Financial Performance - The company's total revenue for the year ended December 31, 2024, was HKD 3,919 million, representing a 1.2% increase compared to HKD 3,873 million in 2023[3]. - Net profit attributable to shareholders was HKD 216 million, down from HKD 345 million in 2023, mainly due to non-recurring expenses and decreased profits from joint ventures[3]. - Adjusted EBITDA for 2024 was HKD 937 million, down from HKD 1,001 million in 2023, a decrease of approximately 6.4%[14][15]. - The company reported a pre-tax profit of HKD 351 million for 2024, compared to HKD 508 million in 2023, a decrease of about 30.9%[14][15]. - Operating profit decreased by 25.0% to HKD 377 million, with an operating margin of 9.6%[43]. - The proposed dividend decreased significantly from HKD 218 million in 2023 to HKD 97 million in 2024, a reduction of approximately 55.5%[8]. Revenue Breakdown - Sales revenue for 2024 reached HKD 3,919 million, up from HKD 3,873 million in 2023, representing an increase of about 1.2%[14][15]. - Revenue from Greater China was HKD 1,714 million, contributing 43.7% to total revenue, a slight decrease of 0.8% from HKD 1,727 million in 2023[39]. - Online business revenue increased by 11.3% to HKD 523 million, contributing 13.3% to total revenue, compared to HKD 470 million in 2023[39]. - Sales in Hong Kong and Macau amounted to HKD 626 million in 2024, compared to HKD 623 million in 2023, while sales in mainland China were HKD 661 million, down from HKD 664 million[16]. Expenses and Margins - The gross profit margin decreased by 1.4 percentage points to 57.0%, attributed to a higher contribution from lower-margin online sales and strategic inventory clearance[3]. - Operating expenses as a percentage of revenue increased to 48.7% from 47.2% in 2023, primarily due to non-recurring expenses in the first half of the year[3]. - The gross profit margin for Greater China decreased to 56.7% in 2024 from 59.4% in 2023, impacted by increased operating expenses and inventory clearance[49]. Inventory and Assets - The inventory balance increased to HKD 508 million from HKD 474 million in 2023, with inventory turnover days at 110 days compared to 108 days in the previous year[3]. - Total assets decreased from HKD 3,856 million in 2023 to HKD 3,766 million in 2024, a decline of approximately 2.3%[8]. - Current assets decreased from HKD 1,735 million in 2023 to HKD 1,692 million in 2024, a decline of about 2.5%[8]. Strategic Initiatives - The strategic investments made under the "Beyond Boundaries" five-year transformation plan are expected to position the company as a growth-oriented entity starting in 2025[3]. - The company aims to strengthen relationships with key franchisees and authorized operators to capture growth opportunities in overseas markets[37]. - The company plans to enhance its digital-first strategy to improve online penetration, which is currently below industry standards[80]. Market Performance - The company implemented effective strategies in Southeast Asia and Australia, contributing to revenue growth and improved performance in the online business in mainland China[3]. - The Taiwan market showed resilience with a mid-single-digit sales growth in the second half of 2024, recovering from a 4.4% decline in the first half[53]. - The Gulf Cooperation Council region reported a revenue of HKD 699 million, a 3.6% increase from 2023, with operating profit rising by 8.5% to HKD 141 million[60][61]. Corporate Governance and Leadership - The company has adhered to all applicable corporate governance codes, with a focus on stability and continuity in leadership roles to support business plan implementation[91]. - The company has appointed Mr. Colin Melville Kennedy Currie as CEO effective April 5, 2024, separating the roles of Chairman and CEO in compliance with corporate governance code C.2.1[92][93]. - The company expresses gratitude to its employees for their dedication, which is deemed crucial for success, and emphasizes the importance of a skilled and motivated workforce[82].

Financial Performance - Revenue for the six months ended June 30, 2024, was HK$1,903 million, a decrease of 3.4% compared to HK$1,970 million in 2023[3]. - Operating profit dropped by 26.3% to HK$202 million from HK$274 million in the previous year[3]. - Profit attributable to shareholders decreased by 36.8% to HK$120 million, down from HK$190 million in 2023[3]. - Basic earnings per share were 7.4 HK cents, down from 12.0 HK cents in 2023, representing a decline of 38.3%[3]. - Total comprehensive income for the period was HK$88 million, significantly lower than HK$207 million in the same period of 2023, reflecting a decline of approximately 57.6%[72]. - The Group's operating profit was HK$202 million, down from HK$319 million in the previous year, marking a decrease of about 36.7%[70]. - Profit after income taxes for the period was HK$120 million, compared to HK$190 million for the same period last year, reflecting a decrease of approximately 36.8%[81]. Revenue Breakdown - Revenue growth in the Gulf Cooperation Council was 0.6%, while Southeast Asia and Australia saw a 6.7% increase; Greater China experienced a decline of 5.1%[5]. - Same-store sales amounted to HK$1,444 million, reflecting a decline due to underperformance in Greater China[14]. - Retail revenue in Greater China dropped by 8.3%, with Mainland China, Hong Kong, and Taiwan experiencing declines of 9.9%, 6.3%, and 8.8% respectively[14]. - Sales in Mainland China reached HK$300 million for the six months ended June 30, 2024[104]. - Sales in Hong Kong and Macau amounted to HK$182 million during the same period[104]. - Southeast Asia and Australia generated sales of HK$739 million for the six months ended June 30, 2024[104]. - The Gulf Cooperation Council (GCC) wholesale to overseas franchisees recorded sales of HK$362 million[104]. Expenses and Margins - Gross margin improved slightly to 58.9%, up 0.2 percentage points, despite a 3.1% decline in gross profit due to adverse currency impacts[5]. - Operating expenses as a percentage of revenue increased by 2.9 percentage points to 49.5% from 46.6%[5]. - The operating expense-to-revenue ratio increased by 2.9 percentage points to 49.5%, primarily due to non-recurring expenses related to the former CEO's severance package[20][21]. - The finance expense increased to HK$22 million from HK$17 million in the previous year, primarily due to higher imputed interest on lease liabilities[23][24]. Dividends and Shareholder Returns - The Board declared an interim dividend of 8.0 HK cents per share, a reduction of 52.9% from 17.0 HK cents in 2023[7]. - The interim dividend declared for 2024 is 8.0 HK cents per share, a decrease from 17.0 HK cents per share in 2023, totaling HK$129 million compared to HK$272 million in the previous year[128][131]. - The company intends to return surplus cash to shareholders through dividends and share repurchase, aligning with its dividend policy[189]. Inventory and Cash Flow - Group inventory remained stable at HK$514 million, with inventory turnover days increasing by eight days to 119 days[7]. - Net cash flow from operating activities was HK$265 million, with a net cash balance of HK$720 million as of June 30, 2024[7]. - The increase in aged inventory, particularly in Mainland China, has negatively impacted sales performance due to a lack of fresh products[50]. - As of June 30, 2024, cash and bank balance, net of bank loans, was HK$720 million, a significant decrease from HK$1,014 million in 2023, primarily due to reduced operating cash inflow and increased cash outflow from dividend payouts[48]. Strategic Initiatives and Future Outlook - IT upgrades are expected to be completed in the second half of 2024, aiming to drive higher sales in 2025 and beyond[14]. - The company aims to achieve positive growth in the second half of 2024 and work towards a flat full-year revenue growth compared to 2023[55]. - The new strategy 'Giordano – Beyond Boundaries' focuses on four pillars: reset, revitalize, recalibrate, and reconnect to transform the company into a growth business[54]. - The company plans to enhance its digital footprint significantly, particularly in Mainland China, to adapt to the shift towards online consumption[56]. - Giordano aims to achieve a high single to low double-digit compound annual growth rate (CAGR) in revenue between 2025 and 2030[59]. Market Conditions and Challenges - The Hong Kong and Macau markets saw a modest revenue decline due to consumer spending shifting to Mainland China and higher rental costs[29]. - Sales in overseas franchised markets declined by 9.3% due to political tensions affecting traditional franchise markets like Myanmar[46]. - The GCC region showed growth with sales and profits advancing in the first half of 2024, despite geopolitical tensions impacting the macroeconomic environment[41]. Shareholder Information - The total number of ordinary shares held by Director Chan Ka Wai was 7,456,000, representing approximately 0.46% of shareholding[194]. - Cheng Yu Tung Family (Holdings) Limited holds 388,180,000 shares, representing approximately 24.02% of the total shareholding[199]. - The company has a share option scheme for directors, with details provided in the report[197].

