Financial Performance - Total sales revenue for the six months ended June 30, 2022, was RMB 1,048.6 million, a decrease of 12.9% or RMB 155.8 million compared to RMB 1,204.4 million in the same period of 2021 due to recurring COVID-19 impacts in several cities [15]. - The total revenue for the group in the first half of 2022 was RMB 1,048.6 million, a decrease of 12.9% compared to RMB 1,204.4 million in the same period of 2021 [17]. - The main brand GXG's sales revenue decreased by 9.5% or RMB 87.9 million year-on-year, primarily due to a decline in product demand caused by COVID-19 outbreaks in several cities [17]. - Sales revenue for gxg jeans and Yatlas decreased by 32.9% or RMB 48.9 million and 58.5% or RMB 7.6 million, respectively, due to brand repositioning and store number reduction [18]. - Despite the impact of COVID-19, gxg.kids' sales revenue remained relatively stable at RMB 88.5 million, compared to RMB 88.1 million in the same period of 2021 [18]. - Mode Commuter's sales revenue increased by 65.9% or RMB 6.0 million, mainly due to new product development [18]. - The group's gross profit for the period was RMB 536.5 million, a decrease of 14.0% or RMB 87.3 million from RMB 623.8 million in the same period of 2021 [25]. - The overall gross margin remained relatively stable at 51.2%, compared to 51.8% in the same period of 2021 [25]. - Pre-tax profit decreased by RMB 55.1 million to RMB 16.8 million, primarily due to a reduction in gross profit [40]. - Net profit for the period was RMB 4.2 million, a decrease of RMB 44.0 million compared to RMB 48.2 million in the same period of 2021 [42]. - The company reported a total comprehensive loss of RMB 27,521 thousand for the period, compared to a comprehensive income of RMB 56,380 thousand in the same period last year [91]. - The profit attributable to equity holders of the parent for the six months ended June 30, 2022, was RMB 5,754,000, a significant decline of 88.2% from RMB 48,511,000 in the same period of 2021 [141]. Operational Strategies - The company aims to enhance customer experience through innovative marketing initiatives and new retail technologies, while optimizing its supply chain network to meet customer demands [13]. - The company is committed to integrating online and offline sales channels to improve operational efficiency and respond more quickly to market changes [13]. - The organization will continue to implement cost control measures to mitigate the impacts of recurring COVID-19 outbreaks [13]. - The company operates an integrated omnichannel business model, enhancing inventory management and supply chain efficiency [6]. - The company has a strong focus on data analysis from both online and offline channels to accurately gauge demand levels and adjust production plans accordingly [6]. - The management believes that performance will steadily recover in the second half of the year, supported by government policies and effective growth strategies implemented in response to COVID-19 [13]. - The company has introduced the MODE COMMUTER brand in 2020, expanding its brand portfolio to include high-quality commuter clothing [5]. Financial Position - The debt-to-asset ratio increased to 50.0% as of June 30, 2022, from 35.0% at the end of 2021, primarily due to increased borrowings [48]. - The company’s total equity attributable to owners of the parent as of June 30, 2022, was RMB 707,341,000, a decrease from RMB 814,714,000 as of June 30, 2021 [99]. - The company reported a decrease in cash and cash equivalents, with a closing balance of RMB 539,387,000 as of June 30, 2022, down from RMB 747,913,000 at the end of June 2021 [104]. - The company incurred a loss of RMB 12,570,000 related to impairment of trade and other receivables for the six months ended June 30, 2022, compared to a gain of RMB 8,331,000 in the same period of 2021 [101]. - The company’s accumulated losses reached RMB 765,498,000 as of June 30, 2022, compared to RMB 632,069,000 as of June 30, 2021, indicating a growing financial strain [99]. - The company’s total liabilities increased, with bank and other borrowings amounting to RMB 658,413,000 for the six months ended June 30, 2022, compared to RMB 500,407,000 in the same period of 2021 [104]. Employee and Management - As of June 30, 2022, the total number of employees in the group was 674, down from 831 on December 31, 2021 [59]. - Total employee costs for the period amounted to RMB 68.1 million, compared to RMB 70.2 million in the same period of 2021, representing a decrease of approximately 3% [59]. - Employee costs accounted for 6.5% of the group's revenue during the period, up from 5.8% in the same period of 2021 [59]. - The increase in employee cost percentage was primarily due to a greater decline in total revenue compared to the reduction in employee costs [59]. - The company emphasizes training and development to attract and retain employees, providing competitive compensation packages [59]. - The total remuneration for key management personnel was RMB 5,225,000 for the six months ended June 30, 2022, down from RMB 7,755,000 in the same period of 2021 [177]. Capital and Investments - The company raised approximately RMB 704.9 million (equivalent to about HKD 802.7 million) from the issuance of 200,000,000 new shares on May 27, 2019 [79]. - As of June 30, 2022, RMB 648.0 million (approximately HKD 736.2 million) of the raised funds have been utilized, with RMB 56.9 million (approximately HKD 66.5 million) remaining for future use [79]. - The company plans to allocate 45% of the raised funds (RMB 317 million) for debt repayment and brand expansion through acquisitions or strategic alliances [79]. - The company did not engage in any significant investments or acquisitions during the period, but will continue to seek new business development opportunities [51]. Market and Sales Channels - Revenue from offline channels was RMB 566,936 thousand, while online channels generated RMB 475,318 thousand, indicating a shift in sales channels [117]. - Online channel sales accounted for 45.3% of total revenue, despite a decrease of 1.8% or RMB 8.8 million compared to the previous year [22]. - The group adjusted its cooperation model with some customers from distributors to partner stores, resulting in a 5.8% increase in partner store sales to RMB 83.9 million [22]. - The company reported no single customer accounting for 10% or more of total revenue during the reporting period [120]. Compliance and Governance - The company has adhered to the principles of the Corporate Governance Code as per the listing rules during the six months ending June 30, 2022 [81]. - There were no purchases, sales, or redemptions of the company's listed securities by the company or its subsidiaries during the six months ending June 30, 2022 [84]. - The group has adopted revised International Financial Reporting Standards (IFRS) without significant impact on its financial position or performance due to the absence of relevant transactions during the reporting period [111][112][114].
慕尚集团控股(01817) - 2022 - 中期财报