Financial Performance - For the fiscal year ending March 31, 2024, the company reported a 25.9% increase in profit before tax to 5,152.3 million JPY (approximately 35.9 million USD), up from 4,092.9 million JPY in the previous year[13]. - The company reported a net profit of ¥4,828,128 million for the fiscal year 2024, an increase of 48.3% from ¥3,255,605 million in the previous year[95]. - Total revenue decreased by 11.1% from ¥29,495.0 million for the fiscal year ending March 31, 2023, to ¥26,222.9 million for the fiscal year ending March 31, 2024[73]. - The operating profit margin decreased to 10.3% for the fiscal year 2024, down from 13.1% in the previous year, reflecting ongoing operational challenges[95]. - The company has seen a recovery in golfer participation and purchasing intent following the easing of COVID-19 restrictions, despite ongoing economic uncertainties[66]. Revenue Breakdown - Golf clubs accounted for 69.6% of the total revenue for the fiscal year ending March 31, 2024, highlighting the company's focus on this product line[24]. - Revenue from golf clubs fell by 15.1% from ¥21,512.9 million to ¥18,256.6 million, with sales in Japan, Korea, and China declining by 4.5%, 12.5%, and 16.3%, respectively[75]. - Revenue from apparel increased by 4.9% from ¥3,009.1 million to ¥3,157.5 million, despite weak consumer confidence in China[76]. - Revenue from accessories and other related products decreased by 7.8% to ¥1,872,368 million, mainly due to sales restrictions in Japan ahead of new product launches[101]. - Revenue from Japan decreased by 4.7% to ¥9,363,144 million, primarily due to a 19.2% drop in wholesale revenue, although retail sales increased by 16.0%[103]. Market Strategy - The company aims to redefine its brand to appeal to younger golfers, enhancing its online presence and communication strategies[23]. - The company plans to continue restructuring its distribution strategy in North America and Europe, focusing on smaller, high-quality customer segments[18]. - The company aims to enhance brand and product awareness through direct consumer communication and sales strategies across existing wholesale points and digital platforms[90]. - The company is committed to optimizing manufacturing processes and expanding production capacity in response to sales growth[61]. - The company plans to focus on sustainable growth in North America and Europe, which account for over 60.0% of the global golf market[90]. Investments and Acquisitions - The company has invested significantly in retail distribution networks and digital capabilities in Japan and China to enhance consumer experience[21]. - The company is focusing on potential strategic acquisitions, with 29.4% of the proceeds from the global offering earmarked for this purpose[184]. - The company has not yet committed to any acquisition targets, but is evaluating potential strategic acquisitions in the golf product industry[187]. - The company plans to utilize the remaining 0.2% of unutilized proceeds from the global offering for general corporate purposes[167]. Cash Flow and Financial Health - The company maintained a positive net operating cash flow of 5,416.1 million JPY (approximately 37.7 million USD) for the fiscal year ending March 31, 2024, compared to 3,675.9 million JPY (approximately 27.3 million USD) in the previous year[13]. - As of March 31, 2024, the company's cash and cash equivalents amounted to ¥16,617.1 million, primarily held in RMB, JPY, and USD[174]. - The company's interest-bearing bank borrowings were ¥6,990.0 million, with an effective interest rate ranging from 0.17% to 3.08%[175]. - The debt-to-equity ratio improved from 36.3% in 2023 to 34.1% in 2024[153]. - The company paid dividends totaling (1,851,458) thousand yen, down from (2,133,460) thousand yen in the previous year, suggesting a potential strategy to retain more earnings[196]. Operational Challenges - The company is facing challenges including increased competition, labor shortages, and rising raw material prices, which may impact future performance[92]. - Sales revenue from third-party retailers and wholesalers decreased by 20.8% from ¥19,278.0 million to ¥15,270.6 million, with a fixed exchange rate basis decline of 22.3%[108]. - The company has not made any significant investments, acquisitions, or sales during the year ended March 31, 2024[157]. - The company is enhancing its e-commerce capabilities and restructuring customer relationship management systems in key markets like Japan, China, and the U.S.[34]. - The company continues to evaluate existing sales channels and explore new ones to enhance its distribution network[59].

[Management Discussion and Analysis](index=4&type=section&id=管理層討論及分析) [Company Profile and Business Overview](index=5&type=section&id=本公司%2C公司主要業績及業務展望概覽) Honma Golf is a vertically integrated golf product company focused on brand repositioning, targeting younger golfers with 'Ultra-Premium' and 'Ultra-Performance' product lines, and expanding its digital ecosystem - The company is a vertically integrated golf company with strong in-house design, development, and manufacturing capabilities, boasting an extensive retail presence across Asia[155](index=155&type=chunk) - The company has launched multiple initiatives to rebrand, aiming to position HONMA as a vibrant, valuable, and international golf brand for digitally-savvy younger golfers[159](index=159&type=chunk)[175](index=175&type=chunk) - Product strategy is consolidated and simplified, focusing on two consumer segments: 'Ultra-Premium' with the BERES series and 'Ultra-Performance' with the TOUR WORLD series for performance-oriented passionate golfers[176](index=176&type=chunk)[189](index=189&type=chunk) - The company is revamping its Customer Relationship Management (CRM) systems and enhancing e-commerce capabilities in key markets to build an end-to-end digital ecosystem for a 360-degree brand experience[179](index=179&type=chunk)[196](index=196&type=chunk)[215](index=215&type=chunk) [Business Outlook](index=13&type=section&id=展望) The Group will continue its long-term growth strategy by strengthening its ultra-premium market leadership, expanding into the ultra-performance segment, developing non-club product lines, and pursuing sustainable growth in North America and Europe - A core strategy is to consolidate market share in domestic markets (Japan, Korea, China), particularly within the fast-growing 'Ultra-Performance' segment[202](index=202&type=chunk) - Plans include collaborating with Itochu Corporation to actively develop complementary non-club product lines like apparel, aiming to establish HONMA as a 'golf lifestyle brand'[204](index=204&type=chunk) - In North America and Europe, the focus will be on smaller, high-quality customer segments, combined with direct-to-consumer communication and sales strategies to achieve sustainable growth[249](index=249&type=chunk) - The company acknowledges multiple challenges in the golf industry, including global economic uncertainties, but is confident in mitigating adverse impacts and seizing opportunities to optimize operational efficiency for sustainable development[206](index=206&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) [Financial Review](index=16&type=section&id=財務回顧) For the six months ended September 30, 2023, total revenue decreased by **11.6%** to **13,194.8 million JPY**, gross profit declined by **12.6%**, but net profit grew by **7.8%** to **3,329.5 million JPY** due to increased other income and reduced income tax expenses, with only Japan showing growth while self-operated stores performed strongly [Overall Financial Performance](index=16&type=section&id=財務回顧-綜合損益表) For the six months ended September 30, 2023, the Group's total revenue was **13,194.8 million JPY**, a **11.6%** decrease from **14,927.4 million JPY** in the prior year, with gross profit declining **12.6%** to **6,877.0 million JPY**, yet net profit increased **7.8%** to **3,329.5 million JPY** due to a **52.2%** reduction in income tax expense, resulting in basic earnings per share of **5.50 JPY** Consolidated Income Statement Summary (For the six months ended September 30) | Metric | 2023 (thousand JPY) | 2022 (thousand JPY) | YoY Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | 13,194,832 | 14,927,415 | (11.6)% | | **Gross Profit** | 6,876,979 | 7,866,314 | (12.6)% | | **Profit Before Tax** | 3,635,760 | 3,728,600 | (2.5)% | | **Net Profit** | 3,329,503 | 3,087,382 | 7.8% | | **Basic EPS (JPY)** | 5.50 | 5.10 | 7.8% | [Revenue by Product