联华超市(00980) - 2025 - 中期财报

Company Information Board of Directors and Management This section outlines the company's board of directors, management, committees, and external professional service providers - The board of directors includes Executive Directors Ms. Wang Xiaoyan, Ms. Zhang Huiqin, Mr. Zhu Dingping (newly appointed), Non-Executive Directors Mr. Pu Shaohua (Chairman), Ms. Shen Chen, Mr. Cao Hailun, Ms. Yang Qin, and Independent Non-Executive Directors Mr. Xia Dawei, Mr. Li Guoming, Mr. Chen Wei, Mr. Zhao Xinsheng[4] - The board has established committees for audit, remuneration and appraisal, strategy, nomination, and environmental, social, and governance (ESG) to ensure a sound corporate governance structure[4] - Ms. Xu Xiaoyi serves as the Company Secretary, Deloitte Touche Tohmatsu is the international auditor, and Baker McKenzie (Hong Kong law) and Grandall Law Firm (Shanghai) (Chinese law) are the legal advisors[4] Company Basic Information This section provides basic information about the company, including its principal bankers, registered and office addresses, H share registrar in Hong Kong, listing venue, stock code, number of H shares issued, and financial year-end date - Principal bankers include Industrial and Commercial Bank of China, Pudong Development Bank, and China Merchants Bank[6] - The company maintains offices in Shanghai, China, and Wan Chai, Hong Kong[6] - The company is listed on The Stock Exchange of Hong Kong Limited with stock code 980, has 372,600,000 H shares issued, and its financial year-end date is December 31[6] Management Discussion and Analysis Operating Environment In H1 2025, global economic uncertainty intensified, yet China's economy showed resilience with moderate consumer market recovery, influencing rational and experience-driven consumer behavior and increasing reliance on short-video platforms - Global economic uncertainty intensified, with US "reciprocal tariffs" impacting the international trade environment, but China's economy maintained stable operation and a moderate consumer market recovery[8] - H1 2025 China Key Economic Indicators | Indicator | Data | | :--- | :--- | | National Consumer Price Index (CPI) YoY | Slight decrease of 0.1% | | Total Retail Sales of Consumer Goods YoY | Increase of 5.0% (reaching RMB 24.5 trillion) | | Grain and Oil Food Retail YoY | Increase of 9.1% | | Beijing Total Retail Sales of Consumer Goods YoY | Decrease of 3.8% | | Shanghai Total Retail Sales of Consumer Goods YoY | Increase of 1.7% | - Consumer behavior exhibited characteristics of both rationality and experience, focusing on "value for money" and emotional value, with short-video platforms (e.g., Douyin, Video Accounts) becoming important channels for product promotion[9] - The group focused on key dimensions such as fresh produce operations, transformation and enhancement, merchandise management, marketing innovation, cost control, digitalization, organizational optimization, and safety and quality to address market competition and changes in consumer demand[9] Financial Review During the review period, the group's turnover decreased by 12.0% to RMB 9.591 billion, while gross profit margin improved by 0.40 percentage points to 11.89%, and profit attributable to shareholders significantly increased to RMB 42 million - H1 2025 Key Financial Indicators | Indicator | H1 2025 (RMB thousands) | YoY Change (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Turnover | 9,591,172 | (1,305,375) | (12.0%) | | Gross Profit | 1,140,095 | (111,801) | (8.9%) | | Gross Profit Margin | 11.89% | +0.40 percentage points | - | | Other Income | 639,751 | (262,674) | (29.1%) | | Other Income and Other Gains and Losses | 410,898 | 128,069 | 45.3% | | Distribution and Selling Expenses | (1,696,579) | 276,522 | (14.0%) | | Administrative Expenses | (311,328) | 12,749 | (3.9%) | | Profit Before Tax | 84,066 | 66,544 | 379.8% | | Income Tax Expense | (24,359) | 21,013 | (46.3%) | | Profit Attributable to Company Shareholders | 42,246 | 97,055 | Turnaround to profit | | Net Profit Margin | 0.44% | +0.94 percentage points | - | | Basic Earnings Per Share | RMB 0.03 | Turnaround to profit | - | - The decrease in turnover was primarily due to evolving consumer demand, intensified industry competition, and the group's strategic adjustments, including the disposal of equity in certain subsidiaries and scaling back unprofitable sales[10] - The increase in gross profit margin resulted from optimized merchandise management, including promoting standardized fresh produce models to reduce spoilage, developing distinctive products, and increasing the proportion of private label brands[11] - Other income and other gains and losses significantly increased by 45.3%, mainly due to gains from the disposal of equity in certain subsidiaries[13] - Distribution and selling expenses decreased by 14.0% year-on-year, primarily due to adjusting the scale of unprofitable outlets and strengthening operational expense control[14] - As of June 30, 2025, the group's cash and bank balances amounted to approximately