its product and business layout while continuing to invest in R&D to drive product innovation and enhance consumer experience[17]. - The company plans to strengthen strategic partnerships with top 100 national chains and diversify marketing activities to improve inventory turnover rates[17]. - The company will focus on profitability in its e-commerce operations, aiming to reduce operational and logistics costs while exploring new business models[17]. - The company will implement a performance management system and enhance employee training to improve operational efficiency and product supply assurance[18]. - The company is committed to adapting to market changes by modernizing the Bishi Yuan brand through social media and content marketing strategies[17]. - The company will actively explore new e-commerce models such as O2O, B2C, live streaming, and interest-based e-commerce to meet changing consumer purchasing scenarios[17]. - The company has streamlined its agency product structure, significantly improving operational quality and sales performance in key product categories[40]. - The company successfully upgraded and transformed its health products, expanding their market for liver protection, sleep aid, and immune enhancement[62]. - The company applied for 2 invention patents and received 3 invention patents and 1 utility model patent, enhancing the technological content of its products[62]. - The company implemented strict quality control measures, combining manual and equipment monitoring to ensure product quality parameters are met[67]. - The BI system underwent comprehensive optimization and performance upgrades to enhance data security and provide precise real-time analysis[67]. - The company aims to enhance its online and offline operations by leveraging member resources and deepening cooperation with offline businesses[78]. - The company is expanding its presence on new retail platforms like Douyin and Kuaishou, aiming to increase market share and improve advertising efficiency[81]. - The company is committed to optimizing its product and channel strategies to strengthen brand influence and market position, particularly through content marketing and collaboration with media platforms[82]. Innovation and R&D - The company holds 25 health food approvals and 117 patents, including 21 invention patents, demonstrating its commitment to innovation[6]. - The R&D department published two academic articles in core journals by July 2024 to support the registration of new weight loss products[65]. - In 2024, the company accelerated the development of new health food products in response to new industry regulations, enhancing its innovation capabilities[61]. - The company aims to focus on "weight management" and "gastrointestinal health" while expanding its product categories to include OTC drugs, health foods, and regular foods[76]. - The company plans to optimize product structure and innovate marketing models to achieve high-quality development by 2025[76]. - The company is committed to modern production management and continuous improvement of production processes to ensure high-quality products[66]. Market Trends and Consumer Behavior - The company forecasts that the consumer health product industry in China is expected to reach $62.401 billion by 2025, with a growth rate exceeding 6%[32]. - In China, 62% of consumers prioritize health in their daily lives, significantly higher than the US (41%) and the UK (29%)[34]. - 74% of Chinese consumers indicated they would increase health-related spending if overall consumption levels decline[34]. - The global health and wellness food market is projected to grow by $627.6 billion from 2025 to 2029, with a CAGR of 9.8%[34]. - The company ranks among the top sellers in health food and weight loss categories on Tmall and JD platforms[39]. - The e-commerce business achieved its best operational results since inception by optimizing product structure and marketing strategies[41]. - During the Double Eleven sales event, the Pinduoduo platform saw daily sales exceed 50,000 units for the main product, Fibrous Tea[45]. - The flagship store's monthly sales increased from over RMB 800,000 in September-October to over RMB 1 million in November-December[45]. Environmental, Social, and Governance (ESG) Initiatives - The company emphasizes a systematic approach to ESG management, with a top-down strategy involving the board for decision-making and risk assessment[144]. - The ESG report is prepared in accordance with the Hong Kong Stock Exchange's guidelines, ensuring compliance and transparency in environmental, social, and governance matters[140]. - The board reviews and approves the ESG report annually to ensure it accurately reflects significant ESG issues and their impact on sustainable development[145]. - The company has established effective communication with stakeholders to understand their needs and concerns regarding ESG factors[145]. - The management team is committed to collecting relevant ESG data and reporting on performance regularly to ensure accountability[144]. - The company has a dedicated ESG leadership team, led by the CEO, to oversee the management and effectiveness of ESG strategies[144]. - The report includes quantifiable data to reflect the company's performance in environmental and social indicators, adhering to the principle of materiality[142]. - The company emphasizes the importance of stakeholder engagement for sustainable development, utilizing various communication channels to gather feedback and expectations[146]. - Key environmental, social, and governance (ESG) issues identified include air pollutant and greenhouse gas emissions management, supply chain management, and employee treatment[153]. - The company has implemented a "lean production" plan to optimize production processes, upgrade equipment, and