Revenue Performance - For the six months ended June 30, 2022, the Group's revenue was approximately RMB 46,509,000, representing a decrease of approximately 71.3% compared to RMB 161,829,000 for the same period in 2021[22]. - The decrease in revenue was mainly due to the prolonged COVID-19 pandemic in Shanghai, which severely impacted the retail sector[22]. - Revenue from the Shanghai area accounted for approximately 59.9% of the Group's revenue in the first half of 2022, down from 66.0% in the same period of 2021[28]. - Total revenue from all product categories decreased in the first half of 2022, with bread and cakes revenue down by approximately RMB92,780,000 or 72.0%, pastries down by approximately RMB17,197,000 or 73.3%, and other products down by approximately RMB5,343,000 or 55.9%[29]. - The revenue from bread and cakes was RMB 36,015,000, while pastries generated RMB 6,274,000, both showing a significant decline compared to the previous year[21]. Financial Performance - The gross profit for the six months ended June 30, 2022, was approximately RMB 9,209,000, down from RMB 71,977,000 in the same period of 2021, reflecting a significant decline[21]. - The Group's gross profit for the six months ended 30 June 2022 was approximately RMB9,209,000, representing a decrease of approximately 87.2% from RMB71,977,000 in the same period of 2021, with a gross profit margin of 19.8% compared to 44.5%[35]. - The loss attributable to owners of the Company increased by approximately RMB4,505,000 from RMB68,009,000 in the first half of 2021 to RMB72,514,000 in the first half of 2022[53]. - The total comprehensive loss for the period was RMB 72,514,000, compared to a loss of RMB 68,009,000 for the same period in 2021[169]. - Loss from operations increased to RMB 67,679,000, compared to a loss of RMB 62,277,000 in the prior year, reflecting a worsening operational performance[157]. Cost Management - Selling and distribution expenses decreased by approximately RMB53,575,000 or 47.4% from approximately RMB112,916,000 in the same period of 2021 to approximately RMB59,341,000[40]. - Administrative expenses decreased by RMB3,158,000 or 14.2% from approximately RMB22,250,000 in the same period of 2021 to approximately RMB19,092,000[46]. - Total staff costs during the period were approximately RMB61,252,000, accounting for approximately 131.7% of operating revenue, a significant increase from 50% in the corresponding period in 2021[129]. Store Operations - The Group closed 94 loss-making stores, reducing the number of operating stores from 340 at the end of June 2021 to 246 by the end of the first half of 2022[25]. - The Group's strategy to close underperforming stores was implemented to mitigate losses due to poor revenue performance and rising rental costs[25]. - Of the closed stores, 57 were located in Shanghai, 23 in Jiangsu, and 14 in Zhejiang[25]. Inventory and Receivables - Inventory turnover days increased to 76 days as of 30 June 2022, compared to 40 days as of 31 December 2021, primarily due to decreased production and sales volume[56]. - Trade receivables turnover days increased by 4 days, from 5 days for the year ended 31 December 2021 to 9 days for the six months ended 30 June 2022[62]. - The aging of trade receivables showed a significant decrease in the 0 to 30 days category, from RMB3,103,000 as of 31 December 2021 to RMB1,484,000 as of 30 June 2022[70]. Cash Flow and Liquidity - Cash (and bank card) sales amounted to approximately RMB26,247,000, accounting for 54.7% of total sales revenue, compared to RMB96,160,000 and 59.4% in the same period of 2021[30]. - Bank and cash balances amounted to approximately RMB21,452,000 as of 30 June 2022, representing an increase of approximately RMB3,550,000 compared to RMB17,902,000 as of 31 December 2021[99]. - The net increase in cash and cash equivalents for the period was RMB 3,550,000, down from RMB 6,622,000 in the prior year[175]. - The cash and cash equivalents at the end of the reporting period were RMB 21,452,000, compared to RMB 70,469,000 at the end of June 2021[175]. Future Outlook and Strategy - The Group is actively attempting to change its traditional marketing model, but new partnerships are still under negotiation and have not yet contributed to revenue growth[22]. - The Group's efforts to adapt to market needs through new marketing strategies are ongoing and require time for implementation[22]. - Management remains optimistic about the bakery industry's growth in China, citing continuous economic growth and an expanding consumer base, particularly in third- and fourth-tier cities[135]. - The Group aims to enhance brand image and product awareness while targeting young consumer groups for healthier and high-quality bakery products[143]. - In the second half of 2022, the R&D department will focus on developing new bakery products, improving existing product quality, and enhancing food therapy product development[142][143]. Financial Position - Total assets as of June 30, 2022, were RMB 417,420,000, down from RMB 448,409,000 at the end of 2021, indicating a decline in asset value[160]. - The Group's total equity showed a deficit of approximately RMB264,471,000 as of June 30, 2022, compared to a deficit of approximately RMB206,037,000 as of December 31, 2021[121]. - Current liabilities totaled RMB 668,782,000, an increase from RMB 634,225,000 at the end of 2021, indicating rising short-term financial obligations[163]. - The Group's current liabilities exceeded its current assets by approximately RMB 587,182,000, and total liabilities exceeded total assets by approximately RMB 264,461,000[190]. Financing Activities - The Group is in negotiations for external financing, including obtaining further bank facilities and various forms of capital raising[193]. - The Group raised approximately HKD 16,567,000 (equivalent to approximately RMB 14,158,000) from the issuance of 202,037,600 subscription shares at a price of HKD 0.082 per share[197]. - The net proceeds from the subscriptions are intended to be used entirely to supplement the general working capital of the Group[200].
克莉丝汀(01210) - 2022 - 中期财报