股 票 研 究 [Table_industryInfo] 家用电器业 [ Table_Main[ VI Tn Eafbo Sl]e Y _ NTi Ctle（] 2148） [评Tab级le_：Inv est] 增持 当前价格（港元）： 5.05 拓渠道、拓品类成效显著，业绩符合预期 2024.03.27 海 ——2023年年报点评 [ 交Ta易bl数e_M据a rket] 外 蔡雯娟(分析师) 樊夏俐(分析师) 谢丛睿(分析师) 52周内股价区间（港元） 2.81-5.65 当前股本（百万股） 1,147 公 021-38031654 021-38676666 021-38038437 当前市值（百万港元） 5,790 司 caiwenjuan024354@gtjas.co fanxiali@gtjas.com xiecongrui@gtjas.com 证书编号 mS0 880521050002 S0880523090006 S0880523090004 （ [ Table_PicQuote] 中 本报告导读： 52周内股价走势图 新品吸尘器、宠物喂食器、电饭锅等有望带来新增量，增持。 国 VESYNC 恒 ...

Investment Rating - The investment rating for VESYNC is maintained as "Buy - A" with a target price of HKD 6.18 for the next six months [2][4]. Core Insights - VESYNC has significantly improved its profitability, with a net profit margin of 13.2% in 2023, an increase of 16 percentage points year-on-year. This improvement is attributed to a reduction in provisions related to a voluntary recall of air fryers and a decrease in international shipping costs [1]. - The company reported a revenue of USD 590 million in 2023, representing a year-on-year growth of 19.4%, and a net profit of USD 80 million, recovering from a loss of USD 20 million in the previous year [1]. - VESYNC is expanding its product categories and actively developing offline sales channels, particularly in Europe and Asia, which is expected to sustain rapid revenue growth [1]. Revenue Growth - In the second half of 2023, VESYNC's revenue continued to grow rapidly, with Amazon channel revenue increasing by 9% year-on-year and non-Amazon channel revenue rising by 45% due to an increase in offline retail presence [1]. - The North American market saw a revenue increase of 19% year-on-year, driven by strong sales of home environment appliances like air purifiers and humidifiers, with VESYNC's Levoit brand leading the market [1]. - The Asian market experienced a remarkable revenue growth of 120% year-on-year in H2 2023, primarily due to rapid sales growth in Japan and the entry into over 1,400 mainstream supermarkets in Singapore, Malaysia, and Thailand [1]. Financial Projections - The projected revenues for VESYNC are USD 694 million in 2024, USD 819 million in 2025, and USD 957 million in 2026, with corresponding net profits of USD 90.6 million, USD 107.4 million, and USD 125.8 million respectively [3][9]. - The earnings per share (EPS) are expected to be USD 0.08 in 2024, USD 0.09 in 2025, and USD 0.11 in 2026 [2][3]. Valuation Metrics - The price-to-earnings (P/E) ratio is projected to be 10.0 in 2024, decreasing to 5.9 by 2026, indicating an attractive valuation as earnings grow [7]. - The net profit margin is expected to stabilize around 13.1% from 2024 to 2026, reflecting consistent profitability [7].

Financial Performance - Revenue for the year ended December 31, 2023, was $585,484 thousand, representing a 19.4% increase from $490,378 thousand in 2022[2] - Gross profit for the same period was $274,372 thousand, a significant increase of 92.8% compared to $142,289 thousand in 2022[2] - The gross profit margin improved to 46.9%, up from 29.0%, reflecting a 17.9 percentage point increase[2] - The company reported a profit before tax of $87,472 thousand, recovering from a loss of $21,841 thousand in the previous year[3] - Net profit attributable to shareholders for the year was $77,481 thousand, compared to a loss of $16,276 thousand in 2022[2] - Basic and diluted earnings per share were both 6.92 cents, a recovery from a loss of 1.44 cents per share in the previous year[5] Revenue Breakdown - Revenue from North America was $429,936,000 in 2023, up from $366,182,000 in 2022, indicating a growth of 17.4%[16] - Revenue from Europe increased to $125,741,000 in 2023 from $107,946,000 in 2022, reflecting a growth of 16.5%[16] - Revenue from Asia rose significantly to $29,807,000 in 2023, compared to $16,250,000 in 2022, marking an increase of 83.6%[16] - The company generated approximately $444,124,000 in revenue from a major customer, up from $405,097,000 in the previous year[18] Assets and Liabilities - Total current assets increased to $505,887 thousand from $396,065 thousand in 2022[6] - Total current liabilities rose to $228,248 thousand, up from $168,252 thousand in the previous year[7] - The net asset value increased to $327,516 thousand from $277,457 thousand in 2022[9] - Non-current liabilities decreased to $9,370 thousand from $11,585 thousand in the previous year[9] Expenses and Costs - Employee benefits expenses, excluding directors and key management personnel, rose to $76,859,000 in 2023 from $67,595,000 in 2022, with salaries and wages increasing to $61,895,000 from $51,538,000[24] - Research and development costs increased to $34,161,000 in 2023 from $29,954,000 in 2022, reflecting a focus on innovation[26] - The cost of goods sold increased to $259,433,000 in 2023 from $235,781,000 in 2022, reflecting higher sales volume[26] - Selling and distribution expenses rose by approximately 11.2% to about $99.2 million in 2023, driven by increased marketing and warehousing costs[62] Taxation - The total income tax expense for the year was $10,042,000 in 2023, compared to a tax credit of $5,524,000 in 2022, indicating a significant change in tax obligations[32] - The effective tax expense for the group was $10,042,000 in 2023, compared to a tax benefit of $5,524,000 in 2022[34] Cash Flow and Dividends - Net cash flow from operating activities for 2023 was approximately $106.1 million, a significant increase from $1.3 million in 2022, supporting the development of user-centered innovative products and market expansion[53] - The total cash dividend for the period ending June 30, 2023, was approximately HKD 62,679,000 (about $8,000,000), with HKD 22,811,000 (about $2,915,000) distributed during the year[34] - The proposed total dividend for the year ending December 31, 2023, is approximately HKD 179,904,000 (about $23,000,000), subject to shareholder approval[35] Market and Product Development - The company has focused on enhancing product development capabilities and expanding non-Amazon channels over the past three years[47] - The company continues to invest in product development and innovation, which has put pressure on short-term operating profit margins but is expected to yield long-term returns[47] - New product launches included five new categories and several upgraded models, enhancing the brand's market share and addressing diverse consumer needs[50] - The company plans to launch over ten new products in 2024, including smart air purifiers, smart humidifiers, and multifunctional smart air fryers[80] Corporate Governance - The company has established a compensation committee to review and recommend compensation policies for all directors and senior management[77] - The company has maintained compliance with all applicable corporate governance codes during the reporting period, except for the separation of the roles of Chairman and CEO, which are currently held by the same person, Yang Lin[87] - The Audit Committee, composed of three independent non-executive directors, has reviewed and recommended the approval of the audited consolidated financial statements for the year ending December 31, 2023[88] Employee and Operational Insights - The group has a total of 1,296 employees as of December 31, 2023, with 1,164 located in China, 125 in the United States, and 7 in other regions[77] - The company has repurchased a total of 12,659,000 shares during the reporting period at a total cost of HK$61,390,430[84] Future Outlook - The company aims to enhance its product portfolio and expand its geographical reach, particularly in the European market for Cosori and Levoit products[80] - The company is committed to developing the Ve Sync app into a home IoT platform and increasing brand awareness through enhanced marketing efforts[80]

