赢家时尚(03709) - 2023 - 中期财报

Company Overview This section introduces EEKA Fashion Holdings Limited, a leading and fast-growing high-end women's apparel enterprise with a diverse brand portfolio and extensive sales network About EEKA Fashion EEKA Fashion Holdings Limited is a leading and rapidly growing mid-to-high-end women's apparel enterprise with an eight-brand portfolio and a comprehensive sales network across China - The company is a leading and fast-growing mid-to-high-end women's apparel enterprise in China, boasting an eight-brand portfolio[17] - The brand portfolio includes proprietary high-end brands Koradior, La Koradior, ELSEWHERE, FUUNNY FEELLN, and acquired brands CADIDL, NAERSI, NAERSILING, NEXY.CO[17] - The sales network covers 31 provinces, autonomous regions, and municipalities in China, primarily through directly operated retail stores and third-party e-commerce platforms such as Tmall, Vipshop, Douyin, and EEKA Fashion Mall[18] Company Information This section details the company's governance structure, including its board of directors and committees, along with registration and contact information Board of Directors and Committees The company's Board of Directors comprises executive and independent non-executive directors, supported by audit, remuneration, and nomination committees to ensure robust corporate governance - Executive Directors include Mr. Jin Ming (Chairman and CEO), Ms. He Hongmei, and Mr. Jin Rui[19] - Independent Non-Executive Directors include Mr. Zhou Xiaoyu, Mr. Zhong Ming, and Mr. Zhang Guodong[19] - The company has an Audit Committee (Chairman: Mr. Zhang Guodong), a Remuneration Committee (Chairman: Mr. Zhou Xiaoyu), and a Nomination Committee (Chairman: Mr. Jin Ming)[19] Registration and Contact Information The company's registered office is in the Cayman Islands, with its headquarters in Shenzhen, China, and a principal place of business in Tsim Sha Tsui, Hong Kong - The registered office is in the Cayman Islands, with headquarters and principal place of business in Futian District, Shenzhen, Guangdong Province, China[19][20] - The principal place of business in Hong Kong is located at Gateway Tower, Harbour City, Canton Road, Tsim Sha Tsui, Kowloon[20] - Principal bankers include The Hongkong and Shanghai Banking Corporation Limited, Ping An Bank Shenzhen Branch, and China Merchants Bank Shenzhen Branch[20] Financial Highlights This section presents key financial performance indicators and liquidity ratios for the reporting period, demonstrating the company's financial health and operational efficiency Key Financial Indicators For the six months ended June 30, 2023, revenue increased by 15.36% to RMB 3,340.90 million, with net profit surging by 71.57% to RMB 442.20 million Key Financial Data for the Six Months Ended June 30, 2023 | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | Year-on-Year Growth Rate | | :--- | :--- | :--- | :--- | | Revenue | 3,340,896 | 2,895,977 | +15.36% | | Gross Profit | 2,514,285 | 2,167,467 | +16.00% | | Net Profit | 442,199 | 257,742 | +71.57% | | Net Cash Flow from Operating Activities | 914,610 | 980,819 | -6.75% | | Basic Earnings Per Share (RMB cents) | 65.9 | 38.5 | +71.17% | | Diluted Earnings Per Share (RMB cents) | 64.8 | 37.8 | +71.43% | | Gross Profit Margin | 75.26% | 74.84% | +0.42pp | | Net Profit Margin | 13.24% | 8.90% | +4.34pp | - As of June 30, 2023, net assets were RMB 4,165,831 thousand, an increase from RMB 3,987,500 thousand as of December 31, 2022[21][26] Liquidity and Capital Ratios As of June 30, 2023, the company maintained a current ratio of 1.64 times, with a debt-to-asset ratio of 10.67% and interest coverage of 22.65 times, indicating robust liquidity and solvency Liquidity and Capital Ratios as of June 30, 2023 | Indicator | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Current Ratio (times) | 1.64 | 1.60 | | Trade and Bills Receivables Turnover Days | 28.20 | 34.52 | | Trade and Bills