Revenue Performance - The group's revenue remained flat year-on-year at fixed exchange rates, with a decline of 3.4% due to currency effects. The GCC region saw a revenue increase of 0.6%, while Southeast Asia and Australia rose by 6.7%. However, Greater China experienced a further decline of 5.1% year-on-year[2]. - The group reported a total revenue of HKD 1,903 million for the six months ended June 30, 2024, compared to HKD 1,970 million for the same period in 2023, reflecting a decrease of approximately 3.4%[11]. - Revenue in Greater China for the six months ended June 30, 2024, was HKD 709 million, a decrease of 5.1% compared to HKD 747 million in 2023[41]. - Revenue in Southeast Asia and Australia for the first half of 2024 reached HKD 783 million, a 6.7% increase from HKD 734 million in the same period of 2023[42]. - The retail and distribution segment in mainland China generated sales of HKD 300 million, while the sales in Hong Kong and Macau were HKD 182 million, showing a year-on-year decrease of 5.5% and 8.5% respectively[11]. Profitability - Gross profit margin recorded at 58.9%, an increase of 0.2 percentage points, primarily due to changes in channel mix. However, gross profit decreased by 3.1% year-on-year due to adverse currency effects[2]. - Net profit attributable to shareholders was HKD 120 million, down from HKD 190 million in 2023, attributed to one-off non-recurring expenses in 2024 and a significant decrease in profits from the Greater China region[2]. - Basic earnings per share decreased to HKD 0.074 from HKD 0.120 in 2023[3]. - Operating profit for the six months ended June 30, 2024, was HKD 811 million, slightly down from HKD 815 million in 2023, reflecting a decrease of 0.49%[16]. - The group's operating profit for the retail and distribution segment was HKD 232 million for the six months ended June 30, 2024, compared to HKD 284 million in the same period of 2023, representing a decline of approximately 18.3%[13]. Expenses and Costs - Operating expenses as a percentage of revenue increased by 2.9 percentage points, rising from 46.6% to 49.5%, mainly due to one-off non-recurring expenses related to a special general meeting[2]. - The group's financing costs amounted to HKD 22 million for the reporting period, reflecting a stable cost structure compared to previous periods[11]. - Interest expenses on lease liabilities increased to HKD 22 million from HKD 17 million, marking a rise of 29.41%[17]. - Total tax expense for the six months ended June 30, 2024, was HKD 53 million, an increase of 6% from HKD 50 million in 2023[19]. Cash Flow and Financial Position - Cash inflow from operating activities was HKD 265 million, with a net cash balance of HKD 720 million as of June 30, 2024, despite negative impacts from foreign exchange differences[3]. - Total assets decreased to HKD 3,668 million from HKD 3,856 million as of December 31, 2023[6]. - Total liabilities decreased slightly to HKD 1,514 million from HKD 1,544 million as of December 31, 2023[6]. - Cash and bank balances, after deducting bank loans, decreased to HKD 720 million from HKD 1,014 million in 2023, indicating a significant cash flow reduction[48]. Inventory Management - Inventory remained stable at HKD 514 million, with inventory turnover days increasing by eight days to 119 days[3]. - The group's inventory as of June 30, 2024, is HKD 514 million, an increase from HKD 474 million on December 31, 2023, and a decrease from HKD 501 million on June 30, 2023[52]. - The accounts receivable net value decreased to HKD 171 million from HKD 197 million, a decline of 13.19%[22]. - Total accounts payable decreased to HKD 496 million from HKD 552 million, a reduction of 10.16%[24]. Strategic Initiatives - The company aims for revenue growth to stabilize at 2023 levels in 2024, with a target of achieving positive growth in the second half of 2024[55]. - The core of the "Beyond Boundaries" strategy is to revitalize the Giordano brand and expand its digital footprint, particularly in mainland China[57]. - The company recognizes the need to enhance organizational capabilities and will develop a comprehensive IT roadmap and restructure team functions[56]. - Giordano's five-year strategy "Beyond Limits" aims to regain leadership in the Greater China fashion apparel market and accelerate growth in the Gulf Cooperation Council and Southeast Asia, targeting a high single-digit to low double-digit CAGR from 2025 to 2030[61]. Shareholder Returns - The board declared an interim dividend of HKD 0.08 per share, down from HKD 0.17 per share in 2023[3]. - The interim dividend for the six months ending June 30, 2024, is set at HKD 0.08 per share, down from HKD 0.17 per share in 2023, reflecting careful consideration of economic outlook and financial status[63]. - Basic and diluted earnings per share for the period were HKD 0.74, down from HKD 1.19 in 2023, representing a decline of 37.02%[20]. Employee and Governance - As of June 30, 2024, the group has approximately 6,800 employees, with a focus on competitive compensation and performance-based bonuses to retain a high-quality leadership team[62]. - The board includes four executive directors and seven non-executive directors, ensuring a diverse governance structure[74].

