Brand Performance - The company has successfully launched multiple cosmetic brands in China, including Han Shu, Yi Ye Zi, and Hong Se Xiao Xiang, catering to diverse consumer needs [12]. - Han Shu ranked second in skincare brand sales on Douyin and first among domestic skincare brands in the first half of 2023 [13]. - In the first half of 2023, Han Shu's flagship product "Red Waist Gift Box" topped multiple rankings on Douyin, achieving significant market visibility [13]. - The collaboration with Douyin and renowned influencer Li Jiaqi has resulted in extensive exposure for Han Shu's products, achieving over 100 million views [13]. - Yi Ye Zi's revenue for the first half of 2023 was RMB 203.6 million, a decrease of 23.1% year-on-year, contributing 12.8% to total revenue [14]. - Hong Se Xiao Xiang's revenue in the first half of 2023 was RMB 189.1 million, down 38.2% from the previous year, representing 11.9% of total revenue [15]. - New Page Yi Ye's revenue reached RMB 59.0 million in the first half of 2023, a remarkable increase of 209.1 times compared to the same period in 2022, contributing 3.7% to total revenue [16]. - The total revenue from the three main brands in the first half of 2023 was RMB 1,420.7 million, an increase of 21.0% year-on-year, accounting for 89.5% of total revenue [15]. Financial Performance - The financial summary and detailed performance metrics for the first half of 2023 are available in the mid-term report [5]. - Han Shu generated revenue of RMB 1,028.0 million in the first half of 2023, an increase of 70.3% compared to the same period in 2022, accounting for 64.8% of total revenue [14]. - Revenue increased by 25.7% from RMB 1,262.4 million in H1 2022 to RMB 1,586.8 million in H1 2023 [30]. - Gross profit rose from RMB 819.5 million in H1 2022 to RMB 1,095.5 million in H1 2023 [27]. - Net profit for H1 2023 was RMB 100.9 million, compared to RMB 62.8 million in H1 2022 [27]. - The net profit for the first half of 2023 was RMB 100.9 million, compared to RMB 62.8 million in the first half of 2022 [43]. - Basic and diluted earnings per share for the period were RMB 0.25, compared to RMB 0.18 for the same period in 2022, indicating improved earnings performance [77]. - Total comprehensive income for the period was RMB 96,939 thousand, compared to RMB 56,036 thousand in the same period of 2022, showing a strong overall financial performance [78]. Research and Development - The core ingredient TIRACLE, developed using dual fermentation technology, has been upgraded to Tiracle Pro, enhancing its effectiveness in addressing skin issues [13]. - R&D expenditure for H1 2023 was RMB 54.4 million, accounting for 3.4% of total revenue, compared to 4.1% in H1 2022 [20]. - The company applied for 40 new patents in H1 2023, including 24 invention patents [20]. - The skincare segment will see increased investment in core ingredient research, particularly in anti-aging and skin barrier repair technologies [25]. - Yi Ye Zi launched a new product, the Light-Transmitting Repair Essence, featuring 10% panthenol, addressing industry pain points related to skin feel [14]. Market Strategy - The company has maintained a multi-brand strategy for over 20 years, establishing itself as a leader in the Chinese cosmetics industry [11]. - The company aims to enhance its market position in the pure beauty segment and plans to invest in plant extraction technology and skin barrier repair research for Yi Ye Zi [14]. - The company is developing new brands and products to meet diverse consumer needs, including high-performance and sensitive skin care lines [18]. - The company aims to enhance brand recognition and expand its product portfolio to capture emerging market opportunities [24]. Operational Efficiency - Online channel revenue reached RMB 1,291.2 million in the first half of 2023, accounting for 81.4% of total revenue, compared to RMB 931.2 million and 73.8% in the first half of 2022 [33]. - Selling and distribution expenses rose from RMB 607.9 million in the first half of 2022 to RMB 850.6 million in the first half of 2023, representing 53.6% of total revenue [38]. - Administrative expenses increased by 9.1% from RMB 102.6 million in the first half of 2022 to RMB 111.9 million in the first half of 2023 [39]. - Research and development costs rose by 4.8% from RMB 51.9 million in the first half of 2022 to RMB 54.4 million in the first half of 2023, reflecting increased R&D activities [40]. Cash Flow and Liquidity - Cash and cash equivalents as of June 30, 2023, were approximately RMB 581.0 million, down from RMB 1,147.7 million at the end of 2022 [43]. - The current ratio improved to 1.8 times as of June 30, 2023, compared to 1.1 times a year earlier [44]. - The company had no significant contingent liabilities as of June 30, 2023, and maintained a strong liquidity position to meet operational funding needs [44]. - Operating cash flow for the six months ended June 30, 2023, was RMB 171,643 thousand, a significant increase from a cash outflow of RMB 74,558 thousand in the same period of 2022 [83]. Shareholder Information - The board proposed an interim dividend of RMB 0.2 per share for the first half of 2023, subject to shareholder approval on October 16, 2023 [49]. - The company declared a dividend of RMB 99,489 thousand during the period, impacting retained earnings [81]. - As of June 30, 2023, Mr. Lu Yixiong holds a beneficial interest in 51.08% of the H shares, equating to 100,800,000 shares [59]. - Major shareholder Hongyin Investment holds 90,000,000 domestic shares, representing 44.86% of the domestic shares and 22.62% of the total shares [63]. Corporate Governance - The company has complied with all applicable corporate governance code provisions, except for the separation of roles between the chairman and CEO [47]. - The audit committee confirmed that the interim financial results comply with applicable accounting standards and regulations, ensuring transparency and reliability [75]. Future Outlook - The company plans to continue expanding its product offerings and market presence, focusing on research and development in cosmetics [85]. - The expected timeline for utilizing the net proceeds is subject to adjustments based on future market conditions and actual business needs [57].
上美股份(02145) - 2023 - 中期财报