Financial Performance - Total revenue for the fiscal year ended March 31, 2022, was RMB 88,134 million, a decrease of 29.3% compared to RMB 124,612 million for the previous year[7]. - Gross profit for the same period was RMB 21,473 million, down 31.5% from RMB 31,365 million[7]. - The company reported an operating profit of RMB 18 million, a significant decline of 99.7% from RMB 5,757 million in the prior year[7]. - Net loss attributable to shareholders was RMB 739 million, compared to a profit of RMB 3,572 million in the previous year, representing a decrease of 120.7%[7]. - For the fiscal year ending March 31, 2022, the total revenue was RMB 88,134 million, a decrease of 5.4% from RMB 93,086 million in the previous year[16]. - Revenue from merchandise sales was RMB 84,595 million, down from RMB 89,458 million, reflecting a decline of RMB 48.63 million[17]. - Same-store sales growth was -6.7%, impacted by industry competition and pandemic challenges in the second half of the fiscal year[17]. - Gross profit for the fiscal year was RMB 21,473 million, a decrease of 11.0% from RMB 24,126 million, with a gross margin of 24.4% compared to 25.9% in the previous year[19]. - The company reported a net loss of RMB 826 million for the fiscal year, compared to a profit of RMB 2,294 million in the previous year[16]. - The company reported a net loss of RMB 826 million for the year ended March 31, 2022, compared to a profit of RMB 3,771 million in the previous year[190]. Assets and Liabilities - Total assets as of March 31, 2022, were RMB 65,746 million, a decrease of 5.0% from RMB 69,227 million the previous year[8]. - Total liabilities decreased by 1.7% to RMB 40,680 million from RMB 41,373 million[8]. - The company’s equity attributable to owners decreased to RMB 23,925 million from RMB 26,223 million, a decline of 9.0%[194]. - Current liabilities totaled RMB 34,093 million as of March 31, 2022, slightly down from RMB 34,116 million in the previous year[192]. - The company’s financial liabilities decreased to RMB 40,680 million from RMB 41,373 million, indicating a reduction of 1.7%[192]. - The company’s inventory as of March 31, 2022, was RMB 9,723 million, a decrease from RMB 9,990 million in the previous year[191]. Cash Flow - The net cash inflow from operating activities for the year ended March 31, 2022, was RMB 3,577 million, a decrease from RMB 12,024 million in the previous fifteen-month period[197]. - The total cash and cash equivalents at the end of the year was RMB 11,294 million, an increase from RMB 8,096 million at the beginning of the year[198]. - The net cash outflow from financing activities was RMB 3,680 million, compared to RMB 3,346 million in the previous period[198]. - The company reported a net cash inflow from investment activities of RMB 3,301 million, a significant improvement from a net cash outflow of RMB 13,833 million in the previous period[197]. - The company paid dividends to shareholders amounting to RMB 1,031 million, down from RMB 1,310 million in the previous period[198]. Strategic Initiatives - The chairman highlighted the company's efforts in transforming traditional hypermarkets into diversified shopping experiences, aiming to enhance customer engagement[14]. - The company plans to upgrade its restructuring initiatives and continue expanding its multi-channel strategies in the upcoming fiscal year[14]. - The management expressed confidence in returning to a growth trajectory by leveraging its extensive supply chain and customer service experience[14]. - The company plans to enhance its fresh supply chain capabilities and maintain a multi-format, omnichannel development strategy[15]. - The company aims to enhance its fresh supply chain capabilities to strengthen its competitive edge in the market[41]. - The company plans to maintain a multi-format, omnichannel development strategy to meet customer needs and improve service efficiency[41]. Market Presence - The company opened 5 new hypermarkets, 3 medium-sized supermarkets, and 73 small supermarkets during the fiscal year, contributing additional sales[17]. - As of March 31, 2022, the company operated 490 hypermarkets, nine medium-sized supermarkets, and 103 small supermarkets in China[38]. - The East China region generated the highest revenue of approximately 5.51 billion, accounting for 40% of total revenue[39]. - The company reported a revenue of 2.44 billion from the South China region, contributing 18% to the total revenue[39]. - The North China region contributed 1.34 billion, representing 10% of total revenue[39]. - The company is focused on providing better shopping experiences for both offline and online customers, targeting families and seniors[41]. Governance and Compliance - The company has adopted high standards of corporate governance to protect shareholder interests and enhance corporate value[124]. - The board consists of seven members, including one executive director, three non-executive directors, and three independent non-executive directors[144]. - The company has held four regular audit committee meetings each fiscal year, exceeding the requirements of the Corporate Governance Code[140]. - The roles of the Chairman and CEO are clearly defined and separated, with Lin Xiaohai serving as CEO since May 10, 2021[145]. - The company has adopted a whistleblowing policy as of March 3, 2022, ensuring compliance with the Corporate Governance Code[140]. - The independent non-executive directors ensure high standards of governance reporting and provide independent judgment on corporate actions and operations[149]. Related Party Transactions - The company has established a procurement framework agreement with Taobao China to purchase various goods and services, including home decor, personal care products, and electronics[82]. - The annual cap for procurement of goods and services from Alibaba Group is set at RMB 1.5 billion for 2022, RMB 1.8 billion for 2023, and RMB 2.1 billion for 2024, with actual transaction amount for 2022 being approximately RMB 324.4 million[84]. - The actual transaction amount under the annual cap for sales to Alibaba Group for the fiscal year ending March 31, 2022, was approximately RMB 633.95 million, indicating a significant gap from the set cap[93]. - The cooperation agreements with Alibaba and its affiliates classify as continuing connected transactions under the listing rules, ensuring transparency and compliance[102]. - The independent auditor confirmed that the financial statements were prepared in accordance with Hong Kong Financial Reporting Standards, providing a true and fair view of the group's financial status[176]. Risks and Challenges - The company faces risks related to consumer demand and preferences, which can change rapidly and impact sales performance[133]. - Economic conditions in China directly influence consumer spending patterns, impacting the company's revenue and profitability[136]. - The company is exposed to risks from currency fluctuations and government controls on currency exchange, which may affect its ability to pay dividends[137]. - The company’s operational performance is sensitive to external economic factors, including inflation and trade relations with major economies[136]. - The company must maintain a diverse product range to meet customer preferences, which requires timely adjustments to changing consumer demands[133].
高鑫零售(06808) - 2022 - 年度财报