Financial Performance - Revenue decreased by 4.2% to RMB617.8 million compared to RMB644.6 million in 2024[7] - Loss attributable to owners of the Company amounted to RMB3.7 million, a significant decline from a profit of RMB41.7 million in 2024[7] - Whole store sales proceeds slightly decreased by 0.4% to RMB2,745.2 million, primarily due to a 13.5% drop in sales at Suzhou Jiuguang[21] - Gross profit fell by 9.5% to RMB327.8 million, with gross profit margin decreasing by 3.1 percentage points to approximately 53.1%[22] - Adjusted EBITDA decreased by 11.0% to RMB175.4 million from RMB197.1 million in the first half of 2024, primarily due to declines in sales and gross profit[40][41]. - For the six months ended June 30, 2025, profit before taxation decreased by 28.7% to RMB 117.0 million from RMB 164.2 million in the same period of 2024[43] - Profit for the period was RMB 72,076,000, representing a decline of 44.9% compared to RMB 130,916,000 in the prior year[137] - Total comprehensive income for the period was RMB 72,035,000, down from RMB 130,919,000 in the same period last year[137] Cost Management - Selling and distribution costs decreased by 7.2% to RMB268.6 million, representing 19.2% of total sales proceeds, down from 20.0% in the same period of 2024[28][34]. - General administrative expenses increased by 8.4% year-on-year to RMB128.9 million, primarily due to a one-off compensation payment of RMB9.6 million[29][35]. - Staff costs, excluding directors' remuneration, decreased by 7.5% to RMB98.7 million, with total full-time staff reduced to 1,056 from 1,104[30][36]. - Other income, gains, and losses decreased by 12.7% to RMB88.6 million, primarily due to an exchange loss of approximately RMB12.3 million[31][37]. - Total finance costs decreased by 12.0% to RMB82.2 million, with bank loan interest falling to RMB48.6 million due to a reduction in the Loan Prime Rate[33][39]. Market and Economic Context - China's GDP expanded by approximately 5.3% year on year in the first half of 2025, indicating resilience in the economy[15]. - Total retail sales of consumer goods in China reached RMB24.55 trillion in the first half of 2025, a year-on-year increase of approximately 5%[16]. - The Chinese government is maintaining a moderately accommodative monetary policy to stimulate consumption and investment growth amid economic challenges[78]. - The retail landscape is shifting towards rational consumption trends and service-oriented spending, prompting the Group to innovate and enhance customer experiences[79]. Strategic Initiatives - The Group is enhancing its membership system and accelerating digital transformation to adapt to changing consumer preferences[17]. - The Group executed innovative marketing campaigns and upgraded the shopping environment to attract more customers[20]. - The Group's strategy includes enriching merchandise categories and optimizing tenant mix to enhance consumer shopping satisfaction and address evolving market needs[54]. - The Group aims to leverage data-driven and AI technologies to deepen personalized marketing and achieve seamless omnichannel integration[84]. - The Group is committed to promoting green consumption and sustainability, collaborating with the government for initiatives like "zero-waste shopping malls"[85]. Operational Insights - Average concessionaire rate decreased to 18.8% from 19.3% in the first half of 2024 due to higher discounts offered to customers[22]. - The Group launched the Jiuguang AI Smart Service feature to enhance online member interactions and incentivize physical store visits[55]. - Shanghai Jiuguang Center's total store sales increased by approximately 8.6% to RMB 911.2 million, while total revenue decreased by about 2.0% year-on-year to RMB 160.7 million due to higher sales discounts and reduced rental income[60][65]. - Average daily footfall at Shanghai Jiuguang Center declined by 1.3% to approximately 33,500 visitors, while the average ticket size decreased from RMB 181 to RMB 175, despite a 10.6 percentage point increase in the stay-and-buy ratio to 85.9%[60][65]. Investment and Financing - As of June 30, 2025, the Group's net debt increased by 28.7% to approximately RMB 253.3 million from RMB 196.8 million as of December 31, 2024[45]. - Cash and bank balances, bank deposits, and structured bank deposits amounted to approximately RMB 2,945.4 million, slightly down from RMB 2,953.3 million at the end of 2024[44]. - The Group has pledged assets in China with a carrying amount of approximately RMB 3,445 million for securing a bank loan facility of RMB 3,300 million[47]. - The Group is focused on increasing rental income from the leasing of JGC's twin office towers to generate steady cash flow[93]. Shareholder Information - No interim dividend has been declared by the Board[7]. - As of June 30, 2025, Mr. Lau Luen Hung, Thomas holds 252,051,460 shares, representing 17.21% of the issued shares, and has interests in 844,988,832 shares through controlled corporations[102]. - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the previous year[113]. Legal and Compliance - The Company complied with the Corporate Governance Code during the six months ended June 30, 2025, except for the roles of Chairman and Chief Executive Officer not being segregated[115]. - Legal actions have been initiated by Beiren Group to recover outstanding trade receivables from debtors, which have defaulted since 2019[192]. - The likelihood of recoverability of Trade Receivables is considered extremely low by external legal counsel[200].
利福中国(02136) - 2025 - 中期财报