谭木匠(00837) - 2025 - 中期财报

Company Information Board and Committee Members The company's board comprises four executive and three independent non-executive directors, with Mr. Tan Lizi and Ms. Liu Kejia appointed on February 1, 2025, and Mr. Zhou Jinrong chairs all key committees - Mr. Tan Lizi and Ms. Liu Kejia were appointed as executive directors on February 1, 2025[5][119] - The Audit, Remuneration, and Nomination Committees are all chaired by independent non-executive director Mr. Zhou Jinrong[5] Company Contact and Registration Information The company is registered in the Cayman Islands, with its principal place of business in Wanzhou District, Chongqing, China, and a Hong Kong branch for share registration - The company's registered office is in the Cayman Islands, with its principal place of business in Wanzhou District, Chongqing, China, and a Hong Kong office in Mong Kok, Kowloon[5][8] - The company's stock code is 837, and its official website is www.ctans.com[8](index=8&type=chunk) Financial Highlights Key Financial Performance For the six months ended June 30, 2025, revenue increased by 9.4% to RMB 288 million, profit for the period grew by 13.2% to RMB 109 million, and basic earnings per share were RMB 43.8 cents Key Financial Data for the Six Months Ended June 30 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Percentage Change | | :--- | :--- | :--- | :--- | | Revenue | 287,886 | 263,082 | 9.4% | | Cost of Sales | (110,089) | (100,837) | 9.2% | | Gross Profit | 177,797 | 162,245 | 9.6% | | Gross Profit Margin | 61.8% | 61.7% | 0.1 percentage points | | Profit Before Tax | 133,366 | 119,182 | 11.9% | | Profit for the Period | 109,046 | 96,288 | 13.2% | | Profit Attributable to Owners of the Company | 109,046 | 96,288 | 13.2% | | Basic Earnings Per Share (RMB cents) | 43.8 | 38.7 | 13.2% | Liquidity and Gearing As of June 30, 2025, the company's current ratio was 5.42 and quick ratio was 1.97, with the gearing ratio not applicable due to no interest-bearing bank borrowings Liquidity and Gearing Ratios | Indicator | June 30, 2025 | December 31, 2024 | Percentage Change | | :--- | :--- | :--- | :--- | | Current Ratio | 5.42 | 5.48 | (1.2)% | | Quick Ratio | 1.97 | 2.50 | (21.2)% | | Gearing Ratio | Not Applicable | Not Applicable | Not Applicable | - As of June 30, 2025, and December 31, 2024, the Group had no interest-bearing bank borrowings, rendering the calculation of the gearing ratio meaningless[15] Chairman's Statement First Half Operating Review Despite a weak macroeconomic environment, Tan Mujiang achieved double-digit retail performance growth through strategic adjustments, largely meeting its first-half targets, but significant customer service deficiencies require reflection - The macroeconomic environment in the first half of 2025 was challenging, with weak market demand and low consumer confidence[17] - The Group achieved double-digit net retail sales growth by adjusting strategies, such as opening larger stores, promoting customer experience services, and organizing brand events, largely meeting its first-half targets[17] - The company exhibited significant shortcomings in customer service, failing to uphold its "customer as family, honest and kind, dedicated service" philosophy, requiring heightened vigilance and thorough self-reflection[18] Second Half Strategic Outlook In the second half, the company will continue store upgrades, open flagship stores in major Chinese cities and new international concept stores in Hong Kong and Singapore, and host brand promotion events - In the second half, the company will continue to transform counter and strip stores into independent concept stores, with plans to open flagship stores in Beijing, Shanghai, Guangzhou, and Shenzhen[18] - Plans include opening new international concept stores in Hong Kong and Singapore to expand domestic and international markets and enhance brand image[18] - The company will host the "Beauty of Combs and Ornaments" Design Competition 10th Anniversary Retrospective Exhibition, focusing on "Wood • Art + Humanity" for brand communication and promotion[18] Management Discussion and Analysis Management Review In the first half, the company strictly executed operational goals, focused on domestic market upgrades and large independent stores, explored new overseas channels despite tariff impacts, advanced production technology, completed new factory construction, and maintained robust governance - In early 2025, the Group set clear operating performance targets, key work directions, and critical measures, which were strictly implemented[23] - The domestic market strategy focused on entering prime business districts, shopping malls, and locations, promoting the upgrade of counter and strip stores to independent stores, and planning to prioritize opening 200-300 square meter flagship concept stores in Beijing, Shanghai, or Guangzhou/Shenzhen[24] - Overseas market plans for a North American local warehouse were postponed due to US tariff trade disputes, but the company is exploring platforms like Sam's Club and Costco, and will open new concept stores in Hong Kong and Singapore[27] - Significant progress has been made in intelligent polishing of comb teeth and bodies, and automated one-time milling of comb blanks, with batch trial production underway[28] - Phase one of the new factory's northern district infrastructure is largely complete, with the logistics distribution center and raw material preparation workshop relocating to the new site in the second half to optimize production processes and enhance safety management[28] - Market rectification and rights protection efforts continued, resulting in strong retail performance and sales outbound growth in the first half, while overall group governance remained effective and healthy[29] Business Review Tan Mujiang's offline POS sales grew 11.9% to RMB 437.5 million, online sales increased 12.65% to RMB 138 million, and overseas outbound sales