Financial Performance - Revenue for 2023 increased to HK$3,873 million, up 2% from HK$3,799 million in 2022[3] - Gross profit rose to HK$2,263 million in 2023, with a gross margin of 58.4%, up from 56.5% in 2022[3] - Operating profit improved to HK$503 million in 2023, with an operating margin of 13.0%, compared to HK$425 million and 11.2% in 2022[3] - EBITDA increased to HK$1,015 million in 2023, with an EBITDA margin of 26.2%, up from HK$913 million and 24.0% in 2022[3] - Net profit attributable to shareholders grew to HK$345 million in 2023, with a net profit margin of 8.9%, compared to HK$268 million and 7.1% in 2022[3] - Revenue for 2023 reached HK$3,873 million, showing a slight increase from HK$3,799 million in 2022[5] - Gross profit for 2023 was HK$2,263 million, with a gross margin of 58.4%, up from 56.5% in 2022[5] - Operating profit for 2023 stood at HK$503 million, a significant improvement from HK$425 million in 2022, with an operating margin of 13.0%[5] - EBITDA for 2023 was HK$1,015 million, with an EBITDA margin of 26.2%, compared to HK$913 million and 24.0% in 2022[5] - Net profit attributable to shareholders for 2023 was HK$345 million, with a net profit margin of 8.9%, up from HK$268 million and 7.1% in 2022[5] - Net profit increased by 28.7% to HK$345 million compared to the previous year[8] - Group revenue increased by 1.9% to HK$3,873 million (2022: HK$3,799 million), or 3.8% growth at constant exchange rates[11][16] - Group gross margin improved by 1.9 percentage points, with retail gross margin reaching 60.6% (2022: 59.5%)[11] - Net profit attributable to shareholders increased by 28.7% to HK$345 million (2022: HK$268 million)[11] - Group same-store sales increased by 6.9% to HK$2,819 million (2022: HK$2,638 million)[13] - Global brand sales grew by 2.7% to HK$4,746 million (2022: HK$4,620 million)[13] - Online sales grew by 7.1%, driven by continued growth in mainland China[16] - Group revenue grew by 1.9% to HK$3,873 million, with comparable retail store sales increasing by 6.9%[17] - Online sales improved by 7.1%, driven by growth in Mainland China, while offline sales increased by 4.7% despite a 2.6% reduction in store count[17] - Gross margin improved by 1.9 percentage points to 58.4%, with retail gross margin reaching 60.6%[20] - Operating profit increased by 18.4% to HK$503 million, with an operating expense-to-revenue ratio of 47.2%[24] - Profit after income taxes attributable to shareholders rose to HK$345 million, with a net margin of 8.9%[28] - 2023 PATS increased to HK$351 million at constant exchange rates, up from HK$268 million in 2022, representing a 31.0% growth[29] - Revenue increased by 6.5% to HK$676 million in 2023, with gross profit rising by 7.8% to HK$429 million[43] - Operating profit grew by 16.1% to HK$130 million, driven by strong performance in the GCC region[43] - Revenue increased to HK$3,873 million in 2023, up from HK$3,799 million in 2022, representing a growth of 1.9%[156] - Gross profit rose to HK$2,263 million in 2023, compared to HK$2,146 million in 2022, reflecting a 5.5% increase[156] - Operating profit improved to HK$503 million in 2023, up from HK$425 million in 2022, showing an 18.4% growth[156] - Profit after income taxes for the year increased to HK$389 million in 2023, compared to HK$329 million in 2022, a rise of 18.2%[156][158] - Earnings per share (basic) increased to 21.6 HK cents in 2023, up from 17.0 HK cents in 2022, a 27.1% growth[156] - Total comprehensive income for the year was HK$377 million in 2023, compared to HK$250 million in 2022, a 50.8% increase[158] - Operating profit before income taxes increased to HK$508 million in 2023 from HK$436 million in 2022, reflecting a 16.5% year-over-year growth[164] - Net cash inflow from operating activities rose to HK$942 million in 2023, up from HK$810 million in 2022, indicating a 16.3% increase[164] - Cash generated from operations reached HK$1,093 million in 2023, compared to HK$911 million in 2022, marking a 20% growth[164] - Profit after income taxes for the year 2023 was HK$345 million, contributing to the total comprehensive income of HK$333 million[168] Store Operations and Inventory - Total number of stores worldwide decreased to 1,822 in 2023 from 1,874 in 2022, with direct-operated stores at 1,055 and franchised stores at 767[3] - Inventory turnover days improved to 108 days in 2023 from 135 days in 2022[3] - The number of stores worldwide at the end of 2023 was 4,259, a significant increase from 2,733 in 2022[5] - Inventory levels were significantly reduced and variable cost ratio increased[8] - The company added 27 overseas franchised stores in 2023, primarily in emerging markets[49] - Inventory turnover days decreased by 27 days to 108 days due to stringent purchase control[57] - System inventories decreased to HK$709 million in 2023, down from HK$893 million in 2022[58] - Total store count in Greater China decreased to 695 in 2023 from 776 in 2022, primarily due to the closure of loss-making direct-operated stores in Mainland China[36] - Southeast Asia and Australia store count remained stable at 565, with Indonesia adding 5 new stores to reach 238 by year-end 2023[40] Cash Flow and Financial Position - Cash and bank balances less bank loans stood at HK$905 million in 2023, down from HK$948 million in 2022[3] - The company's total assets for 2023 were HK$3,856 million, a decrease from HK$4,008 million in 2022[5] - Total liabilities for 2023 were HK$1,544 million, down from HK$1,486 million in 2022[5] - Cash and bank balances, net of bank loans, stood at HK$905 million on December 31, 2023 (2022: HK$948 million)[11] - Capital expenditure during the year was HK$87 million (2022: HK$66 million)[11] - Cash and bank balances decreased to HK$935 million in 2023 from HK$960 million in 2022, a 2.6% decline[159] - Total current assets decreased to HK$1,735 million in 2023 from HK$1,977 million in 2022, a 12.2% reduction[159] - Total liabilities increased to HK$1,544 million in 2023 from HK$1,486 million in 2022, a 3.9% rise[161] - Equity attributable to shareholders of the Company decreased to HK$2,189 million in 2023 from HK$2,317 million in 2022, a 5.5% decline[161] - Net cash outflow from investing activities was HK$155 million in 2023, higher than the HK$76 million outflow in 2022[166] - Dividends received from a joint venture amounted to HK$28 million in 2023, down from HK$32 million in 2022[166] - Net cash outflow from financing activities was HK$926 million in 2023, slightly higher than the HK$853 million outflow in 2022[166] - Cash and cash equivalents at the end of 2023 stood at HK$720 million, a decrease from HK$860 million at the end of 2022[166] - Purchase of property, plant, and equipment totaled HK$87 million in 2023, up from HK$66 million in 2022[166] - Interest income decreased to HK$23 million in 2023 from HK$12 million in 2022[166] - Dividends paid to non-controlling interests were HK$3 million in 2023, compared to HK$2 million in 2022[166] - Total equity decreased from HK$2,522 million at the beginning of 2023 to HK$2,312 million at the end of 2023, reflecting a reduction of HK$210 million[168] - The company paid a final dividend of HK$240 million for 2022 and an interim dividend of HK$274 million for 2023[168] - Non-controlling interests decreased from HK$205 million at the beginning of 2023 to HK$123 million at the end of 2023, a reduction of HK$82 million[168] - Retained profits decreased from HK$819 million at the beginning of 2023 to HK$611 million at the end of 2023, a reduction of HK$208 million[168] - The company issued shares worth HK$47 million upon the exercise of share options[168] - The acquisition of additional interest in a subsidiary resulted in a decrease of HK$53 million