Pandemic Impact and Recovery - In the first half of 2022, the company's operations were severely impacted by the COVID-19 pandemic, particularly in April and May, with a significant decline in retail sales of 11.1% and 6.7% respectively[18]. - The company's operations in the Yangtze River Delta region, where 80% of its stores are located, were particularly affected by the pandemic, leading to temporary store closures[18]. - The overall GDP growth in Shanghai for the first quarter of 2022 was 3.1%, while the second quarter saw a significant decline of 13.7% due to the pandemic[18]. - The company emphasized the integration of logistics and supply chain management to ensure supply during the pandemic, showcasing its operational resilience[21]. - The company’s performance in the first half of 2022 was bolstered by effective supply chain management during the pandemic, which helped mitigate losses from store closures[116]. - The logistics faced severe challenges due to the Shanghai pandemic, but the group quickly adapted to restore efficiency[65]. - The group engaged in rent negotiations with tenants to mitigate losses due to store closures during the pandemic[64]. - The company is actively deploying emergency plans and prevention measures to ensure the quality and safety of supply during the pandemic[68]. Financial Performance - The group's revenue for the second quarter of 2022 was approximately RMB 57.15 billion, an increase of about RMB 1.13 billion, representing a year-on-year growth of approximately 2.0%[24]. - The group's total revenue for the first quarter of 2022 was approximately RMB 78.70 billion, an increase of about RMB 2.34 billion, representing a year-on-year growth of approximately 3.1%[24]. - The gross profit for the group during the review period was approximately RMB 17.99 billion, a decrease of about RMB 0.37 billion, primarily due to a reduction in subsidy income by approximately RMB 0.19 billion[24]. - The group's pre-tax profit for the review period was approximately RMB 1.31 billion, an increase of about RMB 0.06 billion, representing a year-on-year growth of approximately 5.2%[28]. - The company’s revenue for the six months ended June 30, 2022, was RMB 13,585,003 thousand, an increase of 2.6% compared to RMB 13,238,371 thousand for the same period in 2021[102]. - Gross profit for the same period was RMB 1,798,960 thousand, up from RMB 1,618,729 thousand, reflecting a gross margin improvement[102]. - The net profit attributable to the company's shareholders was RMB 13,700 thousand, a decrease from RMB 20,077 thousand in the previous year, indicating a decline of 31.8%[102]. - The company reported total comprehensive income of RMB 60,126 thousand for the period, consistent with the previous year's figure[102]. Store Operations and Expansion - The group opened 203 new stores in the first half of 2022, including 133 direct-operated stores and 70 franchise stores, with 172 new stores located in the Yangtze River Delta region, accounting for 84.73% of new openings[51]. - The group’s total number of stores reached 3,336, with approximately 84.95% located in the Greater East China region[52]. - The company faced significant operational challenges due to the pandemic, particularly in the Yangtze River Delta region, impacting store operations in Shanghai and surrounding areas[116]. - The convenience store segment reported a revenue of approximately RMB 452 million in Q1 2022, an increase of RMB 23 million year-on-year, but in Q2 2022, revenue decreased to approximately RMB 705 million, a decline of RMB 86 million year-on-year, accounting for about 5.2% of the group's total revenue[39]. Cost Management and Efficiency - The distribution and selling costs for the group were approximately RMB 23.22 billion, a decrease of about RMB 0.03 billion, representing a year-on-year decline of approximately 0.1%[26]. - The total labor expenditure was approximately RMB 1,194.15 million during the review period[60]. - The group focused on organizational restructuring to improve management efficiency and control personnel allocation[61]. - The company upgraded its comprehensive budget management and cost control system, enhancing the analysis and evaluation mechanisms[68]. - The total expenses of various business units showed a noticeable decline, with budget ratios and year-on-year comparisons both decreasing[68]. Strategic Initiatives - The company launched a series of promotional activities during the New Year sales season, including "Opening Red Promotions" and "Billion Red Packet Celebrations," which significantly enhanced sales performance[20]. - The group continues to optimize its supply chain by focusing on high-quality new product introductions and implementing a product elimination system for underperforming items[56]. - The group implemented a digital transformation strategy, accelerating the rollout of digital stores nationwide[59]. - The group strengthened its member system and private traffic operations, optimizing member marketing through big data, leading to a significant decrease in total expenses across various business units after absorbing the impact of pandemic costs[68]. Acquisitions and Investments - The acquisition of a 60% stake in Zhejiang Bailian Supermarket Co., Ltd. was completed in January 2022 for a cash consideration of RMB 180,000,000[183][184]. - The revenue contribution from Zhejiang Bailian Supermarket for the period was RMB 292,579,000, with a loss of RMB 21,000 recorded in the interim profit[193]. - The company reported a significant increase in investment and financial cooperation with subsidiaries, amounting to RMB 993,490 thousand as of June 30, 2022, compared to RMB 794,640 thousand as of December 31, 2021, representing a growth of approximately 25%[173]. Shareholder and Governance - The board of directors proposed not to declare an interim dividend for the period ending June 30, 2022[85]. - The company has adopted the Securities Trading Standards Code as its internal compliance guideline, ensuring all directors and supervisors adhered to the code during the review period[85]. - The board of directors has not established a clear mechanism for the rotation of directors, deviating from the code provisions[88]. - Non-executive directors were absent from certain board meetings due to other work commitments, but decisions were made and communicated to all directors[88].
联华超市(00980) - 2022 - 中期财报