Market Performance - In the first half of 2023, the market share of the Group's offline sales was 18.6%, maintaining its position as the industry leader for six consecutive years[13]. - The overall consumer market showed positive momentum from January to March 2023, but sales slowed down from April to June 2023, resulting in longer inventory turnover[14]. - The Group faced challenges in the condiment industry due to rising raw material costs, intensified competition, and weak consumption, leading to a pessimistic outlook for the market[14]. Sales and Revenue - In the first half of 2023, the Group achieved sales revenue of approximately RMB 127.8 million, representing a decrease of approximately RMB 10.7 million, or approximately 7.7% compared to the same period in 2022[27]. - Revenue for the six months ended June 30, 2023, was RMB 127,791,000, a decrease of 7.3% compared to RMB 138,455,000 for the same period in 2022[183]. - Revenue from cooking wine products decreased by 9.2% from RMB 89.6 million to RMB 81.4 million due to intensified competition and market saturation[51]. - Revenue from soy sauce products increased by 6.3% from RMB 12.7 million to RMB 13.4 million as a result of increased promotional efforts[52]. - Revenue from rice vinegar and other products decreased by 9.0% from RMB 36.2 million to RMB 32.9 million due to adjustments in the product portfolio[55]. Profitability and Loss - The gross profit margin decreased from approximately 37.3% for the six months ended June 30, 2022, to approximately 34.6% for the six months ended June 30, 2023[28]. - The Group's gross profit decreased by 14.4% from approximately RMB 51.6 million to approximately RMB 44.2 million, with a gross profit margin decline from 37.3% to 34.6%[58]. - The loss attributable to ordinary equity holders for the six months ended June 30, 2023, was approximately RMB 244.9 million, an increase of about 14.2% compared to RMB 214.5 million in the same period of 2022[32]. - Loss before income tax increased by 14.2% from approximately RMB 214.5 million to approximately RMB 244.9 million[68]. - Basic loss per share increased from RMB 0.37 to RMB 0.42, reflecting the increase in net loss[70]. Marketing and Brand Development - The Group launched a promotional campaign called the "Hundred-Day Campaign" to boost sales amid declining purchasing power and slower sales[14]. - The Group engaged a professional marketing team to upgrade its brand and product positioning, enhancing the brand image of "Lao Heng He" among consumers[15]. - In June 2023, the Group became the title sponsor of the "2023 Wu Xing New Youth City Super Music Festival" to enhance brand awareness and attract younger consumers[16]. - The Group organized a new product launch event themed "Centennial Lao Heng He, Taste of Exquisite Chinese Cooking Wine" to boost distributor confidence[16]. Product Development and Innovation - The Group successfully developed and launched six new products in the first half of 2023, while improving the technology of the new production line for soy sauce and soybean paste[21]. - The Group intends to introduce new products and production lines that align with consumer needs in the PRC market[103]. - The Group emphasizes health, safety, and flavor as core elements of innovation in the condiment cooking wine industry[104]. Financial Management - Selling and distribution expenses increased by 33.7% from approximately RMB 34.8 million to approximately RMB 46.5 million, raising the percentage of revenue from 25.1% to 36.4%[60]. - Other income and gains decreased by 53.0% from approximately RMB 2.7 million to approximately RMB 1.3 million, primarily due to reduced interest income and government grants[59]. - The gearing ratio increased from 242.6% to 297.8%, indicating a rise in financial leverage[49]. - Cash and cash equivalents decreased to approximately RMB 2.2 million as of June 30, 2023, down from RMB 9.8 million as of December 31, 2022[92]. Strategic Initiatives - The Group's market strategy focused on expanding its distributor network in fourth- and fifth-tier cities across 30 provinces, autonomous regions, and municipalities in China[28]. - The company plans to further develop its horizontal and vertical condiment industry chain, aiming to become a diversified condiment manufacturer with cooking wine as the leading product[32]. - The company is accelerating the development of new retail sales channels, including online platforms and community e-commerce, to enhance promotional coverage[43]. Human Resources - As of June 30, 2023, the group had a total of 561 full-time employees, an increase from 535 employees as of December 31, 2022[119]. - Employee costs for the six months ended June 30, 2023, were RMB 21.3 million, a slight decrease from RMB 22.1 million for the same period in 2022[119]. Corporate Governance - The company targets to appoint at least one female director by December 31, 2024, to improve gender diversity on the board[117]. - The company has undergone a change in non-executive directors, with Mr. Wu Hongping appointed as a non-executive director effective January 10, 2023[147]. Shareholding Structure - The overall shareholding structure indicates significant control by a few major shareholders, with the largest holding nearly 60% of the issued share capital[158]. - As of June 30, 2023, Chen Weizhong holds a controlled corporation interest of 283,018,750 shares, representing approximately 48.90% of the company's issued share capital[154].
老恒和酿造(02226) - 2023 - 中期财报