Tenwow International : INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2019

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(In Provisional Liquidation)

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 01219)

INTERIM RESULTS ANNOUNCEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2019

FINANCIAL HIGHLIGHTS
	2019	Six months ended 30 June
(RMB million, unless otherwise specified)	2018	Changes
Revenue	464.3	1,258.8	(63.1%)
Gross Profit	90.9	177.0	(48.6%)
Gross Profit Margin	19.6%	14.1%	5.5 p.p.
Loss attributable to owners	(60.2)	(3,328.3)	N/A

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The board (the "Board") of directors (the "Directors") of Tenwow International Holdings Limited (the "Company" or "Tenwow") hereby announces the unaudited consolidated financial results of the Company and its subsidiaries (together, the "Group") for the six months ended 30 June 2019 with comparative figures for the corresponding period in 2018 as follows:

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

		Unaudited
		Six months ended 30 June
		2019						2018
	Notes	RMB'000	RMB'000
Revenue		464,298						1,258,777
Cost of sales		(373,318)		(1,081,758)
Gross Profit		90,980						177,019
Interest revenue		86						4,065
Other income		9,189						16,585
Other losses - net		(6,282)		(4,101)
Distribution costs		(44,161)		(404,525)
Administrative expenses		(51,422)		(96,983)
Other operating expenses		(6,202)		(2,926,463)
Loss from operations		(7,812)		(3,234,403)
Finance costs		(50,592)		(69,963)
Share of (losses)/profits of associates		(12)		84
Loss before tax	5	(58,416)		(3,304,282)
Income tax expense	6	(1,797)		(23,211)
Loss for the period		(60,213)		(3,327,493)
Other comprehensive income
Items that may be subsequently reclassified to
profit or loss
- Exchange differences on translation of foreign
operations		8,577						2,570
Total comprehensive expenses for the period		(51,636)		(3,324,923)

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		Unaudited
		Six months ended 30 June
		2019			2018
	Note	RMB'000	RMB'000
Total loss attributable to:		(60,211)
Owners of the Company			(3,328,281)
Non-controlling interests		(2)		788
		(60,213)		(3,327,493)
Total comprehensive expense attributable to:
	(45,563)
Owners of the Company			(3,325,746)
Non-controlling interests		(6,073)		823
		(51,636)		(3,324,923)
Loss per share for loss attributable to owners
of the Company
- Basic and diluted loss per share		(2.7)
(Expressed in RMB cents per share)	7		(150.9)

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Notes

Non-current assets

Property, plant and equipment

Land use rights

Goodwill

Other intangible assets

Right-of-use assets

Investments in associates

Current assets
Inventories
Land use rights
Trade and other receivables	9
Restricted bank deposits
Cash and cash equivalents

Current liabilities
Trade, bills and other payables	10

Contract liabilities

Borrowings

Deferred income

Finance lease payables

Lease liabilities

Current tax liabilities

Unaudited		Audited
As at		As at
30 June		31 December
2019	2018
RMB'000		RMB'000
693,580	705,176
161,597	162,553
31,933	31,933
51,893	53,908
3,249		-
3,613	3,785
945,865	957,355
368,788	365,719
3,812	3,812
403,085	383,914
23,694	15,049
37,423	17,735
836,802	786,229
1,046,273	973,245
201,225	161,715
2,592,137	2,609,080
1,765	1,765
38,266	38,266
1,476		-
3,176	6,247

	3,884,318		3,790,318
Net current liabilities	(3,047,516)	(3,004,089)
Total assets less current liabilities	(2,101,651)	(2,046,734)

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	Unaudited	Audited
	As at	As at
	30 June	31 December
Notes	2019		2018
RMB'000	RMB'000
Non-current liabilities			-
Lease liabilities	1,825
Deferred income	14,997		16,993
Deferred tax liabilities	16,148		15,418
	32,970		32,411
NET LIABILITIES	(2,134,621)	(2,079,145)
Capital and reserves
Share capital	176,448		176,448
Share premium	1,190,822		1,190,822
Reserves	(3,545,136)	(3,499,574)
Equity attributable to owners of the Company	(2,177,866)	(2,132,304)
Non-controlling interests	43,245		53,159
TOTAL EQUITY	(2,134,621)	(2,079,145)