RMB 6.148 billion, with a capital gearing ratio of 0.0%, demonstrating strong liquidity and financial stability[22][23] Retail Business Growth Performance All three retail formats (hypermarkets, supermarkets, convenience stores) experienced turnover decline in H1 2025, but strategic adjustments and refined operations led to improved gross margins or narrowed losses - Key Financial Indicators by Retail Format (H1 2025 vs H1 2024) | Format | Turnover (RMB hundred millions) | YoY Change (%) | Gross Profit Margin (%) | Operating Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Hypermarkets | 38.44 | (18.6%) | 13.98 (+1.32pp) | 0.05 (-1.94pp) | | Supermarkets | 50.17 | (6.6%) | 10.31 (-0.11pp) | 0.20 (-0.35pp) | | Convenience Stores | 6.89 | (9.9%) | 11.00 (+0.34pp) | -1.39 (+1.02pp) | - Hypermarket turnover decreased by 18.6%, mainly due to the disposal of equity in certain subsidiaries and scaling back unprofitable sales, but gross profit margin increased by 1.32 percentage points through category adjustments and increased private label penetration[24][25] - Supermarket turnover decreased by 6.6%, with stores upgraded to "community living service centers" by precisely targeting community needs, creating differentiated scenarios, and refining operations, though gross profit margin slightly declined[28] - Convenience store turnover decreased by 9.9%, primarily due to the proactive closure of some long-term unprofitable stores, but operating loss decreased by RMB 8 million year-on-year, and operating profit margin increased by 1.02 percentage points[29][32][36] Capital Structure and Risks As of June 30, 2025, the group held significant cash and cash equivalents with no bank borrowings, while shareholder equity grew due to capital increase and profit, maintaining a robust financial position with no pledged assets or major contingent liabilities - As of June 30, 2025, the group's cash and cash equivalents were primarily held in RMB, with no other bank borrowings[33] - Equity attributable to company shareholders increased from approximately RMB -287 million to approximately RMB 112 million, mainly due to a capital increase of RMB 360 million and profit attributable to company shareholders of approximately RMB 42 million during the period[33] - Issued Share Capital Composition (As of June 30, 2025) | Share Class | Number of Shares | Percentage | | :--- | :--- | :--- | | Domestic Shares | 1,075,397,400 | 72.68% | | Unlisted Foreign Shares | 31,602,600 | 2.14% | | H Shares | 372,600,000 | 25.18% | | Total | 1,479,600,000 | 100.00% | - The group has no pledged assets, and most income and expenditure items are denominated in RMB, encountering no significant foreign exchange fluctuation difficulties, nor any material contingent liabilities[34][35][38] Business Transformation and Development The group focused on the Yangtze River Delta region, driving multi-dimensional transformation of its main retail formats, opening 95 new stores while closing 121 to enhance network quality, and actively incubating discount formats - The group focused on the core Yangtze River Delta region, promoting the transformation of hypermarkets towards "smaller and community-oriented" models, refining supermarket operations, stabilizing convenience store development, and centralizing franchise business[39] - In H1, 95 new stores were opened (26 directly operated, 69 franchised), with 69.5% located in the Yangtze River Delta region; concurrently, 121 stores were closed (21 directly operated, 100 franchised) to enhance network quality[39] - The hypermarket format adopted a strategy centered on "full-scenario coverage, experience upgrade, and efficiency-driven," accelerating its transformation into a "quality life hub," with the Shanghai Zhonghuan and Luban stores pioneering the "smaller and community-oriented" strategy[40] - The supermarket format focused on precisely anchoring community needs, upgrading stores to "community living service centers" by strengthening fresh produce and essential goods supply, adding convenient services, and streamlining SKUs to improve efficiency[41] - The group actively incubated discount formats in the Zhejiang region, opening 13 outlets, and intensified network expansion, owning a total of 3,091 stores as of June 30, 2025, with approximately 83.5% located in East China[42][43] Operating Strategy and Innovation The group enhanced competitiveness through multi-dimensional strategies focusing on fresh produce customer acquisition, strengthening product advantages, and innovative marketing, including direct sourcing, private label expansion, and new media engagement - Focused on fresh produce customer acquisition by strengthening direct sourcing, establishing multi-origin backup mechanisms, promoting regional resource integration, optimizing merchandise management (standardized fresh produce, distinctive products), and combining online and offline marketing promotions[44] - Deepened product advantages by enhancing the JBP cooperation model, expanding partnerships with quality suppliers, increasing the proportion