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九兴控股(01836) - 2023 - 年度财报
01836STELLA HOLDINGS(01836)2024-04-11 08:58

Revenue and Profit Performance - Revenue for 2023 decreased to 1,492,651thousandfrom1,492,651 thousand from 1,630,771 thousand in 2022, representing a decline of 8.5%[14] - Net profit attributable to shareholders increased to 141,072thousandin2023,up19.5141,072 thousand in 2023, up 19.5% from 118,033 thousand in 2022[14] - Gross profit increased by 4.1% to 366,700,000withagrossmarginof24.6366,700,000 with a gross margin of 24.6% (2022: 21.6%)[29] - Reported operating profit increased by 18.2% to 159,400,000 with an operating profit margin of 10.7% (2022: 8.3%)[30] - Net profit for the year was 140,300,000,includingafairvaluelossof140,300,000, including a fair value loss of 7,300,000 related to Lanvin Group investment[31] - Adjusted net profit was 147,600,000withanadjustednetprofitmarginof9.9147,600,000 with an adjusted net profit margin of 9.9% (2022: 7.3%)[31] - Revenue for 2023 was 1,492,651 thousand, a decrease of 8.5% compared to 1,630,771thousandin2022[147]−Grossprofitincreasedto1,630,771 thousand in 2022[147] - Gross profit increased to 366,728 thousand in 2023, up 4.1% from 352,127thousandin2022[147]−Netprofitattributabletoownersoftheparentcompanywas352,127 thousand in 2022[147] - Net profit attributable to owners of the parent company was 141,072 thousand in 2023, up 19.5% from 118,033thousandin2022[148]−Totalcomprehensiveincomefortheyearwas118,033 thousand in 2022[148] - Total comprehensive income for the year was 134,676 thousand, a 45.5% increase from 92,537thousandin2022[147]−Earningspershare(basic)increasedto92,537 thousand in 2022[147] - Earnings per share (basic) increased to 0.1780 in 2023 from 0.1490in2022[148]−Netprofitfortheyearwas0.1490 in 2022[148] - Net profit for the year was 141,072 thousand in 2023, up from 118,033thousandin2022,showinga19.5118,033 thousand in 2022, showing a 19.5% growth[151] - Total comprehensive income for the year was 135,505 thousand in 2023, compared to 93,575thousandin2022,a44.893,575 thousand in 2022, a 44.8% increase[151] Manufacturing and Product Segments - Manufacturing business revenue in 2023 was divided into 26.1% for fashion, 25.5% for luxury, 9.5% for sports, and 8.3% for casual footwear[16] - Revenue from the luxury segment increased to 26.1% in 2023 from 21.2% in 2022, indicating a shift towards higher-end products[16] - Sports footwear sales decreased by 8.0%, accounting for 43.2% of total manufacturing revenue (2022: 42.6%)[28] - Luxury and fashion category revenue increased by 4.1% and decreased by 6.2%, accounting for 9.5% and 26.1% of total manufacturing revenue respectively (2022: 8.3% and 25.5%)[28] - Manufacturing segment revenue reached 1,491,049,000, while retail and wholesale segment revenue was 4,609,000,withtotalrevenueat4,609,000, with total revenue at 1,492,651,000[198] - Manufacturing segment profit was 175,635,000,whiletheretailandwholesalesegmentreportedalossof175,635,000, while the retail and wholesale segment reported a loss of 11,659,000, resulting in a total segment profit of 163,976,000[198]−Totalsegmentrevenuereached163,976,000[198] - Total segment revenue reached 1,637.9 million, with manufacturing contributing 1,627.2 million and retail & wholesale contributing 10.7 million[200] - Segment performance showed a profit of 162.1millioninmanufacturingandalossof162.1 million in manufacturing and a loss of 20.9 million in retail & wholesale, resulting in a total segment profit of 