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NOTES

1. GENERAL INFORMATION
   Tenwow International Holdings Limited was incorporated by Mr. Lin Jianhua (the "Controlling Shareholder") in the Cayman Islands on 25 August 2011 as an exempted company with limited liability under the Companies Law (2010 Revision) of the Cayman Islands. The Company's ordinary shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited (the "SEHK") on 17 September 2013. The address of its registered office is Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman KY1-1108, Cayman Islands.
   The Company, an investment holding company, and its subsidiaries are principally engaged in the manufacturing, distribution and trading of beverages, food and snacks and others in the People's Republic of China (the "PRC" or "China").
   The functional currency of the Company is Hong Kong dollars ("HK$"). The directors of the Company (the "Directors") considered it more appropriate to use Renminbi ("RMB") as the presentation currency of the consolidated financial statements because RMB is the currency of the primary economic environment in which most of the group entities operate and being the functional currency of most of the entities comprising the Group, and all values are rounded to the nearest thousand ('000) unless otherwise stated. This condensed consolidated financial information was approved for issue by the Board of Directors on 31 December 2019.
2. BASIS OF PREPARATION
   This condensed consolidated interim financial information for the six months ended 30 June 2019 has been prepared in accordance with Hong Kong Accounting Standard 34, "Interim Financial Reporting". and the applicable disclosure required by the Rules Governing the Listing of Securities on the SEHK ("Listing Rules").
   Suspension of trading in shares of the Company
   References are made to the Company's announcements dated 10 May 2018 and 17 August 2018, in relation to, among other things, the investigation of former chairman, Mr. Lin Jianhua and certain abnormal transactions. The trading in shares of the Company has been suspended since 13 August 2018.
   Appointment of the Provisional Liquidators
   On 24 October 2018, a winding up petition was presented in the Grand Court of the Cayman Islands (the "Grand Court") by a creditor for the winding up of the Company (the "Petition"). The Petition seeks the appointment of joint official liquidators of the Company. In the same proceedings as the Petition, the Company filed a summons seeking the appointment of joint provisional liquidators ("JPLs") of the Company on a light touch basis for the purpose of restructuring, as an alternative to compulsory liquidation (the "JPL Application"). Under the JPL Application, the Company has requested that, should JPLs be appointed and until further order of the Grand Court, the Board shall retain all its powers of management, subject to the JPLs' supervision of the exercise of such powers in relation to the ordinary course of business of the Company, and in relation to matters outside the ordinary course of business of the Company granting prior approval of the exercise of such powers. This would allow the Company's current management to work with the JPLs to oversee the implementation of a restructuring and resumption proposal that seeks to preserve value and business operations of the Company that would not otherwise be possible in a compulsory liquidation scenario. Accordingly, the Board believes it is in the interests of the Company, its shareholders and creditors that JPLs are appointed in respect of the Company pursuant to the JPL Application.

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Listing status of the Company

On 24 August 2018, 18 February 2019, 3 April 2019 and 18 October 2019, the Stock Exchange had imposed on the Company the following resumption conditions:

1. conduct a forensic investigation on certain abnormal transactions conducted during 2016 and/or 2017, including (i) the Financial Assistance under the Comprehensive Credit Line Contract; (ii) the arrangement in relation to the Prepayment and (iii) the Purchase Agreement (together as the "Transactions") (details of abnormal transactions are defined and as set out in the announcement of the Company dated 17 August 2018), disclose details of the investigation, the findings and rectifying actions taken and to be taken by the Company, and the implications on the Company's financial position (including but not limited to the financial results for the year ended 31 December 2016 and 2017) and operations;
2. conduct an appropriate investigation on the incident (the "Incident") in relation to the PRC investigation by the relevant authority in the PRC, the asset freeze and the involvement of Mr. Lin Jianhua, Nanpu Food (Group) Co., Ltd. ("Nanpu") (and any related entities) and the Group (details of the Incident are defined and as set out in the announcement of the Company dated 12 June 2018), disclose details of the investigation(s), the findings and rectifying actions taken and to be taken by the Company, and the implications of the Incident on the Company's financial positions and operations;
3. conduct an independent internal control review and demonstrate adequate internal control systems being in place to meeting the obligations under the Rules Governing the Listing of Securities on the Stock Exchange;
4. demonstrate that there is no reasonable regulatory concern about the management integrity, and/or the integrity of any persons with substantial influence over the Company's management and operations, which may pose a risk to investors and damage market confidence;
5. demonstrate (with an appropriate level of professional assurance to the Stock Exchange's satisfaction) that the Company's published financial results remains accurate and complete in all material respects and not be misleading or deceptive;
6. inform the market all material information (including but not limited to the Incident and the Transactions) for shareholders and other investors to appraise the Company's position;
7. have the winding up petition(s) (or order(s), if made) against the Company withdrawn or dismissed and the appointment of any liquidator(s) (provisional or not) discharged;
8. publish all outstanding financial results and address any audit modifications; and
9. demonstrate the Company's compliance with Rule 13.24. (collectively, the "Resumption Conditions").

As mentioned in the announcement of the Company dated 21 November 2019, trading in the shares of the Company will remain suspended until further notice pending fulfilment of the Resumption Conditions and such other further conditions that may be imposed by the Stock Exchange.

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Going concern basis

The Group incurred net loss for the period ended 30 June 2019 of approximately RMB60,213,000, and as at 30 June 2019, the Group had net current liabilities and net liabilities of approximately RMB3,047,516,000 and RMB2,134,621,000 respectively. These conditions indicate the existence of a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern. Therefore, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.

The consolidated financial statements have been prepared on a going concern basis on the basis that the proposed restructuring of the Group will be successfully completed, and that, following the restructuring, the Group will continue to meet in full its financial obligations as they fall due in the foreseeable future.

Should the Group be unable to achieve a successful restructuring and to continue its business as a going concern, adjustments would have to be made to the consolidated financial statements to adjust the value of the Group's assets to their recoverable amounts, to provide for any further liabilities which might arise and to reclassify non-current assets and liabilities to current assets and liabilities respectively.

3. ACCOUNTING POLICIES AND ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS

The accounting policies and the methods of computation used in the preparation of this condensed consolidated interim financial information are consistent with those of the annual financial statements for the year ended 31 December 2018, except as stated below.

Leases

The Group as lessee

Leases are recognised as right-of-use assets and corresponding lease liabilities when the leased assets are available for use by the Group. Right-of-use assets are stated at cost less accumulated depreciation and impairment losses. Depreciation of right-of-use assets is calculated at rates to write off their cost over the shorter of the asset's useful life and the lease term on a straight-line basis. The principal annual rates are as follows:

Land and buildings

20%-86%

Right-of-use assets are measured at cost comprising the amount of the initial measurement of the lease liabilities, lease payments prepaid, initial direct costs and the restoration costs. Lease liabilities include the net present value of the lease payments discounted using the interest rate implicit in the lease if that rate can be determined, or otherwise the Group's incremental borrowing rate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease term so as to produce a constant periodic rate of interest on the remaining balance of the lease liability.

