Best Mart 360 Holdings Limited 優品360控股有限公司 (Incorporated in the Cayman Islands with Iimited liability) (於開曼群島註冊成立的有限公司) Stock Code 股份代號：2360 Annual Report 2020/2021 2020/2021 年度報告 | --- | --- | --- | |-------------------------------------------------------------|--------------------------|-------| | | CONTENTS | 目錄 | | Corporate Information | 公司資料 2 | | | Financial Summary | 財務概要 4 | | | Chairman's Statement | 主席報告 5 | | | Chief Executive Officer's Statement | 行政總裁報告 7 | | | Management Discussion and Analys ...

Revenue and Profitability - For the six months ended September 30, 2020, the Group recorded revenue of approximately HK$709,387,000, representing an increase of approximately 16.3% compared to HK$609,857,000 for the same period in 2019[12]. - Profit attributable to owners of the Company for the six months ended September 30, 2020, was approximately HK$35,689,000, representing an increase of approximately 165.2% from approximately HK$13,457,000 in 2019[15]. - Gross profit for the six months ended September 30, 2020, was approximately HK$222,761,000, compared to approximately HK$209,282,000 for the same period in 2019[15]. - The gross profit margin for the Group was approximately 31.4%, a decrease of approximately 2.9 percentage points from 34.3% for the six months ended September 30, 2019[29]. - The increase in profit was primarily due to the recognition of government grants accounted for the period, amounting to approximately HK$21,189,000[44]. Retail Expansion - The Group opened 13 new retail stores in Hong Kong, with 11 located in community or residential districts, expanding its retail network[7]. - The number of retail stores increased from 98 in Hong Kong as of September 30, 2019, to 112 as of September 30, 2020, with an additional three stores in Macau[12]. - The Group opened 15 new stores during the period, including 13 in Hong Kong and 2 in Macau, while closing three stores in Hong Kong[17]. - The Group's retail network expansion included new stores located primarily in community or residential districts to better serve local consumers[17]. Market Conditions - Local consumer spending sentiment remained cautious due to the worsening economic environment and unemployment pressure in Hong Kong[7]. - The Group faced a challenging business environment due to anti-epidemic measures, including border closures and quarantine measures[7]. - The retail business environment in Hong Kong is expected to remain challenging due to the ongoing impact of the novel coronavirus pandemic[37]. Product Offerings and Strategy - The Group's mission is to provide "Best Quality" and "Best Prices" products through global procurement efforts[6]. - The Group's product offerings include a wide range of imported prepackaged leisure foods and grocery products[6]. - The Group adjusted its business strategy and optimized its product portfolio to maintain profitability amid challenging market conditions[7]. - The Group plans to expand its product range, particularly basic grocery products, to meet local community needs while controlling procurement costs to maintain competitive pricing[39]. Financial Position - As of September 30, 2020, the Group's total cash and bank balances were approximately HK$92,781,000, a decrease of approximately HK$123,130,000 from HK$215,911,000 as of March 31, 2020[54]. - The Group's total bank borrowings as of September 30, 2020, were approximately HK$140,030,000, an increase of approximately 40.7% compared to HK$99,542,000 as of March 31, 2020[55]. - The gearing ratio as of September 30, 2020, was approximately 40.9%, up from approximately 32.5% as of March 31, 2020, primarily due to increased bank borrowings for acquisition payments[56]. - The Group had net current liabilities of approximately HK$19,026,000, a significant decrease from net current assets of HK$152,271,000 as of March 31, 2020[61]. Government Support and Grants - The Group received government grants totaling approximately HK$21,189,000, which contributed to the increase in profit for the period[15]. - Other income and gains for the six months ended September 30, 2020, amounted to approximately HK$22,408,000, significantly up from HK$2,161,000 for the same period in 2019, mainly due to government grants recognition[46]. Employee and Operational Costs - Staff costs (excluding Directors' emoluments) for the six months ended September 30, 2020, were approximately HK$67,788,000, a 3.4% increase from HK$65,536,000 in the same period of 2019[20]. - Selling and distribution expenses for the six months ended September 30, 2020, were approximately HK$181,441,000, an increase of approximately 8.0% from HK$168,050,000 for the same period in 2019[47]. - Administrative and other expenses for the six months ended September 30, 2020, were approximately HK$20,733,000, representing an increase of approximately 4.7% from HK$19,809,000 for the same period in 2019[48]. Acquisitions and Investments - The Group completed the acquisition of Allied Wide for a consideration of approximately HK$176.0 million on September 28, 2020[76]. - The Group recognized right-of-use assets of approximately HK$178,865,000 from the acquisition of Allied Wide during the six months ended September 30, 2020, compared to HK$Nil in the same period of 2019[175]. Corporate Governance - The Company has adopted and complied with all applicable code provisions in the Corporate Governance Code during the reporting period[103]. - The Company is committed to maintaining high standards of corporate governance to enhance accountability and transparency[102]. - The Board has established three committees: audit, remuneration, and nomination, to assist in fulfilling its responsibilities[107]. Shareholder Information - The board has recommended an interim dividend of HK2.0 cents per share, totaling HK$20,000,000, an increase from HK1.5 cents per share in the previous period[85]. - An interim dividend of HK$20,000,000, or HK$0.02 per share, has been proposed for the six months ended September 30, 2020, subject to shareholder approval[174].