Payables Turnover Days | 96.61 | 86.60 | | Inventory Turnover Days | 210.55 | 255.88 | | Debt-to-Asset Ratio | 10.67% | 10.79% | | Interest Coverage Ratio (times) | 22.65 | 9.25 | - The current ratio increased from 1.60 times as of December 31, 2022, to 1.64 times as of June 30, 2023, indicating improved liquidity[22] - The debt-to-asset ratio decreased from 10.79% as of December 31, 2022, to 10.67% as of June 30, 2023, indicating a slight reduction in financial leverage[22] Chairman's Report This report reviews the company's strong first-half performance, strategic channel development, and commitment to corporate social responsibility, highlighting its transformation into a luxury brand management group First Half Performance Review In the first half of 2023, the company achieved record-high revenue of RMB 3,340.90 million and net profit of RMB 442.20 million, driven by strong market recovery and effective strategic execution - In the first half of 2023, China's GDP grew by 5.5%, with total retail sales of consumer goods increasing by 8.2% year-on-year, and apparel, footwear, and textiles growing by 12.8%[29] Key Financial Performance in H1 2023 | Indicator | Amount (RMB millions) | Year-on-Year Growth Rate | | :--- | :--- | :--- | | Revenue | 3,340.90 | +15.36% | | Net Profit | 442.20 | +71.57% | Key Brand Growth Rates in H1 2023 | Brand | Year-on-Year Growth Rate | | :--- | :--- | | Koradior | +11.14% | | NAERSI | +8.91% | | NEXY.CO | +24.71% | | CADIDL | +17.67% | | ELSEWHERE | +16.62% | | La Koradior | +30.04% | | NAERSILING | +22.76% | | FUUNNY FEELLN | +18.09% | Channel and Strategic Development Directly operated retail stores saw revenue grow by 19.44% to RMB 2,722.99 million, while e-commerce platforms achieved 4.58% growth, with a 50% increase in live-streaming penetration Channel Revenue Performance in H1 2023 | Channel | Revenue (RMB millions) | Year-on-Year Growth Rate | | :--- | :--- | :--- | | Directly Operated Retail Stores | 2,722.99 | +19.44% | | E-commerce Platforms | 463.72 | +4.58% | - As of June 30, 2023, the Group operated 1,980 retail stores, comprising 1,543 directly operated stores and 437 dealer-operated stores[30] - E-commerce platform live-streaming efficiency improved, achieving a 50% increase in live-streaming penetration[31] - The company adheres to its long-term strategy of 'multi-brand, omni-channel, platform-based, upstream and downstream integration,' earning accolades such as '2022 Fashion Model Brand' (Koradior) and '2022 Top Ten Influential Brand' (La Koradior)[31] Corporate Development and Social Responsibility The company has established a robust talent development framework, earned recognition as a 'China's Best Learning Enterprise,' and actively promotes sustainable fashion through its ELSEWHERE brand's environmental initiatives - The company has established a three-pillar talent development framework encompassing leadership, product excellence, and sales capabilities, earning the title of '2022 China's Best Learning Enterprise'[32] - Actively fulfilling corporate social responsibility, the ELSEWHERE brand collaborated with 'New Paradise' magazine to launch an online art exhibition, promoting marine environmental art and sustainable fashion[32] - The company has successfully transformed from a 'leading enterprise in China's mid-to-high-end women's apparel industry' to a 'China luxury brand management group'[32] Management Discussion and Analysis This section provides a detailed analysis of the company's revenue, costs, profits, financial position, and liquidity for the reporting period Revenue Analysis Total revenue for the period reached RMB 3,340.90 million, a 15.36% year-on-year increase, driven by strong growth in directly operated retail stores and e-commerce platforms, particularly Douyin Revenue Sources and Growth in H1 2023 | Revenue Source | 2023 (RMB millions) | 2022 (RMB millions) | Year-on-Year Growth Rate | | :--- | :--- | :--- | :--- | | Total Revenue | 3,340.90 | 2,895.98 | +15.36% | | Directly Operated Retail Stores | 2,722.99 | 2,279.81 | +19.44% | | Distributors | 142.81 | 162.23 | -11.97% | | E-commerce Platforms | 463.72 | 443.40 | +4.58% | | - Tmall | 115.29 | 106.91 | +7.84% | | - Vipshop | 208.79 | 196.12 | +6.46% | | - EEKA Fashion Mall | 36.70 | 80.46 | -54.39% | | - Douyin | 97.48 | 58.51 | +66.60% | - The total number of retail stores decreased from 2,006 as of January 1, 2023, to 1,980 as of June 30, 2023, a net reduction of 26 stores[34][37] Revenue Growth by Brand in H1 2023 | Brand | 2023 (RMB thousands) | 2022 (RMB thousands) | Year-on-Year Growth Rate | | :--- | :--- | :--- | :--- | | Koradior | 1,126,736 | 1,013,756 | +11.14% | | La Koradior | 217,049 | 166,908 | +30.04% | | ELSEWHERE | 273,118 | 234,191 | +16.62% | | CADIDL | 215,497 | 183,134 | +17.67% | | FUUNNY FEELLN | 71,996 | 60,967 | +18.09% | | NAERSI | 704,565 | 646,901 | +8.91% | | NAERSILING | 252,221 | 205,462 | +22.76% | | NEXY.CO | 479,714 | 384,658 | +24.71% | Cost and Profit Analysis Cost of sales increased by 13.47% to RMB 826.61 million, while gross profit rose by 16.00% to RMB 2,514.29 million, leading to a significant 71.57% surge in net profit to RMB 442.20 million Cost and Profit Data in H1 2023 | Indicator | 2023 (RMB millions) | 2022 (RMB millions) | Year-on-Year Growth Rate | | :--- | :--- | :--- | :--- | | Cost of Sales | 826.61 | 728.51 | +13.47% | | Gross Profit | 2,514.29 | 2,167.47 | +16.00% | | Gross Profit Margin | 75.26% | 74.84% | +0.42pp | | Operating Expenses | 2,081.93 | 1,902.53 | +9.43% | | Selling and Distribution Expenses | 1,792.03 | 1,642.93 | +9.08% | | Administrative and Other Operating Expenses | 289.90 | 259.60 | +11.67% | | Finance Costs | 23.37 | 26.96 | -13.32% | | Income Tax Expense | 63.81 | 36.01 | +77.20% | | Net Profit | 442.20 | 257.74 | +71.57% | | Net Profit Margin | 13.24% | 8.90% | +4.34pp | - The increase in administrative and other operating expenses was primarily due to higher staff salaries and benefits, and increased research and development costs for product design enhancement[45] - The decrease in finance costs was mainly attributable to the reduced impact of IFRS 16[46] Financial Position and Liquidity As of June 30, 2023, the Group maintained a sound capital structure with total current assets of RMB 2,931.11 million, a current ratio of 1.64 times, and a debt-to-asset ratio of 10.67% Financial Position in H1 2023 | Indicator | June 30, 2023 (RMB millions) | December 31, 2022 (RMB millions) | | :--- | :--- | :--- | | Total Current Assets | 2,931.11 | 2,634.55 | | Total Current Liabilities | 1,786.85 | 1,648.88 | | Current Ratio (times) | 1.64 | 1.60 | | Cash and Cash Equivalents | 392.72 | 361.46 | | Net Cash Inflow from Operating Activities | 914.61 | 980.82 | | Debt-to-Asset Ratio | 10.67% | 10.79% | - The Group's interest-bearing bank loans are denominated in HKD and RMB, including a term loan of HKD 45 million and fixed-rate loans of RMB 403 million repayable within one year[49] - The Group adopts a prudent treasury and funding policy, primarily operating in China, thus exchange rate fluctuation risk is not significant[51] Other Important Information This section covers human resources, significant events, future outlook, corporate governance practices, and the company's shareholding structure Human Resources and Remuneration As of June 30, 2023, the Group's employee count increased to 10,137, with total staff costs of RMB 703.78 million, representing 21.07% of revenue Human Resources Data in H1 2023 | Indicator | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Number of Employees | 10,137 | 10,058 | | Total Staff Costs (RMB millions) | 703.78 | 612.48 | | Total Staff Costs as % of Revenue | 21.07% | 21.15% | - The Group has established share option schemes and share award schemes to incentivize and reward employee contributions, alongside providing training and retirement benefits[53] Material Matters