Financial Performance - In the first half of 2023, the company achieved revenue of approximately $276.9 million, a 24.0% increase compared to the same period in 2022[9]. - Gross profit for the same period was approximately $125.1 million, reflecting a 42.9% year-over-year growth[9]. - Profit attributable to the owners of the parent company reached approximately $32.6 million, marking a significant increase of 110.7% compared to $15.5 million in 2022[9]. - Revenue for the first half of 2023 was approximately $276.9 million, a 24.0% increase compared to $223.3 million in the same period of 2022[16]. - Gross profit for the first half of 2023 was approximately $125.1 million, representing a significant increase of 42.9% from the previous year[16]. - Net profit attributable to the parent company was approximately $32.6 million, up 110.7% from about $15.5 million in the same period of 2022[16]. - The total comprehensive income for the period was $29,649 thousand, compared to $12,823 thousand in the same period last year, showing a substantial increase[104]. - Basic earnings per share for the period was $0.0289, up from $0.0137 in the previous year, indicating improved shareholder returns[104]. Revenue Breakdown - Amazon channel revenue grew by approximately 13.9%, while non-Amazon channel revenue surged by approximately 87.7% in the first half of 2023[10]. - The proportion of non-Amazon channel revenue increased from approximately 13.7% in 2022 to about 20.7% in 2023, a 7 percentage point rise[10]. - Sales in the European market reached approximately $65.3 million, a growth of 52.2% compared to the same period in 2022[20]. - Sales in the Asian market amounted to approximately $12.6 million, reflecting a growth of 49.5% year-over-year[20]. - Revenue from Amazon channels was approximately $219.6 million, a 13.9% increase from $192.7 million in the same period of 2022[18]. - Revenue from non-Amazon channels surged by approximately 87.7%, driven by significant sales growth in retail stores[19]. - Revenue for the Levoit brand increased by approximately $24.1 million or 19.9% compared to the same period in 2022, driven by sales of air purifiers, filters, and tower fans[22]. - Cosori brand revenue rose by approximately $19.4 million or 25.7%, primarily due to strong air fryer sales in the European market, with oven sales increasing by approximately 236%[22]. Market Expansion - The company expanded its product presence in mainstream retailers, with 37 products now available in major retail stores in North America, leading to revenue growth exceeding 500% at Walmart and 60% at Target compared to 2022[10]. - In Europe, the company's products are now available in over 2,500 stores across more than 10 countries, including the Nordic region, Spain, Hungary, and Germany[10]. - In the Asia-Pacific market, the company has entered over 1,000 mainstream supermarket stores in countries such as Singapore, Malaysia, Thailand, Japan, and the Middle East[10]. - The company aims to expand its product portfolio and geographic coverage, particularly increasing the market share of Cosori and Levoit products in Europe in the second half of 2023[52]. Investment and Development - The company continues to invest in product development and innovation, which has positively impacted its business operations in 2023[9]. - The company is focused on enhancing its channel development, regional expansion, product strength, operational efficiency, and brand promotion capabilities[9]. - The company allocated 15% of its net proceeds, amounting to HKD 249.4 million, for the development of new products, with HKD 150.4 million utilized and HKD 109.2 million remaining as of December 31, 2022[56]. - 10% of the net proceeds, totaling HKD 166.3 million, is designated for upgrading the VeSync application into a smart home IoT platform, with HKD 50.5 million utilized and HKD 116.3 million remaining[57]. - The company plans to invest 5% of its net proceeds, equivalent to HKD 83.1 million, in developing smart solutions for enterprise clients, with HKD 60.2 million already utilized[57]. - The company is focusing on product upgrades and new product development to enhance market share and drive future growth[30]. Financial Position - As of June 30, 2023, the group's cash and cash equivalents amounted to approximately $116.8 million, up from approximately $93.6 million as of December 31, 2022[42]. - The total bank borrowings as of June 30, 2023, were approximately $11.7 million, compared to approximately $9.2 million as of December 31, 2022[42]. - The debt-to-equity ratio as of June 30, 2023, was approximately 6.7%, down from 7.4% as of December 31, 2022[51]. - The company reported a profit of $32,619 thousand for the period, contributing to the overall total comprehensive income of $29,682 thousand[109]. - The company's net assets increased to $308,451 thousand from $277,457 thousand, reflecting a growth of approximately 11.2%[108]. - The total equity attributable to owners of the parent company rose to $308,525 thousand, up from $277,498 thousand, representing an increase of about 11.2%[108]. Shareholder Information - As of June 30, 2023, the total number of shares issued is 1,162,884,800[66]. - Yang Hai holds 8,067,200 shares through Arceus Co., Ltd, which he fully owns, representing approximately 0.69% of the company's equity[69]. - Yang Yu Zheng has a stake of 365,719,200 shares through Caerus Co., Ltd, which accounts for approximately 31.45% of the company's equity[72]. - The North Point Trust Company LLC holds 406,040,800 shares, representing approximately 34.92% of the company's equity[72]. - The combined ownership of Yang Hai, Yang Yu Zheng, and their family members accounts for approximately 67.74% of the company's equity[66]. - The company has granted stock options totaling 2,000,000 shares to Chen Zhao Jun, 200,000 shares to Fang He, Gu Jiong, and Tan Wen, respectively[69]. Employee Compensation and Incentives - The employee costs for the six months ended June 30, 2023, were approximately $37.0 million, compared to approximately $33.5 million in 2022[48]. - The total remuneration for the highest-paid employees, including equity-settled share-based payment expenses, was USD 2,701,000 in 2022, up from USD 1,495,000 in 2021[85]. - The company is focused on performance-based share awards, with a significant portion tied to sales performance metrics[89]. - Future vesting schedules indicate a structured approach to employee incentives, aligning with company performance and growth objectives[91]. Compliance and Governance - The company has maintained compliance with corporate governance codes, ensuring transparency and accountability to shareholders[61]. - The company has purchased appropriate liability insurance for its directors and senior management[77].