Payments associated with short-term leases and leases of low-value assets are recognised as expenses in profit or loss on a straight-line basis over the lease terms. Short-term leases are leases with an initial lease term of 12 months or less. Low-value assets are assets of value below US$ 5,000.

In the current period, the Group has adopted all the new and revised Hong Kong Financial Reporting Standards ("HKFRSs") issued by the HKICPA that are relevant to its operations and effective for its accounting year beginning on 1 January 2019. HKFRSs comprise Hong Kong Financial Reporting Standards ("HKFRS"); Hong Kong Accounting Standards ("HKAS"); and Interpretations. The adoption of these new and revised HKFRSs did not result in significant changes to the Group's accounting policies, presentation of the Group's financial statements and amounts reported for the current period and prior years except as stated below.

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HKFRS 16 "Leases"

On adoption of HKFRS 16, the Group recognised right-of-use assets and lease liabilities in relation to leases which had previously been classified as 'operating leases' under HKAS 17"Leases".

The Group has adopted HKFRS 16 retrospectively from 1 January 2019, but has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the adoption of HKFRS 16 are therefore recognised in the opening balance sheet on 1 January 2019 as follows:

The following adjustments were made to the amounts recognised in the consolidated statement of financial position at 1 January 2019. Line items that were not affected by the changes have not been included.

	RMB'000
At 1 January 2019:
- Increase in right of use assets	4,091
- Increase in lease liabilities	4,091

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The reconciliation of operating lease commitment to lease liabilities as at 1 January 2019 is set out below:
		RMB'000
Operating lease commitment at 31 December 2018	16,955
Less: Commitments relating to leases with a remaining lease term ending on or before
31 December 2019 and low-value	(12,522)
Discounting	(342)
Lease liabilities as at 1 January 2019	4,091

When recognising the lease liabilities for leases previously classified as operating leases, the Group has applied incremental borrowing rates of the relevant group entities at the date of initial application. The weighted average lessee's incremental borrowing rate applied is 4.75% per annum.

4. SEGMENT INFORMATION

The chief operating decision-maker has been identified as the executive Directors. The executive Directors review the Group's internal reports in order to assess performance and allocate resources. Management determines the operating segments based on the internal reports provided for review to the executive Directors. The executive Directors consider the performance of the Group from a product perspective. The executive Directors assess the performance of the operating segments based on a measure of gross profit for the period which is consistent with that in the consolidated financial statements.

The Group's operations are mainly organize under the following business segments: own brand products and third- party brand products, and each has the segments of non-alcoholic beverages, alcoholic beverages, food and snacks, and other products.

The amounts provided to executive Directors with respect to total assets, total liabilities and capital expenditure are measured in a manner consistent with that of consolidated financial statements. The executive Directors review the total assets, total liabilities and capital expenditure at Group level. Therefore no segment information of total assets, total liabilities and capital expenditure information was presented.

In accordance with the Group's internal financial reporting, the Group has determined that business segments be presented as the primary and only reporting format.

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1. Turnover
   The Group's revenue which represents turnover for the six months ended 30 June 2019 and 2018 is as follows:

	Six months ended 30 June
	2019	2018
	RMB'000	RMB'000
- Own Brand Products	111,731
Non-alcoholic beverages	253,992
Alcoholic beverages	31,207	70,738
Food and snacks	70,554	247,153
Others	14,077	13,121
	227,569	585,004
- Third-Party Brand Products
1,042
Non-alcoholic beverages	7,446
Alcoholic beverages	168,632	488,283
Food and snacks	66,227	147,959
Others	828	30,085
	236,729	673,773
Total	464,298	1,258,777

1. Segment information
   The segment information for the six months ended 30 June 2019 is as follows:

			Own Brand Products							Third-Party Brand Products
	Non-			Food					Non-			Food
	alcoholic	Alcoholic	and					alcoholic	Alcoholic	and
	beverages	beverages	snacks	Others	Sub-total	beverages	beverages	snacks	Others	Sub-total	Total
	RMB'000 RMB'000 RMB'000 RMB'000 RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
Segment sales	111,731		31,207		70,554			14,077		227,569		1,042		168,632		66,227		828		236,729		464,298
Segment cost of sales	(79,039)	(25,887)	(59,013)		(8,288)	(172,227)	(2,271)	(139,813)	(57,884)	(1,123)	(201,091)	(373,318)
Segment gross profit
32,692		5,320		11,541			5,789		55,342		(1,229)	28,819		8,343		(295)	35,638		90,980

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The segment information for the six months ended 30 June 2018 is as follows:

					Own Brand Products						Third-Party Brand Products
		Non-			Food						Non-				Food
		alcoholic	Alcoholic	and			Sub-		alcoholic	Alcoholic		and			Sub-
		beverages	beverages	snacks	Others	total		beverages	beverages		snacks	Others	total	Total
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000		RMB'000	RMB'000		RMB'000	RMB'000	RMB'000	RMB'000
Segment sales
253,992		70,738		247,153		13,121	585,004		7,446		488,283	147,959				30,085	673,773	1,258,777
Segment cost of sales	(196,727)	(51,546)	(190,358)	(4,489)	(443,120)	(5,443)	(460,358)	(144,233)		(28,604)	(638,638)	(1,081,758)
Segment gross profit
57,265		19,192		56,795		8,632	141,884		2,003		27,925	3,726				1,481	35,135	177,019
Operating segments results are reconciled to loss before tax as follows:
																Six months ended 30 June
																		2019								2018
																RMB'000			RMB'000
Total profit of reportable segments														90,980						177,019
Unallocated amounts																		86
Interest revenue																									4,065
Other income																		9,189								16,585
Other losses - net																		(6,282)					(4,101)
Distribution costs																(44,161)			(404,525)
Administrative expenses																(51,422)			(96,983)
Other operating expenses																		(6,202)			(2,926,463)
Finance costs																(50,592)			(69,963)
Share of (losses)/ profit of associates														(12)					84
Loss before tax																(58,416)			(3,304,282)

The Group's operations are substantially located in the PRC. Accordingly, no geographial segment information is presented.

