伟仕佳杰(00856) - 2020 - 年度财报

Corporate Information Chairman's Statement The Group achieved record revenue and net profit in 2020, driven by improved operational efficiency, reduced financial costs, and strong demand for IT infrastructure and cloud services, alongside strategic expansion in emerging technologies and key markets Overall Performance In FY2020, the company achieved record revenue and net profit, with revenue up 6% and net profit attributable to shareholders up 32%, driven by operational efficiency and strong IT infrastructure and cloud service demand Key Financial Indicators for FY2020 | Indicator | FY2020 | Y-o-Y Change | | :--- | :--- | :--- | | Revenue | HKD 70 billion | +6% | | Net Profit Attributable to Shareholders | HKD 1.07 billion | +32% | | Return on Equity (ROE) | 16.5% | - | - Key drivers for performance growth include: - Enhanced operational management, effectively reducing financial costs and administrative expense ratios[27] - Robust demand for IT infrastructure and cloud services in China and Southeast Asia[27] - Strengthened company service capabilities, successfully assisting enterprises in digital transformation[28] Performance by Segment Cloud computing and enterprise systems businesses experienced rapid, double-digit growth, collectively accounting for over 60% of the company's total revenue Revenue Performance by Business Segment for FY2020 | Business Segment | Revenue (HKD) | Y-o-Y Growth (%) | | :--- | :--- | :--- | | Cloud Computing | 1.7 billion | +40 | | Enterprise Systems | 40.9 billion | +15 | Performance by Region Both North Asia and Southeast Asia businesses achieved steady growth, with market demand rebounding significantly in the second half of the year after initial pandemic impacts Revenue Performance by Region for FY2020 | Region | Y-o-Y Growth (%) | | :--- | :--- | | North Asia | +6 | | Southeast Asia | +3 | Strategic Progress During the reporting period, the company made significant progress in expanding its emerging technology product portfolio, strengthening multi-cloud management capabilities, deepening its presence in Southeast Asia, and strategically positioning itself in China's Xinchuang industry - The company continues to expand cooperation with major global technology product suppliers, focusing on emerging technologies like cloud computing, big data, and AI, deepening partnerships with leading cloud vendors such as Alibaba Cloud, Huawei Cloud, and AWS[37] - Through the acquisition of Cloud Star Data, the company strengthened its capabilities in multi-cloud management platform software and services, saving customers 20%-30% on public cloud usage costs[46] - In Southeast Asia, the company transitioned from a distributor to a service partner, providing ICT infrastructure services to government, finance, and telecommunications sectors, with VSTECS (Thailand) winning the 2020 Microsoft Partner of the Year Award[50][52] - In the inaugural year of China's Xinchuang industry, the company secured multiple large orders in basic hardware, software, and industry application software, establishing partnerships with numerous leading Xinchuang vendors including PowerLeader, Primeton Middleware, and Sangfor Technologies[54] Business Model and Strategic Direction The Group, a leading ICT product and service provider with over 50,000 channel partners across China and Southeast Asia, focuses on enterprise systems, consumer electronics, and cloud computing, pursuing sustainable value through market focus, product expansion, and operational efficiency - The company's three main businesses are: - Enterprise Systems: Designing, installing, and implementing IT infrastructure for enterprises[56] - Consumer Electronics: Providing various IT finished products[56] - Cloud Computing: Offering cloud computing solutions and services[56] - The Group's core development strategies include: - Focusing on key markets in China and Southeast Asia[56] - Expanding the product portfolio by leveraging numerous suppliers[56] - Enhancing working capital and financial management[56] - Improving operational efficiency and cost management[56] Management Discussion and Analysis This section reviews the Group's 2020 performance, analyzing financial data, segment and regional revenue contributions, liquidity, risks, and outlook, noting record revenue and strong growth in enterprise systems and cloud computing Business Review In 2020, the Group achieved record-high revenue, gross profit, operating profit, and net profit, with enterprise systems and cloud computing as key growth drivers, increasing by 15% and 40% respectively, while North Asia and Southeast Asia markets also performed well with 6% and 3% revenue growth FY2020 Financial Performance Summary (HKD Thousands) | Indicator | 2020 | 2019 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 69,961,881 | 66,209,921 | +5.7 | | Gross Profit | 3,127,313 | 