rose 1.02%, driven by channel expansion, R&D, production improvements, and brand building, while also focusing on human resources and governance Offline Business For the six months ended June 30, 2025, offline POS sales reached RMB 437.5 million, an 11.9% year-on-year increase, achieving record high metrics across various business indicators - For the six months ended June 30, 2025, offline POS sales reached approximately RMB 437.5 million, a year-on-year increase of 11.9%, with all business indicators reaching historical highs[30] - As of June 30, 2025, Tan Mujiang had 1,278 franchised stores and 1 directly operated store in mainland China, and 5 franchised stores and 3 directly operated stores in Hong Kong overseas, totaling 1,287 stores, an increase of 33 stores from the end of 2024[32] - 101 new stores were opened, with shopping mall stores accounting for 93.07% and an average area of 21.50㎡; over a hundred stores were renovated, rapidly eliminating or upgrading some outlets[33] - Cumulative new members reached 171,917, a 34.51% increase compared to the same period in 2024, with total backend members exceeding 1.4 million[34] - During the reporting period, three new product distributions were conducted, totaling 27 new products, including intangible cultural heritage craft products, Mother's Day products, summer products, and Gua Sha comb products[34] - Key offline business initiatives for the second half include new retail business training, implementing store image design and display standards, building a loyal franchisee team, and addressing higher customer demands for products and services[38] Online Business In the first half, online sales reached RMB 138 million, a 12.65% year-on-year increase, exceeding the semi-annual target, driven by new platform expansion, social media promotion, service optimization, and live streaming - For the six months ended June 30, 2025, online business achieved sales of RMB 138 million, completing 108% of the semi-annual target, a year-on-year increase of 12.65%[39] - Online business now covers 8 mainstream e-commerce platforms, and a JBP strategic cooperation was signed with Tmall, utilizing "Follow-up Assistant" to recall non-member purchasers, generating RMB 1.89 million in payments[43] - Douyin channel promotion focused on brand culture, with Douyin keyword search index increasing by 80.26% year-on-year in the first half, and total video views reaching 249 million[43] - On-site and off-site content promotion generated sales of RMB 3.083 million, a year-on-year increase of 31.3%, indicating good content conversion effectiveness[43] - The introduction of Leyan robots and Shizai Smart RPA robots enhanced reception service capabilities and refund processing efficiency, reducing manual response times[43] - "Hair Care Comb Cui Ping" and "Lacquer Art Comb Bear with Bamboo" emerged as potential best-selling products[44] - Tmall live streaming accumulated 179 sessions, totaling 1,417.5 hours, with "seed-to-sale" transaction value increasing by 19.4% year-on-year, and member transactions contributing as high as 68%[44] - Key online business initiatives for the second half include strengthening platform communication, providing personalized products, integrating online and offline channels, experimenting with AI digital human live streaming, and continuously optimizing private domain customer operations[46][47] Overseas Business In the first half, overseas offline outbound sales were RMB 1.812 million, cross-border e-commerce sales were RMB 0.453 million, and Hong Kong direct store sales were HKD 2.025 million, with plans for new stores in Hong Kong and Singapore Overseas Business Sales for the Six Months Ended June 30 | Indicator | 2025 (RMB/HKD) | 2024 (RMB/HKD) | Year-on-Year Growth/Decline | | :--- | :--- | :--- | :--- | | Overseas Offline Outbound Sales | RMB 1.812 million | - | 1.02% | | Cross-border E-commerce Platform Sales | RMB 0.453 million | - | 2.6% | | Hong Kong Direct Store Sales | HKD 2.025 million | - | (7.11)% | - Plans include opening 1 direct store each in Hong Kong and Singapore, with the Hong Kong store featuring a new design image and the Singapore store using a mature image, expected to open by the end of October[51] - The original plan to establish overseas warehouse sites was postponed due to US-China tariff issues[51] - The company participated in the Las Vegas Consumer Goods and Gifts Show in the first half and will attend the 100th Tokyo International Gift Show in the second half[51] - The US official website tanmujiang.com is being rebuilt and upgraded, expected to launch in September, to unify overseas brand names and enhance recognition[51] Creative R&D The creative R&D team launched 23 new products in the first half, focusing on new structures, materials, and styles, and plans to integrate market feedback to develop best-selling products - The creative R&D team explored new structures, materials, and styles for product design and development, launching 23 new products including inserted-tooth hair combs, inlaid-tooth combs, mixed-material accessories, and co-branded products[49][53] - Co-branded "Family Series" and "Time Series" products and packaging designs were launched with Hong Kong illustrators Siu Kim Ying and Lee Chi Tat, totaling 13 new products[53] - Products were specifically developed for overseas market demands, including Southeast Asian regional products and North American beard combs[53] - Future creative R&D will focus on "brand image enhancement," exploring new materials, processes, and structures, and integrating market feedback into the design and development process to create best-selling products[53] Production Technology In the first half, production orders remained stable despite increased complexity, with efficiency gains of 10.78%, and significant progress in automated comb blank milling, surface adhesion, and glue-free comb structures - In the first half, actual delivery volume was 2.8372 