Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook for its stock performance in the near term [2][3]. Core Views - The company's revenue for 2023 was $1.375 billion, a decrease of 30.9% year-on-year, with a net profit attributable to shareholders of -$37 million, down 126.7% year-on-year [1][2]. - The decline in revenue was primarily due to weak consumer demand in North America caused by high inflation and unexpected cold weather, along with cautious inventory management by core distributors [2]. - The company expects a recovery in 2024, driven by improved end-user demand and the conclusion of the inventory destocking cycle, which should lead to faster revenue growth [2]. Financial Performance Summary - **Revenue**: 2023 revenue was $1.375 billion, down 30.9% from the previous year. The OPE segment generated $810 million, down 33.7%, while power tools revenue was $550 million, down 27.3% [1][2]. - **Net Profit**: The net profit for 2023 was -$37 million, a significant decline from the previous year, with adjusted net profit also at -$37 million [1][2]. - **Gross Margin**: The gross margin for 2023 was 28.1%, a decrease of 2.3 percentage points year-on-year, primarily due to inventory impairment [2]. - **Expense Ratios**: The expense ratios for sales, management, R&D, and financial expenses were 17.8%, 7.0%, 5.1%, and -0.2%, respectively, reflecting increases in operational costs [2]. 2024 Outlook - The company anticipates a recovery year in 2024, with projected net profits of $74 million, $135 million, and $156 million for 2024, 2025, and 2026, respectively, representing year-on-year growth rates of 300.6%, 80.8%, and 15.7% [2][3]. - The expected price-to-earnings ratios for 2024, 2025, and 2026 are 19x, 10x, and 9x, respectively, indicating a favorable valuation for investors [3].

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company's fundamentals have confirmed a bottom, with channel replenishment and real estate recovery expected to drive growth [4] - Despite a significant decline in revenue in 2023, the company is projected to recover in 2024, with potential for double-digit growth in 2025-2026 [6] Financial Summary - The company reported a revenue of $1.375 billion in 2023, a year-over-year decline of 30.9%, primarily due to changes in inventory policies from its core customer, Lowe's [5] - The net loss for 2023 was $0.372 billion, with a gross margin of 28.14% [5] - Revenue forecasts for 2024 and 2025 have been adjusted to $1.444 billion and $1.662 billion, respectively, with a projected net profit of -$0.017 billion in 2024 and $0.050 billion in 2025 [4][7] - The company’s current price-to-book (PB) ratio is 1.34, significantly below its historical average of 2.64 [4] Growth Drivers - Key growth drivers include the replenishment of inventory by core customers and a recovery in the U.S. real estate market, with forecasts indicating a 3.3% and 9.8% increase in new home sales for 2024 and 2025, respectively [6]

Revenue and Profit Performance - Revenue for 2023 decreased by 30.9% to $1,374.7 million compared to $1,989.3 million in 2022[2] - Net loss for 2023 was $37.2 million, compared to a net profit of $139.3 million in 2022[3] - Adjusted net loss for 2023 was $36.7 million, compared to an adjusted net profit of $151.3 million in 2022[3] - Revenue decreased by 30.9% from $1,989.3 million in 2022 to $1,374.7 million in 2023, primarily due to macroeconomic uncertainty and adverse weather conditions in key regions[13] - The company recorded a net loss of $37.2 million in 2023, compared to a net profit of $139.3 million in 2022, with a net loss margin of 2.7%[22] - Net loss for the year ended December 31, 2023, was $37.15 million, compared to a net profit of $139.28 million in 2022[23] - Adjusted net loss for 2023 was $36.65 million, compared to an adjusted net profit of $151.31 million in 2022[23] - Revenue decreased to $1,374,714K in 2023 from $1,989,280K in 2022, a decline of 30.9%[57] - Gross profit dropped to $386,833K in 2023 from $603,873K in 2022, a decrease of 35.9%[57] - Operating loss of $27,225K in 2023 compared to an operating profit of $189,145K in 2022[57] - Net loss for the year was $37,150K in 2023, down from a net profit of $139,278K in 2022[57] - Total comprehensive loss for the year was $47,990K in 2023, compared to a comprehensive income of $126,106K in 2022[58] - The company reported a net loss attributable to equity shareholders of USD 37.15 million for the year ended December 31, 2023, compared to a profit of USD 139.28 million in the previous year[56] Segment Performance - Outdoor Power Equipment (OPE) segment revenue decreased by 33.7% to $811.4 million in 2023 from $1,223.5 million in 2022[4] - Power Tools segment revenue decreased by 27.3% to $548.5 million in 2023 from $754.9 million in 2022[4] - OPE product sales revenue decreased by 33.7% from $1,223.5 million in 2022 to $811.4 million in 