of private label brands, developing localized products, and raising the direct sourcing and supply ratio[45] - Innovated marketing empowerment, with supermarkets planning S-tier seasonal events like "CNY," "Spring Outing Season," and "34th Anniversary," hypermarkets launching "National Brands V. Trend" activities, and leveraging short-video platforms (Video Account IP) to boost brand awareness and fan engagement[46] Digitalization and Organizational Optimization The group is comprehensively advancing store digitalization to enhance operational efficiency and data governance, while accelerating organizational reform, optimizing talent allocation, and increasing investment in talent development to support business transformation - Comprehensively promoted store digitalization, achieving precise task assignment, standardized operations, mobile functionality, and visual tracking, significantly improving operational efficiency and reducing costs[47] - Focused on four key digitalization initiatives: enhancing refined store management, upgrading the EAM system for integrated business and finance, leveraging AI technology for precise marketing, and reconstructing data dashboards to optimize operational data[47] - As of June 30, 2025, the group had 20,900 employees, with total labor costs of approximately RMB 867 million[48] - Accelerated organizational reform, completing the establishment of the hypermarket format's Shanghai City Center and supermarket operations center, deepening headquarters organizational reform, and streamlining functional divisions[48] - Deepened management reform, optimized the appraisal system, piloted a combined procurement and sales performance model in Shanghai supermarkets, and optimized the general partner model at the store level[49] - Increased investment in talent acquisition and development, solidifying the foundation for talent梯队 construction, utilizing a combination of online and offline training formats[49] Cost Control and Future Outlook The group achieved significant cost reduction and efficiency gains through rent reduction, operational expense control, and labor cost optimization, anticipating continued economic resilience and consumer potential in H2 2025, focusing on strategic transformation and core capabilities - Strengthened management for cost reduction by improving rent calculation models to renegotiate high-cost store rents, optimizing personnel allocation, implementing multi-role integration to enhance efficiency, establishing a daily loss monitoring mechanism, and managing marketing resource allocation based on ROI assessment[50] - In H2 2025, China's economy is expected to continue its resilience, with macro policies further strengthening consumption promotion, and consumer potential anticipated to be effectively unleashed[51] - The group will closely adhere to its reform and transformation strategy, focusing on enhancing core capabilities, deepening reform and restructuring, and continuously optimizing and upgrading its supermarket and hypermarket formats, while accelerating the construction of innovative product and supply chain systems[51] - In H2, the group will systematically deploy around eight core tasks: "supermarket development and refined operations, hypermarket transformation and upgrade, product and supply chain development, Quick-Mart expansion and innovative franchise business, cross-sector collaboration and efficiency enhancement, digitalization and empowerment, special cost-saving initiatives, and organizational efficiency and personnel optimization"[52] - The group aims to solidify its brand foundation with a directly operated system as its core, expand brand boundaries through its franchise network, and collectively drive sales growth through multiple dimensions[52] Other Information Equity Disclosure As of June 30, 2025, none of the company's directors, supervisors, or chief executive held any disclosable interests in the company's shares, underlying shares, or debentures, with major shareholders including Bailian Group and Alibaba Group - As of June 30, 2025, none of the company's directors, supervisors, or chief executive held any disclosable interests or short positions in the shares, underlying shares, and/or debentures of the company or any of its associated corporations[53] - Major Shareholder Holdings (As of June 30, 2025) | Shareholder Name | Share Class | Number of Shares | Approximate Percentage of Total Voting Rights | | :--- | :--- | :--- | :--- | | Bailian Group Co., Ltd. | Domestic Shares | 649,661,400 | 43.91% | | Shanghai Bailian Group Co., Ltd. | Domestic Shares | 224,208,000 | 15.15% | | Alibaba Group Holding Limited | Domestic Shares | 201,528,000 | 13.62% | | Xu Zizuo | H Shares | 53,357,000 | 3.61% | - Bailian Group directly and indirectly held interests in a total of 873,869,400 shares of the company, representing approximately 59.06% of the shareholding[55] - Alibaba Group Holding Limited held 201,528,000 shares of the company through its controlled entities, representing a 13.62% shareholding[57] Legal Status of Unlisted