江苏宏信(02625) - 2025 - 中期业绩

Financial Highlights The company's revenue increased by 16.2% to RMB 771.3 million, but gross profit and profit for the period decreased due to higher costs and increased listing expenses Financial Highlights for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 771,288 | 663,625 | 16.2% | | Gross Profit | 138,879 | 148,860 | -6.7% | | Profit for the Period | 13,516 | 18,421 | -26.6% | | Earnings Per Share (RMB) | 0.07 | 0.11 | -36.4% | - Revenue increased by 16.2% to RMB 771.3 million, primarily driven by increased bulk retail sales, wholesale, and catering services sales[4] - Gross profit decreased by 6.7% year-on-year to RMB 138.9 million, with gross margin declining by 4.4 percentage points to 18.0%, mainly due to reduced high-end liquor sales and increased festive promotions[4] - Profit for the period decreased by 26.6% year-on-year to RMB 13.5 million, primarily impacted by increased listing expenses[4] - The Board resolved not to declare any interim dividend for the reporting period[4] Consolidated Financial Statements This section presents the company's consolidated financial performance and position, including income, balance sheet, and cash flow statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the company's revenue grew by 16.2% to RMB 771.3 million, but higher cost of sales led to a 6.7% decrease in gross profit, and increased listing expenses resulted in a 26.6% decline in profit for the period Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 771,288 | 663,625 | | Cost of Sales | (632,409) | (514,765) | | Gross Profit | 138,879 | 148,860 | | Operating Profit | 32,049 | 38,085 | | Profit Before Tax | 22,844 | 26,709 | | Profit for the Period | 13,516 | 18,421 | | Total Comprehensive Income for the Period | 14,356 | 19,877 | - Cost of sales increased by 22.9% year-on-year, outpacing revenue growth and pressuring gross profit[5] - Operating profit decreased by 15.9% year-on-year, reflecting faster growth in costs and expenses than gross profit[5] Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets and net assets increased, with improved net current assets and liquidity ratio, notably a significant rise in financial assets at fair value through other comprehensive income Key Data from Consolidated Statement of Financial Position | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-current Assets | 431,093 | 399,108 | | Current Assets | 1,212,323 | 1,056,580 | | Current Liabilities | 861,864 | 774,555 | | Net Current Assets | 350,459 | 282,025 | | Net Assets | 662,456 | 540,910 | | Total Equity | 662,456 | 540,910 | - Financial assets at fair value through other comprehensive income increased from RMB 31.7 million at the end of 2024 to RMB 57.8 million as of June 30, 2025[7] - Trade and bills receivables increased from RMB 190.0 million at the end of 2024 to RMB 313.1 million as of June 30, 2025[7] - Bank and other borrowings (current portion) increased from RMB 409.7 million at the end of 2024 to RMB 528.0 million as of June 30, 2025[7] Notes to the Interim Financial Report This section provides detailed explanations and disclosures for the interim financial statements, covering accounting policies, revenue breakdown, expenses, and financial position items General Information The company, established in 2005 and listed on the HKEX Main Board on March 31, 2025, primarily engages in grain and oil wholesale and operates "Hongxinlong" brand supermarkets and convenience stores in central Jiangsu - The company was listed on the Main Board of the Hong Kong Stock Exchange on March 31, 2025[9] - The Group is primarily engaged in grain and oil wholesale business and operates supermarkets and convenience stores under the "Hongxinlong" brand in central Jiangsu[9] Basis of Preparation The interim financial report is prepared in accordance with HKEX Listing Rules and IAS 34, applying the same accounting policies as the 2024 annual financial statements, and remains unaudited - The interim financial report is prepared in accordance with IAS 34 and was authorized for issue on August 28, 2025[10] - The interim financial report is unaudited, but the comparative financial data for 2024 is extracted from the annual financial statements which received an unqualified opinion from the auditor[12] Changes in Accounting Policies The amendment to IAS 21 was applied in this period, but it had no significant impact on the interim results as the Group did not engage in foreign currency non-exchangeable transactions - The Group has applied the amendment to IAS 21, but it had no significant impact on the interim results due to the absence of foreign currency non-exchangeable transactions[13] - No new standards or interpretations not yet effective were applied in this accounting period[14] Revenue and Segment Reporting The Group's revenue primarily derives from goods sales (retail and wholesale), commission income, and catering services sales, operating as a single segment mainly in China, thus no segment or geographical information is presented Disaggregation