million pieces, a decrease of approximately 50,000 pieces year-on-year, while comprehensive production efficiency per capita working hour increased by 10.78%[54] - The "Tan Mujiang Product Type Testing Database" was completed and put into use, and the prototype equipment for automated comb blank profiling technology was fabricated and functionally verified[55] - Significant improvements were achieved in product surface adhesion and the structural optimization of glue-free inserted-tooth combs, slated for production application in the second half[55] - The raw material precision processing project has passed acceptance, improving material yield and processing efficiency[55] - The natural plant dyeing process technology project for wooden combs completed extraction and dyeing trials with 10 natural herbal plant pigments, significantly slowing down color fading[56] Logistics Distribution and After-Sales Service In the first half, the logistics team shipped 3.0337 million items, a 9.79% increase, and completed 156,357 after-sales repairs, a 14.66% increase, continuously improving service quality - The logistics distribution team shipped a total of 3.0337 million items, a year-on-year increase of 9.79%[59] - A total of 156,357 product after-sales repairs were completed, a year-on-year increase of 14.66%[60] - Repair quality is continuously improved through source inspection, employee skill enhancement, increased post-repair checks, updated service forms, and standardized repair station management[61] Brand Building In the first half, Tan Mujiang successfully hosted the "Comb Garden" pop-up event, enhancing brand recognition, concluded its 9th design competition, and received multiple awards and recognitions - In March 2025, Tan Mujiang's "Comb Garden" themed event debuted with a new image in Changsha IFS, and toured Kunming and Guangzhou, enhancing brand awareness and reputation[63][64] - The 9th "Beauty of Combs and Ornaments • Tan Mujiang Design Competition" successfully concluded, receiving 528 entries (sets) and conducting university-themed lectures[64] - The brand received multiple honors, including an Excellence Award at the 11th "Zijin Award" Cultural and Creative Design Competition for the "Comb Rhyme Landscape" series of wooden combs, and a Silver Award at the China Tourism Commodity Competition for the "Customized Gift Box Chongqing Impression"[65][67] - Chongqing Tan Mujiang Handicrafts Co., Ltd.'s Intangible Cultural Heritage Comb Industrial Design Center was recognized as a Chongqing Municipal Excellent Industrial Design Center and was selected for the "Yu Ban Li" Chongqing Elite TOP 10 list and the China Brand Value Evaluation list in the Independent Innovation category[68][69][70] Human Resources and Comprehensive Governance The company upholds its core values, promotes fair market expansion, addresses internal violations, encourages employee suggestions, continues market rectification, protects intellectual property, and prioritizes disabled employment and public welfare - The company adheres to its core values of "Honesty, Labor, Happiness" and ethical standards of "Kindness, Humility, Craftsmanship," promoting fair market expansion mechanisms and long-term brand philosophy, avoiding price wars[71] - In the first half, 10 instances of internal cultural norm violations were investigated, and franchised stores with inadequate service were penalized with security deposit deductions and closures, while the franchise system management contract was improved[72] - A total of 443 rationalization and improvement suggestions were received in the first half, with 151 adopted and 94 implemented[74] - Market rectification and rights protection efforts in the first half collected 23 cases of violations, resulting in awarded compensation of RMB 0.2685 million, with continued efforts to combat online infringement[74] - As of June 30, 2025, the Group held 765 valid trademarks (384 domestic, 128 in Hong Kong, Macau, Taiwan, and overseas) and 121 valid patents (16 invention, 55 utility model, 50 design)[75][76] - The company remains committed to promoting and safeguarding employment for people with disabilities, with a net increase of 10 disabled employees in the first half, bringing the total to 357, and improved accessibility facilities[79] - Public welfare activities continue, and improper public opinion handling issues are publicly reported to promote internal improvement and market standardization[80] Financial Review For the six months ended June 30, 2025, revenue increased by 9.4% to RMB 288 million, driven by market recovery and sales mix, with gross margin slightly up to 61.8%, and profit for the period rising 13.2% to RMB 109 million Revenue For the six months ended June 30, 2025, the company's revenue was approximately RMB 288 million, a 9.4% increase year-on-year, primarily due to market demand recovery Revenue Breakdown (For the Six Months Ended June 30) | Sales Category | 2025 (RMB thousands) | % Share | 2024 (RMB thousands) | % Share | | :--- | :--- | :--- | :--- | :--- | | Combs | 21,134 | 7.3% | 20,201 | 7.7% | | Mirrors | 230 | 0.1% | 267 | 0.1% | | Gift Sets | 264,014 | 91.7% | 240,437 | 91.3% | | Other Accessories* | 2,215 | 0.8% | 1,715 | 0.7% | | Franchise Fee Income | 293 | 0.1% | 462 | 0.2% | | Total | 287,886 | 100.0% | 263,082 | 100.0% | - The increase in revenue was primarily due to the gradual recovery of market demand during the reporting period compared to the six months ended June 30, 2024[81] Cost of Sales For the six months ended June 30, 2025, cost of sales was approximately RMB 110 million, a 9.2% year-on-year increase, consistent with increased sales volume and changes in product mix - Cost of sales was approximately RMB 110,089,000, an increase of 9.2% compared to the same period last year, primarily due to increased sales volume and changes in the sales product mix[82] Gross Profit and Gross Profit Margin For the six months ended June 30, 2025, gross