Industry Competition and Market Trends - The catering industry faced intensified competition in 2024, requiring companies to have a profound understanding of industry development patterns to achieve solid returns[19]. - The intense competition in the catering industry has led to a decline in same-store sales and profit margins, increasing corporate losses[34]. - The Group aims to stabilize existing business and explore new growth opportunities despite intense competition in the catering sector[98]. Business Development and Strategy - Best Food Group has seen positive results from its business development model focused on investment and operational empowerment, particularly through franchise operations and digital user engagement[20]. - The Group aims to consolidate existing restaurant operations while expanding its franchise network to adapt to regional dining demands across China[21]. - Best Food is exploring new growth opportunities by leveraging industry resources to establish a closed-loop business model, driving corporate innovation and performance[22]. - The Group's commitment to its business development model emphasizes investment and operational empowerment as key to future success[23]. - Best Food's strategic focus includes both consolidating existing operations and exploring new business avenues to drive growth[22]. Financial Performance - The annual report was presented for the year ended December 31, 2024, highlighting the Group's strategic directions and operational achievements[18]. - The Group's total system sales for 2024 reached RMB3,526 million, a 6.1% increase compared to 2023[33]. - Revenue for 2024 decreased by 22.3% to RMB474 million from RMB610.6 million in 2023[41]. - Revenue from restaurant operations fell by 33.6% to RMB213.2 million, while delivery business revenue decreased by 21.0% to RMB168.6 million[41]. - The Group recorded a loss attributable to equity holders of approximately RMB 241.8 million for the year ended December 31, 2024, compared to a loss of approximately RMB 151.7 million for the year ended December 31, 2023[59]. - The adjusted loss for the year was RMB 76.5 million for 2024, compared to RMB 51.5 million for 2023[67]. Cost Management - Raw material costs decreased by 14.4% to RMB199.3 million, with raw material costs as a percentage of revenue increasing from 38.1% to 42.0%[42]. - Employee benefit expenses decreased by 17.5% to RMB144.1 million, with expenses as a percentage of revenue rising from 28.6% to 30.4%[47]. - Online platform service charges and delivery fees decreased by 14.3% to RMB33.6 million, while their percentage of delivery revenue increased from 18.4% to 19.9%[46]. - Depreciation of right-of-use assets decreased from RMB 70.6 million for the year ended December 31, 2023, to RMB 55.7 million for the corresponding period of 2024, a decline of 21.1%[53]. - Other asset depreciation and amortization decreased from RMB 22.6 million for the year ended December 31, 2023, to RMB 16.8 million for the corresponding period of 2024, a decline of 25.7%[54]. - Property rental and related expenses decreased from RMB 18.3 million for the year ended December 31, 2023, to RMB 14.7 million for the corresponding period of 2024, a decline of 19.7%[55]. - Other expenses decreased by 12.7% from RMB 59.0 million for the year ended December 31, 2023, to RMB 51.5 million for the corresponding period of 2024[56]. Asset Management and Impairment - As of December 31, 2024, the Group recognized right-of-use assets amounting to RMB 95.3 million, down from RMB 149.0 million as of December 31, 2023, mainly due to restaurant closures[71]. - The impairment loss on investments in associates for the year ended December 31, 2024, was approximately RMB 71 million, significantly higher than RMB 1.9 million in the corresponding period of 2023, representing a substantial increase[74][79]. - The net book amount of the Group's trademarks decreased by 25.1% from RMB 373.0 million as of December 31, 2023, to RMB 279.5 million as of December 31, 2024, due to an impairment loss of RMB 93.5 million recognized in 2024[76][80]. - An impairment loss of RMB 93.5 million on trademarks was recorded for the year ended December 31, 2024, based on the higher of fair value less costs of disposal and value in use assessments[84]. Corporate Governance and Management - The Company has complied with the Corporate Governance Code throughout the year ended December 31, 2024[145]. - The Board comprises three executive directors and three independent non-executive directors, with independent directors representing more than one-third of the Board[148]. - The Company has a share award scheme in place to incentivize employees and recognize their contributions since November 11, 2019[140]. - The Board is collectively responsible for promoting the Company's success through strategic decisions and oversight of performance[162][167]. - Independent non-executive Directors play a crucial role in ensuring effective corporate governance[170][175]. Employee and Operational Insights - The Group had a workforce of approximately 1,582 employees as of December 31, 2024, a decrease from about 1,779 employees in 2023[139]. - The Company has established food safety risk assessment and control mechanisms across various operations, including procurement and restaurant operations[136]. - The Company plans to adopt a more prudent restaurant opening strategy and introduce meal sets to enhance value for customers in response to potential declines in sales[138]. Financial Position and Ratios - The Group's total deficit as of December 31, 2024, was RMB 220.2 million, compared to total equity of RMB 46.8 million as of December 31, 2023[99]. - The current ratio was 0.17 as of December 31, 2024, down from 0.68 as of December 31, 2023[102]. - The Group's gearing ratio increased to 152% as of December 31, 2024, compared to 92% as of December 31, 2023[129]. - The net cash to equity ratio as of December 31, 2024, was -0.002, a significant decrease from 0.53 as of December 31, 2023[109]. - The Group's debt-to-equity ratio was 152%, up from 92% on December 31, 2023[133]. Investments and Market Position - The Group's significant investments include a 17.16% stake in Yujian Xiaomian valued at RMB 56.7 million and a 25.03% stake in Tianshuilai valued at RMB 54.3 million as of December 31, 2024[116]. - Yujian Xiaomian has expanded to over 300 stores nationwide, focusing on first-tier and new first-tier cities[117]. - Tianshuilai operates over 200 stores, primarily in first-tier and new first-tier cities, with a focus on premium dining experiences[118]. - The Group has established a multi-brand investment matrix to enhance value and investment returns across diverse catering categories[119].