of Revenue from Contracts with Customers by Major Products | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Retail Business - General Sales | 261,639 | 262,033 | | Retail Business - Bulk Sales | 33,943 | 16,635 | | Wholesale | 441,087 | 355,509 | | Commission Income | 13,758 | 18,710 | | Catering Services Sales | 13,877 | 2,722 | | Rental Income from Operating Leases | 6,984 | 8,016 | | Total Revenue | 771,288 | 663,625 | - The Group has only one operating segment and primarily operates in China, thus no segment or geographical information is presented[18] Other Income and Net Other Gains Other income, mainly from service revenue and government grants, increased year-on-year, while net other gains decreased primarily due to a decline in net foreign exchange gains Details of Other Income | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Service Income | 2,707 | 2,338 | | Government Grants | 508 | 61 | | Dividend Income | 165 | 79 | | Total | 3,380 | 2,478 | Details of Net Other Gains | Gain Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Realized Gains from Structured Deposits and Wealth Management Products | 34 | 152 | | Net Foreign Exchange Gains | 210 | 970 | | Net Loss on Disposal of Property, Plant and Equipment | (2) | (51) | | Others | 174 | (36) | | Total | 416 | 1,035 | Profit Before Tax Profit before tax was influenced by net finance costs, inventory costs, depreciation, impairment losses, listing expenses, and auditor's remuneration, with net finance costs decreasing and listing expenses significantly increasing Net Finance Costs | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | (1,728) | (929) | | Interest Expense on Bank and Other Borrowings | 9,083 | 9,591 | | Interest Expense on Lease Liabilities | 1,850 | 2,714 | | Net Finance Costs | 9,205 | 11,376 | Other Major Expenses | Expense Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of Inventories Recognized as Expense | 624,338 | 509,676 | | Depreciation Expense | 41,818 | 35,536 | | Impairment Losses on Trade and Other Receivables | 2,873 | 4,335 | | Listing Expenses | 12,552 | 7,040 | | Auditor's Remuneration | 1,855 | 1,575 | - Listing expenses increased from RMB 7,040 thousands in 2024 to RMB 12,552 thousands in 2025, significantly impacting profit before tax[22] Income Tax Income tax expense increased year-on-year, primarily due to higher non-deductible listing expenses, with China income tax calculated at applicable corporate income tax rates and Hong Kong profits tax at 16.5% Details of Income Tax Expense | Tax Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Tax - Provision for the Period | 10,662 | 10,450 | | Deferred Tax - Origination and Reversal of Temporary Differences | (1,334) | (2,162) | | Total Income Tax | 9,328 | 8,288 | - The increase in income tax expense was primarily attributable to higher non-deductible listing expenses[59] Earnings Per Share Basic earnings per share decreased to RMB 0.07 from RMB 0.11 in the prior year, with diluted earnings per share being the same as basic earnings per share due to no potential dilutive ordinary shares Earnings Per Share Calculation | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Ordinary Equity Shareholders (RMB thousands) | 12,499 | 18,002 | | Weighted Average Number of Ordinary Shares in Issue (thousands) | 187,466 | 160,685 | | Basic and Diluted Earnings Per Share (RMB) | 0.07 | 0.11 | - The company had no outstanding potential dilutive ordinary shares during the reporting period, thus diluted earnings per share were the same as basic earnings per share[26] Inventories During the reporting period, the reversal of inventory impairment provisions amounted to RMB 1.59 million, a significant increase compared to the prior year Reversal of Inventory Impairment Provisions | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Reversal of Inventory Impairment Provisions | 1,590 | 152 | Trade and Bills Receivables Total trade and bills receivables significantly increased, driven by growth in both trade receivables and bills receivables, with most receivables expected to be recovered within one year Trade and Bills Receivables | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables | 213,841 | 173,007 | | Bills Receivables | 99,286 | 17,000 | | Total | 313,127 | 190,007 | Ageing Analysis of Trade Receivables | Ageing | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 Months | 200,614 | 122,506 | | Over 3 Months but Within 6 Months | 11,980 | 44,062 | | Over 6 Months but Within 9 Months | 1,051 | 3,293 | | Over 9 Months but Within 12 Months | 196 | 3,021 | | Over 12 Months | – | 125 | - The Group endorsed certain bank acceptance bills to suppliers to settle trade payables, which were derecognized, with a maximum exposure to loss of zero (2024: RMB 107,608 thousands)[29] Prepayments, Deposits and Other Receivables Total prepayments, recoverable VAT, and other deposits and receivables increased, with most expected to be recovered or recognized as expenses within one year Prepayments, Deposits and Other Receivables | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Prepayments | 378,670 | 295,909 | | Recoverable VAT | 1,666 | 488 | | Other Deposits and Receivables | 30,067 | 23,824 | | Less: Loss Allowance | (2,168) | (2,168) | | Total | 408,235 | 318,053 | Restricted Deposits and Cash and Cash Equivalents Restricted deposits increased while cash and cash equivalents decreased, with funds remitted out of mainland China subject to foreign exchange control regulations Restricted Deposits | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Pledged for Letters of Credit | 6,100 | 1,600 | Cash and Cash Equivalents | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Bank Balances | 167,054 | 215,959 | | Cash on Hand | 848 | 899 | | Total | 167,902 | 216,858 | - Remittance of funds out of mainland China is subject to foreign exchange control regulations and rules[32] Bank and Other Borrowings Total bank and other borrowings increased, with short-term borrowings constituting the largest portion, and most borrowings maturing within one year Bank and Other Borrowings | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Short-term Bank and Other Borrowings | 527,463 | 409,265 | | Long-term Bank and Other Borrowings | 41,523 | 58,775 | | Total | 569,506 | 468,517 | Maturity Profile of Bank and Other Borrowings | Maturity Period | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 Year or On Demand | 527,959 | 409,688 | | After 1 Year but Within 2 Years | 37,397 | 48,787 | | After 2 Years but Within 5 Years | 4,150 | 10,042 | | Total | 569,506 | 468,517 | Trade and Bills Payables Total trade and bills payables decreased, with most expected to be settled within three months Trade and Bills Payables | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Payables | 83,039 | 110,285 | | Bills Payables | 100 | – | | Total | 83,139 | 110,285 | Ageing Analysis of Trade and Bills Payables | Ageing | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 Months | 63,664 | 89,894 | | 3 to 12 Months | 12,809 | 12,856 | | Over 12 Months | 6,666 | 7,535 | | Total | 83,139 | 110,285 | Other Payables and Accruals Total other payables and accruals increased, primarily driven by growth in other tax payables and other payables Other Payables and Accruals | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Staff-related Costs Payable | 5,982 | 15,878 | | Deposits Received | 14,054 | 12,423 | | Other Tax Payables | 22,542 | 12,169 | | Others | 56,599 | 48,054 | | Total | 99,177 | 88,524 | Capital, Reserves and Dividends Share capital and capital reserves significantly increased due to the issuance of H shares through the initial public offering, with no dividends paid or declared during the reporting period Changes in Share Capital and Capital Reserves | Metric | Number of Ordinary Shares | Share Capital (RMB thousands) | Capital Reserves (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | December 31, 2024 | 160,684,910 | 160,685 | 147,996 | 308,681 | | Issuance of H Shares from IPO | 53,562,000 | 53,562 | 53,628 | 107,190 | | June 30, 2025 | 214,246,910 | 214,247 | 201,624 | 415,871 | - The company issued 53,562,000 H shares with a par value of RMB 1.0 per share through a global offering on March 31, 2025, raising gross proceeds of approximately RMB 123,568 thousands[36] - The company neither paid nor declared any dividends for the six months ended June 30, 2025 and 2024[37] Commitments Authorized and contracted capital commitments significantly increased, reflecting future investment plans Unfulfilled Commitments | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Authorized and Contracted | 15,786 | 1,453 | Significant Related Party Transactions Certain bank and other borrowings of the Group are guaranteed by controlling shareholders and key management personnel Related Party Guarantees | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Guarantees for Bank and Other Borrowings | 328,186 | 327,040 | - Certain financings granted to the Group are guaranteed by Mr. Gao Feng, a controlling shareholder, and his spouse Ms. Leng Yuemei, Mr. Zhang Jiaan, a controlling shareholder, and Ms. Yin Qin, a key management personnel[39] Management Discussion and Analysis This section provides an overview of the company's business, market conditions, and a detailed financial review, including key performance indicators and future strategies Business Review and Outlook The company primarily engages in grain and oil wholesale, supermarket and convenience store retail ("Hongxinlong" brand), and central kitchen catering services, with future plans to strengthen its market position through omnichannel strategies, smart stores, logistics efficiency, informatization, and market share expansion - The company's business covers supermarkets, convenience stores, mall retail, as well as grain and oil wholesale and catering services[40][41][42][43] - Future strategies include enhancing the "offline stores + online platforms" omnichannel layout, preparing for unmanned smart stores, introducing unmanned logistics vehicles, improving informatization, and