Foreign Shares Holders of unlisted foreign shares enjoy the same treatment as domestic share holders, with additional rights to receive dividends in foreign currency and remit residual assets upon liquidation, and these shares can be converted into new H shares under specific conditions - Holders of unlisted foreign shares enjoy the same treatment as domestic share holders, including the right to attend and vote at general meetings and receive meeting notices[58] - Holders of unlisted foreign shares additionally have the right to receive dividends declared by the company in foreign currency and to remit their share of residual assets out of China upon liquidation, in accordance with Chinese foreign exchange control laws and regulations[60] - Unlisted foreign shares can be converted into new H shares, subject to multiple conditions, including the company being listed for at least one year, completion of filing with the China Securities Regulatory Commission, approval for listing and trading by the Stock Exchange, and approval by the general meeting of shareholders[61] Significant Investments and Capital Operations The group renewed its investment and wealth management cooperation framework agreement with Shanghai Securities Co., Ltd., increasing the total entrusted assets to RMB 1.35 billion, with no significant M&A activities during the period, and completed a private placement of 360 million domestic shares to Bailian Group to fund business transformation and working capital - The group renewed its investment and wealth management cooperation framework agreement with Shanghai Securities, extending the term until December 31, 2026, and increasing the total entrusted assets to RMB 1.35 billion[63] - As of June 30, 2025, the fair value of these asset management investments was approximately RMB 1.287 billion, accounting for 7.3% of the group's total assets, with unrealized gains/losses of approximately RMB 27.424 million[64] - There were no significant mergers and acquisitions or disposals of other subsidiaries, associates, or joint ventures during the period[65] - The company completed a private placement of 360,000,000 domestic shares to Bailian Group at an subscription price of RMB 1.00 per share, raising net proceeds of RMB 357 million[66][69] - Approximately 85% of the net proceeds are allocated to business ecosystem transformation, including supermarket and hypermarket store transformation and digitalization, with approximately 15% for increasing general working capital[68] Corporate Governance and Compliance The board recommended no interim dividend for H1 2025, with no share repurchases, sales, or redemptions during the period, and the audit committee reviewed the financial statements, while the company fully complied with the Model Code for Securities Transactions by Directors of Listed Issuers, with some deviations from the Corporate Governance Code regarding director rotation and attendance - The board of directors recommended not to declare an interim dividend for the six months ended June 30, 2025[72] - The company and its subsidiaries did not purchase, sell, or redeem any listed securities during the review period[73] - The audit committee considered and reviewed the accounting principles and methods adopted by the group, discussed internal controls and financial reporting matters, and had no disagreements with the condensed interim financial statements[74] - All directors, supervisors, and relevant employees of the company fully complied with the Model Code for Securities Transactions by Directors of Listed Issuers during the review period[75] - The company deviated from the Corporate Governance Code regarding the rotation of directors, as the company's articles of association do not explicitly stipulate this, considering the continuity of operational management decisions[76] - Some non-executive directors and independent non-executive directors did not attend board meetings or annual general meetings due to other work commitments but authorized other directors to attend on their behalf and were informed of the meeting resolutions[77][79] - Changes in director information occurred, with Mr. Wang Dexiong resigning as a non-executive director and Mr. Zhu Dingping appointed as an executive director[80] Review Report on Condensed Consolidated Financial Statements Review Conclusion Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements of Lianhua Supermarket Holdings Co., Ltd. and its subsidiaries, finding no matters indicating non-compliance with HKAS 34 in all material respects - Deloitte Touche Tohmatsu has reviewed the group's condensed consolidated financial statements, with the scope of review being less than an audit[82][83] - The review concluded that no matters were found to suggest that the condensed consolidated financial statements were not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[84] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Profit or Loss Statement Overview For the six months ended June 30, 2025, the group's turnover was RMB 9.591 billion, a 12.0% decrease, with