Financial Performance - Revenue for the fiscal year 2024 decreased to RMB 474.2 million, down 22.3% from RMB 610.6 million in 2023[9]. - Restaurant operating revenue fell by 33.6% to RMB 213.2 million, while takeaway business revenue decreased by 21.0% to RMB 168.6 million[9]. - The adjusted loss for the year was RMB 76.5 million, compared to RMB 51.5 million in the previous year[3]. - The company recorded a loss attributable to equity holders of approximately RMB 241.8 million for the year ended December 31, 2024, compared to a loss of approximately RMB 151.7 million for the same period in 2023[19]. - The company's revenue for the year ended December 31, 2024, was RMB 474.2 million, a decrease of 22.3% compared to RMB 610.6 million for the year ended December 31, 2023[37]. - The group reported a total deficit of RMB 220.2 million as of December 31, 2024, compared to total equity of RMB 46.8 million as of December 31, 2023[97]. - The company reported a net loss attributable to equity holders of RMB 241.8 million for the year ended December 31, 2024, compared to a net loss of RMB 151.7 million for the year ended December 31, 2023[37]. - Basic and diluted loss per share attributable to equity holders was RMB 15.32 for the year ended December 31, 2024, compared to RMB 9.61 for the year ended December 31, 2023[38]. Operational Metrics - The total system sales for the fiscal year 2024 reached RMB 3,526 million, representing a 6.1% increase compared to the previous year[5]. - The number of stores reached 1,171 as of December 31, 2024, with over 110 new stores opened during the year[5]. - The inventory turnover days increased from 37 days to 43 days due to a decrease in revenue during the reporting period[30]. - The group reported a significant increase in convertible bonds from RMB 16,602,000 in 2023 to RMB 647,780,000 in 2024, reflecting a strategic shift in financing[40]. - The company aims to stabilize existing operations and strive for profitability while exploring new business growth opportunities[36]. Expenses and Costs - Employee benefits expenses decreased to RMB 144.1 million, down 17.5%, but as a percentage of revenue, it increased to 30.4%[12]. - The depreciation of right-of-use assets decreased to RMB 55.7 million, down 21.1%, with its percentage of revenue slightly increasing to 11.7%[13]. - Online platform service fees and delivery costs decreased to RMB 33.6 million, down 14.3%, while their percentage of takeaway revenue increased to 19.9%[11]. - Property rental and related expenses decreased from RMB 18.3 million for the year ended December 31, 2023, to RMB 14.7 million for the same period in 2024, a decline of 19.7%[15]. - Other expenses decreased from RMB 59.0 million for the year ended December 31, 2023, to RMB 51.5 million for the same period in 2024, a decline of 12.7%[16]. Assets and Liabilities - Total assets decreased from RMB 1,108,361,000 in 2023 to RMB 801,682,000 in 2024, a decline of approximately 27.6%[39]. - The company reported a total liability of RMB 1,021,859,000 in 2024, compared to RMB 1,061,608,000 in 2023, indicating a decrease of about 3.7%[40]. - Non-current assets decreased from RMB 906,779,000 in 2023 to RMB 648,936,000 in 2024, a reduction of approximately 28.4%[39]. - Cash and cash equivalents fell from RMB 35,636,000 in 2023 to RMB 21,325,000 in 2024, a decrease of about 40.2%[39]. - The current ratio decreased significantly to 0.17 as of December 31, 2024, down from 0.68 as of December 31, 2023, indicating a decline in short-term financial health[97]. Impairments and Provisions - The carrying amount of trademarks decreased from RMB 373.0 million as of December 31, 2023, to RMB 279.5 million as of December 31, 2024, a decline of 25.1%[26]. - The impairment loss on trademarks for the year ended December 31, 2024, was RMB 93.5 million, compared to RMB 95.3 million in 2023[26]. - The company recognized an impairment loss on investments in associates of approximately RMB 71.4 million for the year ended December 31, 2024, significantly up from RMB 1.9 million in 2023[24]. - The expected credit loss provision for trade receivables increased to RMB 1,694 thousand in 2024 from RMB 959 thousand in 2023[76]. Corporate Governance and Compliance - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange rules throughout the year[112]. - The audit committee reviewed the audited annual results for the year ended December 31, 2024, and confirmed alignment with the financial statements[114]. - The company did not declare any dividends for the year ended December 31, 2024, consistent with the previous year[94]. - The company has adopted a share incentive plan since November 11, 2019, to reward employees for their contributions[109]. Market Focus and Strategy - The group has a significant focus on the Chinese market, with overseas sales contributing less than 10% to total revenue[54]. - The group has established a multi-brand investment matrix across regions and industries, focusing on enhancing investment returns and value creation[102]. - The company aims to enhance operational performance in the chain restaurant business while controlling costs and expenses to generate operating cash inflows[47].

√ 百福控股 咖喱猪排 小锅现炒 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立之有限公司) Stock Code 股份代號 : 1488 INTERIM 《重复盟吧 照猫烫火锅 ZILE LD OTT 锅仔烤串 粥面馆 小锅现炒 咖喱猪掉 2 132 no C Contents 目錄 | --- | --- | --- | |-------|--------------------------------------------------------------------------------------------|-------| | | | | | | | | | | | | | | | | | | Corporate Information 02 公司資料 | | | | Management Discussion and Analysis 04 管理層討論及分析 | | | | Interim Results 25 中期業績 | | | | Interim Condensed Consolidate ...

