Consumer and Market Positioning - The company's main consumer group is young people aged 35 and below, and it has been awarded the 2022 GEN-Z's Favorite Brands "Inspiration and Vitality Brand" and the 2022 Global Innovativeness Review "Annual Consumer Brand" by TMT Post[4] - The company has an omni-channel sales and distribution network that includes supermarkets, chained convenience stores, and e-commerce channels, effectively reaching young consumers[4] - The company's product portfolio includes traditional Latiao (辣條) snacks, Konjac Shuang (魔芋爽), Fengchi Kelp (風吃海帶), and 78° Braised Egg (78°滷蛋), among others[3] - The company adheres to a product development philosophy of "maximizing the intrinsic value of nature with an industrialized approach," continuously upgrading existing products and launching new ones[4] - The company launched new nitrogen preservation technology and introduced sharing packs suitable for family and party scenarios in 2022[38] - Two product categories each generated over RMB1 billion in annual retail sales value in 2022, with four products each exceeding RMB0.5 billion[52] - China's snack food market size was RMB825.1 billion in 2021, with a CAGR of 6.1% from 2016 to 2021, projected to grow at 6.8% CAGR to RMB1,147.2 billion by 2026[47] - China's spicy snack food market is expected to grow at a CAGR of 9.6% from 2021 to 2026, reaching RMB273.7 billion by 2026[48] - The Group aims to enhance product core competency by expanding product categories and improving quality, and to increase user engagement through entertaining brand marketing and online content marketing[126][129] Financial Performance - Revenue for 2022 was RMB 4,632.2 million, showing a slight decrease from RMB 4,800.2 million in 2021[26] - Gross profit for 2022 increased to RMB 1,959.6 million, up from RMB 1,793.0 million in 2021[26] - Profit for the year in 2022 was RMB 151.3 million, a significant drop from RMB 826.7 million in 2021[26] - Adjusted net profit for 2022 was RMB 913.1 million, slightly higher than RMB 907.8 million in 2021[26] - Total assets as of December 31, 2022, were RMB 6,930.3 million, up from RMB 5,190.6 million in 2021[27] - Net assets increased to RMB 5,524.4 million in 2022, compared to RMB 3,669.9 million in 2021[27] - Working capital rose to RMB 2,557.0 million in 2022, up from RMB 1,730.8 million in 2021[27] - Current assets grew to RMB 3,557.2 million in 2022, compared to RMB 2,986.3 million in 2021[27] - Non-current assets increased to RMB 3,373.1 million in 2022, up from RMB 2,204.3 million in 2021[27] - Total liabilities decreased to RMB 1,405.9 million in 2022, down from RMB 1,520.7 million in 2021[27] - The company's gross margin increased to 42.3% in 2022, up by 4.9 percentage points from 37.4% in 2021[34] - Adjusted net profit for 2022 was RMB 913.1 million, a slight increase of 0.6% compared to the previous year[34] - Inventory turnover days increased to 82 days in 2022, up by 12 days from 70 days in 2021[29] - Trade receivables turnover days rose to 4.9 days in 2022, an increase of 1.2 days from 3.7 days in 2021[29] - The company's current ratio improved to 3.56 in 2022, up from 2.38 in 2021[29] - Gearing ratio decreased significantly to 2.9% in 2022, down by 9.6 percentage points from 12.5% in 2021[29] - The company's overall revenue for 2022 was RMB 4,632.2 million, a slight decrease of 3.5% compared to the previous year[34] - Total revenue for 2022 reached RMB4,632.2 million, a slight decrease of 3.5% compared to RMB4,800.2 million in 2021[51] - Gross profit increased by 9.3% from RMB1,793.0 million in 2021 to RMB1,959.6 million in 2022, with gross profit margin rising from 37.4% to 42.3%[51] - Net profit decreased by 81.7% from RMB826.7 million in 2021 to RMB151.3 million in 2022, while adjusted net profit increased by 0.6% to RMB913.1 million[51] - Adjusted net profit margin improved from 18.9% in 2021 to 19.7% in 2022[51] - Revenue from seasoned flour products decreased by 6.8% from RMB2,918.0 million in 2021 to RMB2,718.6 million in 2022, primarily due to COVID-19 impacts and product upgrades[56][57] - Revenue from vegetable products increased by 1.8% from RMB1,664.1 million in 2021 to RMB1,693.3 million in 2022, driven by increased market demand and expanded production capacity[56][57] - Sales volume of seasoned flour products decreased from 193,598.6 tons in 2021 to 150,557.5 tons in 2022, while the average selling price increased from RMB15.1/kg to RMB18.1/kg[59][60] - Sales volume of vegetable products decreased from 60,699.3 tons in 2021 to 54,523.5 tons in 2022, with the average selling price rising from RMB27.4/kg to RMB31.1/kg[59][60] - Revenue from offline channels decreased by 2.4% from RMB4,246.4 million in 2021 to RMB4,145.9 million in 2022, contributing 89.5% of total revenue[64][65] - Revenue from online channels decreased by 12.2% from RMB553.8 million in 2021 to RMB486.3 million in 2022, with online direct sales slightly decreasing by 0.8% and online distribution decreasing by 21.7%[64][65] - Overseas revenue increased significantly from RMB19.8 million in 2021 to RMB65.5 million in 2022, reflecting initial penetration into overseas markets[67][68] - The company's revenue decreased by 3.5% from RMB 4,800.2 million in 2021 to RMB 4,632.2 million in 2022, mainly due to COVID-19 impacts and temporary sales volume effects from product upgrades[86] - Gross profit increased by RMB 166.6 million to RMB 1,959.6 million, with gross profit margin rising from 37.4% to 42.3% due to higher average selling prices[87] - Distribution and selling expenses increased by 21.6% to RMB 