Best Mart 360 Holdings Limited 優品360控股有限公司 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立的有限公司) Stock Code 股份代號：2360 Annual Report 2019/2020 2019/2020 年度報告 | --- | --- | --- | |-------------------------------------------------------------|--------------------------|-------| | | CONTENTS | 目錄 | | Corporate Information | 公司資料 2 | | | Financial Summary | 財務概要 4 | | | Chairman's Statement | 主席報告 5 | | | Chief Executive Officer's Statement | 行政總裁報告 8 | | | Management Discussion and Analys ...

Financial Performance - The Group recorded a revenue growth of approximately 14.7% for the six months ended September 30, 2019, compared to the same period last year[7]. - Profit attributable to owners of the Company decreased by approximately 6.0% during the same period, primarily due to adverse impacts from social movements in Hong Kong[7]. - For the six months ended 30 September 2019, the Group recorded revenue of approximately HK$609,857,000, representing an increase of approximately 14.7% compared to HK$531,492,000 for the same period in 2018[13]. - The gross profit for the six months ended 30 September 2019 was approximately HK$209,282,000, up from approximately HK$179,251,000 for the same period in 2018[15]. - Profit attributable to owners of the Company for the six months ended 30 September 2019 was approximately HK$13,457,000, a decrease of approximately 6.0% compared to HK$14,317,000 for the same period in 2018[15]. - The gross profit margin for the Group was approximately 34.3%, an increase of 0.6 percentage points from 33.7% for the same period in 2018[29]. - Operating profit increased to HK$23,584,000, up 17.5% from HK$20,067,000 in the previous year[121]. - Profit before income tax was HK$16,520,000, a decrease of 6.4% from HK$18,709,000 in 2018[121]. - Net profit for the period was HK$13,457,000, down 6.0% from HK$14,317,000 in the same period last year[121]. Retail Operations - The Group operates under the brand "Best Mart 360˚," offering a wide range of imported prepackaged leisure foods and grocery products[6]. - The decline in tourist numbers visiting Hong Kong since June 2019 has negatively affected the Group's retail operations[7]. - The number of retail stores increased from 77 as at 30 September 2018 to 98 as at 30 September 2019, with 14 new stores opened and 5 closed during the period[17]. - As of September 30, 2019, the Group operated a total of 98 retail stores in Hong Kong, an increase from 77 stores as of September 30, 2018[19]. - The Group aims to create a comfortable shopping environment and pleasurable shopping experience for its customers[6]. Economic Environment - The overall economic deterioration in Hong Kong has been influenced by US-China trade tensions and a decline in private consumption expenditure[7]. - The provisional estimated value of total retail sales in Hong Kong decreased by 20.4% in September 2019 compared to the same month in 2018[10]. - Visitor arrivals in Hong Kong dropped significantly from July to September 2019, with decreases of 4.8%, 39.1%, and 34.2% compared to the same months in 2018[10]. - Hong Kong's GDP decreased by 2.9% in real terms in Q3 2019, with private consumption expenditure falling by 3.4%[35]. - Consumer spending on food in Hong Kong dropped by 12.1% in Q3 2019, reflecting a challenging retail environment[35]. - The ongoing social unrest and global economic factors are significantly impacting the retail business environment in Hong Kong[35]. Cost and Expenses - Rental expenses for retail stores were approximately HK$77,179,000 for the six months ended 30 September 2019, representing an increase of approximately 29.2% compared to HK$59,739,000 for the same period in 2018[17]. - The average monthly rental for the six months ended 30 September 2019 was approximately HK$126.8 per square foot, an increase of approximately 2.0% from HK$124.3 per square foot for the same period in 2018[17]. - The percentage of rental expenses to sales revenue for the six months ended 30 September 2019 was approximately 12.7%, slightly higher than 11.2% for the same period in 2018[17]. - Selling and distribution expenses amounted to approximately HK$168,050,000 for the six months ended September 30, 2019, reflecting an increase of approximately 25.1% from HK$134,329,000 for the same period in 2018[48]. - Finance costs increased to approximately HK$7.1 million, representing an increase of approximately 420.2% from approximately HK$1.4 million for the same period in 2018, primarily due to interest expenses on lease liabilities[53]. Employee and Staffing - The total number of employees increased from 624 to 816, with staff costs rising by approximately 23.8% to HK$65,536,000 for the six months ended September 30, 2019[21]. - The remuneration policy is based on employee performance, with a total employee cost increase of approximately 23.8% from the previous year[72][77]. Digitalization and