and Outlook The company reported no major acquisitions or disposals, invested approximately RMB 327 million in wealth management products, and maintains an optimistic outlook for the second half, focusing on quality enhancement and strategic investments - No material acquisitions or disposals of any subsidiaries, associates, or joint ventures occurred during the reporting period[55] - The company's subsidiaries subscribed to wealth management products totaling approximately RMB 327 million[55] - Looking ahead to the second half, the company will adhere to a comprehensive 'quality enhancement' strategy, improving quality, store, and personnel efficiency, while strengthening brand building, product innovation, supply chain integration, and online channel investments (e.g., Xiaohongshu, Video Accounts, Tmall, JD.com)[57] - The company is confident in achieving its established operational goals and has transformed from a 'leading enterprise in China's mid-to-high-end women's apparel industry' to a 'China luxury brand management group'[57] Corporate Governance and Shareholding Structure The Board resolved not to declare an interim dividend, maintains compliance with corporate governance codes, and details share award scheme expenses and major shareholder equity interests - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2023[59] - The company complies with the Corporate Governance Code, though the roles of Chairman and Chief Executive Officer are combined and held by Mr. Jin Ming, an arrangement the Board believes ensures consistent leadership and decision-making efficiency[59] - A total of 40,973,000 award shares were granted under the share award scheme, with an expense of RMB 11,165,000 recognized during the reporting period[62] Major Shareholder Holdings (as of June 30, 2023) | Shareholder Name/Entity | Capacity | Number of Shares Held | Approximate % of Share Capital | | :--- | :--- | :--- | :--- | | Mr. Jin Ming | Settlor of Discretionary Trust | 247,715,000 | 35.18% | | Ms. He Hongmei | Beneficial Owner | 925,493 | 0.13% | | Mr. Jin Rui | Settlor of Discretionary Trust | 198,713,195 | 28.22% | | Koradior Investments Limited | Beneficial Owner | 247,715,000 | 35.18% | | Apex Noble Holdings Limited | Beneficial Owner | 198,713,195 | 28.22% | | BOS Trustee Limited | Trustee | 446,428,195 | 63.41% | Condensed Consolidated Financial Statements This section presents the condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows for the reporting period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2023, the company reported revenue of RMB 3,340,896 thousand, gross profit of RMB 2,514,285 thousand, and profit for the period of RMB 442,199 thousand Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 3,340,896 | 2,895,977 | | Gross Profit | 2,514,285 | 2,167,467 | | Profit Before Tax | 506,010 | 293,754 | | Income Tax Expense | (63,811) | (36,012) | | Profit for the Period | 442,199 | 257,742 | | Net Other Comprehensive Income/(Loss) | (25,921) | 575 | | Total Comprehensive Income for the Period | 416,278 | 258,317 | - Profit attributable to owners of the parent was RMB 445,227 thousand, while loss attributable to non-controlling interests was RMB 3,028 thousand[73] Condensed Consolidated Statement of Financial Position As of June 30, 2023, total non-current assets were RMB 3,531,726 thousand, total current assets were RMB 2,931,106 thousand, and net assets amounted to RMB 4,165,831 thousand Summary of Condensed Consolidated Statement of Financial Position (as of June 30, 2023) | Indicator | June 30, 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 3,531,726 | 3,623,133 | | Total Current Assets | 2,931,106 | 2,634,550 | | Total Current Liabilities | 1,786,849 | 1,648,876 | | Total Non-current Liabilities | 510,152 | 621,307 | | Net Assets | 4,165,831 | 3,987,500 | | Total Equity | 4,165,831 | 3,987,500 | - Inventories decreased from RMB 1,023,962 thousand as of December 31, 2022, to RMB 