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5. LOSS BEFORE TAX

The Group's loss for the period is stated after charging/(crediting) the following:

		Six months ended 30 June
		2019		2018
		RMB'000		RMB'000
Amortisation of other intangible assets	949		1,297
Amortisation of land use rights	1,958		1,866
Depreciation	32,706		44,811
Loss/(gain) on disposals of property, plant and equipment	5,443		(6,584)
Impairment losses on property, plant and equipment *	-	286,440
Operating lease charges	56,192		15,688
Auditor's remuneration	900		584
Cost of inventories sold	1,358,273		976,034
Allowance for inventories *	-	578,756
Write-down of inventories *	-	150,000
Impairment loss on investment in a joint venture *	-	423,315
Increase in loss allowances for trade and other receivables *	6,202		1,283,392
Staff costs including directors' emoluments
- Salaries, bonus and allowances	48,377			104,560
- Retirement benefits contributions	11,375			29,540
- Share-based payments	-		-
		59,752		134,100

• Included in other operating expenses

6. INCOME TAX EXPENSE

No provision for Hong Kong Profits Tax has been made for both six months ended 30 June 2019 and 2018 as either the Group entities did not generate any assessable profits arising in Hong Kong or the Group entities have sufficient tax losses brought forward to set off against current period's assessable profit during that period.

Tax charge on profits assessable elsewhere have been calculated at the rates of tax prevailing in the countries in which the Group operates, based on existing legislation, interpretation and practices in respect thereof.

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Under the Law of the People's Republic of China on Enterprise Income Tax (the "EIT Law") and Implementation Regulation of the EIT Law, the tax rate of the PRC subsidiaries is 25%. However, no provision was made for the financial year ended 31 December 2018 as the Group's entities incurred tax losses in the year. The EIT Law and Implementation Regulation of the EIT Law also required withholding tax to be levied on distribution of profits earned by a PRC entity to non-PRC tax residents for profits generated after 1 January 2008. The applicable dividend withholding tax rate is 10%.

	2019	2018
	RMB'000		RMB'000
Current tax - PRC Enterprise Income Tax
- Provision for the period	1,067	11,313
Current tax - PRC Dividends Withholding Tax
- Provision for the period	-	2,095
Current tax - Hong Kong Profits Tax
- Provision for the period	-		-
Deferred tax	730		9,803
	1,797	23,211

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7. LOSS PER SHARE

The calculation of the basic and diluted loss per share attributable to the owners of the Company is based on the following:

	2019		2018
	RMB'000	RMB'000
Loss
Loss for the period attributable to owners of the Company	(60,211)	(3,328,280)
Loss for the purpose of calculating basic and diluted earnings per share	(60,211)	(3,328,280)
Number of shares:
Weighted average number of ordinary shares for the purpose of
calculating basic and diluted loss per share (thousands)	2,205,970		2,205,970

The computation of diluted loss per share for both six months ended 30 June 2019 and 2018 does not assume the exercise of the Company's share options because the exercise price of those options was higher than the average market price of shares during both six months ended 30 June 2019 and 2018.

8. DIVIDENDS

The Directors do not declare the payment of any dividend for the six months ended 30 June 2019 (for the six months ended 30 June 2018: Nil).

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9. TRADE AND OTHER RECEIVABLES

		As at	As at
		30 June	31 December
		2019	2018
		RMB'000	RMB'000
Trade receivables
Related parties	125,049	108,894
Other third parties	812,192	619,323
		937,241	728,217
Less: Provision for loss allowance	(778,673)	(504,417)
Trade receivables, net	158,568	223,800
Prepayments
Related parties	85,929	100,899
Other third parties	244,954	201,499
		330,883	302,398
Less: Impairment losses	(224,145)	(233,526)
Prepayments, net	106,738	68,872
Other receivables
Related parties	352,237	357,190
Other third parties	1,857,242	1,964,817
		2,209,479	2,322,007
Less: Provision for loss allowance	(2,071,700)	(2,230,765)
Other receivables, net	137,779	91,242
Total trade and other receivables	403,085	383,914

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1. Ageing analysis
   The aging analysis of trade receivables, based on the invoice date, and net of allowance, is as follows:

	As at	As at
	30 June	31 December
	2019	2018
	RMB'000	RMB'000
Within 3 months	150,340	145,162
4 to 6 months	8,228	45,872
7 to 12 months	-	32,766
	158,568	223,800

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10.	TRADE, BILLS AND OTHER PAYABLES
			As at	As at
			30 June	31 December
			2019	2018
			RMB'000	RMB'000
	Trade and bills payables	1,069
	Related companies	1,069
	Other third parties	536,787	609,759
			537,856	610,828
	Other payables
	64,908
	Payables for acquisition of property, plant and equipment	95,347
	Accrued staff costs	9,677	8,923
	Other tax payables	2,432	20,227
	Accrued operating expenses	351,737	195,366
	Interest payables	79,663	42,554
	Due to related companies	-	-
			508,417	362,417
	Total trade and other payables	1,046,273	973,245

The ageing analysis of trade and bills payables, based on invoice date, at the reporting date is as follows:

	As at	As at
	30 June	31 December
	2019	2018
	RMB'000	RMB'000
Within 2 months	116,208	281,257
2 to 3 months	19,290	56,147
4 to 6 months	32,379	118,469
7 to 12 months	231,374	138,218
Over 12 months	138,605	16,737
	537,856	610,828

Trade payables are non-interest bearing and the average credit terms received from suppliers of the Group is 30 (2018:

1. days. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.