Financial Performance - The group's revenue decreased by 20.1% to RMB 244 million in the first half of 2024, down from RMB 305.2 million in the same period of 2023[5] - The company's revenue for the six months ended June 30, 2024, was RMB 243,952,000, a decrease of 20.1% compared to RMB 305,248,000 for the same period in 2023[27] - The group reported a total revenue of RMB 116,163 thousand for the six months ended June 30, 2024, compared to RMB 168,760 thousand for the same period in 2023, representing a decrease of approximately 31%[37] - Other income for the six months ended June 30, 2024, was RMB 10,290 thousand, down from RMB 12,716 thousand in 2023, indicating a decline of about 19%[38] - The group incurred total expenses of RMB 22,464 thousand for the six months ended June 30, 2024, compared to RMB 24,820 thousand in 2023, reflecting a decrease of approximately 9%[39] - The group reported a net loss of RMB 39,313 thousand for the six months ended June 30, 2024, down from RMB 46,862 thousand in 2023, showing an improvement of about 16%[46] - The net loss for the period was RMB 46,569,000, compared to a net loss of RMB 5,692,000 in the same period last year, representing an increase in losses[28] - The total comprehensive loss for the period was RMB 49,764,000, compared to a total comprehensive loss of RMB 15,100,000 in the previous year[28] Operational Metrics - The total system sales for the first half of 2024 reached RMB 1,715 million, representing a 10% increase compared to RMB 1,564 million in the same period of 2023[3] - The number of stores under the group and its joint ventures reached 1,131 as of June 30, 2024, with a net increase of 71 stores since December 31, 2023[3] - Inventory turnover days increased from 37 days to 42 days, primarily due to a decrease in revenue during the reporting period[20] - Trade and other receivables decreased to RMB 66.7 million as of June 30, 2024, down from RMB 80.1 million as of December 31, 2023[21] - Trade receivables amounted to RMB 12,178,000 as of June 30, 2024, an increase from RMB 11,327,000 as of December 31, 2023, representing a growth of approximately 7.5%[49] - Total trade and other receivables decreased to RMB 96,820,000 from RMB 110,130,000, reflecting a decline of about 12%[49] - Net trade and other receivables stood at RMB 66,725,000, down from RMB 80,070,000, indicating a reduction of approximately 16.6%[50] - Trade payables were reported at RMB 42,246,000 as of June 30, 2024, down from RMB 48,817,000, showing a decrease of about 13.1%[51] Cost Management - The operating income from restaurant operations fell by 31.2% to RMB 116.2 million in the first half of 2024, compared to RMB 168.8 million in the same period of 2023[5] - The revenue from takeaway services decreased by 18.8% to RMB 84.9 million in the first half of 2024, down from RMB 104.5 million in the same period of 2023[5] - The cost of raw materials and inventory changes decreased by 12.0% to RMB 99.8 million in the first half of 2024, compared to RMB 113.4 million in the same period of 2023[6] - Employee benefits expenses decreased by 12.0% to RMB 76.2 million in the first half of 2024, down from RMB 86.6 million in the same period of 2023[8] - Property rental and related expenses decreased from RMB 9.5 million for the six months ended June 30, 2023, to RMB 8.2 million for the same period in 2024, a decrease of 13.7%[11] - Other expenses decreased from RMB 24.8 million for the six months ended June 30, 2023, to RMB 22.5 million for the same period in 2024, a reduction of 9.3%[12] - The group's operating expenses for advertising and marketing decreased to RMB 2,952 thousand in 2024 from RMB 4,837 thousand in 2023, a reduction of approximately 39%[39] - The group's depreciation and amortization expenses totaled RMB 39,313 thousand for the six months ended June 30, 2024, compared to RMB 46,862 thousand in 2023, indicating a decrease of about 16%[46] Financial Position - The company's total assets decreased to RMB 1,043,656,000 as of June 30, 2024, down from RMB 1,108,361,000 as of December 31, 2023[29] - Current liabilities exceeded current assets by RMB 114,486,000, indicating potential liquidity concerns[31] - The company's cash and cash equivalents decreased to RMB 32,602,000 from RMB 35,636,000 as of December 31, 2023[29] - The company’s non-current liabilities included convertible bonds amounting to RMB 601,876,000 as of June 30, 2024, compared to RMB 577,788,000 at the end of 2023[30] - The current ratio as of June 30, 2024, was 0.60, a decline from 0.68 as of December 31, 2023[57] - The net cash to equity ratio as of June 30, 2024, was -4.64, compared to 0.53 as of December 31, 2023[57] - The debt-to-equity ratio increased to 101% as of June 30, 2024, from 92% as of December 31, 2023[62] Strategic Initiatives - The group is actively adapting to market conditions by launching new products and enhancing online traffic through various marketing strategies[3] - The "Co-Creation Camp" project was launched to optimize and strengthen the ecosystem, aiming to connect and integrate diverse industry resources for new business growth[4] - The company aims to enhance brand value, explore diverse investment models, and identify new business growth points despite the competitive landscape in 2024[26] - The group expects that newly issued and amended accounting standards will not have a significant impact on its financial performance in the current or foreseeable future reporting periods[34] Employee Metrics - The number of employees decreased to approximately 1,618 as of June 30, 2024, from approximately 1,779 as of December 31, 2023[64] - The company’s employee benefits expenses decreased to RMB 16,079,000 from RMB 17,999,000 year-on-year[27] Other Information - The group has not declared an interim dividend for the six months ended June 30, 2024, consistent with the previous year[47] - The group’s primary market is in China, with overseas sales contributing less than 10% to total revenue[38] - The group has no significant transactions with any single external customer contributing 10% or more to total revenue[38] - The group had no significant investments or acquisitions during the six months ended June 30, 2024[60] - The group has sufficient cash and available credit facilities to meet its operational needs and obligations for the next 12 months[57] - There were no significant contingent liabilities as of June 30, 2024[61] - The company has not reported any significant events affecting the group from June 30, 2024, until the date of the earnings announcement[56]