141.2million[200]ProductionandCapacityExpansion−ThecompanyexpandeditsproductioncapacityinSoutheastAsiawithnewfactoriesinIndonesiaandthePhilippines[11]−ThecompanyplanstoexpandproductioncapacityinIndonesiaandBangladesh,includinganewdedicatedsportsshoefactoryinIndonesia[24]−Thecompany′ssubsidiaries,suchasP.T.YoungTreeIndustriesandP.T.TyfountexIndonesia,areprimarilyengagedinfootwearmanufacturing[156]−Thecompany′ssubsidiariesinChina,suchasDongguanXingangFootwearCo.,Ltd.,arewhollyownedandengagedinfootwearmanufacturing[157]−Thecompany′ssubsidiariesinVietnam,suchasStellaLeatherGoods(HoChiMinh)Co.,Ltd.,areengagedinhandbagmanufacturing[157]−Thecompany′ssubsidiariesinEurope,suchasStellaFashionItaliaS.R.L.,areengagedinfootwearsalesanddistribution[156]StrategicInitiativesandMarketExpansion−StellaInternationallauncheditsfirstthree−yearstrategicplan(2023−2025)todrivefuturegrowth[11]−Thecompanyenteredthehandbagmarket,targetinghigh−endclientswithleatherproducts[7]−ThecompanymaintainsstrongpartnershipswithglobalbrandssuchasNike,HOKA,Coach,andPrada[7]−Thecompanyisfocusingonstrengtheningitspositionintheluxuryandpremiumfashionfootwearsegments,withnewproductsalreadyshowingpromisingsales[19]−Productionimprovementsandproductivityenhancementsimplementedaspartofthethree−yearplanhavecontributedtomarginexpansion[19]−Thecompanyaimstoachievea10141.2 million[200] Production and Capacity Expansion - The company expanded its production capacity in Southeast Asia with new factories in Indonesia and the Philippines[11] - The company plans to expand production capacity in Indonesia and Bangladesh, including a new dedicated sports shoe factory in Indonesia[24] - The company's subsidiaries, such as P.T. Young Tree Industries and P.T. Tyfountex Indonesia, are primarily engaged in footwear manufacturing[156] - The company's subsidiaries in China, such as Dongguan Xingang Footwear Co., Ltd., are wholly owned and engaged in footwear manufacturing[157] - The company's subsidiaries in Vietnam, such as Stella Leather Goods (Ho Chi Minh) Co., Ltd., are engaged in handbag manufacturing[157] - The company's subsidiaries in Europe, such as Stella Fashion Italia S.R.L., are engaged in footwear sales and distribution[156] Strategic Initiatives and Market Expansion - Stella International launched its first three-year strategic plan (2023-2025) to drive future growth[11] - The company entered the handbag market, targeting high-end clients with leather products[7] - The company maintains strong partnerships with global brands such as Nike, HOKA, Coach, and Prada[7] - The company is focusing on strengthening its position in the luxury and premium fashion footwear segments, with new products already showing promising sales[19] - Production improvements and productivity enhancements implemented as part of the three-year plan have contributed to margin expansion[19] - The company aims to achieve a 10% operating profit margin and low double-digit percentage growth in post-tax profit by the end of 2025, with progress ahead of schedule[19] Financial Position and Cash Flow - Net cash position as of December 31, 2023, was 287,400,000 (2022: 206,100,000)[33]−CashandcashequivalentsasofDecember31,2023,were206,100,000)[33] - Cash and cash equivalents as of December 31, 2023, were 294,500,000 (2022: 213,300,000)[34]−Bankborrowingsdecreasedto213,300,000)[34] - Bank borrowings decreased to 7,100,000 as of December 31, 2023, compared to 7,200,000inthepreviousyear[35]−Thecompanymaintainedanetcashpositionof7,200,000 in the previous year[35] - The company maintained a net cash position of 287,400,000 as of December 31, 2023, with a net capital gearing ratio of -26.9%[37] - Cash and cash equivalents increased by 38.1% to 294,471thousandin2023from294,471 thousand in 2023 from 213,303 thousand in 2022[149] - Total assets increased to 1,094,465thousandin2023,up5.41,094,465 thousand in 2023, up 5.4% from 1,038,214 thousand in 2022[149] - Total equity rose to 1,067,464thousandin2023,a5.11,067,464 thousand in 2023, a 5.1% increase from 1,015,949 thousand in 2022[150] - Total equity increased to 1,067,464thousandin2023,upfrom1,067,464 thousand in 2023, up from 1,015,949 thousand in 2022, reflecting a growth of 5.1%[151] - Retained earnings rose to 853,890thousandin2023,comparedto853,890 thousand in 2023, compared to 798,533 thousand in 2022, marking a 6.9% increase[151] - Cash flow from operating activities was 229,153thousandin2023,slightlydownfrom229,153 thousand in 2023, slightly down from 240,076 thousand in 2022, a decrease of 4.5%[153] - Investment activities resulted in a net cash outflow of 56.573million,comparedto56.573 million, compared to 53.774 million in the previous year[154] - Financing activities