Category](index=18&type=section&id=按產品類別劃分的收益) Golf clubs remain the primary revenue source, accounting for **75.9%** of total revenue, despite a **12.5%** year-on-year decrease, while apparel was the only category to grow with a **2.1%** increase, and golf balls and accessories saw declines of **2.2%** and **27.1%** respectively Revenue by Product Category (For the six months ended September 30) | Product Category | 2023 Revenue (thousand JPY) | % of Total | YoY Change (%) | | :--- | :--- | :--- | :--- | | Golf Clubs | 10,011,857 | 75.9 | (12.5)% | | Golf Balls | 1,097,872 | 8.3 | (2.2)% | | Apparel | 1,263,961 | 9.6 | 2.1% | | Accessories & Others | 821,142 | 6.2 | (27.1)% | | **Total** | **13,194,832** | **100.0** | **(11.6)%** | - The decrease in golf club revenue was primarily due to a **26.3%** sales decline in the China market[7](index=7&type=chunk) - Revenue from accessories and other related products significantly decreased by **27.1%**, mainly due to sales limitations in Japan prior to new product launches to ensure profit margins[9](index=9&type=chunk) [Revenue by Geographical Region](index=19&type=section&id=按地理區域劃分的收益) Japan was the only region to achieve positive growth, with revenue increasing **5.6%** year-on-year, while Korea and China (including Hong Kong and Macau) saw declines of **7.0%** and **12.4%** respectively, and North America and Europe experienced the most significant drops of **40.7%** and **52.5%** due to distribution network adjustments and model shifts, with the three key domestic markets of Japan, Korea, and China collectively accounting for **88.3%** of total revenue Revenue by Geographical Region (For the six months ended September 30) | Geographical Region | 2023 Revenue (thousand JPY) | % of Total | YoY Change (%) | | :--- | :--- | :--- | :--- | | Japan | 4,172,787 | 31.6 | 5.6% | | Korea | 3,942,808 | 29.9 | (7.0)% | | China (incl. HK & Macau) | 3,529,130 | 26.7 | (12.4)% | | North America | 335,024 | 2.5 | (40.7)% | | Europe | 135,861 | 1.0 | (52.5)% | | Other Regions | 1,079,222 | 8.2 | (41.9)% | | **Total** | **13,194,832** | **100.0** | **(11.6)%** | - Japan market revenue grew by **5.6%**, benefiting from a strong rebound in consumer demand and ongoing marketing activities[13](index=13&type=chunk) - North America and Europe revenues significantly declined, primarily due to the ongoing impact of distribution network adjustments and changes in distribution models[14](index=14&type=chunk) [Revenue by Sales and Distribution Channel](index=21&type=section&id=按銷售及經銷渠道劃分的收益) Self-operated store channels performed strongly with a **13.2%** year-on-year revenue increase, primarily driven by robust retail sales recovery in Japan and China, whereas third-party retailer and wholesaler channels saw a significant **22.5%** decline, mainly impacted by China market challenges and European distribution model changes Revenue by Sales Channel (For the six months ended September 30) | Sales Channel | 2023 Revenue (thousand JPY) | % of Total | YoY Change (%) | | :--- | :--- | :--- | :--- | | Self-operated Stores | 5,170,582 | 39.2 | 13.2% | | Third-party Retailers & Wholesalers | 8,024,250 | 60.8 | (22.5)% | | **Total** | **13,194,832** | **100.0** | **(11.6)%** | - The growth in self-operated store revenue was primarily driven by strong retail sales recovery in Japan and China, which recorded increases of **30.7%** and **23.6%** respectively[17](index=17&type=chunk) [Cost of Sales and Gross Profit](index=22&type=section&id=銷售成本及毛利) Gross profit for the period was **6,877.0 million JPY**, a **12.6%** year-on-year decrease, with the overall gross profit margin slightly declining from **52.7%** to **52.1%**, while golf club gross margin slightly decreased to **59.3%**, golf ball gross margin fell to **29.0%** due to rising raw material costs, apparel gross margin decreased to **28.2%**, and accessories and other products' gross margin improved to **32.4%** due to product mix optimization - Total gross profit decreased by **12.6%** from **7,866.3 million JPY** to **6,877.0 million JPY**, with the gross profit margin slightly declining from **52.7%** to **52.1%**[58](index=58&type=chunk) Gross Profit and Gross Margin by Product Category (For the six months ended September 30) | Product Category | 2023 Gross Profit (thousand JPY) | 2023 Gross Margin (%) | 2022 Gross Margin (%) | | :--- | :--- | :--- | :--- | | Golf Clubs | 5,935,944 | 59.3 | 59.8 | | Golf Balls | 318,691 | 29.0 | 31.9 | | Apparel | 356,200 | 28.2 | 30.2 | | Accessories & Other Related Products | 266,144 | 32.4 | 25.6 | | **Total** | **6,876,979** | **52.1** | **52.7** | [Operating Expenses and Profit](index=24&type=section&id=經營開支及溢利) Sales and distribution expenses decreased by **8.0%** year-on-year to **4,486.0 million JPY**, though their percentage of revenue increased from **32.7%** to **34.0%**, while administrative expenses remained stable, other income and gains increased due to positive foreign exchange revaluation, and finance costs rose by **84.9%** due to higher borrowing costs, ultimately leading to a **7.8%** increase in net profit for the period to **3,329.5 million JPY** due to a significant **52.2%** reduction in income tax expense - Sales and distribution expenses decreased by **8.0%** year-on-year to **4,486.0 million JPY**[294](index=294&type=chunk) - Other income and gains increased to **2,019.4 million JPY**, primarily due to positive foreign exchange revaluation results[23](index=23&type=chunk) - Income tax expense decreased by **52.2%** from **641.2 million JPY** to **306.3 million JPY**, with the effective tax rate falling from **17.2%** to **8.4%**[272](index=272&type=chunk) - Net profit for the period was **3,329.5 million JPY**, representing a **7.8%** year-on-year increase[297](index=297&type=chunk)[118](index=118&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=流動資金及資本資源) The company demonstrates sound working capital management, with trade receivables turnover days decreasing from **54** to **49** days, while inventory turnover days increased to **320** days due to lower sales, and the debt-to-equity ratio improved from **36.3%** to **31.5%**, with approximately **4,972.2 million JPY** of global offering proceeds remaining unutilized at period-end, primarily earmarked for potential strategic acquisitions - Trade receivables and bills receivable turnover days decreased from **54** to **49** days, primarily due to enhanced collection efforts[35](index=35&type=chunk) - Inventory turnover days increased from **299** to **320** days, mainly due to a decline in sales over the past 12 months[279](index=279&type=chunk) - The debt-to-equity ratio decreased from **36.3%** as of March 31, 2023, to **31.5%** as of September 30, 2023[284](index=284&type=chunk) - As of September 30, 2023, the unutilized balance of global offering proceeds was approximately **4,972.2 million JPY**, with **29.4%** intended for potential strategic acquisitions[64](index=64&type=chunk)[288](index=288&type=chunk)[114](index=114&type=chunk) [Other Information](index=34&type=section&id=其他資料) [Directors' and Shareholders' Interests](index=34&type=section&id=董事及最高行政人員於股份%2C相關股份及債權證之權益及淡倉) This section details the interests of the company's directors, chief executives, and major shareholders in the company's shares as of September 30, 2023, with Chairman Mr. Liu Jianguo holding approximately **38.72%** interest, and other major shareholders including Charoen Pokphand Group (**29.93%**), Mr. Ma Jianrong (**7.76%**), Itochu Corporation (**6.32%**), and Fosun International-related entities (**5.88%**) Directors' and Chief Executives' Shareholding Interests | Name | Capacity/Nature of Interest | Number of Shares Held (L) | Approximate % of Interest (%) | | :--- | :--- | :--- | :--- | | Mr. Liu Jianguo | Founder and Sole Beneficiary of Trust/Interest in Controlled Corporation/Beneficial Owner | 234,512,775 | 38.72% | | Mr. Yasuki Ito | Beneficial Owner | 337,552 | 0.06% | | Mr. Zuo Jun | Beneficial Owner | 254,020 | 0.04% | Major Shareholders' Shareholding Interests | Shareholder Name | Nature of Interest | Number of Shares Held (L) | Approximate % of Interest (%) | | :--- | :--- | :--- | :--- | | Kouunn Holdings Limited | Beneficial Owner | 233,560,525 | 38.56% | | Charoen Pokphand Group Company Limited | Interest in Controlled Corporation | 181,296,500 | 29.93% | | Mr. Ma Jianrong | Interest in Controlled Corporation | 47,000,000 | 7.76% | | Itochu Corporation | Beneficial Owner | 38,284,000 | 6.32% | | Fosun International Limited | Interest in Controlled Corporation | 35,629,425 | 5.88% | [Share Award Schemes](index=37&type=section&id=受限制股份單位計劃及首次公開發售後購股權計劃) The company operates a 'Restricted Share Unit Scheme' and a 'Post-IPO Share Option Scheme' to incentivize and retain talent, with share movements but no new grants under the RSU scheme during the period, and no options granted under the Post-IPO Share Option Scheme since its inception, while an interim dividend of **1.5 JPY** per share has been declared for the six months ended September 30, 2023 - The company adopted the Restricted Share Unit (RSU) scheme in 2015, aiming to reward and incentivize directors, senior management, and employees[322](index=322&type=chunk) - The company adopted the Post-IPO Share Option Scheme in 2016 to incentivize eligible persons, with no options granted under the scheme as of September 30, 2023[79](index=79&type=chunk)[108](index=108&type=chunk) - The Board has declared an interim dividend of **1.5 JPY** per share for the six months ended September 30, 2023, totaling approximately **908.5 million JPY**, on November 24, 2023[469](index=469&type=chunk) [Corporate Governance](index=44&type=section&id=遵守企業管治守則) The company complied with all applicable code provisions of the Corporate Governance Code in Appendix 14 of the Listing Rules during the reporting period, with the sole deviation being the combined roles of Chairman and President (Chief Executive Officer) held by Mr. Liu Jianguo, an arrangement the Board believes facilitates effective group management and business development, and an Audit Committee has been established and reviewed this interim report - The company complies with the Corporate Governance Code, with one deviation: the roles of Chairman and President (Chief Executive Officer) are combined and held by Mr. Liu Jianguo[334](index=334&type=chunk)[84](index=84&type=chunk) - The Board believes that combining the roles of Chairman and President allows the Group to effectively plan and execute business decisions under strong and consistent leadership, benefiting management and business development[84](index=84&type=chunk) - The company has established an Audit Committee, comprising three independent non-executive directors, which has reviewed this interim results and report[86](index=86&type=chunk)[260](index=260&type=chunk) [Interim Condensed Consolidated Financial Statements](index=46&type=section&id=中期簡明綜合財務報表) [Review Report and Financial Statements](index=46&type=section&id=中期簡明綜合財務報表審閱報告) This section includes the review report by independent auditor Ernst & Young, along with the unaudited interim condensed consolidated income statement, statement of comprehensive income, statement of financial position, statement of changes in equity, and cash flow statement, with Ernst & Young concluding that nothing has come to their attention to suggest the interim financial information is not prepared in all material respects in accordance with International Accounting Standard 34 - Independent auditor Ernst & Young has reviewed the interim financial information and issued no audit opinion, concluding that nothing significant suggests non-compliance with International Accounting Standard 34[91](index=91&type=chunk)[117](index=117&type=chunk)[261](index=261&type=chunk) Interim Condensed Consolidated Income Statement (For the six months ended September 30) | Item | 2023 (thousand JPY) | 2022 (thousand JPY) | | :--- | :--- | :--- | | Revenue | 13,194,832 | 14,927,415 | | Gross Profit | 6,876,979 | 7,866,314 | | Profit Before Tax | 3,635,760 | 3,728,600 | | Profit for the Period | 3,329,503 | 3,087,382 | | Profit Attributable to Owners of the Parent Per Share (JPY) | 5.50 | 5.10 | Interim Condensed Consolidated Statement of Financial Position (Summary) | Item | September 30, 2023 (thousand JPY) | March 31, 2023 (thousand JPY) | | :--- | :--- | :--- | | Total Non-current Assets | 8,320,186 | 8,208,542 | | Total Current Assets | 33,543,335 | 32,158,818 | | Total Current Liabilities | 11,832,643 | 12,134,527 | | Total Non-current Liabilities | 2,094,826 | 2,201,905 | | **Net Assets** | **27,936,052** | **26,030,928** | Interim Condensed Consolidated Cash Flow Statement (Summary, For the six months ended September 30) | Item | 2023 (thousand JPY) | 2022 (thousand JPY) | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 3,251,296 | 3,277,219 | | Net Cash Flows Used in Investing Activities | (196,923) | (228,919) | | Net Cash Flows Used in Financing Activities | (1,449,364) | (1,267,049) | | **Cash and Cash Equivalents at End of Period** | **16,659,964** | **17,038,061** | [Notes to the Financial Statements](index=57&type=section&id=中期簡明綜合財務資料附註) The notes to the financial statements provide detailed explanations and supplementary information on interim financial data, covering key matters such as basis of preparation, changes in accounting policies, operating segment information, revenue recognition, composition of costs and expenses, tax details, earnings per share calculation, asset and liability specifics (e.g., inventories, receivables, bank borrowings), dividend policy, and related party transactions [Basis of Preparation and Accounting Policies](index=57&type=section&id=編製基準及會計政策) This interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', with accounting policies consistent with those used in the annual financial statements for the year ended March 31, 2023, and new and revised International Financial Reporting Standards effective during the period have been adopted without significant impact on the Group - The interim financial information is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'[140](index=140&type=chunk) - Several new and revised International Financial Reporting Standards were adopted for the first time during the period, but they had no significant impact on the Group's interim condensed consolidated financial information[130](index=130&type=chunk)[425](index=425&type=chunk)[433](index=433&type=chunk) [Operating Segments and Revenue](index=59&type=section&id=經營分部資料) For management purposes, the Group has only one reportable operating segment: 'Manufacture and sale of golf-related products and provision of related services', with revenue primarily derived from golf-related product sales recognized at a point in time when goods are transferred, and the notes provide detailed revenue by geographical region, indicating approximately **3,512.8 million JPY** of revenue from a single customer during the period - The Group has only one reportable operating segment: the manufacture and sale of golf-related products and the provision of services related to such products[427](index=427&type=chunk) - For the six months ended September 30, 2023, approximately **3,512,852 thousand JPY** of revenue was generated from sales to a single customer[458](index=458&type=chunk) Revenue by Geographical Region (For the six months ended September 30) | Region | 2023 (thousand JPY) | 2022 (thousand JPY) | | :--- | :--- | :--- | | Japan | 4,172,787 | 3,951,625 | | Korea | 3,942,808 | 4,237,634 | | China (incl. HK & Macau) | 3,529,130 | 4,028,409 | | Other Regions Worldwide | 1,079,222 | 1,858,853 | | North America | 335,024 | 565,128 | | Europe | 135,861 | 285,766 | | **Total** | **13,194,832** | **14,927,415** | [Profit, Taxation, and Earnings Per Share](index=62&type=section&id=除稅前溢利) This section details the components of profit before tax, including various costs, expenses, and exchange gains, along with explanations of income tax rates and calculation methods across different jurisdictions (e.g., Japan, Hong Kong, Mainland China, USA), ultimately resulting in basic and diluted earnings per share of **5.50 JPY** Key Adjustments to Profit Before Tax (For the six months ended September 30) | Item | 2023 (thousand JPY) | 2022 (thousand JPY) | | :--- | :--- | :--- | | Cost of Inventories Sold | 6,273,022 | 7,017,994 | | Employee Benefit Expenses | 2,230,947 | 2,395,600 | | Net Exchange Gains | (1,912,301) | (1,624,510) | | Write-down of Inventories to Net Realizable Value | 702,101 | 770,562 | - The Group pays income tax in its major operating regions (Japan, Hong Kong, Mainland China, USA, Switzerland, etc.) at local statutory tax rates[371](index=371&type=chunk)[439](index=439&type=chunk)[464](index=464&type=chunk)[440](index=440&type=chunk)[465](index=465&type=chunk) - Basic and diluted earnings per share are calculated based on profit attributable to owners of the parent of **3,329,450 thousand JPY** and a weighted average of **605,643 thousand** ordinary shares outstanding, resulting in **5.50 