达芙妮国际(00210) - 2025 - 中期财报

Corporate Information Board of Directors and Committee Composition The company's board and committees saw changes, with Mr. Wong Shun Choi resigning and Ms. Xu Wenguan appointed as an independent non-executive director and committee chair - Independent Non-Executive Director Mr. Wong Shun Choi resigned on June 19, 2025[6][9] - Ms. Xu Wenguan was appointed as an independent non-executive director on June 19, 2025, also serving as Chairman of the Nomination Committee and a member of the Audit and Remuneration Committees[6][7][8][9][10] Company Contact and Operational Details The company disclosed its company secretary, authorized representatives, registered office, principal place of business in Hong Kong, operational headquarters, share registrar, auditor, principal bankers, website, and investor relations contact - Mr. Cheung Chun Hei is the Company Secretary, and Mr. Cheung Chi Kai and Mr. Cheung Chun Hei are the Authorized Representatives[9][10] - The auditor is PricewaterhouseCoopers, and principal bankers include Bank of China (Hong Kong), Wenzhou Bank, China Construction Bank, and MUFG Bank (Hong Kong Branch)[11][12] Financial Highlights Key Financial Performance Indicators For the six months ended June 30, 2025, revenue increased by 17% to RMB 198.3 million, operating profit grew by 24% to RMB 70.5 million, and profit attributable to shareholders rose by 15% to RMB 64.7 million, with basic earnings per share at RMB 0.033 2025 First Half Key Financial Data | Indicator | 2025 First Half (RMB million) | 2024 First Half (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 198.3 | 168.8 | +17% | | Other Income | 27.1 | 24.9 | +9% | | Operating Profit | 70.5 | 56.7 | +24% | | Profit Attributable to Shareholders | 64.7 | 56.1 | +15% | | Operating Profit Margin (%) | 35.6 | 33.6 | +2.0 ppt | | Net Profit Margin (%) | 32.6 | 33.2 | -0.6 ppt | | Basic Earnings Per Share (RMB) | 0.033 | 0.028 | +18% | Key Financial Position Indicators As of June 30, 2025, cash and cash equivalents were RMB 376.6 million, equity attributable to shareholders increased by 3% to RMB 784.2 million, the current ratio improved to 4.4 times, and the net debt-to-equity ratio remained in a net cash position 2025 June 30 Key Financial Position Data | Indicator | 2025 June 30 (RMB million) | 2024 December 31 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 376.6 | 476.2 | -21% | | Equity Attributable to Shareholders | 784.2 | 758.5 | +3% | | Current Ratio (times) | 4.4 | 3.4 | +29% | | Net Debt-to-Equity Ratio (%) | Net Cash | Net Cash | N/A | Management Discussion and Analysis Business Review In the first half of 2025, the global economy faced uncertainty, while China's economy showed resilience with a 5.3% GDP growth, driven by "trade-in" policies and a growing but competitive e-commerce market, prompting the Group to adjust strategies to consolidate "Daphne" and cultivate "Daphne.Lab" for diversified and steady growth - In the first half of 2025, China's GDP grew by 5.3% year-on-year, with total retail sales of consumer goods increasing by 5.0%[18][19][21] - Consumers shifted towards rational consumption, prioritizing value-for-money, quality, and experience, with increased confidence in domestic brands[19][21] - E-commerce market online retail sales grew by 8.5% to RMB 7.43 trillion, but competition intensified, making content-driven platforms mainstream[20][22] - The Group adopted a dual-focus strategy, consolidating the leading position of the "Daphne" brand while actively cultivating the "Daphne.Lab" brand[23][26] The Group's Performance Despite market challenges, the Group achieved steady growth in revenue and operating profit in the first half of 2025 through robust forward-looking strategies and lean supply chain management, with increased basic earnings per share, but the Board does not recommend an interim dividend 2025 First Half Group Performance | Indicator | 2025 First Half (RMB million) | 2024 First Half (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 198.3 | 168.8 | +17% | | Operating Profit | 70.5 | 56.7 | +24% | | Basic Earnings Per Share (RMB) | 0.033 | 0.028 | +18% | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[29][31] Brand Licensing and Distribution Business The "Daphne" brand successfully enhanced its influence and sales through a comprehensive refresh, appointing Song Qian as global ambassador, launching the "Free Rebirth" fashion campaign and "Cloud Soft" series, and expanding into children's shoes and bags, while actively deploying across multiple e-commerce platforms and prudently expanding its offline franchise network, leading to significant growth in licensing fee income and wholesale goods sales - The "Daphne" brand appointed renowned Chinese artist Song Qian as its global brand ambassador and launched the "Free Rebirth" fashion campaign, enhancing brand vitality and resonance with younger consumers[33][34] - The original "Cloud Soft" series achieved significant sales with the endorsement of the ambassador, and the brand continued to expand product categories such as children's shoes and bags[33][34] - The Group consolidated its influence on mainstream e-commerce platforms like "Tmall" and "JD.com" and achieved growth in emerging channels such as "Douyin" and "Pinduoduo," leveraging short videos and influencer collaborations to boost brand exposure[35][37] Brand Licensing and Distribution Business Revenue | Revenue Category | 2025 First Half (RMB million) | 2024 First Half (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Licensing