improve energy efficiency, contributing to sustainable business development[157]. - No significant violations of environmental laws and regulations were reported during the reporting period, ensuring compliance with relevant legislation[158]. - The company actively promotes environmental awareness among employees and adheres to environmental laws and regulations[157]. - Key performance indicators related to emissions include measures to reduce industrial waste gas and improve overall air quality[160]. - The company's nitrogen oxide emissions decreased from 112.67 kg in 2023 to 108.09 kg in 2024, representing a reduction of approximately 4.6%[161]. - The total greenhouse gas emissions (Scope 1) reduced from 356.37 tons CO2 equivalent in 2023 to 331.69 tons CO2 equivalent in 2024, a decrease of about 6.9%[163]. - The total greenhouse gas emissions (Scope 2) decreased from 1,331.90 tons CO2 equivalent in 2023 to 1,224.83 tons CO2 equivalent in 2024, reflecting a reduction of approximately 8.0%[163]. - The total hazardous waste emissions dropped significantly from 10.35 tons in 2023 to 5.84 tons in 2024, a decrease of about 43.5%[169]. - The total electricity consumption decreased from 1,493,900 kWh in 2023 to 1,365,900 kWh in 2024, representing a reduction of approximately 8.6%[176]. - The total natural gas consumption reduced from 60,252 m³ in 2023 to 57,802 m³ in 2024, a decrease of about 4.1%[176]. - The total fuel consumption decreased from 38,118 liters in 2023 to 30,000 liters in 2024, reflecting a reduction of approximately 21.4%[176]. - The density of hazardous waste emissions per million RMB revenue improved from 0.02 tons in 2023 to 0.01 tons in 2024, indicating enhanced efficiency[169]. - The company implemented measures to reduce waste generation and promote recycling, including encouraging employees to minimize food waste and adopt paperless practices[170]. - The company aims to enhance resource efficiency and reduce ecological footprint through its "4R" strategy: Replace, Reuse, Reduce, and Recycle[172]. - Water consumption decreased from 15,068 tons in 2023 to 8,329 tons in 2024, a reduction of approximately 44.3%[179]. - Water consumption density improved from 27.75 tons per million revenue in 2023 to 17.20 tons per million revenue in 2024, a decrease of approximately 38.2%[179]. - Packaging materials consumed increased from 585 tons in 2023 to 710 tons in 2024, an increase of approximately 21.4%[180]. - Packaging material density improved from 1.08 tons per million revenue in 2023 to 1.47 tons per million revenue in 2024, an increase of approximately 36.1%[180]. - The company achieved its environmental targets, including a 3% reduction in air emissions density and greenhouse gas emissions density compared to 2021[182]. - The company has implemented policies to reduce environmental impact, including compliance with Chinese environmental laws and monitoring air pollutants[184]. - The company is committed to energy conservation, aiming for a 2% reduction in electricity and natural gas consumption density by 2024 compared to 2021[182]. - The company has established flexible work arrangements and preventive measures to mitigate climate-related operational risks[189]. - The company regularly monitors climate-related trends and regulations to manage potential legal and reputational risks[190]. - The company has set a three-year target plan for environmental impact reduction, with specific goals for waste and resource management[181]. Employee Management and Training - As of December 31, 2024, the company had 128 employees in mainland China and Hong Kong, down from 179 employees as of December 31, 2023[127]. - Employee costs, including director remuneration, amounted to RMB 56.9 million for the year ending December 31, 2024, a decrease from RMB 210.9 million in 2023[127]. - The company emphasizes the recruitment, motivation, and retention of suitable talent, investing significantly in continuous education and training programs for employees[127]. - The company appointed Mr. Feng Bing as an independent non-executive director starting October 2023, who has over 31 years of corporate management and consulting experience[133]. - Mr. Zhao Yihong serves as the CEO of the group, with a background detailed in the board introduction[134]. - The group has a strong management team with extensive experience in various sectors, including pharmaceuticals and media, enhancing operational efficiency[136][137]. - The company provides competitive compensation, including basic salary, performance pay, and bonuses, linked to employee performance[194]. - The company has a standard working time of 7.5 hours per day and offers various types of leave, including annual leave and maternity leave[193]. - There were no fatalities or work-related injuries reported in the past three years, maintaining a 0% fatality rate[199]. - The company emphasizes a balanced work-life environment and adheres to relevant labor laws and regulations[193]. - All employees receive an employee handbook detailing employment terms, compensation, and policies[196]. - The company has implemented a recruitment management system to ensure fair hiring practices[196]. - Regular internal safety training is conducted to enhance employee awareness of occupational safety[198]. - The company encourages employee participation in training programs to improve skills and career development[199]. - Percentage of trained employees: Male 69.62%, Female 30.38%[200]. - Percentage of trained employees by type: Senior Management 7.59%, Middle Management 12.66%, Junior Employees 79.75%[200]. - Average training hours per employee: Male 232 hours, Female 166 hours[200]. - Average training hours by employee type: Senior Management 300 hours, Middle Management 98 hours, Junior Employees 76 hours[200].
碧生源(00926) - 2024 - 年度财报