909,887 thousand as of June 30, 2023[77] - Trade and bills receivables increased from RMB 472,233 thousand as of December 31, 2022, to RMB 574,469 thousand as of June 30, 2023[77] Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2023, total equity attributable to owners of the parent increased from RMB 3,997,449 thousand to RMB 4,178,808 thousand, driven by profit for the period and share award scheme expenses Summary of Changes in Equity Attributable to Owners of the Parent | Item | 2023 H1 (RMB thousands) | | :--- | :--- | | As at January 1 | 3,997,449 | | Profit for the Period | 445,227 | | Total Other Comprehensive Income | 419,306 | | Share Award Scheme Arrangements | 11,165 | | 2022 Final Dividend Paid | (249,112) | | As at June 30 | 4,178,808 | - Non-controlling interests changed from RMB (2,949) thousand at the beginning of the period to RMB (12,977) thousand at the end of the period[80] Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2023, net cash from operating activities was RMB 914,610 thousand, with a net increase in cash and cash equivalents of RMB 30,837 thousand Summary of Condensed Consolidated Statement of Cash Flows | Cash Flow Category | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 914,610 | 980,819 | | Net Cash Used in Investing Activities | (236,946) | (316,843) | | Net Cash Used in Financing Activities | (646,827) | (924,864) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 30,837 | (260,888) | | Cash and Cash Equivalents as at June 30 | 392,715 | 251,996 | - Proceeds from bank loans amounted to RMB 373,000 thousand, while repayment of bank loans totaled RMB 360,149 thousand[82] - Dividends paid to equity holders of the company amounted to RMB 248,910 thousand[82] Notes to the Unaudited Interim Financial Report This section provides detailed notes on the accounting policies, segment reporting, revenue and other income breakdown, profit before tax, income tax, earnings per share, balance sheet items, share capital, reserves, related party transactions, and fair value measurement of financial instruments Accounting Policies and Segment Reporting The interim financial statements are prepared in accordance with HKEX Listing Rules and IAS 34, with no material impact from newly adopted IFRS, and no segment analysis presented due to a single business segment in China - These interim financial statements are prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34[85] - The Group has adopted new and revised International Financial Reporting Standards effective from January 1, 2023, with no material impact on the financial statements[86] - The Group operates a single business segment in China, namely the retail and wholesale of women's apparel, thus no segment analysis is presented[88] Details of Revenue and Other Income Revenue primarily derived from directly operated retail stores (RMB 2,722,989 thousand), wholesale to distributors (RMB 142,813 thousand), and e-commerce platforms (RMB 463,715 thousand), with total other income and gains amounting to RMB 105,947 thousand Revenue Composition in H1 2023 | Revenue Source | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Directly Operated Retail Stores | 2,722,989 | 2,279,809 | | Wholesale to Distributors | 142,813 | 162,225 | | E-commerce Platforms | 463,715 | 443,399 | | Others | 11,379 | 10,544 | | Total | 3,340,896 | 2,895,977 | Composition of Other Income and Gains in H1 2023 | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Bank Interest Income | 1,746 | 736 | | Subsidy Income | 43,076 | 48,118 | | Other Interest Income from Financial Assets at FVTPL | 12,704 | 9,588 | | Rental Income | 5,575 | 6,073 | | Net Exchange Gain | 34,665 | 920 | | Others | 8,181 | 4,159 | | Total | 105,947 | 69,594 | Profit Before Tax and Income Tax Profit before tax was RMB 506,010 thousand, after deducting costs of inventories sold, depreciation, amortization, lease payments, and employee benefits, with income tax expense of RMB 63,811 