profit was approximately RMB 178 million, a 9.6% year-on-year increase, with gross profit margin slightly rising to 61.8% due to a shift towards higher-margin products - Gross profit was approximately RMB 177,797,000, an increase of 9.6% compared to the same period last year[83] - Gross profit margin increased from 61.7% in 2024 to 61.8% in 2025, primarily due to a shift in sales mix towards higher-margin products[83] Other Income For the six months ended June 30, 2025, other income was approximately RMB 22.762 million, a 5.8% year-on-year increase, mainly from increased VAT preferential refunds and government subsidies - Other income was approximately RMB 22,762,000, an increase of 5.8% compared to the same period last year, primarily from increased China VAT preferential refunds and government subsidies[83] Selling and Distribution Expenses For the six months ended June 30, 2025, selling and distribution expenses were approximately RMB 46.012 million, a 6.1% year-on-year increase, mainly due to higher advertising, transportation, and staff costs - Selling and distribution expenses were approximately RMB 46,012,000, an increase of 6.1% compared to the same period last year, primarily due to increased advertising expenses, transportation costs, and staff costs[86] Administrative Expenses For the six months ended June 30, 2025, administrative expenses were approximately RMB 17.673 million, a 2.7% year-on-year decrease, mainly due to reduced consulting fees - Administrative expenses were approximately RMB 17,673,000, a decrease of 2.7% compared to the same period last year, primarily due to reduced consulting fees[86] Operating Profit For the six months ended June 30, 2025, operating profit was approximately RMB 134 million, an 11.9% year-on-year increase, primarily attributable to increased gross profit - Operating profit was approximately RMB 133,654,000, an increase of 11.9% compared to the same period last year, primarily attributable to an increase in gross profit of approximately RMB 15,552,000[86] Finance Costs For the six months ended June 30, 2025, finance costs were approximately RMB 0.288 million, largely stable year-on-year, primarily from HKFRS 16, with no bank loan interest expenses - The Group had no bank loan interest expenses in the first half of 2025 and 2024[86] - Finance costs were approximately RMB 288,000, primarily arising from the adoption of HKFRS 16[86] Profit Before Tax For the six months ended June 30, 2025, profit before tax was approximately RMB 133 million, an 11.9% year-on-year increase, primarily due to higher operating profit - Profit before tax was approximately RMB 133,366,000, an increase of 11.9% compared to the same period last year, primarily attributable to an increase in operating profit of approximately RMB 14,163,000[86] Income Tax Expense For the six months ended June 30, 2025, income tax expense was approximately RMB 24.32 million, a 6.2% year-on-year increase, with an effective tax rate of 18.2%, down 1.0 percentage point - Income tax expense was approximately RMB 24,320,000, an increase of 6.2% compared to the same period last year, primarily due to increased profit before tax and deferred tax provision[86] - The effective tax rate for the reporting period was 18.2%, a decrease of 1.0 percentage point compared to 19.2% in the same period last year[87] Profit for the Period For the six months ended June 30, 2025, profit for the period was approximately RMB 109 million, a 13.2% year-on-year increase, influenced by the combined effect of the aforementioned financial factors - Profit for the period was approximately RMB 109,046,000, an increase of 13.2% compared to the same period last year[87] Liquidity and Sources of Funds The Group primarily uses cash generated from operations to meet funding needs, had no bank loans during the period, and saw cash and bank balances significantly increase to RMB 117 million as of June 30, 2025 - The Group primarily uses cash generated from operations to meet its working capital needs and had no bank loans during the reporting period[89] - As of June 30, 2025, cash and bank balances were RMB 116,530,000, a significant increase from RMB 41,714,000 as of December 31, 2024[89] - The Directors believe the Group has sufficient working capital to meet its funding needs for the current period and at least the next twelve months from the reporting date[89] Cash Flow During the reporting period, net cash and cash equivalents increased by approximately RMB 74.816 million, with net cash from operating activities at RMB 98.627 million, from investing activities at RMB 56.796 million, and used in financing activities at RMB 86.435 million - During the reporting period, cash and cash equivalents increased by approximately RMB 74,816,000[90] Major Components of Cash Flow (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | | :--- | :--- | | Net Cash from Operating Activities | 98,627 | | Net Cash from Investing Activities | 56,796 | | Net Cash Used in Financing Activities | (86,435) | | Net Positive Impact from Exchange Rate Changes | 5,828 | Capital Structure As of June 30, 2025, the Group had no interest-bearing bank loans, rendering the gearing ratio inapplicable - As of June 30, 2025, and during the reporting period, the Group had no bank loans[91] - The calculation of the gearing ratio is meaningless due to the absence of interest-bearing bank loans[92] Pledge of Assets As of June 30, 2025, the Group had no assets pledged to banks - As of June 30, 2025, the Group had no assets pledged to banks[93] Capital Expenditure During the reporting period, capital expenditure was RMB 11.236 million, a decrease from RMB 22.32 million in the prior year - During the reporting period, the Group's capital expenditure was RMB 11,236,000, a decrease from RMB 22,320,000 in the same period last year[94] Exchange Rate Risk The Group's primary business operates with RMB and HKD as functional and operating currencies, posing no