Fee Income | 85.2 | 68.6 | +24% | | Wholesale Sales under Licensing Arrangements | 102.7 | 91.5 | +12% | - As of June 30, 2025, the Group operated 116 physical stores (December 31, 2024: 111 stores) and 1,150 online stores (December 31, 2024: 790 stores), all operated by franchisees[39][42] Retail Business The "Daphne.Lab" brand, with its bold and avant-garde aesthetic, high quality, and originality, gained favor among new-generation consumers and Korean and Chinese artists, driving continuous growth in e-commerce sales, while deepening brand cultural penetration through collaborations with trend artists, K-pop dance community events, and celebrity influencer partnerships, operating 2 directly-managed offline and 6 online stores, and enhancing market competitiveness by optimizing the supply chain - The "Daphne.Lab" brand, with its bold and avant-garde aesthetic, high quality, and originality, gained favor among new-generation consumers and Korean and Chinese artists, significantly enhancing its global influence[40][43] - The brand collaborated with trend artists to launch the "Slightly Flower Lollipop Generation 2" co-branded slippers and organized K-pop dance community events to deepen the brand's K-pop cultural DNA penetration among Gen Z[41][44] - The Group operates 2 directly-managed offline and 6 online "Daphne.Lab" stores, with the Chengdu pop-up store demonstrating ideal single-store operating efficiency[45][47] - The Group continuously optimizes supply chain processes to enhance overall efficiency and ensure strict quality control, responding swiftly to market demands[46][47] Financial Review The Group's total revenue for the first half of 2025 increased by 17% to RMB 198.3 million, driven by growth in licensing fee income, wholesale goods sales, and retail business, with gross profit margin on goods sales improving to 18.5% and operating profit increasing by 24%, while income tax expense significantly rose, leading to a 15% increase in profit attributable to shareholders Revenue and Gross Profit The Group's total revenue for the first half of 2025 increased by 17% year-on-year to RMB 198.3 million, with licensing fee income growing by 24%, wholesale goods sales by 12%, and retail business revenue by 20%, while the gross profit margin on goods sales improved from 17.2% to 18.5%, primarily due to better cost and inventory control 2025 First Half Revenue and Gross Profit | Revenue Category | 2025 First Half (RMB million) | 2024 First Half (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Licensing Fee Income | 85.2 | 68.6 | +24% | | Goods Sales – Wholesale | 102.7 | 91.5 | +12% | | Goods Sales – Retail | 10.4 | 8.7 | +20% | | Total Goods Sales | 113.1 | 100.2 | +13% | | Cost of Sales | (92.2) | (83.0) | +11% | | Gross Profit from Goods Sales | 20.9 | 17.2 | +22% | | Gross Profit Margin from Goods Sales | 18.5% | 17.2% | +1.3 ppt | | Total Revenue | 198.3 | 168.8 | +17% | | Total Gross Profit | 106.1 | 85.8 | +24% | - The increase in licensing fee income was primarily attributable to the overall increase in the quantity of footwear products and other product categories licensed to online franchisees[51][56] - The gross profit margin on goods sales improved to 18.5%, mainly due to better cost and inventory control[54][57] Other Income Other income for the first half of 2025 was approximately RMB 27.1 million, a 9% year-on-year increase, primarily comprising rental income from investment properties, which grew due to the recovery of long-overdue rents from certain tenants 2025 First Half Other Income | Income Category | 2025 First Half (RMB million) | 2024 First Half (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 27.1 | 24.9 | +9% | | Total Rental Income | 20.9 | 19.3 | +8.3% | - The increase in total rental income was mainly due to the recovery of long-overdue rents from certain tenants[55][58] Operating Expenses Operating expenses for the first half of 2025 were approximately RMB 62.7 million, an increase from RMB 54.0 million in the prior period, primarily due to higher marketing and promotion expenses and employee benefit expenses 2025 First Half Operating Expenses | Indicator | 2025 First Half (RMB million) | 2024 First Half (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Expenses | 62.7 | 54.0 | +16.1% | - The overall increase in operating expenses was primarily due to higher marketing and promotion expenses and employee benefit expenses[59][64] Operating Profit Operating profit for the first half of 2025 was approximately RMB 70.5 million, a 24% increase from RMB 56.7 million in the corresponding period of 2024 2025 First Half Operating Profit | Indicator | 2025 First Half (RMB million) | 2024 First Half (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Profit | 70.5 | 56.7 | +24% | Finance Costs Finance costs for the first half of 2025 were approximately RMB 0.1 million, primarily interest on lease liabilities, representing a decrease from the prior period 2025 First Half Finance Costs | Indicator | 2025 First Half (RMB million) | 2024 First Half (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on Lease Liabilities | 0.1 | 0.2 | -50% | Income Tax Expense Income tax expense for the first half of 2025 was approximately RMB 5.8 million, a significant increase from RMB 0.7 million in the prior period, mainly due to the net effect of utilizing deferred tax assets and reversing deferred tax liabilities related to unremitted earnings from the previous year 2025 First Half Income Tax Expense | Indicator | 2025 First Half (RMB million) | 2024 First Half (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Income Tax Expense | 5.8 | 0.7 | +728.6% | - The increase in income tax expense was primarily due to the net effect of tax expenses arising from the utilization of deferred tax assets related to tax losses and the reversal of over-provision for deferred tax liabilities related to Chinese withholding tax on unremitted earnings from the previous year[62][67] Profit Attributable to Shareholders of the Company Profit attributable to shareholders of the Company for the first half of 2025 was approximately RMB 64.7 million, a 15% year-on-year increase, with basic earnings per share at RMB 0.033 2025 First Half Profit Attributable to Shareholders | Indicator | 2025 First Half (RMB million) | 2024 First Half (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Profit Attributable to Shareholders | 64.7 | 56.1 | +15% | | Basic Earnings Per Share (RMB) | 0.033 | 0.028 | +18% | Liquidity, Financial Resources and Capital Structure As of June 30, 2025, the Group's cash and cash equivalents were approximately RMB 376.6 million, a 21% decrease from the end of 2024, primarily due to deposits into time deposits and dividends paid, while the net debt-to-equity ratio remained in a net cash position, the current ratio improved to 4.4 times, and management is confident in the sufficiency of future working capital 2025 First Half Cash and Cash Equivalents Movement | Indicator | 2025 First Half (RMB million) | 2024 First Half (RMB million) | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 38.5 | 45.9 | | Capital Expenditure | (0.2) | (0.4) | | Deposits into Time Deposits with Original Maturity over Three Months | (102.6) | – | | Dividends Paid to Shareholders of the Company | (35.8) | (14.9) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (96.9) | 43.3 | - As of June 30, 2025, the Group's cash and cash equivalents were approximately RMB 376.6 million, a 21% decrease from December 31, 2024[14][69] - The Group maintained a net cash position for its net debt-to-equity ratio, and its current ratio further improved to 4.4 times (December 31, 2024: 3.4 times)[14][76][80] - The Group held approximately RMB 103.0 million in time deposits with original maturity over three months and approximately RMB 30.8 million in certificates of deposit for treasury management to maximize the utilization of surplus cash[70][72][73][75][79] Foreign Exchange Risk Management The Group primarily faces foreign exchange risks related to HKD and USD, managed through regular review of net foreign exchange exposure, but no forward foreign exchange contracts were entered into for hedging in the first half of 2025, and exchange rate fluctuations may impact financial results - The Group primarily faces foreign exchange risks related to HKD and USD[77][81] - The Group manages foreign exchange risk by regularly reviewing its net foreign exchange exposure, but no forward foreign exchange contracts were entered into for hedging during the six months ended June 30, 2025[78][81] Significant Investments and Capital Assets As of June 30, 2025, the Group had no significant investments, future plans for significant investments or capital assets, or pledged or charged assets, with capital expenditure of approximately RMB 0.2 million during the period primarily for leasehold improvements and office equipment, and no significant capital commitments - As of June 30, 2025, the Group had no significant investments or future plans for significant investments and capital assets[82][83][89] - As of June 30, 2025, the Group had no pledged or charged assets[84][90] - During the review period, capital expenditure was approximately RMB 0.2 million, primarily for leasehold improvements and office equipment, with no significant capital commitments[85][91] Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities[86][92] Human Resources As of June 30, 2025, the Group's total number of employees was 113, with employee benefit expenses increasing by 11% year-on-year to RMB 25.6 million, mainly due to an increase in headcount, discretionary performance bonuses, and staff benefits and allowances, as the Group values talent and provides competitive remuneration, share options, bonuses, and various benefits and training - As of June 30, 2025, the Group's total number of employees was 113 (December 31, 2024: 109 employees)[87][93] - Employee benefit expenses were approximately RMB 25.6 million (2024: RMB 23.1 million), an 11% increase year-on-year, primarily due to an increase in headcount, discretionary performance bonuses, and staff benefits and allowances[87][93] - The Group offers remuneration packages based on market conditions and individual capabilities, grants share options and discretionary performance bonuses to eligible employees, and provides retirement plans, medical insurance, staff purchase discounts, and training courses[88][93] Outlook Looking ahead to the second half of 2025, the global economic outlook remains complex, while China's economy maintains solid long-term fundamentals, with the retail industry transitioning towards value-driven consumption, prompting the Group to steadfastly execute its strategy, optimizing product development, category expansion, licensing and distribution, marketing, and supply chain management, and advancing its omnichannel strategy, with plans to launch new products at Paris and Shanghai Fashion Weeks, expand "Daphne" children's shoes and bags, and broaden "Daphne.Lab" presence in non-traditional retail shopping