中生联合(03332) - 2025 - 中期财报

Corporate Information This section outlines the company's governance structure, including directors, committees, and key contact information Directors and Committees This section lists the company's executive and independent non-executive directors, along with the composition of its audit, remuneration, nomination, and strategy and development committees - Executive Directors include Mr. Gui Pinghu (Chairman), Ms. Zhang Yuan (CEO), and Ms. Zhu Feifei[2][3] - Independent Non-Executive Directors include Mr. Yu Bo, Mr. Ye Bangyin, and Mr. Cheng Jianming[2][3] - Mr. Ye Bangyin chairs the Audit Committee, Mr. Cheng Jianming chairs the Remuneration Committee, Mr. Yu Bo chairs the Nomination Committee, and Mr. Gui Pinghu chairs the Strategy and Development Committee[3][4] Company Contacts and Advisers This section provides details on the company's joint company secretaries, registered office, Hong Kong principal place of business, authorized representatives, legal advisers, H-share registrar, principal bankers, and auditor - Joint Company Secretaries are Ms. Zhi Hui and Mr. You Zilin[3][4] - The company's registered office and headquarters are in Nanjing, Jiangsu Province, China, with its principal place of business in Hong Kong at 40/F, Jardine House, 1 Connaught Place[3][4] - The auditor is Ernst & Young, and the stock code is 3332[7][8] Financial Highlights This section presents a concise overview of the company's key financial performance indicators for the first half of 2025 2025 First Half Financial Highlights The company's financial performance declined in the first half of 2025, with year-on-year decreases in revenue, gross profit, and profit for the period, reduced basic earnings per share, and no interim dividend declared 2025 First Half Financial Highlights | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 332.4 | 370.2 | -10.2% | | Gross Profit | 243.4 | 268.7 | -9.4% | | Profit for the Period | 15.3 | 33.4 | -54.2% | | Basic Earnings Per Share | 1.62 cents | 3.53 cents | -54.0% | - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[10] Product Information This section details the company's extensive 'Good Health' product line, encompassing a wide range of nutritional supplements and health foods Good Health Series The company's primary product line, 'Good Health,' offers a diverse range of nutritional and health supplements, including oyster essence, propolis, high calcium, CoQ10, grapeseed, glucosamine, green-lipped mussel, milk thistle, fish oil, bilberry lutein, collagen, stomach powder, immune powder, cranberry evening primrose oil, nasal capsules, throat lozenges, lactoferrin milk powder, probiotics, calcium-iron-zinc nutritional packs, and various children's products - The 'Good Health' series features a rich product line, including adult health supplements such as oyster essence capsules, propolis capsules, high calcium liquid calcium and vitamin D, CoQ10 capsules, grapeseed 55,000 capsules, glucosamine capsules, green-lipped mussel 6000 capsules, milk thistle capsules, fish oil capsules, high-concentration fish oil capsules, bilberry lutein capsules, and collagen capsules[13][14][16][17][18] - It also includes specialized functional products like stomach powder, Vilex Immune Powder, cranberry evening primrose oil capsules, Vilex Nasal Capsules, Vilex Throat Lozenges, lactoferrin milk powder, Little Monkey Lactoferrin Powder, Vilmin Compound Powder, and lactase milk powder[22][24][26] - Children's series products include calcium-iron-zinc nutritional packs, probiotic solid beverages, children's vision chewable tablets, children's immunity chewable tablets, children's growth chewable tablets, children's magnesium chewable tablets, children's algal oil DHA capsules, children's vision lutein chewable tablets, and gummy candy series[25][26][29][31] Management Discussion and Analysis This section provides a comprehensive review and analysis of the group's business operations, financial performance, and future outlook Business Review In the first half of 2025, the group's performance declined due to global economic slowdown, trade policy uncertainties, and intensified industry competition, with revenue decreasing by 10.2% and profit by 54.2%, while the group focused on cross-border e-commerce for its 'Good Health' brand, enhancing promotion on platforms like Douyin and launching 11 new products - In the first half of 2025, the group's revenue was approximately RMB 332.4 million, a year-on-year decrease of 10.2%[32][35] - Profit for the period was approximately RMB 15.3 million, a year-on-year decrease of 54.2%[32][35] - The group focused on the 'Good Health' brand's cross-border e-commerce business, implementing a combined strategy of influencer marketing, external promotion, and live streaming on Douyin, alongside brand building and sales promotion through distributors, pharmacies, duty-free shops, and e-commerce platforms[33][36] - For the six months ended June 30, 2025, the group launched 11 new products, comprising 9 from the 