2023, driven by industry destocking cycles and adverse weather in North America[13] - Electric tool sales revenue decreased by 27.3% from $754.9 million in 2022 to $548.5 million in 2023, due to macroeconomic factors and housing demand slowdown[13] - Electric Tools segment revenue decreased to $548.544 million in 2023 from $754.924 million in 2022, a decline of 27.3%[69] - Outdoor Power Equipment segment revenue dropped to $811.408 million in 2023 from $1.223 billion in 2022, a decrease of 33.7%[69] Regional Performance - North America revenue decreased by 37.3% from $1,499.9 million in 2022 to $940.2 million in 2023, while China revenue increased by 1.1% from $99.5 million to $100.6 million[14] - North America revenue fell to $940.197 million in 2023 from $1.499 billion in 2022, a 37.3% decline[70] - Europe revenue decreased to $282.359 million in 2023 from $317.247 million in 2022, an 11% drop[70] Financial Metrics and Ratios - Gross profit decreased by 35.9% from $603.9 million in 2022 to $386.8 million in 2023, with gross margin declining from 30.4% to 28.1% due to inventory impairment provisions[15] - Cash and cash equivalents decreased to $296.3 million as of December 31, 2023, from $466.7 million in 2022[25] - Inventory turnover days increased to 209 days in 2023 from 157 days in 2022, primarily due to reduced customer orders[28] - Trade receivables and notes turnover days increased to 77 days in 2023 from 47 days in 2022, mainly due to reduced supply chain financing[28] - The company's capital gearing ratio decreased to 0.3 as of December 31, 2023, from 0.4 in 2022[27] - Current assets decreased to $1,315,211K in 2023 from $1,433,989K in 2022[59] - Non-current assets increased to $481,174K in 2023 from $428,515K in 2022[59] - Total equity increased slightly to $960,621K in 2023 from $946,099K in 2022[63] - Other losses net amounted to $8.333 million in 2023, compared to $52.254 million in 2022, a significant improvement[71] - Net finance costs were $3.290 million in 2023, down from $22.265 million in 2022[72] - Total income tax expense was $11.706 million in 2023, compared to $22.112 million in 2022[74] - Trade payables and notes payable decreased to $224.954 million in 2023 from $294.452 million in 2022, with $156.043 million due within 3 months in 2023 compared to $220.610 million in 2022[82] - Other payables and accrued expenses decreased to $142.507 million in 2023 from $177.166 million in 2022, with salaries, wages, bonuses, and benefits decreasing to $13.988 million from $25.355 million[83] Investments and Capital Expenditures - The company invested in management transformation, adopting advanced management tools and top-tier consulting services to enhance strategic planning and execution capabilities[10] - Capital expenditures for 2023 were $77.1 million, primarily used for investments in factories, production equipment, and IT systems[29] - Capital commitments for factory and building construction and machinery and equipment purchases were $67.5 million as of December 31, 2023, down from $428.2 million in 2022[30] - The fair value of the company's investment in Quanfeng Automotive Precision Technology was $131.6 million, representing 7.3% of total assets as of December 31, 2023[33] - The company sold its interest in Quanfeng Automotive Precision Technology's convertible bonds, receiving $19.3 million in proceeds and recording an unrealized loss of $0.6 million in 2023[34] - Property, plant, and equipment additions amounted to $77.1 million in 2023, down from $81.2 million in 2022[77] - Capital commitments for construction of plants and buildings decreased significantly to $66.435 million in 2023 from $426.965 million in 2022[86] Research and Development - R&D costs increased by 7.5% from $65.7 million in 2022 to $70.7 million in 2023, driven by investments in product development and increased R&D personnel[18] - R&D expenses increased to $70.673 million in 2023 from $65.733 million in 2022, reflecting a 7.5% growth[73] Sales and Distribution - Sales and distribution expenses increased by 14.0% from $214.0 million in 2022 to $244.1 million in 2023, due to higher marketing expenses and warranty provisions[17] - Inventory write-down provisions surged to $47.058 million in 2023 from $12.248 million in 2022[73] Brand and Product Performance - EGO brand lithium battery platform global sales reached approximately 14 million units by the end of 2023[5] - EGO achieved double-digit revenue growth in Europe and expanded its sales and distribution network[6] - FLEX launched over 40 new products globally, including the STACK PACK and expanded its 24V platform[7] - DEVON achieved high double-digit growth in 2023, with 20V battery pack sales exceeding 4 million units in the Chinese market[9] Future Outlook - The company expects financial performance to recover and grow in 2024 and beyond, supported by increased lithium product market penetration