gross profit of RMB 1.140 billion and a 11.89% gross profit margin, achieving a profit attributable to shareholders of RMB 42.246 million and basic earnings per share of RMB 0.03 - Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Turnover | 9,591,172 | 10,896,547 | | Cost of Sales | (8,451,077) | (9,644,651) | | Gross Profit | 1,140,095 | 1,251,896 | | Other Income | 639,751 | 902,425 | | Other Income and Other Gains and Losses | 410,898 | 282,829 | | Distribution and Selling Expenses | (1,696,579) | (1,973,101) | | Administrative Expenses | (311,328) | (324,077) | | Profit Before Tax | 84,066 | 17,522 | | Income Tax Expense | (24,359) | (45,372) | | Profit (Loss) for the Period and Total Comprehensive Income (Loss) for the Period | 59,707 | (27,850) | | Profit (Loss) Attributable to Company Shareholders | 42,246 | (54,809) | | Earnings (Loss) Per Share – Basic (RMB cents) | 3.1 | (4.9) | Condensed Consolidated Statement of Financial Position Assets and Liabilities Overview As of June 30, 2025, total assets decreased to RMB 17.581 billion and total liabilities to RMB 17.103 billion, while shareholder equity turned positive to RMB 112 million, with total equity reaching RMB 478 million - Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-Current Assets | | | | Property, Plant and Equipment | 2,838,353 | 2,954,612 | | Right-of-Use Assets | 3,960,942 | 4,363,238 | | Fixed Deposits (Non-Current) | 2,724,622 | 3,214,024 | | Current Assets | | | | Inventories | 1,605,362 | 1,879,688 | | Cash and Cash Equivalents | 870,425 | 1,602,613 | | Total Assets | 17,580,927 | 19,662,370 | | Equity Attributable to Company Shareholders | 112,332 | (286,639) | | Total Equity | 478,149 | 67,931 | | Non-Current Liabilities | | | | Lease Liabilities (Non-Current) | 3,267,479 | 3,698,516 | | Current Liabilities | | | | Trade and Bills Payables | 3,275,941 | 3,870,893 | | Coupon Liabilities and Advances from Customers | 8,218,931 | 8,730,204 | | Total Liabilities | 17,102,778 | 19,594,439 | - Both non-current and current assets decreased, with right-of-use assets and non-current fixed deposits showing more significant declines[88] - Equity attributable to company shareholders turned positive from a negative value at the end of 2024, primarily due to an increase in share capital and profit for the period[90] - Current liabilities, including trade and bills payables, and coupon liabilities and advances from customers, both decreased[90] Condensed Consolidated Statement of Changes in Equity Equity Changes Overview For the six months ended June 30, 2025, shareholder equity increased from a negative RMB 287 million to RMB 112 million, driven by comprehensive income of RMB 42.246 million and proceeds from ordinary share issuance of RMB 357 million - Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | January 1, 2025 (RMB thousands) | Change (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | :--- | | Share Capital | 1,119,600 | 360,000 | 1,479,600 | | Accumulated Losses | (1,988,895) | 42,246 | (1,946,649) | | Total Equity Attributable to Company Shareholders | (286,639) | 398,971 | 112,332 | | Non-Controlling Interests | 354,570 | 11,247 | 365,817 | | Total Equity | 67,931 | 410,218 | 478,149 | - Total comprehensive income for the period was RMB 59.707 million, of which RMB 42.246 million was attributable to company shareholders[91] - The issuance of ordinary shares (360 million shares) resulted in a share capital increase of RMB 360 million, with net proceeds of RMB 357 million after deducting issuance costs[91][92] Condensed Consolidated Statement of Cash Flows Cash Flow Overview For the six months ended June 30, 2025, operating activities resulted in a net cash outflow of RMB 805 million, while investing activities generated a net inflow of RMB 160 million, and financing activities saw a net outflow of RMB 87 million - Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Activity Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash from (Used in) Operating Activities | (804,946) | 719,733 | | Net Cash from (Used in) Investing Activities | 159,548 | (494,481) | | Net Cash Used in Financing Activities | (86,790) | (299,395) | | Net Decrease in Cash and Cash Equivalents | (732,188) | (74,143) | | Cash and Cash Equivalents at June 30 | 870,425 | 2,373,477 | - Net cash from operating activities shifted from a net inflow in the prior period to a net outflow of RMB 805 million[95] - Net cash inflow from investing activities was RMB 160 million, primarily including the withdrawal of unrestricted fixed deposits of RMB 2.395 billion and proceeds from the sale of financial assets measured at fair value of RMB 333 million[95] - Net cash outflow from financing activities was RMB 87 million, where cash inflow from the issuance of ordinary shares of RMB 360 million was offset by bill payments and repayment of lease liabilities[95] Notes to the Condensed Consolidated Financial Statements Basis of Preparation and Accounting Policies The condensed consolidated financial statements are prepared under HKAS 34 using historical cost and