633.3 million, driven by higher promotion and advertising expenses (up to RMB 139.3 million) and employee benefit expenses (up to RMB 248.7 million)[88][89] - Administrative expenses increased by 34.1% to RMB 481.7 million, mainly due to higher employee benefit expenses and depreciation and amortization[90] - Other net income decreased to RMB 107.6 million from RMB 152.7 million, primarily due to a reduction in government subsidies[90] - The Group recorded other losses of RMB 597.7 million, compared to other gains of RMB 11.7 million in the previous year, mainly due to share-based payments related to Pre-IPO investments[90] - Net finance income increased significantly to RMB 57.7 million from RMB 19.2 million, driven by higher bank interest income[90] - Profit for the year decreased to RMB 151.3 million from RMB 826.7 million, primarily due to share-based payments related to Pre-IPO investments, partially offset by higher gross profit[92][94] - Adjusted net profit (Non-IFRS measure) for the year was RMB 913.1 million, adjusted for share-based payments and listing expenses[96][98] - Adjusted net profit (Non-IFRS measure) increased by 0.6% from RMB907.8 million to RMB913.1 million, with adjusted net profit margin rising from 18.9% to 19.7% due to higher average selling prices[100] - The company proposed a final dividend of RMB0.12 per share and a special dividend of RMB0.12 per share, each totaling approximately RMB273.9 million, representing 30% of the adjusted net profit for 2022[101][105] - Cash and cash equivalents, including term deposits and restricted cash, increased by 77.8% to RMB3,939.3 million, driven by IPO proceeds and operating cash flow[103][105] - Borrowings decreased from RMB460.1 million to RMB161.3 million, primarily secured bank loans for plant construction and operational needs[103][105] - Inventories decreased by 0.8% to RMB599.3 million, while inventory turnover days increased from 70 to 82 days due to higher finished goods reserves before Chinese New Year[104][106] - Trade receivables increased from RMB56.1 million to RMB66.4 million, with turnover days rising from 3.7 days to 4.9 days[107] - Other receivables increased from RMB13.8 million to RMB62.4 million, primarily due to higher receivables from local government[107] - Prepayments decreased from RMB249.1 million to RMB111.2 million, mainly due to a reduction in input VAT recoverable[107] - Financial assets at fair value through profit or loss decreased by 52.3% from RMB802.1 million to RMB382.4 million, reflecting reduced investment in wealth management products[107] - Trade payables decreased by 5.4% from RMB197.9 million to RMB187.3 million, with turnover days increasing from 21 days to 26 days[107] - Other payables increased by 26.9% from RMB396.0 million to RMB502.5 million, driven by higher salary and welfare payables and deposits from distributors[107] - Contract liabilities increased by 24.7% from RMB180.6 million to RMB225.3 million, attributed to higher distributor orders ahead of the Chinese New Year[107] - Gearing ratio decreased from 12.5% to 2.9%, reflecting lower interest-bearing borrowings relative to equity[107] - Capital commitments for property, plant, and equipment decreased from RMB141.7 million to RMB79.5 million[111] - Pledged land use rights increased from RMB68.7 million to RMB93.8 million[112] - Total number of employees at the end of 2022 was 6,307, with total employee benefits (including director remuneration) amounting to RMB 853.0 million[123] - The Group proposed a Final Dividend of RMB 0.12 per share and a Special Dividend of RMB 0.12 per share for the year ended December 31, 2022, totaling approximately RMB 273.9 million each[130] Production and Operations - The company has established an industry-leading production system and a strict quality assurance system to ensure product quality[4] - The company's ERP system helps manage business operations and automates back-office functions related to technology, service, and human resources[7] - The company's FSSC 22000 certification ensures food safety management through ISO 22000, sector-specific Pre-Requisite Programs, and additional requirements[8] - The company's HACCP system identifies and evaluates production points to set up measures and control hazards, ensuring product safety[8] - The company expanded its overseas distribution network and strengthened its sales team in 2022[39] - The company actively promoted supply chain upgrading, capacity expansion, and digital upgrading in 2022[39] - The company collaborated with 1,847 offline distributors and 143 national/regional operators for hypermarkets, supermarkets, and convenience stores as of December 31, 2022[61][62] - The company established a presence on major e-commerce platforms and expanded its online business, supported by a dedicated e-commerce team analyzing user and sales data[63] - The company has 127 patents related to production processes such as material supply, puffing, and cutting as of December 31, 2022[69][70] - The company operates five plants in Henan, with one under construction (Luohe Xinglin Plant) and part of its production lines already operational[71][72] - Designed production capacity for seasoned flour products decreased from 261,308.3 tons in 2021 to 242,422.3 tons in 2022, with utilization rates dropping from 68.8% to 57.1%[73] - Vegetable products' designed production capacity increased from 79,992.0 tons in 2021 to 84,392.0 tons in 2022, but utilization rates decreased from 75.8% to 64.4%[73] - Total designed production capacity decreased from 346,610.3 tons in 2021 to 