Financial Performance - The Group recorded a loss attributable to equity holders of approximately RMB151.7 million for the year ended 31 December 2023, a slight improvement from a loss of RMB156.2 million in 2022[30]. - The adjusted loss for the year was RMB 53.4 million, a significant improvement from the adjusted loss of RMB 102.98 million in 2022, reflecting a reduction of approximately 48%[49]. - The Group recognized an impairment loss on trademarks amounting to approximately RMB95.3 million in 2023, compared to nil in 2022[30]. - The impairment of intangible assets amounted to RMB 95.3 million for the year ended December 31, 2023, with a tax impact of RMB 23.8 million[49]. - As of December 31, 2023, the total equity of the Group was RMB 46.8 million, a decrease from RMB 210.6 million as of December 31, 2022[66]. - The Group's current assets amounted to RMB 201.6 million, down from RMB 226.5 million in the previous year, while current liabilities decreased to RMB 298.0 million from RMB 339.6 million[66]. - The Group's debt-to-asset ratio rose to 92% as of December 31, 2023, compared to 72% a year earlier[80]. - As of December 31, 2023, the Group's gearing ratio was 92%, an increase from 72% in the previous year[130]. Revenue and Expenses - Employee benefit expenses increased by 0.9% from RMB173.0 million in 2022 to RMB174.6 million in 2023, while the percentage of revenue decreased from 32.2% to 28.6%[42]. - Depreciation of right-of-use assets decreased by 16.7% from RMB84.7 million in 2022 to RMB70.6 million in 2023, with the percentage of revenue dropping from 15.8% to 11.6%[44]. - Finance expenses net decreased by 9.0% from RMB51.9 million in 2022 to RMB47.2 million in 2023, mainly due to lower interest on convertible bonds and lease liabilities[29]. - Other expenses increased by 7.1% from RMB55.1 million in 2022 to RMB59.0 million in 2023, but as a percentage of revenue, it decreased from 10.3% to 9.7%[46]. - Property rentals and related expenses decreased from RMB18.8 million in 2022 to RMB18.3 million in 2023, with the percentage of revenue declining from 3.5% to 3.0%[45]. - The Group's other expenses as a percentage of revenue decreased from 10.3% in 2022 to 9.7% in 2023, attributed to revenue growth during the reporting period[48]. Strategic Direction and Market Outlook - The Group remains confident in the long-term potential of the Chinese catering market and will continue to focus on franchise and digital operations strategies[12]. - The Group's strategic direction includes enhancing its franchise business to adapt to local market needs across different regions in China[20]. - The Xinladao Group plans to continue focusing on profitable direct-sales stores while expanding its franchised store network, adapting to changes in the consumer market and macro-economy[55]. - The Group expects intense competition in the food and beverage industry to persist in 2024, with continued growth in the franchise business[60]. Governance and Compliance - The Company has established mechanisms to ensure independent views and input are available to the Board, with independent non-executive Directors representing more than one-third of the Board[119]. - The Company has complied with the Corporate Governance Code throughout the year ended December 31, 2023[141]. - The Company’s governance structure includes a clear distinction of responsibilities between the Chairman and the CEO[150]. - The Audit Committee regularly reviews the effectiveness and objectivity of the Group's financial reporting, internal control systems, and risk management processes[200]. - The Remuneration Committee's terms of reference were amended in December 2023 to align with relevant code provisions of the CG Code[184]. - The Company ensures that no Director is involved in deciding his own remuneration, maintaining independence in the remuneration process[184]. Risk Management - The Company faces risks related to discretionary spending and increased competition, which may adversely affect its business and financial condition[135]. - The Company has not entered into any forward contracts to hedge its foreign exchange risks for the year ended December 31, 2023[103]. Workforce and Employee Relations - The Group's workforce decreased to approximately 1,779 employees as of December 31, 2023, down from about 2,162 employees in 2022[138]. - The Company has adopted a share award scheme to provide incentives to employees and recognize their contributions[138].

Financial Performance - The group's revenue for 2023 was RMB 611 million, up 13.6% from RMB 537.5 million in 2022[34]. - Revenue for the year ended December 31, 2023, was RMB 610.6 million, an increase from RMB 537.5 million in the previous year, representing a growth of approximately 13.6%[61]. - Total revenue for the year ended December 31, 2023, was RMB 610,619,000, an increase from RMB 537,510,000 in 2022, representing a growth of approximately 13.6%[101]. - The group reported a significant increase in franchise income, which rose to RMB 13,724,000 in 2023 from RMB 4,905,000 in 2022, marking an increase of approximately 179.5%[104]. - Government grants received increased to RMB 11,647,000 in 2023, compared to RMB 1,645,000 in 2022, reflecting a growth of approximately 608.5%[104]. Losses and Adjusted Loss - The company recorded a loss attributable to equity holders of approximately RMB 151.7 million for the year ended December 31, 2023, compared to a loss of RMB 156.2 million for the year ended December 31, 2022[48]. - The adjusted loss for the year was RMB (53,406,000), significantly improved from RMB (102,983,000) in the previous year, indicating a reduction in losses by about 48%[72]. - The loss attributable to equity holders for the year was RMB (162,695,000), slightly better than RMB (166,708,000) in 2022, with a diluted loss per share of RMB (9.61) compared to RMB (9.90) in the prior year[72][77]. Cash Flow and Liquidity - The company's ability to generate sufficient cash flow from operations is expected to support its financial obligations over the next 12 months[92]. - The current ratio as of December 31, 2023, was 0.68, slightly up from 0.67 in the previous year, indicating improved short-term liquidity[55]. Assets and Liabilities - Total assets as of December 31, 2023, amounted to RMB 1,108.4 million, down from RMB 1,343.4 million as of December 31, 2022, indicating a decrease of approximately 17.5%[68]. - Total liabilities decreased to RMB 1,061,608,000 in 2023 from RMB 1,132,748,000 in 2022, reflecting a reduction of approximately 6.3%[81]. - Current assets were RMB 201.6 million as of December 31, 2023, compared to RMB 226.5 million as of December 31, 2022, reflecting a decline of about 11%[55]. Employee and Workforce Changes - The workforce decreased to approximately 1,779 employees as of December 31, 2023, down from approximately 2,162 employees in 2022[16]. - Employee benefits expenses grew by 0.9% to RMB 174.6 million, decreasing as a percentage of revenue from 32.2% in 2022 to 28.6% in 2023[38]. Operational Efficiency and Digital Transformation - The group is focusing on digital operations to enhance efficiency and resource