in non-controlling interests[168] - The disposal of partial interest in a subsidiary resulted in an increase of HK$2 million in non-controlling interests[168] - The fair value change on financial assets at fair value through other comprehensive income resulted in a loss of HK$8 million[168] - Exchange adjustments on translation of overseas subsidiaries, a joint venture, and branches resulted in a loss of HK$10 million[168] Dividends and Shareholder Returns - Dividend per share increased to HK$0.305 in 2023 from HK$0.235 in 2022, with a dividend payout ratio of 141.3%[3] - Total dividend for the year rose by 29.8% to 30.5 HK cents per share[8] - The Company's Board recommended a final dividend of 13.5 HK cents per share, with total dividends for the year increasing by 29.8% to 30.5 HK cents per share[11] - Full-year dividend increased by 29.8% to 30.5 HK cents per share (2022: 23.5 HK cents per share)[62] - The Board recommended a final dividend of 13.5 HK cents per share for the year ended December 31, 2023, payable on June 14, 2024[122] - The company's dividend policy, adopted on November 8, 2018, aims to allow shareholders to participate in profits while retaining reserves for future growth[117] - The company may consider declaring special dividends in addition to semi-annual dividends, depending on financial conditions and commitments[117] - The company's ability to pay dividends depends on factors such as distributable profits, operating results, and capital expenditure plans of its subsidiaries[117] - The Board has discretion on dividend payments, subject to shareholder approval, with decisions based on operations, earnings, capital needs, and financial conditions[118] Market Capitalization and Shareholding - Market capitalization rose to HK$4,259 million in 2023 from HK$2,733 million in 2022[3] - Market capitalization for 2023 was HK$1,613,417 million, slightly up from HK$1,579,817 million in 2022[5] - Director Lau Kwok Kuen, Peter holds 27,518,000 shares, representing approximately 1.71% of the total shareholding[131] - Director Chan Ka Wai holds 8,456,000 shares, including 7,700,000 share options, representing approximately 0.52% of the total shareholding[131] - Director Mark Alan Loynd holds 9,064,000 shares through share options, representing approximately 0.56% of the total shareholding[131] - Cheng Yu Tung Family (Holdings) Limited and related entities hold 388,180,000 shares, representing 24.05% of the total issued shares of 1,613,416,518 as of December 31, 2023[135][136] - Sino Wealth International Limited, a wholly-owned subsidiary of Chow Tai Fook Nominee Limited, holds 388,180,000 shares, with Chow Tai Fook Capital Limited holding an 81.03% interest in Chow Tai Fook (Holding) Limited[135] - The company maintained sufficient public float as required by the Listing Rules, with no purchase, sale, or redemption of listed securities during the year ended December 31, 2023[140] - The total number of shares issued by the company as of December 31, 2023, is 1,613,416,518[129] Corporate Governance and Board Composition - The company emphasizes corporate governance and social responsibility, treating staff and suppliers as equal partners[9] - The Board adopted new Terms of Reference for the Remuneration Committee on January 1, 2023, and revised the shareholders' communication policy on March 9, 2023, and December 31, 2023[72] - The Board reviewed the Board Diversity Policy and the Nomination Policy on November 2, 2023[72] - The Company fully complied with the Corporate Governance Code provisions except for deviations from Code Provisions B.2.2 and C.2.1[72] - The Board is responsible for setting the Group's overall objectives, strategies, and monitoring financial performance[73] - The Board ensures independent views and input are available, with a strong independence element in its current composition[75] - The Board reviewed the implementation and effectiveness of the board independence mechanism for the year ended December 31, 2023, and considered it effective[75] - The Board is responsible for developing, reviewing, and updating corporate governance policies and practices[76] - The Board determines the nature and extent of significant risks, including ESG risks, in achieving strategic objectives[76] - The Board reviews and monitors the Group's disclosure process, including the accuracy and materiality of inside information[76] - The Board consists of three Independent Non-executive Directors, two Non-executive Directors, and three Executive Directors as of December 31, 2023[77] - The Independent Non-executive Directors and Non-executive Directors provide diverse expertise, skills, and experience, offering effective guidance and an outside perspective on major decisions[77] - The Board emphasizes diversity, including gender diversity, across all levels of the Group, with details on gender ratio available in the ESG Report[77] - The Board has established three committees: Audit Committee, Nomination Committee, and Remuneration Committee, along with a Management Committee and Risk Management Committee[77] - Dr. LAU Kwok Kuen, Peter serves as the Chairman and Chief Executive, and is a member of the Nomination Committee and Remuneration Committee[79] - Dr. Barry John BUTTIFANT is the Chairman of the Audit Committee and a member of the Nomination and Remuneration Committees[79] - Professor WONG Yuk is the Chairman of the Remuneration Committee and a member of the Audit and Nomination Committees[79] - Mr. TSANG On Yip, Patrick, a Non-executive Director, is the CEO and a director of Chow Tai Fook Enterprises Limited, a substantial shareholder[80] - Mr. LEE Chi Hin, Jacob, a Non-executive Director, serves as a senior vice president of Chow Tai Fook Enterprises Limited[80] - The Board believes that the relationships of the Non-executive Directors do not affect their independent judgment and integrity in executing their roles[81] - The appointment of a new Director is made by the Board upon recommendation by the Nomination Committee, considering diversity in accordance with the Company's Board Diversity Policy[82] - Any new Director (other than the Chairman or the Managing Director) appointed by the Board must retire and be re-elected by Shareholders at the next AGM following their appointment[82] - At each AGM, one-third (or the number nearest to, but not less than one-third) of the Directors (other than the Chairman or the Managing Director) will retire from office by rotation[82] - Non-executive Directors have an initial term of three years and can continue in office subject to termination by not less than one month's prior notice in writing[82] - The Board believes that stability and continuation are key factors to the successful implementation of business plans of the Group, and the Chairman should be exempt from retirement by rotation[82] - Dr. Barry John BUTTIFANT, an Independent Non-executive Director, has served since March 3, 1995, and continues to provide invaluable expertise and experience to the Board[83] - All Independent Non-executive Directors provided confirmation of independence in accordance with rule 3.13 of the Listing Rules, and the Board considers them independent[83] - Dr. BUTTIFANT voluntarily retired and was re-elected as Director at the AGM held on May 20, 2022, and will retire by rotation at the forthcoming AGM[83] - The Board held four regular meetings and passed six sets of written resolutions during the year ended December 31, 2023, focusing on quarterly operational updates, future strategies, policies, and budgets[84] - All Executive Directors attended 4 out of 4 Board meetings, while Independent Non-executive Directors had varying attendance rates, with some attending 3 out of 4 meetings[87] - The Company provides comprehensive induction packages to newly appointed Directors to ensure they are aware of their responsibilities as directors of a Hong Kong-listed company[90] - The Company has arranged appropriate directors' and officers' liability insurance in line with the Corporate Governance Code[91] - The Company Secretary regularly updates Directors on changes in Listing Rules, corporate governance practices, and other regulatory regimes, providing

