Financial Performance - Total revenue for 2018 reached RMB 20,513.9 million, an increase from RMB 18,079.6 million in 2017, representing a growth of 13.5%[11] - Profit attributable to equity holders for 2018 was RMB 3,799.8 million, slightly up from RMB 3,794.0 million in 2017, indicating a marginal increase of 0.1%[11] - Basic earnings per share for 2018 was RMB 3.151, compared to RMB 3.149 in 2017, reflecting a stable performance[11] - The net profit margin for 2018 was 18.5%, down from 21.0% in 2017, showing a decrease of 2.5 percentage points[8] - The group's gross margin decreased to approximately 38.2% in 2018, down from 41.8% in 2017, due to increased production costs[28] - Operating profit increased by approximately 3.0% to about RMB 5,429,224,000 in 2018, compared to RMB 5,271,574,000 in 2017[29] - The total comprehensive income for the year was RMB 3,876,658 thousand, compared to RMB 3,758,805 thousand in 2017, marking an increase of approximately 3.1%[156] Revenue Breakdown - The total revenue for personal hygiene products reached RMB 20,513,881 thousand in 2018, an increase from RMB 18,079,560 thousand in 2017, representing a growth of approximately 13.5%[97] - Revenue from sanitary napkin products was RMB 6,593,710 thousand in 2018, compared to RMB 6,214,820 thousand in 2017, indicating a growth of about 6.1%[97] - Revenue from disposable diapers was RMB 1,536,304 thousand in 2018, down from RMB 1,793,726 thousand in 2017, reflecting a decline of approximately 14.3%[97] - Revenue from tissue products increased to RMB 10,227,313 thousand in 2018, up from RMB 8,609,840 thousand in 2017, marking a growth of around 18.8%[97] Assets and Liabilities - The total assets as of December 31, 2018, amounted to RMB 45,652.2 million, an increase from RMB 38,898.0 million in 2017[14] - Total liabilities reached RMB 28,653,473 thousand in 2018, compared to RMB 22,553,739 thousand in 2017, marking an increase of around 27.4%[161] - The company's equity attributable to owners increased to RMB 16,725,160 thousand in 2018, compared to RMB 16,106,418 thousand in 2017, reflecting a growth of about 3.8%[161] Cash Flow and Dividends - The operating cash flow for the year ended December 31, 2018, was RMB 5,074,822 thousand, an increase from RMB 4,935,631 thousand in 2017, reflecting a growth of approximately 2.8%[166] - The company paid dividends totaling RMB 2,593,258 thousand, compared to RMB 2,470,021 thousand in 2017, marking an increase of about 5%[166] - The board proposed a final dividend of RMB 1.20 per share, leading to a total annual dividend of RMB 2.20 per share, up from RMB 2.10 in 2017[20] Strategic Initiatives - The company aims to enhance its brand image and expand its market presence as part of its strategic initiatives[3] - The company is focused on developing new products and technologies to strengthen its competitive position in the market[3] - The group plans to continue its multi-channel strategy in 2019, focusing on e-commerce and mother-baby stores to improve sales performance in traditional channels[38] - The group aims to develop high-quality, high-margin products in response to consumer demand for premium products, with significant upgrades to existing products planned[38] Market Expansion - The group expanded its sales network into Southeast Asia through the acquisition of the Malaysian company, Royal Group, and established a production base in Russia to enter the European market[21] - The group has established a sales office in Indonesia to promote and sell its products, expanding its presence in the Southeast Asian market[47] - The company plans to continue expanding its market presence in China and overseas, focusing on the production and distribution of personal hygiene products[169] Corporate Governance - The company has established a strong governance structure with various committees overseeing audit, nomination, and remuneration[62] - The board consists of 14 members, including the chairman, vice chairman (also CEO), 7 executive directors, and 5 independent non-executive directors, ensuring over one-third of the board is independent[67] - The company has adopted the Corporate Governance Code as per the Hong Kong Stock Exchange, aiming to enhance transparency and accountability to protect shareholder interests[66] Employee and Management - The group employed approximately 23,000 employees as of December 31, 2018, with compensation based on individual experience and market conditions[51] - The management team has extensive experience, with over 28 years in business development and customer service, and over 18 years in finance and business consulting[60] - Continuous professional development is mandatory for all directors to ensure they remain knowledgeable and capable of contributing effectively to the board[73] Risk Management - The risk management framework was reviewed and deemed effective by the board for the year ending December 31, 2018, with a focus on continuous assessment of potential risks[90] - The company has maintained a focus on internal controls to ensure the accuracy of financial reporting, as emphasized in the auditor's report[146] Accounting Standards - The group adopted new accounting standards effective from January 1, 2018, including HKFRS 9 "Financial Instruments" and HKFRS 15 "Revenue from Contracts with Customers" which resulted in adjustments to accounting policies and financial statements[173][176] - The adjustments made under HKFRS 15 did not affect the retained earnings of the group as of January 1, 2018, and January 1, 2017[178]