and improved customer demand[12] - The company is expanding its global manufacturing capabilities, including the Vietnam factory, and has launched the second phase of its new energy industrial park[11] Corporate Governance and Shareholder Information - The company maintains high corporate governance standards, with the Chairman and CEO roles held by Mr. Pan Longquan, who is also the founder, ensuring consistent leadership and efficient decision-making[48][49] - The company adopted the 2024 Share Scheme on January 29, 2024, as per the Listing Rules Chapter 17[51] - The Audit Committee, composed of three independent non-executive directors, reviewed the accounting principles and audited consolidated financial statements for the year ended December 31, 2023[52] - The company's registered office is located at 22/F, West Tower, 7 Cheung Shun Street, Lai Chi Kok, Kowloon, Hong Kong[65] - The company proposed a special dividend of USD 0.0354 per share (equivalent to HKD 0.2764 per share) for the year ended December 31, 2023, with no final dividend recommended for the same period[46] - The company will suspend share transfer registration from May 30, 2024, to June 4, 2024, to determine shareholders eligible to attend the Annual General Meeting (AGM) and from June 11, 2024, to June 13, 2024, for the special dividend record date[47] Employee and Workforce Information - The company had 6,173 employees as of December 31, 2023, down from 6,990 in 2022, with total employee costs of $209.0 million compared to $214.4 million in 2022[39] - The company's male to female employee ratio was approximately 1.56:1 as of December 31, 2023[39] Proceeds and Capital Allocation - The company's net proceeds from the global offering in 2021 were approximately HK$3,470.1 million, with HK$1,930.5 million remaining as of June 30, 2023[41] - The company reallocated HK$430.5 million (22.3%) of the remaining 2021 net proceeds to expand and upgrade production facilities, with HK$192.8 million still unused as of December 31, 2023[42] - The company allocated HK$469.1 million (24.3%) of the remaining 2021 net proceeds to product research and development, with HK$146.9 million still unused as of December 31, 2023[42] - The company fully utilized the HK$773 million net proceeds from the 2023 placement and top-up subscription by December 31, 2023[44] - Net proceeds of HKD 773.0 million were fully utilized, with 40.0% (HKD 309.2 million) allocated to enhancing sales and distribution channels, 30.0% (HKD 231.9 million) to product development, 10.0% (HKD 77.3 million) to upgrading production facilities, and 20.0% (HKD 154.6 million) to general working capital purposes[45] - The company issued 20,835,000 shares in 2023, raising net proceeds of $99.205 million after deducting issuance costs[84][85] Foreign Exchange and Derivatives - The company's net exchange gain in 2023 was $4.9 million, compared to a net foreign exchange loss of $15.5 million in 2022[36] - The net realized and unrealized loss on derivative financial instruments (mainly foreign exchange forward contracts) in 2023 was $12.2 million, down from $23.3 million in 2022[36] Customer and Supplier Concentration - The largest customer accounted for 34.5% of total revenue in 2023, down from 49.8% in 2022, while the top five customers accounted for 59.3% of total revenue, down from 70.5% in 2022[38] - The largest supplier accounted for 21.7% of total procurement in 2023, up from 10.8% in 2022, while the top five suppliers accounted for 33.8% of total procurement, up from 27.9% in 2022[38]

Financial Performance - Revenue for the six months ended June 30, 2023, was US$738,545,000, a decrease of 26.3% compared to US$1,002,021,000 in 2022[12] - Gross profit for the same period was US$237,296,000, down 18.2% from US$290,046,000 in 2022[12] - Profit before tax decreased by 24.3% to US$57,851,000 from US$76,456,000 in the previous year[12] - Profit for the period was US$49,051,000, representing a decline of 22.7% compared to US$63,473,000 in 2022[12] - Earnings per share (basic and diluted) were both US$0.10, down 23.1% from US$0.13 in the prior year[12] - Total comprehensive income for the period was US$20.744 million, a decrease of 54.7% from US$45.766 million in the previous year[129] - Adjusted net profit for the period was US$49.5 million, down from US$73.6 million in the same period of 2022[48] Revenue Breakdown - Revenue from power tools decreased by 28.6% from US$401.2 million to US$286.3 million, attributed to unfavorable macroeconomic factors and a slowdown in housing demand[27] - Revenue from OPE products decreased by 25.3% from US$595.9 million to US$445.2 million during the same period, primarily due to industry destocking and unfavorable weather[27] - Revenue from North America decreased by 30.3% to US$485.3 million, while revenue from China decreased by 17.0% to US$54.2 million[28] - Revenue from the OBM business accounted