centers for sustainable growth - The Group remains optimistic about the long-term fundamentals of the Chinese retail market and will continue to adopt a diversified business model, integrating brand licensing, direct retail, and wholesale businesses[94][95][97] - The "Daphne" brand plans to launch new "Cloud Soft" series models in collaboration with designer brands during Paris Fashion Week in October, with global ambassadors leading Double Eleven live stream promotions[96][98] - The "Daphne.Lab" brand plans to hold a fashion show and launch a designer brand collaboration series during Shanghai Fashion Week in October to strengthen its avant-garde fashion image[96][98] - The Group will advance its omnichannel strategy, strengthening its online platform presence, and plans to expand "Daphne.Lab" retail points in non-traditional retail shopping centers in first-tier and new first-tier cities in the second half of the year[99][101] Condensed Consolidated Income Statement Income Statement Summary For the six months ended June 30, 2025, the Group recorded revenue of RMB 198,297 thousand, gross profit of RMB 106,113 thousand, operating profit of RMB 70,518 thousand, profit for the period of RMB 64,599 thousand, of which profit attributable to shareholders of the Company was RMB 64,685 thousand Condensed Consolidated Income Statement (For the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 198,297 | 168,796 | | Cost of Sales | (92,184) | (83,027) | | Gross Profit | 106,113 | 85,769 | | Other Income | 27,114 | 24,948 | | Other (Losses)/Gains – Net | (638) | 703 | | Selling and Distribution Expenses | (29,431) | (20,587) | | General and Administrative Expenses | (33,815) | (34,563) | | Reversal of Impairment Loss on Financial Assets | 1,175 | 462 | | Operating Profit | 70,518 | 56,732 | | Finance Costs | (112) | (193) | | Share of Profit of an Associate | 31 | 53 | | Profit Before Income Tax | 70,437 | 56,592 | | Income Tax Expense | (5,838) | (732) | | Profit for the Period | 64,599 | 55,860 | | Profit Attributable to Shareholders of the Company | 64,685 | 56,055 | | Non-controlling Interests | (86) | (195) | | Basic Earnings Per Share (RMB) | 0.033 | 0.028 | | Diluted Earnings Per Share (RMB) | 0.032 | 0.028 | Condensed Consolidated Statement of Comprehensive Income Comprehensive Income Statement Summary For the six months ended June 30, 2025, the Group's profit for the period was RMB 64,599 thousand, with other comprehensive loss of RMB 2,686 thousand due to exchange differences on translation of overseas operations, resulting in a total comprehensive income of RMB 61,913 thousand for the period Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period | 64,599 | 55,860 | | Other Comprehensive (Loss)/Income | | | | Exchange Differences on Translation of Overseas Operations | (2,686) | 525 | | Total Comprehensive Income for the Period | 61,913 | 56,385 | | Attributable to Shareholders of the Company | 61,999 | 56,580 | | Non-controlling Interests | (86) | (195) | Condensed Consolidated Balance Sheet Balance Sheet Summary As of June 30, 2025, the Group's total assets were RMB 919,649 thousand, comprising non-current assets of RMB 384,098 thousand and current assets of RMB 535,551 thousand, with total liabilities of RMB 131,848 thousand, net assets of RMB 787,801 thousand, and equity attributable to shareholders of RMB 784,193 thousand Condensed Consolidated Balance Sheet (As of June 30, 2025) | Indicator | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | | | | Investment Properties | 357,444 | 365,832 | | Property, Plant and Equipment | 3,779 | 4,209 | | Right-of-use Assets | 6,194 | 6,539 | | Interests in an Associate | 1,222 | 1,192 | | Deferred Income Tax Assets | 15,459 | 15,115 | | Current Assets | | | | Inventories | 4,798 | 4,388 | | Trade Receivables | 5,844 | 7,235 | | Deposits, Prepayments and Other Receivables | 14,447 | 20,015 | | Other Financial Assets | 133,819 | 30,477 | | Cash and Cash Equivalents | 376,643 | 476,170 | | Current Liabilities | | | | Trade Payables | 35,443 | 36,891 | | Accrued Charges and Other Payables | 42,350 | 38,212 | | Contract Liabilities | 14,652 | 54,081 | | Lease Liabilities | 3,990 | 3,126 | | Current Income Tax Liabilities | 23,935 | 24,624 | | Non-current Liabilities | | | | Lease Liabilities | 2,721 | 3,854 | | Deferred Income Tax Liabilities | 8,757 | 8,141 | | Net Assets | 787,801 | 762,243 | | Equity Attributable to Shareholders | 784,193 | 758,549 | | Non-controlling Interests | 3,608 | 3,694 | | Total Equity | 787,801 | 762,243 | Condensed Consolidated Statement of Changes in Equity Equity Changes Summary For the six months ended June 30, 2025, equity attributable to shareholders of the Company increased from RMB 758,549 thousand at the beginning of the period to RMB 784,193 thousand, primarily driven by profit for the period of RMB 64,685 thousand, partially offset by dividends paid of RMB 36,355 thousand and a decrease in exchange reserve Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, 2025) | Indicator | Share Capital (RMB thousand) | Reserves (RMB thousand) | Non-controlling Interests (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | As of January 1, 2025 | 175,202 | 583,347 | 3,694 | 762,243 | | Profit/(Loss) for the Period | – | 64,685 | (86) | 64,599 | | Other Comprehensive Loss | – | (2,686) | – | (2,686) | | Total Comprehensive Income/(Loss) | – | 61,999 | (86) | 61,913 | | Dividends Declared or Paid | – | (36,355) | – | (36,355) | | As of June 30, 2025 | 175,202 | 608,991 | 3,608 | 787,801 | Condensed