significant risk to other exchange rate fluctuations - The Group's primary business operates with RMB and HKD as functional and operating currencies, posing no significant risk to other exchange rate fluctuations[95] Contingent Liabilities, Legal and Potential Proceedings As of June 30, 2025, the Group has a property in Jurong City, Jiangsu, with a carrying value of approximately RMB 22.735 million, for which ownership certificates are pending due to the developer's liquidation, but management expects no material adverse impact - The Group has a property in Jurong City, Jiangsu, with a carrying value of approximately RMB 22,735,000, for which ownership certificates have not yet been obtained, and the developer has entered liquidation proceedings[96] - Management assesses that the liquidator is highly likely to continue executing the sale and purchase agreement and complete the issuance of ownership certificates, thus having no material adverse impact on business operations and financial position[96] - As of June 30, 2025, other than the aforementioned disclosure, the Group had no other significant contingent liabilities, legal proceedings, or potential litigation[97] Material Acquisitions and Disposals For the six months ended June 30, 2025, the Group had no material acquisitions or disposals - For the six months ended June 30, 2025, the Group had no material acquisitions or disposals[97] Going Concern Based on current financial conditions and available financing, the Group has sufficient financial resources to continue operations, thus financial reports are prepared on a going concern basis - The Group has sufficient financial resources to continue operations for the foreseeable future, and the financial reports are prepared on a going concern basis[97] Significant Investments Held As of June 30, 2025, the Group's investment properties had a carrying value of approximately RMB 84.1 million, with no significant difference from fair value and no purchases or disposals during the period - As of June 30, 2025, the Group's investment properties had a carrying value of approximately RMB 84,100,000[97] - The Directors believe there is no material difference between the carrying amount of investment properties and their fair value as of December 31, 2024, with no fair value changes recognized, nor any purchases or disposals of investment properties during the period[97] Future Outlook In the second half of 2025, the company plans to continue store upgrades, expand into prime commercial locations, open flagship stores in major Chinese cities and international concept stores in Hong Kong and Singapore, and advance brand activities and production improvements - In the second half, the company will continue to implement store upgrades, expand into prime commercial areas and shopping malls, and encourage the opening of larger stores in new first-tier cities[101] - Plans include opening Lee Wing Shing international concept stores in Hong Kong and Singapore, and designing and opening flagship concept stores with a "Wood • Art + Humanity • Modern Song Dynasty Aesthetics" style in Beijing, Shanghai, or Guangzhou/Shenzhen[101] - The company will continue to organize the "Comb Garden" brand pop-up events, host the 10th Design Competition and its 10th-anniversary retrospective exhibition, and resume wood art exhibitions[101] - The logistics distribution center and the Wanzhou factory's material preparation workshop will relocate to the new factory area, and progress will be made in the maturation and small-batch production of traditional handicraft techniques such as lacquerware, mother-of-pearl inlay, and cloisonné[101] - Technical improvements will be made to product spraying processes and working environments, accessibility facilities for disabled employees at the old factory will be continuously improved, and plans for a Tan Mujiang Museum will be conceptualized[101] Human Resources and Training As of June 30, 2025, the Group employed 1,007 staff, committed to providing employment opportunities for people with disabilities and enhancing employee skills and corporate culture through various training programs - As of June 30, 2025, the Group employed a total of 1,007 staff across mainland China, Hong Kong, and overseas regions[99] - The Group is committed to providing employment opportunities for people with disabilities and enhancing employee work skills, marketing strategies, and team spirit through various training programs[99] - For the six months ended June 30, 2025, the total remuneration paid to employees by the Group was approximately RMB 54,939,000, an increase from RMB 51,346,000 in the same period of 2024[99] Other Information Principal Business The company primarily designs, manufactures, and distributes small wooden ornaments made from natural wood, including combs, mirrors, other wooden accessories, and gift sets, mainly sold under the "Tan Mujiang" brand - The Group primarily engages in the design, manufacturing, and distribution of small wooden ornaments made from natural wood, including wooden combs, mirrors, other wooden accessories, and gift sets[102] - Products are mainly sold under the "Tan Mujiang" brand through franchised stores, distribution networks, and directly operated stores[102] Directors' and Major Shareholders' Interests As of June 30, 2025, Director Mr. Tan Chuanhua held 67.43% of the company's shares through a controlled entity, while Mr. Yang Tiannan beneficially owned 0.99%, with major shareholders Mr. Tan Chuanhua, Ms. Fan Chengqin, and Lingchang all holding 67.43% long positions Directors' Interests in the Company's Shares (As of June 30, 2025) | Director Name | Capacity/Nature of Interest | Number of Securities | Approximate Percentage | | :--- | :--- | :--- | :--- | | Tan Chuanhua | Interest in controlled corporation | 167,700,000 | 67.43% | | Yang Tiannan | Beneficial owner | 2,480,000 | 0.99% | Major Shareholders' Interests in the Company's Shares (As of