for 78.1% of total revenue, up from 71.3% in the same period last year[18] Cost and Expenses - Selling and distribution expenses decreased by 7.3% from US$101.4 million to US$94.0 million, primarily due to decreased sales[35] - Administrative and other operating expenses increased slightly by 0.7% from US$40.0 million to US$40.3 million, reflecting continued investments in digital transformation[36] - Research and development costs increased by 6.6% from US$31.4 million for the six months ended June 30, 2022, to US$33.5 million for the six months ended June 30, 2023[42] - Net finance costs decreased by 84.1% from US$9.5 million for the six months ended June 30, 2022, to US$1.5 million for the six months ended June 30, 2023[42] Market Strategy and Innovation - The company focuses on user-centric innovation and has a robust brand portfolio including EGO, FLEX, SKIL, DEVON, and X-TRON[4] - Chervon aims to expand its market share through continuous innovation in lithium-ion battery technology and smart manufacturing systems[5] - The company is committed to becoming a global leader in power tools and outdoor power equipment in the lithium-ion, intelligent, and digital era[6] - More than 90 new products were introduced during the reporting period, with lithium-ion battery powered products accounting for approximately 90% of the new offerings[14] Operational Developments - The CHERVON Green Power Industrial Park Phase II commenced operations, enhancing production capacity with advanced automation technologies[23] - The company is adjusting its development plan for the CHERVON Smart Production Industrial Park to align with market trends and customer demands[23] - The company continues to enhance its multi-channel sales and distribution network across key markets, including North America, Europe, Oceania, and Asia[18] Financial Position and Assets - As of June 30, 2023, the Group had cash and cash equivalents of US$396.3 million, down from US$466.7 million as of December 31, 2022[50] - The Group's bank loans amounted to US$255.2 million as of June 30, 2023, a decrease from US$329.5 million as of December 31, 2022[50] - Inventory as of June 30, 2023, was US$565.2 million, compared to US$600.0 million as of December 31, 2022, with inventory turnover days increasing to 209 days from 152 days year-over-year[52] - Total assets amounted to US$1,353,288,000, a decrease from US$1,433,989,000 as of December 31, 2022, representing a decline of approximately 5.6%[130] Corporate Governance - The company has established an Audit Committee comprising three independent non-executive Directors to oversee financial reporting and internal controls[106] - The company has adopted the Corporate Governance Code and complied with all applicable provisions during the reporting period[112] - The roles of the Chairman and Chief Executive Officer are held by the same individual, Mr. Pan, which the Board believes ensures consistent leadership[113] - The company emphasizes effective risk management and internal control systems as part of its corporate governance practices[111] Shareholder Information - The shareholding interest of Mr. Pan Longquan is 50.92%, with 260,226,344 shares held[70] - Ms. Zhang Tong holds a 19.34% shareholding interest, with 98,835,550 shares[70] - Mr. Ke Zuqian has a 5.31% shareholding interest, holding 27,118,822 shares[70] - The total number of issued shares as of June 30, 2023, was 511,053,811[71] Future Outlook - Despite short-term challenges, the company remains confident in its growth prospects and market outperformance as macroeconomic conditions improve[24] - The Board believes that reallocating the Remaining Net Proceeds will strengthen the Company's competitive position and improve fund utilization efficiency[88] - The company continues to monitor its investments in Chervon Auto Precision Technology and explore opportunities to monetize these investments if appropriate market opportunities arise[62]

Revenue Performance - Revenue decreased by 26.3% to $738.5 million compared to $1,002.0 million in the same period last year[9] - Sales revenue from OPE products fell by 25.3% to $445.2 million, primarily due to inventory destocking and adverse weather conditions[10] - Sales revenue from power tools decreased by 28.6% to $286.3 million, attributed to a weak real estate market and inventory destocking[10] - Revenue from North America declined by 30.3% to $485.3 million, while revenue from China decreased by 17.0% to $54.2 million[10] - Total revenue for the six months ended June 30, 2023, was $738.545 million, a decrease of 26.3% from $1,002.021 million in the same period of 2022[61] Profitability Metrics - Adjusted net profit decreased by 32.7% to $49.5 million from $73.6 million year-on-year[2] - Gross profit margin improved from 28.9% to 32.1% due to RMB depreciation and lower raw material costs[3] - Gross profit for the same period was $237.296 million, down 18.2% from $290.046 million year-on-year[50] - Operating profit decreased to $67.589 million, a decline of 22.0% compared to $86.697 million in the previous year[50] - Net profit for the period was $49.051 million, representing a decrease of 22.8% from $63.473 million in the prior year[50] Expenses and Costs - Sales and distribution expenses decreased by 7.3% from $101.4 million to $94.0 million due to reduced sales[14] - Research and development costs increased by 6.6% from $31.4 million to $33.5 million, reflecting continued investment in research and product development[16] - The cost of goods sold for the period was $501.249 million, down from $711.975 million year-over-year[65] Cash Flow and Financial Position - Cash and cash equivalents amounted to $396.3 million as of June 30, 2023, down from $466.7 million at the end of 2022[23] - Current liabilities totaled $680.238 million, a decrease from $710.858 million as of December 31, 2022[52] - Total assets less current liabilities were $1,123.941 million, down from $1,151.646 million at the end of 2022[52] - Trade receivables as of June 30, 2023, amounted to $291.616 million, significantly higher than $168.017 million as of December 31, 2022, showing an increase of approximately 73.6%[74] - Trade payables as of June 30, 2023, were $198.439 million, down from $271.020 million as of December 31, 2022, representing a decrease of about 26.8%[76] Strategic Initiatives - The company launched over 90 new products during the reporting period, with lithium-ion battery-powered products accounting for approximately 90%[4] - OBM business revenue accounted for 78.1% of total revenue, up from 71.3% in the previous year[5] - The company expanded its global multi-channel sales and distribution network, enhancing online sales channels with over 20% growth on a leading e-commerce platform in the U.S.[6] - The company plans to continue monitoring its investment in Quanfeng Automotive Precision Technology and explore opportunities for divestment when appropriate[32] Taxation and Other Income - Income tax expense decreased by 32.2% from $13.0 million to $8.8 million, with an effective tax rate of 15.2% compared to 17.0% in the prior year[19] - Other income increased to $2.7 million for the six months ended June 30, 2023, compared to $1.7 million for the same period in 2022[12] Shareholder Returns - The company has resolved not to declare an interim dividend for the six months ending June 30, 2023[42] - Basic and diluted earnings per share were both $0.10, down from $0.13 in the same period of 2022[50] Foreign Exchange and Financial Instruments - The company recorded a net foreign exchange gain of $7.2 million for the six months ended June 30, 2023, compared to a net loss of $9.9 million in the same period of 2022[34] - The company has established foreign exchange forward contracts to mitigate currency fluctuation risks, with a net loss of $12.3 million from derivative financial instruments for the six months ended June 30, 2023[34] Capital Expenditures and Investments - Capital expenditures for the six months ended June 30, 2023, were $46.4 million, a decrease from $73.1 million in the same period of 2022[27] - The investment in Quanfeng Automotive Precision Technology accounted for 8.2% of total assets, with a fair value of $148.4 million as of June 30, 2023, down from 10.1% and $188.3 million as of December 31, 2022[32]

Innovation and Product Development - Chervon Holdings Limited focuses on innovation in lithium-ion battery technology, contributing to significant scale and rapid growth in the power tools and outdoor power equipment market[11]. - Chervon has established a user-centric innovation model supported by integrated research and development, manufacturing, and sales capabilities, enabling continuous introduction of advanced technology products[12]. - Chervon is committed to becoming a global leader in power tools and outdoor power equipment through continuous innovation in the lithium-ion, intelligent, and digital era[13]. - Chervon introduced over 200 new products in 2022, with approximately 85% being lithium-ion battery-powered[28]. - The company plans to continue developing lithium-ion battery powered new products and expand its multi-channel sales and distribution network to drive sustainable long-term growth[53]. - The EGO-branded products contributed significantly to growth, with the flagship EGO Z6 mower winning multiple design awards in 2022[40]. - The FLEX brand celebrated its 100th anniversary and launched the Stack PackTM products, which won the 2022 Power Tool Innovation Award[41]. Financial Performance - In 2022, Chervon reported revenue of US$1,989.3 million, a 13.2% year-over-year increase[27]. - The Group's revenue increased by 13.2% from US$1,757.8 million in 2021 to US$1,989.3 million in 2022, with a local currency growth of 15.1%[35]. - The Original Brand