Consolidated Statement of Cash Flows Cash Flow Statement Summary For the six months ended June 30, 2025, the Group's net cash inflow from operating activities was RMB 38,535 thousand, net cash outflow from investing activities was RMB 98,093 thousand, mainly due to deposits into time deposits with original maturity over three months, and net cash outflow from financing activities was RMB 37,376 thousand, primarily for dividends paid, resulting in cash and cash equivalents of RMB 376,643 thousand at period-end, a decrease of RMB 96,934 thousand from the beginning of the period Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, 2025) | Activity Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 38,535 | 45,918 | | Net Cash (Outflow)/Inflow from Investing Activities | (98,093) | 15,427 | | Net Cash Outflow from Financing Activities | (37,376) | (18,055) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (96,934) | 43,290 | | Cash and Cash Equivalents as of January 1 | 476,170 | 366,273 | | Effect of Exchange Rate Changes | (2,593) | 637 | | Cash and Cash Equivalents as of June 30 | 376,643 | 410,200 | - Net cash outflow from investing activities was primarily due to deposits into time deposits with original maturity over three months of approximately RMB 102,629 thousand[115] - Net cash outflow from financing activities was primarily due to dividends paid to shareholders of the Company of approximately RMB 35,791 thousand[115] Notes to the Condensed Consolidated Interim Financial Statements 1 General Information Daphne International Holdings Limited and its subsidiaries are primarily engaged in the licensing, distribution, and sale of footwear products and accessories in Mainland China; the Company is incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange; these financial statements are presented in RMB and have been reviewed by the Audit Committee and approved for issue by the Board of Directors - The Group is primarily engaged in the licensing, distribution, and sale of footwear products and accessories in Mainland China[116][122] - The condensed consolidated interim financial statements are unaudited, have been reviewed by the Audit Committee, and were approved for issue by the Board of Directors on August 20, 2025[118][122] 2 Basis of Preparation These condensed consolidated interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting," applying accounting policies consistent with the 2024 annual financial statements, and the first-time application of amendments to HKAS 21 and HKFRS 1 had no significant impact on operations or financial position - These financial statements are prepared in compliance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[119][123] - The Group first applied amendments to HKAS 21 and HKFRS 1 for the reporting period commencing January 1, 2025, which had no significant impact on its operations or financial position[120][121][123] 3 Revenue and Segment Information The Group is primarily engaged in the licensing, distribution, and sale of footwear products and accessories in Mainland China, with executive directors identified as the chief operating decision-makers, and based on the assessment of overall revenue and profit/loss, the Group has only one reportable segment, with revenue primarily derived from licensing fee income and goods sales - The Group is primarily engaged in the licensing, distribution, and sale of footwear products and accessories in Mainland China and has only one reportable segment[124][125][127] 2025 First Half Revenue Composition | Revenue Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Licensing Fee Income | 85,153 | 68,575 | | Goods Sales | 113,144 | 100,221 | | Total | 198,297 | 168,796 | 4 Other Income Total other income for the first half of 2025 was RMB 27,114 thousand, primarily comprising total rental income of RMB 20,941 thousand and interest income of RMB 5,487 thousand 2025 First Half Other Income Details | Income Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Rental Income | 20,941 | 19,281 | | Interest Income | 5,487 | 4,703 | | Government Grants | 9 | 553 | | Others | 677 | 411 | | Total | 27,114 | 24,948 | 5 Other (Losses)/Gains – Net Other (losses)/gains – net for the first half of 2025 was RMB (638) thousand, primarily including fair value gains on financial assets at fair value through profit or loss of RMB 230 thousand and net exchange losses of RMB (874) thousand 2025 First Half Other (Losses)/Gains – Net Details | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Fair Value Gains on Financial Assets at Fair Value Through Profit or Loss | 230 | 158 | | Gain on Disposal of Property, Plant and Equipment | 6 | – | | Net Exchange (Losses)/Gains | (874) | 545 | | Total | (638) | 703 | 6 Operating Profit Operating profit for the first half of 2025 was stated after deducting various expenses, including cost of inventories sold of RMB 92,184 thousand, employee benefit expenses of RMB 25,613 thousand, and marketing and promotion expenses of RMB 11,117 thousand 2025 First Half Operating Profit Deductions | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Auditor's Remuneration | 1,003 | 1,083 | | Cost of Inventories Sold | 92,184 | 83,027 | | Depreciation of Investment Properties | 8,388 | 8,405 | | Depreciation of Property, Plant and Equipment | 675 | 520 | | Depreciation of Right-of-use Assets | 1,551 | 2,149 | | Employee Benefit Expenses | 25,613 | 23,129 | | Marketing and Promotion Expenses | 11,117 | 5,241 | 7 Finance Costs Finance costs for the first half of 2025 amounted