Financial Performance - The company's revenue increased by 3.8% at constant exchange rates, reaching HKD 3.873 billion, up from HKD 3.799 billion in 2022, with a 1.9% increase when converted to HKD [2]. - Net profit attributable to shareholders rose by 28.7% to HKD 345 million, up from HKD 268 million in 2022 [2]. - Total revenue grew by 1.9% to HKD 3.873 billion in 2023, up from HKD 3.799 billion in 2022, with a fixed exchange rate growth of 3.8% [33]. - The company reported a profit before tax of HKD 508 million, indicating a stable operational performance despite market challenges [13]. - Operating profit for 2023 was HKD 1,630 million, compared to HKD 1,594 million in 2022, reflecting an increase of 2.26% [21]. - The company recorded a net profit of HKD 345 million in 2023, up from HKD 268 million in 2022, reflecting resilience despite ongoing geopolitical conflicts and high inflation [58]. Profitability Metrics - Gross profit margin improved by 1.9 percentage points, with retail gross margin at 60.6% compared to 59.5% in 2022 [2]. - The company’s equity decreased to HKD 2,312 million from HKD 2,522 million, reflecting a decline of approximately 8.3% [9]. - The total income tax expense for the year was HKD 119 million, up from HKD 107 million in 2022, indicating an increase of approximately 11.21% [24]. - The company reported a net current asset position of HKD 639 million, down from HKD 890 million in the previous year, indicating a decline of approximately 28.2% [9]. Dividends and Shareholder Returns - The proposed final dividend is HKD 0.135 per share, with a total annual dividend of HKD 0.305 per share, representing a 29.8% increase from HKD 0.235 per share in 2022 [2]. - The proposed final dividend for 2023 is HKD 0.135 per share, down from HKD 0.150 per share in 2022, resulting in a total annual dividend of HKD 0.305 per share, an increase of 29.8% [57]. Inventory and Asset Management - Inventory turnover days decreased by 27 days to 108 days, with year-end inventory at HKD 474 million, down from HKD 612 million in 2022 [2]. - The company’s inventory decreased to HKD 474 million in 2023 from HKD 612 million in 2022, with inventory turnover days reduced to 108 days [54]. - Total assets decreased to HKD 3,856 million in 2023 from HKD 4,008 million in 2022, a decline of approximately 3.8% [9]. - Current assets totaled HKD 1,735 million, down from HKD 1,977 million, representing a decrease of about 12.2% [9]. Operational Efficiency - Operating expenses as a percentage of revenue remained stable at 47.2%, reflecting ongoing cost control measures [2]. - The company maintained a stable operating expense ratio at 47.2% of revenue, reflecting ongoing cost control measures [31]. - Cash and bank balances (after deducting bank loans) stood at HKD 905 million as of December 31, 2023, compared to HKD 948 million in 2022 [2]. - Cash and bank balances (net of bank loans) at the end of 2023 were HKD 905 million, a decrease of 4.5% from HKD 948 million in 2022 [32]. Market and Sales Performance - Revenue from the mainland China segment reached HKD 664 million, contributing to a total revenue of HKD 3,873 million for the year [14]. - Retail and distribution segment sales for 2023 amounted to HKD 3,630 million, up from HKD 3,499 million in 2022, indicating a growth of approximately 3.75% [16]. - The sales in Hong Kong and Macau reached HKD 623 million, compared to HKD 586 million in 2022, showing an increase of about 6.31% [16]. - Revenue from Greater China was HKD 1,727 million, contributing 44.6% to total revenue, with a slight increase of 0.4% from 2022 [34]. - Revenue from Southeast Asia and Australia was HKD 1,471 million, maintaining a contribution of 38.0% to total revenue, with a 1.9% increase [34]. - Online sales in mainland China and South Korea accounted for nearly 55% and 40% of total sales, respectively, with satisfactory profit performance reported [58]. Strategic Initiatives - The company continues to focus on pricing power rather than volume, indicating a strategic shift in its operational approach [2]. - The company plans to expand its retail and distribution operations in Southeast Asia and the Gulf Cooperation Council regions [12]. - The company plans to continue its strategy of pricing, product innovation, store upgrades, and marketing investments to enhance brand reputation [58]. - The company expanded its sales points in India to 50 in 2023, indicating a positive momentum in its strategy to penetrate developing markets [58]. Staffing and Employment - As of December 31, 2023, the company employed approximately 6,500 staff, an increase from 6,200 in 2022, reflecting its commitment to competitive compensation and talent retention [59]. Other Financial Metrics - Interest income increased to HKD 23 million in 2023 from HKD 12 million in 2022, representing a growth of 91.67% [20]. - Financing costs rose to HKD 40 million in 2023 from HKD 25 million in 2022, an increase of 60% [22]. - The company experienced a 6.3% increase in other income and gains, totaling HKD 19 million in 2023 [46].

Financial Performance - Group sales increased by 5.0% to HK$1,970 million for the six months ended June 30, 2023, compared to HK$1,877 million in 2022[3]. - Operating profit surged by 65.1% to HK$274 million, up from HK$166 million in the previous year[3]. - Net profit attributable to shareholders rose by 95.9% to HK$190 million, with a net profit margin of 9.6% compared to 5.2% in 2022[5]. - Gross margin improved by 3.6 percentage points to 58.7%, driven by higher selling prices and fewer discounts[5]. - Basic earnings per share increased to 12.0 HK cents, up from 6.1 HK cents in 2022, representing a growth of 96.7%[3]. - The company declared an interim dividend of 17.0 HK cents per share, a 100% increase from 8.5 HK cents in 2022[5]. - Profit after income taxes attributable to shareholders was HK$190 million, reflecting a net margin of 9.6%[23]. - Profit before income taxes was HK$69 million, a 15.0% increase from HK$60 million in 2022, with a margin of 19.1%[43]. - The Group's net profit surged by 96% to HK$190 million for the first half of 2023 compared to the previous year[56]. - Total comprehensive income for the period was HK$207 million, up from HK$67 million in the same period of 2022, indicating a substantial increase of 209.9%[68]. Sales and Revenue Growth - Same-store sales increased by 12.3% to HK$1,493 million, compared to HK$1,329 million in 2022[8]. - Group revenue increased by 5.0% to HK$1,970 million, with a 12.3% growth in comparable retail store sales[12]. - Online sales grew by 8.2%, with significant growth noted in Greater China[12]. - Sales in Greater China for the six months ended June 30, 2023, reached HK$786 million, a 15.1% increase from HK$683 million in 2022[28]. - Sales in Southeast Asia and Australia totaled HK$751 million, a 7.9% increase from HK$696 million in 2022[39]. - Taiwan's sales increased by 10.6% to HK$241 million, with expectations for continued growth in the second half of the year[35]. - Hong Kong and Macau achieved a sales increase of 42.4% to HK$188 million, transitioning from loss to profit[29]. - The retail and distribution segment generated sales of HK$1,842 million, an increase from HK$1,706 million in 2022, marking a growth of about 7.98%[98]. Cost