'Good Health' series and 2 from the 'Living Nature' series[34][36] Financial Review This section provides a detailed review of the group's financial performance for the first half of 2025, including specific data and reasons for changes in revenue, gross profit, other income and gains, selling and distribution expenses, administrative expenses, income tax expense, and profit for the period Results Overview In the first half of 2025, the group experienced significant declines in both revenue and profit, with a corresponding reduction in earnings per share 2025 First Half Performance Overview | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 332.4 | 370.2 | -10.2% | | Profit for the Period | 15.3 | 33.4 | -54.2% | | Earnings Per Share | 1.62 cents | 3.53 cents | -54.0% | Revenue Analysis The decrease in revenue is primarily attributed to reduced income from infant and child products sold through mainland China distributor platforms - Revenue for the first half of 2025 was approximately RMB 332.4 million, a decrease of approximately RMB 37.8 million or 10.2% compared to the first half of 2024[40][44] - The decrease in revenue was primarily due to lower income generated from infant and child products sold through domestic distributor platforms for the six months ended June 30, 2025[40][44] Gross Profit Analysis Gross profit decreased by 9.4% year-on-year, but the gross profit margin remained stable at approximately 73.2% Gross Profit and Gross Profit Margin | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Gross Profit | 243.4 | 268.7 | -9.4% | | Gross Profit Margin | 73.2% | 72.6% | +0.6% | Other Income and Gains Other income and gains, primarily comprising rental income, government grants, and bank interest income, saw a slight year-on-year increase, mainly driven by higher bank interest income Other Income and Gains | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Other Income and Gains | 3.8 | 3.5 | +8.6% | - The increase was primarily due to higher bank interest income[42][46] Operating Expenses Selling and distribution expenses increased by 2.4% year-on-year, rising to 7.1% of sales revenue, mainly due to increased investment in cross-border e-commerce promotion and staff expansion, while administrative expenses decreased by 2.4% year-on-year, with its proportion to sales revenue remaining largely stable Operating Expenses | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 190.7 | 186.3 | +2.4% | | Selling and Distribution Expenses as % of Revenue | 57.4% | 50.3% | +7.1% | | Administrative Expenses | 36.5 | 37.4 | -2.4% | | Administrative Expenses as % of Revenue | 11.0% | 10.1% | +0.9% | - The increase in selling and distribution expenses was primarily due to the group's continued vigorous development of the 'Good Health' brand's cross-border e-commerce channel business in the Chinese market, increased investment in sales promotion resources, and an expanded headcount in the cross-border e-commerce department[47][50] Income Tax Expense Income tax expense significantly decreased year-on-year, primarily due to a decline in the pre-tax profit of the New Zealand subsidiary, Good Health Products Limited Income Tax Expense | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Income Tax Expense | 2.5 | 6.9 | -63.8% | - The decrease in income tax expense was primarily attributable to the lower pre-tax profit of Good Health Products Limited, one of the company's New Zealand subsidiaries, for the six months ended June 30, 2025, compared to the same period last year[49][52] Profit for the Period The combined effect of decreased revenue and an increased proportion of selling and distribution expenses led to a 54.2% year-on-year decline in profit for the period in the first half of 2025, with the profit margin falling from 9.0% to 4.6% Profit for the Period and Profit Margin | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Profit for the Period | 15.3 | 33.4 | -54.2% | | Profit Margin | 4.6% | 9.0% | -4.4% | - The decline in profit was primarily due to the combined impact of reduced revenue and an increased proportion of selling and distribution expenses relative to sales revenue[54][57] Other Comprehensive Income In the first half of 2025, the group recorded exchange gains of approximately RMB 13.7 million, primarily due to a significant appreciation of the New Zealand Dollar against the Renminbi, contrasting with an exchange loss in the prior period Exchange Differences | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Exchange differences on translation of foreign operations | 13.7 (gain) | -2.5 (loss) | - The exchange gain was primarily due to a significant appreciation of the New Zealand Dollar against the Renminbi[55][58] Liquidity and Capital Resources This section analyzes the group's cash flows, inventories, trade receivables, trade payables, foreign exchange risk, borrowings and asset pledges, gearing ratio, and capital expenditure and commitments Cash Flow As of June 30, 2025, the group's cash and cash equivalents increased by approximately RMB 31.6 