中国顺客隆(00974) - 2025 - 中期业绩

Financial Summary Company Information and Announcement China Shunke Long Holdings Limited announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025, which were reviewed by the Company's audit committee - China Shunke Long Holdings Limited (Stock Code: 974) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025[2] - The unaudited consolidated results have been reviewed by the Company's audit committee[2] Key Financial Highlights For the six months ended June 30, 2025, the Company's revenue decreased by 20.2% to RMB 245,947 thousand, gross profit decreased by 25.7% to RMB 28,809 thousand, but loss for the period significantly narrowed by 82.5% to RMB 3,285 thousand; total assets and total liabilities also decreased by 10.2% and 12.2% respectively Financial Highlights for the Six Months Ended June 30 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 245,947 | 308,164 | -20.2% | | Gross Profit | 28,809 | 38,783 | -25.7% | | Loss for the period | (3,285) | (18,747) | -82.5% | | As at period-end | | | | | Total Assets | 273,622 | 304,700 | -10.2% | | Total Liabilities | 195,226 | 222,342 | -12.2% | Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Company's revenue was RMB 245,947 thousand, gross profit RMB 28,809 thousand, loss for the period significantly narrowed to RMB 3,285 thousand, and basic and diluted loss per share was RMB 0.01 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 245,947 | 308,164 | | Cost of inventories sold | (217,138) | (269,381) | | Gross Profit | 28,809 | 38,783 | | Other operating income | 14,014 | 8,589 | | Selling and distribution costs | (36,482) | (56,311) | | Administrative expenses | (8,043) | (6,891) | | Finance costs | (2,242) | (2,264) | | Loss before tax | (3,243) | (18,677) | | Income tax expense | (42) | (70) | | Loss for the period | (3,285) | (18,747) | | Loss for the period attributable to owners of the Company | (3,200) | (18,596) | | Loss per share - basic and diluted (RMB) | (0.01) | (0.06) | Condensed Consolidated Statement of Financial Position As at June 30, 2025, the Company's total non-current assets were RMB 83,912 thousand, total current assets RMB 190,810 thousand, and total current liabilities RMB 173,495 thousand; net assets decreased to RMB 78,396 thousand, mainly due to reduced retained earnings and exchange differences Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-current Assets | | | | Property, plant and equipment | 23,625 | 23,452 | | Right-of-use assets | 45,645 | 54,785 | | Investment properties | 8,207 | 8,370 | | Deferred tax assets | 1,127 | 1,127 | | Current Assets | | | | Inventories | 62,459 | 77,535 | | Trade and bills receivables | 36,844 | 35,088 | | Deposits paid, prepayments and other receivables | 64,682 | 77,229 | | Cash and cash equivalents | 25,523 | 21,152 | | Current Liabilities | | | | Trade payables | 50,709 | 66,591 | | Other payables | 25,423 | 21,503 | | Bank borrowings | 62,000 | 62,000 | | Net Assets | 78,396 | 82,358 | | Total Equity | 78,396 | 82,358 | Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, total equity attributable to owners of the Company decreased from RMB 81,346 thousand at the beginning of the period to RMB 77,469 thousand, mainly due to a loss for the period of RMB 3,200 thousand and exchange differences of RMB 677 thousand arising from translation of financial statements Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | January 1, 2025 (RMB thousands) | Loss for the period (RMB thousands) | Exchange differences (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Total equity attributable to owners of the Company | 81,346 | (3,200) | (677) | 77,469 | | Non-controlling interests | 1,012 | (85) | – | 927 | | Total Equity | 82,358 | (3,285) | (677) | 78,396 | - Statutory reserve, in accordance with the PRC Company Law, requires 10% of annual statutory after-tax net profit (after offsetting any prior year losses) to be allocated until it reaches 50% of the registered capital[8] Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash generated from operating activities was RMB 22,544 thousand, net cash used in investing activities RMB 3,613 thousand, and net cash used in financing activities RMB 13,912 thousand, resulting in a net increase in cash and cash equivalents of RMB 5,019 thousand Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Activity Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash from (used in) operating activities | 22,544 | (3,855) | | Net cash used in investing activities | (3,613) | (4,349) | | Net cash used in financing activities | (13,912) | (15,633) | | Net increase in cash and cash equivalents | 5,019 | (23,837) | | Cash and cash equivalents at January 1 | 21,152 | 48,683 | | Effect of foreign exchange rate changes | (648) | 272 | | Cash and cash equivalents at June 30 | 25,523 | 25,118 | Notes to the Condensed Consolidated Interim Financial Statements General Information and Basis of Preparation China Shunke Long Holdings Limited is incorporated in the Cayman Islands, primarily operating supermarket chain stores in Guangdong Province, China, maintaining both retail and wholesale distribution channels; its shares are listed on the Main Board of the Hong Kong Stock Exchange, with Supply and Marketing Grand Bazaar Group as the controlling shareholder - The Company was incorporated in the Cayman Islands, and its shares were listed on the Main Board of The Stock Exchange of Hong Kong on September 10, 2015[10] - The Group operates supermarket chain stores, primarily in Guangdong Province, China, maintaining both retail and wholesale distribution channels[11] - The Company's controlling shareholder