Financial Performance - The total revenue for the six months ended June 30, 2023, was approximately RMB 99.6 million, a decrease of approximately 13.9% from RMB 115.6 million for the same period last year[13]. - The operating profit for the same period was approximately RMB 5.2 million, compared to an operating loss of approximately RMB 15.0 million for the same period last year[13]. - The net profit for the six months ended June 30, 2023, was approximately RMB 4.5 million, compared to a net loss of approximately RMB 16.2 million for the same period last year[14]. - Revenue from the Group's core brand, Bawang, was approximately RMB 96.1 million, accounting for approximately 96.5% of total revenue, representing a decrease of approximately 13.6% year-over-year[32]. - The Royal Wind brand generated revenue of approximately RMB 1.1 million, accounting for approximately 1.1% of total revenue, with a decrease of approximately 43.6% compared to the previous year[33]. - The Litao product series generated revenue of approximately RMB 2.3 million, accounting for approximately 2.3% of total revenue, with a slight increase of approximately 1.8% year-over-year[34]. - The Herborn skincare series generated revenue of approximately RMB 22,000, accounting for approximately 0.02% of total revenue, representing a decrease of approximately 56.0% compared to the same period last year[35]. - The Group's sales in overseas markets, including Hong Kong, Singapore, Thailand, Malaysia, the USA, and Mongolia, accounted for approximately 1.1% of total revenue during the six months ended June 30, 2023[41]. - For the six months ended June 30, 2023, the total sales revenue was distributed as follows: 54.0% through conventional channels and 46.0% through online channels[38]. - The Group recorded an operating profit of approximately RMB 5.2 million, compared to an operating loss of approximately RMB 15.0 million for the same period last year[48]. - The total number of shares that can be issued under the 2020 Share Option Scheme cannot exceed 30.0% of the company's total issued shares[154]. Distribution Network - As of June 30, 2023, the Bawang brand distribution network included 1,089 distributors and six KA retailers, covering 26 provinces and four municipalities in China[23]. - As of June 30, 2023, the Royal Wind brand distribution network included 1,058 distributors and one key account retailer, covering 26 provinces and four municipalities in China[24]. Marketing and Brand Strategy - The company engaged in cross-sector cooperation with Fairy Sword and Chivalrous Legend, producing a co-branded limited-edition haircare shampoo gift-pack[21]. - The company utilized social media platforms like Weibo, Douyin, and Xiaohongshu to enhance brand exposure and customer engagement[16][17]. - The company participated in community welfare events, donating products to needy women and impoverished families, enhancing its public image[22]. - The company advertised its products in metro stations of Shenzhen and other first-tier cities to increase brand visibility[16]. - The company aims to strengthen distributor confidence and accelerate the development of a new distribution network through in-store promotions[17]. - The Group plans to roll out new anti hair-fall shampoo products and scented shampoo bottles to attract high-end customers and younger demographics[73]. - The Group aims to enhance sales revenue through both conventional and online sales channels for its Royal Wind branded product series, targeting young consumers[75]. - The Group will expand its Herborn branded product line into shampoo products to supplement the previously underdeveloped market and enhance sales revenue[76]. - The Group intends to increase sales revenue by developing new distributors and establishing points-of-sale in uncovered markets[78]. - The Group plans to utilize major festive days for promotional activities in shopping malls to boost sales[80]. - The Group aims to achieve stable growth in online sales by optimizing operational efficiency and upgrading hair-care product categories[82]. - The Group will transform the sales platform on JD.com from consigned sales into direct-operated stores to enhance market share and sales revenue[82]. - The Group will continue to promote Bawang branded products through social media platforms to increase brand influence and sales growth[79]. - The company plans to increase weekend promotions and in-store events at high-quality sales points to enhance brand influence[83]. - The company aims to optimize operational efficiency and maintain market share for key products like anti-hair loss sprays and herbal shampoos through targeted marketing on platforms like Xiaohongshu and Alibaba[83]. - The company will transition its JD platform from a third-party operation to self-operated, enhancing product offerings in the shampoo category to increase market share[88]. - The company intends to boost sales on the Pinduoduo channel by introducing new products such as fragrant shampoo and hyaluronic acid shampoo while maintaining market share for existing hot items[88]. - The company will increase investment in live-streaming sales to enhance revenue through direct online sales[88]. - The company will maintain key online distributors by assisting with inventory planning and management, especially during