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MANAGEMENT DISCUSSION AND ANALYSIS

Review of First Half of 2019

The Group produces and distributes a wide range of own brand products and distributes various products produced by well-known international and domestic third-party brands. The Group's products can be divided into four major categories, namely food and snacks, non- alcoholic beverages, alcoholic beverages, and other products.

In the first half of 2019, the Group has scaled down and stabilised its business and operation by focusing on key products and key markets. Revenue of the Group decreased to RMB464.3 million (first half of 2018: RMB1,258.8 million). Gross profit decreased to RMB90.9 million (first half of 2018: RMB177.0 million). Gross profit margin was 19.6% (first half of 2018: 14.1%).

The Board did not declare any interim dividend for the six months ended 30 June 2019 (first half of 2018:Nil).

Revenue

The table below sets forth the Group's revenue by product segment and main product category for the six months ended 30 June 2019 and 30 June 2018:

	2019	Six months ended 30 June
			2018
	RMB'000	%	RMB'000	%
Own brand products	111,731		24.1%
Non-alcoholic beverages		253,992		20.2%
Alcoholic beverages	31,207		6.7%	70,738		5.6%
Food and snacks	70,554		15.2%	247,153		19.6%
Others(1)	14,077		3.0%	13,121		1.0%
	227,569		49.0%	585,004		46.5%
Third-party brand products
1,042		0.2%
Non-alcoholic beverages		7,446		0.6%
Alcoholic beverages	168,632		36.3%	488,283		38.8%
Food and snacks	66,227		14.3%	147,959		11.8%
Others(2)	828		0.2%	30,085		2.4%
	236,729		51.0%	673,773		53.5%
Total	464,298		100%	1,258,777		100%

Notes:

1. Primarily includes "Chuan Xiang" Chinese seasonings and packaging materials.
2. Primarily includes household care products.

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Gross Profit and Gross Profit Margin

The table below sets forth the gross profit, proportion of total gross profit and gross profit margin by product segment and main product category for the six months ended 30 June 2019 and 30 June 2018:

				Six months ended 30 June
				2019		Gross				2018		Gross
		Gross			profit	Gross			profit
		Profit	Shares	margin	Profit	Shares	margin
		RMB'000	%	%	RMB'000	%	%
Own brand products	32,692		35.9%		29.3%
Non-alcoholic beverages				57,265		32.3%		22.5%
Alcoholic beverages	5,320		5.8%		16.9%		19,192		10.8%		27.1%
Food and snacks	11,541		12.7%		16.4%		56,795		32.1%		23.0%
Others	5,789		6.4%		41.1%		8,632		4.9%		65.8%
		55,342		60.8%		24.3%		141,884		80.2%		24.3%
Third-party brand products	(1,229)	-1.4%		-118.0%
Non-alcoholic beverages			2,003		1.1%		26.9%
Alcoholic beverages	28,819		31.7%		17.1%		27,925		15.8%		5.7%
Food and snacks	8,343		9.2%		12.6%		3,726		2.1%		2.5%
Others	(295)	-0.3%		-35.7%		1,481		0.8%		4.9%
		35,638		39.2%		15.1%		35,135		19.8%		5.2%
Total	90,980		100.0%		19.6%		177,019		100%		14.1%

Own Brand Product Business

In the first half of 2019, revenue of the Group's own brand products amounted to RMB227.6 million (first half of 2018: RMB585.0 million). Gross profit margin was 24.3% (first half of 2018: 24.3%) while gross profit amounted to RMB55.3 million (first half of 2018: RMB141.9 million). In the first half of 2019, own brand products contributed 60.8% of the Group's overall gross profit (first half of 2018: 80.2%).

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• Non-alcoholicbeverages

The own brand non-alcoholic beverages comprise ready-to-drink beverages such as "VitC VitE" series, "Fruit Tea" series, "Charcoal Roasted" series, "Barno" coffee series, as well as bottled water series such as "Tribute Spring" ("金貢泉") and "My Favourite Water" ("心水"). In the first half of 2019, revenue and gross profit of own brand non-alcoholic beverages amounted to RMB111.7 million (first half of 2018: RMB254.0 million) and RMB32.7 million (first half of 2018: RMB57.3 million), respectively. Own brand non-alcoholic beverages contributed to around a quarter of revenue, over one third of gross profit and has a gross profit margin of 29.3% (first half of 2018: 22.5%), which is the highest among our major product segments. The Group will strive to focus on improving the overall performance of this particular segment.

• Alcoholic beverages

Revenue of the Group's own brand alcoholic beverages primarily was comprised of self- produced Chinese rice wines. The Group used to distribute larger quantity of imported bottled wines from Italy, France and Chile marketed under the Group's own brands. However, due to the financial difficulties after the Incident, the Group reduced importing bottled wines from overseas. Instead, it focused on well-established and self-produced Chinese rice wine that was tailored for local markets in Eastern China. This shift has caused the decrease of revenue of own brand alcoholic beverages to RMB31.2 million (first half of 2018: RMB70.7 million.