Manufacturing (OBM) business grew by 22.1%, contributing US$1,381.8 million to total revenue, which accounted for 69.5% of total revenue in 2022[42]. - The OPE segment experienced a significant revenue growth of 41.5%, rising from US$864.6 million in 2021 to US$1,223.5 million in 2022[37]. - Revenue from power tools decreased by 14.7% from US$885.2 million in 2021 to US$754.9 million in 2022 due to slower market demand[37]. - Gross profit increased by 22.1% from US$494.5 million in 2021 to US$603.9 million in 2022, with the overall gross profit margin rising from 28.1% to 30.4%[63]. - The company reported a net loss of US$52.3 million in 2022, compared to a net gain of US$37.9 million in 2021, primarily due to foreign exchange losses and unrealized losses on convertible bonds[65]. - Profit for the period decreased to US$139.3 million in 2022 from US$149.7 million in 2021, reflecting a decline of approximately 6.5%[77]. - Adjusted Net Profit increased to US$151.3 million in 2022, up from US$125.0 million in 2021, representing a growth of about 21.0%[77]. Market Expansion and Strategy - The company aims to expand its market share by leveraging global operations and local market knowledge, enhancing its competitive position in target markets[12]. - The company expanded its geographic reach for SKIL products to South Korea and Thailand, enhancing brand awareness in the Asia market[42]. - The company has plans for future market expansion in North America, leveraging the expertise of its senior management team[131]. - The company is actively involved in the production of key automobile and mechanical components through its subsidiaries, which supports its growth strategy[128]. Environmental, Social, and Governance (ESG) Commitment - The company emphasizes its commitment to environmental, social, and governance (ESG) responsibilities as part of its growth strategy[32]. - The Group has complied with the "comply or explain" provisions in the Environmental, Social and Governance Reporting Guide[190]. - The EHS department is responsible for managing environmental and climate-related risks within the Group's operations[189]. - There were no material fines or penalties due to non-compliance with environmental protection laws during the reporting period[188]. Operational Efficiency and Management - The company reported a significant increase in overall operations and management efficiency, driven by strategic planning and business development initiatives led by the executive team[124]. - The executive team is focused on continuous improvement in manufacturing and supply chain processes to enhance product quality and operational efficiency[130]. - The leadership team is committed to maintaining high standards in corporate governance and operational excellence[124]. - The Group's financial operations are overseen by Mr. Hu, who has extensive experience in financial management within the industry[146]. Challenges and Risks - Key risks include unfavorable economic conditions, intense competition, and rapid changes in customer preferences, which may adversely affect sales[175]. - The company faces challenges in developing new products at favorable margins and maintaining customer demand for these products[176]. - Economic and political conditions in China, as well as currency fluctuations, pose risks to the company's business and financial results[184]. Human Resources and Workforce - The Group's total staff costs for the reporting period amounted to US$214.4 million, an increase from US$189.5 million in 2021[117]. - The number of employees increased to 6,990 as of December 31, 2022, compared to 6,732 in the previous year[117]. - The male-to-female employee ratio is approximately 1.55 to 1, reflecting the nature of the business with a higher portion of male engineers and front-line workers[118]. Corporate Governance and Leadership - The leadership team includes individuals with diverse backgrounds and expertise, enhancing the Group's strategic direction and operational efficiency[144][146][148][149][153]. - Mr. Tian Ming has 20 years of experience in competitive strategy, operation management, and property investment and development[135]. - Dr. Li Minghui has been a professor in accounting at Nanjing University since December 2009[139]. - Mr. Jiang Li is the founder of Nanjing Tianjia Environmental Technology Co., Ltd. and has served as its chairman since 1999[143].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不就因本公告全部或任何部分內容而產生或因依 賴該等內容而引致的任何損失承擔任何責任。 Chervon Holdings Limited 泉峰控股有限公司 （於香港註冊成立之有限公司） （股份代號：2285） 截至2022年12月31日 止年度的年度業績公告 | --- | --- | --- | --- | |------------------------------------|--------------------|------------------------------|--------------| | | | | | | 財務摘要 | | | | | | 截至 12 月 2022 年 | 31 日止年度 2021 年 千美元 | 同比變動 | | 收入 | 1,989,280 | 1,757,784 | 13.2% | | 毛利 除稅前利潤 | 603,873 161,390 | 494,508 176,098 | 22.1% (8.4)% | | 年內利潤 | 139 ...