fair value methods, with directors affirming going concern despite high net current liabilities due to controlled liquidity risk from non-current fixed deposits and coupon liabilities - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and presented in RMB[96][97] - As of June 30, 2025, the group had net current liabilities of RMB 6.406 billion, but the directors believe that liquidity risk is effectively controlled through non-current unrestricted fixed deposits and the historical settlement pattern of coupon liabilities, enabling the group to continue as a going concern[96] - The financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value at the discretion of the company[98] - The group first applied the amendments to Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants during the period, but these had no significant impact on the financial position and performance[99][100] Turnover and Other Income Analysis The group's turnover primarily derived from goods sales, totaling RMB 9.591 billion in H1 2025, with other income including supplier revenue, franchise fees, and rental income, all contributing to a year-on-year decrease in total turnover and other income - Turnover and Other Income Composition (For the six months ended June 30) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Sale of Goods | 9,591,172 | 10,896,547 | | Income from Suppliers (Service Income) | 440,798 | 657,273 | | Franchise Fee Income from Franchisees | 17,761 | 18,829 | | Rental Income from Leased Properties | 176,548 | 225,664 | | Total Turnover and Other Income | 10,230,923 | 11,798,972 | - Turnover is primarily recognized at a point in time (sale of goods), with some recognized over a period based on performance progress (service income)[102] - Rental income from leased properties decreased by approximately RMB 49 million year-on-year, mainly due to the implementation of the "smaller and community-oriented" strategic adjustment in the hypermarket format, optimizing product structure and reducing operating area[12] Segment Information and Other Income Segment revenue primarily from supermarkets and hypermarkets saw year-on-year declines in both revenue and performance, while other income and gains, significantly boosted by RMB 187 million from subsidiary disposals, also included interest income, government grants, and fair value changes of financial assets - Segment Revenue and Performance (For the six months ended June 30) | Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | 2025 Performance (RMB thousands) | 2024 Performance (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Hypermarkets | 4,116,687 | 5,220,509 | 1,830 | 94,228 | | Supermarkets | 5,363,098 | 5,756,369 | 9,979 | 29,776 | | Convenience Stores | 704,771 | 785,340 | (9,585) | (18,432) | | Other Businesses | 46,367 | 36,754 | 8,251 | 1,277 | | Total | 10,230,923 | 11,798,972 | 10,475 | 106,849 | - All segment revenue originated from external customers in China[108][109] - Other Income and Other Gains and Losses (For the six months ended June 30) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest Income from Bank and Fixed Deposits | 84,730 | 122,218 | | Government Grants | 21,905 | 14,618 | | Gain on Disposal of 3 Target Companies | 187,126 | – | | Fair Value Change Gain on Financial Assets | 34,631 | 14,783 | | Net Gain on Derecognition of Right-of-Use Assets and Lease Liabilities | 43,643 | 50,917 | | Total | 410,898 | 282,829 | - The gain on disposal of three target companies, amounting to RMB 187 million, was the primary reason for the significant increase in other income and gains during the period[110] Key Expenses and Profit Composition Other operating expenses decreased year-on-year due to reduced losses from property, plant, and equipment disposals, while finance costs primarily comprised lease liability interest and bill discounting fees, leading to a significant increase in profit before tax driven by subsidiary disposal gains and cost control - Key Expenses (For the six months ended June 30) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Other Operating Expenses | 13,242 | 15,999 | | Finance Costs | 88,948 | 106,655 | | Total Amortization and Depreciation | 562,607 | 631,039 | | Staff Costs | 867,039 | 974,992 | - Other operating expenses decreased year-on-year, mainly due to a reduction in losses from the disposal of property, plant, and equipment from RMB 7.203 million to RMB 0.609 million[112] - Finance costs decreased year-on-year, primarily consisting of interest expenses on lease liabilities and discounting fees for bills receivable[112] - Income tax expense decreased year-on-year, with domestic subsidiaries in China subject to a 25% corporate income tax rate, while some subsidiaries in western provinces enjoy a 15% preferential tax rate, and small low-profit enterprises enjoy a 5% to 10% preferential tax rate[115] Earnings Per Share and Dividends For the six months ended June 30, 2025, profit attributable to shareholders was RMB 42.246 million, resulting in basic earnings per share of RMB 0.03, a turnaround from