Discontinued or strategically contracted business lines
Hong Kong IPO disclosure precedents · 103 companies, 111 items
Deliberate discontinuation, restructuring or strategic retrenchment of production lines or non-core business segments, including workforce consultation and effects on revenue and margin comparability.
In the nine months ended September 30, 2024, revenue generated from self-operated stores declined year over year, primarily due to the decrease in the number of our self-operated stores.
Business · p. 206
As we continue to scale business presence and enhance brand reputation, we have been able to effectively grow our store network through the franchise model in relevant markets, and accordingly, we decided to close certain self-operated stores, or transfer them to franchisees in the nine months ended September 30, 2024.
Business · p. 206
During the Track Record Period, we opened a limited number of self-operated stores primarily to gain operating insights and strengthen our brands.
We also began offering training facilitation service in 2023 where we assist our customer and the organizer of the training sessions in performing the organizational and logistical groundwork, such as (i) co-designing the training curriculum, standards, and attendance certificates; (ii) contacting training session lecturers; (iii) promoting the training sessions among potential attendees; (iv) handling the logistics of setting up the training sessions; (v) providing attendee after-sale services; and (vi) maintaining the website and online portals in relation to the trainings.
Business · p. 275
We ceased offering training facilitation service in January 2024, and entered into a termination agreement with the customer in April 2024.
Save for Ausnutria Group from whom we commenced to procure our milk powder products in 2022, we have established business relationship of six to 12 years with our five largest suppliers for each year/period during the Track Record Period.
Business · p. 221
Despite the purchases from which constituted approximately 23.3% and 22.0% of the our total purchases for FY2022 and FY2023, respectively, our Group has terminated all of its agreements with Ausnutria Group in October 2023 and our Group had no plan to resume milk powder business in the near future
Business · p. 229
The Internal Control Consultant has also reviewed and assessed our entering into and termination of milk powder business, and has made certain recommendations in order to mitigate the risks of any substantial loss to be suffered by our Group in the event that our Group intends to commence any business in new products with material financial commitment or enter into any significant business contracts in the ordinary course of our business.
By the end of 2023, we phased out most e-commerce service cloud offerings as customers transitioned their O2O operations in-house, where they carried out their own daily online store management, such as updating product listings, maintaining product information, handling inquiries and after-sales, and managing store promotions.
Summary · p. 2
In April 2024, we completed the Restructuring to divest all of our equity in Dmall Fresh (Beijing), our former VIE.
Summary · p. 2
We believe that the discontinued operation did not have a material impact on our business, as it has always been our strategic goal to focus on providing digitalization solutions to our customers.
The legacy commodity business accounted for RMB0.1 million, RMB0.5 million, nil and nil of our revenues in 2021, 2022, 2023 and the six months ended June 30, 2024, respectively.
Financial Information · p. 396
We have fully exited the legacy commodity business due to its insignificant contribution to and impact on the growth and profitability of our Company as well as its strategic incompatibility with our Company’s focus of providing retail cloud products and services to customers who are undergoing digitalization.
As of April 30, 2024, we have ceased the operation of the 61 brands on Amazon and still operate these brands on other sales channels.
Business · p. 253
The decrease was also partly due to our strategic shift to furniture and home furnishings and the downsizing of our product offerings of electric tools, home appliances, consumer electronics and sports and wellness after the Amazon Incident.
Summary · p. 5
Our revenue from sales of furniture and home furnishings increased by 19.1% from RMB3,516.3 million in 2021 to RMB4,187.1 million in 2022, and further increased by 27.5% to RMB5,336.6 million in 2023, accounting for 38.8%, 59.0% and 61.5% of our total revenue in the respective years.
(1) To address the market condition that has affected long-haul services in the Transpacific and the Asia – Europe markets where deployment of smaller vessels became less profitable or even loss-making in light of the continued decline of freight rates, we decided to suspend our services in the Transpacific and Asia – Europe markets in December 2022, and all services in the Transpacific and Asia – Europe markets had been suspended in February and in March 2023, respectively.
Summary · p. 5
In addition, our revenue generated from the Transpacific market and the Asia – Europe market decreased from US$354.4 million in 2022 to nil in 2023 and from US$43.3 million in 2022 to US$16,000 in 2023, respectively, as all services in the Transpacific and Asia – Europe markets had been suspended in February and in March 2023, respectively.
Summary · p. 6
Our revenue generated from the Asia – Oceania market decreased by 84.2% from US$628.6 million in 2022 to US$99.4 million in 2023 mainly because we suspended one independent service to Australia in April 2023 and the only one independent service to New Zealand in August 2023 due to the continued decline in the freight rate which made our independent services not economically justifiable.
In light of the above events, we made the decision in 2022 to scale down our all-in-one server business. As a result, our revenue from our Kodo business decreased from RMB650.8 million in 2021 to RMB320.4 million in 2022 and our total revenue and gross profit decreased accordingly.
Summary · p. 15
Our gross margin of other business decreased from 28.5% in 2022 to 9.2% in 2023 as we made the strategic adjustment to scale down our DPaaS business, despite its relatively high gross margin as DPaaS solutions are typically sold in the form of dedicated and technical software deployed on a private cloud built for our customers.
Summary · p. 11
In 2023 and the three months ended March 31, 2024, our all-in-one server business gradually recovered mainly due to the recovery of all-in-one server business in the industry.
In April 2023, we reassessed the business performance of Beijing Nuoming and decided to cease its business in order to improve operating efficiency.
Financial Information · p. 407
Beijing Nuoming has made provision for impairment of goodwill and patent for RMB8.4 million and RMB1.2 million, respectively, in 2023.