• Food and snacks

The Group's own brand food and snacks mainly include products (such as roasted nuts and seeds, gift boxes, preserved fruits and meat snacks) sold under the Group's flagship "Tenwow" brand and its sub brands. Revenue of own brand food and snacks amounted to RMB70.6 million in the first half of 2018 (first half of 2017: RMB247.2 million) due to decline in sales of roasted nuts and seeds and Chinese New Year gift boxes. The downsizing of roasted nuts and seeds and Chinese New Year gift boxes has the greatest impact on this segment.

Third-party Brand Product Business

In the first half of 2019, revenue from third-party brand products amounted to RMB236.7 million (first half of 2018: RMB673.8 million). Overall gross profit margin was 15.1% (first half of 2018: 5.2%), while gross profit amounted to RMB35.6 million (first half of 2018: RMB35.1 million). This contributed to 39.2% of the Group's overall gross profit (first half of 2018: 19.8%).

Third party brand product business tends to be capital intensive business. Taken into consideration of its financial position, the Group realigned itself by focusing on a few fast-selling key third party brands. Products that generally have longer shelf life and longer cash conversion cycle will not be the business focus of the Group in the near term. However, the Group did tactically maintained its relationship with a few key third party brands such as Moutai.

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Revenue of third party brand alcoholic beverages, which mainly comprises Chinese wine and spirit, amounted to RMB168.6 million (first half of 2018: RMB488.3 million). On the other hand, revenue of third-party brand food and snacks amounted to RMB66.7 million (first half of 2018: RMB148.0 million).

Revenue by Sales Channels

The table below sets forth the breakdown of the Group's revenue by sales channel for the six months ended 30 June 2019 and 30 June 2018:

	2019	Six months ended 30 June
			2018
	RMB'000	%	RMB'000	%
Direct channels	26,275		5.7%	32,012		2.5%
On-premise channels (1)
Modern retail channels (2)	119,221		25.7%	343,638		27.3%
Small business channels(3)	109,267		23.5%	364,147		28.9%
Other channels (4)	133,076		28.7%	167,803		13.3%
Sub-total	387,840		83.5%	907,600		72.1%
Distributors
3,350		0.7%	47,694		3.8%
Nanpu(5)
Third-party distributors	73,107		15.7%	303,484		24.1%
Sub-total	76,456		16.5%	351,177		27.9%
Total	464,298		100.0%	1,258,777		100.0%

Notes:

1. Includes chain restaurants, hotels, and leisure and entertainment locations that provide dine-in services for the Group's products.
2. Includes chain hypermarkets, chain supermarkets and chain convenience stores.
3. Includes wholesale centres and various retail stores.
4. Primarily includes group purchase and online sales.
5. Nanpu and its associates.

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Revenue by Geographic Locations

The table below sets forth the Group's revenue contribution by sales in different geographic locations for the six months ended 30 June 2019 and 30 June 2018:

	2019	Six months ended 30 June
			2018
	RMB'000	%	RMB'000	%
Eastern China	332,827		71.7%	605,336		48.1%
Central China	94,860		20.4%	491,771		39.1%
Southern China	19,589		4.2%	96,699		7.7%
Northern China	3,598		0.8%	28,626		2.3%
Western China	13,424		2.9%	36,345		2.9%
Total	464,298		100.0%	1,258,777		100%

Distribution Costs

Distribution costs primarily include advertising and promotion expenses, wages and benefits, and transportation expenses, etc. relating to the distribution activities. In the first half of 2019, the Group's distribution costs amounted to RMB44.2 million (first half of 2018: RMB404.5 million).

Administrative Expenses

Administrative expenses consist primarily of wages and benefits for management and administrative staff, and depreciation expenses associated with property, facilities and equipment for administrative purposes. The Group's administrative expenses amounted to RMB51.4 million (first half of 2018:

97.0 million). A decrease in administrative expenses was primarily a result of the shrinking number of employees.

Finance Costs

The Group's finance costs primarily include bank loan interests and interests on finance leases. In the first half of 2019, finance costs amounted to RMB50.6 million (first half of 2018: RMB70.0 million).

Status of Nanpu, a joint venture

Nanpu's accounts cannot be obtained since May 2018 and its latest status remains unknown to the Board. As investment in Nanpu was fully impaired in 2018, there was no share of profit/loss from Nanpu in the first half of 2019 (2018: Nil).

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Loss Attributable to the Owners of the Company

Loss attributable to owners of the Company was RMB60.2 million in the first half of 2019 (first half of 2018: loss attributable to owners of the Company: RMB3,328.3 million).

Liquidity and Capital Resources

The Group's funds and capital required for operations are primarily sourced from internal resources and loans provided by the Group's principal banks.

As at 30 June 2019, the Group had bank deposits and cash balance in the amount of RMB61.1 million (31 December 2018: RMB32.8 million). As at 30 June 2019, the Group had total borrowings and finance lease payables in the amount of RMB2,630.4 million (31 December 2018: RMB2,647.3 million).

The net borrowings of the Group as at 30 June 2019 (total borrowings less cash and cash equivalents and restricted cash) was RMB2,569.30 million (31 December 2018: RMB2,614.6 million). The Group's gearing ratio as at 30 June 2019 was 591.1% (31 December 2018: 488.3%).

Capital Expenditures and Capital Commitments

In the first half of 2019, the Group's capital expenditures and investments amounted to RMB2.1 million (first half of 2018: RMB44.1 million). The Group's capital commitments relating to building, equipment and land was RMB225.3 million in the first half of 2019.