is Supply and Marketing Grand Bazaar Group (whose shares are listed on the Shenzhen Stock Exchange), and the ultimate controlling party is the All-China Federation of Supply and Marketing Cooperatives[11] Accounting Policies The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with those used for the 2024 annual consolidated financial statements; amendments to IFRS accounting standards were first applied in this interim period but did not have a significant impact on financial performance and position - The condensed consolidated financial statements are prepared on a historical cost basis and in accordance with International Accounting Standard 34 and the applicable disclosure requirements of Appendix D2 to the Listing Rules[12][13] - Amendments to IFRS accounting standards (HKAS 21 Amendment: Lack of Exchangeability) were first applied in this interim period but did not have a significant impact on the Group's financial performance and position[14] Operating Segment Information The Group has two reportable segments: retail store operations and wholesale distribution; for the six months ended June 30, 2025, retail store operations revenue was RMB 188,366 thousand and wholesale distribution revenue was RMB 57,581 thousand, with both segments reporting losses; all revenue and non-current assets primarily originate from China - The Group has two reportable segments: retail store operations (selling fresh food, groceries, and household items) and wholesale distribution (selling fast-moving consumer goods and groceries)[15][17] Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (RMB thousands) | 2025 Loss (RMB thousands) | 2024 Revenue (RMB thousands) | 2024 Loss/Profit (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Retail store operations | 188,366 | (115) | 231,307 | (16,839) | | Wholesale distribution | 57,581 | (2,568) | 76,857 | 25 | | Total | 245,947 | (2,683) | 308,164 | (16,814) | - The Group's revenue from external customers and non-current assets are entirely from China (domicile)[19][20] Revenue and Other Operating Income For the six months ended June 30, 2025, the Group's revenue primarily came from goods sales, with retail store operations contributing RMB 184,134 thousand and wholesale distribution RMB 57,581 thousand; other operating income significantly increased by 63.2% year-on-year to RMB 14,014 thousand, mainly due to increased gains from early lease terminations Revenue Analysis (For the six months ended June 30) | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | General retail sales under retail store operations | 178,602 | 218,036 | | Bulk sales under retail store operations | 5,532 | 2,770 | | Integrated wholesale under wholesale distribution | 57,581 | 76,857 | | Commission income from franchise sales under retail store operations | 532 | 6,292 | | Rental income from subleasing certain retail areas under retail store operations | 3,700 | 4,209 | | Total Revenue | 245,947 | 308,164 | Other Operating Income Analysis (For the six months ended June 30) | Income Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Gain from early termination of leases | 3,111 | 183 | | Gain on disposal of property, plant and equipment | 29 | 89 | | Government grants | 110 | 8 | | Interest income from bank deposits | 42 | 130 | | Promotion income from suppliers | 5,012 | 5,299 | | Net rental income from investment properties | 1,458 | 1,371 | | Others | 4,252 | 1,509 | | Total | 14,014 | 8,589 | - The net gain from early termination of leases in the first half of 2025 was RMB 3,111 thousand, a significant increase from RMB 183 thousand in the same period of 2024[25] Loss Before Tax For the six months ended June 30, 2025, loss before tax was RMB 3,243 thousand, a significant narrowing from RMB 18,677 thousand in the prior year; major expenses included employee benefit expenses of RMB 22,175 thousand and depreciation of right-of-use assets of RMB 8,843 thousand Items Deducted from Loss Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 3,511 | 3,571 | | Depreciation of investment properties | 163 | 163 | | Depreciation of right-of-use assets | 8,843 | 14,303 | | Total employee benefit expenses | 22,175 | 29,846 | | Total finance costs | 2,242 | 2,264 | Income Tax Expense For the six months ended June 30, 2025, income tax expense was RMB 42 thousand, a decrease from the prior year; PRC subsidiaries are subject to a 25% corporate income tax rate, with preferential rates for small low-profit enterprises, while Hong Kong and Macau subsidiaries incurred no taxable profits and thus no income tax - For the six months ended June 30, 2025, income tax expense was RMB 42 thousand, a decrease from RMB 70 thousand in the same period of 2024[29] - PRC subsidiaries are subject to a tax rate of 25%, but small low-profit enterprises may enjoy preferential tax rates of 5% or 10%[29][30] - The Group did not incur taxable profits in the Cayman Islands, British Virgin Islands, Hong Kong, and Macau, thus no related income tax was payable[29][30] Dividends For the six months ended June 30, 2025, the Company neither paid nor proposed any interim dividends, and no dividends have been proposed since the end of the reporting period - No dividends were paid or proposed for the six months ended June 30, 2025 (six months ended June 30, 2024: nil), and no dividends have been proposed since the end of the reporting period (2024: nil)[31] Loss Per Share For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the Company was RMB 0.01, a significant narrowing from RMB 0.06 in the prior year; diluted loss per share was the same as basic loss per share due to the absence of potential dilutive ordinary