330,071.3 tons in 2022, with utilization rates dropping from 70.7% to 59.2%[73] - The company's designed production capacity for seasoned flour products decreased in 2022, primarily due to equipment upgrades and production line adjustments, while vegetable products capacity increased due to new production lines at Xinglin Plant[74] - The total designed production capacity across all plants decreased from 346,610.3 tons in 2021 to 330,071.3 tons in 2022, with a utilization rate drop from 70.7% to 59.2%[75] - The company's Luohe Xinglin Plant achieved a high utilization rate of 90.1% in 2022, while other plants experienced decreased utilization rates due to production line shifts and product adjustments[75] - The company's capacity adjustments in 2022 were influenced by shifting production lines to the more efficient Xinglin Plant, product specification changes, and structural product adjustments[76] - The company's digital transformation strategy includes implementing various IT systems such as ERP, sales management, and Industrial Internet of Things to optimize operations[83] - The company's food safety and quality control system covers the entire production process, with a dedicated quality management center overseeing all aspects of production[77] - The company's R&D model integrates different teams across food technology, production techniques, and packaging technology to improve product development success rates[79] - The company has a professional R&D team of 75 employees, with approximately 62.7% holding postgraduate degrees, and operates two application R&D centers in Henan and Shanghai[81] - The company established a long-term cooperation with Jiangnan University, jointly establishing a food science and technology laboratory to strengthen R&D capabilities[81] Corporate Governance and Board Structure - The company was listed on the Main Board of the Hong Kong Stock Exchange (stock code: 9985.HK) on December 15, 2022, and was selected as a constituent stock of the Hang Seng Composite Index, the Hang Seng Composite Mid-Cap Index, and the Hang Seng Consumer Price Index by Hang Seng Indexes Company Limited on February 24, 2023, effective from March 13, 2023[5] - The company's latest practicable date for the annual report is April 20, 2023[9] - The company was listed on the Hong Kong Stock Exchange Main Board on December 15, 2022, marking a major milestone[41] - The Board of the Company comprises nine Directors, including six executive Directors and three independent non-executive Directors, ensuring a balance of skills and experience for effective leadership[143] - The Company has complied with the requirement that at least one-third of the Board members must be independent non-executive directors, with each confirming their independence[144] - The Board diversity policy includes selecting candidates based on gender, age, cultural and educational background, industry experience, and professional qualifications, with two female members accounting for 22.22% of the total Directors[149] - The roles of Chairman and Chief Executive Officer are separated and held by different individuals to ensure a balance of power and authority[148] - The Company has adopted the Model Code as the code of conduct for Directors to buy and sell the Company's securities, with all Directors confirming compliance from the Listing Date to December 31, 2022[142] - The Board is responsible for formulating the Company's long-term and short-term strategic direction, including development strategy, major investment, acquisition, and disposal of significant assets[138] - Management provides monthly management accounts and updates to the Board, including detailed data on the Company's performance, financial position, and prospects[138] - The Company has made appropriate insurance arrangements for any legal proceedings against its Directors[147] - The Board is required to review periodically the contribution of the Directors in discharging their responsibilities to the Company and whether they have devoted sufficient time to their duties[143] - The Company has adopted good governance and disclosure practices, continuously optimizing and improving these practices to establish a corporate culture with high integrity[137] - The proportion of male and female employees (including executive Directors and senior management) as of December 31, 2022, was 42.02% and 57.98%, respectively, achieving gender diversity[151][154] - The Board includes two female members, accounting for 22.22% of the total Board members, meeting the gender diversity requirements of the Listing Rules[153] - The Board has three committees: Audit Committee, Nomination Committee, and Remuneration Committee, each with its own terms of reference and reporting regularly to the Board[162] - The Company held one Board meeting and one general meeting for the year ended December 31, 2022, and will comply with holding at least four Board meetings annually starting from January 1, 2023[163] - The Board reviewed and monitored the Company's compliance with legal and regulatory requirements, as well as the Corporate Governance Code, during the year[155][157] - The Company arranged training for all Directors, including updates on the latest developments in the Listing Rules and other regulatory requirements, to enhance corporate governance awareness[158][159] - The Board adopted a policy on seeking independent professional advice by Directors on March 23, 2023, and will review its implementation annually[158] - The Board is responsible for overseeing the Company's business
卫龙(09985) - 2022 - 年度财报