resulted in a net cash outflow of 90.788million,comparedto90.788 million, compared to 106.412 million in the previous year[154] - The company's cash and cash equivalents increased by 81.792million,reaching81.792 million, reaching 294.471 million at the end of the year[154] - Interest received from investments increased significantly to 10.234million,upfrom10.234 million, up from 1.665 million in the previous year[154] - The company acquired property, plant, and equipment worth 55.699million,anincreasefrom55.699 million, an increase from 45.267 million in the previous year[154] - The company paid dividends of 88.074million,adecreasefrom88.074 million, a decrease from 99.130 million in the previous year[154] Dividends and Shareholder Returns - A final dividend of HK0.61persharewasdeclared,bringingthefull−yeardividendtoHK0.61 per share was declared, bringing the full-year dividend to HK1.03 per share with a payout ratio of approximately 70%[20] - The board proposed a final dividend of 61 HK cents per ordinary share for the year ended December 31, 2023, amounting to approximately 62.2million[89]−Thefinaldividend,ifapproved,willbepaidonoraroundJune7,2024,toshareholdersontheregisterbyMay17,2024[89]−ThecompanywillsuspendsharetransferregistrationfromMay6,2024,toMay9,2024,inclusive,withalltransferdocumentsrequiredtobesubmittedbyMay3,2024,at4:30PMforeligibilitytoattendandvoteattheannualgeneralmeeting[90]−Thecompany′sdistributablereservesasofDecember31,2023,amountedto62.2 million[89] - The final dividend, if approved, will be paid on or around June 7, 2024, to shareholders on the register by May 17, 2024[89] - The company will suspend share transfer registration from May 6, 2024, to May 9, 2024, inclusive, with all transfer documents required to be submitted by May 3, 2024, at 4:30 PM for eligibility to attend and vote at the annual general meeting[90] - The company's distributable reserves as of December 31, 2023, amounted to 449.8 million, compared to 440.7millionin2022[91]−Thecompanypaiddividendsof440.7 million in 2022[91] - The company paid dividends of 45,590 thousand for the 2022 final dividend and 42,484thousandforthe2023interimdividend[151]CorporateGovernanceandBoardStructure−Theboardofdirectorsconsistsmostlyofindependentnon−executivedirectors,ensuringstrongindependentelementsandeffectiveindependentjudgment[45]−Thecompanyhasaboarddiversitypolicythatconsidersfactorssuchasgender,age,culturalandeducationalbackground,race,professionalexperience,andskills[45]−Thenominationcommitteeisresponsibleforreviewingtheboard′sstructure,size,andcomposition,andforidentifyingandselectingqualifiedcandidatesforboardmembership[46]−Thecompanyhassetmeasurablegoalsforincreasingfunctionalexperiencediversityandunderstandingoftargetmarketsandcustomergroups[47]−Theboard′sgenderdiversityisachievedthroughtheinclusionoftwofemaleindependentnon−executivedirectors,andthenominationcommitteewillcontinuetoseekqualifiedcandidatestomaintaingenderdiversity[47]−Theboardhasadoptedaboardevaluationplantoenhanceefficiencyandeffectiveness,andtoregularlyreviewthecorporategovernanceframework[48]−Athird−partyconsultanthasbeenengagedtoensuretheindependenceandeffectivenessoftheboardevaluationprocess[49]−Thecompanymaintainsaformalandtransparentprocessforappointingnewdirectors,withastructuredplanforboardsuccessionandnomination[50]−Thenominationcommitteecurrentlyhasfivemembers,allofwhomareindependentnon−executivedirectors[51]−TheNominationCommitteereviewedtheboard′sstructure,size,andcomposition,aswellastheboarddiversitypolicyandsuccessionplanning[52]−Newlyappointeddirectorsreceivedtailoredinductiontraining,includinganoverviewofthecompany′soperationsandregulatoryresponsibilities[52]−Directorsreceivemonthlyupdatesonfinancialdata,businessperformance,andmarketintelligencetobetterassesstheindustry[52]−ThecompanyadoptedtheModelCodeforSecuritiesTransactionsbyDirectorsofListedIssuersastheguidelinefordirectorsandrelevantemployees[52]−Directorsarerequiredtoconfirmtheirexternalcommitmentsandanychangeseverysixmonthstoensuresufficienttimecontribution[55]−Independentnon−executivedirectorsactivelycontributetoboarddiscussionsandprovideindependentjudgmentonbusinessstrategies[55]−TheChairmanisresponsibleforsettingbroadstrategicdirectionandensuringeffectivecommunicationbetweentheboard,management,andshareholders[55]−TheCEOoverseestheimplementationofboard−approvedobjectivesandmanagesrelationshipswithstakeholders[55]−Theboardretainsauthorityovermajordecisions,includingstrategy,budgetapproval,andsignificantinvestmentsoracquisitions[56]−Theboardhasestablishedfourgovernance−relatedcommittees:Audit,CorporateGovernance,Remuneration,andNominationCommittees[57]−Thecompany′sBoardofDirectorsheld7meetingsin2023,withallexecutivedirectorsattendingall7meetings[58]−Thecompany′sindependentnon−executivedirectorsattendedall7Boardmeetings,withsomeexceptionsduetoresignationsornewappointments[58]−Thecompany′sChairmanmaintainsopendialoguewithindependentnon−executivedirectorsoutsideformalBoardmeetings[59]−Thecompany′sBoardmembershavenosignificantfinancial,business,orotherrelationships,exceptforonefamilialrelationshipbetweentwodirectors[60]−Thecompany′sBoardmeetingsarescheduledinadvancewithatleast14days′notice,andmeetingagendasarecirculatedbeforehandfordirectorstoadditems[60]−Thecompany′smanagementprovidesmonthlyupdatestotheBoard,includinginternalfinancialdata,peercomparisons,andmarketintelligence[61]−Thecompany′sBoardreviewstheeffectivenessofitsriskmanagementandinternalcontrolsystemsatleastannually,coveringfinancial,operational,andcompliancecontrols[62]−Thecompanyhasaprocessforhandlingsignificantcontrolfailuresorweaknesses,withmonthlyreportingtoseniormanagementandtheAuditCommittee[62]−Nosignificantcontrolfailuresorweaknesseswereidentifiedduringtheyear[62]−Thecompany′sBoardensuresadequateresources,qualifications,andtrainingforaccounting,internalaudit,financialreporting,andESGfunctions[62]−Thecompany′sinternalcontrolsystem,basedonCOSO,includesfiveelements:controlenvironment,riskassessment,controlactivities,informationandcommunication,andmonitoring[63]−Thecompany′sinternalauditteamreportsdirectlytotheAuditCommitteeandtheCEO,withexternalauditorEYsubmittingareportoninternalcontrolmattersfortheyearendedDecember31,2023[64]−TheAuditCommitteereviewedthefinancialreportingsystem,riskmanagement,andinternalcontrolsystemsduringtheyear[65]−Thecompanypaid42,484 thousand for the 2023 interim dividend[151] Corporate Governance and Board Structure - The board of directors consists mostly of independent non-executive directors, ensuring strong independent elements and effective independent judgment[45] - The company has a board diversity policy that considers factors such as gender, age, cultural and educational background, race, professional experience, and skills[45] - The nomination committee is responsible for reviewing the board's structure, size, and composition, and for identifying and selecting qualified candidates for board membership[46] - The company has set measurable goals for increasing functional experience diversity and understanding of target markets and customer groups[47] - The board's gender diversity is achieved through the inclusion of two female independent non-executive directors, and the nomination committee will continue to seek qualified candidates to maintain gender diversity[47] - The board has adopted a board evaluation plan to enhance efficiency and effectiveness, and to regularly review the corporate governance framework[48] - A third-party consultant has been engaged to ensure the independence and effectiveness of the board evaluation process[49] - The company maintains a formal and transparent process for appointing new directors, with a structured plan for board succession and nomination[50] - The nomination committee currently has five members, all of whom are independent non-executive directors[51] - The Nomination Committee reviewed the board's structure, size, and composition, as well as the board diversity policy and succession planning[52] - Newly appointed directors received tailored induction training, including an overview of the company's operations and regulatory responsibilities[52] - Directors receive monthly updates on financial data, business performance, and market intelligence