2,967,854 | +5.4 | | Operating Profit | 1,420,354 | 1,260,212 | +12.7 | | Net Profit | 1,067,580 | 809,948 | +31.8 | | Basic Earnings Per Share | 75.54 HK cents | 57.03 HK cents | +32.5 | FY2020 Revenue Contribution by Business Segment | Business Segment | Revenue (HKD Thousands) | Y-o-Y Change (%) | Share of Total Revenue (%) | | :--- | :--- | :--- | :--- | | Enterprise Systems | 40,914,823 | +15 | 58.5 | | Consumer Electronics | 27,364,638 | -7 | 39.1 | | Cloud Computing | 1,682,420 | +40 | 2.4 | FY2020 Revenue Contribution by Region | Region | Revenue (HKD Thousands) | Y-o-Y Change (%) | Share of Total Revenue (%) | | :--- | :--- | :--- | :--- | | North Asia | 55,354,208 | +6 | 79 | | Southeast Asia | 14,607,673 | +3 | 21 | Prospects The Group plans to drive growth by leveraging its product portfolio and network, expanding market share and service scope, continuing expansion in China and Southeast Asia, improving operational efficiency for better margins, and developing consumer electronics and cloud computing - Strategic priorities include: - Continuous expansion in the China and Southeast Asia markets[71] - Improving internal operational and financial efficiency to enhance profit margins[71] - Expanding consumer electronics and cloud computing businesses[71] Liquidity and Financial Resources As of year-end 2020, the Group's financial position was robust, marked by increased cash, reduced borrowings, an improved net debt-to-total assets ratio of 0.11, a healthy current ratio of 1.22 times, and growing shareholders' equity Key Liquidity and Financial Resources Indicators (As of December 31) | Indicator | 2020 (HKD Thousands) | 2019 (HKD Thousands) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 3,559,192 | 2,327,702 | | Total Borrowings | 6,750,812 | 8,017,112 | | Net Debt to Total Assets Ratio | 0.11 | 0.23 | | Current Ratio | 1.22 times | 1.30 times | | Shareholders' Equity | 6,826,286 | 5,654,472 | Employees As of the end of 2020, the Group's full-time employee count slightly increased to 3,414, with total annual net remuneration approximately HKD 863 million - As of December 31, 2020, the Group had 3,414 full-time employees (2019: 3,352 employees)[78] - Total net remuneration paid for 2020 was approximately HKD 863 million (2019: approximately HKD 910 million)[78] Biographical Details of Directors and Company Secretary Environmental, Social and Governance Report This report details the Group's ESG policies, practices, and performance, covering environmental impact minimization, employee welfare, robust operational practices including supply chain and anti-corruption, and active community engagement Environmental Protection As a trading company, the Group's operations have minimal environmental impact with no significant emissions or hazardous waste, focusing efforts on managing electricity and paper consumption in offices and warehouses through energy-saving measures and eco-friendly printing habits - Due to the nature of its business, the Group's operations have no significant impact on exhaust gas, greenhouse gas emissions, water and soil pollution, or waste generation[110] - Resource consumption primarily involves electricity and paper in offices and warehouses, with the Group implementing measures such as encouraging energy saving and eco-friendly printing to reduce consumption[111][112][113] Social Responsibility The Group's social responsibility covers employment, labor practices, operational conduct, and social engagement, valuing employees, ensuring health and safety, robust supply chain management, product responsibility, and anti-corruption policies, while encouraging community service - Employment and Labor: The Group strictly adheres to relevant labor laws, provides equal treatment and competitive compensation and benefits, prohibits child and forced labor, and offers both on-the-job and external training to employees[119][123] - Operational Practices: - Supply Chain Management: Collaborating with renowned brands like Huawei, HP, and Apple, implementing an efficient supply chain management system[125] - Product Responsibility: Prudently selecting suppliers, ensuring product quality, and protecting customer personal data and intellectual property rights[126] - Anti-Corruption: Maintaining a compliance department and whistleblowing policy, with strict codes of conduct and anti-corruption training for employees and business partners[127] - Community Investment: The Group supports and participates in community and charitable activities, encouraging employee volunteerism to foster harmonious development between the enterprise and the community[130] Corporate Governance Report This report outlines the company's 2020 corporate governance practices, confirming compliance with listing rules (except for the combined Chairman/CEO role), detailing board composition, committee operations, risk management, internal