Business Operations - China Foods holds an exclusive franchise to manufacture, market, and distribute Coca-Cola products across 19 provincial-level regions, covering approximately 50% of mainland China's population[11]. - The company offers 24 brands across 11 major beverage categories, including sparkling drinks, juices, and energy drinks, supported by a sales force of approximately 10,000 serving over 2.4 million customers[11]. - Nearly 90% of the overall business is driven by customer orders served directly by sales representatives, indicating a strong direct sales model[11]. - The marketing network of China Foods reaches 100% of cities and counties in its operating regions, with over 60% of towns also covered[11]. - The company operates Coca-Cola products across 19 provincial regions, covering approximately 50% of China's population, with a marketing network serving over 2.4 million customers[13]. Financial Performance - Revenue for the first half of 2022 reached RMB 11,893.7 million, representing a year-on-year growth of 6%, despite a 4% decrease in sales volume[23][24]. - The gross profit margin decreased by 2.7 percentage points compared to the same period last year, while the operating margin improved due to reduced selling and administrative expenses[24]. - The smart retail business generated revenue exceeding RMB 200 million, with over 20,000 vending machines installed, covering more than 5 million consumers, marking a year-on-year increase of over 100%[25][26]. - Revenue increased by 6% year-on-year despite a slight decline in sales volume, attributed to improvements in product and packaging structure[52]. - The company expects external uncertainties and high raw material prices to pressure gross profit margins in the second half of the year, despite a 6% year-on-year revenue increase[48][49]. Product Development and Strategy - The company aims to enhance product quality and optimize its business portfolio through resource investment and differentiated development strategies[12]. - China Foods plans to implement a total beverage strategy to meet the growing consumer demand for healthier options and sustainable practices[12]. - The company launched several new products, including "Coca-Cola Peach Coke" and three new sugar-free variants, enhancing its product portfolio in the sparkling drinks segment[29][30]. - The revenue from the juice segment achieved double-digit growth, driven by significant increases in "Minute Maid Pulpy Orange Juice" and new product sales, with revenue exceeding RMB10 million shortly after launch[33][35]. - The company launched a new sugar-free and fat-free sparkling juice series, which includes three flavors: peach, grape, and apple, contributing to the overall revenue growth in the juice category[33][35]. Digital Transformation and Efficiency - Efficiency improvements will focus on supply chain integration and digitalization of production and logistics, aiming for better standardization and flexibility[12]. - Digital transformation will be a key focus area to drive high-quality growth in performance[12]. - The company is focusing on digital transformation, with over 1.8 million customers using the "Coke GO" platform and more than 1.35 million active users[16][19]. Sustainability and Development Goals - The company is committed to high-quality development, emphasizing market-oriented approaches and risk containment strategies[12]. - The company is committed to sustainable development, enhancing safety, quality, and environmental protection[18][20]. - The company is dedicated to achieving development goals centered on high quality and sustainability[12]. Market Position and Competitiveness - The market share of sparkling drinks maintained over 50% in operating regions, consistently outperforming major competitors[30]. - The company maintained a market share of over 50% in the soda category, continuing to outperform major competitors[31]. - The management remains cautiously optimistic about the non-alcoholic ready-to-drink industry maintaining healthy development throughout the year, despite economic uncertainties[47]. Financial Position and Cash Flow - As of June 30, 2022, the company had unpledged cash and cash equivalents of approximately RMB 1,992 million, an increase from RMB 1,592 million at the end of 2021[58]. - The company maintained a net cash position of approximately RMB 1,992 million with a gearing ratio of nil as of June 30, 2022[63]. - For the six-month period ended June 30, 2022, net cash from operating activities was RMB 1,265,309, an increase from RMB 699,650 in the same period of 2021, representing an 81.3% growth[98]. - The company generated RMB 1,496,478 from operations during the six-month period ended June 30, 2022, compared to RMB 878,361 in the same period of 2021, indicating a 70.5% increase[98]. Employee and Governance - The workforce decreased to 19,048 employees as of June 30, 2022, from 19,189 at the end of 2021[68]. - The company provides various employee benefits, including retirement plans, life insurance, and medical insurance, in compliance with local laws[71]. - The company emphasizes talent development and has established policies for recruitment, training, and performance evaluation to ensure employee rights and non-discrimination[71]. - The Company has complied with all Code Provisions of the Corporate Governance Code throughout the six-month period ended June 30, 2022[78]. Shareholder Information - As of June 30, 2022, substantial shareholders include China Foods (Holdings) Limited, holding 2,072,688,331 shares, representing approximately 74.10% of the issued shares[76]. - The total number of issued shares as of June 30, 2022, was 2,797,223,396 shares[76]. Financial Reporting and Compliance - The Group's interim financial information for the six-month period ended June 30, 2022, has been reviewed by the Audit Committee[79]. - The interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[84]. - The review concluded that there are no significant matters that would lead to the belief that the interim financial information is not materially compliant with the relevant standards[84].