JPY**[373](index=373&type=chunk)[374](index=374&type=chunk)[443](index=443&type=chunk) [Assets and Liabilities](index=66&type=section&id=存貨) The notes detail major asset and liability items, with total inventories at **11,196.7 million JPY** as of September 30, 2023, lower than the beginning of the period, trade receivables and bills receivable at **3,863.1 million JPY** primarily within one month aging, and total interest-bearing bank borrowings at **6,540.0 million JPY**, mostly unsecured loans due within one year, alongside actuarial valuations for employee defined benefit liabilities Inventory Details (thousand JPY) | Item | September 30, 2023 (thousand JPY) | March 31, 2023 (thousand JPY) | | :--- | :--- | :--- | | Raw Materials | 2,758,875 | 3,244,147 | | Work-in-progress | 1,134,280 | 1,547,032 | | Finished Goods | 10,559,390 | 10,634,117 | | Less: Provision | (3,255,810) | (3,127,965) | | **Total** | **11,196,735** | **12,297,331** | Interest-bearing Bank Borrowings (thousand JPY) | Term | September 30, 2023 (thousand JPY) | March 31, 2023 (thousand JPY) | | :--- | :--- | :--- | | Current (within one year) | 5,940,000 | 6,690,000 | | Non-current | 600,000 | 600,000 | | **Total** | **6,540,000** | **7,290,000** | - The credit period for trade receivables and bills receivable typically ranges from **30** to **90** days, with no significant concentration of credit risk[474](index=474&type=chunk) [Equity, Dividends, and Related Party Transactions](index=65&type=section&id=股息) This section covers share capital structure, dividend distribution, and related party transactions, including the Board's declaration of an interim dividend of **1.50 JPY** per ordinary share for the six months ended September 30, 2023, and disclosures on lease transactions with related parties (e.g., Shanghai Pentech Enterprise (Group) Co., Ltd.) and key management personnel compensation - The Board declared an interim dividend of **1.50 JPY** per ordinary share for the six months ended September 30, 2023, totaling approximately **908.5 million JPY**, on November 24, 2023[469](index=469&type=chunk) - During the period, total compensation paid to key management personnel was **71,171 thousand JPY**, a decrease from **100,480 thousand JPY** in the prior period[505](index=505&type=chunk) - The Group has related party transactions, primarily rental expenses, with Shanghai Pentech Enterprise (Group) Co., Ltd., a company controlled by a shareholder[392](index=392&type=chunk)[485](index=485&type=chunk)

Revenue Performance - Revenue from North America decreased by 40.7% to ¥335.0 million for the six months ended September 30, 2023, primarily due to ongoing adverse effects from last year's distribution network adjustments [3]. - Total revenue for the six months ended September 30, 2023, was ¥4,485,975 million, representing 100% of total revenue, compared to ¥4,874,327 million in the same period last year [11]. - The company's revenue from the Japanese market was 4,172,787 thousand yen for the six months ended September 30, 2023, up from 3,951,625 thousand yen in the same period of 2022, reflecting an increase of about 5.6% [44]. - The group's revenue decreased by 11.6% to ¥13,194.8 million (approximately $93.9 million) for the six months ended September 30, 2023, compared to the same period last year [181]. - Revenue from Japan and Hong Kong increased by 5.6%, while revenue from China (including Hong Kong and Macau) decreased by 12.4% due to a significant slowdown in the overall economy and retail market [181]. - Revenue from golf clubs declined by 12.5%, primarily due to a 26.3% drop in sales in China, while revenue from Japanese golf clubs increased by 20.1% [181]. Profitability and Financial Performance - The pre-tax profit for the six months ended September 30, 2023, was ¥3,635.8 million [16]. - The company reported a profit of 3,329,503 thousand yen for the six months ended September 30, 2023, compared to 3,087,382 thousand yen for the same period in 2022, representing an increase of approximately 7.9% [36]. - The total comprehensive income for the six months ended September 30, 2023, was 2,813,588 thousand yen, compared to 2,159,003 thousand yen for the same period in 2022, indicating an increase of approximately 30.3% [63]. - The total operating profit before tax for the six months ended September 30, 2023, was ¥3,635,760,000, slightly down from ¥3,728,600,000 in the same period of 2022, reflecting a decrease of about 2.5% [66]. - The income tax expense for the six months ended September 30, 2023, was ¥306,257 thousand, compared to ¥641,218 thousand for the same period in 2022, showing a decrease of approximately 52.3% [163]. Assets and Liabilities - The company's inventory as of September 30, 2023, totaled ¥11,196,735 million, compared to ¥12,297,331 million as of March 31, 2023 [24]. - Non-current liabilities totaled 2,094,826 thousand yen as of September 30, 2023, down from 2,201,905 thousand yen as of March 31, 2023, indicating a decrease of about 4.9% [37]. - The company's net asset value increased to 27,936,052 thousand yen as of September 30, 2023, compared to 26,030,928 thousand yen as of the same date in 2022, reflecting a growth of approximately 7.3% [37]. - The company's cash and cash equivalents increased to 16,659,964 thousand JPY as of September 30, 2023, compared to 14,084,777 thousand JPY as of March 31, 2023 [136]. - Trade receivables amounted to 3,431,403 thousand JPY as of September 30, 2023, down from 3,513,495 thousand JPY as of March 31, 2023 [136]. Investments and Capital Expenditures - The company did not undertake any significant investments, acquisitions, or disposals during the six months ended September 30, 2023, but will continue to seek new business development opportunities [29]. - Capital expenditures for the six months ended September 30, 2023, amounted to 251.3 million yen, primarily for the purchase of machinery and equipment [56]. - The company plans to use the remaining unutilized proceeds for general corporate purposes, with no significant plans for major capital asset investments or acquisitions [31]. Employee and Operational Metrics - The total employee benefits expense for the six months ended September 30, 2023, was ¥29,278,000, down from ¥32,933,000 in the same period of 2022, indicating a decrease of approximately 11.5% [96]. - The company's employee-defined benefit liabilities decreased to 145,845 thousand yen as of September 30, 2023, from 349,300 thousand yen as of March 31, 2023, showing a reduction of approximately 58.3% [37]. - The average duration of defined benefit obligations was 4.8 years as of September 30, 2023, down from 5.4 years as of March 31, 2023 [106]. Market Strategy and Brand Positioning - The company has invested significantly in retail distribution networks and digital capabilities in Japan and China to enhance consumer experience [178]. - The company is focusing on the ultra-high-end and super-performance consumer segments, updating its product strategy to include technologically advanced TOUR WORLD golf clubs [184]. - The company has restructured its global brand positioning and communication to appeal to younger golfers, resulting in increased digital engagement metrics [185]. - HONMA is restructuring its growth strategy in North America and Europe, focusing on smaller, high-quality customer segments to enhance financial conditions in these markets [188]. - The company aims to strengthen its market penetration by modernizing and refining its product offerings to attract today's golfers [184]. Customer Engagement and Marketing - HONMA hosted a total of 1,757 customer engagement events across major markets, primarily at golf courses, to improve brand and product awareness [190]. - The company recorded a continuous increase in website traffic, reflecting strong brand equity and consumer interest in the North American market [189]. - HONMA's digital marketing efforts, including social media remarketing and search engine marketing, have led to double-digit monthly growth in natural traffic and conversion rates [198]. Financial Health and Debt Management - The debt-to-equity ratio as of September 30, 2023, was 31.5%, down from 36.3% as of March 31, 2023 [27]. - The company's interest-bearing bank loans stood at 6,540.0 million yen as of September 30, 2023, with an effective interest rate ranging from 0.62% to 3.08% [55]. - The interest expense on bank loans rose to ¥78,048,000 for the six months ended September 30, 2023, compared to ¥40,055,000 in the previous year, marking an increase of approximately 94.6% [93].