Revenue Growth - Chervon Holdings Limited reported significant growth in revenue, achieving US$XXX million for the six months ended June 30, 2022, compared to US$XXX million in the same period of 2021, reflecting a growth rate of XX%[19] - Revenue for the six months ended June 30, 2022, increased by 15.3% to US$1,002.0 million, with local currency growth of 17.2%[22] - The Group's total revenue for the six months ended June 30, 2022, was USD 1,002,021,000, an increase of 15.4% compared to USD 868,797,000 for the same period in 2021[169] - Revenue from OPE products increased by 43.9% from US$414.0 million for the six months ended June 30, 2021, to US$595.9 million for the six months ended June 30, 2022[41] - Revenue from power tools decreased by 11.1% from US$451.1 million for the six months ended June 30, 2021, to US$401.2 million for the six months ended June 30, 2022, due to slower market demand and customer destocking[42] Product Development and Innovation - The company has expanded its product portfolio, focusing on lithium-ion battery technology, which has contributed to its rapid growth and market scale[8] - The company emphasizes user-centric innovation, supported by a robust research and development system, which has led to the introduction of advanced technology products[9] - The company introduced 127 new products during the reporting period, with approximately 80% being lithium-ion battery powered[23] - The company plans to continue investing in innovative product development and building premier brands globally, aiming to increase market share despite challenges[39] - Research and development costs increased by 12.3% from US$28.0 million for the six months ended June 30, 2021, to US$31.4 million for the same period in 2022[51] Financial Performance - Profit for the period decreased by 30.4% to US$63.5 million, with profit before tax down by 31.0% to US$76.5 million[20] - The financial outlook for the remainder of 2022 remains positive, with expectations for continued revenue growth driven by new product launches and market expansion efforts[19] - Profit before income tax decreased by 31.0% to US$76.5 million for the six months ended June 30, 2022, compared to US$110.9 million for the same period in 2021[53] - Profit for the period was $63,473,000, a decrease of 30.4% from $91,239,000 in the prior year[134] - Total comprehensive income for the period was $45,766,000, down from $92,032,000, indicating a decrease of about 50.3%[136] Assets and Liabilities - As of June 30, 2022, total assets amounted to US$XXX million, while total liabilities were US$XXX million, indicating a healthy balance sheet[19] - Total assets decreased by 7.9% to US$1,893.3 million, while total equity increased by 8.6% to US$865.9 million[21] - The Group's bank loans amounted to US$351.3 million, a decrease from US$433.6 million as of December 31, 2021, with a gearing ratio of 0.4 compared to 0.6 at the end of 2021[71] - Cash and cash equivalents decreased to $498,878,000 from $664,990,000, a decline of approximately 25%[137] - The Group's inventories increased to US$607.5 million as of June 30, 2022, from US$592.0 million at the end of 2021, with inventory turnover days rising to 152 days from 97 days year-over-year[72] Market Strategy - Chervon Holdings Limited aims to enhance its market share through global operations and local market knowledge, addressing diverse end-user needs[9] - The company has established a multi-channel sales and distribution network to effectively reach its end users[9] - Chervon is focused on expanding its market presence through strategic initiatives, including potential mergers and acquisitions[9] - The company is enhancing its multi-channel sales and distribution network, with solid growth in online sales channels[32] - Revenue from North America grew by 21.6% to US$696.2 million, while revenue from China grew by 6.4% to US$65.3 million[43] Cost Management - Selling and distribution expenses increased by 5.1% from US$96.4 million for the six months ended June 30, 2021, to US$101.4 million for the six months ended June 30, 2022[49] - Administrative and other operating expenses increased by 22.8% from US$32.6 million for the six months ended June 30, 2021, to US$40.0 million for the six months ended June 30, 2022, due to strategic investments in infrastructure[50] - Net finance costs rose by 20.3% from US$7.9 million for the six months ended June 30, 2021, to US$9.5 million for the same period in 2022[52] - The company reported a net loss of USD 32,295 in other net (loss)/gain, compared to a gain of USD 19,754 in the previous year[193] - Cost of inventories sold amounted to USD 711,975, an increase from USD 617,688, reflecting a rise of 15.2%[196] Shareholder Information - As of June 30, 2022, Mr. Pan Longquan held 260,226,344 shares, representing a 53.08% interest in the company[95] - Ms. Zhang Tong held 98,835,550 shares, representing a 20.16% interest in the company[95] - The total number of issued shares as of June 30, 2022, was 490,218,811[96] - The company has resolved not to declare an interim dividend for the six months ended June 30, 2022[109] - The total net proceeds amount to HK$3,470.1 million, with HK$1,119.8 million utilized up to June 30, 2022, leaving HK$2,350.3 million unutilized[107] Compliance and Governance - The interim financial report for the six months ended June 30, 2022 was reviewed by KPMG, ensuring compliance with Hong Kong standards[116] - The company has established an Audit Committee to oversee financial reporting and internal controls, comprising three independent non-executive directors[115] - The independent auditor's report concluded that the interim financial report was prepared in accordance with HKAS 34, with no significant issues identified[132] - The Group has not applied any new accounting standards that are not yet effective for the current accounting period, ensuring consistency in financial reporting[165] - The notes on pages 40 to 72 form part of the interim financial report, providing additional context and details[145]

