Financial Performance - The company's revenue reached approximately RMB 1,449 million in 2018, an increase of 23.3% compared to RMB 1,175 million in 2017[13] - Gross profit rose to RMB 462 million, reflecting a 29.6% increase from RMB 356 million in the previous year, with a gross margin of 31.9%, up 1.6 percentage points[13] - Net profit attributable to the company's owners decreased by 18.8% to approximately RMB 86.5 million, primarily due to a provision for impairment losses on receivables[15] - EBITDA for the year was RMB 173 million, representing a 4.0% increase from RMB 167 million in 2017[13] - Basic and diluted earnings per share were RMB 20.84, down 18.8% from RMB 25.68 in the previous year[13] - The company declared a final dividend of HKD 0.05 per share, a decrease of 66.7% compared to HKD 0.15 in 2017[13] - Total revenue for the year 2018 was RMB 1,449,288 thousand, representing a 23.3% increase from RMB 1,174,977 thousand in 2017[186] - Gross profit for 2018 was RMB 461,965 thousand, up 29.5% from RMB 356,403 thousand in 2017[186] - The net profit for the year was RMB 86,176 thousand, a decrease of 19.1% compared to RMB 106,566 thousand in 2017[186] - Basic and diluted earnings per share for 2018 were RMB 20.84, down from RMB 25.68 in 2017, reflecting an 18.5% decline[186] Sales and Distribution - Sales volume increased by 20.1% to 104,089 tons, driven primarily by the strong performance of sandwich cookies and wafer cookies, which accounted for over 34.3% of total cookie revenue[15] - The acquisition of 85% equity in Siran Foods in April 2018 contributed approximately RMB 131.8 million in revenue, accounting for about 9.1% of the total revenue[21] - The sales revenue of the sandwich cookie series rose by 31.4% to approximately RMB 362.8 million, with a volume increase of 30.1% to 21,827 tons[29] - The thin biscuit series saw a sales increase of 7.2% to approximately RMB 295.3 million, attributed to effective pricing and promotional strategies[28] - The breakfast cookie series generated sales revenue of RMB 360.9 million, a 3.7% increase from the previous year[27] - The wafer cookie series achieved sales of approximately RMB 135.4 million, reflecting a 16.6% increase year-on-year[31] - Total sales to the group's five largest customers accounted for approximately 5.8% of total revenue, with the largest customer contributing about 1.5%[125] - Over 700 distributors contributed more than RMB 400,000 each to the company's sales, with 33 cities recording revenues exceeding RMB 10 million[122] Cost and Expenses - The company did not increase product prices in 2018, despite rising packaging material costs, which were partially offset by a decline in raw material prices[15] - Sales and distribution expenses increased from RMB 154.8 million in 2017 to RMB 207.9 million in 2018, a growth of approximately 34.3%[36] - Administrative expenses rose by approximately 41.2% to about RMB 85.3 million in 2018, compared to RMB 60.3 million in 2017[37] - The packaging material costs increased by approximately 15.4%, impacting the overall gross margin despite a decrease in sugar and palm oil costs by 18.3% and 16.6% respectively[35] Research and Development - R&D expenses grew by approximately 14.9% to around RMB 44.2 million, representing about 3.1% of total revenue[23] - The company has obtained 31 patents related to advanced technology improvements and cookie production processes[23] - The company is focusing on research and development to enhance existing product flavors and improve taste, with plans to introduce new flavors such as cheese, xylitol, milk, and cake[115] Distribution Network - The company has 1,452 distributors, an increase from 1,106 in 2017, and plans to continue expanding its distribution network[17] - As of December 31, 2018, the company had a total of 1,452 distributors and over 200,000 sales points in China, establishing a vast national distribution network[121] Corporate Governance - The board held six meetings during the year ended December 31, 2018, with no directors authorized to attend on behalf of others[53] - The company has three independent non-executive directors, constituting at least one-third of the board, with one possessing appropriate accounting or financial management qualifications[55] - The board focused on reviewing operational and current trading conditions, approving interim financial reports, and adopting the 2018 budget[60] - The remuneration committee, consisting of four members, is responsible for recommending compensation for directors and senior management based on performance and company results[62] - The company encourages continuous professional development for directors to enhance their knowledge and skills regarding corporate governance and regulatory developments[58] - The company emphasizes the importance of diversity in the board's composition and skills[57] Internal Controls and Audit - The board reviewed the effectiveness of the internal control and risk management systems, concluding that they were effective and adequate in all material aspects[75] - The audit committee held three meetings during the year ended December 31, 2018, with all members attending all meetings[68] - The internal audit function aims to provide independent opinions and reviews to the audit committee and the board, ensuring timely detection and correction of any significant deficiencies[90] - The company maintained a structured internal control system, including defined responsibilities and authority distribution[77] Shareholder Engagement - The company engages in continuous dialogue with analysts and institutional investors through roadshows, one-on-one meetings, and conference calls[99] - The company emphasizes the importance of effective communication with shareholders and the investment community on a fair and timely basis[99] - The company has established a system for shareholders to raise inquiries and propose resolutions at general meetings[93][94] Financial Position - Total bank borrowings increased by approximately 89% to about RMB 360.5 million as of December 31, 2018, compared to RMB 190.8 million in the previous year[42] - Cash and cash equivalents as of December 31, 2018, were approximately RMB 379.3 million, down from RMB 419.1 million in 2017[41] - Total liabilities increased to RMB 585,142 thousand in 2018 from RMB 454,155 thousand in 2017, representing a 28.8% rise[188] - Total equity rose to RMB 702,581,000, up from RMB 658,765,000, indicating an increase of about 6.6%[190] - The company's capital and reserves reached RMB 690,884,000, up from RMB 658,765,000, showing an increase of around 4.9%[190] Acquisitions - The acquisition of Dongguan Jintai Food Co., Ltd. and Silang Food (Huaibei) Co., Ltd. for a total consideration of RMB 68 million was completed, with identifiable intangible assets valued at RMB 50.558 million and goodwill at RMB 27.449 million[171] - The company engaged an independent qualified professional valuer for the valuation and purchase price allocation related to the acquisitions[171] Community Engagement - Charitable donations made by the group during the year amounted to approximately RMB 0.2 million, a decrease from RMB 2.6 million in 2017[133]