Financial Highlights The Group's first-half 2025 revenue grew 7.9% to RMB 1.727 billion, while operating profit and profit attributable to equity holders declined, and inventory turnover days increased Financial Highlights For the six months ended June 30, 2025, the Group's revenue increased by 7.9% to RMB 1.727 billion year-on-year, but operating profit and profit attributable to equity holders decreased by 17.1% and 13.4% respectively, with average inventory turnover days significantly increasing to 231 days 2025 First Half Key Financial Metrics | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 1.727 billion | RMB 1.600 billion | +7.9% | | Gross Profit | RMB 868 million | RMB 801 million | +8.4% | | Operating Profit | RMB 260 million | RMB 314 million | -17.1% | | Profit Attributable to Equity Holders | RMB 243 million | RMB 280 million | -13.4% | | Basic Earnings Per Share | RMB 20.2 cents | RMB 23.4 cents | -13.6% | | Interim Dividend Per Share | 11 HK cents | 13 HK cents | -15.4% | | Special Interim Dividend Per Share | 5 HK cents | 5 HK cents | Unchanged | | Gross Profit Margin | 50.2% | 50.0% | +0.2 percentage points | | Operating Profit Margin | 15.1% | 19.6% | -4.5 percentage points | | Average Inventory Turnover Days | 231 days | 189 days | Increased 42 days | Management Discussion and Analysis The Group achieved 7.9% revenue growth amidst a complex international trade environment and cautious domestic consumption, actively pursuing strategic transformation and internationalization Overall Performance Overview Despite a complex international trade environment and cautious domestic consumption, the Group's revenue grew by 7.9% in the first half of 2025, driven by strategic transformation, DTC model success, and international expansion - Facing a cautious consumer environment, the Group actively pursued strategic transformation, including transitioning to a DTC model, optimizing sales channels, and expanding new retail businesses101217 - New retail business showed strong momentum, with online sales growing 24.6% year-on-year, outperforming the Group's overall performance1419 - The Group launched a "multi-brand, internationalization" strategy, opening its first overseas store in Malaysia and commencing online sales of the golf apparel brand MUNSINGWEAR1519 Financial Review Total revenue grew 7.9% to RMB 1.727 billion, driven by strong growth in the casual business and other series, while operating profit and profit attributable to equity holders declined due to reduced government subsidies and increased direct store expenses Revenue Analysis Total Group revenue increased by 7.9%, with the "Casual Business and Other Series" showing strong growth, while regional performance varied due to channel transformation and distributor changes Revenue by Series (RMB Million) | Series | H1 2025 | % of Total | H1 2024 | % of Total | Growth Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | Main Series | 1,190.6 | 68.9% | 1,193.0 | 74.6% | -0.2% | | Casual Business and Other Series | 536.6 | 31.1% | 407.0 | 25.4% | +31.8% | | Total | 1,727.2 | 100.0% | 1,600.0 | 100.0% | +7.9% | Revenue by Region (RMB Million) | Region | H1 2025 | Change | | :--- | :--- | :--- | | North China | 127.1 | +1.4% | | Northeast China | 80.2 | +361.3% | | East China | 766.0 | +6.9% | | Central South China | 389.5 | +6.6% | | Southwest China | 181.9 | -11.4% | | Northwest China | 182.0 | +7.2% | | Overseas | 0.5 | N/A | Cost, Expense, and Profit Analysis Gross profit margin slightly increased by 0.2 percentage points to 50.2% due to higher direct sales, but operating profit decreased by 17.1% to RMB 260 million due to increased selling and administrative expenses and reduced government subsidies - Gross profit margin slightly increased by 0.2 percentage points to 50.2% due to a higher proportion of direct sales3537 - Selling and distribution expenses increased to RMB 546 million, accounting for 31.6% of total revenue, primarily due to increased direct store and e-commerce expenses414247 - Operating profit decreased by 17.1% year-on-year to RMB 260 million, mainly due to reduced government subsidies and increased direct store expenses4550 Dividend The Board recommended an interim dividend of 11 HK cents and a special interim dividend of 5 HK cents per ordinary share for FY2025, totaling approximately HKD 191.6 million 2025 Interim Dividend Proposal | Dividend Type | Amount per share (HK cents) | Same period 2024 (HK cents) | | :--- | :--- | :--- | | Interim Dividend | 11 | 13 | | Special Interim Dividend | 5 | 5 | Business Review The Group deepened its presence in the men's wear market with a differentiated brand matrix, successfully transforming its core "LILANZ" series to a DTC model in some regions and achieving