Financial Performance - Revenue for the six months ended June 30, 2023, was $276,932 thousand, representing a 24.0% increase from $223,297 thousand in the same period of 2022[2] - Gross profit for the same period was $125,118 thousand, up 42.9% from $87,554 thousand year-over-year[2] - The profit before tax increased significantly by 104.2% to $33,620 thousand compared to $16,466 thousand in the prior year[4] - Net profit attributable to the owners of the parent company was $32,619 thousand, reflecting a 110.7% increase from $15,480 thousand in the previous year[2] - Basic earnings per share rose to 2.89 cents, a 110.9% increase from 1.37 cents in the same period last year[5] - The company reported a gross margin of 45.2%, up from 39.2% in the previous year, indicating improved profitability[2] - Other income and gains for the period were $8,581 thousand, compared to $3,506 thousand in the same period of 2022[4] - The pre-tax profit for the six months ended June 30, 2023, was $128,242,000, compared to $102,696,000 for the same period in 2022, reflecting a year-over-year increase of approximately 24.9%[23] - The profit attributable to the owners of the parent company for the six months ended June 30, 2023, was approximately $32.6 million, an increase of about 110.7% from approximately $15.5 million in the same period of 2022[63] Assets and Liabilities - Total assets less current liabilities amounted to $317,613 thousand as of June 30, 2023, compared to $289,042 thousand at the end of 2022[6] - Current assets totaled $418,543 thousand, an increase from $396,065 thousand at the end of 2022[6] - The company’s non-current liabilities decreased to $9,162 thousand from $11,585 thousand at the end of 2022, indicating improved financial stability[7] - Non-current assets totaled $32,098,000 as of June 30, 2023, a slight decrease from $33,135,000 as of December 31, 2022[16] - The total trade receivables and notes receivable as of June 30, 2023, amounted to $169.471 million, an increase from $149.217 million as of December 31, 2022[34] - The total trade payables and notes payable as of June 30, 2023, were $82.533 million, compared to $60.751 million as of December 31, 2022[35] - Cash and cash equivalents increased from approximately $93.6 million as of December 31, 2022, to approximately $116.8 million as of June 30, 2023[64] - As of June 30, 2023, the total bank loans amounted to $11,708 thousand, an increase from $9,236 thousand as of December 31, 2022, representing a growth of approximately 27%[67] Revenue Breakdown - North America generated $199,017,000 in revenue for the six months ended June 30, 2023, compared to $171,946,000 in 2022, reflecting a growth of 15.7%[15] - Europe revenue increased significantly to $65,293,000 in 2023 from $42,911,000 in 2022, marking a growth of 52.2%[15] - Asia revenue rose to $12,622,000 in 2023, up from $8,440,000 in 2022, representing a growth of 49.4%[15] - Revenue from Amazon channels in the first half of 2023 was approximately $219.6 million, a growth of about 13.9% compared to $192.7 million in the same period of 2022[43] - Revenue from non-Amazon channels surged by approximately 87.7% in the first half of 2023, driven by significant increases in sales at retail chains[44] - Sales in the European market amounted to approximately $65.3 million, reflecting a growth of about 52.2% compared to the same period in 2022[39] - Revenue from the Levoit brand increased by approximately $24.1 million in the first half of 2023, mainly driven by sales of air purifiers and fans[47] Expenses and Costs - The cost of goods sold for the six months ended June 30, 2023, was $128,242,000, representing an increase from $102,696,000 in the same period in 2022[23] - Sales and distribution expenses increased by approximately 26.7% from about $37.7 million for the six months ended June 30, 2022, to about $47.8 million for the six months ended June 30, 2023[52] - Administrative expenses rose by approximately 38.7% from about $31.0 million for the six months ended June 30, 2022, to about $43.0 million for the six months ended June 30, 2023[54] - Research and development expenses increased to $15.9 million for the six months ended June 30, 2023, from $12.3 million in the same period of 2022[54] - The group recorded other expenses of approximately $8.2 million for the six months ended June 30, 2023, compared to approximately $4.9 million in the same period of 2022, primarily due to investment losses[55] Corporate Governance and Compliance - The company has adhered to all applicable corporate governance codes during the reporting period, except for the deviation regarding the roles of the Chairman and CEO being held by the same person[80] - The Board believes that the current arrangement of having the same person serve as both Chairman and CEO enhances leadership consistency and decision-making efficiency[80] - The company will periodically review the separation of the roles of Chairman and CEO to ensure appropriate arrangements in response to changing circumstances[80] - The company emphasizes high standards of ethics, transparency, accountability, and integrity in its operations[79] - The company is committed to maintaining effective internal control measures across all business aspects[79] - The Audit Committee, composed of three independent non-executive directors, reviewed the unaudited interim consolidated financial information for the six months ended June 30, 2023[81] Product Development and Market Strategy - The company continues to invest in product development and innovation, which has led to improved operational efficiency and market performance in 2023[37] - The company plans to enhance its product portfolio and expand its geographical coverage, particularly increasing the market share of Cosori and Levoit products in Europe[74] - New product launches in the first half of 2023 included air purifiers, humidifiers, and air fryers, with additional new products planned for the second half, such as smart food probes and pet feeders[74] - The company's Levoit air purifiers captured approximately 39% of the U.S. market share in sales volume and 27% in sales revenue, marking increases of 7 percentage points and 5 percentage points respectively compared to 2022[39] - The number of activated devices on the Ve Sync app reached approximately 5.4 million, with an increase of about 1 million devices in the first half of 2023[41] Dividends and Shareholder Information - The group declared an interim dividend of HKD 0.0539 per share, totaling approximately HKD 62,696,000 (around $8,000,000) for the period ended June 30, 2023[31] - The board declared an interim dividend of HK$0.0539 per share, equivalent to approximately $0.0069, to be paid on October 20, 2023[76] - The interim report for 2023 will be timely sent to shareholders and published on the company's website and the Hong Kong Stock Exchange's disclosure website[82]