sharing among its brands[32]. - The company focused on enhancing operational efficiency and customer experience through digital transformation initiatives in 2023[75]. - The company plans to leverage its digital capabilities and scale to maintain a competitive edge in the restaurant industry[146]. Debt and Borrowings - As of December 31, 2023, the company had outstanding borrowings of RMB 11.0 million, down from RMB 14.8 million as of December 31, 2022[7]. - The company's debt-to-equity ratio was 92% as of December 31, 2023, up from 72% as of December 31, 2022[14]. - Financial expenses decreased by 9.0% to RMB 47.2 million, primarily due to lower convertible bond interest and reduced lease liabilities[44]. Impairment and Asset Valuation - The carrying value of trademarks declined by 20.3% from RMB 468.3 million on December 31, 2022, to RMB 373.0 million on December 31, 2023, due to an impairment loss of RMB 95.3 million recognized in 2023[126]. - Impairment loss for the trademark of the new brand is recognized at RMB 95.3 million as of December 31, 2023, compared to none in 2022[159]. Compliance and Governance - The company has maintained compliance with the corporate governance code throughout the year ended December 31, 2023[20]. Future Outlook - The company anticipates continued growth in the franchising business and aims to enhance brand value to contribute to profitability[146]. - The company plans to focus on franchise development as a strategic initiative and enhance digital operational capabilities[59].

6 收入及分部資料 | --- | --- | --- | --- | --- | |--------------------------|----------|-------|--------------------------------------------------------------------------------------------------|----------------------------------------------------------------| | | | | Six months ended 30 June 截至 6 月 30 \n2023 \nRMB'000 千人民幣 (Unaudited) （未經審核） | 日止 6 個月 \n2022 \nRMB'000 千人民幣 (Unaudited) （未經審核） | | Restaurant operation | 餐廳經營 | | 168,760 | 158,979 | | Delivery business | 外賣業務 | | 104,458 | 89,113 | | Sale of food in ...

Financial Position - As of June 30, 2023, the group's current liabilities exceeded its current assets by RMB 96,209,000[1]. - The total equity of the group as of June 30, 2023, was RMB 196.3 million, down from RMB 210.6 million as of December 31, 2022[33]. - The group's current assets were RMB 218.8 million as of June 30, 2023, compared to RMB 226.5 million as of December 31, 2022[33]. - The current ratio as of June 30, 2023, was 0.69, slightly improved from 0.67 as of December 31, 2022[33]. - The group had cash and cash equivalents of RMB 36.3 million as of June 30, 2023, up from RMB 34.1 million as of December 31, 2022[34]. - The group had outstanding bank borrowings of RMB 12.0 million as of June 30, 2023, down from RMB 14.8 million as of December 31, 2022[34]. - The group had no assets pledged as collateral as of June 30, 2023, compared to RMB 22.2 million in collateralized assets as of December 31, 2022[17]. - The total liabilities, including trade payables and other payables, decreased from RMB 167.980 million as of December 31, 2022, to RMB 160.925 million as of June 30, 2023[59]. - The company's debt-to-equity ratio was 74%, up from 72% on December 31, 2022[145]. Revenue and Sales Performance - The total system sales for the first half of 2023 reached RMB 1,770 million, representing a 44% increase compared to the same period in 2022[66]. - The group's revenue for the first half of 2023 was RMB 305 million, an increase of 13.8% year-on-year[66]. - The group's revenue for the six months ended June 30, 2023, was RMB 305.2 million, an increase of 13.9% compared to RMB 268.1 million for the same period in 2022[99]. - Restaurant operating revenue rose from RMB 159.0 million in the first half of 2022 to RMB 168.8 million in 2023, an increase of 6.2%[70]. - The takeaway business revenue grew from RMB 89.1 million in the first half of 2022 to RMB 104.5 million in 2023, marking a 17.3% increase, attributed to the lifting of COVID-19 restrictions[70]. - Revenue from restaurant operations increased to RMB 168,760 thousand, up 6.3% from RMB 158,979 thousand in the prior year[135]. - The takeaway business generated revenue of RMB 104,458 thousand, representing a 17.2% increase from RMB 89,113 thousand in the same period last year[135]. - The total revenue for the period reached RMB 305,248 thousand, a 13.8% increase compared to RMB 268,104 thousand in the previous year[135]. Profitability and Loss - Adjusted profit for the period was RMB 12.7 million, compared to a loss of RMB 67.7 million in the same period last year[80]. - The net loss for the period decreased significantly to RMB 5.7 million from RMB 107.3 million year-on-year, mainly due to the recovery of restaurant operations[75]. - The group reported a net loss attributable to equity holders of the company of RMB 8.6 million for the period, compared to a loss of RMB 100.9 million in the same period last year[101]. - The company reported a total comprehensive loss of RMB 15,100 thousand for the period, compared to a loss of RMB 117,717 thousand in the same period last year[128]. - The adjusted profit for the period was a loss of RMB 5.7 million, significantly improved from a loss of RMB 107.3 million in the same period last year[99]. Expenses and Financial Management - Employee benefits expenses increased slightly from RMB 85.6 million to RMB 86.6 million, a rise of 1.2%, but as a percentage of revenue, it decreased from 31.9% to 28.4%[71]. - Depreciation of right-of-use assets decreased by 25.9% from RMB 48.3 million to RMB 35.8 million, reflecting a reduction in the percentage of revenue from 18.0% to 11.7%[71]. - Financial expenses for the six months ended June 30, 2023, were RMB 4.8 million, down from RMB 7.2 million in the previous year[99]. - The total expenses for the six months ended June 30, 2023, amounted to RMB 24,820,000, an increase from RMB 23,700,000 in the same period of 2022[155]. Investments and Capital Expenditures - The group reported no significant investments or capital asset plans as of the announcement date[23]. - There were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended June 30, 2023[52]. Operational Developments - The number of stores under the group and its associates reached 967 as of June 30, 2023, with nearly 100 new direct-operated and franchised stores opened since December 31, 2022[66]. - The group expanded its franchise partnerships in new regions such as Shandong, Jiangsu, Zhejiang, and Fujian during the first half of 2023[67]. - The digital team focused on upgrading self-developed systems to enhance operational efficiency across multiple brands within the group[68]. - The group provided value-added services to affiliated brands, contributing positively to financial performance in the first half of 2023[69]. - The company aims to expand its franchise network and