investing in R&D for new equipment[46] - The company plans to expand market share and the number of retail stores, increase warehousing and processing capabilities by establishing new distribution centers and central kitchens, and strengthen ERP and infrastructure systems to enhance operational efficiency[46] Market and Industry Overview China's economy continues to recover, supporting consumer spending and accelerating omnichannel transformation in retail; while the chain supermarket market declines due to e-commerce, small and medium-sized supermarkets show resilience, and convenience stores maintain strong growth, but department stores face decline - China's economy continued to recover in 2023, with GDP growth of 5.2%, rising per capita disposable income, and online retail accounting for 32.7%[45] - The Chinese chain supermarket market had a CAGR of -1.28% from 2017-2023, projected to moderately recover to 1.43% from 2024-2027[47] - Small and medium-sized supermarkets showed strong growth in Jiangsu Province and Yangzhou City, with an optimistic outlook expected for the coming years[47] - The convenience store market demonstrated strong growth nationwide and in Yangzhou, with continued expansion expected in the future[48] - The industry faces challenges such as intense market competition (especially from e-commerce), changing consumer preferences, and operational cost management[48] Financial Review Revenue grew by 16.2% this period, driven by wholesale, bulk retail sales, and catering services; however, a larger increase in cost of sales, reduced high-end liquor sales, and increased listing expenses led to a decline in both gross profit and profit for the period Revenue Total revenue increased by 16.2% year-on-year to RMB 771.3 million, with wholesale revenue up 24.1%, bulk retail sales up 104.0%, and catering services revenue up 409.8%, while operating lease rental income decreased by 12.9% Year-on-Year Changes in Revenue Breakdown | Revenue Source | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Wholesale | 441.1 | 355.5 | 24.1% | | Retail Operations - General Sales | 261.6 | 262.0 | -0.2% | | Retail Operations - Bulk Sales | 33.9 | 16.6 | 104.0% | | Catering Services Sales | 13.9 | 2.7 | 409.8% | | Operating Lease Rental Income | 7.0 | 8.0 | -12.9% | - Wholesale revenue growth was primarily due to the introduction of new categories of grain and oil and expansion into the northern Jiangsu market[49] - Bulk retail sales growth was mainly due to active expansion of group purchasing business with local enterprises and government agencies[50] - The significant increase in catering services revenue was primarily due to some schools resuming and restarting the catering tender process in the second half of 2024[50] Cost of Sales Cost of sales increased by 22.9% year-on-year to RMB 632.4 million, mainly due to increased costs from wholesale and bulk retail sales Changes in Cost of Sales | Metric | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of Sales | 632.4 | 514.8 | 22.9% | - The increase in cost of sales was primarily attributable to higher wholesale and bulk sales costs in the retail business[51] Gross Profit and Gross Profit Margin Gross profit decreased by 6.7% year-on-year to RMB 138.9 million, with gross margin declining by 4.4 percentage points to 18.0%, mainly due to rising grain and oil costs, reduced high-end liquor sales, and increased festive promotions Changes in Gross Profit and Gross Profit Margin | Metric | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 138.9 | 148.9 | -6.7% | | Gross Profit Margin | 18.0% | 22.4% | -4.4 percentage points | - The decrease in gross profit margin was primarily attributable to a slight increase in grain and oil costs, a decline in high-end liquor sales volume, and increased festive promotional activities[52] Other Income Other income increased by 36.0% year-on-year to RMB 3.4 million, mainly due to higher service revenue and government grants Changes in Other Income | Metric | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 3.4 | 2.5 | 36.0% | - Other income primarily includes service revenue from processing meals for two catering operators in Yangzhou and government grants[53] Net Other Gains Net other gains decreased by 59.6% year-on-year to RMB 0.4 million, mainly due to a reduction in net foreign exchange gains Changes in Net Other Gains | Metric | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net Other Gains | 0.4 | 1.0 | -59.6% | - The decrease in net other gains was primarily due to a reduction in net foreign exchange gains[54] Selling and Distribution Costs Selling and distribution costs decreased by 5.5% year-on-year to RMB 75.1 million, mainly due to reduced staff costs Changes in Selling and Distribution Costs | Metric | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Costs | 75.1 | 79.5 | -5.5% | - The decrease in selling and distribution costs was primarily due to reduced staff costs[55] Administrative and Other Operating Expenses Administrative and other operating expenses increased