shares Loss Per Share Calculation (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company | (3,200) | (18,596) | | Weighted average number of ordinary shares used for basic and diluted loss per share calculation | 290,457,000 | 290,457,000 | | Loss per share - basic and diluted (RMB) | (0.01) | (0.06) | - As there were no outstanding potential dilutive ordinary shares for both periods, the diluted loss per share was the same as the basic loss per share[32] Capital Expenditure For the six months ended June 30, 2025, the Group added RMB 4,079 thousand in property, plant and equipment; at period-end, the carrying value of property, plant and equipment was RMB 23,625 thousand, and investment properties RMB 8,207 thousand; some buildings and investment properties were pledged to banks for financing Changes in Property, Plant and Equipment and Investment Properties (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Carrying value of property, plant and equipment at beginning of period | 23,452 | 28,095 | | Additions | 4,079 | 4,916 | | Disposals | (395) | (348) | | Depreciation/Amortisation | (3,511) | (3,571) | | Carrying value of property, plant and equipment at end of period | 23,625 | 29,092 | | Carrying value of investment properties at beginning of period | 8,370 | 8,697 | | Depreciation/Amortisation of investment properties | (163) | (163) | | Carrying value of investment properties at end of period | 8,207 | 8,534 | - As at June 30, 2025, buildings with a carrying value of RMB 10,334 thousand and investment properties with a carrying value of RMB 8,207 thousand were pledged to banks[34] Leases As at June 30, 2025, total right-of-use assets were RMB 45,645 thousand and total lease liabilities RMB 40,642 thousand; new right-of-use assets of RMB 4,424 thousand were added, and depreciation of right-of-use assets of RMB 8,843 thousand and lease liability interest expense of RMB 1,181 thousand were recognized; total lease cash outflow was RMB 13,298 thousand Right-of-Use Assets (As at period-end) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Other leased properties held for own use | 25,821 | 34,525 | | Ownership interests in leased land | 19,824 | 20,260 | | Total | 45,645 | 54,785 | Lease Liabilities (As at period-end) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current | 18,911 | 24,303 | | Non-current | 21,731 | 31,527 | | Total | 40,642 | 55,830 | Lease-Related Amounts Recognized in Profit or Loss (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of right-of-use assets | 8,843 | 14,303 | | Interest expense on lease liabilities | 1,181 | 1,702 | | Gain from early termination of leases | 3,111 | 183 | | Short-term lease expenses | 337 | 460 | - For the six months ended June 30, 2025, total lease cash outflow was RMB 13,298 thousand[41] Trade and Bills Receivables As at June 30, 2025, total trade and bills receivables were RMB 36,844 thousand, a slight increase from RMB 35,088 thousand at the end of 2024; the average credit period is 0 to 180 days, with receivables within 30 days accounting for the highest proportion Trade and Bills Receivables (As at period-end) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 39,020 | 38,111 | | Less: Impairment allowance for trade receivables | (2,201) | (3,069) | | Net trade receivables | 36,819 | 35,042 | | Bills receivables | 25 | 46 | | Total | 36,844 | 35,088 | - The average credit period granted to customers or tenants is generally 0 to 180 days from the invoice date[42] Ageing Analysis of Trade Receivables (As at period-end) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 30 days | 15,378 | 13,172 | | 31 to 60 days | 6,924 | 6,742 | | 61 to 180 days | 10,549 | 7,607 | | 181 to 365 days | 299 | 3,120 | | Over 1 year to 2 years | 3,635 | 4,326 | | Over 2 years | 34 | 75 | | Total | 36,819 | 35,042 | Trade Payables As at June 30, 2025, total trade payables were RMB 50,709 thousand, a decrease from RMB 66,591 thousand at the end of 2024; the Group generally obtains credit periods of 0 to 360 days from its suppliers - The Group generally obtains credit periods of 0 to 360 days from its suppliers[43] Ageing Analysis of Trade Payables (As at period-end) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current to 30 days | 16,740 | 29,472 | | 31 to 60 days | 9,100 | 11,643 | | 61 to 180 days | 10,667 | 12,481 | | 181 to 365 days | 7,593 | 4,901 | | Over 1 year to 2 years | 1,829 | 2,357 | | Over 2 years | 4,780 | 5,737 | | Total | 50,709 | 66,591 | Amounts Due from Related Companies As at June 30, 2025, amounts due from related companies were trade-related, unsecured, interest-free, and repayable on demand; the carrying value includes accumulated impairment losses of RMB 440 thousand - Amounts due from related companies are trade-related, unsecured, interest-free, and repayable on demand[45] - The carrying value includes accumulated impairment losses of RMB 440 thousand[45] Bank Borrowings As at June 30, 2025, the Group had RMB 62,000 thousand in secured bank borrowings, bearing fixed annual interest rates of 3.35% to 3.45%, all repayable within one year; these borrowings are secured by certain buildings, right-of-use assets, and investment properties Bank Borrowings (As at period-end) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Secured bank borrowings classified as current liabilities | 62,000 | 62,000 | | Due within one year | 62,000 | 62,000 | - Bank borrowings bear fixed annual interest rates of 3.35% to 3.45% (December 31, 2024: 3.45% to 3.6%)[47] - The Group's interest-bearing bank borrowings are secured by certain buildings, right-of-use assets, and investment properties[48][49] Share Capital