Expansion - The Group opened its first WeChat Pay Smart Store in Hong Kong, marking a significant step in its digitalization strategy[32]. - The Group launched two WeChat Mini Programs: "Best Mart Scan & Go" and "Best Mart Card," enhancing customer engagement and payment options[32]. - The Group is preparing to expand its market coverage by establishing a retail presence in Mainland China, with the first store expected to open in the upcoming financial year[38]. - The Group aims to actively expand its retail network in Macau as part of its growth strategy[40]. Corporate Governance - The Company has adopted and complied with all applicable code provisions in the Corporate Governance Code during the reporting period[99]. - The Board is responsible for overseeing the overall management of the Group's business and has established three committees: audit, remuneration, and nomination[100]. - The audit committee reviewed the unaudited interim condensed consolidated financial statements for the six months ended 30 September 2019, confirming compliance with applicable accounting standards[111]. - The Company is committed to maintaining high standards of corporate governance to enhance accountability and transparency[98]. Accounting Standards - The Group adopted HKFRS 16 "Leases" effective from April 1, 2019, resulting in right-of-use assets of approximately HK$223.6 million and lease liabilities of approximately HK$230.9 million as of September 30, 2019[49]. - The Group's financial statements do not include all information required for a complete set of financial statements prepared in accordance with HKFRSs[131]. - The impact of adopting HKFRS 16 Leases has been summarized, indicating potential changes in accounting treatment for leases[136]. - The Group recognized right-of-use assets amounting to HK$156,474,000 and lease liabilities of HK$158,089,000 as of April 1, 2019[142][146].

Financial Performance - Revenue for the year ended March 31, 2019, was HK$1,288,479,000, representing a 19.7% increase from HK$1,075,930,000 in 2018[4] - Gross profit for the same period was HK$434,440,000, up from HK$342,289,000, indicating a growth of 27%[4] - Operating profit increased to HK$78,820,000, compared to HK$68,796,000 in the previous year, reflecting a rise of 14.7%[4] - Profit attributable to owners of the Company was HK$59,728,000, a 11.4% increase from HK$53,599,000 in 2018[4] - Earnings per share attributable to owners was 7.4 HK cents, slightly up from 7.1 HK cents in the previous year[4] - The total equity attributable to owners of the Company rose significantly to HK$369,582,000 from HK$93,184,000, marking a growth of 296%[4] - The Group achieved satisfactory growth in both revenue and profit attributable to owners despite a slowdown compared to the previous financial year, primarily due to the US-China trade tensions and global financial market fluctuations[10][12]. - The Group's revenue and profit growth were sustained through effective pricing policies and cost control measures, optimizing gross profit margin and same-store sales growth[10][12]. - Same-store sales growth was approximately 6.8% for the financial year under review[47] - The Group achieved a gross profit margin of approximately 33.7% for the year ended 31 March 2019, an increase of approximately 1.9 percentage points from 31.8% for the year ended 31 March 2018[54] Retail Expansion and Strategy - The Company successfully listed on the main board of The Stock Exchange of Hong Kong on January 11, 2019, enhancing brand awareness and capital for future expansion[9] - The Group aims to provide "Best Quality" and "Best Prices" through global procurement efforts, positioning itself as one of the largest leisure food retailers in Hong Kong[7] - The Company plans to continue expanding its retail presence and improving customer shopping experiences[9] - The Group's retail network expanded to 89 chain retail stores as of March 31, 2019, contributing to increased revenue and profitability[23]. - The number of Best Mart 360° chain retail stores reached 93, covering shopping districts, community areas, and major traffic hubs as of June 26, 2019[38] - The Group opened its first retail store at the Hong Kong-Zhuhai-Macau Bridge Passenger Clearance Building in May 2019, aiming to capture consumer potential from the "one-hour living circle" created by the infrastructure[27][30] - The Group plans to commence operations of a retail store in the Macau Special Administrative Region by the end of the forthcoming financial year, aiming to bring new growth momentum[28][31] - The Group's retail products mainly consist of fast-moving consumer packaged goods, and management is confident in maintaining competitiveness due to a strong business foundation[11][13]. - The Group's retail network expansion includes meticulous planning to increase market share and penetration in Hong Kong while exploring