Financial Performance - Total revenue for the fiscal year 2022 was $490.378 million, an increase of 8% from $454.250 million in 2021[13]. - Gross profit for 2022 was $142.289 million, down 19% from $176.107 million in the previous year[13]. - The company reported a loss before tax of $21.841 million, compared to a profit of $51.009 million in 2021[13]. - Net loss attributable to shareholders for 2022 was $16.276 million, a significant decrease from a profit of $41.588 million in 2021[13]. - Total assets as of the end of 2022 were $457.294 million, slightly down from $460.807 million in 2021[14]. - Total liabilities increased to $179.837 million in 2022, up from $146.169 million in the previous year[14]. - The group had a net loss attributable to shareholders of approximately $16.3 million, with a basic loss per share of about $1.44[26]. - Other income and gains for 2022 totaled approximately $4 million, a 193.5% increase from $1.4 million in 2021, largely due to government subsidies[33]. - The group experienced a significant increase in transportation costs, which rose by approximately 42% or $14.8 million compared to 2021, impacting overall gross margin[32]. - The group’s income tax expense changed from approximately $9.4 million in 2021 to an income tax benefit of about $5.5 million in 2022, mainly due to a decrease in profits and deferred tax impacts[43]. Market Expansion and Product Development - The company aims to enhance user experience through technology and innovation, focusing on building a smart ecosystem[15]. - The company is committed to expanding its market presence and developing new products to meet user needs[15]. - Future outlook includes strategic initiatives to improve profitability and operational efficiency[15]. - The company plans to invest in research and development to drive innovation and market expansion[15]. - In 2023, the company plans to launch over 10 new products, including air purifiers, humidifiers, air fryers, and ovens, to expand market share[21]. - The company aims to enhance product innovation capabilities by optimizing product development processes and talent management in 2023[21]. - The company is focused on expanding its market presence in Europe, particularly for its Cosori and Levoit brands[55]. - The company plans to accelerate channel expansion in non-Amazon markets, particularly in Europe and Asia, with a focus on offline retail[22]. - The company aims to enhance its product portfolio, particularly in smart home devices, and plans to launch new products including advanced air purifiers and smart food probes in 2023[55]. Sales and Revenue Growth - In 2022, the company's sales revenue reached $490.4 million, representing an 8.0% year-over-year growth[16]. - The GMV from channel customers increased by approximately 40% compared to 2021, indicating strong market demand for the company's products[16]. - Non-Amazon channel revenue reached $79.9 million, reflecting a significant year-over-year growth of approximately 95%[18]. - The company's European market revenue grew by 33%, with non-Amazon channel sales in Europe increasing by over 500%[18]. - The company achieved over 130% and 170% revenue growth in sales to Target and Walmart, respectively, in the U.S. market[18]. - Non-Amazon channel revenue grew approximately 95.1% year-over-year, increasing its share of total revenue from about 9% in 2021 to approximately 16.3%[25]. - Levoit air purifiers ranked first in the U.S. market with a market share of about 33% and sales growth of approximately 10 percentage points compared to 2021[23]. - The sales of Levoit humidifiers recorded a year-over-year growth of about 68%, achieving a market share of approximately 20.2%[24]. - European market sales increased by approximately $26.9 million, or about 33%, compared to the same period in 2021[25]. Operational Efficiency and Cost Management - The company improved its cash flow management through effective financial tools, achieving positive cash flow[20]. - The company's debt-to-equity ratio as of December 31, 2022, was 7.4%, a decrease from 15.4% on December 31, 2021[53]. - The group’s sales and distribution expenses increased by approximately 29.6% from about $68.8 million in 2021 to approximately $89.2 million in 2022, primarily due to increased marketing and advertising expenses and higher employee costs to support business growth[35]. - Administrative expenses rose by approximately 36.1% from about $51.1 million in 2021 to approximately $69.6 million in 2022, mainly due to increased R&D expenses for product upgrades and new products, as well as higher administrative personnel costs[38]. - Financial costs increased from approximately $0.8 million in 2021 to about $1.7 million in 2022, primarily due to an increase in interest on bank loans and other borrowings[40]. - The management team emphasized a focus on improving operational efficiency, aiming for a 5% reduction in costs over the next year[58]. Employee Management and Development - The company employs a total of 1,280 employees, with 1,130 located in China, 145 in the United States, and 5 in other regions[50]. - The company has established a dual career development path for employees, focusing on both management and professional growth, with a fixed promotion mechanism in place[141]. - The company emphasizes the importance of stakeholder relationships, maintaining transparent communication with employees, customers, suppliers, and investors[142]. - The company has developed qualification standards for key positions, covering areas such as product development, quality, and supply chain, to enhance employee professional capabilities[140]. - The company has implemented a strict recruitment process to ensure equal opportunities for all candidates, regardless of gender, age, or ethnicity[186]. - The average training hours for female employees is 11.61 hours, while for male employees it is 12.80 hours, indicating a training participation rate of 50.20% for females and 49.80% for males[191]. - The company emphasizes a healthy and safe working environment, adhering to local occupational health and safety regulations and achieving ISO45001 certification[192]. - The company provides annual health check-ups for employees, including routine examinations and specialized tests for married women, ensuring employee health and safety[195]. Corporate Governance and Compliance - The company is committed to maintaining high standards of financial management and corporate governance[63][66]. - The board includes members with qualifications in finance, law, and engineering, providing a well-rounded perspective on business decisions[63][67]. - The company has independent non-executive directors with extensive experience in finance and investment, enhancing governance[63][64][65]. - The company has not entered into any management contracts with individuals or entities to perform its business operations during the reporting period[86]. - The company has not engaged in any non-compliance matters that could significantly adversely affect its business, financial condition, or operating performance during the reporting period[130]. - The company strictly adheres to various laws and regulations related to personal data protection, including the Personal Information Protection Law of the People's Republic of China[179]. - The company has established a personal data protection system and implemented