Financial Performance - Revenue for the year ended December 31, 2024, was RMB 3,650.0 million, representing a 3.0% increase from RMB 3,542.8 million in 2023[13]. - Gross profit for the same period was RMB 1,739.3 million, up 1.9% from RMB 1,706.8 million[13]. - Profit from operations decreased by 9.5% to RMB 552.5 million compared to RMB 610.6 million in 2023[13]. - Profit attributable to equity shareholders fell by 13.1% to RMB 461.1 million from RMB 530.4 million[13]. - Basic and diluted earnings per share decreased to RMB 38.51, down 13.1% from RMB 44.30[13]. - Gross profit margin declined to 47.7%, down from 48.2%[13]. - Operating profit margin decreased to 15.1%, compared to 17.2% in 2023[13]. - Effective tax rate increased to 24.3%, up from 19.4%[13]. - Other income increased to RMB 70.0 million from RMB 51.0 million, with local government grants contributing RMB 66.9 million[72]. - Selling and distribution expenses rose by RMB 101.7 million to RMB 1,058.9 million, accounting for 29.0% of total revenue, up 2.0 percentage points[73]. - Profit attributable to equity shareholders was RMB 461.1 million, a decrease of 13.1%, with the profit margin down 2.4 percentage points to 12.6%[87]. - Earnings per share decreased by 13.1% to RMB 38.51 cents[88]. - The Group's total cash and bank balance as of December 31, 2024, was RMB 3,157.4 million, slightly up from RMB 3,139.3 million in 2023[160]. - Cash and cash equivalents decreased by RMB 250.2 million, with net cash generated from operating activities amounting to RMB 527.3 million[162]. Dividend and Shareholder Returns - Final dividend per share was reduced by 30.8% to HK9 cents from HK13 cents in the previous year[13]. - Special final dividend per share decreased by 40.0% to HK3 cents from HK5 cents[13]. - The Board recommended a final dividend of HKD 9 cents per share and a special final dividend of HKD 3 cents per share, totaling HKD 143.7 million[24]. - The Group's total dividend payment for the year is HK$ 143.7 million, reflecting a stable dividend payout ratio[55][58]. - The Group's dividend policy targets a payout ratio of about 45% to 55% of the annual profit, with potential for additional special dividends based on profitability and cash flow[174]. Retail and Store Expansion - The Group maintained 2,773 stores nationwide as of December 31, 2024, with a net increase of 78 stores, including 994 consignment stores and 64 direct-to-retail stores[25][26]. - In 2024, China Lilang recorded a net increase of 78 stores, bringing the total to 2,773 nationwide, with 2,451 stores under the core collection[50]. - The Group plans to open 100 new physical stores in 2025, focusing on prime shopping centers in provincial capitals and prefecture-level cities[40]. - China Lilang plans to open its first store in Malaysia in the first half of 2025 as part of its international expansion strategy[27][29]. - The Group's total retail stores increased to 2,773 by the end of December 2024, a net increase of 78 stores during the year, with a total retail floor area of approximately 460,205 square meters, representing a 7.1% increase compared to the previous year[103][104]. E-commerce and New Retail Strategy - New retail sales grew significantly by 24% during the year, driven by the transformation of e-commerce platforms into primary retail outlets for new products[26]. - The Group launched a new retail strategy, enhancing online-offline connectivity and customer experience through a fully upgraded retail management system[26]. - The Group aims to increase online sales of new products to 80% of total e-commerce sales by 2025, targeting overall sales growth of at least 10%[40]. - E-commerce sales achieved a growth of 24% during the year, outperforming the overall business performance[51]. - The Group's new retail strategy includes leveraging TikTok live-streaming to enhance online sales and customer engagement[51]. - The Group's new retail strategy has transformed e-commerce from a channel for clearing inventory to a primary retail channel for new products, achieving a 24% growth in e-commerce sales[53]. Product Development and Innovation - The Group's commitment to research and development is evident through the launch of new product lines, including a down jacket series and durable non-iron shirts[31]. - The smart casual collection saw significant growth of 27.2%, driven by increased average sales per store and contributions from new retail channels[56][59]. - Revenue from tops increased by 7.4%, accounting for 65.5% of total revenue, while the down jacket category grew by 40.8%[57][59]. - The introduction of innovative products, such as the Water-Repellent Down 3.0, addressed consumer needs and enhanced the brand's market appeal[117][118]. - The group debuted its durable white non-iron shirts, recognized as "the world's outstanding extra durable white non-iron shirt" by the World Record Certification Agency[6]. - The group launched the "Water-Resistant Down Jacket 3.0," achieving over 10,000 minutes in IDFL's shock test, leading to a 41% year-on-year increase in overall down jacket sales[1]. Strategic Focus and Market Positioning - The Group's strategic focus includes the "Multi-brands and Internationalization" strategy to enhance brand value and market share[27][34]. - The introduction of a direct-to-consumer (DTC) model in select markets has been implemented to replace the previous distributor-dominated model[25]. - The DTC model is expected to positively impact sales starting from 2025, enhancing connections with consumers[38]. - The "LILANZ" core collection will continue channel reform in 2025, enhancing brand-consumer connections through the DTC model, which is anticipated to unlock further sales growth[145]. - China Lilang aims to strategically upgrade its brand position during market consolidation to enhance competitiveness[152]. Operational Efficiency and Inventory Management - The Group's average inventory turnover days increased to 189 days as of June 30, 2024, compared to 170 days in the previous year[20]. - The Group's inventory management strategy includes enhancing supply chain efficiency and further automating production to improve profitability[41]. - Average inventory turnover days increased to 183 days, up by 13 days compared to the previous year, primarily due to a higher proportion of direct retail sales[167]. - The total inventory balance rose by RMB 261.2 million to RMB 1,086.9 million as of December 31, 2024[167]. Corporate Social Responsibility and Governance - China Lilang has donated over RMB 6.58 million and established 23 Dream Centers, benefiting approximately 30,881 children in underdeveloped areas through its "2022-2027 Aesthetic Education Public Welfare Program"[140]. - The group has donated RMB 5 million to Jinjiang Municipal Hospital and collaborated with Tencent Charity Foundation to donate RMB 1.10 million for charitable initiatives[140]. - The company complies with all code provisions of the Corporate Governance Code during the year ended December 31, 2024[198]. - The group is committed to environmental sustainability, incorporating it into daily operations, with details outlined in the Environmental, Social and Governance Report[186]. Risks and Challenges - The company faces strategic risks including economic slowdown and deterioration of market competition, as well as operational risks related to ineffective management of retail operations and misjudgment of fashion trends[185]. - The Group continues to control financial risks prudently, with the functional currency being Hong Kong Dollars and financial statements translated into Renminbi for reporting purposes[189].
中国利郎(01234) - 2024 - 年度业绩