Revenue and Profit Performance - Revenue for the fiscal year ending March 31, 2023, reached 29,494,999 thousand yen, a slight increase from the previous year's 28,971,099 thousand yen[17] - Gross profit margin for 2023 was 50.8%, down from 54.1% in 2022[17] - Operating profit for 2023 was 3,856,557 thousand yen, a decrease from 5,456,791 thousand yen in 2022[17] - Net profit attributable to the company's owners for 2023 was 3,255,488 thousand yen, compared to 6,191,197 thousand yen in 2022[17] - Revenue increased by 1.8% to 29,495.0 million yen (equivalent to 218.8 million USD) for the fiscal year ending March 31, 2023[107] - Pre-tax profit for the fiscal year ending March 31, 2023, was 4,092.9 million yen[126] - Pre-tax profit decreased by 45.9% to 4,092.9 million yen (equivalent to 30.4 million USD) compared to 7,560.3 million yen in the previous year[131] Regional Revenue Performance - Japan, the company's largest market, contributed 9,841.4 million yen in revenue, a 15.8% year-on-year increase[23] - Revenue from Korea and China increased by 3.8% and 2.0% respectively, despite challenges from COVID-19[23] - North America revenue grew by 3.2% year-on-year, driven by a strategic focus on high-quality customer segments[23] - Revenue from Japan, Korea, China, and North America grew by 15.6%, 3.8%, 2.0%, and 3.2% respectively, benefiting from strong consumer demand rebound and successful marketing activities[31] - North America revenue increased by 3.2% to 1,024.2 million JPY for the fiscal year ending March 31, 2023, but decreased by 11.0% on a constant currency basis[32] - Revenue growth was recorded in Japan (15.6%), Korea (3.8%), China (2.0%), and North America (3.2%) despite COVID-19 impacts[128] - Revenue from Japan and South Korea increased by 15.6% and 3.8% respectively, while China's growth rate was 2.0% due to COVID-19 disruptions, and Europe saw a sales decline of 68.2% due to a shift to an indirect distribution model[129] Product Sales Performance - Golf club sales increased by 3.3% for the fiscal year ending March 31, 2023, driven by the launch of BERES AIZU and TW757 products targeting the ultra-premium and high-performance consumer markets[25] - Apparel sales grew by 1.6% year-over-year, supported by increased investment in professional and fashion sport sub-lines[25] - Golf club revenue grew by 3.2%, while apparel revenue increased by 1.5%, but golf ball sales declined by 1.1% due to raw material supply challenges[108] Financial Position and Cash Flow - Total assets as of March 31, 2023, were 40,367,360 thousand yen, slightly down from 41,427,472 thousand yen in 2022[19] - Net current assets stood at 20,024,291 thousand yen, up from 19,763,221 thousand yen in 2022[19] - The company maintained strong operating cash flow, with net cash inflow of 3,682.9 million yen for the fiscal year[22] - Operating cash flow remained positive at 3,675.9 million yen (equivalent to 27.3 million USD) for the fiscal year ending March 31, 2023[110] - The company held cash and cash equivalents of JPY 14,084.8 million as of March 31, 2023, primarily in RMB, JPY, and USD, consisting mainly of cash on hand and demand deposits[196] Expenses and Costs - Gross profit decreased by 4.4% to 14,988.3 million JPY, with gross margin declining from 54.1% to 50.8%[38] - Apparel gross profit dropped by 44.8% to 802.9 million JPY, with gross margin falling from 49.1% to 26.7%, primarily due to supply chain disruptions in Japan and Korea[40] - Gross margin decreased by 3.3 percentage points to 50.8% due to rising raw material costs, currency pressures, and tighter inventory provisions[109] - Administrative expenses remained stable at 1,381.1 million yen for the fiscal year ending March 31, 2023[123] - Financing costs increased by 88.2% to 125.0 million yen due to higher Japanese borrowing rates[124] - Financing income rose by 25.0% to 13.5 million yen due to increased average bank deposit balances[125] Capital Expenditures and Investments - Capital expenditures for the fiscal year ending March 31, 2023, amounted to 663.5 million JPY, primarily allocated to purchasing factory machinery, office equipment, and leasehold improvements[55] - Potential strategic acquisitions accounted for 29.4% of the intended use of proceeds, with JPY 4,939 million utilized as of March 31, 2023[59] - Sales and marketing activities in North America, Europe, Japan, South Korea, and China (including Hong Kong and Macau) accounted for 15.1% of the intended use of proceeds, with JPY 2,536 million utilized[59] - Capital expenditures accounted for 13.0% of the intended use of proceeds, with JPY 2,184 million utilized[59] - Repayment of interest-bearing bank loans accounted for 17.3% of the intended use of proceeds, with JPY 2,906 million utilized and 0.2% remaining unused[59] - The unused balance of global offering proceeds as of March 31, 2023, was approximately JPY 4,942.2 million, held in reputable banks[61] - The company did not undertake any significant investments, acquisitions, or disposals during the fiscal year ending March 31, 2023, but continues to seek new business development opportunities[86] Debt and Financial Obligations - The company's interest-bearing bank loans as of March 31, 2023, amounted to JPY 7,290.0 million, with interest rates ranging from 0.17% to 3.08%[75] - The company's debt-to-equity ratio as of March 31, 2023, was 36.3%, down from 38.1% on March 31, 2022[76] - The company has fully repaid the interest-bearing bank loans intended to be repaid using the proceeds from the global offering, with the remaining unused balance of 0.2% to be evaluated for appropriate use based on business needs[89] Dividend and Shareholder Returns - The company proposed a final dividend of 1.5 yen per share for the fiscal year ending March 31, 2023, totaling approximately 908.5 million yen, representing 27.9% of the distributable profit for the year[90] - The company's dividend for the fiscal year ending March 31, 2023, is 3.0 yen per share, totaling 1,817.0 million yen, representing approximately 55.8% of the distributable profit[174] - The company's distributable reserves as of March 31, 2023, amounted to 10,006 million yen, down from 11,524 million yen the previous year[154] - The company will evaluate its dividend policy and distributions from time to time, with details provided in the "Corporate Governance Report - Dividend Policy" section of the annual report[200] Tax and Regulatory Compliance - Income tax expenses decreased by 38.8% from 1,369.1 million yen in the fiscal year ending March 31, 2022, to 837.3 million yen in the fiscal year ending March 31, 2023[94] - The company's effective tax rate increased from 18.1% in the fiscal year ending March 31, 2022, to 20.5% in the fiscal year ending March 31, 2023[94] - The company has not experienced any significant legal or regulatory violations in Japan, China, or South Korea during the fiscal year[161] Operational and Strategic Initiatives - The company typically launches new golf clubs, balls, and accessories every 24 months, with additional promotion of older generation products for 12 months[77] - The company plans to strengthen its leadership in the ultra-premium segment and expand into the high-performance consumer segment in Asia[113] - The company plans to focus on high-quality customer segments in North America and Europe, and leverage its R&D capabilities to develop products aligned with market trends[133] - The company's growth strategy focuses on expanding non-club businesses, such as golf balls, bags, gloves, and apparel[166] - The company closed 615 sales points in Europe, reducing the total number of sales points to 35, while opening 8 new sales points in North America, forming a network of 345 sales points[173] - The company aims to reduce emissions and waste through energy-efficient machinery, water-saving equipment, and promoting energy-saving awareness among employees[160] Supply Chain and Inventory Management - The company relies on strategic suppliers in Japan, Taiwan, China, Hong Kong, and the US, with OEM partnerships exceeding five years[135] - The company's inventory aging analysis is based on product launch dates rather than capitalization dates, with some inventory aged 2-3 years reflecting products launched 2-3 years prior to the fiscal year-end[195] - Trade receivables and bills turnover days decreased by 14 days from 68 days in FY2022 to 54 days in FY2023, primarily due to enhanced collection efforts in certain markets[187] - Trade payables and bills turnover days decreased by 11 days from 58 days in FY2022 to 47 days in FY2023, mainly due to reduced procurement caused by high inventory levels throughout the year[187] Corporate Governance and Social Responsibility - The company operates the largest number of self-operated stores among major golf product companies, equipped with golf simulators and specialized fitting centers[135] - The company donated products worth 1.96 million yen during the fiscal year ending March 31, 2023[179] - The company's restricted stock unit plan, effective for 10 years from October 20, 2015, has approximately 2 years and 7 months remaining as of March 31, 2023[183] - The company's pledged deposits increased by 8.89% from 4.75 million yen to 5.17 million yen due to exchange rate fluctuations[178]