Management and Efficiency - The expense-to-sales ratio declined by 0.9 percentage points to 46.6% due to efficiency gains[5]. - The operating expense-to-sales ratio decreased to 46.6% from 47.5% in the previous year[19]. - The cost of sales decreased to HK$814 million for the six months ended June 30, 2023, from HK$842 million in the same period of 2022, reflecting a reduction of 3.3%[104]. - Staff costs increased to HK$304 million in the first half of 2023, up from HK$289 million in the same period of 2022, indicating an increase of 5.2%[104]. - The company recorded a provision for obsolete stock of HK$1 million, significantly lower than HK$14 million in the previous year, marking a decrease of 92.9%[104]. Inventory and Cash Management - Cash and bank balances, net of bank loans, rose to HK$1,014 million, compared to HK$910 million in the previous year, marking an increase of 11.4%[8]. - Inventory at period-end decreased to HK$501 million from HK$541 million, reflecting prudent procurement management[5]. - The inventory turnover days declined to 111 days, down from 116 days in the previous year, indicating better inventory management[52]. - The company experienced a decrease in inventories, which contributed to an operating cash inflow before changes in working capital of HK$544 million, compared to HK$456 million in 2022[73]. - Total cash and cash equivalents, including bank deposits with maturity over three months, increased to HK$1,019 million as of June 30, 2023, compared to HK$960 million as of December 31, 2022[120]. Market Expansion and Strategic Initiatives - The company expects an increase in the number of franchised stores in Mainland China in the second half of the year[12]. - The Group is focusing on expanding its franchise and licensing operations, particularly in emerging markets[58]. - The Group plans to enhance its brand image by increasing marketing resources and defending selling prices amid inflation[59]. - The Group's management is responsible for implementing risk management strategies, with no transfers of assets between fair value hierarchy levels noted during the period[84]. - The company continues to focus on market expansion and new product development strategies to drive future growth[65]. Shareholder Returns and Equity - The company aims to return surplus cash to shareholders through dividends and share repurchase, aligning with its dividend policy[180]. - The total equity attributable to shareholders of the company was HK$2,281 million as of June 30, 2023, compared to HK$2,317 million at the beginning of the year, reflecting a decrease of 1.6%[76]. - The company paid dividends of HK$240 million for the 2022 final dividends, which is an increase from HK$158 million in 2021[76]. - The interim dividend declared is 17.0 HK cents per share, up from 8.5 HK cents per share in 2022, resulting in a total of HK$272 million compared to HK$134 million in the previous year[115][119]. Employee and Management Information - As of June 30, 2023, the Group had approximately 6,300 employees, an increase from 6,100 in 2022[180]. - The average age of the Group's management team remained unchanged at 48 years as of June 30, 2023[180]. - The company has a structured approach to managing share options, ensuring compliance with individual limits and overall share issuance[197]. Risk Management and Compliance - The Group's risk management program aims to minimize potential adverse effects on financial performance, utilizing derivative financial instruments when necessary[84]. - There were no significant changes in the business or economic circumstances affecting the fair value of the Group's financial assets and liabilities during the reporting period[84]. - The Group's financial liabilities are primarily due within one year, indicating a focus on short-term liquidity management[86].

Financial Performance - The group's sales increased by 5.0% to HKD 1.97 billion (2022: HKD 1.88 billion) with growth recorded in Greater China, Southeast Asia, and the Gulf Cooperation Council markets[2]. - Gross profit margin rose by 3.6 percentage points to 58.7% (2022: 55.1%), leading to an 11.7% increase in gross profit[2]. - Net profit attributable to shareholders surged to HKD 190 million (2022: HKD 97 million), with a net profit margin of 9.6% (2022: 5.2%)[2]. - Basic earnings per share were HKD 0.12 (2022: HKD 0.061)[2]. - Total comprehensive income for the period was HKD 207 million (2022: HKD 67 million)[4]. - The group reported a profit before tax of HKD 287 million for the six months ended June 30, 2023, compared to HKD 179 million for the same period in 2022, indicating a growth of approximately 60.9%[11]. - Shareholders' profit after tax reached HKD 190 million, a significant increase of 95.9% from HKD 97 million in the previous year[26][33]. - The group recorded a slight increase in operating expenses, with total operating expenses amounting to HKD 815 million (2022: HKD 786 million)[25]. Cash and Assets - Cash and bank balances (net of bank loans) increased to HKD 1.014 billion (2022: HKD 910 million) as of June 30, 2023[2]. - Total assets amounted to HKD 3.854 billion as of June 30, 2023, compared to HKD 4.008 billion as of December 31, 2022[5]. - The group's bank loans decreased to HKD 5 million from HKD 45 million in 2022, resulting in a leverage ratio of 0.2% compared to 1.8% in 2022[45]. Inventory and Operating Efficiency - Inventory balance decreased to HKD 501 million (2022: HKD 541 million), with inventory turnover days reduced by 5 days to 111 days[2]. - Operating expenses as a percentage of sales decreased by 0.9 percentage points to 46.6% due to efficiency improvements[2]. - The group's operating expenses as a percentage of sales improved to 46.6% from 47.5% in 2022[31]. Dividends and Shareholder Returns - The board declared an interim dividend of HKD 0.17 per share (2022: HKD 0.085) totaling HKD 272 million (2022: HKD 134 million)[20]. - The interim dividend declared for the six months ended June 30, 2023, is HKD 0.17 per share, up from HKD 0.085 per share in 2022[52]. Sales and Market Performance - The group's total sales for the six months ended June 30, 2023, amounted to HKD 1,970 million, an increase from HKD 1,877 million in the same period of 2022, representing a growth of approximately 4.95%[10]. - Comparable store sales grew by 12.3%, driven by strategic price adjustments and effective localized marketing efforts[27]. - Online business continued to grow, with an increase of 8.2%, particularly notable in the Greater China market[27]. - The retail and distribution segment's sales in mainland China were HKD 333 million, consistent with the previous year's figure, while sales in Hong Kong and Macau increased to HKD 188 million from HKD 132 million[10][13]. Operational Developments - The group has not adopted any new or revised accounting standards that would significantly impact its financial performance or position[8]. - The group plans to increase marketing resources to enhance brand image and defend pricing in an inflationary environment[50]. - The group has established significant online business operations in mainland China and South Korea, with plans to accelerate development in Hong Kong and Taiwan[50]. - The company completed the acquisition of 100% of the issued share capital of PT Retail Kreatif Amerta Internasional for a total price of SGD 1 million (approximately HKD 5.9 million) on June 23, 2023[58]. Employee and Franchise Developments - The group employed approximately 6,300 staff as of June 30, 2023, an increase from 6,100 in 2022, with competitive compensation and performance-based bonuses[51]. - The company added 37 new overseas franchise stores during the period, primarily in emerging markets[44].