technical and organizational measures to ensure data security[179]. - The company promotes a culture of integrity and zero tolerance towards corruption and bribery, in compliance with both Chinese and U.S. laws[180]. Environmental, Social, and Governance (ESG) Initiatives - The company has set environmental goals and continuously reviews its ESG performance to ensure sustainable development practices[149]. - The ESG governance structure includes a board and an ESG working group to oversee and manage sustainability-related matters[150]. - The company’s ESG report is prepared in accordance with the guidelines set by the Hong Kong Stock Exchange, ensuring transparency and consistency in reporting[145]. - The company actively responds to climate change by participating in carbon peak and carbon neutrality initiatives, enhancing climate risk assessment and management[197]. - The company has established specific response strategies for different levels of climate change risks, ensuring effective risk management[197]. - The company has implemented strict disinfection protocols and health monitoring measures in response to varying levels of COVID-19 risk[194]. - The company has identified physical climate risks such as water scarcity and extreme weather events that may impact employee operations and office locations[198]. Customer Satisfaction and Product Quality - Customer satisfaction rate reached 91.8% during the reporting period, with no significant complaints received regarding products or services[166]. - The company has implemented a strict quality control process, including on-site quality monitoring and product inspection, ensuring that no products were recalled for safety or health reasons during the reporting period[164]. - The company utilizes two major customer service platforms, including Zendesk for complaint management and a self-developed after-sales system for streamlined service operations[165]. - Vesync's smart home products, including smart plugs and air purifiers, have received widespread acclaim for their performance, reliability, and compatibility with virtual assistants[169][170]. - The air purifier is noted for its effectiveness in air purification and quiet operation, further enhancing its appeal to consumers[170]. Innovation and Intellectual Property - The company registered a total of 407 patents, with 126 new patents added during the reporting period[182]. - The company has established a knowledge property department responsible for formulating intellectual property strategies and handling patent applications and litigation[182]. - The company has implemented a patent reward system to encourage employee innovation[182].

Revenue Performance - Revenue for the year ended December 31, 2022, was $490,378 thousand, representing an 8.0% increase from $454,250 thousand in 2021[2] - Total revenue for the year ended December 31, 2022, was approximately $405.1 million, an increase from $338.5 million in 2021, primarily from sales to a major retail customer[17] - The total revenue for 2022 was $490.4 million, compared to $454.3 million in 2021, reflecting a growth of approximately 8%[18] - Revenue from external customers in North America for 2022 was $366.2 million, up from $358.1 million in 2021, while Europe saw an increase to $107.9 million from $81.0 million[15] - Revenue from non-Amazon channels grew approximately 95.1%, increasing its share of total revenue from about 9% in 2021 to approximately 16.3%[48] - Sales in the European market increased by approximately $26.9 million, or about 33.2%, compared to the same period in 2021[48] Profitability and Loss - Gross profit decreased to $142,289 thousand, down 19.2% from $176,107 thousand in the previous year, resulting in a gross margin of 29.0%, a decline of 9.8 percentage points[2] - The company reported a loss before tax of $21,841 thousand, compared to a profit of $51,009 thousand in 2021, marking a 142.8% decrease[3] - Net loss attributable to equity holders of the parent was $16,276 thousand, a significant decline from a profit of $41,588 thousand in the prior year, reflecting a 139.1% decrease[5] - Basic and diluted loss per share was $(1.44) cents, compared to earnings of 3.68 cents per share in 2021, indicating a 139.1% decline[5] - The company reported a pre-tax loss of $21,841,000 for 2022, compared to a profit of $51,009,000 in 2021[36] - The company reported a loss attributable to equity holders of approximately $16.3 million for the year ended December 31, 2022, compared to a profit of approximately $41.6 million for the year ended December 31, 2021[66] Assets and Liabilities - Total assets less current liabilities decreased to $289,042 thousand in 2022 from $327,991 thousand in 2021[7] - Current liabilities increased to $168,252 thousand from $132,816 thousand in 2021, indicating a rise in short-term obligations[6] - Non-current assets totaled $61,229 thousand, an increase from $45,138 thousand in the previous year[6] - Non-current assets in North America decreased to $5.6 million in 2022 from $6.8 million in 2021, while non-current assets in China increased to $25.3 million from $22.9 million[16] - Trade receivables increased to $149,255,000 in 2022 from $106,398,000 in 2021, with a provision for impairment of $175,000[38] - Trade payables increased to $60,751,000 in 2022 from $37,739,000 in 2021[42] Research and Development - The company engaged in research and development of smart home appliances and devices, primarily manufacturing in China and selling to markets including the USA, Canada, and several European countries[10] - Research and development costs increased significantly to 29,954 thousand USD in 2022 from 17,308 thousand USD in 2021, marking a growth of about 73.3%[25] - The company established a product development and quality control team consisting of 519 employees, accounting for 40.5% of the total workforce[48] Income and Expenses - The company reported other income and gains of $4,042 thousand, up from $1,377 thousand in 2021, indicating growth in additional revenue streams[3] - Other income included bank interest income of $775,000 in 2022, up from $665,000 in 2021, and government grants increased to $2.6 million from $469,000[21] - Sales and distribution expenses rose by approximately 29.6% to about $89.2 million in 2022, driven by increased marketing and advertising expenses to boost market share[59] - Administrative expenses increased by approximately 36.1% to about $69.6 million in 2022, primarily due to higher R&D expenses for product upgrades and new product development[61] - Financial costs increased from approximately $0.8 million in 2021 to about $1.7 million in 2022, mainly due to higher interest on bank loans and other borrowings[63] Taxation - The total tax expense for the year was (5,524) thousand USD, a decrease from 9,421 thousand USD in 2021, indicating a significant reduction in tax liabilities[33] - The company reported a tax expense of $(5,524,000) for 2022, compared to $9,421,000 in 2021[36] - The company’s effective tax rate in China is 25%, with certain subsidiaries qualifying for reduced rates of 15% due to high-tech enterprise status and regional