thousand primarily from China corporate income tax Key Deductions for Profit Before Tax in H1 2023 | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Cost of Inventories Sold | 826,611 | 728,510 | | Depreciation of Property, Plant and Equipment | 66,354 | 77,167 | | Depreciation of Right-of-Use Assets | 404,371 | 390,486 | | Total Employee Benefit Expenses | 703,779 | 612,476 | | Net Exchange Gain | (34,665) | (920) | | Impairment of Trade Receivables | 5,425 | 1,657 | | (Reversal of)/Write-down of Inventories to Net Realizable Value | (1,988) | 4,704 | Income Tax Expense in H1 2023 | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Current Tax (PRC Corporate Income Tax) | 81,723 | 47,739 | | Deferred Tax | (17,912) | (11,727) | | Total | 63,811 | 36,012 | - Certain subsidiaries (e.g., Dongfang Susu, Jianmo, Shenzhen Koradior, NAERSI, Shenzhen Dikolai Technology Development Co., Ltd.) enjoy preferential tax rates of 15% for high-tech enterprises or a 50% reduction in corporate income tax[96] Earnings Per Share and Balance Sheet Notes Basic earnings per share were RMB 65.9 cents and diluted earnings per share were RMB 64.8 cents, with detailed notes on property, plant and equipment, inventories, trade and other receivables, trade and other payables, and interest-bearing bank borrowings Earnings Per Share in H1 2023 | Indicator | Six Months Ended June 30, 2023 (RMB cents) | Six Months Ended June 30, 2022 (RMB cents) | | :--- | :--- | :--- | | Basic Earnings Per Share | 65.9 | 38.5 | | Diluted Earnings Per Share | 64.8 | 37.8 | - For the six months ended June 30, 2023, the Group acquired property, plant and equipment totaling RMB 36,771 thousand[104] - Inventories primarily consist of finished goods (RMB 752,584 thousand), raw materials (RMB 148,179 thousand), and work-in-progress (RMB 9,124 thousand)[105] - Total trade and bills receivables amounted to RMB 574,469 thousand, with RMB 336,948 thousand due within one month[107][109] - Total trade and bills payables amounted to RMB 423,065 thousand, including RMB 260,500 thousand in bills payable[115] - Total interest-bearing bank borrowings amounted to RMB 444,490 thousand, all repayable within one year[119] Share Capital, Reserves, and Related Party Transactions The company's issued share capital is 704,050,195 shares, with reserves including share premium and capital reserves, and details of significant related party transactions with Winner Fashion Group - The company's issued share capital comprises 704,050,195 shares with a par value of RMB 5,766 thousand[121] - Capital reserve primarily arises from differences in equity acquisitions of subsidiaries, such as Shenzhen Koradior, Shanghai Kedi Brand Management Co., Ltd., Mondale, and Shenzhen Fangfu[124] - The Group entered into processing agreements with Winner Fashion Group (owned by Ms. Chen Lingmei and Mr. Jin Jingquan), paying processing fees of RMB 160,858 thousand in H1 2023[129] - As of June 30, 2023, the outstanding balance payable to Winner Fashion Group was RMB 100,038 thousand, and receivables from Winner Fashion Group amounted to RMB 9,928 thousand[130] Fair Value Measurement of Financial Instruments The Group's financial instruments are measured across three fair value hierarchy levels, with equity investments at FVTOCI of RMB 31,883 thousand (Level 1) and financial assets at FVTPL of RMB 828,341 thousand (Level 1 and 2) Fair Value Measurement of Financial Instruments as of June 30, 2023 | Item | Level 1 (RMB thousands) | Level 2 (RMB thousands) | Level 3 (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Equity Investments Designated at FVTOCI | 31,883 | – | – | 31,883 | | Financial Assets at FVTPL | 207,211 | 621,130 | – | 828,341 | | Total | 239,094 | 621,130 | – | 860,224 | - The fair value of unlisted equity investments is based on the most recent market transactions, while unlisted wealth management products are estimated using discounted cash flow valuation models[135][136]