Financial Performance - The company's revenue for the fiscal year 2022 was approximately RMB 638.8 million, a decrease of about RMB 102.9 million or 13.9% compared to the previous year[73]. - The net loss attributable to equity shareholders for the fiscal year 2022 was approximately RMB 25.0 million, a reduction in loss of about RMB 13.0 million compared to the previous year[73]. - The group's revenue for the fiscal year ending December 31, 2022, was approximately RMB 638.8 million, a decrease of about RMB 102.9 million or 13.9% compared to the fiscal year ending December 31, 2021[88]. - The net loss attributable to equity shareholders for the fiscal year 2022 was approximately RMB 25.0 million, a reduction in loss of about RMB 13.0 million compared to the previous fiscal year, primarily due to decreased management and distribution costs[88]. - The company reported non-current assets of RMB 132.586 million in 2022, down from RMB 170.933 million in 2021[185]. - Current assets totaled RMB 257.233 million in 2022, compared to RMB 310.652 million in 2021[185]. - The company's cash and cash equivalents decreased to RMB 48.972 million in 2022 from RMB 103.343 million in 2021[185]. - The company’s total liabilities decreased from RMB 224.702 million in 2021 to RMB 172.976 million in 2022[185]. - The company’s net asset value was RMB 176.760 million in 2022, down from RMB 200.848 million in 2021[185]. Corporate Governance - The company has established a compensation committee consisting of three members, including the chairman, Mr. Wang Yilin, and two independent non-executive directors[22]. - The company has adopted a nomination policy that includes transparent and formal standards for selecting directors, focusing on academic background, professional qualifications, and industry experience[25]. - The company has implemented a standard code of conduct for directors regarding securities trading, ensuring compliance with regulations[11]. - The company has arranged appropriate liability insurance for directors and senior personnel against potential legal claims arising from company activities[14]. - The company encourages directors and senior management to participate in relevant training courses to enhance their knowledge and skills[17]. - The company’s board of directors is required to rotate every three years, with new directors subject to re-election at the next shareholders' meeting[18]. - The audit committee is responsible for providing independent opinions on the effectiveness of financial reporting procedures, internal controls, and risk management systems[20]. - The company has appointed Mr. Zhao Xiaofei as the Chief Financial Officer since February 2022, bringing extensive experience in financial management[9]. - The company has a total of three executive directors, with Ms. Wang Hui appointed as an executive director in February 2022[12]. - The board of directors has reviewed the structure, composition, and diversity of the board, assessing the independence of non-executive directors[28]. - The company has received confirmations of independence from all independent non-executive directors as per listing rules[106]. - The company’s independent non-executive directors have confirmed their independence according to the relevant listing rules[106]. - The audit committee reviewed the financial statements and discussed accounting policies and risk management with senior management[141]. - The company maintained the public float required by listing rules as of December 31, 2022[140]. - There were no significant events requiring disclosure after December 31, 2022, up to the date of the report[142]. - The annual general meeting is scheduled for June 6, 2023, with a suspension of share transfer registration from June 1 to June 6, 2023[143]. Business Strategy and Operations - The company operates supermarket chains primarily in Guangdong Province, China, focusing on both retail and wholesale distribution channels[57]. - The company has faced increased competition from the rise of online retail platforms, which has affected its retail store expansion plans[54]. - The company plans to repurpose part of the funds originally allocated for opening new retail stores to renovate existing stores, enhancing competitiveness in Guangdong Province[62]. - The company has decided to slow down the pace of opening new retail stores due to the recent slowdown in China's economic growth[62]. - Management has noted that the retail industry is experiencing significant changes in consumer habits and business models post-COVID-19, necessitating a shift towards online platforms and enhanced in-store experiences[73]. - The group aims to develop its own e-commerce platform "Shun Ke Long You Xuan" and enhance online sales through continuous live streaming on platforms like Douyin[76]. - The company is committed to upgrading stores and optimizing the shopping experience through category structure adjustments[76]. - The group has implemented cost control measures, significantly reducing expenses related to rent, labor, bank loan interest, and utilities[75]. - The company is focusing on the Guangdong-Hong Kong-Macao Greater Bay Area to become a leading