enhance services to franchisees as part of its strategic initiatives[98]. - The company aims to enhance digital development and operational capabilities as part of its future strategy[125]. Other Financial Information - The group had total accounts receivable and other receivables amounted to RMB 105.198 million as of June 30, 2023, compared to RMB 103.480 million as of December 31, 2022[55]. - Inventory increased from RMB 24.2 million as of December 31, 2022, to RMB 25.8 million as of June 30, 2023, with inventory turnover days decreasing from 52 days to 40 days[94]. - Total lease liabilities decreased by 26.3% from RMB 218.2 million as of December 31, 2022, to RMB 160.9 million as of June 30, 2023, due to rental payments and the closure of some stores[97]. - The initial fair value of derivative financial instruments was RMB 46,631,000, recognized as shareholder contributions[160]. - The company has not entered into any forward contracts to hedge foreign exchange risks as of June 30, 2023[147]. - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange regulations during the reporting period[163]. - The company's financial statements were prepared based on historical cost, with certain financial assets measured at fair value[152].

Business Recovery and Market Outlook - Best Food Group experienced significant challenges in 2022 due to the COVID-19 pandemic, leading to rigorous "stress testing" of its brands[15]. - The company reported a recovery in consumer sentiment following the adjustment of China's pandemic-control policy in December 2022, allowing for rapid business recovery[15]. - The catering industry is gradually recovering, and the company is confident in the long-term potential of the Chinese catering market[22]. - Many of the Group's brands have strengthened their foundations during market testing and are poised for growth in the coming years[22]. - The Board anticipates that several brands will enter a rapid growth stage within the next three years, contributing significant value to the Group's performance[22]. Financial Performance - The Group's revenue for 2022 was RMB 537.5 million, representing a year-on-year decrease of 28.6% compared to 2021[32]. - Total system sales for the Group amounted to RMB 2,670 million in 2022, reflecting a year-on-year increase of 5.1%[32]. - Revenue decreased by 28.6% from RMB 753.0 million in 2021 to RMB 537.5 million in 2022, with restaurant operations revenue dropping by 43.6% from RMB 500.9 million to RMB 282.5 million due to pandemic impacts[42]. - The Group recorded a loss for the year attributable to equity holders of approximately RMB 156.2 million, a decrease from a loss of RMB 639.6 million for the year ended 31 December 2021[53]. - The total loss for the year amounted to RMB (166,708) thousand, compared to RMB (651,837) thousand in the prior year, showing a reduction in overall losses[63]. Membership and Customer Engagement - The number of members in the Group increased from approximately 16.0 million at the beginning of the year to approximately 23.0 million by the end of 2022[33]. - The group’s membership and points program grew from approximately 16.0 million to 23.0 million members during the year[38]. - The amount of revenue recognized from the customer loyalty program is determined based on the number of points redeemed relative to the total number expected to be redeemed[4]. Digital Transformation and Technology - Best Food is committed to leveraging technology to enhance its food and beverage operations, achieving tangible progress in building digital-driven platform capabilities[20]. - The digital team developed a smart cashier system, mobile app ordering system, and membership management system, enhancing operational efficiency across multiple brands[41]. - The intelligent delivery system was preliminarily formed, providing timely support for operational decision-making through data dashboards[41]. Franchising and Expansion - The Group actively expanded its franchising network, focusing on cross-regional franchisees to promote brand presence beyond local communities[32]. - "Yujian Xiaomian" solidified its presence in the Beijing market and opened stores at transportation hubs in various cities[32]. - "King of Clay Pot" expanded its franchising model into new regions including Jiangsu, Anhui, Zhejiang, Fujian, and Sichuan, with over 70 stores outside Beijing by the end of 2022[32]. - The Group established a franchise expansion team to facilitate cross-region development and entered into strategic cooperation agreements with national commercial property enterprises[35]. Cost Management and Expenses - Employee benefit expense decreased by 20.6% from RMB217.9 million for the year ended 31 December 2021 to RMB173.0 million for the corresponding period of 2022, while the percentage of revenue increased from 28.9% to 32.2%[50]. - Depreciation of right-of-use assets decreased by 18.1% from RMB103.4 million for the year ended 31 December 2021 to RMB84.7 million for the corresponding period of 2022, with the percentage of revenue increasing from 13.7% to 15.8%[50]. - Property rentals and other related expenses decreased by 41.8% from RMB32.3 million for the year ended 31 December 2021 to RMB18.8 million for the corresponding period of 2022, with the percentage of revenue decreasing from 4.3% to 3.5%[51]. - Other expenses decreased by 42.5% from RMB95.8 million for the year ended 31 December 2021 to RMB55.1 million for the corresponding period of 2022, with the percentage of revenue decreasing from 12.7% to 10.3%[51]. Financial Risk Management - The Group's financial risk management focuses on minimizing potential adverse effects on financial performance due to market risks, credit risks, and liquidity risks[84]. - The Group's activities expose it to various financial risks, including market risk, credit risk, and liquidity risk, which are managed by the finance department[84]. - The Group's risk management policies are approved by the Board of Directors and cover specific areas such as foreign exchange risk and credit risk[84]. Leadership and Governance - The Company held an annual general meeting on 2 June 2022, allowing shareholders to communicate their views with the chairman of the Board[180]. - The Company has maintained sufficient contact details for shareholders to put forward inquiries to the Board[180]. - Corporate communications were published on the websites of the Company and the Stock Exchange in a timely manner[180]. Strategic Initiatives - The Group plans to enhance digital development and operation capabilities to improve performance and create shareholder value[68]. - The Group aims to develop and better serve franchisors as part of its future growth strategy[69]. - The Group will facilitate the increase in values of brands and enterprises it invests in, contributing profits to the Company[70].