significant growth in new retail channels Brand Performance The core "LILANZ" series continued its DTC model transformation, expanding DTC stores, while the "LESS IS MORE" casual business series achieved 31.8% revenue growth - The "LILANZ" main series advanced its DTC model transformation in Northeast, Jiangsu, Shandong, and Chongqing, increasing DTC store count to 273636466 - The "LESS IS MORE" casual business series revenue grew 31.8% year-on-year, with a net increase of 9 stores to 331656768 Store Network and Channel Strategy As of June 30, 2025, the Group's total retail stores numbered 2,774, with a net increase of 1, focusing on premium shopping mall and outlet stores, while new retail business revenue significantly grew by 24.6% Store Count Changes | Metric | June 30, 2025 | December 31, 2024 | Net Change during Period | | :--- | :--- | :--- | :--- | | Total Stores | 2,774 | 2,773 | +1 | | Shopping Mall Stores | 957 | 933 | +24 | | Outlets Stores | 121 | 103 | +18 | - New retail business revenue grew 24.6% year-on-year, with channels upgrading from inventory clearance to new product sales platforms7780 Strategic Initiatives and Innovation The Group made substantial progress in its "multi-brand, internationalization" strategy, completing brand acquisition and opening its first overseas store, while also achieving significant R&D and ESG milestones - "Multi-brand, internationalization" strategy advanced: completed "MUNSINGWEAR" acquisition and opened the first overseas store in Malaysia787981 - Significant R&D innovation achievements, with products like water-repellent down 3.0 and durable white non-iron shirts receiving multiple certifications and international awards848588 - Released the first independent ESG report, with MSCI ESG rating upgraded to BB, and continued investment in aesthetic education public welfare and environmental protection activities101102104 Prospects The Group aims for 50-100 net new stores and over 20% growth in new retail business for FY2025, with overall sales growth of at least 10%, while accelerating its "multi-brand, internationalization" strategy FY2025 Full-Year Performance Guidance | Metric | Target | | :--- | :--- | | Net Store Openings | 50 - 100 stores | | New Retail Business Revenue Growth | ≥ 20% | | Overall Sales Growth | ≥ 10% | - Will continue to leverage the operational advantages of the DTC model and moderately expand its scale based on market conditions108110 - Accelerate the "multi-brand, internationalization" strategy, with physical stores for "MUNSINGWEAR" opening in the second half and further expansion into Malaysia and Southeast Asian markets115117 Liquidity and Financial Resources As of June 30, 2025, the Group maintained a robust financial position with total cash and bank balances of RMB 2.924 billion, while average inventory turnover days increased to 231 days Cash and Bank Balances (RMB Million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Pledged bank deposits | 795.3 | 995.7 | | Cash and cash equivalents | 517.0 | 827.0 | | Bank fixed deposits | 1,611.7 | 1,334.7 | | Total | 2,924.0 | 3,157.4 | Working Capital Turnover Days | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Average inventory turnover days | 231 | 189 | | Average trade receivables turnover days | 37 | 39 | | Average trade payables turnover days | 179 | 162 | - As of June 30, 2025, the Group had 5,191 employees, with total employee costs of approximately RMB 291 million during the period142146 Review Report of the Auditor KPMG reviewed the interim financial report for the six months ended June 30, 2025, finding no material issues indicating non-compliance with IAS 34 Review Report of the Auditor KPMG conducted a review of the company's interim financial report for the six months ended June 30, 2025, concluding no material issues indicating non-compliance with International Accounting Standard 34 - Review scope: The auditor conducted a review of the interim financial report in accordance with Hong Kong Standard on Review Engagements 2410150152 - Review conclusion: No material issues were found indicating the financial report was not prepared in accordance with International Accounting Standard 34154155 Condensed Consolidated Financial Statements This section presents the Group's condensed consolidated financial statements, including statements of profit or loss, financial position, changes in equity, and cash flows Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement details revenue, cost of sales, expenses, operating profit, profit before tax, and profit for the period for the six months ended June 30, 2025, showing revenue of RMB 1.727 billion and profit for the period of RMB 240 million Profit or Loss Statement Summary (RMB