Revenue Performance - The group's revenue increased by 1.8% to ¥29,495.0 million (approximately $218.8 million) for the year ended March 31, 2023, despite challenges in the Chinese market due to COVID-19 outbreaks[3]. - Revenue from Japan and Korea grew by 15.6% and 3.8% respectively, while revenue from China and North America recorded increases of 2.0% and 3.2%[9]. - The group's golf club revenue showed a solid growth of 3.2%, contributing 72.9% to total revenue, while apparel revenue increased by 1.5%[3][11]. - HONMA's revenue for the fiscal year ending March 31, 2023, was ¥29,494,999, representing a 1.8% increase from ¥28,971,099 in the previous year[63]. - Revenue from golf clubs rose by 3.2% from 20,843.1 million JPY to 21,512.9 million JPY, while revenue from golf balls decreased by 1.1% to 2,942.3 million JPY[81]. - Revenue from accessories and other related products decreased by 7.3% to 2,030.7 million JPY, primarily due to sales restrictions in Japan and decreased sales in Europe[67]. - Revenue from Japan increased by 15.6% to 9,821.6 million JPY, driven by a broad recovery in sales across all channels and product categories[86]. - Revenue from South Korea grew by 3.8% to 7,088.7 million JPY, attributed to increased participation in golf and successful new product launches[71]. - Revenue from North America increased by 3.2% to 1,024.2 million JPY, although it decreased by 11.0% on a constant currency basis[72]. - Revenue from Europe decreased significantly by 68.2% to 442.6 million JPY, reflecting a shift to an indirect distribution model[72]. - Revenue from China (including Hong Kong and Macau) rose by 2.0% to 7,795.3 million JPY, with a decrease of 6.9% on a constant currency basis due to COVID-19 outbreaks[84]. Profitability and Margins - The gross profit margin decreased by 3.3 percentage points to 50.8% due to rising raw material prices and tightening inventory policies[5]. - The group's operating profit before tax decreased by 45.9% to ¥4,092.9 million (approximately $30.4 million) compared to ¥7,560.3 million for the previous year[5]. - The gross profit for the same period was ¥14,988,255 thousand, down from ¥15,685,627 thousand, indicating a decrease of about 4.4%[190]. - The operating profit for the fiscal year was ¥4,092,869, a decrease of 45.9% compared to ¥7,560,291 in the previous year[63]. - The gross profit for golf balls decreased by 36.2% to ¥862.6 million, with a gross margin decline to 29.3% due to rising raw material costs[115]. - The gross profit for apparel dropped by 44.8% to ¥802.9 million, with a gross margin decrease to 26.7% attributed to supply chain issues[115]. - The company’s net profit for the year was ¥3,255,605 thousand, a significant decline from ¥6,191,188 thousand, reflecting a decrease of approximately 47.5%[190]. Cash Flow and Financial Position - The company maintained a positive net operating cash flow of ¥3,675.9 million (approximately $27.3 million) for the year[5]. - Cash and cash equivalents as of March 31, 2023, totaled ¥14,084.8 million, primarily held in RMB, JPY, and USD[144]. - The net cash flow from operating activities for the year was ¥3,675,866 thousand, down from ¥5,916,455 thousand in the prior year, indicating a decrease of about 37.5%[194]. - The company reported a net loss from the sale of right-of-use assets of ¥18,527 thousand, compared to a net gain of ¥40,263 thousand in the previous year, reflecting a significant change in asset management strategy[194]. - The debt-to-equity ratio as of March 31, 2023, was 36.3%, a decrease from 38.1% the previous year, indicating improved financial stability[178]. Strategic Initiatives and Market Positioning - The company continues to prioritize product development and has launched proprietary golf balls to meet brand positioning and user preferences[11]. - The company aims to redefine the HONMA brand as vibrant and globally recognized among young golfers through various global branding initiatives[14]. - HONMA held a total of 4,061 customer events across major markets during the year ending March 31, 2023[24]. - The company is focusing on enhancing its distribution strategy in North America and Europe to target key customer segments[21]. - The introduction of new products, such as the BERES AIZU and TW757, aims to penetrate the ultra-high-end and ultra-performance consumer markets[17]. - HONMA's investment in e-commerce and customer relationship management systems aims to provide a comprehensive brand experience and boost sales[19]. - The company has established five trial centers across Japan, China, and South Korea to meet the needs of passionate golfers[39]. - The company aims to enhance brand loyalty and recognition through new retail experiences and marketing strategies, particularly in Asia and North America[48]. - HONMA plans to expand its TOUR WORLD product family to capture a larger share of the high-performance segment in its domestic markets[48]. - The company is focusing on sustainable growth in North America and Europe, which together account for nearly 70% of the global golf market[48]. Operational Changes and Workforce - The company closed 615 sales points in Europe, reducing the total to 35, while opening eight new sales points in North America, resulting in a network of 345 points[12]. - As of March 31, 2023, the company operated 90 self-owned HONMA brand stores, all located in Asia, with plans to continuously update store design and consumer experience[30]. - The company employs 745 staff globally, primarily in Japan, and offers various training programs to ensure employee growth and retention of skilled artisans[33]. - The company has 3,717 sales points globally, including 1,304 large sports retail stores in Japan, and continuously evaluates and expands its sales and distribution network[41]. Dividends and Shareholder Returns - The proposed final dividend is ¥1.5 per share, totaling approximately ¥1,817.0 million, which represents 55.8% of the group's distributable profits for the year[5]. - Total dividends for the fiscal year will amount to ¥3.0 per share, totaling ¥1,817.0 million, representing approximately 55.8% of the distributable profits[93]. - The board proposed a final dividend of ¥1.5 per share, totaling approximately ¥908.5 million, which represents about 27.9% of the distributable profits for the fiscal year[93].

Revenue Growth - For the six months ended September 30, 2022, the company's revenue increased by 25.7% compared to the same period in 2021[7]. - Revenue from Japan increased by 3.4%, while Korea saw a significant growth of 97.1% year-on-year due to the rising number of golf participants and successful new product launches[7]. - Revenue from China, North America, and other regions recorded strong growth rates of 11.1%, 31.6%, and 41.2% respectively[7]. - Japan, Korea, and China contributed 81.9% of the company's total revenue[7]. - Total revenue increased by 25.7% from ¥11,871.9 million to ¥14,927.4 million for the six months ending September 30, 2022[37]. - Revenue from Japan increased by 3.4% to ¥3,951.6 million, while revenue from South Korea surged by 97.1% to ¥4,237.6 million[44]. - Revenue from China (including Hong Kong and Macau) rose by 11.1% to ¥4,028.4 million, although it decreased by 4.3% on a constant currency basis due to government lockdowns[44]. - North American revenue increased by 31.6% to ¥565.1 million, with a 9.9% increase on a constant currency basis[45]. - Revenue from self-operated stores was ¥4,566.9 million, a 29.9% increase from ¥3,516.1 million, driven by optimized retail operations[47]. - Revenue from third-party retailers and wholesalers rose by 24.0% to ¥10,360.5 million, attributed to strong demand[47]. Product Performance - Golf club sales increased by 31.2% for the six months ended September 30, 2022, demonstrating strong brand value and resilience since 1959[9]. - Revenue from the BERES and TOUR WORLD product families grew by 37.1% and 17.1% respectively compared to the same period last year[9]. - Golf clubs accounted for 76.6% of total revenue for the six months ended September 30, 2022, with Japan showing a robust growth of 20.3% year-on-year[10]. - The company aims to enrich its TOUR WORLD product family with technology-enhanced series and modern designs to attract contemporary golfers[6]. - The company has launched new product families, including the GS series and TW757 series, aimed at attracting younger, performance-focused golfers[24]. Market Strategy - The company is focusing on two market segments: ultra-high-end and ultra-performance, to simplify and strengthen its product portfolio[6]. - The company has redefined its brand to appeal to younger golfers, enhancing its global brand positioning and communication strategies[8]. - The company aims to enhance its growth strategy in North America and Europe, focusing on smaller, high-quality customer segments[11]. - The company is focusing on sustainable growth in North America and Europe, which account for nearly 70% of the global golf market, by targeting high-quality customer segments[27]. - The company has established a strategic partnership with Itochu Corporation to develop its apparel business, promoting HONMA as a "golf lifestyle brand" in Japan, China, and Korea[28]. Financial Performance - Operating profit increased by 37.5% from ¥1,590.3 million to ¥2,187.5 million[36]. - Net profit attributable to equity holders increased by 129.0% from ¥1,348.4 million to ¥3,087.4 million[36]. - Basic and diluted earnings per share rose by 128.7% from ¥2.23 to ¥5.10[36]. - Gross profit margin decreased from 55.3% to 52.7%, while total sales cost increased by 33.0%[36]. - The company attributes stable revenue growth to ongoing improvements in product development, merchandise planning, and retail operations[41]. Operational Efficiency - The company closed 378 sales points in Europe, reducing the total to 237, while opening eight new sales points in North America, resulting in a network of 345 locations[11]. - The average order value exceeded $1,000, indicating a positive trend in e-commerce activities[12]. - HONMA hosted 1,912 customer events during the six months ended September 30, 2022, enhancing brand and product awareness[14]. - The company continues to evaluate and expand its sales and distribution networks to adapt to local retail landscapes and consumer behaviors[20]. - The company has implemented a customer relationship management system with e-commerce functionalities to provide a comprehensive brand experience[8]. Challenges and Risks - The golf industry is expected to face challenges due to public health uncertainties and supply chain issues, but the company sees positive recovery trends as golf participation increases[29]. - The company is committed to optimizing operational efficiency and maintaining cash reserves to mitigate the impacts of global health challenges[29]. - The company will continue to monitor external challenges related to COVID-19 and adjust its business strategies accordingly to protect employee health and safety[30]. Shareholder Information - The company declared an interim dividend of ¥1.5 per share, totaling approximately ¥908.5 million, which represents 29.4% of the group's distributable profit for the six months ended September 30, 2022[83]. - Kouunn Holdings Limited holds 233,560,525 shares, representing 38.56% of the total shares[90]. - Huang Wenhuan holds 234,512,775 shares, representing 38.72% of the total shares[90]. - The total number of issued shares is 605,642,500[93]. - The company has not yet committed to any acquisition targets as of the reporting date, indicating a cautious approach to potential acquisitions in the golf product industry[82].