June 30, 2025) | Name | Capacity/Nature of Interest | Number of Shares | Type | Approximate Percentage | | :--- | :--- | :--- | :--- | :--- | | Tan Chuanhua | Interest in controlled corporation | 167,700,000 | Long Position | 67.43% | | Fan Chengqin | Interest in controlled corporation | 167,700,000 | Long Position | 67.43% | | Lingchang | Beneficial owner | 167,700,000 | Long Position | 67.43% | Capital Commitments and Public Float As of June 30, 2025, the Group had contracted but unprovided capital commitments of approximately RMB 20.588 million for property, plant, and equipment, maintaining a public float of at least 25% - As of June 30, 2025, the Group had contracted but unprovided capital commitments of approximately RMB 20,588,000 for the acquisition of property, plant, and equipment[109] - From the reporting period to the date of this report, at least 25% of the company's issued share capital was held by public shareholders[110] - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[111] Corporate Governance The company is committed to complying with the Corporate Governance Code, has adopted the Model Code for directors' securities transactions, and its Nomination and Audit Committees are established and functioning, with the Audit Committee reviewing the interim financial information - The company has complied with the code provisions set out in the Corporate Governance Code throughout the reporting period[113] - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules[114] - Both the Nomination Committee and the Audit Committee have been established, and the Audit Committee has reviewed the financial information in this interim report and agreed with the accounting treatments adopted[115][116] Dividends and Directors' Appointments The company paid a final dividend of HKD 36.63 cents per share for FY2024, totaling approximately HKD 91.104 million, but the board resolved not to declare any interim dividend for the first half of 2025, and Mr. Tan Lizi and Ms. Liu Kejia were appointed as executive directors on February 1, 2025 - The company paid a final dividend for FY2024 of HKD 36.63 cents per share on June 30, 2025, totaling approximately HKD 91,104,000 (approximately RMB 85,632,000)[118] - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025[118] - Mr. Tan Lizi and Ms. Liu Kejia were appointed as executive directors of the company on February 1, 2025[119] Condensed Consolidated Statement of Profit or Loss Profit or Loss Overview For the six months ended June 30, 2025, the company reported revenue of RMB 288 million, gross profit of RMB 178 million, profit for the period of RMB 109 million, and basic earnings per share of RMB 43.8 cents Condensed Consolidated Statement of Profit or Loss (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 287,886 | 263,082 | | Cost of Sales | (110,089) | (100,837) | | Gross Profit | 177,797 | 162,245 | | Other Income | 22,762 | 21,520 | | Selling and Distribution Expenses | (46,012) | (43,386) | | Administrative Expenses | (17,673) | (18,170) | | Other Operating Expenses | (3,220) | (2,718) | | Operating Profit | 133,654 | 119,491 | | Finance Costs | (288) | (309) | | Profit Before Tax | 133,366 | 119,182 | | Income Tax | (24,320) | (22,894) | | Profit for the Period | 109,046 | 96,288 | | Basic Earnings Per Share | RMB 43.8 cents | RMB 38.7 cents | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Comprehensive Income Overview For the six months ended June 30, 2025, profit for the period was RMB 109 million, with net other comprehensive income of RMB 5.828 million, resulting in a total comprehensive income of RMB 115 million 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) | | :--- | :--- | :--- | | Profit for the Period | 109,046 | 96,288 | | Exchange differences on translation from functional currency to presentation currency | (3,530) | 5,787 | | Exchange differences arising from translation of overseas operations | 9,358 | (7,692) | | Other Comprehensive Income/(Loss) for the Period | 5,828 | (1,905) | | Total Comprehensive Income for the Period | 114,874 | 94,383 | Condensed Consolidated Statement of Financial Position Assets and Liabilities Overview As of June 30, 2025, the Group's total non-current assets were RMB 566 million, total current assets were RMB 466 million, and net assets increased to RMB 913 million from RMB 884 million at the end of 2024 Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-current Assets | | | | Property, Plant and Equipment | 139,903 | 132,355 | | Right-of-use Assets | 34,400 | 36,233 | | Investment Properties | 84,100 | 84,100 | | Unpledged Fixed Bank Deposits | 306,000 | 218,000 | | Other Receivables, Deposits and Prepayments | 1,137 | 624 | | Total Non-current Assets | 565,540 | 471,312 | | Current Assets | | | | Inventories | 296,535 | 292,498 | | Trade Receivables | 10,540 | 7,153 | | Other Receivables, Deposits and Prepayments | 12,006 | 10,656 | | Financial Assets at Fair Value Through Profit or Loss | 10,000 | 80,791 | | Unpledged Fixed Bank Deposits (maturing in >3 months but <1 year) | 20,000 | 105,000 | | Cash and Cash Equivalents | 116,530 | 41,714 | | Total Current Assets | 465,611 | 537,812 | | Current Liabilities | | | | Trade Payables | 7,738 | 9,507 | | Other Payables and Accruals | 46,353 | 47,798 | | Income Tax Payable | 29,642 | 38,595 | | Lease Liabilities | 2,175 | 2,161 | | Total Current Liabilities | (85,908) | (98,061) | | Net Current Assets | 379,703 | 439,751 | | Total Assets Less Current Liabilities | 945,243 | 911,063 | | Non-current Liabilities | | | | Deferred Tax Liabilities | 22,197 | 16,654 | | Deferred Income | 487 | 497 | | Lease Liabilities | 9,358 | 9,953 | | Total Non-current Liabilities | (32,042) | (27,104) | | Net Assets | 913,201 | 883,959 | | Total Equity | 913,201 | 883,959 | Condensed Consolidated Statement of Changes in Equity - Unaudited Equity Movement Overview As of June 30, 2025, total equity attributable to owners of the company