by 7.1% year-on-year to RMB 32.7 million, mainly due to higher listing expenses, partially offset by reduced staff costs Changes in Administrative and Other Operating Expenses | Metric | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative and Other Operating Expenses | 32.7 | 30.5 | 7.1% | - The increase in administrative and other operating expenses was primarily due to higher listing expenses, partially offset by reduced staff costs[56] Impairment Losses on Trade and Other Receivables Impairment losses on financial assets decreased by RMB 1.5 million year-on-year to RMB 2.9 million, mainly due to a reduction in trade receivables Changes in Impairment Losses | Metric | 2025 (RMB millions) | 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Impairment Losses on Trade and Other Receivables | 2.9 | 4.3 | -1.5 | - The decrease in impairment losses was primarily due to a reduction in trade receivables compared to the prior year[57] Net Finance Costs Net finance costs decreased by RMB 2.2 million year-on-year to RMB 9.2 million, mainly due to increased bank deposit interest income and reduced interest expenses on lease liabilities Changes in Net Finance Costs | Metric | 2025 (RMB millions) | 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Net Finance Costs | 9.2 | 11.4 | -2.2 | - The decrease in net finance costs was primarily due to increased bank deposit interest income and reduced interest expenses on lease liabilities[58] Income Tax Income tax expense increased by 12.1% year-on-year to RMB 9.3 million, primarily due to higher non-deductible listing expenses Changes in Income Tax Expense | Metric | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Income Tax Expense | 9.3 | 8.3 | 12.1% | - The increase in income tax expense was primarily due to higher non-deductible listing expenses[59] Profit for the Period Profit for the period decreased by 26.6% year-on-year to RMB 13.5 million, primarily attributable to increased listing expenses Changes in Profit for the Period | Metric | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 13.5 | 18.4 | -26.6% | - The decrease in profit for the period was primarily due to increased listing expenses[60] Non-IFRS Measures To supplement IFRS, the company presents adjusted net profit and adjusted net profit margin (non-IFRS measures) by adding back listing expenses to provide a fairer assessment of operating performance - Adjusted net profit is defined as profit for the period adjusted by adding back listing expenses, aiming to provide an overall and fair understanding of operating results and financial performance[63][64] Adjusted Net Profit and Adjusted Net Profit Margin | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 13,516 | 18,421 | | Add back: Listing Expenses | 12,552 | 7,040 | | Adjusted Net Profit | 26,068 | 25,461 | | Adjusted Net Profit Margin | 3.4% | 3.8% | Financial Position Shareholders' equity increased from RMB 540.9 million as of June 30, 2024, to RMB 662.5 million as of December 31, 2025, primarily due to the global offering and profit for the period Changes in Shareholders' Equity | Metric | As of December 31, 2025 (RMB millions) | As of June 30, 2024 (RMB millions) | | :--- | :--- | :--- | | Shareholders' Equity | 662.5 | 540.9 | - The increase in shareholders' equity was primarily due to the global offering and profit for the period[65] Liquidity and Financial Resources, Treasury Policy and Capital Structure The Group maintains a sound financial position with an improved current ratio; cash and cash equivalents decreased, and net cash used in operating activities increased. Bank borrowings are RMB-denominated and comply with financial covenants, with no hedging activities undertaken Liquidity and Financial Resources | Metric | As of June 30, 2025 (RMB millions) | As of December 31, 2024 (RMB millions) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 167.9 | 216.9 | | Net Cash Used in Operating Activities | 141.8 | 45.4 | | Total Current Assets | 1,212.3 | 1,056.6 | | Total Current Liabilities | 861.9 | 774.6 | | Current Ratio | 1.41 | 1.36 | - Total long-term bank and other borrowings amounted to RMB 41.5 million, while total short-term bank and other borrowings amounted to RMB 528.0 million[67] - The Group had unutilized bank facilities of approximately RMB 20.1 million and did not engage in any hedging activities for financial instruments[67] - The company's share capital comprises H shares and unlisted shares, with no changes in capital structure since the listing date[68] Capital Expenditure Capital expenditure for the period was RMB 71.3 million, primarily for property, plant and equipment, financial assets, and interests in associates. Funding mainly came from operating cash, with future plans to utilize existing cash, borrowings, and global offering proceeds Capital Expenditure | Metric | For H1 2025 (RMB millions) | | :--- | :--- | | Capital Expenditure | 71.3 | - Capital expenditure primarily included the acquisition of property, plant and equipment, financial assets measured at fair value