Financial Information · p. 407
For core customers especially, such a decrease is also attributable to our decision of business cease of Beijing Nuoming, which primarily focuses on the sales of customized products for hospitals and clinical research institutions, resulting in customer termination in 2023.
We made a strategic adjustment to dispose of our business of data collection for sales of pharmaceuticals during the Track Record Period.
Summary · p. 21
From February 2022 to September 2023, we entered into a series of agreements with an independent third party and our client to transfer our business of data collection for sales of pharmaceuticals for a total consideration of RMB1.1 million.
Summary · p. 21
As a result, the revenue in this business line decreased by RMB4.4 million, or approximately 52.0%, in 2023.
We have entered into an equity transfer agreement and supplemental agreements to transfer the entire equity interest in Shanghai Yabao to an Independent Third Party with a consideration of RMB34,900,000 and we are in the process of completing this transaction.
We had previously engaged in e-cigarette sales from May 2021 to December 2022, but such sales had ceased after December 2022. Our total revenue from such sales amounted to approximately RMB250,000, comprising approximately RMB171,300 generated in FY2021 and RMB79,400 generated in FY2022, accounted for approximately 0.05% and 0.02% of our total revenue in FY2021 and FY2022, respectively.
Business · p. 277
In light of such regulatory requirements, we initiated the reduction of e-cigarette sales, and completely ceased such activities by December 2022.
Business · p. 278
We have ceased e-cigarette sales and have no plans to relaunch such businesses as at the Latest Practicable Date.
Since its inception, it had always been our Directors’ intention that Metaoptics Technologies will be a long-term investment in our Group with Mr. Thng (who has the relevant optics industry experiences and connections) spearheading its entire business operations.
Summary · p. 4
Up until May 2023, as Metaoptics Technologies had been growing its business operations and expanding its investor base to other independent third-party investors, Metasurface Technologies agreed to transfer an approximately 33.32% equity interest in Metaoptics Technology at a consideration of S$180,000 in aggregate.
Summary · p. 4
The transfer of our approximately 33.32% equity interests in Metaoptics Technologies to Mr. Thng resulted in the recognition in our consolidated statements of comprehensive income for the year ended 31 December 2023 (a) gains on disposal of a subsidiary of approximately S$2.5 million; and (b) share-based payments of approximately S$2.1 million because the transfer is perceived to be a form of compensation to remunerate Mr. Thng’s past services and contribution to our Group as an employee.
Revenue derived from mobile top-up service contributed to approximately 80%, 99%, and 99% of the total top-up service revenue for the years ended December 31, 2021, 2022 and 2023, respectively.
Summary · p. 4
We have been strategically scaling down our top-up service since 2021.
We temporarily suspended our online games publishing services in June 2020 to further optimize our business structure and streamline our operations, considering the change in China’s regulatory environment of online games market.
Business · p. 248
We resumed our online games publishing services in the fourth quarter of 2021 and officially launched our first overseas online game, Civilization（文明）, in October 2022 mainly in the United States, Canada and Europe.
Business · p. 250
As a result of the temporary suspension of our online games publishing services, the cost and expenses related to the operation of our online games publishing services decreased accordingly, which enabled us to avoid incurring substantial operating expenses for the online games publishing services business during the period when China suspended its release of ISBN for new games and to re-allocate our existing corporate resources.
Upon our disposal of Mobvoi JV in 2022, the tracking of the number of users of our in-vehicle speech dialogue system was discontinued.
Summary · p. 3
The decrease from RMB130.7 million in 2021 to nil in 2022 was due to our disposal of online education business. It remained nil as of December 31, 2023.
Financial Information · p. 472
Our Group had transferred the control of the relevant deliverables to Mobvoi JV and had satisfied all rectification requirements during the second half of 2023.
We had decrease of working capital of RMB130.5 million in 2020, primarily due to the micro-loan and factoring services issued loan to customers of RMB120.4 million, which business was discontinued in May 2021.
Summary · p. 28
Our reversal of impairment losses on financial assets of RMB2.5 million in 2020 and impairment losses on financial assets of RMB0.1 million in 2021 were mainly related to our micro-loan and factoring services.
For the years ended 31 December 2020, 2021 and 2022 and the nine months ended 30 September 2022 and 2023, (i) there were 13, 4, 88, 61 and 3 customers migrated to our mobile advertising solutions services, respectively, and (ii) our revenue generated from these migrated customers amounted to approximately RMB56.0 million, RMB122.3 million, RMB136.3 million, RMB79.8 million and RMB2.6 million, respectively.
Summary · p. 5
It exposed our Group to credit and liquidity risks because we may need to make prepayments to suppliers for these customers before arranging for bidding of advertising space.
Business · p. 187
Thus, we implemented our strategy to serve customers with greater advertising needs in general.
We strategically ceased the operation of Datong Clinic since July 2022 to focus on the development of our Datong Hospital. We completed the deregistration process of Datong Clinic in March 2023.
For the years ended December 31, 2020, 2021 and 2022 and the six months ended June 30, 2022 and 2023, sales revenue from PCBA products amounted to RMB42.4 million, RMB57.6 million, RMB35.0 million, RMB17.0 million and RMB10.3 million, respectively.
Business · p. 255
Going forward, as we expect to focus on providing autonomous driving solutions and products to OEM customers, we plan to gradually wind down our sales of PCBA products to third parties over the next five years.
Business · p. 255
We do not consider the sales of PCBA products to third parties as our core business and plan to gradually wind down sales of PCBA products to third parties over the next five years.