Key Financial Ratios
The following table sets forth the Group's key financial ratios:
	Six months ended 30 June
	2019	2018
Gross profit margin	19.6%	14.1%
Operating margin	N/A	N/A
Margin of profit attributable to the owners of the Company	N/A	N/A
	30 June	31 December
	2019	2018
Current ratio	0.22	0.21
Quick ratio	0.12	0.11
Gearing ratio*	591.1%	488.3%

• Gearing ratio = net borrowings ÷ (total equity + net borrowings)

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Inventory

The Group's inventory primarily includes finished products, followed by raw materials and packaging materials, as well as work-in-process products. As at 30 June 2019, inventory and inventory turnover days were RMB368.8 million (31 December 2018: RMB365.7 million) and 179 days (31 December 2018: 193 days) respectively.

Trade Receivables

The Group's trade receivables refer to the Group's accounts receivable balance from its customers. As at 30 June 2019, trade receivables balance and trade receivables turnover days were RMB158.6 million (31 December 2018: RMB223.8 million) and 62 days (31 December 2018: 277 days) respectively.

Trade Payables

The Group's trade payables primarily include payment due to suppliers of third-party brand products, raw materials and outsourced products. As at 30 June 2019, trade payables balance and trade payable turnover days were RMB537.9 million (31 December 2018: RMB610.8 million) and 260 days (31 December 2018: 245 days) respectively.

Foreign Currency Risk

The majority of the Group's transactions are settled in Renminbi, which is not a free-floating currency. The fluctuation of Renminbi during the year did not have any material effect on the Group's performance. The Group will periodically review its foreign currency risks. As the Group is exposed to minimal exchange rate fluctuation risks, the Group currently did not have a hedging policy. However, the Group will closely monitor foreign currency risk, and will consider hedging should the need arise.

Contingent Liability

As at 30 June 2019, the Group was a defendant in various law suits claiming outstanding contractual payments together with damages and interests relating to failures in performing obligations in accordance with the terms of various contracts. The Group intends to contest the claim, and while the final outcome of the proceedings is uncertain, it is the directors' opinion that no provision is to be made in respect of those claims.

As at 31 December 2018, the Group was still in the process of renewing certificates for certain land use rights with net book value amounting to RMB0.9 million. The Group might incur certain obligations in connection with such application of land use rights certificates. Since the amount of the obligation cannot be measured with sufficient reliability, no provision was made in the consolidated financial statements.

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Asset Pledge

As at 30 June 2019, buildings, land use rights, and machinery and equipment with net book value of RMB533.7 million were pledged for borrowings (31 December 2018: RMB561.6 million).

Human Resources and Staff Remuneration

As at 30 June 2019, the Group had a total of 1,311 employees in the PRC and Hong Kong (31 December 2018: 1,697 employees). In the first half of 2019, employee remuneration was RMB59.8 million (first half of 2018: RMB134.1 million). The Group's employees and Directors are remunerated with reference to their position, performance, experience and prevailing salary trends in the market. The Company also operates share option schemes for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group's operations.

Significant Investments

In the first half of 2019, the Group did not have any significant investments.

Material Acquisitions or Disposals of Subsidiaries, Associates and Joint Ventures

There were no material acquisitions or disposals of subsidiaries, associates and joint ventures in the first half of 2019.

Future Plans for Material Investments or Capital Assets

The Directors currently do not have any future plans for material investments or capital assets. The management will continue to monitor the industry and review its business regularly, so as to take necessary measures in the Group's best interests.

Prospects

The rest of 2019 continued to be full of challenges. As domestic and international economic environment remained uncertain, the Chinese government had adopted various policies to ensure steady progress in the overall economy and to safeguard employment. Many circumstances will remain uncertain in the short term, but in the long run, the rising salary and purchasing power will be able to drive the overall consumer market. With the huge potential of China's consumer market, the Group believes that there are still ample opportunities up for grabs in the food and beverage market.

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EVENTS AFTER THE REPORTING PERIOD

In respect of Resumption Conditions

As set out in the announcement of the Company dated 18 October 2019, the Stock Exchange imposed the last Resumption Conditions.

In respect of the Transactions

As set out in the announcement of the Company dated 12 February 2019, an independent committee of the Board (comprising all independent non-executive Directors) (the "IBC") for the forensic investigation on the Transactions was established. A forensic accountant has been engaged by the solicitors representing the IBC to conduct an forensic investigation on the Transactions (the "Forensic Investigation"). The final report of the Forensic Investigation was issued and was announced by the Company on 21 November 2019.

In respect of auditor

PricewaterhouseCoopers ("PwC") has resigned as auditor of the Company with effect from 12 April 2019. With the recommendation from the audit committee of the Company (the "Audit Committee"), the Board has resolved to appoint ZHONGHUI ANDA CPA Limited as the new auditor of the Company to fill the casual vacancy following the resignation of PwC and to hold office until the conclusion of the forthcoming annual general meeting of the Company. Annual results of the Company for the year ended 31 December 2018 were published on 11 October 2019, to which the new auditor has issued a disclaimer of opinion.

In respect of internal control

On 19 June 2019, the Company engaged Pan-China Enterprise Risk Management Consulting Limited to act as its independent internal control adviser to conduct an independent internal control review as part of its ongoing effect to fulfill Resumption Conditions. The preliminary draft internal control review report has been provided to the Company as set out in its announcement dated 21 November 2019.

In respect of potential investor

On 30 September 2019, the Company and 上海智陽投資有限公司 (the "Potential Investor", together with the Company, the "Parties") have entered into a memorandum of understanding (the "MOU") on potential investment in the Company's shares and participation in the Group's affairs in relation to, among other things, the reorganisation and resumption of trading of the Company's shares (the "Possible Transaction"). The MOU is non-legally binding (save for a provision on confidentiality) and only records the direction of the strategic cooperation between the Parties.

