Economic Overview - In 2022, the global average Consumer Price Index (CPI) increased by 8.8%, significantly higher than the growth rate in 2021[17]. - The annual average CPI growth rate for the United States was approximately 8.1%, while the Eurozone experienced a growth rate of about 8.3%[17]. - Emerging European economies saw a staggering CPI increase of 27.8% in 2022, with inflation levels rising sharply across major economies[17]. - The pandemic's impact led to a reduction in the labor force in many countries, resulting in tight supply in the labor market and rapid wage increases, further pushing up inflation[19]. - The reconfiguration of supply chains from an emphasis on efficiency to a focus on safety and politics has raised costs and driven up prices globally[19]. China's Economic Conditions - China's economy faced pressures from demand contraction and supply shocks, with actual consumption's contribution to economic growth significantly weakened[20]. - The growth rate of total retail sales of social consumer goods in China became more volatile, indicating a shift in consumer behavior[20]. - The decline in real estate investment in China continued to expand, while manufacturing investment remained resilient due to rapid export growth[20]. - Infrastructure investment contributed to the growth of fixed asset investment in China despite challenges in the service industry[20]. - Net exports stimulated economic growth, although the year-on-year growth rate of foreign trade imports and exports declined due to slowing global economic growth[20]. Retail Industry Trends - The retail industry is shifting towards high-quality, personalized, and differentiated consumption, with a growing trend in e-commerce and community convenience stores[24][25]. - The retail business is recovering, but traditional department stores face unprecedented pressure due to the pandemic and rising operational costs[30]. - The domestic consumption market was severely impacted by the pandemic, leading to significant challenges for supermarkets and department stores in 2022[71]. - In 2022, many listed supermarket companies, including Yonghui and Lianhua Supermarket, reported substantial losses, prompting strategic contractions and store closures[74]. - The Chinese government issued the "Strategic Planning Outline for Expanding Domestic Demand (2022–2035)" to promote domestic spending and consumption upgrades[71]. Shopping Mall Developments - In 2022, 366 shopping malls with a total area of approximately 32.68 million square meters were opened, bringing the total number of shopping mall projects in China to 5,685, with a total area of 503 million square meters[27][28]. - The number of new openings decreased due to the pandemic's impact, reflecting intensified market competition and a gradual slowdown in industry growth[27][28]. - East China accounted for over 40% of new openings, while South China represented 18%, with Guangdong Province alone contributing over 70% of that figure[27][28]. - The proportion of shopping malls with areas between 150,000 to 200,000 square meters is significantly increasing, while smaller projects of 30,000 to 50,000 square meters continue to grow year-on-year[27][28]. - A wave of sports experience has emerged in shopping centers, reflecting the national trend towards sports and fitness[27][28]. Company Financial Performance - For the year ended December 31, 2022, the Group recorded revenue of approximately RMB335.3 million, representing a YOY decrease of approximately 22.8%[31]. - Gross profit from direct sales was approximately RMB14.8 million, reflecting a YOY increase of approximately 4.0%[31]. - Loss attributable to owners of the Company was approximately RMB107.9 million, representing a YOY increase of approximately 7.8%, mainly due to impairment loss provisions on existing loss-making retail stores[31]. - The decline in revenue was primarily due to decreased sales of goods, commissions from concessionaire sales, and rental income from sub-leasing of properties[31]. - The Group implemented operational reforms, reorganized the internal structure of flagship stores, and streamlined business processes to reduce costs[32]. Future Strategies and Outlook - The retail industry is expected to face continued pressure from high operating costs and a slowdown in economic growth, leading to increased consolidation in 2023[36]. - The Group plans to focus on resource consolidation and retail chain development, with an emphasis on expanding in Guangdong and Guangxi through various models including acquisitions and joint ventures[38]. - The integration of physical stores and online platforms is anticipated to enhance customer experience by sharing resources and marketing strategies[36]. - The Group aims to strengthen management and brand image while expanding steadily in the market[38]. - The overall operating environment remains challenging, but the Directors believe there are both opportunities and challenges ahead for the retail industry[37]. Management and Governance - Mr. Zhuang Xiao Xiong has over 17 years of experience in overall operation management of the Group[47]. - Mr. Chin Kam Cheung has over 15 years of experience as an independent non-executive director, with extensive auditing and financial management expertise[48]. - Mr. Sun Ju Yi has over 33 years of experience in financial lecturing, accounting, and corporate financial management, serving the Group for over 10 years[49]. - The company has been in strict compliance with legal and regulatory requirements, enhancing the transparency of corporate governance and information disclosure[200]. - The Group adopted the principles in the Corporate Governance Code to improve the quality of corporate governance, reflected in its Articles of Association and internal regulations[200]. Challenges in the Retail Sector - The pandemic has led to a decline in customer flow and weakening consumption power, making store closures a necessary strategy for many retailers[75]. - Major supermarket companies have begun to close stores, with significant contractions observed in various markets, including the complete withdrawal of Better Life supermarket from the Sichuan market[74]. - The community group buying model's reliance on capital to capture market share is no longer viable, emphasizing the need for core capabilities in supply chain and cost efficiency for future success[80][82]. - The catering industry faced significant challenges, with many well-known brands experiencing sharp declines in net profit and numerous store closures due to pandemic-related restrictions[84][87]. - The overall performance of listed catering companies has deteriorated, with many reporting operating losses and shrinking scales amid the pandemic[84][87].
佳华百货控股(00602) - 2022 - 年度财报