opportunities in the Greater China region[28][31] Customer Engagement and Technology - A mobile app was launched in March 2019 to enhance communication and interaction with customers, aiming to improve shopping convenience and experience[24]. - The introduction of mobile payment options, including Apple Pay, Android Pay, Alipay, and WeChat Pay, is part of the Group's strategy to enhance customer experience and streamline operations[29][36] - A WeChat Pay Smart Store was opened on June 13, 2019, in Tsimshatsui East, integrating automated checkout processes to improve shopping efficiency[29][39] - The Group aims to enhance consumer experience through strategic cooperation with well-known internet companies and social media platforms in the digital transformation of retail operations[33][36] Supply Chain and Product Management - The Group sourced approximately 675 brands and 3,261 SKUs from suppliers across over 16 countries, focusing on quality and competitive pricing[20]. - The Group is committed to developing quality private label products to better control product quality and enhance customer loyalty[25]. - Continuous optimization of the supply chain and procurement capabilities is a priority, including identifying additional suppliers and lowering procurement costs[68] - The Group aims to accelerate the development of private label products to enhance cost advantages and quality control, thereby maximizing customer loyalty[68] Human Resources and Staff Management - Employee count increased from 562 (406 full-time and 156 part-time) as of 31 March 2018 to 728 (538 full-time and 185 part-time) as of 31 March 2019[58] - Staff costs (excluding Directors' emoluments) for the year ended 31 March 2019 were approximately HK$119,373,000, a 36.2% increase from approximately HK$87,676,000 for the previous year[58] - Staff costs represented approximately 9.3% of the Group's revenue for the year ended 31 March 2019, up from 8.2% for the year ended 31 March 2018[58] - The increase in staff cost ratio was primarily due to salary adjustments, bonuses, and management structure enhancements during the financial year[58] Corporate Governance - The Company is committed to maintaining high standards of corporate governance to improve accountability and transparency[155] - The roles of the Chairman and the Chief Executive Officer are separate, ensuring a balance of power and authority[157] - The Company has adopted and complied with all applicable code provisions in the Corporate Governance Code since its listing[156] - The Board of Directors consists of five members, including three independent non-executive Directors, meeting the requirement of at least one-third representation[165] - The audit committee, comprising three independent non-executive Directors, reviewed the Group's audited annual results for the year ended March 31, 2019, ensuring compliance with applicable accounting standards[172] - The Board has established three committees: audit, remuneration, and nomination, each with specific written terms of reference[170] - The Group's governance structure includes provisions for independent professional advice for Directors at the Company's expense[163] Financial Position and Liquidity - As of 31 March 2019, the Group's total cash and bank balances were approximately HK$277,394,000, a significant increase from HK$37,809,000 in 2018, with the current ratio improving from approximately 1.7 times to approximately 4.7 times[90] - The gearing ratio decreased to approximately 20.0% as of 31 March 2019 from approximately 72.5% as of 31 March 2018, attributed to an increase in share premium from the Share Offer[91] - Total bank borrowings as of 31 March 2019 were approximately HK$73,775,000, representing a 9.2% increase from approximately HK$67,555,000 as of 31 March 2018[92] - The Group plans to finance its liquidity and working capital requirements through various sources, including cash generated from operations, bank borrowings, and net proceeds from the Share Offer[97] Dividend and Shareholder Information - The final dividend per share declared was 6.0 HK cents, compared to no dividend in the previous year[4] - A final dividend of HK6.0 cents per share was proposed for the year ended March 31, 2019, representing a payout ratio of approximately 100.5%[16]. - The proposed final dividend is subject to shareholder approval at the AGM scheduled for 7 August 2019[125] - The final dividend is expected to be paid on or around 23 August 2019 if approved[128] Risk Management and Compliance - The company has adopted a series of internal control policies and implemented risk management policies to address various potential risks, including operational, credit, market, financial, and legal risks[200] - The Board believes that the Group's risk management and internal control systems were adequate and effective from the listing date to March 31, 2019[200]