to RMB 112 thousand, entirely comprising interest on lease liabilities 2025 First Half Finance Costs Details | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on Lease Liabilities | 112 | 193 | 8 Income Tax Expense Income tax expense for the first half of 2025 was RMB 5,838 thousand, comprising current income tax of RMB 660 thousand and deferred income tax of RMB 5,178 thousand, recognized based on management's estimate of the weighted average annual effective income tax rate for the entire financial year 2025 First Half Income Tax Expense Details | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Income Tax – Mainland China | 660 | 732 | | Deferred Income Tax | 5,178 | – | | Total | 5,838 | 732 | 9 Earnings Per Share Basic earnings per share for the first half of 2025 was RMB 0.033, and diluted earnings per share was RMB 0.032, with the dilutive effect primarily stemming from the exercise of 49,621,345 share options 2025 First Half Earnings Per Share Calculation | Indicator | 2025 (Number of Shares) | 2024 (Number of Shares) | | :--- | :--- | :--- | | Weighted Average Number of Ordinary Shares in Issue | 1,978,598,429 | 1,978,598,429 | | Effect of Share Options Exercised | 49,621,345 | – | | Weighted Average Number of Shares Adjusted for Dilutive Effect | 2,028,219,774 | 1,978,598,429 | - For the six months ended June 30, 2025, 11,250,000 share options had no dilutive effect as their exercise price was higher than the average market price and were not included in the diluted earnings per share calculation[145][148] 10 Dividends For the first half of 2025, a final dividend of HKD 0.02 per share for the year ended December 31, 2024, totaling RMB 36,355 thousand, was declared or paid, and the Board does not recommend an interim dividend for the six months ended June 30, 2025 2025 First Half Dividend Payment | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Final Dividend Declared or Paid | 36,355 | 17,934 | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[150] 11 Investment Properties As of June 30, 2025, the net book value of investment properties was RMB 357,444 thousand, with depreciation of RMB 8,388 thousand during the period Investment Properties Net Book Value | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Book Value as of January 1 | 365,832 | 394,464 | | Depreciation | (8,388) | (8,405) | | Net Book Value as of June 30 | 357,444 | 386,059 | 12 Property, Plant and Equipment As of June 30, 2025, the net book value of property, plant and equipment was RMB 3,779 thousand, with additions of RMB 245 thousand and depreciation of RMB 675 thousand during the period Property, Plant and Equipment Net Book Value Movement | Item | Leasehold Improvements (RMB thousand) | Furniture, Fixtures and Equipment (RMB thousand) | Motor Vehicles (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Net Book Value as of January 1, 2025 | 2,664 | 977 | 568 | 4,209 | | Additions | 160 | 85 | – | 245 | | Depreciation | (500) | (94) | (81) | (675) | | Net Book Value as of June 30, 2025 | 2,324 | 968 | 487 | 3,779 | 13 Trade Receivables As of June 30, 2025, net trade receivables amounted to RMB 5,844 thousand, after deducting a loss allowance of RMB 8,283 thousand, with the aging analysis indicating an increase in receivables over 60 days Trade Receivables Net Amount and Aging Analysis | Item | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 14,127 | 16,636 | | Less: Loss Allowance | (8,283) | (9,401) | | Trade Receivables – Net | 5,844 | 7,235 | | Aging Analysis by Invoice Date | | | | 0 to 30 Days | 2,794 | 5,433 | | 31 to 60 Days | 957 | 1,251 | | Over 60 Days | 2,093 | 551 | - The Group generally grants its trade customers a credit period of 30 to 60 days[159] 14 Deposits, Prepayments and Other Receivables As of June 30, 2025, total deposits, prepayments, and other receivables amounted to RMB 14,447 thousand, primarily including recoverable value-added tax of RMB 9,518 thousand Deposits, Prepayments and Other Receivables Details | Item | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | Recoverable Value-Added Tax (Net of Impairment Loss) | 9,518 | 13,561 | | Deposits Paid | 2,059 | 3,162 | | Prepayments | 1,837 | 1,883 | | Rental Receivables | 3 | 248 | | Others | 1,030 | 1,161 | | Total | 14,447 | 20,015 | 15 Other Financial Assets As of June 30, 2025, total other financial assets amounted to RMB 133,819 thousand, including certificates of deposit at fair value through profit or loss of RMB 20,707 thousand, and certificates of deposit measured at amortized cost of RMB 10,082 thousand and time deposits with original maturity over three months of RMB 103,030 thousand, primarily used for treasury management to achieve higher returns Other Financial Assets Details | Item | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | Financial Assets at Fair Value Through Profit or Loss – Certificates of Deposit | 20,707 | 20,477 | | Financial Assets Measured at Amortized Cost – Certificates of Deposit | 10,082 | 10,000 | | Financial Assets Measured at Amortized Cost – Time Deposits with Original Maturity over Three Months | 103,030 | – | | Total | 133,819 | 30,477 | - Certificates of deposit at fair value through profit or loss are tradable at any time before maturity and are classified as current assets[167] - Certificates of deposit measured at amortized cost are not tradable or redeemable before maturity[167] - As of June 30, 2025, the fair value of certificates of deposit was determined using observable market data and classified as Level 2 financial assets[175][180] 