loss, with no interim dividend recommended by the board - Earnings (Loss) Per Share Information (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit (Loss) Attributable to Company Shareholders | 42,246 | (54,809) | | Weighted Average Number of Ordinary Shares | 1,370,208,000 | 1,119,600,000 | | Basic Earnings (Loss) Per Share (RMB cents) | 3.1 | (4.9) | - Basic earnings per share for the period was RMB 0.03, a turnaround from a basic loss per share of RMB 0.049 in the prior period[117] - The board of directors recommended not to declare an interim dividend for the six months ended June 30, 2025[116] Non-Current Asset Movements As of June 30, 2025, the carrying values of property, plant and equipment, construction in progress, right-of-use assets, and goodwill all decreased, while intangible assets slightly increased, with no impairment recognized during the period - Non-Current Asset Carrying Value Movements (As of June 30, 2025) | Asset Category | January 1, 2025 (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | | Property, Plant and Equipment | 2,954,612 | 2,838,353 | | Construction in Progress | 9,199 | 4,005 | | Right-of-Use Assets | 4,363,238 | 3,960,942 | | Goodwill | 144,175 | 143,214 | | Intangible Assets | 115,363 | 121,971 | - The decrease in goodwill was primarily due to the subsequent reduction in deferred tax liabilities arising from business combinations[118] - Group management regularly reviewed leasehold improvements and operating office equipment, with no impairment recognized during the period[119] Financial Assets and Fixed Deposits The group holds financial assets measured at fair value through profit or loss, totaling approximately RMB 1.362 billion, alongside fixed deposits of approximately RMB 5.255 billion, including restricted deposits, primarily in RMB with annual interest rates ranging from 1.35% to 4.00% - Financial Assets Measured at Fair Value Through Profit or Loss (As of June 30, 2025) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Unlisted Equity Instruments | 797 | 797 | | Listed Equity Securities | 74,836 | 67,629 | | Unlisted Wealth Management Products | 1,286,843 | 1,332,593 | | Total | 1,362,476 | 1,401,019 | - Investments in unlisted wealth management products are managed by licensed financial institutions in China, primarily investing in domestic bonds, trusts, and money market funds, with a fair value change gain of RMB 27.424 million for the period[121] - Fixed Deposits (As of June 30, 2025) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-Current Fixed Deposits | 2,724,622 | 3,214,024 | | Current Fixed Deposits | 2,530,058 | 2,005,933 | | Total | 5,254,680 | 5,219,957 | - Restricted fixed deposits serve as collateral for prepaid vouchers issued to customers and cannot be used for other purposes, with actual annual interest rates ranging from 1.35% to 4.00%[122][123] Deferred Tax and Trade Receivables As of June 30, 2025, deferred tax assets were RMB 79.377 million and liabilities RMB 118 million, with unutilized tax losses of RMB 2.609 billion unrecognised, while net trade and bills receivables were RMB 261 million, primarily from wholesale sales with reduced overdue accounts - Deferred Tax Assets/Liabilities (As of June 30, 2025) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Deferred Tax Assets | 79,377 | 83,028 | | Deferred Tax Liabilities | (118,171) | (161,006) | | Net | (38,794) | (77,978) | - As of the end of this interim period, the group had unutilized tax losses of RMB 2.609 billion available for offsetting future profits, but no deferred tax assets were recognized due to the inability to predict future profit streams[124] - Trade and Bills Receivables (As of June 30, 2025) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables – from Customer Contracts | 268,833 | 270,006 | | Less: Provision for Credit Losses | (7,969) | (9,013) | | Net | 260,864 | 262,893 | - Trade receivables primarily arose from sales to wholesalers, with credit terms ranging from 30 to 60 days; overdue trade receivables from 1 to 30 days and over 30 days totaled RMB 1.754 million, a significant decrease from RMB 10.283 million at the end of 2024[126][128] Impairment Losses and Related Party Transactions The period saw a net reversal of impairment losses of RMB 0.25 million under the expected credit loss model, primarily due to trade receivables, with the group engaging in various related party transactions and holding most deposits and borrowings with government-related entity banks - Impairment Losses under Expected Credit Loss Model (For the six months ended June 30) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables | (1,042) | 1,586 | | Other Receivables | 792 | 1,454 | | Total | (250) | 3,040 | - A reversal of impairment for trade receivables of RMB 1.042 million resulted in a net reversal of total impairment losses for the period[129] - Amounts due from/to the ultimate holding company/fellow subsidiaries are trade in nature, unsecured, interest-free, with credit terms ranging from 30 to 90 days[130] - The group entered into financial service agreements