Financial Data and Key Metrics Changes - The company achieved a net sales of 14.9 billion JPY (approximately 110 million USD), a year-on-year increase of 25.7% [3] - Gross margin was 52.7%, slightly down by 2.6 percentage points compared to the previous year, but still maintained a high level [3] - Net profit surged by 129% to 3.1 billion JPY (approximately 23.2 million USD), with a net profit margin increasing by 9.3 percentage points to 20.7% [3] - Cash flow from operations was 3.3 billion JPY (approximately 24 million USD), a slight decrease of 11.5% year-on-year, but net cash increased significantly by 65.5% to 10 billion JPY (approximately 69.7 million USD) [3] Business Line Data and Key Metrics Changes - Sales from golf clubs increased by 31.2%, while accessories and other products saw a growth of 52.2% [5] - Sales from apparel and golf balls experienced slight declines of 1.7% and 2.7%, respectively, primarily due to strict pandemic control measures in various regions [5][14] - Golf clubs accounted for 76.7% of total sales, with apparel becoming the second-largest product category, contributing 8.3% to total sales [6] Market Data and Key Metrics Changes - Sales in South Korea grew by 97.1%, driven by an increase in golf participation and successful new product launches [4] - Sales from Japan increased by 3.4% following the lifting of pandemic restrictions, while sales from China, North America, and Southeast Asia grew by 11.1%, 31.6%, and 41.2%, respectively [4] - European sales declined by 46%, attributed to a strategic shift in the distribution model and cost optimization efforts [4][26] Company Strategy and Development Direction - The company is focused on a long-term growth strategy that emphasizes product, channel, and brand development [7] - The product strategy includes a full range of offerings in both golf clubs and non-club products, targeting ultra-luxury and high-performance segments [7][8] - The company is enhancing its e-commerce capabilities and investing in digital marketing to adapt to changing consumer behaviors post-pandemic [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges from supply chain disruptions and inflationary pressures but remains optimistic about achieving over 10% sales growth and maintaining a profit margin around 25% for the year [24][25] - The company plans to continue optimizing costs and enhancing cash flow while ensuring employee health and safety [23][30] Other Important Information - The company has a robust cash position and a healthy balance sheet, with a significant increase in cash and cash equivalents [21] - The company is committed to maintaining a strong presence in the Asian markets while adjusting its strategies in Europe and North America to focus on profitability [26] Q&A Session Summary Question: Does the management have guidance for full-year revenue and profit expectations? - The company has not provided specific guidance due to market uncertainties but anticipates over 10% sales growth and a profit margin around 25% [24] Question: What are the reasons for the decline in European market sales and the outlook for the second half? - The decline is attributed to strategic adjustments in distribution and a focus on Asian markets, with expectations for a narrowing of the sales decline in the second half [25][26] Question: Can you elaborate on the e-commerce strategy and future sales plans? - The company has established a strong e-commerce presence in China and is expanding its digital marketing efforts to enhance customer engagement [27] Question: Will there be a shift in focus towards self-operated stores over third-party retailers? - While self-operated stores are important, third-party channels still contribute significantly to sales, and the company aims to enhance customer experience across all channels [28] Question: How has the company addressed supply chain issues related to raw materials? - Supply chain challenges persist, particularly for golf ball materials, but overall supply chain conditions are improving [30] Question: What are the future revenue targets for club and non-club products? - The company expects the revenue share of non-club products to increase from 25% to potentially 40-50% in the coming years [31] Question: What growth rate is expected for the apparel business in the next few years? - The apparel segment is anticipated to grow at a compound annual growth rate of over 50% once pandemic-related restrictions ease [32] Question: How will inflation and currency fluctuations impact profit margins? - Inflation and currency fluctuations have affected margins, but the company is implementing price adjustments to mitigate these impacts [34]

Financial Performance - For the fiscal year ending March 31, 2022, total revenue reached a historical high of ¥28,971.1 million, an increase of 27.4% from ¥22,735.1 million in the previous year[6] - Gross profit rose by 37.0% to ¥15,685.6 million, compared to ¥11,445.2 million for the fiscal year ending March 31, 2021[6] - The operating profit increased significantly to ¥5,456.8 million from ¥1,232.8 million in the previous year[4] - Overall revenue increased by 27.4% for the fiscal year ending March 31, 2022, despite ongoing challenges from COVID-19[14] - Net profit increased by 233.0% from ¥1,859.1 million to ¥6,191.2 million, indicating strong overall financial performance[43] - Basic and diluted earnings per share increased to ¥10.22 from ¥3.07, marking a growth of 232.9%[43] - Profit before tax surged by 212.4% to ¥7,560.3 million (approximately $65.0 million) compared to ¥2,420.3 million for the previous year[115] Revenue Growth by Region - Revenue growth was recorded across all products and regions, with Japan, China, Europe, and other regions showing increases of 29.8%, 38.7%, 47.1%, and 48.7% respectively[8] - Revenue from Japan grew by 29.8%, while China led in growth rate with a 38.7% increase, highlighting the expanding retail presence and optimized product mix[15] - European and other regions saw revenue increases of 47.1% and 48.7% respectively, attributed to successful market launches of golf club products[15] - Revenue from North America increased by 8.0% to ¥992,169 million from ¥918,542 million[51] - Revenue from South Korea rose by 7.0% to ¥6,831,638 million from ¥6,383,392 million[50] - Revenue from China (including Hong Kong and Macau) surged by 38.7% to ¥7,644,271 million from ¥5,512,022 million[50] Product Performance - Golf club sales increased by 23.9% for the fiscal year ending March 31, 2022, driven by the launch of new products like Beres Aizu and TW757[9] - Revenue from apparel and accessories rose significantly, with increases of 71.6% and 43.1% respectively, making apparel the second-largest product category for HONMA[9] - Golf clubs contributed 71.9% of the total revenue for the group as of March 31, 2022, with golf ball revenue rising by 11.8% compared to the previous year[19] - The gross margin for the group's golf club products improved by 3.8 percentage points to 54.1% for the year ended March 31, 2022[114] Strategic Initiatives - The company plans to launch more youth-oriented and female-targeted products to maintain growth momentum[7] - The company continues to invest in brand awareness and marketing to attract younger consumers and expand market share[7] - HONMA's brand exposure was enhanced through participation in golf tournaments, notably with TEAM HONMA's Hideto Tanihara winning major championships[11] - The company aims to attract younger consumers with the launch of the limited-edition Sakura series in celebration of its 65th anniversary[12] - The company continues to seek sponsorships with young Asian golfers to strengthen brand appeal among younger demographics[23] E-commerce and Digital Strategy - E-commerce sales surged by 125% year-on-year, reflecting the success of the direct-to-consumer strategy and investment in online channels[10] - The company aims to enhance its e-commerce capabilities and has rebuilt its website, resulting in double-digit monthly growth in digital engagement metrics[31] - HONMA's digital ecosystem was enhanced with new CRM systems and e-commerce functionalities to improve consumer engagement[17] Market Expansion and Retail Strategy - HONMA opened 120 new retail locations in North America, bringing the total to 337[20] - The total number of sales points increased by 209 to approximately 4,144 as of March 31, 2022, including 1,569 points in large sports retail stores[29] - The company is deepening collaborations with major sporting goods stores in both domestic and new markets