Franchise and Brand Development - The company's franchise empowerment strategy has led to the establishment of a multi-brand franchise network across multiple regions, with strategic agreements signed with national commercial real estate companies in 2022[2] - The company completed two angel round investments in 2022, including the hot pot brand "Zhao Cai Feng Zhua" and the small hot pot brand "Panda Tang," contributing to the valuation growth of its portfolio companies[3] - The company plans to focus on enhancing digital development and operational capabilities, as well as supporting franchisees and increasing the value of invested brands[50] - The company expanded its presence in new regions, with brands like "Meet the Noodles" and "Baozai King" achieving breakthroughs in multiple cities and markets[182] Membership and Digital Growth - The company's membership base grew from 16.0 million at the beginning of the year to 23.0 million by the end of 2022, driven by multi-channel traffic empowerment strategies including live streaming, short video content, and community marketing[2] - The company's digital team developed lightweight POS systems, mini-program ordering systems, and membership management systems, which are being rolled out across multiple brands[180] - The company's smart delivery system and franchise management big data system were established to enhance operational decision-making and support franchise business growth[183] Financial Performance and Losses - Revenue for 2022 decreased to RMB 537.51 million from RMB 752.96 million in 2021, a decline of 28.6%[38] - Net loss for 2022 was RMB 166.71 million, compared to a net loss of RMB 651.84 million in 2021, showing a significant improvement[38] - The adjusted loss for the year was RMB 102.983 million, compared to a loss of RMB 166.708 million in 2022 and RMB 651.837 million in 2021, with significant contributions from convertible bond interest and derivative financial instrument fair value changes[11] - Total comprehensive loss for the year attributable to equity holders of the company was RMB 180,757 thousand, compared to RMB 640,496 thousand in the previous year[56] - Basic loss per share attributable to equity holders of the company was RMB 9.90 cents, compared to RMB 40.52 cents in the previous year[57] - Total comprehensive loss for the year was RMB 191,366 thousand, compared to RMB 652,694 thousand in the previous year[68] - The company reported a net loss per share of 9.90 RMB in 2022, an improvement from 40.52 RMB in 2021[92] - The company's basic loss per share for 2022 was RMB (156,242) thousand, compared to RMB (639,639) thousand in 2021[117] - Net loss attributable to equity holders of the company improved to RMB 156.2 million in 2022 from RMB 639.6 million in 2021, primarily due to the absence of impairment losses on goodwill and other intangible assets in 2022[176] Financial Expenses and Liabilities - Financial expenses increased by 8.1% from RMB 48.0 million in 2021 to RMB 51.9 million in 2022, primarily due to increased convertible bond interest, partially offset by reduced lease liability interest from store closures[10] - The company's lease liabilities decreased by 23.2% from RMB 284.1 million in 2021 to RMB 218.2 million in 2022, mainly due to rental payments and partial store closures[18] - The company extended the maturity date of its convertible bonds to the seventh anniversary of the issuance date, from November 23, 2023, to November 23, 2025, with investor consent[22] - Convertible bonds and related interest increased to RMB 548.4 million in 2022 from RMB 502.1 million in 2021, a rise of 9.2%[48] - Short-term borrowings stood at RMB 14.8 million in 2022, slightly down from RMB 15.0 million in 2021[52] - The maturity date of convertible bonds was extended from November 23, 2023, to November 23, 2025, with an adjusted carrying amount of RMB 481,787,000[156] - The carrying amount of convertible bonds as of December 31, 2022, was RMB 16,366,000 for the current portion and classified as non-current liabilities for the remaining balance[160] Revenue and Income Breakdown - Revenue from customer contracts primarily comes from the Chinese market, with overseas sales contributing less than 10% of total revenue[65] - Total revenue for the year ended December 31, 2022, was 9,874 thousand RMB, a decrease from 18,085 thousand RMB in 2021[79] - Franchise income decreased to 4,905 thousand RMB in 2022 from 6,182 thousand RMB in 2021[79] - Government subsidies dropped significantly to 1,645 thousand RMB in 2022 from 4,331 thousand RMB in 2021[79] - Loss from restaurant closures amounted to 1,528 thousand RMB in 2022[81] - The company recorded a deferred tax benefit of 15,518 thousand RMB in 2022, compared to 20,059 thousand RMB in 2021[85] - Income tax credits increased from RMB 13.8 million in 2021 to RMB 15.5 million in 2022 due to increased losses that can be carried forward to future years[186] Asset and Liability Management - Inventory decreased from RMB 35.2 million in 2021 to RMB 24.2 million in 2022, a reduction of 31.3%[46] - Trade and other receivables decreased by 9.9% from RMB 100.2 million in 2021 to RMB 90.3 million in 2022[47] - Trade and other payables decreased from RMB 178.8 million in 2021 to RMB 168.0 million in 2022, a decline of 6.0%[47] - Right-of-use assets decreased to RMB 188.4 million in 2022 from RMB 274.0 million in 2021, a reduction of 31.2%[45] - Total assets decreased to RMB 1,343,356 thousand from RMB 1,520,296 thousand year-over-year[70] - Current liabilities exceeded current assets by RMB 113,082 thousand as of December 31, 2022[77] - Property, plant, and equipment decreased to RMB 80,140 thousand from RMB 99,195 thousand year-over-year[70] - Cash