promotional periods like Double 11[88]. Cost Management and Profitability - The cost of sales decreased to approximately RMB58.3 million, down by approximately RMB17.2 million (or 22.8%) from RMB75.5 million in the same period last year[39]. - Gross profit increased to approximately RMB41.2 million, representing a 2.8% increase from approximately RMB40.1 million for the same period last year, with a gross profit margin rising from 34.7% to 41.4%[40]. - Selling and distribution costs amounted to approximately RMB27.6 million, a decrease of approximately 38.3% from RMB44.7 million for the same period last year, with the percentage of revenue dropping from 38.7% to 27.7%[45]. - Administrative expenses were approximately RMB9.7 million, down by approximately 30.2% from RMB13.9 million for the same period last year[46]. - Other income increased to approximately RMB1.5 million, a 7.1% increase from RMB1.4 million for the same period last year[55]. Assets and Liabilities - As of June 30, 2023, the Group's cash, bank balances, and time deposits amounted to approximately RMB 107.6 million, a decrease of 13.5% from RMB 124.4 million as of December 31, 2022[97][99]. - The total assets of the Group decreased to RMB 212.5 million as of June 30, 2023, down from RMB 244.2 million as of December 31, 2022, representing a decline of 13.0%[99]. - Trade and other payables decreased by 44.1% to approximately RMB 44.5 million as of June 30, 2023, compared to RMB 79.6 million as of December 31, 2022[114][119]. - The Group had no bank borrowings as of June 30, 2023, consistent with the position as of December 31, 2022[116][121]. - The total personnel expenses for the six months ended June 30, 2023, were approximately RMB 23.0 million, down from RMB 25.8 million for the same period in 2022, indicating a decrease of 10.9%[124][125]. - The Group employed 430 employees as of June 30, 2023, a reduction from 468 employees as of June 30, 2022, reflecting a decrease of 8.1%[124][126]. - The Group's operations are primarily conducted in Renminbi, mitigating significant exchange rate risks associated with daily operations[103][104]. - The Board will continue to monitor foreign exchange exposure and is prepared to take prudent measures such as hedging when required[105]. Corporate Governance and Compliance - The company has complied with the applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2023[168]. - The company has adopted the Model Code for Securities Transactions by Directors and all Directors confirmed compliance throughout the review period[169]. - The Audit and Risk Management Committee reviewed the unaudited interim results for the six months ended June 30, 2023, and recommended its adoption by the Board[177]. - The ESG Committee was established on June 2, 2023, to oversee the Group's ESG performance and strategies[175]. Shareholder Information - As of June 30, 2023, Chen Qiyuan and Chen Zheng He each hold a long position of 1,900,840,000 ordinary shares, representing approximately 60.12% of the issued share capital of the Company[133]. - Wong Sin Yung holds a long position of 2,100,000 ordinary shares, representing approximately 0.07% of the issued share capital of the Company[133]. - Chen Qiyuan has beneficial interests in 20,000 shares of Fortune Station, representing 50.43% of its issued share capital[139]. - Chen Zheng He has a long position in 19,657 shares of Fortune Station, representing 49.57% of its issued share capital[139]. - As of June 30, 2023, no other directors or chief executives had interests or short positions in shares or debentures of the Company or its associated corporations that were required to be disclosed[140]. - The Company maintains a register of interests and short positions as required by the Securities and Futures Ordinance[141]. - The Company has not disclosed any substantial shareholders with interests or short positions in shares or underlying shares other than those mentioned[142]. Employee Policies - The Company emphasizes the importance of human resources policies for future development, including competitive compensation and a comfortable work environment[129]. - The Company has implemented a performance-based bonus scheme and stock option plan for employees[129]. - The share option scheme aims to motivate employees and retain those contributing to the long-term growth and profitability of the Group[148]. - The total number of shares in respect of which options may be granted under the 2020 Share Option Scheme is 316,244,072 shares, representing 10.0% of the issued share capital of the Company[152]. - The maximum number of shares issuable to each eligible participant in the 2020 Share Option Scheme within any 12-month period is limited to 1.0% of the shares of the Company in issue at any time[151]. - The 2020 Share Option Scheme was adopted on May 29, 2020, and will remain in force for 10 years unless cancelled or amended[149]. - No share options were outstanding or granted under the 2020 Share Option Scheme for the six months ended June 30, 2023[160]. - The beneficial interests of CHEN Qiyuan's five children under 18 in Heroic Hour represent 65.00% of the issued share capital of Heroic Hour[144]. - CHEN Zheng He is deemed to be interested in the shares of Fortune Station held by Heroic Hour due to his role as trustee[144].
霸王集团(01338) - 2023 - 中期财报