supermarket enterprise in the region[76]. - The group is actively exploring and expanding its international wholesale trade business, leveraging policies from the Hainan Free Trade Port and the Greater Bay Area[76]. - The company has successfully adopted new sales methods such as live streaming to align with consumer habits and enhance online sales[75]. - The group has opened 12 "Shun Ke Long Fresh Community" stores, highlighting growth in fresh product sales[75]. - The company plans to expand its franchise store count by leveraging its supply chain and brand advantages, focusing on brand output and management output[76]. - The group has exclusive distribution rights for 21 brands in Foshan, Jiangmen, and Zhaoqing, collaborating with over 483 suppliers[93]. - The group aims to achieve a balanced budget amidst a challenging retail environment, focusing on the successful model of the "Shun Ke Long Fresh Community"[93]. - The group plans to enhance its online platform and community marketing through its self-operated platform "Shun Ke Long You Xuan" and partnerships with major e-commerce platforms[93]. - The group has set annual caps for the goods procurement agreement with Gongxiao Daji Group at RMB 60 million, RMB 80 million, and RMB 100 million for the next three years[101]. - The group emphasizes the importance of supply chain management in the fresh produce sector, viewing it as a key competitive advantage[93]. - The group will maintain a high level of risk awareness to respond to any unexpected events following the COVID-19 pandemic[91]. - The group is committed to expanding its geographical sales channels across China to meet the growing demand for its products[101]. - The company is expanding its sales channels to online platforms as part of its growth strategy[124]. Challenges and Risks - The company faced a fine of RMB 700,000 due to non-disclosure of certain non-operating related transactions and guarantees in financial reports from 2017 to 2020[4]. - The company is facing challenges due to high employee turnover rates, particularly among younger workers, which may adversely affect business operations and expansion plans[114]. - The company is facing intense competition in the retail sector, which may impact future growth and profitability[182]. - The company’s ability to expand its retail network in the Greater Bay Area is contingent on various risks, including finding suitable locations and securing government approvals[182]. - Changes in customer preferences in China are rapid and influenced by multiple factors, which may affect the company's operational performance if not addressed[183]. Shareholder Information - The company has a significant indirect shareholding of approximately 70.42% held by the controlling shareholder through Supply Chain International Holdings Limited[118]. - The major shareholder, Supply and Marketing Group Co., Ltd., holds approximately 70.42% of the company's issued shares[127]. - The main shareholders include Everbright Xinglong Trust Co., Ltd. and CITIC Trust Co., Ltd., each holding 204,558,317 shares, representing 70.42%[129]. - Infini Capital Management holds 27,600,000 shares, accounting for 9.50% of the total equity[129]. - Golden Prime Holdings Limited owns 25,988,000 shares, which is 8.95% of the total equity[129]. - Hainan HNA No. 2 Trust holds a 14.67% stake in Supply and Marketing Group Co., Ltd. through 11 wholly-owned subsidiaries[130]. - The company confirms that there were no significant transactions or contracts with directors or related entities as of December 31, 2022[132]. Audit and Compliance - The company has not established an internal audit function but has engaged an independent consultant to assess its internal controls and risk management systems[32]. - The company has adopted a share option scheme as a long-term incentive plan for employees[157]. - The audit firm has been engaged since December 29, 2017, and will be proposed for reappointment at the upcoming annual general meeting[160]. - There were no transactions under the product sales agreement for the fiscal year 2022, which requires annual review by independent non-executive directors and auditors[122]. - The pricing for products sold to the supply chain group will be based on a cost-plus model, with markup rates typically ranging from 2% to 5%[121]. - The procurement amount from the largest supplier accounted for 9.13% of total purchases, while the top five suppliers accounted for 22.84%[161]. - The revenue contribution from the top five customers was 4.87% for the year ended December 31, 2022[161]. - The impairment assessment of cash-generating units is identified as a key audit matter due to significant management judgment involved[170]. - As of December 31, 2022, the wholesale cash-generating unit has a carrying value of RMB 2,343,000, with an impairment loss recognized of RMB 403,000[147]. - The retail cash-generating unit has a carrying value of RMB 79,670,000, with no impairment loss recognized for the year ended December 31, 2022[147]. - Trade receivables amounted to RMB 28,660,000 as of December 31, 2022, after deducting cumulative impairment losses of RMB 608,000[171].
中国顺客隆(00974) - 2022 - 年度财报