and cash equivalents decreased to RMB 34,097 thousand from RMB 62,571 thousand year-over-year[70] - The group's asset-to-liability ratio increased to 72% in 2022 from 56% in 2021, calculated as net debt divided by total capital[194] - Trade payables decreased from RMB 59.166 million in 2021 to RMB 53.855 million in 2022, with related party payables increasing from RMB 6.608 million to RMB 7.604 million[192] Operational Costs and Expenses - Employee benefit expenses decreased by 20.6% from RMB 217.9 million in 2021 to RMB 173.0 million in 2022, primarily due to reduced working hours during pandemic lockdowns[155] - Right-of-use asset depreciation decreased by 18.1% from RMB 103.4 million in 2021 to RMB 84.7 million in 2022, mainly due to the closure of underperforming restaurants[155] - Property rental expenses for office space decreased to 442 thousand RMB in 2022 from 1,627 thousand RMB in 2021[90] - Restaurant rental expenses (fixed payments) decreased to 7,033 thousand RMB in 2022 from 9,231 thousand RMB in 2021[90] - COVID-19 related rental concessions amounted to 5,890 thousand RMB in 2022, compared to 921 thousand RMB in 2021[90] - Depreciation and amortization expenses totaled 112,296 thousand RMB in 2022, down from 144,641 thousand RMB in 2021[102] - Raw materials and inventory costs decreased by 27.7% to RMB 208.1 million in 2022 from RMB 288.0 million in 2021, mainly due to reduced store operations during the pandemic[165] - Online platform service fees and delivery fees increased by 4.0% to RMB 38.6 million in 2022, accounting for 18.6% of delivery business revenue, up from 18.0% in 2021[166] - Other asset depreciation and amortization decreased by 33.0% to RMB 27.6 million in 2022, accounting for 5.1% of revenue, down from 5.5% in 2021[174] - Property rental and related expenses decreased by 41.8% to RMB 18.8 million in 2022, accounting for 3.5% of revenue, down from 4.3% in 2021, due to pandemic-related rent concessions and store closures[174] - Other expenses decreased by 42.5% from RMB 95.8 million in 2021 to RMB 55.1 million in 2022, primarily due to reduced maintenance costs (RMB 7.6 million) and advertising expenses (RMB 7.3 million)[185] Impairment and Valuation - The goodwill and trademarks of Hehegu Group and Xindao Group were subject to impairment review due to lower-than-expected operating performance in 2022, impacted by the COVID-19 pandemic[111] - Hehegu Group's recoverable amount as of December 31, 2022, was approximately RMB 432 million, 25.7% higher than its carrying amount[122] - Xindao Group's recoverable amount was determined using the fair value less costs to sell method, with no impairment identified as of December 31, 2022[126] - The company recognized a total impairment loss of RMB 646.463 million, primarily related to goodwill and identifiable net assets[130] - Goodwill impairment amounted to RMB 535,436 thousand, with a total impairment of RMB 566,455 thousand[134] - The fair value less costs to sell of Xinladao Group was RMB 249 million, 11.1% higher than its carrying amount[138] - Impairment losses recognized in 2021 amounted to RMB 646.463 million[191] - Goodwill impairment of RMB 535.436 million was recognized in the comprehensive income statement, with RMB 31.019 million allocated to trademarks with indefinite useful lives[199] Investment and Financing - The company initiated the development of a big data platform and business intelligence (BI) analysis system, marking the beginning of its intelligent data platform construction[4] - The weighted average annual interest rate for bank loans decreased from 4.35% in 2021 to 4.01% in 2022[28] - The company's partial disposal and dilution of investments in associates resulted in a net gain of RMB 82.041 million in 2021[114] - The group entered into a 2020 investment agreement for the issuance of convertible bonds with a total principal amount not exceeding HKD 780 million[200] System-wide Sales and Store Operations - System-wide sales for 2022 increased by 5.1% to RMB 2,670 million, with the total number of stores reaching 878, including over 160 new directly operated and franchised stores[182] - Group revenue decreased by 28.6% from RMB 753.0 million in 2021 to RMB 537.5 million in 2022, with restaurant operating revenue dropping by 43.6% from RMB 500.9 million to RMB 282.5 million due to pandemic-related store closures and suspended dine-in services[184] Credit and Provisions - The group's expected credit loss provision decreased from RMB 406 thousand in 2021 to RMB 361 thousand in 2022, with provisions of RMB 177 thousand made during the year[189] - The group had no significant contingent liabilities as of December 31, 2022, and no committed capital expenditures for property, plant, and equipment not included in the financial statements[196] Miscellaneous - No dividends were declared for the year ended December 31, 2022, consistent with the previous year[27] - The company's main business is chain catering operations[76] - The company's liquidity depends on its ability to maintain sufficient operating cash inflows and adequate financing to meet its financial obligations[77] - The total goodwill as of December 31, 2021, was RMB 615,444 thousand[141] - The fair value of derivative financial instruments at the initial recognition date was RMB 46,631,000, recognized as a capital contribution and included in equity as a special reserve[146] - Trade and other receivables as of December 31, 2022, amounted to RMB 13,376 thousand, with RMB 934 thousand from related parties and RMB 12,803 thousand from third parties[148] - Revenue for 2022 decreased by 28.6% to RMB 537.5 million compared to RMB 752.9 million in 2021[161] - Basic loss per share was -19[133]