As at June 30, 2025, the Company's authorized share capital was 2,000,000,000 ordinary shares of HKD 0.01 each, with 290,457,000 issued and fully paid ordinary shares of HKD 0.01 each, having a carrying value of RMB 2,387 thousand Share Capital (As at period-end) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Authorized share capital (2,000,000,000 shares of HKD 0.01 each) | 15,826 | 15,826 | | Issued and fully paid share capital (290,457,000 shares of HKD 0.01 each) | 2,387 | 2,387 | Operating Lease Arrangements The Group, as lessor, subleases internal areas of its retail stores and leases out investment properties for terms ranging from 1 to 10 years; as at June 30, 2025, irrevocable operating lease payments receivable within one year amounted to RMB 8,966 thousand - The Group subleases certain internal areas of its retail stores and leases out its investment properties, with negotiated lease terms ranging from 1 to 10 years[49] Future Operating Lease Payments Receivable (As at period-end) | Period | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within one year | 8,966 | 9,397 | Major Non-Cash Transactions For the six months ended June 30, 2025, the Group had a non-cash increase in right-of-use assets and lease liabilities of RMB 4,424 thousand due to retail store lease arrangements; concurrently, non-cash decreases of RMB 4,721 thousand in right-of-use assets and RMB 7,832 thousand in lease liabilities resulted from early lease terminations - Due to retail store lease arrangements, there was a non-cash increase in right-of-use assets and lease liabilities of RMB 4,424 thousand[50] - Due to early lease terminations, there was a non-cash decrease in right-of-use assets of RMB 4,721 thousand and a non-cash decrease in lease liabilities of RMB 7,832 thousand[50] Related Party Transactions For the six months ended June 30, 2025, the Group had purchases of goods from related companies amounting to RMB 265 thousand, and no sales of goods; total key management personnel compensation was RMB 1,449 thousand Related Party Transactions (For the six months ended June 30) | Related Party Relationship | Nature of Transaction | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | | Related companies | Sales of goods | – | 4 | | Related companies | Purchases of goods | 265 | 17 | Key Management Personnel Compensation (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 1,320 | 1,305 | | Contributions to retirement benefit schemes | 129 | 97 | | Total | 1,449 | 1,402 | - The consideration for sales and purchase transactions was based on past transaction prices, market prices, and discount rates, with a credit period of within 90 days[53] Management Discussion and Analysis Business Review The Group operates as a supermarket chain in Guangdong Province, China, encompassing retail store operations, integrated wholesale, and franchise operations; as at June 30, 2025, the number of retail stores decreased to 39, and franchised retail stores to 939, while integrated wholesale focuses on attracting more distributors - The Group operates as a supermarket chain, primarily in Guangdong Province, China, maintaining both retail and wholesale distribution channels[54] Retail Stores As at June 30, 2025, the Group's total number of retail stores decreased from 51 at the beginning of the year to 39, mainly due to closing or converting inefficient stores; 38 are in Guangdong Province, China, and 1 in Macau, China Retail Store Count Changes | Period/Year | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Beginning of period/year | 61 | 51 | | Additions | 6 | 0 | | Reductions | (16) | (12) | | End of period/year | 51 | 39 | Retail Store Geographical Distribution (June 30, 2025) | Location | Number of Retail Stores | | :--- | :--- | | Foshan | 32 | | Zhaoqing | 4 | | Zhuhai | 1 | | Shenzhen | 1 | | Total Guangdong Province | 38 | | Macau | 1 | | Total | 39 | Integrated Wholesale As at June 30, 2025, the Group retained exclusive distribution rights for 16 brands in Foshan and Zhaoqing, with an increased focus on attracting more distributors rather than retailers as customers - The Group retains exclusive distribution rights for 16 brands in Foshan and Zhaoqing[56] - The Group is focusing more on attracting distributors rather than retailers as customers[56] Franchise Operations The Group operates a franchise program, and as at June 30, 2025, the number of franchised retail stores decreased from 1,181 at the beginning of the year to 939 - The Group operates a franchise program, and revenue from selling goods to franchisees constitutes part of its wholesale distribution revenue[57] Franchised Retail Store Count Changes | Period/Year | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Beginning of period/year | 1,008 | 1,181 | | Additions | 173 | 3 | | Reductions | 0 | 245 | | End of period/year | 1,181 | 939 | Recent Developments and Outlook In the first half of 2025, Shunke Long continued its "one store, one policy" strategy, significantly narrowing losses by optimizing the supply chain, closing inefficient stores, and expanding new customers; the second half will focus on "stabilizing existing business, expanding new business, and improving quality" strategies, optimizing supply chain management, innovating procurement models, enhancing gross profit margins, and accelerating diversified growth drivers and new business formats, including launching large-scale school food delivery projects and transitioning to an integrated brand trading model - In the first half of 2025, Shunke Long continued to implement its "one store, one policy" strategy, achieving positive progress in profit improvement