Financial Performance - Sales for 2022 reached HK$3,799 million, an increase of 12.4% compared to HK$3,380 million in 2021[3]. - Gross profit for 2022 was HK$2,146 million, with a gross margin of 56.5%, slightly down from 57.1% in 2021[3]. - Operating profit for 2022 was HK$425 million, representing an operating margin of 11.2%, up from 7.8% in 2021[3]. - EBITDA for 2022 was HK$913 million, with an EBITDA margin of 24.0%, consistent with the previous year[3]. - Profit attributable to shareholders for 2022 was HK$268 million, with a profit margin of 7.1%[3]. - The company reported a basic earnings per share of HK$17.00 for 2022, compared to HK$12.00 in 2021[5]. - The company's net profit for 2022 was HK$268 million, an increase of 41.1% from HK$190 million in 2021[8][11]. - The Group's operating profit rose significantly by 61.6% to HK$425 million, with an operating margin of 11.2%[16]. - Profit after income taxes for the year was HK$329 million, a 47.5% increase from HK$223 million in 2021[199]. Liquidity and Financial Position - Total assets as of the end of 2022 amounted to HK$4,008 million, while total liabilities were HK$1,486 million[3]. - The current ratio for 2022 was 1.8 times, indicating a stable liquidity position[3]. - Cash and bank balances less bank loans stood at HK$1,486 million, indicating a strong liquidity position[5]. - Cash and bank balances, net of bank loans, rose to HK$948 million as of December 31, 2022, compared to HK$875 million in 2021[12]. - The year-end cash and bank balances increased by 10.8% to HK$2,924 million[16]. - The Group's gearing ratio decreased to 0.5% in 2022 from 6.6% in 2021, with bank borrowings amounting to HK$12 million compared to HK$168 million in the previous year[55]. Store and Inventory Management - The number of stores worldwide at year-end 2022 was 1,874, including 1,083 directly operated stores and 791 franchised stores[3]. - The inventory turnover days for 2022 were 135 days, compared to 153 days in 2021[3]. - Year-end inventories were HK$612 million, slightly up from HK$606 million in 2021, with inventory turnover days decreasing by 18 days to 135 days[12]. - The total inventories at year-end were HK$612 million, reflecting a 1.0% increase from HK$606 million in 2021[16]. Sales Performance by Region - Total sales in Greater China decreased by 8.7% to HK$1,475 million in 2022, down from HK$1,616 million in 2021[33]. - Total sales in Mainland China decreased by 9.4% to HK$694 million in 2022, with a total store count of 552, down from 739 in 2021[39]. - Total sales in Southeast Asia and Australia increased by 44.1% to HK$1,504 million, with operating profit rising by 131.6% to HK$308 million[41]. - Indonesia's sales surged by 39.3% to HK$719 million, while Malaysia's sales nearly doubled, increasing by 98.0% to HK$200 million[44]. - The Gulf Cooperation Council (GCC) reported a 20.2% increase in total sales to HK$631 million, with profit before income tax rising by 46.6% to HK$107 million[46]. Corporate Governance and Management - The company has a strong governance structure with a diverse board comprising experienced professionals from various sectors[66][67][68][69]. - The Board is committed to maintaining the highest standard of corporate governance and believes that transparency, accountability, and independence are essential for maximizing shareholder value[77]. - The Company has established compliance procedures to ensure adherence to relevant laws and regulations, with the Board responsible for monitoring compliance policies[58]. - The Company emphasizes the importance of corporate social responsibility and public service involvement among its directors[67]. - The Board has established a mechanism to ensure independent views and input are available, and it has reviewed the effectiveness of this mechanism for the year ended December 31, 2022, considering it effective[80]. Dividend and Shareholder Communication - The Board recommended a final dividend of 15.0 HK cents per share, totaling 23.5 HK cents for the year, up from 16.5 HK cents in 2021[12]. - The Company has adopted a dividend policy since November 8, 2018, allowing shareholders to participate in profits while retaining adequate reserves for future growth[132]. - The Company actively utilizes the internet and electronic communication to provide timely and transparent information to shareholders[129]. - The Company encourages shareholder attendance at its Annual General Meeting (AGM) by providing at least 20 clear business days' notice[131]. Risk Management and Internal Controls - The Group has implemented "whistle-blowing" and "anti-corruption" mechanisms as part of its governance framework[97]. - The Risk Management Committee is responsible for overseeing the Group's risk exposure and assessing its risk management capabilities[112]. - The Group maintains strict internal procedures for handling and disseminating inside information[115]. - The internal audit team plays a major role in monitoring the risk management and internal controls of the Group[118]. Strategic Initiatives and Future Outlook - The company plans to expand its market presence and invest in new product development to drive future growth[6]. - The company plans to continue expanding its business into emerging markets, particularly in the African continent[52]. - The Group's strategy includes strengthening proprietary e-commerce channels and partnering with reputable third-party platforms[63]. - The company has established a framework for robust controls and effective risk management to support its operational strategies[75].

Financial Performance - Group sales increased by 11.7% to HK$1,877 million (2021: HK$1,681 million) due to notable sales recovery in Southeast Asia and the Gulf Cooperation Council[6]. - Operating profit rose significantly by 76.6% to HK$166 million (2021: HK$94 million) driven by increased sales and reduced operating expenses[5]. - Net profit attributable to shareholders was HK$97 million (2021: HK$60 million), reflecting a 61.7% increase[5]. - Basic earnings per share increased by 60.5% to 6.1 HK cents (2021: 3.8 HK cents)[5]. - Gross profit rose by 7.9% to HK$1,035 million, with a gross profit margin of 55.1%[12]. - Profit after income tax attributable to shareholders increased by 61.7% to HK$97 million, compared to HK$60 million in 2021[12]. - The Group's gross margin decreased by 1.9 percentage points, while gross profit increased by 7.9% due to higher sales and average selling prices[16]. - Profit before income taxes for the six months ended June 30, 2022, was HK$179 million, an increase from HK$105 million in 2021, representing a growth of 70.5%[76]. Dividends - The Board of Directors declared an interim dividend of 8.5 HK cents per share (2021: 6.5 HK cents), representing a 30.8% increase[5]. - Proposed dividends for the period were HK$134 million, compared to HK$158 million in the previous year, a decrease of 15.2%[71]. - The Group's dividend policy aims to return surplus cash to shareholders while retaining adequate reserves for future growth[187]. - The Group's financial position and future expansion plans were considered in the decision to increase the interim dividend[187]. Sales and Market Performance - Online sales grew by 22.5%, now accounting for 11.0% of total group sales, up from 10.1% in 2021[13]. - Offline sales increased by 9.0%, despite a 5.6% reduction in the total number of stores[13]. - Wholesales to franchisees rebounded by 18.3%, reflecting recovery in overseas markets[13]. - Total sales in Greater China for the six months ended June 30, 2022, were HK$686 million, a decrease of 11.4% from HK$774 million in 2021[28]. - Total sales in Southeast Asia and Australia increased by 33.9% to HK$711 million, with a gross profit margin of 59.8%[35]. - The Gulf Cooperation Council (GCC) saw a sales increase of 26.0% to HK$325 million, with operating profit rising by 72.2% to HK$62 million[41]. Inventory and Cash Management - Inventory turnover on cost decreased by eight days to 116 days, despite total inventory increasing to HK$541 million (2021: HK$494 million)[6]. - Cash and bank balances, net of bank loans, were HK$910 million (2021: HK$932 million), reflecting a modest decline due to increased inventory[6]. - Cash and cash equivalents at the end of the period were HK$918 million, down from HK$1,022 million at the end of June 2021, a decrease of 10.2%[79]. - The company reported a decrease in inventories of HK$51 million and a decrease in trade and other receivables of HK$74 million, improving working capital management[76]. Operating Expenses and Efficiency - Operating expenses decreased by 1.9% to 47.6% of sales (2021: 54.1%), indicating improved efficiency[6]. - Other income and gains fell by approximately 50% to HK$23 million, attributed to reduced government subsidies and increased exchange losses[20]. - Finance expenses decreased to HK$12 million from HK$16 million in 2021, reflecting lower imputed interests on lease liabilities[23]. Store Operations - The number of stores at period end decreased to 1,940, down by 154 from the previous year[12]. - The total number of stores in Southeast Asia and Australia decreased to 561 from 572[39]. - The company maintained a strong brand image and effective marketing strategies to minimize sales declines in Taiwan[32]. Future Outlook - The company expects sales to begin recovering in the second half of the year following a substantial drop in Q1 due to the pandemic[32]. - The Group anticipates continued growth in the second half of 2022 despite global economic uncertainties[58]. - The Group anticipates a substantial increase in wholesales in the second half, supported by sustained sales recovery in developed franchise regions and ongoing expansion in emerging countries, including Africa[60]. Employee and Management - As of June 30, 2022, the Group had approximately 6,100 employees, an increase from 5,900 employees on June 30, 2021[61]. - The Group is investing heavily in training for sales and customer service, management, planning, and leadership development[61]. Financial Position - Total current assets decreased to HK$1,875 million from HK$2,082 million, a decline of 9.9%[69]. - Total liabilities reduced to HK$1,453 million, down from HK$1,645 million, indicating a decrease of 11.7%[71]. - Total equity attributable to shareholders decreased to HK$2,287 million from HK$2,402 million, a decline of 4.8%[71]. Risk Management - The Group's activities expose it to various financial risks, including foreign exchange risk, credit risk, liquidity risk, and cash flow interest rate risk[87]. - The Group's overall risk management program aims to minimize potential adverse effects on financial performance, utilizing derivative financial instruments when necessary[87].