increased to RMB 913 million from RMB 884 million on January 1, 2025, driven by profit for the period and foreign currency translation differences, net of dividend payments Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Equity at January 1 | 883,959 | 808,484 | | Profit for the Period | 109,046 | 96,288 | | Exchange differences on translation from functional currency to presentation currency | (3,530) | 5,787 | | Exchange differences arising from translation of overseas operations | 9,358 | (7,692) | | Total Comprehensive Income for the Period | 114,874 | 94,383 | | Dividends | (85,632) | (87,000) | | Acquisition of additional interests in a subsidiary | - | (4,444) | | Total Equity at June 30 | 913,201 | 811,423 | Condensed Consolidated Statement of Cash Flows Cash Flow Overview For the six months ended June 30, 2025, net cash and cash equivalents increased by RMB 68.988 million, with net cash from operating activities at RMB 98.627 million, from investing activities at RMB 56.796 million, and used in financing activities at RMB 86.435 million Condensed Consolidated Statement of Cash Flows (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 98,627 | 53,530 | | Net Cash from Investing Activities | 56,796 | 77,719 | | Net Cash Used in Financing Activities | (86,435) | (92,418) | | Net Increase in Cash and Cash Equivalents | 68,988 | 38,831 | | Cash and Cash Equivalents at January 1 | 41,714 | 67,381 | | Net Effect of Exchange Rate Changes | 5,828 | (1,908) | | Cash and Cash Equivalents at June 30 | 116,530 | 104,304 | Notes to the Unaudited Interim Financial Report General Information and Basis of Preparation The company, incorporated in the Cayman Islands and listed on the HKEX, prepared its interim financial report under HKAS 34 and Listing Rules, measured at historical cost, and reviewed by the Audit Committee, with no material impact from new HKFRS amendments - The company was incorporated in the Cayman Islands and its shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[136] - The unaudited interim financial report has been prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[137] - The condensed consolidated interim financial statements are prepared on the historical cost basis, except for investment properties and financial assets at fair value through profit or loss, which are measured at fair value, and have been reviewed by the Audit Committee[137] - The application of the revised Hong Kong Financial Reporting Standards during the period had no material impact on the Group's financial position and performance during the period and prior periods, and/or the disclosures contained in these condensed consolidated interim financial statements[139] Accounting Judgments and Segment Reporting Management's significant judgments and estimation uncertainties in preparing financial statements remain consistent with the prior year, and no segment information is presented as over 90% of the Group's revenue, results, and assets derive from a single segment of wooden crafts and accessories - The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty are the same as those described in the consolidated financial statements for the previous year[141] - Over 90% of the Group's revenue, results, and assets are derived from a single segment of manufacturing and selling wooden crafts and accessories, thus no segment information is presented[141] - The Group's sales generally fluctuate due to seasonality, with higher sales in March to April and September to December, primarily due to increased purchases before holidays[142] Revenue and Other Income Details The Group's principal business is designing, manufacturing, and distributing "Tan Mujiang" brand small wooden crafts and accessories, generating RMB 288 million in goods sales and RMB 0.293 million in franchise fees for the six months ended June 30, 2025 - The Group's principal business is the design, manufacturing, and distribution of "Tan Mujiang" brand small wooden crafts and accessories, and operating franchised and distribution networks[143] Revenue Breakdown (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of Goods | 287,593 | 262,620 | | Franchise Fee Income | 293 | 462 | | Total | 287,886 | 263,082 | Other Income Breakdown (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government Subsidies | 2,459 | - | | Interest Income from Financial Assets | 1,450 | 5,336 | | Gain on Fair Value Change of Financial Assets at FVTPL | 225 | 25 | | China VAT Preferential Refunds | 16,412 | 12,298 | | Rental Income from Investment Properties | 1,095 | 2,267 | | Net Exchange Gain | 15 | 52 | | Reversal of Loss Provision for Other Receivables | 10 | - | | Others | 1,096 | 1,542 | | Total | 22,762 | 21,520 | Profit Before Tax and Income Tax For the six months ended June 30, 2025, profit before tax was RMB 133 million, with income tax expense of RMB 24.32 million and an effective tax rate of 18.2%, benefiting from preferential tax rates and deductions for employing disabled individuals Components of Profit Before Tax (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Carrying amount of inventories sold | 111,087 | 101,430 | | Inventories (reversal of write-down)/write-down | (998) | (593) | | Cost of Inventories | 110,089 | 100,837 | | Depreciation - Property, Plant and Equipment | 3,665 | 2,515 | | Depreciation - Right-of-use Assets | 1,769 | 1,847 | | Staff Costs (including Directors' emoluments) | 54,939 | 51,346 | | Net Rental Income | (723) | (1,940) | Income Tax Expense (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Tax - China Corporate Income Tax | 18,678 | 19,135 | | Deferred Tax - Provision for the Period | 5,642 | 3,759 | | Total | 24,320 | 22,894 | - Chongqing Tan Mujiang Handicrafts Co., Ltd. enjoys a preferential corporate income tax rate of 15%[148] - Tan Mujiang, a wholly-owned subsidiary of the Group, is entitled to a double income tax deduction for salaries paid to its disabled employees and VAT refunds[149] Earnings