Company Overview - Shenzhou International is one of the largest vertically integrated knitwear manufacturers globally, producing approximately 430 million pieces of knitwear annually[9]. - The company has over 85,700 employees and operates factories covering over 5.38 million square meters[9]. - Major clients include renowned brands such as NIKE, UNIQLO, ADIDAS, and PUMA, with markets spanning China, Japan, Asia Pacific, Europe, and the US[9]. - Shenzhou International was listed on the Hong Kong Stock Exchange in November 2005 and is included in several indices, including the Hang Seng Composite Index and MSCI Index[10]. - The company has received multiple awards, including recognition as one of the "Top 100 HK Listed Companies" in 2012, 2015, and 2016[12]. - In 2019, Shenzhou International was named in the "Listed Company Awards of Excellence 2019" by Hong Kong Economic Journal[13]. Financial Performance - Total sales for 2019 reached RMB 22,665,272, an increase of 8.7% from RMB 20,950,205 in 2018[19]. - Profit for the year was RMB 4,958,536, representing a growth of 10.4% compared to RMB 4,492,543 in 2018[16]. - Gross profit margin decreased to 30.3% in 2019 from 31.6% in 2018[16]. - Net profit margin improved slightly to 21.9% in 2019 from 21.4% in 2018[16]. - Non-current assets increased to RMB 11,360,620 in 2019, up from RMB 9,411,627 in 2018[16]. - Current assets rose to RMB 20,494,238, compared to RMB 18,140,427 in the previous year[16]. - Total equity reached RMB 25,191,327, an increase from RMB 22,454,279 in 2018[16]. - Cash and cash equivalents increased to RMB 5,060,896 in 2019 from RMB 3,565,916 in 2018[16]. - The profit attributable to owners of the parent for the same period was approximately RMB 5,095,206,000, reflecting a year-on-year increase of approximately 12.2%, or approximately 14.1% when excluding the negative impact from the retail business[41]. - Earnings per share for the year were RMB 3.39, with cash and cash equivalents amounting to approximately RMB 5,060,896,000 as of 31 December 2019[41]. Market Trends and Challenges - The apparel industry in China faced a challenging operating environment in 2019, with exports of apparel products declining by approximately 4% year-on-year, particularly to the US, EU, and Japan[43]. - Despite the challenges, the Group focused on enhancing long-term competitiveness by expanding production capacity and improving efficiency in overseas factories[39]. - The current difficulties in the industry are viewed as opportunities for growth, promoting quality-oriented development and enhancing competitiveness through innovation and flexible manufacturing[43]. - The textile and apparel industry in China faced multiple pressures in 2019, including slow global economic recovery and rising operational costs[54]. - The domestic demand growth has significantly slowed, impacting market demand and export enterprises[54]. Production and Operations - The company aims to be the most competitive knitwear manufacturer globally, focusing on high-quality production through OEM and ODM methods[8]. - Shenzhou International has strategically established production bases in Ningbo, China, and Tây Ninh, Vietnam, enhancing its manufacturing capabilities[9]. - The Group's global production layout and vertical integration have mitigated the adverse impacts of COVID-19, allowing full production capacity to be resumed in a short period[45]. - The Group's operational management has matured, and resource allocation in domestic bases has been optimized, leading to reduced energy consumption levels[39]. - The Group plans to moderately increase domestic fabric production capacity to replace imports from overseas bases, aiming to balance upstream and downstream productivity[76]. Corporate Governance - The Company has complied with all code provisions of the Corporate Governance Code throughout the year ended December 31, 2019[132]. - The Board includes at least three independent non-executive directors, with one possessing appropriate professional qualifications or financial management expertise, meeting all regulatory requirements[137]. - Continuous professional development for Directors is arranged to update their knowledge on Listing Rules and related legal requirements[136]. - The Company adopted a shareholders' communication policy effective from March 26, 2012, allowing shareholders to propose candidates for Director elections[143]. - The Company has increased transparency and governance standards through continuous training for Directors and staff, and by appointing external professional advisers[131]. Sustainability and Social Responsibility - The sustainability report outlines the company's commitment to environmental protection, social responsibility, and governance practices across its major subsidiaries in China, Vietnam, and Cambodia[195]. - The company aims to become the best garment operator globally, focusing on innovation, automation, and environmental protection as key components of its future development strategy[200]. - The company is committed to creating a green enterprise and achieving sustainable development through ongoing investment in environmental protection[199]. - Stakeholder engagement is prioritized, with internal and external communication channels established to gather feedback and address major issues[197]. Future Outlook - The Group aims to improve employee living conditions and establish motivating remuneration and welfare policies[49]. - The Group emphasizes excellent corporate governance and transparent communication with shareholders and investors[47]. - The Group plans to enhance the sharing of resources between overseas and domestic production bases, improving the independent operational capabilities of overseas factories[123]. - Continuous investment in environmental protection is seen as a future competitive advantage, with plans to increase the use of clean energy sources like solar and wind energy[124][125].
申洲国际(02313) - 2019 - 年度财报