through other comprehensive income, and interests in associates[69] - The company intends to fund future capital expenditure and long-term investments using existing cash balances, bank and other borrowings, and proceeds from the global offering[69] Pledge of Assets The Group pledged land use rights, plant, and buildings with a total net book value of RMB 56.3 million as collateral for bank and other borrowings amounting to RMB 376.8 million - The Group pledged land use rights with a net book value of RMB 27.6 million and plant and buildings with a net book value of RMB 28.7 million as collateral for bank and other borrowings amounting to RMB 376.8 million[70] Contingent Liabilities As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[71] Share Pledges During the reporting period, controlling shareholders did not pledge their equity interests in shares to provide debt guarantees or support - During the reporting period, controlling shareholders did not pledge their interests in shares to provide debt guarantees or other support for their obligations[72] Gearing Ratio As of June 30, 2025, the Group's gearing ratio was 86.0%, a slight decrease compared to 86.6% as of December 31, 2024 Gearing Ratio | Metric | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio | 86.0% | 86.6% | Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures The Group invested RMB 25.0 million in Haike (18% stake) and HKD 20.0 million (approximately RMB 18.3 million) in Hanhong (40% stake), classified as financial assets at fair value through other comprehensive income and an associate, respectively, with these transactions not constituting notifiable transactions under the Listing Rules - The Group invested RMB 25.0 million in Haike Hongxin Digital Technology (Jiangsu) Co., Ltd. (18% stake), classifying the investment as financial assets at fair value through other comprehensive income[74] - The Group invested HKD 20.0 million (approximately RMB 18.3 million) in Hanhong Holdings Limited (40% stake), classifying it as an associate[74] - Haike is primarily engaged in providing IT-related information services, while Hanhong is primarily engaged in providing business consulting services[74] Future Plans for Material Investments and Capital Assets As of June 30, 2025, the Group had no other plans for material investments and capital assets beyond those disclosed in the prospectus - As of June 30, 2025, the Group had no plans for material investments and capital assets, other than those disclosed in the "Future Plans and Use of Proceeds" section of the prospectus[76] Foreign Currency Fluctuation Risk Most of the Group's assets, liabilities, and cash flows are RMB-denominated, so the depreciation of RMB against HKD had no significant impact on conversion; the company undertook no hedging activities and will continue to monitor foreign currency markets - Most of the Group's assets, liabilities, and cash flows are denominated in RMB, and the depreciation of RMB against HKD had no significant impact on conversion[77] - For the six months ended June 30, 2025, the Group did not engage in any hedging activities and has no intention to do so in the foreseeable future[77] Material Investments and Events During the Reporting Period As of June 30, 2025, the Group had not undertaken any material investments (where the investment value accounted for 5% or more of total assets) - As of June 30, 2025, the Group had not undertaken any material investments (including any investment in investee companies where the value accounted for 5% or more of the Group's total assets as of June 30, 2025)[78] Events After the Reporting Period No other events with a material impact on the Group occurred after the reporting period and up to the date of this announcement, other than those disclosed herein - Other than those disclosed in this announcement, no other events with a material impact on the Group occurred after June 30, 2025, and up to the date of this announcement[79] Corporate Governance and Other Information This section details the company's corporate governance practices, employee policies, dividend declarations, global offering specifics, and compliance with regulatory standards Employees and Remuneration Policy As of June 30, 2025, the company had 1,412 employees, with total employee benefits decreasing year-on-year. The company contributes to social insurance and housing provident funds, despite some underpayment, and focuses on internal training for retention and management development Employee Headcount and Benefits | Metric | As of June 30, 2025 | | :--- | :--- | | Total Employees | 1,412 | | Total Employee Benefits (RMB millions) | 43.7 | | Total Employee Benefits as of June 30, 2024 (RMB millions) | 52.2 | Employee Functional Classification | Function | Headcount | | :--- | :--- | | Management | 13 | | Administration | 104 | | Finance and IT | 42 | | Marketing | 11 | | Procurement | 24 | | Logistics | 69 | | Operations | 1,149 | | Total | 1,412 | - The company had not fully paid social insurance and housing provident