controls, and shareholder communication Board of Directors The Board comprises 10 members, including 4 executive, 2 non-executive, and 4 independent non-executive directors, meeting listing rule requirements, responsible for overall management and strategy, with the Chairman and CEO roles combined to enhance decision-making efficiency, and generally high attendance at board meetings - The Board of Directors consists of 10 members, including 4 independent non-executive directors, meeting listing rule requirements[136][137] - The company deviates from the Corporate Governance Code's provision for separate Chairman and Chief Executive roles, with Mr. Li Jialin holding both positions, which the Board believes enhances the timeliness and effectiveness of decision-making[146] Board Committees The Board has three committees—Audit, Remuneration, and Nomination—each predominantly composed of independent non-executive directors, responsible for reviewing financial reports, internal controls, executive remuneration, and board composition, all of which held meetings and fulfilled their duties during the year - Audit Committee: Composed of four independent non-executive directors, held two meetings during the year, reviewing financial reports, risk management, and internal control systems[153][154] - Remuneration Committee: Composed of four independent non-executive directors, held one meeting during the year, reviewing the remuneration of directors and senior management[157][159] - Nomination Committee: Composed of one executive director and four independent non-executive directors, held one meeting during the year, reviewing board composition and director appointments[160][161] Risk Management and Internal Control The Board is responsible for maintaining and annually reviewing effective risk management and internal control systems, which management designs, implements, and monitors across financial, operational, and compliance controls, with the Board confirming the system's effectiveness and adequacy for 2020 - The Board is ultimately responsible for the Group's risk management and internal control systems, conducting annual reviews of their effectiveness[163] - The Board has completed its annual review and considers the Group's existing risk management and internal control systems to be effective and adequate[164] Directors' Report This report covers the company's principal activities, performance, major customers and suppliers, dividend policy, share repurchases, and director/shareholder interests, highlighting IT product channel development, a proposed final dividend of 22 HK cents per share, and share repurchases Principal Activities As an investment holding company, the Group's subsidiaries primarily engage in IT product channel development and technical solution integration services, categorized into three main segments: enterprise systems, consumer electronics, and cloud computing - The company's three main business segments are: - Enterprise Systems: Providing IT infrastructure tools, design, implementation, training, and maintenance services[173] - Consumer Electronics: Supplying complete IT products[173] - Cloud Computing: Offering cloud computing solutions and services[173] Major Customers and Suppliers In 2020, the Group maintained reasonable customer and supplier concentration, with the largest customer accounting for approximately 9% of total revenue and the top five customers for 18%, while the largest supplier accounted for approximately 21% of total purchases and the top five for 63% 2020 Customer and Supplier Concentration | Category | Share | 2020 (%) | 2019 (%) | | :--- | :--- | :--- | :--- | | Largest Customer | of total revenue | ~9 | ~9 | | Top Five Customers | of total revenue | ~18 | ~22 | | Largest Supplier | of total purchases | ~21 | ~18.8 | | Top Five Suppliers | of total purchases | ~63 | ~61 | Results and Appropriations The Board recommends a final dividend of 22 HK cents per ordinary share for the year ended December 31, 2020, an increase from 16.7 HK cents in 2019 - A final dividend of 22 HK cents per share is proposed for 2020, higher than 16.7 HK cents in 2019[178] Purchase, Sale or Redemption of Securities During the year, the company repurchased and cancelled 1,770,000 ordinary shares on the Stock Exchange and acquired 11,372,000 shares in the open market through a trust for its employee remuneration scheme 2020 Share Repurchase Details | Month of Repurchase | Number of Shares Repurchased | Price Range Per Share (HKD) | Total Price Paid (HKD) | | :--- | :--- | :--- | :--- | | March 2020 | 1,488,000 | 3.30 | 4,910,400 | | April 2020 | 282,000 | 3.52 | 992,640 | | Total | 1,770,000 | - | 5,903,040 | - 11,372,000 ordinary shares were acquired in the open market through a trust established for employee remuneration, at a total cost of approximately HKD 44.212 million[183] Independent Auditor's