million compared to the end of 2024, primarily driven by net cash inflows from operating activities, financing activities, and exchange rate effects Changes in Cash and Cash Equivalents | Item | Amount (RMB million) | | :--- | :--- | | Increase in cash and cash equivalents from beginning to end of period | 31.6 | | Net cash inflow from operating activities | 9.5 | | Net cash outflow from investing activities | -0.03 | | Net cash inflow from financing activities | 17.7 | | Cash inflow from exchange rate effects | 4.4 | Working Capital Inventories decreased by 5.5%, mainly due to increased raw material demand from e-commerce channel development and enhanced procurement management; trade receivables increased by 49.2%, primarily from growth in cross-border e-commerce platform sales; and trade payables increased by 39.8% to meet increased production capacity needs for core products driven by cross-border e-commerce sales growth Changes in Working Capital Metrics | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Inventories | 112.5 | 119.1 | -5.5% | | Trade Receivables | 62.5 | 41.9 | +49.2% | | Trade Payables | 17.9 | 12.8 | +39.8% | - The decrease in inventories was primarily due to the vigorous development of the 'Good Health' e-commerce channel, leading to increased raw material usage to meet second-half e-commerce sales demand, coupled with strengthened raw material procurement management[60][63] - The increase in trade receivables was mainly due to growth in sales revenue from cross-border e-commerce channels, particularly the increase in receivables from e-commerce platforms[61][64] - The growth in trade payables was primarily due to the continuous increase in cross-border e-commerce sales, leading to increased procurement of raw materials required for production to boost output of certain core products in response to market demand[62][65] Debt and Gearing As of June 30, 2025, the group incurred new borrowings of RMB 20 million at an annual interest rate of 2.6%, pledging approximately RMB 1.5 million in property as collateral, with the gearing ratio increasing to 21.1% Borrowings and Gearing Ratio | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Borrowings | 20.0 | 0 | | Annual Interest Rate on Borrowings | 2.6% | - | | Net Book Value of Pledged Property | 1.5 | 0 | | Gearing Ratio | 21.1% | 18.7% | - The group has not adopted any hedging or alternative policies to manage foreign exchange risk, considering its exposure manageable[67][72] Capital Expenditure and Commitments Capital expenditure for the first half of 2025 significantly decreased to RMB 0.3 million, with no material capital commitments or contingent liabilities Capital Expenditure | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Additions to Property, Plant and Equipment | 0.3 | 5.8 | - As of June 30, 2025, the group had no material capital commitments or contingent liabilities[71][76] Outlook For the second half of 2025, the global economy is expected to continue its trend of slowing growth, increasing regional divergence, trade fragmentation, and policy uncertainty, while China's economy faces structural breakthroughs and domestic demand challenges, but supply-side reform 2.0, accelerated commercialization of tech manufacturing (e.g., AI terminals, drones), stable employment, expanded domestic demand, high-level opening-up, and green low-carbon development policies will inject new vitality into high-quality development - In the first half of 2025, the global economy exhibited a complex landscape of escalating risks and uneven recovery, with global economic growth slowing and major institutions generally lowering their full-year growth forecasts[77][79] - China's economy achieved better-than-expected growth amidst internal and external pressures but still faces challenges such as unresolved deflationary pressure, increasing employment pressure, and insufficient consumer confidence[77][79] - In the second half of 2025, China's economic development will confront challenges of structural breakthroughs and domestic demand strengthening, but policies such as supply-side reform 2.0, accelerated commercialization of technology manufacturing (e.g., AI terminals, drones), stable employment, expanded domestic demand, high-level opening-up, and green low-carbon development will inject new vitality[78][80] - The group's key priorities for the second half include vigorously developing e-commerce platforms to expand sales, optimizing promotion strategies, and accelerating new product R&D; strengthening supply chain management, developing quality suppliers, enhancing production capacity, and shortening production and procurement cycles; and optimizing promotional expenses to improve overall profitability[82][84] Human Resources Management The group considers high-quality employees a key asset for success, providing regular training and corporate culture education, along with competitive compensation and benefits; as of June 30, 2025, the group employed 481 staff, with total salaries and related costs