16 Trade Payables As of June 30, 2025, total trade payables amounted to RMB 35,443 thousand, with the carrying amount being the same as the fair value due to their short-term nature, and the aging analysis showing the highest proportion of payables within 0 to 30 days Trade Payables Aging Analysis | Aging | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 Days | 33,074 | 34,729 | | 31 to 60 Days | 278 | 43 | | Over 60 Days | 2,091 | 2,119 | | Total | 35,443 | 36,891 | 17 Accrued Charges and Other Payables As of June 30, 2025, total accrued charges and other payables amounted to RMB 42,350 thousand, primarily including deposits received of RMB 13,251 thousand and accrued employee benefit expenses of RMB 11,849 thousand Accrued Charges and Other Payables Details | Item | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | Deposits Received | 13,251 | 11,984 | | Accrued Employee Benefit Expenses | 11,849 | 6,748 | | Accrued Charges | 8,540 | 10,203 | | Advances Received | 5,645 | 5,267 | | Other Taxes Payable | 1,873 | 2,598 | | Others | 1,192 | 1,412 | | Total | 42,350 | 38,212 | 18 Share Capital As of June 30, 2025, the Company's authorized share capital was 10,000,000 thousand shares, with issued and fully paid share capital of 1,978,599 thousand shares, amounting to RMB 175,202 thousand, and no changes in share capital occurred during the period Share Capital Composition | Item | 2025 (Thousand Shares) | 2025 (HKD thousand) | 2024 (Thousand Shares) | 2024 (HKD thousand) | | :--- | :--- | :--- | :--- | :--- | | Authorized Ordinary Shares of HKD 0.10 Each | 10,000,000 | 1,000,000 | 10,000,000 | 1,000,000 | | Issued and Fully Paid Ordinary Shares of HKD 0.10 Each | 1,978,599 | 175,202 | 1,978,599 | 175,202 | - There were no changes in the Company's share capital during the six months ended June 30, 2025[185] 19 Reserves As of June 30, 2025, the Group's total reserves amounted to RMB 608,991 thousand, an increase from the beginning of the period, with profit for the period of RMB 64,685 thousand increasing retained earnings, but partially offset by dividends paid of RMB 36,355 thousand and a decrease in exchange reserve Reserves Movement Summary | Item | Share Premium (RMB thousand) | Capital Reserve (RMB thousand) | Merger Reserve (RMB thousand) | Share-Based Payment Reserve (RMB thousand) | Exchange Reserve (RMB thousand) | Statutory Reserve (RMB thousand) | Retained Earnings (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | As of January 1, 2025 | 128,943 | 2,554 | 347 | 8,504 | (39,367) | 150,612 | 331,754 | 583,347 | | Profit for the Period | – | – | – | – | – | – | 64,685 | 64,685 | | Other Comprehensive Loss | – | – | – | – | (2,686) | – | – | (2,686) | | Dividends Declared or Paid | – | – | – | – | – | – | (36,355) | (36,355) | | As of June 30, 2025 | 128,943 | 2,554 | 347 | 8,504 | (42,053) | 150,612 | 360,084 | 608,991 | 20 Share-Based Payment Transactions As of June 30, 2025, a total of 129,350,000 share options remained unexercised under the 2013 Share Option Scheme, with a weighted average exercise price of HKD 0.24, and no share options were granted, cancelled, exercised, or lapsed during the period, nor were any share-based payment expenses incurred 2013 Share Option Scheme Movement | Item | 2025 Weighted Average Exercise Price (HKD) | 2025 Number of Share Options (Thousand Shares) | 2024 Weighted Average Exercise Price (HKD) | 2024 Number of Share Options (Thousand Shares) | | :--- | :--- | :--- | :--- | :--- | | As of January 1 | 0.24 | 129,350 | 0.25 | 129,450 | | Lapsed During the Period | – | – | 4.50 | (100) | | As of June 30 | 0.24 | 129,350 | 0.24 | 129,350 | | Exercisable as of June 30 | 0.24 | 129,350 | 0.26 | 93,920 | - During the six months ended June 30, 2025, no share options were granted, cancelled, exercised, or lapsed, and no share-based payment expenses were incurred as of June 30, 2025[191] 21 Events After the Reporting Period From June 30, 2025, until the approval date of these condensed consolidated interim financial statements, the Directors were not aware of any significant events that would materially affect the Group - From June 30, 2025, until the approval date of these condensed consolidated interim financial statements, the Directors were not aware of any significant events that would materially affect the Group[192] 22 Related Party Transactions The Group had no significant transactions with related companies in the first half of 2025, and total key management personnel compensation increased year-on-year to RMB 6,543 thousand - The Group had no significant transactions with related companies during the six months ended June 30, 2025[196] 2025 First Half Key Management Personnel Compensation | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries, Allowances and Bonuses | 6,437 | 4,006 | | Retirement Benefit Costs | 106 | 33 | | Share-Based Payment Expenses | – | 225 | | Total | 6,543 | 4,264 | Other Information Purchase, Sale or Redemption of the Company's Shares During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares[197][202] Material Acquisitions and Disposals of Subsidiaries, Associates or Joint Ventures During the six months ended June 30, 2025, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the six months ended June 30, 2025, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[198][203] Securities Transactions by Directors The Company's Directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the six months ended June 30, 2025, and the Company was not aware of any non-compliance by