initiatives and significantly narrowing its losses[58] - The supermarket segment significantly improved operational efficiency through supply chain and cost structure optimization; the brand agency business adjusted its distribution layout and expanded its operating model; the group purchasing segment achieved strong growth; and the headquarters segment maintained stable operations through cost control and improved management efficiency[59] - In the second half of the year, the Company will continue to focus on the "stabilizing existing business, expanding new business, and improving quality" strategy, further optimizing supply chain management, innovating procurement models, enhancing gross profit margins, and strengthening operational guidance for adjusted stores[60] - The group purchasing segment will continue to expand its institutional and corporate customer base and actively prepare for the launch of large-scale school food delivery projects; the brand agency business will accelerate its transformation towards an integrated brand trading model[60] Financial Review Revenue for the period decreased by 20.2% year-on-year to RMB 246.0 million, with gross profit margin decreasing by 0.9% to 11.7%; other operating income grew by 63.2%, selling and distribution costs significantly decreased by 35.2%, administrative expenses increased by 16.7%, finance costs slightly decreased by 1.0%, and income tax expense decreased; ultimately, net loss attributable to owners of the Company significantly narrowed by 82.8% to RMB 3.2 million Revenue Revenue for the period was approximately RMB 246.0 million, a year-on-year decrease of 20.2%, mainly due to the optimization and closure or conversion of inefficient retail stores and a reasonable reduction in the scale of distribution agency brands - Revenue for the period was approximately RMB 246.0 million, a 20.2% decrease compared to the same period in 2024[62] - Revenue from retail store business was approximately RMB 188.4 million, a 18.6% decrease year-on-year; revenue from wholesale distribution business was approximately RMB 57.6 million, a 25.1% decrease year-on-year[62] Gross Profit Margin Gross profit margin for the period was 11.7%, a decrease of 0.9% from 12.6% in the same period of 2024 - Gross profit margin for the period was 11.7%, a 0.9% decrease from 12.6% in the same period of 2024[63] Other Operating Income Other operating income for the period was approximately RMB 14.0 million, a year-on-year increase of 63.2%, mainly due to increased gains from early termination of lease contracts and increased income from converted franchised retail stores - Other operating income for the period was approximately RMB 14.0 million, a 63.2% increase compared to the same period in 2024[64] - The increase was mainly due to increased gains from early termination of lease contracts and increased income from converted franchised retail stores[64] Selling and Distribution Costs Selling and distribution costs for the period were approximately RMB 36.5 million, a year-on-year decrease of 35.2%, mainly due to significant reductions in labor and lease costs from optimizing and closing inefficient retail stores, and active cost control by management - Selling and distribution costs for the period were approximately RMB 36.5 million, a 35.2% decrease compared to the same period in 2024[65] - The decrease was mainly due to significant reductions in labor costs and lease costs from optimizing and closing or converting inefficient retail stores, as well as reasonable control over vehicle delivery fees, utilities, and advertising and promotion expenses[65] Administrative Expenses Administrative expenses for the period were approximately RMB 8.0 million, a year-on-year increase of 16.7%, mainly due to reduced lease concessions for retail stores and forfeiture of some early lease termination deposits for optimized and closed retail stores - Administrative expenses for the period were approximately RMB 8.0 million, a 16.7% increase compared to the same period in 2024[66] - The increase was mainly due to reduced lease concessions for retail stores and forfeiture of some early lease termination deposits for optimized and closed retail stores[66] Finance Costs Finance costs for the period were approximately RMB 2.2 million, a slight year-on-year decrease of 1.0%, mainly due to a decrease in unrecognized finance expenses on lease liabilities - Finance costs for the period were approximately RMB 2.2 million, a 1.0% decrease compared to the same period in 2024[67] - The decrease was mainly due to a year-on-year decrease in unrecognized finance expenses on lease liabilities[67] Income Tax Expense Income tax expense for the period was approximately RMB 42 thousand, a decrease of RMB 28 thousand year-on-year, mainly due to a subsidiary's supplementary corporate income tax payment in the prior year - Income tax expense for the period was approximately RMB 42 thousand, a RMB 28 thousand decrease compared to the same period in 2024[68] - The decrease was due to a subsidiary being determined not to be a small low-profit enterprise and making a supplementary corporate income tax payment in the same period of 2024[68] Net Loss Net loss attributable to owners of the Company for the period was approximately RMB 3.2 million, a year-on-year reduction of 82.8%, mainly due to a significant decrease in selling and distribution costs and an increase in other operating income - Net loss attributable to owners of the Company for the period was approximately RMB 3.2 million, an 82.8% reduction compared to the same period in 2024[69] - The decrease in net loss was mainly due to a significant