amounting to approximately RMB 51.5 million - The group continuously enhances employees' knowledge and skills in nutritional supplements, maternal and infant nutrition, and cross-border e-commerce operations and promotion through comprehensive training and corporate culture education[82][83] - As of June 30, 2025, the group employed 481 staff (350 in China, 128 in New Zealand, and 3 in Australia)[82][83] Salaries and Related Costs | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Total Salaries and Related Costs | 51.5 | 51.7 | Other Information This section covers shareholding details, securities transactions, director and supervisor information, corporate governance, investments, and interim dividend policy Shareholding Information This section discloses the interests and short positions of directors, supervisors, senior management, and substantial shareholders in the company's shares and related shares Directors', Supervisors' and Chief Executives' Interests As of June 30, 2025, Executive Director Mr. Gui Pinghu held a 54.84% H-share interest in the company, with his spouse Ms. Wu Yanmei holding 5.60%, and other directors and supervisors also holding minor H-share interests Shareholding of Directors, Supervisors, and Senior Management (June 30, 2025) | Name | Capacity | Nature of Interest | Class of Shares | Number of Shares Held | Approximate % of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Gui Pinghu | Director | Beneficial Owner | H Shares | 518,937,108 | 54.84 | | Mr. Gui Pinghu | Director | Spouse's Interest | H Shares | 52,965,000 | 5.60 | | Ms. Zhang Yuan | Director | Beneficial Owner | H Shares | 6,817,550 | 0.72 | | Ms. Zhu Feifei | Director | Beneficial Owner | H Shares | 659,340 | 0.07 | | Ms. Yu Min | Supervisor | Beneficial Owner | H Shares | 409,340 | 0.04 | Substantial Shareholders' Interests As of June 30, 2025, in addition to directors and supervisors, Ms. Wu Yanmei, Mr. Gui Ke, Derun Group (International) Holdings Limited, and its associates were substantial shareholders, holding 5% or more of the company's shares Shareholding of Substantial Shareholders (June 30, 2025) | Name/Entity | Nature of Interest | Class of Shares | Number of Shares Held | Approximate % of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | | Ms. Wu Yanmei | Beneficial Owner | H Shares | 52,965,000 | 5.60 | | Ms. Wu Yanmei | Spouse's Interest | H Shares | 518,937,108 | 54.84 | | Mr. Gui Ke | Beneficial Owner | H Shares | 65,923,000 | 6.97 | | Ms. Li Shi | Spouse's Interest | H Shares | 65,923,000 | 6.97 | | Derun Group (International) Holdings Limited | Beneficial Owner | H Shares | 59,121,600 | 6.25 | | Derun Group Holdings Limited | Controlled Corporation Interest | H Shares | 59,121,600 | 6.25 | | Ms. Guan Liwen | Controlled Corporation Interest | H Shares | 59,121,600 | 6.25 | | Ms. Guan Liwen | Spouse's Interest | H Shares | 404,000 | 0.04 | | Mr. Peng Shaoyan | Controlled Corporation Interest | H Shares | 59,121,600 | 6.25 | | Mr. Peng Shaoyan | Beneficial Owner | H Shares | 404,000 | 0.04 | Securities Transactions For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, redeemed, or sold any of the company's listed securities, nor did they hold any treasury shares - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[100][105] - For the six months ended June 30, 2025, the group held no treasury shares[100][105] Directors and Supervisors Information Executive Director Mr. Gui Pinghu was appointed as a director of Living Nature Natural Products Limited and Living Nature Limited on June 1, 2025, while Executive Director Ms. Zhang Yuan resigned from her directorships in both companies on the same date, with no other changes to director and supervisor information since the publication date of the 2024 annual report - Executive Director Mr. Gui Pinghu was appointed as a director of Living Nature Natural Products Limited and Living Nature Limited on June 1, 2025[101][106] - Executive Director Ms. Zhang Yuan resigned as a director of Living Nature Natural Products Limited and Living Nature Limited on June 1, 2025[101][106] - Save as disclosed, there have been no changes to the information on directors and supervisors since the publication date of the company's 2024 annual report[102][106] Corporate Governance The company adopted the Model Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions, with all directors and supervisors confirming compliance during the reporting period, and the company's corporate governance practices align with the principles and code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules of the Stock Exchange as the code of conduct for directors' dealings in the company's securities[103][107] - All directors and supervisors have confirmed their compliance with the Model Code for the six months ended June 30, 2025, and up to the date of this interim report[103][107] - The directors believe that the company has complied with the code provisions set out in Part 2 of the Corporate Governance Code contained in Appendix C1 of the Listing Rules