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THE APPOINTMENT OF JOINT PROVISIONAL LIQUIDATORS

On 24 October 2018, a winding-up petition was presented in the Grand Court of the Cayman Islands (the "Grand Court") by a creditor for the winding-up of the Company (the "Petition"), which was listed for hearing on 12 December 2018.

Immediately following the presentation of the Petition, the Company filed an application seeking the appointment of joint provisional liquidators ("JPLs") of the Company on a light touch basis for the purpose of restructuring, as an alternative to compulsory liquidation (the "JPL Application"), pursuant to section 104(3) of the Companies Law of the Cayman Islands on the basis that the Company is unable to pay its debts and intends to present a compromise or arrangement to its creditors. On 16 November 2018, the Grand Court granted the JPL Application and ordered the appointment of Messrs. Lai Kar Yan (Derek) and Ho Kwok Leung (Glen) of Deloitte Touche Tohmatsu and Mr. Mike Penner of Deloitte & Touche as the JPLs of the Company with the power to act jointly and severally.

Following the appointment of the JPLs, the Board shall retain all its powers of management, subject to the JPLs' supervision of the exercise of such powers in relation to the ordinary course of business of the Company, and in relation to matters outside the ordinary course of business of the Company granting prior approval of the exercise of such powers.

The appointment of the JPLs under the order of the Grand Court was recognised by an order of the High Court of Hong Kong on 26 February 2019 with the powers conferred therein. The Grand Court has ordered that the hearing of the Petition be adjourned to 23 January 2020.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

Neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company's listed securities during the six months ended 30 June 2019.

REVIEW OF INTERIM RESULTS AND FINANCIAL STATEMENTS

The unaudited interim results of the Group for the six months ended 30 June 2019 have been reviewed and approved by the Audit Committee. The Audit Committee is of the opinion that such interim results were prepared in accordance with the applicable accounting standards, the Listing Rules and all other applicable legal requirements and therefore recommended for the Board's approval of the same.

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CORPORATE GOVERNANCE

The Company has adopted the code provisions set out in the Corporate Governance Code (the "CG Code") as contained in Appendix 14 to the Listing Rules as its code of corporate governance.

Under CG Code provisions C.1.1 and C.1.2, management should provide sufficient explanation and information to the Board to enable it to make an informed assessment of financial and other information put before it for approval and provide the Board with monthly updates giving a balanced and understandable assessment of the Company's performance, position and prospects in sufficient detail to enable the Board as a whole and each Director to discharge their duties. Instead of providing monthly updates to all members of the Board, all Directors (including independent non-executive Directors) were provided by the management with a balanced and understandable assessment of the Group's performance, position and prospects in sufficient details on a quarterly basis, prior to the regular Board meetings or upon requests.

Under CG Code provision C.2, the Board should establish and maintain appropriate and effective risk management and internal control systems. The Board should oversee the Company's risk management and internal control systems on an on-going basis and ensure that a review of the effectiveness and adequacy of such systems on a Group basis is conducted on an annual basis and when necessary. During the reporting period, the risk management and internal control systems aspect of CG Code provision C.2 was not complied with. In order to ensure an effective risk management and internal control systems of the Company in the future, the Company has engaged an independent internal control adviser, Pan-China Enterprise Risk Management Consulting Limited.

Save as disclosed above, the Company has complied with all other applicable code provisions as set out in the CG code for the six months ended 30 June 2019.

UPDATES ON DIRECTORS' INFORMATION

Mr. Hu Hongwei was re-designated from an existing independent non-executive director of the Company to a non-executive director of the Company with effect from 12 July 2019.

MODEL CODE FOR SECURITIES TRANSACTIONS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") as set out in Appendix 10 to the Listing Rules. Specific enquiry has been made to all the Directors. All the Directors have confirmed that they have complied with the Model Code for the six months ended 30 June 2019.

INTERIM DIVIDEND

The Directors do not declare the payment of any dividend for the six months ended 30 June 2019 (first half of 2018: Nil).

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PUBLICATION OF INTERIM RESULTS AND INTERIM REPORT

This interim results announcement will be published on the websites of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the Company (ir.tenwow.com.hk), respectively. The 2019 Interim Report will be despatched to the Shareholders and published on the above-mentioned websites in due course.

CONTINUED SUSPENSION OF TRADING

All dealings in the shares of the Company have been suspended with effect from 9:00 a.m. on 13 August 2018. Trading in the shares of the Company will remain suspended until further notice pending fulfilment of the Resumption Conditions and such other further conditions that may be imposed by the Stock Exchange. The Company will keep its shareholders and the public informed of the latest developments by making further announcement(s) as and when appropriate.

Subject to the application and grant of a validation order, any transfer of Shares may be restricted as Hong Kong Securities Clearing Company Limited may at any time, and without notice, exercise its powers to temporarily suspend any of its services in respect of the Company's shares, including the suspension of acceptance of deposits of share certificates of the Company into CCASS. Shareholders and potential investors of the Company should exercise caution when they deal or contemplate dealing in the Shares or other securities of the Company.

By Order of the Board

Tenwow International Holdings Limited

(In Provisional Liquidiation)

Lin Qi

Chairman

Hong Kong, 31 December 2019

As at the date of this announcement, the executive directors of the Company are Mr. Lin Qi and Mr. Yeung Yue Ming; the non-executive directors of the Company are Mr. Liu Zhao and Mr. Hu Hongwei; and the independent non-executive directors of the Company are Mr. Lam Tin Faat, Mr. Lau Fai Lawrence and Ms. Shen Congju.

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