reduction in selling and distribution costs and an increase in other operating income[69] Total Comprehensive Expense Total comprehensive expense attributable to owners of the Group for the period was approximately RMB 3.9 million, a year-on-year decrease of 78.8%, consistent with the reduction in net loss - Total comprehensive expense attributable to owners of the Group for the period was approximately RMB 3.9 million, a 78.8% decrease compared to the same period in 2024[70] - The decrease was mainly due to a significant reduction in selling and distribution costs and an increase in other operating income[70] Capital Expenditure The Group's capital expenditure requirements primarily involve additions to property, plant and equipment for new retail stores and renovation of existing ones; expenditure for the period was approximately RMB 4.1 million - The Group's capital expenditure requirements primarily involve additions to property, plant and equipment for new retail stores and renovation of existing retail stores[71] - The Group's expenditure on property, plant and equipment for the period was approximately RMB 4.1 million[71] Use of Proceeds The net proceeds from the global offering were approximately RMB 155.0 million, with an amended allocation plan to adapt to market changes; as at June 30, 2025, most of the proceeds have been utilized, with the remaining RMB 6.9 million primarily for renovating existing retail stores, expected to be fully utilized by December 31, 2026 - The net proceeds from the global offering were approximately HKD 188.6 million (approximately RMB 155.0 million), with an amended allocation plan to adapt to the slowdown in China's economic growth and the retail market outlook[72][73] Use and Allocation of Net Proceeds | Use | Original Allocation (RMB millions) | Revised Allocation (RMB millions) | Actual Utilized as at June 30, 2025 (RMB millions) | Remaining as at June 30, 2025 (RMB millions) | | :--- | :--- | :--- | :--- | :--- | | Opening new retail stores | 116.9 | 74.4 | 74.4 | – | | Renovating existing retail stores | – | 27.1 | 20.2 | 6.9 | | Repaying bank borrowings | – | 27.9 | 27.9 | – | | Upgrading information systems | 11.2 | 11.2 | 11.2 | – | | Renovating and expanding distribution centers | 13.3 | 0.8 | 0.8 | – | | General working capital | 13.6 | 13.6 | 13.6 | – | | Total | 155.0 | 155.0 | 148.1 | 6.9 | - The Board expects the unutilized balance to be used as disclosed in the Company's announcement dated June 19, 2024, and is expected to be fully utilized by December 31, 2026[74] Liquidity and Financial Resources As at June 30, 2025, the Group had cash and cash equivalents of approximately RMB 25.5 million, net current assets of approximately RMB 16.2 million, and net assets of approximately RMB 78.4 million; unutilized bank facilities amounted to RMB 28.0 million; total trade and other receivables decreased by 9.6%, mainly due to reduced prepayments for goods and recovery of some long-term deposits - As at June 30, 2025, the Group had cash and cash equivalents of approximately RMB 25.5 million (December 31, 2024: RMB 21.2 million)[75] - Net current assets were approximately RMB 16.2 million (December 31, 2024: RMB 20.4 million), and net assets were approximately RMB 78.4 million (December 31, 2024: RMB 82.4 million)[75] - Total trade and bills receivables and deposits paid, prepayments and other receivables decreased by 9.6%, mainly due to reduced prepayments for goods to brand manufacturers and the recovery of some long-term deposits[76] Material Investments The Group held no material investments during the period - The Group held no material investments during the period[77] Material Acquisitions and Disposals The Group did not undertake any material acquisitions or disposals of subsidiaries or associates during the period - The Group did not undertake any material acquisitions or disposals of subsidiaries or associates during the period[78] Indebtedness and Pledges of Assets As at June 30, 2025, the Group had RMB 62.0 million in bank borrowings, all repayable within one year, secured by certain buildings, right-of-use assets, and investment properties - As at June 30, 2025, the Group had bank borrowings of RMB 62.0 million, all repayable within one year[79] - These loans bear fixed annual interest rates of 3.35%-3.45%[79] - Pledged assets include buildings with a carrying value of approximately RMB 10.3 million, right-of-use assets of approximately RMB 18.1 million, and investment properties of approximately RMB 8.2 million[84] Gearing Ratio As at June 30, 2025, the Group's gearing ratio (total borrowings divided by total equity) was approximately 79.1%, an increase from 75.3% as at December 31, 2024 - As at June 30, 2025, the Group's gearing ratio was approximately 79.1% (December 31, 2024: 75.3%)[80] Foreign Exchange Risk Most of the Group's assets, liabilities, and cash flows are denominated in RMB, and management believes that exchange rate fluctuations between RMB and foreign currencies will not have a significant impact on financial position and performance; no hedging activities are intended for the current period or the near future - Most of the Group's assets, liabilities, and cash flows are denominated in RMB, and management believes that exchange rate fluctuations will not have a significant impact[81] - No hedging activities are intended for the current period or the near future[81] Contingent Liabilities As at June 30, 2025, the Group had not provided any guarantees to any third parties and had no material contingent liabilities - As at June 30, 2025, the Group had not provided any guarantees to any third parties and had