for the six months ended June 30, 2025, and up to the date of this interim report[104][108] Investments and Events For the six months ended June 30, 2025, the company made no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures, and no material events affecting the group occurred after the reporting period - For the six months ended June 30, 2025, there were no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[109][113] - No material events affecting the group occurred after the six months ended June 30, 2025, and up to the date of this interim report[110][114] Interim Dividend The Board resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[111][115] Audit Committee The company's Audit Committee reviewed the group's unaudited condensed consolidated interim results for the six months ended June 30, 2025, comprising three independent non-executive directors chaired by Mr. Ye Bangyin, with primary responsibilities including reviewing and monitoring financial reporting, internal controls, and risk management systems - The group's unaudited interim condensed consolidated financial results for the six months ended June 30, 2025, have been reviewed by the company's Audit Committee[112][116] - The Audit Committee comprises three independent non-executive directors, Mr. Yu Bo, Mr. Ye Bangyin, and Mr. Cheng Jianming, with Mr. Ye Bangyin serving as Chairman[112][116] - The primary responsibilities of the Audit Committee are to review and monitor the company's financial reporting, internal control, and risk management systems, and to assist the Board in fulfilling its audit responsibilities[112][116] Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the group's financial performance, including revenue, gross profit, and profit for the period, along with other comprehensive income Consolidated Profit and Loss For the six months ended June 30, 2025, the group reported revenue of RMB 332.4 million, gross profit of RMB 243.4 million, profit for the period of RMB 15.3 million, and basic earnings per share of 1.62 cents, with all metrics decreasing compared to the prior period Summary of Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 332,364 | 370,189 | | Cost of Sales | (88,975) | (101,503) | | Gross Profit | 243,389 | 268,686 | | Other Income and Gains | 3,819 | 3,492 | | Selling and Distribution Expenses | (190,710) | (186,263) | | Administrative Expenses | (36,462) | (37,420) | | Finance Costs | (1,672) | (1,723) | | Other Expenses | (561) | (6,439) | | Profit Before Tax | 17,803 | 40,333 | | Income Tax Expense | (2,481) | (6,924) | | Profit for the Period | 15,322 | 33,409 | | Exchange differences on translation of foreign operations | 13,689 | (2,523) | | Total Comprehensive Income for the Period | 29,011 | 30,886 | | Basic Earnings Per Share | 1.62 cents | 3.53 cents | Interim Condensed Consolidated Statement of Financial Position This statement provides a snapshot of the group's assets, liabilities, and equity as of the reporting date Consolidated Financial Position As of June 30, 2025, the group's total assets were RMB 549.3 million, net current assets were RMB 250.2 million, and net assets were RMB 423.1 million, with both total assets and net assets increasing compared to December 31, 2024 Summary of Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | | | | Property, Plant and Equipment | 76,793 | 80,416 | | Investment Properties | 56,857 | 57,256 | | Right-of-use Assets | 37,426 | 37,117 | | Goodwill | 31,870 | 30,023 | | Other Intangible Assets | 130 | 912 | | Deferred Tax Assets | 12,518 | 12,288 | | Other Non-current Assets | 791 | 214 | | Total Non-current Assets | 216,385 | 218,226 | | Current Assets | | | | Inventories | 112,467 | 119,085 | | Trade Receivables | 62,482 | 41,902 | | Prepayments, Deposits and Other Receivables | 21,879 | 21,814 | | Cash and Cash Equivalents | 136,115 | 104,530 | | Total Current Assets | 332,943 | 287,331 | | Total Assets | 549,328 | 505,557 | | Current Liabilities | | | | Trade Payables | 17,868 | 12,750 | | Other Payables and Accruals | 36,213 | 44,145 | | Interest-bearing Loans and Borrowings | 20,000 | – | | Lease Liabilities | 4,759 | 4,286 | | Tax Payable | 3,908 | 7,958 | | Total Current Liabilities | 82,748 | 69,139 | | Net Current Assets | 250,195 | 218,192 | | Total Assets Less Current Liabilities | 466,580 | 436,418 | | Non-current Liabilities | | | | Lease Liabilities | 30,606 | 29,615 | | Deferred Tax Liabilities | 12,081 | 11,968 | | Provisions | 786 | 739 | | Total Non-current Liabilities | 43,473 | 42,322 | | Net Assets | 423,107 | 394,096 | | Total Equity | 423,107 | 394,096 | Interim Condensed Consolidated Statement of Changes in Equity This statement details the changes in the group's equity attributable to owners of the parent during the reporting period Consolidated Changes in Equity As of June 30, 2025, total equity attributable to owners of the parent was RMB 423.1 million, an increase of approximately RMB 29 million from the beginning of the year, primarily due to profit for the period and an increase