as part of its growth strategy[111] - The company is actively sponsoring TEAM HONMA golfers to enhance brand visibility and market presence[111] Financial Health and Investments - The total assets of the company amounted to ¥41,427.5 million, an increase from ¥36,493.5 million in the previous year[5] - Total equity reached ¥25,352.6 million, compared to ¥21,321.1 million in the previous year[5] - Cash and cash equivalents amounted to ¥14,454.6 million as of March 31, 2022, primarily held in USD, JPY, and RMB[77] - Interest-bearing bank loans totaled ¥7,700.0 million as of March 31, 2022, with actual interest rates ranging from 0.33% to 1.07%[78] - Debt-to-equity ratio improved to 38.1% as of March 31, 2022, down from 49.4% a year earlier[79] Corporate Governance and Leadership - Yang Xiaoping appointed as a non-executive director in May 2018, providing strategic advice for business development[98] - The company emphasizes the importance of strategic advice from its board members to enhance business development and market expansion[98][100] - The board comprises experienced professionals with diverse backgrounds in finance, technology, and corporate governance, ensuring robust oversight and strategic direction[101][103] Challenges and Future Outlook - The golf industry is expected to face challenges due to global public health uncertainties and supply chain issues, but HONMA anticipates revenue growth in all major markets as golf participation increases[40] - The company is committed to sustainable business development and creating long-term value for shareholders while adapting to the new normal in the golf industry[40] - The company will continue to cautiously assess potential acquisition targets in the golf product industry based on brand recognition, geographical coverage, distribution networks, product variety, and financial status[88]

非常感谢大家抽时间参加HOMA高尔夫2022财政年度全年业绩公布媒体线上沟通会首先我会为大家介绍今天在线的管理层他们包括首席财务官兼首席营运官边卫文女士投资者关系总监陈丽珠女士首先我把时间交给 陈女士介绍一下公司2022年财政年度业绩的表现之后我们会有一个问答环节到时候各位媒体朋友可以用zoom的直手功能提问或者可以在问答视窗输入问题下面我先将时间交给陈女士有请 各位分析师朋友 媒体朋友富途和智通大陆眼平台的各位投资人朋友 大家好欢迎各位波荣参加鸿马高尔夫2022财年全年业绩发布会我们将在接下去的一小时为大家分享这一年的业务进展和取得的成绩并期待在问答环节和大家进行交流截至2022年 3月31日的年度红马交出了一份令人满意的成绩单首先对首次参加公司发布会的朋友我先简单介绍一下红马 欧马高尔夫成立于1959年是高尔夫业内最富盛名的标志性品牌之一公司以精湛的工艺、卓越的性能以及无与伦比的产品质量而闻名融合先进的创新科技以及日本的传统工艺为全球高尔夫球手提供高端、高性能的高尔夫球杆、球类、服装以及配件 作为全球唯一的垂直整合型高尔夫公司鸿马拥有自主设计开发及制造的能力在日本九天拥有占地16万平方米的研发和制造中心2 ...

Revenue Growth - For the six months ended September 30, 2021, the company's revenue increased by 31.1% compared to the same period in 2020, despite most self-operated stores being closed due to COVID-19[6]. - Revenue from Japan increased by 105.9%, while China saw a year-on-year growth of 54.0%, and North America and Europe recorded increases of 40.7% and 29.2%, respectively[7]. - The total revenue of the group increased by 31.1% from 9,053.0 million yen for the six months ended September 30, 2020, to 11,872.0 million yen for the six months ended September 30, 2021[37]. - Revenue from golf clubs accounted for 73.4% of total revenue, rising by 23.9% to 8,719.4 million yen for the six months ended September 30, 2021[41]. - Revenue from apparel surged by 151.3% from 501.1 million yen to 1,259.3 million yen during the same period, driven by ongoing investment in product development[41]. - Revenue from the Chinese market (including Hong Kong and Macau) increased by 54.0% to 3,624.7 million yen, with a fixed exchange rate basis increase of 39.4%[44]. - Revenue from Japan saw a significant increase of 105.9%, rising to 3,821.6 million yen for the six months ended September 30, 2021[44]. - Revenue from North America and Europe increased by 40.7% and 29.2% respectively, reaching 4,295 million JPY and 5,296 million JPY for the six months ended September 30, 2021[45]. Product and Market Strategy - The company is focusing on the ultra-high-end and ultra-performance consumer segments, enhancing its product portfolio by introducing the new GS series under the TOUR WORLD family, which launched in January 2021[9]. - The company has redefined its brand positioning and communication to appeal to younger golfers, resulting in increased digital engagement and brand awareness[8]. - The company has removed the Be ZEAL product line while enhancing the TOUR WORLD family and traditional BERES products for beginner golfers[6]. - The BERES and TOUR WORLD product families target specific consumer segments, with a focus on high-end and performance-driven golfers[15]. - The company aims to strengthen its leadership in the ultra-high-end segment while solidifying its presence in the rapidly growing super-performance segment, particularly in the domestic markets of Japan, Korea, and China[26]. Digital and Retail Expansion - The company is implementing customer relationship management systems and e-commerce functionalities to enhance consumer experience and drive sales[8]. - The company continues to invest in e-commerce and digital marketing strategies to enhance brand visibility and consumer engagement[12]. - The company opened 102 new retail points in North America, bringing the total to 336 retail locations as of September 30, 2021[11]. - The company opened 38 new retail points in Europe, increasing the total to 628 locations as of September 30, 2021[12]. - Website traffic nearly doubled, with the average order value exceeding $1,000, reflecting strong brand interest in the North American market[12]. - A total of 2,008 customer events were held during the six months ended September 30, 2021, compared to 1,357 events in the same period last year[14]. Financial Performance - Gross profit increased by 41.6% to ¥6,561,849, up from ¥4,634,374, resulting in a gross margin of 55.3%[34]. - The company reported a pre-tax profit of ¥1,746,495, a significant turnaround from a loss of ¥431,376 in the same period the previous year, reflecting a 504.9% improvement[34]. - Net profit for the period was ¥1,348,351, compared to a loss of ¥803,525 in the same period the previous year, indicating a strong recovery[34]. - The company reported a total comprehensive income of ¥1,364,535 thousand for the period, compared to a loss of ¥752,412 thousand in the same period last year[123]. - Cash flow from operating activities for the six months ended September 30, 2021, was 3,897,456 thousand yen, significantly higher than 2,153,871 thousand yen in the previous year, marking an increase of about 80.9%[128]. Employee and Operational Management - The company aims to maintain employee health and financial stability while pursuing growth strategies during the pandemic[8]. - Employee welfare expenses amounted to 2,312.4 million yen for the six months ending September 30, 2021[23]. - The company has a strong focus on maintaining a good reputation with banks, as indicated by the absence of recent violations[84]. Investment and Capital Management - The planned use of proceeds from the global offering includes 29.4% allocated for potential strategic acquisitions, amounting to 4,939 million yen[83]. - As of September 30, 2021, 70.4% of the global offering proceeds had been utilized, leaving a remaining balance of 29.6%[83]. - The company has fully repaid interest-bearing bank loans using proceeds from the global offering, with the remaining unused balance planned for general corporate purposes[84]. - The company will continue to cautiously evaluate potential acquisition targets in the golf product industry based on brand recognition, geographical coverage, distribution networks, product variety, and financial status[84]. Shareholder Information - The percentage of shares held by Kouunn Holdings Limited is 38.56%, representing a significant ownership stake[92]. - The company’s major shareholder, Fosun International, holds a 72.31% stake in Fosun Industrial Holdings Limited[94]. - The total number of issued shares as of September 30, 2021, is 605,642,500[90]. - The board declared an interim dividend of JPY 1.5 per share, totaling approximately JPY 908.5 million, which corresponds to about 7.8% of the distributable profit as of September 30, 2021[111]. Corporate Governance - The company has complied with all applicable code provisions of the Corporate Governance Code, except for A.2.1, which states that the roles of the chairman and CEO should be separate[113]. - The audit committee, consisting of three independent non-executive directors, has reviewed and discussed the unaudited interim results for the six months ended September 30, 2021[115]. - The company believes that the current leadership structure allows for effective planning and execution of business decisions and strategies[113].