ADHERENT TO LOW-CARBON, GREEN AND SUSTAINABLE DEVELOPMENT, BUILDING NATIONWIDE RETAIL CHAIN NETWORK WITH YANGTZE RIVER DELTA AS CORE
Since the opening of its first store, Nanjing Xinjiekou Store, and after 26 years of dedicated operation, the Group has successfully opened 31 stores in the People's Republic of China ("PRC") with a total gross floor area of 2,529,930 square metres and a total operating area of 1,713,415 square metres as at 31 December 2021. These stores are located in 17 cities, across four provinces of Jiangsu, Anhui, Shaanxi, and Yunnan, and the municipality of Shanghai, covering Shanghai, Nanjing, Suzhou, Nantong, Yangzhou, Xuzhou, Taizhou, Huai'an, Yancheng, Suqian, Danyang, Kunshan, Wuhu, Ma'anshan, Huaibei, Xi'an and Kunming.

Leveraging on its leading position and strong competitive advantages in Jiangsu Province, the Group will continue to reinforce its market leadership and presence in Jiangsu, Anhui, Shaanxi, Yunnan and Shanghai by establishing comprehensive lifestyle centres which can enhance the Group's competitive strengths in the long term and have substantial potential for its business growth. Meanwhile, the Group will progressively expand into the first- and second-tier cities as well as tapping into third-tier cities' with immense potential for growth in order to achieve its goal of establishing a nationwide retail chain network. The Group will also actively fulfill its corporate social responsibilities by adopting a strategy of low-carbon business development that features emission reduction. It will press ahead with green renovation of its retail stores and the construction of new green commercial complexes, targeting for its sustainable development and contribution to the society.

CONTINUING TO ENHANCE ORGANIC GROWTH AND DEVELOPING COMPREHENSIVE LIFESTYLE CENTRES
Tapping on the growing demand of middle-class families and young customers for high-quality lifestyle, the Group has been steadily upgrading its existing merchandise portfolio. Meanwhile, capitalising on the mainstream customers' demand for consumption upgrade, the Group is developing itself into a professional operator which provides high-quality and comprehensive experiences. The Group prioritises the development of retail business and product categories with high growth and high gross margin that are able to enhance customers' shopping experiences and interaction with the stores. Therefore, the Group expands its retail business on lifestyle and amenities that are related to children's development, maternity and baby care, healthcare, household goods and cultural and creative activities in order to build comprehensive lifestyle centres that meet the needs for shopping, leisure and family gatherings. As at 31 December 2021, the Group operated 15 comprehensive lifestyle centres with a total gross floor area of 1,971,090 square metres. The section on lifestyle and amenities occupies 35.0% of the Group's total operating area. Following the launch of the Group's new flagship store, Nanjing Hexi Golden Eagle World store, being the latest generation of comprehensive lifestyle centre, the Group further strengthens its core competitiveness through improving its quality of services and enriching consumer experience with diverse contents.

EMPHASISING INCREMENTAL GROWTH DEVELOPMENT, CAPITALISING ON CONSUMPTION UPGRADE AND EMERGING INDUSTRIES OF HEALTH MAINTE-NANCE AND MEDICAL CARE, CHILDREN'S DEVELOPMENT, ART AND CULTURE, AND BUILDING UP ASSET-LIGHT BUSINESS MODEL AND INTELLIGENT CON-SUMPTION SERVICE PLATFORM

The Group will secure more core resources such as new contents, new channels and new VIP members to foster its capabilities for its business with an asset-light business model and for providing services to meet the needs for long-term development. By pressing on its dual development strategy of self-operated stores and asset-light management output, the Group is committed to maintaining its flexibility for its sustainable development in the fast-changing and highly competitive operating environment: (i) New contents. The Group will continue to invest and develop new types of business contents to align itself with the trend of consumption upgrade. The new types of business contents will be profitable and have a rate of conversion and customers stickiness. The content of such businesses will also be innovated consistently and replicable; (ii) New channels. The Group will be able to develop new channels through the introduction of new types of business contents. By using those new channels, the Group can disseminate the new contents to other businesses beyond its existing business ecosystem, whereby the contents and channels will become the driving force of development and growth of each other; (iii) New VIP members. Leveraging on the social media and new technologies, the Group will strengthen the integration and utilisation of its internal resources, and expedite collaboration with external shared platforms, so as to continuously recruit more VIP members from middle-class families and young consumer groups who value personalised services.

DEDICATED TO INTELLIGENT RETAIL UPGRADE TO PROVIDE VIPS WITH INNOVATIVE OMNI-CHANNEL SERVICES THAT MEET THE NEED OF CONSUMERS' DAILY LIFE AND ENHANCE THEIR SHOPPING EXPERIENCE
The Group has upgraded the online shopping experiences, the attraction of the offline sales channels and marketing activities to provide value-added VIP services in a more precise and comprehensive manner. Through the use of mobile phone application "GE Life" which was upgraded from Jinying.com mobile application(the"App"), WeChat and Weibo social network platforms and the"electronic VIP card", the Group integrates the App's online platform with its retail stores, 7-ELEVEN convenience stores, brand flagship stores and the upstream and downstream resources along the value chain of the retail industry. Leveraging on its quality and convenient comprehensive lifestyle services, the Group has successfully conducted an online-and-offline two-way marketing. As at 31 December 2021, the App had registered over 9.24 million downloads and recorded an average of approximately 140,000 active daily users. At the same time, out of the Group's 3.14 million successfully recruited VIP customers, over 98% of them have connected their electronic VIP cards with the App. During the period under review, the aggregate spending by VIP customers accounted for 64.4% of the Group's total gross sales proceeds, and the consumer group became younger of which consumption by young VIP customers aged 34 and below increased to constitute 51.2% of the Group's total gross sales proceeds.

LOCALISED OPERATION STRATEGIES AND MANAGEMENT WITH INTERNATIONAL PERSPECTIVE
The Group appreciates the dedication and contribution of its staff and fosters their capabilities, competence and international perspective by conducting regular professional training sessions and overseas study trips for all levels of its human resources structure. The Group has also implemented localised management systems for each local market. For each of its stores, the Group recruits local talents to form a management team with local expertise and wisdom that the Group can utilise on the respective markets. As at 31 December 2021, the Group had approximately 2,590 employees.