in exchange fluctuation reserve Summary of Interim Condensed Consolidated Statement of Changes in Equity | Item | January 1, 2025 (Audited) (RMB thousand) | Profit for the Period (RMB thousand) | Exchange Differences (RMB thousand) | June 30, 2025 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Share Capital | 94,630 | – | – | 94,630 | | Capital Reserve | 544,223 | – | – | 544,223 | | Exchange Fluctuation Reserve | (23,201) | – | 13,689 | (9,512) | | Statutory Surplus Reserve | 55,902 | – | – | 55,902 | | Merger Reserve | (3,871) | – | – | (3,871) | | Other Reserves | (2,022) | – | – | (2,022) | | Asset Revaluation Reserve | 12,972 | – | – | 12,972 | | Accumulated Losses | (284,537) | 15,322 | – | (269,215) | | Total Equity | 394,096 | 15,322 | 13,689 | 423,107 | Interim Condensed Consolidated Statement of Cash Flows This statement provides an overview of the group's cash inflows and outflows from operating, investing, and financing activities Consolidated Cash Flows For the six months ended June 30, 2025, the group generated net cash inflow of RMB 9.5 million from operating activities, net cash outflow of RMB 0.03 million from investing activities, net cash inflow of RMB 17.7 million from financing activities, with cash and cash equivalents totaling RMB 136.1 million at period-end Summary of Interim Condensed Consolidated Statement of Cash Flows | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 9,480 | (32,287) | | Net cash used in investing activities | (32) | (5,135) | | Net cash generated from/(used in) financing activities | 17,726 | (2,272) | | Net increase/(decrease) in cash and cash equivalents | 27,174 | (39,694) | | Cash and cash equivalents at beginning of period | 104,530 | 117,556 | | Effect of foreign exchange rate changes, net | 4,411 | (884) | | Cash and cash equivalents at end of period | 136,115 | 76,978 | Notes to the Interim Condensed Consolidated Financial Statements This section provides detailed explanatory notes to the interim condensed consolidated financial statements, covering accounting policies, segment information, and specific financial line items Corporate and Group Information The company, a joint stock company incorporated in China, primarily manufactures and sells nutritional supplements and health foods in China, Australia, and New Zealand, with notes detailing key subsidiaries including their place of registration, date of establishment, registered capital, and principal activities - The company is a joint stock company incorporated in the People's Republic of China, primarily engaged in the manufacture and sale of nutritional supplements and health foods in China, Australia, and New Zealand[123][124][125][126] - Key subsidiaries include Nanjing ZhongSheng Bio-Technology Co., Ltd. (production, processing, and sale of health foods), New Good Health Nutrition (Nanjing) Co., Ltd. (retail of health foods and e-commerce operations), and Good Health Products Limited (New Zealand, production, processing, and sale of health foods)[128][131] Basis of Preparation and Changes to Accounting Policies The interim condensed consolidated financial statements are prepared in accordance with HKAS 34 and presented in RMB, with the first-time adoption of revised HKFRS accounting standards in this period having no material impact on financial information due to the convertibility of the group's transaction and functional currencies - The group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, have been prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting and are presented in Renminbi[132][133][136] - This period marks the first-time adoption of revised Hong Kong Financial Reporting Standards accounting standards, specifically the amendments to Hong Kong Accounting Standard 21 'Lack of Exchangeability'[134][135][137] - As the currencies used for the group's transactions and the functional currencies used by group entities for translating the group's presentation currency are convertible, these amendments have had no impact on the interim condensed consolidated financial information[135][137] Operating Segment Information The group operates a single reportable segment, manufacturing and selling nutritional supplements and health foods in China, Australia, and New Zealand, with revenue primarily from mainland China, followed by New Zealand and Australia, and non-current assets also predominantly located in these regions - The group operates a single business unit based on its products and has a single reportable segment, which is the manufacture and sale of nutritional supplements and packaged health foods in China, Australia, and New Zealand[138][139] Revenue Analysis by Major Market | Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 273,002 | 304,902 | | New Zealand | 52,571 | 52,862 | | Australia | 437 | 3,463 | | Other Countries | 6,354 | 8,962 | | Total | 332,364 | 370,189 | Geographical Distribution of Non-current Assets (excluding goodwill and deferred tax assets) | Region | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 