Financial Performance - Sales for 2021 were HK$3,380 million, an increase of 8.3% from HK$3,122 million in 2020[4] - Gross profit for 2021 was HK$1,930 million, representing a gross margin of 57.1%, up from 55.6% in 2020[4] - Operating profit for 2021 was HK$263 million, compared to an operating loss of HK$105 million in 2020, marking a significant turnaround[4] - EBITDA for 2021 was HK$811 million, with an EBITDA margin of 24.0%, compared to 17.8% in 2020[4] - Profit attributable to shareholders for 2021 was HK$190 million, a recovery from a loss of HK$112 million in 2020[4] - Earnings per share for 2021 were HK$12.00, compared to a loss per share of HK$7.10 in 2020[4] - Profit after income taxes for the year was HK$223 million, compared to a loss of HK$108 million in the previous year[171] - Total comprehensive income for the year was HK$193 million, a turnaround from a loss of HK$84 million in 2020[171] Store Operations - The number of stores worldwide at year-end 2021 was 2,056, with 1,134 directly operated stores and 922 franchised stores[4] - The total number of stores worldwide at year-end was 1,134, with 875 direct-operated stores and 259 franchised stores[6] - The number of stores at year-end in Greater China was 975, down from 1,030 in 2020[28] - The total number of stores in Mainland China at year-end was 739, down from 784 in 2020[33] - The number of franchised stores decreased from 383 in 2020 to 337 in 2021, with a temporary drop of 46 stores across all franchise markets[43] Liquidity and Financial Position - The total assets as of year-end 2021 were HK$4,208 million, while total liabilities were HK$1,645 million[4] - The current ratio for 2021 was 1.9 times, indicating a stable liquidity position[4] - Cash and bank balances, net of bank loans, were HK$875 million, down from HK$1,104 million in 2020[13] - Net current assets improved to HK$960 million in 2021, compared to HK$916 million in 2020[174] Dividends and Shareholder Returns - The dividend payout ratio for 2021 was 137.5%, reflecting a strong commitment to returning value to shareholders[4] - The Board of Directors recommended a final dividend of 10.0 HK cents per share, up from 6.9 HK cents per share in 2020, totaling HK$158 million if approved[13] - Proposed dividends for the year amounted to HK$158 million, an increase from HK$109 million in 2020[174] - The final dividend proposed for the year ended December 31, 2021, is HK$0.10 per share, up from HK$0.069 per share in 2020, totaling HK$0.165 per share for 2021 compared to HK$0.10 per share in 2020[55] Online Sales Performance - Online sales surged by 25.5%, contributing 12.1% to total sales, compared to 10.5% in 2020[13] - Online sales in Mainland China grew by 12.8%, contributing approximately 40% to total sales, up from 36% in 2020[30] - The company experienced a 29% year-over-year increase in online sales, primarily driven by third-party platform growth in Hong Kong and Macau[31] - Online sales in South Korea accounted for 35% of total sales, demonstrating stable performance despite pandemic disruptions[42] Operational Strategies and Future Outlook - The company plans to expand its market presence and invest in new product development to drive future growth[6] - The Group aims to continue improving its business and profitability despite the unpredictable future[12] - The Group plans to reduce new purchases in 2022 while utilizing existing inventory to navigate ongoing supply chain issues[12] - The Group is focused on upgrading the Giordano brand, achieving higher selling prices and gross margins[56] Corporate Governance - The Board is committed to maintaining the highest standard of corporate governance, emphasizing transparency, accountability, and independence to maximize shareholder value[65] - The Company has adopted the Corporate Governance Code as its governance framework, ensuring compliance with legal and regulatory requirements[65] - The Board plays a crucial role in decision-making regarding annual and interim results, notifiable transactions, and appointments of Directors[65] - The Company emphasizes the importance of maintaining high standards of corporate governance and transparency in its operations[60] Risk Management and Internal Controls - The Group's risk management and internal control systems were evaluated as sufficient and effective on a continuing basis[99] - The Management Committee is responsible for implementing business strategies and managing daily operations, fully accountable to the Board[96] - The internal audit team conducted independent audits covering significant business processes and activities, working with management to address identified control weaknesses[100] - The Company has implemented a "whistle-blowing" mechanism for employees to report misconduct anonymously[88] Financial Reporting and Audit - The independent auditor, PricewaterhouseCoopers, issued an unqualified opinion on the Group's consolidated financial statements for the year ended December 31, 2021, confirming compliance with Hong Kong Financial Reporting Standards[152] - The audit process involved communication with governance regarding the planned scope, timing, and significant audit findings[167] - The overall presentation, structure, and content of the consolidated financial statements were evaluated to ensure they fairly represent underlying transactions[166] - Sufficient and appropriate audit evidence was obtained regarding the financial information of the entities within the Group to express an opinion on the consolidated financial statements[166] Shareholder Engagement - The Company held approximately 7 meetings with institutional investors and research analysts in 2021 to communicate its business strategies and developments[106] - The Company has a diverse shareholder base, including institutional and retail investors, and actively engages with them[106] - The Company utilizes internet and electronic communication to provide timely and transparent information to shareholders[106] - The Company has established a shareholders' communication policy to enhance relationships with shareholders and ensure compliance with relevant rules[106]