"Battles of 'Hundred Cities, Thousand Stores' yield frequent good news; Executive director Wu Xiaoli increases holdings in COSMO LADY (02298) stocks."

On November 14th, COSMO LADY (02298) announced that Wu Xiaoli, an executive director of COSMO LADY, purchased 1,427,000 ordinary shares of the company between November 10th and 14th, at an average price of approximately HKD 0.214 per share. The purchased shares represent approximately 0.1% of the total share capital of the company. The announcement stated that Wu Xiaoli is the spouse of Zheng Yaonan, and they are both acting in concert. It is noteworthy that this is the third time this year that Zheng Yaonan and his spouse have increased their holdings in the company, totaling 5,919,300 shares, which demonstrates their confidence in the future growth of the company. According to records, on May 31st, COSMO LADY announced that its major shareholder and chairman, Zheng Yaonan, purchased 3,642,300 ordinary shares of the company on May 29th at an average price of approximately HKD 0.4 per share. Prior to that, on May 22nd, Zheng Yaonan acquired 850,000 shares. Altogether, Zheng Yaonan purchased a total of 4,492,300 shares in these two transactions. In the period of 2020-2021, Zheng Yaonan had previously increased his holdings of COSMO LADY shares 10 times. In August, COSMO LADY already bought a total of 27,532,400 shares as part of its share incentive plan, at a total cost of approximately HKD 9.636 million. The board of directors of COSMO LADY believes that the share repurchase reflects the company's confidence in its long-term prospects and will ultimately benefit the company and its shareholders as a whole. The profit growth of franchisees has brought COSMO LADY a possibly best semi-annual report in the past five years. According to the financial data for the first half of 2023, COSMO LADY achieved revenue of CNY 1.368 billion, with a net profit attributable to the parent company of CNY 26.129 million, a year-on-year increase of 158%. The gross profit margin increased from 46.6% in the same period of 2022 to approximately 47.4%. It is reported that offline stores are where COSMO LADY started and where its core strengths lie. At the end of 2022, COSMO LADY officially launched the "Hundred Cities, Thousand Stores" campaign, adopting the innovative "1+N+Special" store cluster profit model to achieve full-channel coverage. In terms of store expansion, as of the first half of 2023 (January to October), COSMO LADY has opened more than 700 new stores. As of October, the total number of COSMO LADY Group stores in China has exceeded 4,200. COSMO LADY stated that the group will continue to concentrate resources to prioritize the development of major provinces, aiming to establish a thousand stores in these provinces and build a well-structured distribution network. In addition, the group will also increase the proportion of stores in third- and fourth-tier cities, and explore growth and profit opportunities in untapped markets. Zheng Yaonan expressed his confidence in the future development momentum of the company at the previous interim performance meeting. He admitted that the lower-tier market is actually the best place for COSMO LADY to develop and grow. The company started a comprehensive transformation last year, and he believes that it has achieved certain results and efficiency this year. He believes that the net growth in the second half of the year will be better than the first half.