134,373 | 138,178 | | New Zealand | 37,445 | 37,564 | | Australia | 179 | 173 | | Total | 171,997 | 175,915 | - No revenue from transactions with a single external customer accounted for 10% or more of the group's revenue[144][146] Revenue, Other Income and Gains Revenue primarily derives from goods sales, recognized at a specific point in time, while other income and gains mainly comprise bank interest income, government grants, reversal of impairment on trade receivables, net exchange differences, and rental income - Revenue refers to the net invoiced value of goods sold after deducting returns and trade discounts, and the value of services provided, all recognized at the point in time when goods or services are transferred[148][150][153] Analysis of Other Income and Gains | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank Interest Income | 798 | 572 | | Government Grants | 628 | 573 | | Reversal of Impairment on Trade Receivables | 163 | – | | Net Exchange Differences | 108 | – | | Rental Income | 1,899 | 2,089 | | Others | 223 | 258 | | Total | 3,819 | 3,492 | Profit Before Tax Profit before tax is derived after deducting costs of inventories sold, staff costs, depreciation and amortization of various assets, lease payments, and R&D expenses, with a reversal of impairment on trade receivables and a net exchange gain recorded for the period Deductions from Profit Before Tax | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Inventories Sold | 88,975 | 101,503 | | Staff Costs (excluding key management personnel remuneration) | 46,712 | 46,473 | | Depreciation of Right-of-use Assets | 1,486 | 1,554 | | Amortization of Intangible Assets | 811 | 1,003 | | Depreciation of Property, Plant and Equipment | 4,325 | 4,446 | | Lease Payments (not included in lease liabilities measurement) | 436 | 436 | | Trade Receivables (Reversal)/Impairment | (163) | 837 | | Net Exchange Differences | (108) | 4,737 | | Government Grants | (628) | (573) | | Research and Development Expenses | 440 | 416 | Income Tax Expense Income tax expense for the first half of 2025 was RMB 2.5 million, a significant decrease from the prior period, with Chinese subsidiaries subject to a 25% tax rate, New Zealand 28%, and Australia 30% Income Tax Expense | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Current — New Zealand | 2,318 | 8,218 | | Deferred | 163 | (1,294) | | Total Tax Expense for the Period | 2,481 | 6,924 | - Chinese subsidiaries are subject to an income tax rate of 25%, New Zealand 28%, and Australia 30%[158][160] Dividend The Board resolved not to declare any interim dividend for the six months ended June 30, 2025, and no dividend has been proposed for the year ended December 31, 2024 - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[159][161] - The Board has not proposed any dividend for the year ended December 31, 2024[159][161] Earnings Per Share Basic earnings per share are calculated based on the profit for the period attributable to ordinary equity holders of the parent and the weighted average number of ordinary shares outstanding, with no potential dilutive ordinary shares outstanding for the periods ended June 30, 2025, and 2024 - Basic earnings per share are calculated based on the profit for the period attributable to ordinary equity holders of the parent and the weighted average number of 946,298,370 ordinary shares outstanding during the period[162][164] - For the periods ended June 30, 2025, and 2024, the group had no potential dilutive ordinary shares outstanding[163][165] Basic Earnings Per Share Calculation | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent | 15,322 | 33,409 | | Weighted average number of ordinary shares outstanding | 946,298,370 | 946,298,370 | Property, Plant and Equipment Additions to property, plant, and equipment for the period amounted to RMB 253 thousand, a significant decrease from the prior period, with no impairment losses recognized for either period Additions to Property, Plant and Equipment | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Additions to Property, Plant and Equipment | 253 | 9,028 | - No impairment losses were recognized for property, plant, and equipment for the current or prior period[169] Inventories As of June 30, 2025, the group's total inventories amounted to RMB 112.5 million, a 5.5% decrease from the end of 2024, primarily driven by a reduction in raw materials Composition of Inventories | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Raw Materials | 7,032 | 18,332 | | Work-in-progress | 3,175 | 1,523 | | Finished Goods | 102,057 | 99,144 | | Purchased Goods | 203 | 86 | | Total | 112,467 | 119,085 | Trade Receivables As of June 30, 2025, the net book value of trade receivables was RMB 62.5 million, a 49.2% increase from the end of 2024, with receivables within one month accounting for the largest proportion, and a reversal of impairment loss of RMB 163 thousand recorded for the period Net Book Value of Trade Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 65,990 | 45,429 | | Impairment | (3,508) | (3,527) | | Net Book Value | 62,482 | 41,902 | Ageing Analysis of Trade Receivables (by invoice date) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 44,046 | 38,962 | | 1 to 3 months | 17,834 | 2,543 | | 3 months to 1 year | 429 | 303 | | Over 1 year | 173 | 94 | | Total | 62,482 | 41,902 | Movement in Provision for Impairment Loss on Trade Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Beginning of Year | 3,527 | 2,994 | | Accumulated Impairment Loss | (163) | 759 | | Exchange Adjustment | 144 | (226) | | Total | 3,508 | 3,527 | Prepayments, Deposits and Other Receivables As of June 30, 2025, total prepayments, deposits, and other receivables amounted to RMB 21.9 million, largely consistent with the end of 2024, with none of these assets being overdue or impaired Composition of Prepayments, Deposits and Other Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Prepayments | 16,716 | 17,195 | | Right of Return Assets | 440 | 36 | | Deposits and Other Receivables | 4,723 | 4,583 | | Total | 21,879 | 21,814 | - None of the aforementioned assets are overdue or impaired, and they involve receivables with no recent history of default[179] Cash and Cash Equivalents As of June 30, 2025, total cash and cash equivalents amounted to RMB 136.1 million, primarily comprising cash and bank balances, representing an increase from the end of 2024 Composition of Cash and Cash Equivalents | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash and Bank Balances | 127,480 | 95,937 | | Time Deposits | 8,635 | 8,593 | | Cash and Cash Equivalents | 136,115 | 104,530 | Trade Payables As of June 30, 2025, total trade payables amounted to RMB 17.9 million, a 39.8% increase from the end of 2024, with trade payables being interest-free and typically settled within 30 to 90 days Ageing Analysis of Trade Payables (by invoice date) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 14,912 | 11,310 | | 1 to 3 months | 1,836 | 124 | | 3 months to 1 year | 360 | 556 | | Over 1 year | 760 | 760 | | Total | 17,868 | 12,750 | - Trade payables are interest-free and generally settled within 30 to 90 days[184] Other Payables and Accruals As of June 30, 2025, total other payables and accruals amounted to RMB 36.2 million, a decrease from the end of 2024, primarily due to reductions in accrued payroll and refund liabilities Composition of Other Payables and Accruals | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Accrued Payroll | 12,285 | 22,480 | | Contract Liabilities | 11,725 | 10,075 | | Other Payables | 9,045 | 5,030 | | Refund Liabilities | 1,922 | 3,170 | | Other Taxes Payable | 1,236 | 3,390 | | Total | 36,213 | 44,145 | - Other payables are non-interest bearing[187] Share Capital As of June 30, 2025, the company had 946,298,370 issued and fully paid ordinary shares, with total share capital of RMB 94.6 million, consistent with the end of 2024 Share Capital Information | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Number of Issued and Fully Paid Ordinary Shares | 946,298,370 | 946,298,370 | | Share Capital | 94,630 | 94,630 | Related Party Disclosures This section discloses the remuneration of the group's key management personnel, including basic salaries and bonuses, social insurance, and housing provident fund contributions Key Management Personnel Remuneration | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Basic Salaries and Bonuses | 4,749 | 5,184 | | Social Insurance and Housing Provident Fund | 84 | 85 | | Total Remuneration Paid to Key Management Personnel | 4,833 | 5,269 | Financial Instruments by Category As of June 30, 2025, total financial assets measured at amortized cost amounted to RMB 203.3 million, and total financial liabilities were RMB 26.9 million Financial Assets Measured at Amortized Cost | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 62,482 | 41,902 | | Financial Assets included in Prepayments, Deposits and Other Receivables | 4,723 | 4,583 | | Cash and Cash Equivalents | 136,115 | 104,530 | | Total | 203,320 | 151,015 | Financial Liabilities Measured at Amortized Cost | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 17,868 | 12,750 | | Financial Liabilities included in Other Payables and Accruals | 9,045 | 5,030 | | Total | 26,913 | 17,780 | Fair Value and Fair Value Hierarchy of Financial Instruments The carrying amounts of the group's financial instruments are reasonably approximate to their fair values, with no significant differences - The carrying amounts of the group's financial instruments are reasonably approximate to their fair values[195][198] - Management assesses that the fair values of trade receivables, financial assets included in prepayments, deposits and other receivables, trade payables, and financial liabilities included in other payables and accruals do not differ significantly from their carrying amounts[196][198] Events After the Reporting Period No significant events affecting the group occurred after June 30, 2025 - No significant events affecting the group occurred after June 30, 2025[197][199]