Company Overview - Chervon Holdings Limited is a global provider of power tools and outdoor power equipment, focusing on lithium-ion battery system technology for significant scale and rapid growth[10]. - The company offers a comprehensive range of products under five well-recognized brands: EGO, FLEX, SKIL, DEVON, and X-TRON, targeting both industrial/professional and consumer end users[10]. - Chervon has a user-centric innovation approach supported by an integrated system of research and development, manufacturing, and sales, enabling continuous introduction of new products[11]. - The company aims to become a global leader in power tools and outdoor power equipment through continuous innovation in the lithium-ion, intelligent, and digital era[12]. Financial Performance - The financial summary indicates a consistent growth trend in revenue and assets over the past four financial years, reflecting the company's robust market position[22]. - In 2021, the company achieved revenue of US$1,757.8 million, representing a 46.4% year-over-year growth from US$1,200.9 million in 2020[27]. - The net profit increased more than threefold from US$48.4 million in 2020 to US$149.7 million in 2021[27]. - Adjusted net profit grew by 79.0% from US$69.8 million in 2020 to US$125.0 million in 2021[27]. - The power tools segment generated revenue of US$885.2 million in 2021, a growth of 33.9% from US$661.1 million in 2020[33]. - The outdoor power equipment (OPE) segment saw revenue growth of 62.0%, increasing from US$533.7 million in 2020 to US$864.6 million in 2021[33]. - Total assets increased from US$1,091.5 million in 2020 to US$2,056.2 million in 2021[24]. - Total equity attributable to equity shareholders rose from US$259.7 million in 2020 to US$797.0 million in 2021[24]. Product Development and Innovation - The company launched 232 new products in 2021, with 77% powered by lithium-ion batteries[29]. - A total of 232 new products were introduced in 2021, with lithium-ion battery powered products accounting for approximately 77% of all new products[38]. - The company plans to continue investing in product portfolio, sales and distribution network, and production capacity in 2022[31]. Market Expansion and Sales - The company expanded its multi-channel sales and distribution network, significantly increasing sales of EGO-branded OPE products in Europe and Oceania markets[43]. - Online sales of OBM products through pure-play e-commerce channels in North America increased by over 100% from 2020 to 2021[44]. - Revenue from North America, the largest market, grew by 48.6% from US$798.9 million in 2020 to US$1,187.4 million in 2021[55]. Cost and Expenses - Gross profit increased by 34.1% from US$368.7 million in 2020 to US$494.5 million in 2021, while gross profit margin decreased from 30.7% to 28.1% due to rising raw material costs[59]. - Research and development costs rose by 28.8% from US$38.9 million in 2020 to US$50.2 million in 2021, reflecting continued investment in new product initiatives[60]. - Selling and distribution expenses increased by 8.9% from US$179.4 million in 2020 to US$195.5 million in 2021, primarily due to higher marketing investments[59]. - Administrative and other operating expenses rose by 25.1% from US$82.8 million in 2020 to US$103.6 million in 2021, mainly due to costs related to the initial public offering[59]. Investment and Financial Position - As of December 31, 2021, the Group had US$665.0 million in cash and cash equivalents, a substantial increase from US$166.9 million in 2020, primarily due to strong operating cash flow and net proceeds from the IPO[75][78]. - The Group's bank loans amounted to US$433.6 million as of December 31, 2021, up from US$337.9 million in 2020, with short-term loans accounting for 98.0% of total bank loans[77][80]. - The gearing ratio improved from 1.2 as of December 31, 2020, to 0.6 as of December 31, 2021, indicating a stronger financial position[81]. - The Group's funding and finance policy focuses on maintaining a stable financial position and mitigating financial risks to support current operations and future investments[76][79]. Governance and Management - The Audit Committee consists of three independent non-executive Directors, ensuring compliance with the CG Code and reviewing the Group's accounting principles and internal controls[125]. - The company has established a governance structure with independent directors to ensure effective oversight and independent judgment[149]. - The leadership team has a diverse background in finance, technology, and management, contributing to the company's strategic direction and growth[154][155][157]. Risks and Challenges - Key risks include intense competition leading to pricing pressures and the potential inability to respond to rapid changes in customer preferences and production conditions[179]. - The Group's financial condition may be affected by risks such as inadequate financing on commercially reasonable terms and counterparty risk in hedging arrangements[183]. - The Company may face challenges in maintaining its brand position and market perception among targeted end-user groups[182]. - Changes in taxation may materially and adversely affect the Company's business and financial condition[183]. Environmental, Social, and Governance (ESG) - The Group has complied with the "comply or explain" provisions in the Environmental, Social and Governance Reporting Guide as set out in Appendix 27 to the Listing Rules for the year ended December 31, 2021[189]. - The Group had not been subject to any material fines or penalties due to noncompliance with environmental protection laws and regulations for the year ended December 31, 2021[187]. - The Board is responsible for evaluating and managing material environmental, social, and governance issues, with oversight provided by the Board[186]. - The EHS department is responsible for managing environmental and climate-related risks arising from business operations and conducts relevant monitoring and inspections[188].