to better assess the industry[52] - The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as the guideline for directors and relevant employees[52] - Directors are required to confirm their external commitments and any changes every six months to ensure sufficient time contribution[55] - Independent non-executive directors actively contribute to board discussions and provide independent judgment on business strategies[55] - The Chairman is responsible for setting broad strategic direction and ensuring effective communication between the board, management, and shareholders[55] - The CEO oversees the implementation of board-approved objectives and manages relationships with stakeholders[55] - The board retains authority over major decisions, including strategy, budget approval, and significant investments or acquisitions[56] - The board has established four governance-related committees: Audit, Corporate Governance, Remuneration, and Nomination Committees[57] - The company's Board of Directors held 7 meetings in 2023, with all executive directors attending all 7 meetings[58] - The company's independent non-executive directors attended all 7 Board meetings, with some exceptions due to resignations or new appointments[58] - The company's Chairman maintains open dialogue with independent non-executive directors outside formal Board meetings[59] - The company's Board members have no significant financial, business, or other relationships, except for one familial relationship between two directors[60] - The company's Board meetings are scheduled in advance with at least 14 days' notice, and meeting agendas are circulated beforehand for directors to add items[60] - The company's management provides monthly updates to the Board, including internal financial data, peer comparisons, and market intelligence[61] - The company's Board reviews the effectiveness of its risk management and internal control systems at least annually, covering financial, operational, and compliance controls[62] - The company has a process for handling significant control failures or weaknesses, with monthly reporting to senior management and the Audit Committee[62] - No significant control failures or weaknesses were identified during the year[62] - The company's Board ensures adequate resources, qualifications, and training for accounting, internal audit, financial reporting, and ESG functions[62] - The company's internal control system, based on COSO, includes five elements: control environment, risk assessment, control activities, information and communication, and monitoring[63] - The company's internal audit team reports directly to the Audit Committee and the CEO, with external auditor EY submitting a report on internal control matters for the year ended December 31, 2023[64] - The Audit Committee reviewed the financial reporting system, risk management, and internal control systems during the year[65] - The company paid 629,000 for audit services and $183,000 for non-audit services (primarily tax advisory services) to the external auditor for the year ended December 31, 2023[66] - The company has established a whistleblowing policy and system for employees and key stakeholders to anonymously report concerns to the Audit Committee[64] - The Audit Committee consists of three independent non-executive directors and reviewed tax matters of the group during the year[65] - The company has a formal and transparent director remuneration policy, with no director involved in determining their own remuneration[68] - The Remuneration Committee reviewed the group's human resources and remuneration strategy, as well as the remuneration policy for executive directors during the year[68] Share Options and Incentive Plans - The company granted a total of 19,760,000 share options to 56 grantees, including 1,500,000 to CEO Qi Leren, 450,000 to Gillman Charles Christopher, and 1,200,000 to Jiang Yimin, with the remaining 16,610,000 granted to 53 other employees[69] - The share options are intended to incentivize grantees to execute the company's strategic plan over the next three years, with