Financial Performance - Revenue for the six months ended June 30, 2025, was RMB 67.3 million, a decrease of 18.2% compared to RMB 82.3 million in the same period of 2024[2] - Gross profit for the same period was RMB 35.8 million, down 28.0% from RMB 49.7 million year-on-year[2] - Operating loss increased by 5.1% to RMB 51.3 million, compared to RMB 48.8 million in the previous year[2] - The gross profit margin decreased by 7.2 percentage points to 53.2% from 60.4%[2] - Basic loss per share was RMB (1.34), an increase of 3.9% from RMB (1.29) in the prior year[3] - The company reported a net loss of RMB 46.1 million for the period, compared to RMB 42.7 million in the same period last year[4] - The group reported a pre-tax loss of RMB 46,063,000 for the six months ended June 30, 2025, compared to a loss of RMB 42,396,000 for the same period in 2024[32][33] - The company reported a pre-tax loss of RMB 46.2 million in 2025, compared to a pre-tax loss of RMB 42.7 million in 2024[58] - The net loss attributable to equity holders increased from RMB 42.4 million in 2024 to RMB 46.1 million in 2025, an increase of approximately 8.7%[59] Assets and Liabilities - Total assets less current liabilities amounted to RMB 955.4 million, a decrease from RMB 982.0 million as of December 31, 2024[5] - Total assets as of June 30, 2025, amounted to RMB 1,149,019,000, reflecting a decrease from RMB 1,290,705,000 as of June 30, 2024[18] - The company’s total liabilities as of June 30, 2025, were RMB 202,477,000, a decrease from RMB 259,608,000 as of June 30, 2024[18] - Non-current assets decreased to RMB 388.5 million from RMB 433.6 million as of December 31, 2024[5] - Current assets net value increased from RMB 548.4 million at the end of 2024 to RMB 566.9 million by mid-2025[63] Cash Flow - Cash and cash equivalents increased to RMB 176.3 million from RMB 100.8 million at the end of 2024[5] - Cash and cash equivalents rose from RMB 333.4 million at the end of 2024 to RMB 385.7 million by mid-2025[64] - Net cash flow from operating activities decreased from RMB 1.2 million in the six months ended June 30, 2024, to a cash outflow of RMB 3.0 million in the current period, primarily due to changes in working capital[66] - Net cash flow from investing activities amounted to RMB 74.8 million, driven by proceeds from the sale of equity investments totaling RMB 45.3 million and withdrawals from short-term deposits of RMB 23.4 million[67] - Net cash flow used in financing activities was RMB 0.9 million, mainly due to principal payments on lease liabilities of RMB 2.8 million[68] Revenue Breakdown - Revenue from customer contracts for the six months ended June 30, 2025, was RMB 67,316,000, a decrease of 18.2% compared to RMB 82,264,000 for the same period in 2024[22][23] - Revenue from self-operated retail points decreased from RMB 66.4 million to RMB 53.2 million, a decline of about 19.9%, accounting for approximately 79.0% of total revenue[45] - Revenue from sales to third-party retailers increased from RMB 4.0 million to RMB 5.5 million, an increase of approximately 37.5%, representing about 8.2% of total revenue[45] - Online sales revenue decreased from RMB 11.9 million to RMB 8.6 million, a decline of approximately 27.7%, accounting for about 12.8% of total revenue[46] - Revenue from proprietary brands fell from RMB 56.1 million in 2024 to RMB 50.3 million in 2025, a decline of approximately 10.3%, while the percentage of total revenue increased from 68.2% to 74.7%[49] Expenses and Costs - The cost of goods sold for the six months ended June 30, 2025, was RMB 17,414,000, an increase of 12.6% from RMB 15,461,000 in 2024[27] - Other income for the six months ended June 30, 2025, totaled RMB 11,128,000, down 22.8% from RMB 14,287,000 in the prior year[25] - Other income and gains fell from RMB 14.3 million in 2024 to RMB 11.1 million in 2025, a decrease of about 22.4%[53] - Administrative expenses decreased from RMB 27.6 million in 2024 to RMB 24.0 million in 2025, a decline of approximately 13.0%[56] Inventory and Receivables - Inventory as of June 30, 2025, was RMB 81,935,000, a decrease of 15.3% from RMB 96,707,000 as of December 31, 2024[34] - Accounts receivable decreased from RMB 28,182 thousand as of December 31, 2024, to RMB 18,292 thousand as of June 30, 2025, representing a decline of approximately 35.2%[35] - The impairment loss on accounts receivable decreased from RMB 11,150 thousand as of December 31, 2024, to RMB 8,656 thousand as of June 30, 2025, a reduction of about 22.4%[37] Operational Focus and Strategy - The company continues to focus on its core business in apparel design, production, marketing, and sales, with no significant changes in operations during the reporting period[7] - The company has established a credit control department to minimize credit risk associated with accounts receivable[35] - The company continues to expand its digital marketing efforts, including the establishment of a digital marketing department and the use of AI-generated content to enhance marketing efficiency[76] Investments and Partnerships - Guangdong Junrui invested a total of RMB 52 million in a partnership, with contributions of RMB 50 million from Guangdong Junrui, RMB 1 million from Guangdong Yida, and RMB 1 million from Zhuhai Xinpao[81] - The 2024 partnership will focus on investing in sectors such as new generation information technology, new energy, and biomedicine, aiming to diversify the company's business and revenue sources[83] - In April 2025, the company sold a total of 6,142,839 shares of Guangdong Shaoneng Group Co., Ltd. for approximately RMB 43.88 million[84] - The company plans to invest RMB 10 million in a technology company focused on developing chemical materials, with potential applications in functional clothing[85] Employee and Corporate Governance - The total employee cost for the reporting period was RMB 92 million, compared to RMB 153 million for the six months ending June 30, 2024[87] - The board does not recommend any interim dividend for the reporting period[90] - The company expresses gratitude to employees for their hard work and loyalty during challenging times[98] - The board of directors acknowledges the continuous support from shareholders, customers, suppliers, and business partners[99] - The executive directors include Mr. Zhang Yongli, Mr. Sun Ruwei, and Ms. Huang Xiaoyun, with non-executive and independent directors listed[100]
汇成国际控股(01146) - 2025 - 中期业绩