Per Share For the six months ended June 30, 2025, basic earnings per share were RMB 43.8 cents, calculated using a profit of RMB 109 million and a weighted average of 248,714 thousand ordinary shares, with no diluted earnings presented due to the absence of potential ordinary shares - The profit used for calculating basic earnings per share was RMB 109,046,000[151] - The weighted average number of ordinary shares outstanding was 248,714 thousand shares[153] - No diluted earnings per share are presented as there were no potential ordinary shares outstanding during the period[153] Fixed Assets and Trade Receivables For the six months ended June 30, 2025, the Group's property, plant, and equipment acquisitions totaled RMB 11.236 million, investment property carrying values were not materially different from fair value, and trade receivables amounted to RMB 10.54 million, with RMB 8.551 million aged 0-30 days - For the six months ended June 30, 2025, the total cost of property, plant, and equipment acquired by the Group was RMB 11,236,000[155] - The Directors believe that the carrying amount of the Group's investment properties does not materially differ from their fair value as estimated on December 31, 2024[155] Ageing Analysis of Trade Receivables (Net of Loss Provision) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 30 days | 8,551 | 5,617 | | 31 to 60 days | 744 | 799 | | 61 to 90 days | 201 | 315 | | 91 to 180 days | 290 | 52 | | 181 to 365 days | 163 | 655 | | Over 1 year | 99 | 207 | | Total | 10,540 | 7,153 | Financial Assets and Trade Payables As of June 30, 2025, principal-protected wealth management products at fair value through profit or loss amounted to RMB 10 million, with an expected annual return rate of 1.40% to 2.18%, and total trade payables were RMB 7.738 million, with RMB 6.292 million aged 0-30 days - As of June 30, 2025, principal-protected wealth management products at fair value through profit or loss amounted to RMB 10,000,000, with an expected annual return rate of 1.40% to 2.18%[159] Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 30 days | 6,292 | 5,209 | | 31 to 60 days | 869 | 3,211 | | 61 to 90 days | 49 | 777 | | 91 to 180 days | 333 | 104 | | 181 to 365 days | 81 | 95 | | Over 1 year | 114 | 111 | | Total | 7,738 | 9,507 | Dividends and Share Capital The board resolved not to declare an interim dividend for the first half of 2025, while a final dividend of RMB 85.632 million for FY2024 was paid, and as of June 30, 2025, the company had 248,714 thousand issued and fully paid shares at HKD 0.01 par value - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025[162] - The final dividend for FY2024, approved and paid during the interim period, amounted to RMB 85,632,000[162] - As of June 30, 2025, the issued and fully paid share capital consisted of 248,714,000 shares with a par value of HKD 0.01 per share[161] Fair Value Measurement of Financial Instruments The Group's financial instruments measured at fair value on a recurring basis primarily consist of Level 3 principal-protected wealth management products, totaling RMB 10 million as of June 30, 2025, with fair value measurements using expected returns as a significant unobservable input - The Group's financial instruments measured at fair value on a recurring basis at the end of the reporting period primarily consist of Level 3 principal-protected wealth management products[164][165] - As of June 30, 2025, the fair value of financial assets at fair value through profit or loss (principal-protected wealth management products) was RMB 10,000,000[164] - Fair value measurement is positively correlated with expected returns, and the discount rate used is derived from expected returns, serving as a significant unobservable input[168] - As of June 30, 2025, and December 31, 2024, there were no material differences between the carrying amounts and fair values of the Group's financial instruments accounted for at amortized cost[170] Acquisition of Additional Interests in a Subsidiary and Contingent Liabilities For the six months ended June 30, 2024, the Group acquired an additional 5% equity in Jiangsu Mujianggu Tourism Development Co., Ltd. for RMB 4.444 million, increasing its stake to 100%, and as of June 30, 2025, the Group had no significant contingent liabilities - For the six months ended June 30, 2024, the Group acquired an additional 5% equity interest in Jiangsu Mujianggu Tourism Development Co., Ltd. for a cash consideration of RMB 4,444,000, increasing its equity interest to 100%[171] - As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities[171] Capital Commitments and Related Party Transactions As of June 30, 2025, the Group had contracted but unprovided capital commitments of approximately RMB 20.558 million for property, plant, and equipment, and total key management personnel remuneration for the period was RMB 2.859 million - As of June 30, 2025, the Group had contracted but unprovided capital commitments of approximately RMB 20,558,000 for the acquisition of property, plant, and equipment[171] - The total remuneration for the Group's key management personnel (including amounts paid to the company's directors) for the period was RMB 2,859,000[174] Accounting Standards Amendments Not Yet Effective The HKICPA has issued several amendments not yet effective, which the Group is evaluating, with preliminary conclusions indicating no material impact on the condensed consolidated financial statements - The Hong Kong Institute of Certified Public Accountants has issued several amendments that are not yet effective for the six months ended June 30, 2025, and have not been adopted in these interim financial statements[174] - The Group is assessing the expected impact of these developments upon initial application, and the conclusion to date is that the adoption of these developments is unlikely to have a material impact on the condensed consolidated financial statements[175]