relevant senior officers and employees - All Directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the six months ended June 30, 2025[199][204] - The Company was not aware of any non-compliance with the Model Code by relevant senior officers and employees[200][204] Interests of Directors and Chief Executive As of June 30, 2025, several Directors and the Chief Executive held long positions in the Company's shares and underlying shares, primarily through share options, with Mr. Wang Jungang holding 51,800,000 underlying shares, representing 2.62% of the total issued shares Directors' and Chief Executive's Long Positions in the Company's Shares and Underlying Shares | Director Name | Capacity | Number of Shares Held | Number of Underlying Shares | Total Interests | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Cheung Chi Kai | Personal Interest | – | 23,200,000 | 23,200,000 | 1.17 | | Mr. Cheung Chi Kiu | Personal Interest | – | 20,200,000 | 20,200,000 | 1.02 | | Mr. Wang Jungang | Personal Interest | – | 51,800,000 | 51,800,000 | 2.62 | | Ms. Cheung Yuen Huen | Personal and Spouse's Interest | 3,600,000 | 18,700,000 | 22,300,000 | 1.13 | - Interests in underlying shares refer to interests in the Company's underlying shares involved in share options granted to Directors[208][210] Interests of Substantial Shareholders As of June 30, 2025, the Company was notified that several substantial shareholders held 5% or more interests in the Company's issued share capital, with Lucky Earn International Ltd. holding 26.66%, Lemon Water Limited holding 10.04%, and BIDIBI Limited holding 5.09% Substantial Shareholders' Long Positions in the Company's Shares and Underlying Shares | Shareholder Name | Capacity | Total Interests | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Lucky Earn International Ltd. | Beneficial Owner | 527,442,915 | 26.66 | | Lemon Water Limited | Beneficial Owner | 198,719,493 | 10.04 | | Mr. Wan Liujun | Interest in Controlled Corporation | 198,719,493 | 10.04 | | BIDIBI Limited | Beneficial Owner | 100,701,535 | 5.09 | | Mr. Yu Zhongyin | Interest in Controlled Corporation | 100,701,535 | 5.09 | | Mr. Yu Zhongsu | Interest in Controlled Corporation | 100,701,535 | 5.09 | | Mr. Liu Haibo | Beneficial Owner | 99,408,000 | 5.02 | - Lucky Earn International Ltd. is beneficially owned by Mr. Cheung Chi Kai (Chairman and Executive Director), Mr. Cheung Chi Kiu (Executive Director and Chief Executive Officer), Ms. Cheung Yuen Huen (Executive Director), and her elder sister, each holding 26%, 26%, 24%, and 24% respectively[215][216] Share Option Schemes The Company terminated the 2013 Share Option Scheme and adopted a new 2022 Share Option Scheme on May 25, 2022, aimed at incentivizing eligible participants, with the total number of shares under the 2022 Scheme capped at 10% of issued shares and a 1% limit for any single participant within 12 months; as of June 30, 2025, 129,350,000 share options remained unexercised under the 2013 Scheme, while no share options were granted or exercised under the 2022 Scheme - The Company terminated the 2013 Share Option Scheme and adopted a new 2022 Share Option Scheme on May 25, 2022, with a validity period of ten years[218][220][224] - The 2022 Scheme aims to grant share options to full-time or part-time employees, officers, or Directors of the Group as incentives or rewards[221][224] - Under the 2022 Scheme, the total number of share options available for grant is 181,405,662 shares, representing approximately 9.17% of the Company's issued shares[226][229] - As of June 30, 2025, a total of 129,350,000 share options granted under the 2013 Scheme remained unexercised[235][237] Changes in Directors' Information Since the date of the 2024 Annual Report, Independent Non-Executive Director Mr. Wong Shun Choi resigned, and Ms. Xu Wenguan was appointed as an Independent Non-Executive Director and Chairman of the Nomination Committee, also serving as a member of the Audit Committee and Remuneration Committee - Effective June 19, 2025, Mr. Wong Shun Choi resigned as an independent non-executive director, and Ms. Xu Wenguan was appointed as an independent non-executive director and Chairman of the Nomination Committee, also serving as a member of the Audit Committee and Remuneration Committee[242][247] Compliance with Corporate Governance Code For the six months ended June 30, 2025, the Company complied with all applicable code provisions of the Corporate Governance Code and will continue to strengthen its corporate governance practices - For the six months ended June 30, 2025, the Company complied with all applicable code provisions contained in the Corporate Governance Code[243][248] Sufficiency of Public Float For the six months ended June 30, 2025, and up to the date of this report, the Company maintained a sufficient public float, representing more than 25% of the Company's total issued share capital, in accordance with the Listing Rules - For the six months ended June 30, 2025, and up to the date of this report, the Company maintained a sufficient public float, representing more than 25% of the Company's total issued share capital[245][249] Review of the Condensed Consolidated Interim Financial Statements The Audit Committee reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, and deemed them prepared in accordance with applicable accounting standards - The Audit Committee reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, and considered them prepared in accordance with applicable accounting standards[246][250]