tax incentives[64] - The group’s deferred tax impact contributed to a tax benefit of approximately $5.5 million for the year ended December 31, 2022, compared to a tax expense of approximately $9.4 million for the year ended December 31, 2021[65] Inventory and Impairments - The company’s inventory impairment net amount was 2,028 thousand USD in 2022, up from 1,625 thousand USD in 2021, indicating challenges in inventory management[24] - Inventory provisions increased to $(8,045,000) in 2022 from $(6,017,000) in 2021[38] - The net impairment of trade receivables was recorded at (204) thousand USD in 2022, compared to 172 thousand USD in 2021, indicating a deterioration in receivables quality[24] Market Position and Strategy - Levoit air purifiers ranked first in the US market with a market share of approximately 33% in sales volume and 23% in sales revenue, an increase of about 10 percentage points and 7 percentage points compared to 2021[46] - Levoit humidifiers achieved a year-on-year sales growth of approximately 68%, becoming the second highest in sales revenue in the US market with a market share of about 20.2%[47] - The company faced challenges in 2022, including increased sales costs and inventory reduction by distributors, prompting a strengthening of organizational capabilities[46] - The company aims to enhance product advantages, operational efficiency, and regional expansion capabilities to improve market performance[46] - The company plans to expand its geographical coverage, particularly increasing market share for Cosori and Levoit products in Europe[78] Corporate Governance and Compliance - The company adopted revised Hong Kong Financial Reporting Standards effective January 1, 2022, with no significant impact on financial performance due to the absence of business combinations during the year[12] - The audit committee reviewed the consolidated financial statements for the year ending December 31, 2022, and recommended their approval to the board[86] - The company has adopted the corporate governance code and confirmed compliance with all applicable provisions during the reporting period[83] Shareholder Returns - The company did not declare any final ordinary or special dividends for 2022, compared to 9,274 thousand USD in dividends declared in 2021[35] - The company has not recommended any final dividend for the year ending December 31, 2022[79] - The company repurchased a total of 2,165,000 shares during the reporting period at a total cost of HKD 15,963,038.07, with a price range of HKD 6.67 to HKD 8.16 per share[81][82] Future Outlook - The company aims to enhance its product portfolio in 2023, focusing on smart home devices and plans to launch advanced air purifiers, air humidifiers, dual-basket air fryers, and other new categories[78] - The company is committed to developing the Ve Sync application into a home IoT platform, enhancing consumer engagement[78] - The company will continue to invest in technology to support its product development and quality control capabilities[78]

Financial Performance - In the first half of 2022, the company's revenue was approximately $223.3 million, representing a growth of about 12.0% compared to $199.3 million in the same period of 2021[17]. - The gross profit for the first half of 2022 was approximately $87.6 million, slightly down by about 1.1% from the previous year[17]. - The net profit attributable to the parent company was approximately $15.5 million, a decrease of about 51.6% compared to $32.0 million in the first half of 2021[17]. - Total revenue for the first half of 2022 was approximately $223.3 million, an increase of about 12.1% compared to $199.3 million in the first half of 2021[19]. - Revenue from North America was approximately $171.9 million, an increase of about 7.4% from $160.2 million in the previous year[21]. - Revenue from Europe increased approximately 28.1% year-over-year, driven by sales growth in Spain, Germany, and the UK[21]. - The company's profit attributable to owners for the six months ended June 30, 2022, was approximately $15.5 million, a decrease from $32.0 million for the same period in 2021[33]. - The pre-tax profit for the period was $16.466 million, a decrease from $36.982 million in the previous year, indicating a decline of approximately 55.5%[74]. - Basic earnings per share for the period were 1.37 cents, down from 2.75 cents in the same period of 2021[74]. - The company reported a profit of $15,480 thousand for the six months ended June 30, 2022[77]. - The total comprehensive income for the period was $12,823 thousand, reflecting a decrease due to foreign exchange differences[77]. Sales and Market Performance - The number of activated devices on the VeSync app reached approximately 3.5 million as of June 30, 2022, an increase of about 25% from approximately 2.8 million as of December 31, 2021[13]. - The sales of humidifiers grew over 100% year-on-year, with the product achieving the 1 market share on Amazon[14]. - Non-Amazon channel revenue increased by approximately 182% year-on-year, rising from about 5.4% of total revenue in the first half of 2021 to about 13.7% in the first half of 2022[16]. - Sales in the European market increased by approximately $9 million, or about 28.1%, compared to the first half of 2021[16]. - The overall conversion rate on Amazon's US site grew by about 19% in the first half of 2022 compared to the same period in 2021[16]. - The Levoit air purifier ranked first in the US market in both sales volume and sales revenue according to NPD Group statistics[13]. - Revenue from Levoit and Cosori brands increased to approximately $197 million for the six months ended June 30, 2022[47]. Expenses and Costs - Sales and distribution expenses increased approximately 24.4% to about $37.7 million from $30.3 million in the previous year, driven by increased marketing and advertising expenses[26]. - Administrative expenses rose approximately 37.7% to about $31.0 million from $22.5 million, mainly due to increased R&D expenses for product upgrades and new products[28]. - Financial costs increased from approximately $0.4 million to about $0.9 million, primarily due to higher bank loan interest[30]. - The cost of goods sold for the six months ended June 30, 2022, was $102,696,000, compared to $84,327,000 in 2021, reflecting a significant increase[104]. Assets and Liabilities - As of June 30, 2022, the total bank borrowings amounted to approximately $38.9 million, an increase from $34.9 million as of December 31, 2021[35]. - The company's cash and cash equivalents decreased to $94,176 thousand, down 25.5% from $126,659 thousand as of December 31, 2021[75]. - Total liabilities remained stable with current liabilities at $131,910 thousand, slightly down from $132,816 thousand as of December 31, 2021[76]. - The total inventory as of June 30, 2022, was $124,711,000, a decrease of 3% from $128,547,000 as of December 31, 2021[117]. - Trade receivables as of June 30, 2022, amounted to $118,659,000, an increase of 11.9% from $106,019,000 as of December 31, 2021[119]. Corporate Governance and Structure - The company has a significant ownership structure, with directors