Financial Performance - Total revenue for 2021 reached RMB 19,784 million, an increase of 14.7% compared to RMB 17,249 million in 2020[5] - Adjusted EBITDA for 2021 was RMB 1,990.7 million, reflecting an 11.3% increase from RMB 1,789.3 million in 2020[9] - Earnings per share rose to RMB 20.46 in 2021, up 14.8% from RMB 17.83 in 2020[5] - Profit before income tax for 2021 was RMB 1,422.9 million, compared to RMB 1,253.2 million in 2020[9] - In 2021, China Foods achieved a revenue of nearly RMB 20 billion and a net profit exceeding RMB 1 billion, marking a double-digit increase compared to the previous year[19] - Revenue for 2021 increased by 14.7% year-on-year, while sales volume grew by 13.5%[68] - Other income and gains increased by 19.1% year-on-year, primarily due to an increase of approximately RMB 20 million in interest income[72] - Income tax expenses rose to RMB 348 million, reflecting a 16.1% increase in line with profit growth[75] Market Presence and Strategy - The company maintains a strong market presence with 24 brands across 11 major beverage categories[2] - China Foods Limited is focused on market-oriented strategies, globalization, and risk containment[1] - The company operates in 19 provincial-level regions, covering approximately 50% of mainland China's population, with a marketing network reaching 100% of cities and counties in its operating regions[31] - The company aims to maintain its leading position in classic sparkling drinks while boosting the development of sugar-free products and light sparkling drinks[27] - China Foods intends to accelerate the growth of the juice category to maintain the No. 1 market position for Minute Maid products[28] - The company will expand catering channels and enhance its presence in both online and offline markets, particularly in rural areas[28] Product Development and Innovation - COFCO Coca-Cola launched a total of 91 new products in 2021, with each of COSTA, Minute Maid peach juice, Light Soda AHHA, and Chunyue functional water generating over RMB 100 million in revenue during the year[14] - The sparkling drinks segment saw a year-on-year double-digit growth, driven by sleek and mini cans, both increasing by over 50%[45] - The "Sugar-free" and "Fiber+" series maintained rapid growth, with a growth rate exceeding 50%[46] - The domestic juice industry recorded a year-on-year revenue increase, with "Minute Maid Pulpy Orange Juice" seeing significant revenue growth due to new packaging[49] - The company launched "Minute Maid 100% Juice" and "Minute Maid Apple Soda Water," entering the fruit juice sparkling water segment[50] - The ready-to-drink coffee market share surpassed 10% for the first time, with "Costa" becoming the second largest brand in key markets[57] Operational Efficiency and Digital Transformation - The smart retail business established approximately 20,000 vending machines and smart refrigerators, generating annual sales exceeding RMB 300 million and a profit of over RMB 10 million in its first full year of operation[25] - The company is focusing on digital transformation, including the establishment of a big data center to enhance consumer insights and improve marketing strategies[36] - The management team focused on reaching more consumers through new channels and improving operational efficiency through new technologies[20] - The company aims to enhance efficiency through supply chain integration and digitalization of production and logistics[35] Environmental, Social, and Governance (ESG) Initiatives - The ESG Committee was established on June 1, 2021, to guide and supervise the implementation of the Company's ESG practices, ensuring compliance with relevant laws and regulations[143] - The Company aims to create long-term value for shareholders through sound ESG performance, which is crucial for future sustainability[139] - The Company engages in public welfare activities and contributes to community development, promoting targeted poverty alleviation and environmental protection[156] - The Company is committed to reducing energy consumption and emissions in its operations, aligning with national policies for sustainable development[166] - The company invested a total of RMB 7,350,000 in energy conservation and emission reduction projects, expected to save 1,034 tonnes of standard coal and reduce carbon emissions by approximately 2,500 tonnes[178] Leadership and Management - The Company has a strong leadership team with diverse backgrounds in finance, strategy, and operations, enhancing its market position[102] - Mr. Chen Lang was appointed as a non-executive director and chairman of the board in April 2019, currently serving as executive vice president of COFCO Corporation[91] - The board of directors includes members with significant experience in corporate governance and financial oversight, ensuring robust management practices[111] - The Company is focused on expanding its market presence through strategic leadership and management expertise in the beverage industry[95] Challenges and Future Outlook - The company anticipates a GDP growth rate of 5.5% in 2022, which is expected to create new opportunities for the food and beverage industry despite challenges from rising raw material prices and market competition[21] - The Company faced production challenges due to insufficient power supply, with 11 plants experiencing brownouts, leading to a total of 975 hours of work affected[172] - The company recognizes the urgency of addressing climate change and aims to drive the entire value chain to tackle this challenge[171]