fund contributions for all employees, but no administrative actions, fines, or penalties were incurred during the reporting period[84] - The company enhances employee retention through internal training programs and cultivates management candidates for business expansion[86] Corporate Governance The company is committed to maintaining high corporate governance standards and has fully complied with all principles and applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules since its listing date - The company adopted the code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules as its own corporate governance code since its listing date[87] - From the listing date to June 30, 2025, the company has consistently complied with all principles and applicable code provisions contained in Part 2 of the Corporate Governance Code[87] Interim Dividend The Board recommended not to declare an interim dividend for the six months ended June 30, 2025 - The Board recommended not to declare an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[88] Global Offering The company's H shares were listed on the HKEX Main Board on March 31, 2025, with a global offering of 53,562,000 H shares at an offer price of HKD 2.50 per share, and the over-allotment option has not yet been exercised - The company's H shares were listed on the Main Board of the Stock Exchange on March 31, 2025, with a global offering of 53,562,000 H shares[89] - The H shares were issued at an offer price of HKD 2.50 per share, and the over-allotment option has not yet been exercised by the overall coordinator[89] Use of Proceeds from Global Offering The net proceeds from the global offering were approximately HKD 89.04 million, lower than estimated due to higher actual listing expenses. The company adjusted the planned use of net proceeds accordingly and has utilized approximately HKD 21.7 million - The net proceeds from the global offering were approximately HKD 89.04 million, lower than the HKD 92.55 million disclosed in the prospectus, mainly due to higher actual listing expenses (approximately RMB 41.4 million) than estimated[90][91] - As of the date of this announcement, the company has utilized approximately HKD 21.7 million of the net proceeds from the global offering[92] Details of Use of Net Proceeds from Global Offering | Use | Estimated Allocation in Prospectus (HKD millions) | Revised Allocation after Actual Listing Expenses (HKD millions) | Utilized (HKD millions) | Remaining Amount (HKD millions) | | :--- | :--- | :--- | :--- | :--- | | Opening New Retail Stores | 32.5 | 27.5 | 20.7 | 6.8 | | Establishing New Distribution Centers | 43.3 | 36.7 | – | 36.7 | | Establishing New Central Kitchens | 28.1 | 23.9 | – | 23.9 | | Enhancing ERP System and Infrastructure Systems | 1.2 | 1.0 | 1.0 | – | | Total | 105.1 | 89.1 | 21.7 | 67.4 | 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 from the listing date up to the date of this announcement - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities from the listing date up to the date of this announcement[94] Standard Code for Securities Transactions by Directors and Supervisors The company adopted the Standard Code to regulate securities transactions by directors, supervisors, and relevant employees, and all directors and supervisors confirmed strict compliance with its provisions - The company has adopted the Standard Code to regulate all dealings in the company's securities by directors, supervisors, and relevant employees[95] - All directors and supervisors confirmed strict compliance with the required standards set out in the Standard Code from the listing date up to the date of this announcement[95] Audit Committee The Audit Committee, comprising four independent non-executive directors and one non-executive director, reviewed the unaudited interim consolidated results, confirming compliance with accounting principles, standards, and disclosure requirements - The Audit Committee comprises four independent non-executive directors (Mr. Lam Ka Tak, Mr. Zheng Manjun, Mr. Zheng Yu, and Mr. Zhu Bo) and one non-executive director (Ms. Wei Yan)[96] - The Audit Committee reviewed the unaudited interim consolidated results for the six months ended June 30, 2025, and confirmed compliance with applicable accounting principles, standards, and requirements, as well as adequate disclosure[96] Publication of Interim Results and Interim Report The interim results announcement has been published on the HKEX and company websites, and the interim report will be made available to shareholders in due course - The interim results announcement is published on the HKEX website (www.hkexnews.hk) and the company's website (www.hxsupermarket.cn)[97](index=97&type=chunk) Board of Directors As of the announcement date, the Board of Directors includes seven executive directors, one non-executive director, and four independent non-executive directors - The Board of Directors comprises seven executive directors, one non-executive director, and four independent non-executive directors[98]