and key executives holding approximately 67.84% of the company's equity, totaling 788,909,200 shares[55]. - The company has maintained compliance with corporate governance codes, ensuring effective internal control measures and high standards of ethics and transparency[53]. - The company is committed to reviewing and considering the separation of the roles of Chairman and CEO to ensure appropriate arrangements in response to changing circumstances[53]. - The company has maintained the public float as required by the listing rules throughout the reporting period[70]. Future Plans and Investments - The company plans to allocate 15% of the net proceeds (approximately HKD 249.4 million) for R&D of new products and upgrades, with a timeline for utilization by December 2023[50]. - The company aims to expand its market share in key regions, including North America, Europe, and Japan, with a focus on increasing brand awareness and sales channels[48]. - The company has taken measures to mitigate the impact of COVID-19, including enhancing health protocols and ensuring employee vaccinations[45]. - The company plans to acquire or collaborate with companies in the data technology sector, allocating 15% of total funds, which equals HKD 249.4 million[51]. Shareholder Information - The company repurchased a total of 2,165,000 shares at a total cost of HKD 15,963,038.07, with a highest price per share of HKD 8.16 and a lowest price of HKD 6.67[72][71]. - The company declared a final ordinary dividend of HKD 0.064 per share for the year ended December 31, 2021, totaling approximately $19,071,000, compared to $18,561,000 for the previous period[113]. - The total remuneration paid to key management personnel amounted to $1,017,000 for the six months ended June 30, 2022, down from $1,071,000 in the same period of 2021, representing a decrease of approximately 5%[123].

Financial Performance - In 2021, the company's sales revenue reached $454.3 million, representing a year-over-year growth of approximately 30.2%[15] - The group's revenue for 2021 was $454.3 million, a 30.2% increase from $348.9 million in 2020[26] - Gross profit for 2021 was $176.1 million, up approximately 15.5% from $152.4 million in 2020, with a gross margin of 38.8%[31] - Net profit attributable to the parent company was $41.6 million, a decrease of about 24.0% from $54.7 million in 2020[26] - Revenue from Vendor Central increased by approximately 45.4% in 2021, while revenue from Seller Central decreased by about 27.0%[29] - Sales from North America rose by 18.4% to $358.1 million, driven by increased sales of home appliances and kitchen products[30] - Revenue from Europe nearly doubled, increasing by about 99.0% to $81.0 million, primarily due to sales growth in the UK, Germany, Spain, and Italy[30] - Other income and gains totaled approximately $1.4 million in 2021, a 304.0% increase from $0.3 million in 2020, mainly due to increased bank interest income[32] - The profit attributable to the company's owners decreased from $54.7 million in 2020 to $41.6 million in 2021[43] Asset and Equity Growth - The company's non-current assets increased to $45.1 million in 2021, up from $30.6 million in 2020[13] - Total assets rose to $460.8 million in 2021, compared to $369.7 million in 2020[13] - The company's total equity increased to $314.6 million in 2021, up from $260.1 million in 2020[13] - Cash and cash equivalents decreased from $183.5 million in 2020 to $126.7 million in 2021, while total bank borrowings increased significantly from $2.9 million to $34.9 million[44][45] - The company's debt-to-equity ratio as of December 31, 2021, was 15.4%, an increase from 5.7% as of December 31, 2020[51] Market Expansion and Product Development - The company plans to expand its product offerings in 2022, including new categories such as vacuum cleaners and pressure cookers, alongside its main products like air purifiers and air fryers[19] - The company achieved significant progress in channel expansion in 2021, establishing sales partnerships with major retailers like Walmart, Best Buy, and Target[22] - The company will accelerate its market expansion efforts in Europe and Japan in 2022, integrating its brand and establishing a global brand organization[19] - The company plans to continue expanding its product offerings and market presence, leveraging strong consumer demand for home products[26] - New product launches in 2021 included coffee grinders, indoor grills, air fryers, and new Levoit air purifiers and humidifiers[55] User Engagement and App Performance - The number of connected smart devices on the VeSync platform increased from approximately 1.8 million to 2.8 million by the end of 2021[15] - The number of activated devices on the VeSync app increased by approximately 55.6% from about 1.8 million as of December 31, 2020, to approximately 2.8 million as of December 31, 2021[25] - The VeSync App's iOS App Store ranking improved from 171 to 81 in the lifestyle category by December 31, 2021[15] - The VeSync app's ranking in the App Store for lifestyle categories improved by 90 places, from 171 to 81, between December 31, 2020, and December 31, 2021[25] Operational and Cost Management - Sales and distribution expenses rose by approximately 45.7% to $68.8 million, driven by increased marketing and advertising expenses[35] - The company's administrative expenses increased by approximately 31.4% from $38.9 million in 2020 to $51.1 million in 2021, primarily due to increased R&D expenses for product upgrades and new products, as well as higher office expenses due to an increase in employee count[37] - Total financial costs decreased from $1.14 million in 2020 to $0.76 million in 2021, mainly due to a reduction in bank loan interest[40] - The company's income tax expenses rose from approximately $5.3 million in 2020 to about $9.4 million in 2021, driven by increased taxable income from sales and profits in the US and other countries[42] Supply Chain and Logistics - The group has established a professional logistics management team to effectively arrange and manage logistics transportation, ensuring timely delivery to meet customer procurement and sales needs[146] - The group has maintained strategic partnerships with multiple leading logistics companies, securing shipping space and ensuring timely delivery despite global supply chain challenges[147] - In 2021, the group expanded its overseas warehousing centers in countries such as the USA, Germany, UK, Canada, Japan, and UAE to enhance global supply chain responsiveness[147] - The group has implemented a scientific inventory baseline to ensure sufficient stock levels and timely supply during peak sales seasons[147] Compliance and Risk Management - The group strictly adheres to product safety, liability, and environmental regulations across multiple regions, including the U.S. Consumer Product Safety Act and EU compliance regulations[155] - The group emphasizes a comprehensive compliance management approach to ensure adherence to Amazon's operational guidelines, resulting in no account anomalies or freezes in recent years[150] - The group has established a risk management framework