vesting conditions spread over three years from the grant date[69] - The company has issued a total of 27,970,000 share options to 107 eligible participants, with each option priced at HKD 11.48 per share[105] - The share options are valid for six years from the grant date and will vest in five tranches, each tied to the company's financial performance and individual performance evaluations[106] - 3,417,500 share options were granted to the company's executive director Qi Leren, and 270,000 share options were granted to current executive director Jiang Yimin[107] - The vesting of share options is contingent on the company achieving both net profit margin and revenue growth targets set by the board for the relevant fiscal year[106] - If the company fails to meet either the net profit margin or revenue growth target, only 50% of the share options expected to vest will be granted[106] - If both the net profit margin and revenue growth targets are met, 100% of the share options expected to vest will be granted[106] - If both the net profit margin and revenue growth targets are not met, all share options expected to vest will automatically lapse[106] - The 2007 Long-Term Incentive Plan, which aimed to attract and retain talent, expired on July 5, 2017[105] - A total of 8,967,750 share options under the 2007 Plan lapsed during the review period[108] - The trustee held 1,778,000 shares in trust as of December 31, 2023, unchanged from December 31, 2022[109] - No share options were granted under the 2007 Plan during the review year, and no options remained unexercised as of the annual report date[109] - The 2017 Plan was approved by shareholders on May 19, 2017, and aligns with Chapter 17 of the applicable listing rules[110] - The 2017 Plan aims to reward selected participants, including employees and directors, for their contributions to the group[111] - From January 1, 2023, the company can only grant share options under the 2017 Plan to "qualified participants" as defined by Chapter 17 of the listing rules[112] - The 2017 Plan allows the board to set performance targets and minimum holding periods for share options, with exercise prices not lower than the listing rules' requirements[111] - Participants eligible for share options under the 2017 Plan include employees, directors, suppliers, customers, and consultants contributing to the group's development[112] - The total number of shares that may be issued upon the exercise of all options granted under the 2017 Plan and any other share option schemes of the Group shall not exceed 79,437,950 shares, equivalent to 10% of the issued shares as of the effective date of the 2017 Plan[113] - As of January 1, 2023, December 31, 2023, and the date of this annual report, the total number of shares that could be allotted and issued upon the exercise of options under the general plan limit were 79,437,950 shares[114] - The number of options that could still be granted under the general plan limit as of January 1, 2023, December 31, 2023, and the date of this annual report were 27,957,950, 9,133,450, and 9,193,450 shares respectively[114] - The total number of shares that may be issued and to be issued upon the exercise of options granted to each participant under the 2017 Plan and any other share option schemes of the Group within any 12-month period shall not exceed 1% of the issued shares at that time[115] - Any grant of options to a director, chief executive, or substantial shareholder of the company or their associates must be approved by the independent non-executive directors of the company[116] - Participants may accept the option offer within 21 days from the date of the option offer[117] - The subscription price for shares under the 2017 Plan shall not be less than the highest of (i) the closing price of the shares on the offer date, (ii) the average closing price of the shares over the five trading days immediately preceding the offer date, and (iii) the nominal value of the shares[118] - The 2017 Plan will remain in effect for a period of 10 years from May 19, 2027, and will expire on May 18, 2027[119] - During the