no material contingent liabilities[82] Employees As at June 30, 2025, the Group had a total of 578 employees; the Company offers competitive salaries and internal training, maintains good employee relations, and has not experienced any significant labor disputes - As at June 30, 2025, the Group had a total of 578 employees[83] - Employee salaries are maintained at a competitive level, with internal training and bonuses provided[83] - No significant impact on operations due to labor disputes occurred during the period, nor were there any significant difficulties in recruiting senior staff[83] Other Information Interim Dividend 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[85] Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[86] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures As at June 30, 2025, Ms. Wang Hui and Ms. Du Jing held 50,000 and 99,100 ordinary shares of Supply and Marketing Grand Bazaar Group Co., Ltd. respectively, each representing less than 0.01% of the total issued shares; no other directors or chief executives had disclosable interests or short positions Directors' Long Positions in Ordinary Shares of Associated Corporations (June 30, 2025) | Director's Name | Name of Associated Corporation | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Shares of Associated Corporation | | :--- | :--- | :--- | :--- | :--- | | Ms. Wang Hui | Supply and Marketing Grand Bazaar Group Co., Ltd. | Beneficial owner | 50,000 | 0.00% | | Ms. Du Jing | Supply and Marketing Grand Bazaar Group Co., Ltd. | Beneficial owner | 99,100 | 0.00% | - Save as disclosed above, no other directors and chief executives had any interests or short positions required to be recorded in the register or otherwise notified to the Company and the Stock Exchange[88] Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares As at June 30, 2025, the All-China Federation of Supply and Marketing Cooperatives and its multi-level controlled corporations (including Supply and Marketing Grand Bazaar International Holdings Limited) collectively held 204,558,317 shares of the Company, representing 70.42% of the total issued shares; additionally, Infini Capital Management held 27,600,000 shares, representing 9.50% Substantial Shareholders' Long Positions in Shares (June 30, 2025) | Name of Substantial Shareholder | Capacity | Number of Shares (Long Position) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | All-China Federation of Supply and Marketing Cooperatives | Interest of controlled corporation | 204,558,317 | 70.42% | | Beijing Zhonghe Nongxin Enterprise Management Consulting Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | China Supply and Marketing Group Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | China Supply and Marketing Commercial Circulation Group Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | Zhonghe Lian Investment Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | New Cooperation Commercial Chain Group Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | Supply and Marketing Grand Bazaar Group Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | Hainan Supply and Marketing Grand Bazaar Holdings Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | Hainan Supply and Marketing Grand Bazaar Supply Chain Network Technology Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | Green Industry (Hong Kong) Co., Ltd. | Interest of controlled corporation | 204,558,317 | 70.42% | | Supply and Marketing Grand Bazaar International Holdings Limited | 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 multi-level equity control, ultimately holding interests in Supply and Marketing Grand Bazaar International Holdings Limited[94] Share Option Scheme The Company's share option scheme was approved on August 19, 2015, to incentivize management and employees; as at the date of this interim report, the maximum number of shares subject to options that may be granted is 28,647,700 shares (approximately 9.86% of issued shares); no options were granted during the period - The share option scheme was approved on August 19, 2015, to incentivize management and employees[92] - The maximum number of shares subject to options that may be granted is 28,647,700 shares (approximately 9.86% of issued shares)[92] - No share options were granted before the end of the period[92] Directors' Securities Transactions The Company has adopted the Model Code as the standard for directors' securities transactions; all directors confirmed compliance with the required standards of the Model Code throughout the period - The Company has adopted the Model Code as its own code of conduct for directors' securities transactions[93] - All directors confirmed compliance with the required standards set out in the Model Code throughout the period[93] Sufficiency of Public Float The Directors confirm that the Company has maintained the public float as required by the Listing Rules throughout the period and up to the date of this interim report - The Directors confirm that the Company has maintained the public float as required by the Listing Rules throughout the period and up to the date of this interim report[95] Corporate Governance Practices The Company has complied with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules during the period, including appointing a Deputy CEO, revising the Nomination Committee's terms of reference to promote board diversity, appointing Nomination Committee members, successfully holding the AGM, and changes in company secretary and principal place of business in Hong Kong - The Company has complied with all code provisions of the Corporate Governance Code throughout the