to address potential disruptions from public health crises, ensuring business continuity[152] - The group has established a dedicated product compliance department in 2021 to ensure adherence to safety, responsibility, and environmental regulations in various sales regions[156] Environmental, Social, and Governance (ESG) Initiatives - The company has implemented a robust ESG governance framework, with the board overseeing ESG strategies and performance[172] - Vesync Co., Ltd aims to create long-term value by integrating sustainable development into daily operations[173] - The ESG working group regularly reports to the board on ESG matters and ensures compliance with relevant laws and regulations[175] - The company is committed to improving environmental sustainability and monitoring its performance closely[140] Employee and Management Structure - As of December 31, 2021, the total number of employees is 1,236, with 570 female employees and 666 male employees[200] - The company has a total of 1,176 full-time grassroots employees, 46 full-time middle management, and 14 full-time senior management[200] - The company has a strong management team with extensive experience in finance and investment, enhancing its strategic decision-making capabilities[67][68] Shareholder and Stock Information - The company issued 281,000,000 shares at a price of HKD 5.52 per share during its global offering, raising a net amount of HKD 1,662.9 million after expenses[71] - The board proposed a final ordinary dividend of HKD 0.064 per share (approximately USD 0.0082) for the reporting period, compared to HKD 0.1274 per share in 2020[75] - Approximately 79.1% of total revenue was generated from the top five customers, with the largest customer contributing about 74.5% of total revenue[81] - The company has not entered into any equity-linked agreements during the reporting period[100]

Financial Performance - For the first half of 2021, Vesync Co., Ltd reported revenue of $199.3 million, a 54.2% increase compared to $129.3 million for the same period in 2020[8]. - Gross profit for the first half of 2021 was $88.6 million, reflecting a year-on-year growth of 43.4%[8]. - Net profit attributable to the owners of the parent company was $32.0 million, up 42.3% from $22.5 million in the first half of 2020[8]. - Revenue increased to $199.3 million for the six months ended June 30, 2021, primarily driven by online sales[47]. - Revenue for the six months ended June 30, 2021, was $199,290,000, representing a 54% increase from $129,254,000 in the same period of 2020[113]. - The company reported a net profit attributable to shareholders of $31.98 million, compared to $22.48 million in the prior year, representing a 42% increase[90]. - The total tax expense for the six months ended June 30, 2021, was $5,001,000, compared to $4,647,000 in 2020, showing an increase of 7.6%[136]. Sales and Market Growth - The number of activated devices on the VeSync app reached approximately 2.2 million, an increase of 83.3% from 1.2 million as of June 30, 2020[7]. - Sales through the Seller Central channel amounted to $54.3 million, while Vendor Central sales reached $134.1 million for the first half of 2021[11]. - Total revenue from North America increased by 46.1% in the first half of 2021, primarily driven by sales growth in the U.S.[14]. - Revenue from the Vendor Central program increased by 69.5% in the first half of 2021, driven by increased product sales and the number of products sold through the program[12]. - Revenue from the Seller Central program rose by 19.1% in the first half of 2021, primarily due to increased sales of the Cosori smart air fryer and a higher number of products sold in Europe and Asia[12]. - Revenue from other channels, including chain retailers, surged by 139.2% in the first half of 2021, mainly due to increased sales of Levoit air purifiers and Cosori smart air fryers[12]. Product Development and Innovation - New product launches and technological iterations are ongoing, aimed at improving user experience and home automation[7]. - The company plans to enhance its product portfolio, particularly in smart home devices, and has launched new products such as the Cosori coffee grinder and Levoit air purifier[48]. - The company is investing in technology and data insights to improve user interaction with smart products and enhance its IoT platform[49]. - The company allocated 15% of its funds, amounting to HKD 249.4 million, for new product development, with an expected utilization timeline by December 2023[54]. - The company plans to continue expanding its product offerings and market presence, focusing on new technology development[90]. Expenses and Financial Management - Selling and distribution expenses rose by 55.2% to $30.3 million in the first half of 2021, driven by increased platform commissions and marketing expenses[20]. - Administrative expenses increased by approximately 71.5% to $22.5 million in the first half of 2021, primarily due to higher R&D costs and increased personnel expenses to support business growth[24]. - Financial costs decreased to $0.4 million in the first half of 2021, down from $0.6 million in the same period of 2020, mainly due to the repayment of bank loans[28]. - The company incurred a depreciation expense of 2,448 thousand USD, which includes 1,861 thousand USD for right-of-use assets and 587 thousand USD for property, plant, and equipment[104]. Cash Flow and Assets - As of June 30, 2021, the group's cash and cash equivalents amounted to $194.8 million, up from $183.5 million as of December 31, 2020[34]. - Total current assets increased to $397.45 million from $339.12 million, driven by higher inventory and cash balances[92]. - The company reported a net cash flow from operating activities of $(29,718) thousand USD, compared to a net cash flow of 36,982 thousand USD before tax for the same period in 2020[104]. - The total liabilities increased to $127.74 million from $109.59 million, primarily due to higher trade payables[94]. Shareholder Information and Corporate Governance - The company holds a 67.31% equity interest, totaling 784,327,200 shares, as of June 30, 2021[63]. - Major shareholder North Point Trust Company L.L.C. holds 406,040,800 shares, representing approximately 34.85% of the company's equity[73]. - The company has committed to maintaining high standards of corporate governance and transparency throughout its operations[62]. - The company has adhered to all applicable corporate governance codes during the reporting period[62]. Future Outlook and Strategic Initiatives - Future outlook indicates a projected revenue growth of 20% for the next fiscal year, driven by new product launches and market expansion strategies[162]. - The company plans to expand its market presence in Europe and North America, targeting a 15% increase in market share by the end of 2022[161]. - The company has initiated discussions for potential acquisitions to enhance its product portfolio and technological capabilities[162]. - The company has set a performance guidance of HKD 180 million in revenue for the next six months, indicating a continued growth trajectory[160].