and supplementary investment and wealth management cooperation framework agreements with fellow subsidiaries controlled by Bailian Group[145] - The group has various business dealings with government-related entities directly or indirectly owned or controlled by the Chinese government, including substantial purchases of goods and the vast majority of deposits and bank borrowings[147] Share Capital and Trade Payables As of June 30, 2025, total issued share capital increased by 360 million shares to 1,479,600,000 shares, while trade and bills payables totaled RMB 3.276 billion, primarily from goods purchases with reduced overdue accounts - Share Capital Information (As of June 30, 2025) | Category | Number of Shares | | :--- | :--- | | Issued Shares as of December 31, 2024 | 1,119,600,000 | | Issuance of Ordinary Shares | 360,000,000 | | Issued Shares as of June 30, 2025 | 1,479,600,000 | - Trade and Bills Payables (As of June 30, 2025) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Payables | 2,200,063 | 2,765,969 | | Bills Payables | 1,075,878 | 1,104,924 | | Total | 3,275,941 | 3,870,893 | - Trade payables primarily arose from purchases of goods with credit terms ranging from 30 to 60 days; trade payables aged over 90 days decreased from RMB 1.074 billion at the end of 2024 to RMB 806 million[133] Other Payables and Coupon Liabilities Other payables and accruals decreased to RMB 1.271 billion, including franchisee prepayments, deposits, and closure provisions, while coupon liabilities and advances from customers totaled RMB 8.219 billion, largely comprising group-issued coupons and including VAT payable - Other Payables and Accruals (As of June 30, 2025) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Prepayments from Franchisees and Other Third Parties | 399,251 | 703,508 | | Lease Deposits, Franchise Deposits, and Other Third-Party Deposits | 298,709 | 303,318 | | Provision for Store Closure Costs | 115,099 | 130,113 | | Accrued Salaries, Staff Welfare, and Other Staff Costs | 190,778 | 221,490 | | Total | 1,271,443 | 1,718,446 | - Coupon Liabilities and Advances from Customers (As of June 30, 2025) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Coupon Liabilities Issued by the Group | 6,897,296 | 7,168,026 | | Coupon Liabilities Issued on Behalf of Fellow Subsidiaries | 1,222,080 | 1,425,938 | | Advances from Customers | 99,555 | 136,240 | | Total | 8,218,931 | 8,730,204 | - The balance of coupon liabilities issued by the group includes value-added tax payable of RMB 703 million[137] Capital Commitments and Subsidiary Disposals As of June 30, 2025, capital expenditure committed for property, plant, and equipment was RMB 24.618 million, and the group completed the disposal of three subsidiaries, generating cash proceeds of RMB 145.5 million and recognizing a disposal gain of RMB 187 million - Capital Commitments (As of June 30, 2025) | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Capital Expenditure for Purchase of Property, Plant and Equipment | 24,618 | 38,165 | - The group completed the disposal of all equity interests in three target subsidiaries (Jiangsu Lianhua, Anhui Lianhua, and Hongkou Century Lianhua) to Shanghai Dongran Industrial Co., Ltd. in January 2025[139][140] - The cash consideration for the disposal of the three target companies was approximately RMB 145.5 million, and a disposal gain of RMB 187 million was recognized[139][143] - Analysis of Assets and Liabilities of Disposed Subsidiaries (On Disposal Date) | Asset/Liability Category | Amount (RMB thousands) | | :--- | :--- | | Property, Plant and Equipment | 43,593 | | Right-of-Use Assets | 174,559 | | Inventories | 47,741 | | Cash and Cash Equivalents | 19,093 | | Lease Liabilities | (235,651) | | Trade and Bills Payables | (75,865) | | Net Liabilities Disposed | (63,148) | Fair Value Measurement of Financial Instruments The group measures certain financial assets at fair value, including unlisted financial product investments (Level 2, discounted cash flow), listed equity securities (Level 1, active market quotes), and unquoted equity investments (Level 3, income approach discounted cash flow) - Fair value measurement of financial assets is categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[149] - Fair Value Measurement of Financial Assets (As of June 30, 2025) | Financial Asset | Fair Value (RMB thousands) | Fair Value Level | Valuation Techniques and Key Inputs | | :--- | :--- | :--- | :--- | | Unlisted Financial Product Investments | 1,286,843 | Level 2 | Discounted cash flow method, estimated based on expected returns and market interest rates | | Listed Equity Securities Investments | 74,836 | Level 1 | Quoted in active markets | | Unquoted Equity Investments | 797 | Level 3 | Income approach – discounted cash flow method, based on long-term earnings growth rate and management experience | - The Chief Financial Officer is responsible for determining valuation techniques and inputs, collaborating with external valuers, and regularly reporting reasons for fair value fluctuations to the board[154]