Report KPMG issued an unmodified opinion on the company's 2020 consolidated financial statements, affirming they present a true and fair view of the Group's financial position and operating results, with inventory valuation and trade receivables valuation highlighted as key audit matters involving significant management judgment Auditor's Opinion KPMG believes the Group's consolidated financial statements for the year ended December 31, 2020, present a true and fair view of its financial position, performance, and cash flows in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance - The auditor issued a standard unmodified opinion on the financial statements[206][208] Key Audit Matters Auditors identified inventory valuation and trade receivables valuation as key audit matters due to significant management judgment and inherent uncertainty involved in estimating future market changes, customer credit, and forward-looking information - Inventory Valuation: As of year-end, inventory amounted to HKD 5.5 billion, and its net realizable value estimation involves significant management judgment due to the susceptibility of technology product demand and prices to technological changes and customer preferences, thus identified as a key audit matter[212][213][215] - Trade Receivables Valuation: As of year-end, trade receivables totaled HKD 13.2 billion after a loss allowance of HKD 672 million, with the recognition of expected credit losses involving significant, subjective, and uncertain judgments on customer-specific factors, current economic conditions, and forward-looking information, thus identified as a key audit matter[215][216][218] Consolidated Financial Statements Consolidated Statement of Financial Position As of December 31, 2020, total assets rose to HKD 29.43 billion and total equity to HKD 6.83 billion, primarily due to increased receivables and cash, maintaining a robust financial structure despite higher current liabilities offset by reduced non-current borrowings Statement of Financial Position Summary (As of December 31) | Indicator (HKD Thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Total Assets | 29,425,571 | 24,936,069 | | Non-current Assets | 2,199,058 | 2,068,734 | | Current Assets | 27,226,513 | 22,867,335 | | Total Liabilities | 22,599,285 | 19,281,597 | | Non-current Liabilities | 206,666 | 1,676,282 | | Current Liabilities | 22,392,619 | 17,605,315 | | Total Equity | 6,826,286 | 5,654,472 | | Net Current Assets | 4,833,894 | 5,262,020 | Consolidated Statement of Profit or Loss For FY2020, the Group achieved revenue of HKD 69.96 billion, a 5.7% year-on-year increase, with profit for the year (net profit) reaching HKD 1.07 billion, a significant 31.8% year-on-year growth, attributed to effective cost control and a substantial 34% reduction in finance costs Consolidated Statement of Profit or Loss Summary (For the year ended December 31) | Indicator (HKD Thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 69,961,881 | 66,209,921 | | Gross Profit | 3,127,313 | 2,967,854 | | Operating Profit | 1,420,354 | 1,260,212 | | Finance Costs | (193,908) | (295,616) | | Profit Before Tax | 1,247,265 | 1,009,507 | | Profit for the Year | 1,067,580 | 809,948 | Consolidated Cash Flow Statement For FY2020, the Group generated HKD 2.62 billion in net cash from operating activities, a significant increase, with net cash outflow of HKD 7.51 million from investing activities and HKD 1.64 billion from financing activities, resulting in a net increase of HKD 967 million in cash and cash equivalents for the year Cash Flow Statement Summary (For the year ended December 31) | Indicator (HKD Thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 2,616,286 | 1,146,904 | | Net Cash (Used in)/Generated from Investing Activities | (7,507) | 12,867 | | Net Cash Used in Financing Activities | (1,641,997) | (387,847) | | Net Increase in Cash and Cash Equivalents | 966,782 | 771,924 | | Cash and Cash Equivalents at Year-End | 3,559,192 | 2,327,702 | Financial Summary This section provides a summary of the Group's key financial data for the past five fiscal years (2016-2020), illustrating a continuous growth trend in revenue, profit, total assets, and total equity Five-Year Financial Summary (HKD Thousands) | For the year ended December 31 | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Performance | | | | | | | Revenue | 69,961,881 | 66,209,921 | 62,481,961 | 54,543,084 | 48,161,318 | | Profit Before Tax | 1,247,265 | 1,009,507 | 946,999 | 919,711 | 688,775 | | Profit for the Year | 1,067,580 | 809,948 | 740,827 | 716,441 | 551,915 | | Assets and Liabilities | | | | | | | Total Assets | 29,425,571 | 24,936,069 | 23,877,461 | 20,653,352 | 16,293,051 | | Total Liabilities | 22,599,285 | 19,281,597 | 18,830,739 | 15,818,638 | 12,429,413 | | Total Equity | 6,826,286 | 5,654,472 | 5,046,722 | 4,834,714 | 3,863,638 |