period[96] Senior Management Personnel Arrangements The Company appointed Mr. Bai Tao as Deputy Chief Executive Officer on April 25, 2025, to enhance the management structure, strengthen daily operational management, and improve strategic execution capabilities - On April 25, 2025, the Company appointed Mr. Bai Tao as Deputy Chief Executive Officer[97] - Mr. Bai's extensive experience in the retail industry helps to improve the management structure, strengthen daily operational management, and enhance strategic execution capabilities[97] Amendments to the Terms of Reference of the Nomination Committee On May 23, 2025, the Company revised the Nomination Committee's terms of reference to clarify its composition, operation, and responsibilities, including requiring at least one director of a different gender, aiming to promote board diversity and improve corporate governance structure - On May 23, 2025, the Company revised the terms of reference of the Nomination Committee, further clarifying its composition, operation, and responsibilities[98] - The revisions include requiring the committee to have at least one director of a different gender, aiming to promote board diversity and improve the corporate governance structure[98] Appointment of Members to the Nomination Committee On May 28, 2025, the Company appointed Ms. Wang Hui, Executive Director and Chief Executive Officer, and Mr. Zheng Xueqi, Independent Non-executive Director, as members of the Nomination Committee to ensure gender diversity and strengthen board governance capabilities - On May 28, 2025, the Company appointed Ms. Wang Hui, Executive Director and Chief Executive Officer, and Mr. Zheng Xueqi, Independent Non-executive Director, as members of the Nomination Committee[99] - This aims to ensure gender diversity within the committee and further strengthen board governance capabilities[99] Annual General Meeting and Protection of Shareholders' Rights The Company held its Annual General Meeting on June 6, 2025, where all proposed resolutions were passed with 100% affirmative votes, demonstrating the Company's commitment to safeguarding shareholders' participation in decision-making and maintaining transparency - The Company held its Annual General Meeting on June 6, 2025, with all incumbent directors attending in person or electronically, and votes scrutinized by an independent third party[100] - All proposed resolutions were passed with 100% affirmative votes, fully demonstrating the Company's commitment to safeguarding shareholders' participation in decision-making and maintaining transparency[100] Change of Company Secretary Mr. Qiu Minghao resigned as Company Secretary on June 30, 2025; Ms. Pang Hui, President of Anfu Zhixin Management Limited, was appointed as Company Secretary, authorized representative, and agent for service of process on June 30, 2025, to ensure continuity and professionalism of the company secretarial function - Mr. Qiu Minghao resigned as Company Secretary on June 30, 2025[101] - On June 5, 2025, the Company signed a listed company secretarial service agreement with Anfu Zhixin Management Limited, and on June 30, 2025, appointed Ms. Pang Hui, President of Anfu Zhixin, as Company Secretary, authorized representative, and agent for service of process[101] Change of Principal Place of Business in Hong Kong The Company's principal place of business in Hong Kong has changed to Room 1602, 16/F, Yan Wing Commercial Building, 9 Irving Street, Causeway Bay, Hong Kong, effective June 30, 2025 - The Company's principal place of business in Hong Kong has changed to Room 1602, 16/F, Yan Wing Commercial Building, 9 Irving Street, Causeway Bay, Hong Kong, effective June 30, 2025[102] Continuing Commitments The Company will continue to improve its corporate governance structure, promote diversified development, enhance transparency, and increase decision-making efficiency to ensure stable operations and create long-term value for shareholders - The Company will continue to improve its corporate governance structure, promote diversified development, enhance transparency, and increase decision-making efficiency to ensure stable operations and create long-term value for shareholders[103] Events After the Reporting Period The Board is not aware of any disclosable material events occurring after June 30, 2025, and up to the date of this interim report - The Board is not aware of any disclosable material events occurring after June 30, 2025, and up to the date of this interim report[104] Audit Committee The Company has established an Audit Committee, primarily responsible for providing independent opinions to the Board on financial reporting processes, internal controls, and the effectiveness of risk management systems; the condensed consolidated financial statements for this period, though unaudited, have been reviewed by the Audit Committee; all committee members are independent non-executive directors, with Mr. Zheng Xueqi serving as Chairman - The Company has established an Audit Committee in compliance with the Listing Rules and the Corporate Governance Code[105] - The primary responsibility of the Audit Committee is to provide independent opinions to the Board on the Group's financial reporting processes, internal control procedures, and the effectiveness of its risk management systems[105] - The Group's condensed consolidated financial statements for the six months ended June 30, 2025, although unaudited, have been reviewed by the Audit Committee[105] - The Audit Committee members include Mr. Zheng Xueqi (Chairman), Mr. Gao Jingyuan, and Mr. Wu Kai, all of whom are independent non-executive directors[106]