Thousand) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 1,727,215 | 1,600,043 | | Gross Profit | 867,760 | 800,528 | | Operating Profit | 260,107 | 313,826 | | Profit for the Period | 240,095 | 280,142 | | Attributable to Equity Holders of the Company | 242,525 | 280,142 | Condensed Consolidated Statement of Financial Position This statement presents the Group's assets, liabilities, and equity as of June 30, 2025, with total assets of RMB 6.675 billion, total liabilities of RMB 2.427 billion, and net assets of RMB 4.248 billion Financial Position Statement Summary (RMB Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current assets | 2,102,207 | 3,015,500 | | Current assets | 4,572,454 | 3,838,123 | | Current liabilities | 2,361,345 | 2,050,709 | | Non-current liabilities | 65,351 | 747,708 | | Net Assets | 4,247,965 | 4,055,206 | Condensed Consolidated Statement of Changes in Equity This statement reflects changes in equity items such as share capital, reserves, and retained earnings during the period, including the impact of profit for the period, dividends paid, and other comprehensive income - As of June 30, 2025, total equity attributable to equity holders of the Company increased from RMB 4.026 billion at the beginning of the period to RMB 4.123 billion165 Condensed Consolidated Statement of Cash Flows This statement summarizes cash inflows and outflows from operating, investing, and financing activities, showing net cash generated from operating activities of RMB 118 million, net cash used in investing activities of RMB 80 million, and net cash used in financing activities of RMB 347 million, resulting in a net decrease of RMB 310 million in cash and cash equivalents Cash Flow Statement Summary (RMB Thousand) | Item | H1 2025 | | :--- | :--- | | Net cash generated from operating activities | 117,695 | | Net cash used in investing activities | (80,050) | | Net cash used in financing activities | (347,336) | | Net decrease in cash and cash equivalents | (309,691) | Notes to the Unaudited Interim Financial Report This section provides detailed explanations and supplementary information for the condensed consolidated financial statements, covering preparation basis, accounting policy changes, revenue recognition, taxation, EPS, asset/liability details, dividends, equity-settled transactions, and related party transactions Notes to the Unaudited Interim Financial Report This section provides detailed explanations and supplementary information for the condensed consolidated financial statements, including the basis of preparation, accounting policy changes, and specific details on various financial items and transactions - The notes provide detailed explanations of the basis of preparation for the financial statements, adhering to International Accounting Standard 34 "Interim Financial Reporting"168 - Note 18 details the interim, special interim, and final dividend amounts declared and proposed during the period236237238 - Notes 12 and 16 provide aging analyses for trade receivables and trade payables, respectively207228232 Other Information This section includes disclosures of interests for directors and major shareholders, details of the share option scheme, and corporate governance matters Disclosure of Interests This chapter discloses the interests of the company's directors, chief executives, and major shareholders in the company's shares and related shares as of June 30, 2025, with major shareholders holding significant stakes - Major shareholder Xiao Sheng International Limited holds 692,345,000 shares, representing approximately 58.77% of the company's equity261 - Executive Directors Wang Liangxing, Wang Congxing, and Non-executive Director Wang Dongxing directly hold company shares and indirectly hold interests through Xiao Sheng International252253 Share Option Scheme The company adopted a share option scheme on April 23, 2019, with 10,739,000 unexercised share options at an exercise price of HKD 4.31 as of June 30, 2025 - As of June 30, 2025, a total of 10,739,000 share options remained unexercised under the share option scheme269 - During the period, 67,000 share options granted to employees lapsed, with no options exercised or cancelled269 Corporate Governance and Other Matters The company complied with all corporate governance code provisions during the reporting period, with interim results reviewed by the audit committee and KPMG, and no purchases, sales, or redemptions of listed securities - The company complied with all code provisions of the Corporate Governance Code for the six months ended June 30, 2025275280 - To determine entitlement to interim and special interim dividends, the register of members will be closed from September 5 to 8, 2025284
中国利郎(01234) - 2025 - 中期业绩