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保宝龙科技(01861) - 2019 - 年度财报

Financial Performance - The total revenue for the group was approximately HKD 561.5 million, a decrease of about 8.1% compared to HKD 610.9 million in the previous year[8]. - The net profit for the year was approximately HKD 38.1 million, down about 18.8% from HKD 46.9 million in the previous year[8]. - The automotive beauty and maintenance products segment recorded revenue of approximately HKD 506.5 million, an increase of about 4.5% from HKD 484.9 million in the previous year[19]. - The personal care products division generated revenue of approximately HKD 55.0 million, a significant decrease of about 56.3% compared to HKD 125.9 million in 2018, primarily due to reduced sales to US customers amid US-China trade tensions[20]. - The group's cost of sales was approximately HKD 397.4 million, accounting for about 70.8% of revenue, down from 74.2% in 2018, reflecting a 12.3% decrease due to lower raw material costs and improved production management[21]. - Gross profit increased to approximately HKD 164.2 million, up about 4.2% from HKD 157.6 million in 2018, with the gross margin rising to approximately 29.2% from 25.8%[22]. - Other income and gains decreased by 18.6% to approximately HKD 12.7 million, down from HKD 15.6 million in 2018, mainly due to a significant drop in foreign exchange gains[23]. - Selling and distribution expenses rose by approximately 21.1% to HKD 54.6 million, compared to HKD 45.1 million in 2018, driven by increased transportation and marketing costs[24]. - Administrative expenses increased significantly by about 16.9% to HKD 45.6 million from HKD 39.0 million in 2018, largely due to increased donations and share-based payment expenses[25]. - Net profit for the period was approximately HKD 38.1 million, a decrease of about 18.8% from HKD 46.9 million in 2018, primarily due to higher selling and distribution expenses[26]. Dividend and Shareholder Communication - The board proposed a final dividend of HKD 0.0245 per share, compared to zero in the previous year[9]. - The company has adopted a dividend policy prioritizing cash distributions to shareholders, with decisions based on financial performance and capital needs[90]. - The company emphasizes open communication with shareholders, providing annual and interim performance reports and maintaining compliance with continuous disclosure obligations[91]. Business Strategy and Market Outlook - The group is focusing on enhancing its OBM business and has increased brand awareness activities, including sponsorship of exhibitions and public relations efforts[17]. - The group plans to continue participating in various exhibitions and launching new products to meet market demand, strengthening its brand promotion and customer relationships[11]. - Despite the economic slowdown due to COVID-19, the group maintains a cautious yet optimistic outlook on its domestic market and OBM business[11]. - The group has recorded significant growth in online sales, reflecting the ongoing implementation of e-commerce strategies in China[17]. - The group aims to improve existing OBM product lines, strictly control costs, and enhance brand image to increase product competitiveness[11]. - The group believes in the growth potential of the new Precious Dragon series products, although the establishment of new product lines will take time[17]. Corporate Governance - The company has adopted and complied with the corporate governance code as per the Hong Kong Stock Exchange listing rules, except for the separation of the roles of Chairman and CEO[47]. - The board consists of four executive directors and three independent non-executive directors, ensuring high independence and effective judgment[54]. - The board of directors consists of seven members, including four executive directors and three independent non-executive directors[55]. - All directors have been appointed for a specified term, with executive directors serving a three-year term starting from June 21, 2019[56]. - The company has adopted a board diversity policy, considering factors such as gender, age, cultural background, and professional experience in the selection process[64]. - The board has implemented a nomination policy to enhance board diversity and governance standards, evaluating candidates based on qualifications, skills, and experience[65]. - All directors confirmed participation in continuous professional development during the reporting period to enhance their knowledge and skills[58]. - The attendance record for board meetings shows a 100% attendance rate for all directors during the reporting period[67]. - The company has established a succession plan to address potential vacancies on the board due to resignations or other circumstances[65]. - The board meetings can be conducted via telephone or electronic means, ensuring participation from all members[66]. Risk Management - The board has overall responsibility for assessing and determining the nature and extent of risks the group is willing to take to achieve strategic objectives[94]. - The group faces strategic risks related to human resource allocation and maintaining good relationships with government and media, which are mitigated through clear departmental structures and effective management incentives[96]. - Financial risks include potential misuse of funds and compliance issues with accounting regulations, which the group addresses through enhanced accounting controls and budget management[97]. - Operational risks involve ensuring product safety and environmental standards, with the group focusing on monitoring hazards and updating employee training[98]. - Legal risks are managed through contract review processes and regular compliance audits to minimize potential impacts on the group[99]. - The board has conducted an annual review of the effectiveness of the risk management and internal control systems for the year ending December 31, 2019[100]. - The company has engaged a third-party professional organization to audit the design effectiveness and compliance of its internal control systems related to risk management and governance[100]. - The internal control system is designed to provide reasonable assurance against material misstatements or losses, acknowledging inherent limitations[100]. Environmental, Social, and Governance (ESG) Initiatives - The report covers the group's initiatives and performance in environmental and social aspects during the reporting period from January 1, 2019, to December 31, 2019[105]. - The group will continue to assess its business impact on key environmental, social, and governance aspects and include them in future reports[106]. - The report is prepared in accordance with the ESG reporting guidelines set forth by the Hong Kong Stock Exchange[107]. - The company aims to enhance the disclosure of key performance indicators and improve its ESG reporting practices[107]. - The board is responsible for evaluating and determining the group's ESG-related risks and ensuring effective risk management and internal control systems are in place[104]. - The company encourages feedback on its sustainable development measures and has provided contact information for stakeholders[108]. - The company reported total greenhouse gas emissions of 3,285.97 tons during the reporting period, with Scope 1 emissions at 335.14 tons, Scope 2 emissions at 2,933.24 tons, and Scope 3 emissions at 17.59 tons[118]. - The company generated 195.22 tons of waste during the reporting period, consisting of 30.30 tons of hazardous waste and 164.92 tons of non-hazardous waste[120]. - The company emitted 65.33 kg of sulfur dioxide, 60.01 kg of nitrogen oxides, and 4.76 kg of particulate matter as major air pollutants[116]. - The company has committed to using more environmentally friendly propellants, primarily DME and liquefied petroleum gas, in its products[115]. - The company has implemented various environmental measures, including the construction of septic tanks and continuous optimization of wastewater treatment[121]. - The company has established an environmental management system certified to ISO 14001 standards for aerosol and non-aerosol product production[121]. - The company has introduced smart equipment in its workshops to save production materials and labor costs[121]. - The company has conducted approximately 10 industry seminars, 10 exhibitions, and 4 meetings to promote sustainable development in the industry[115]. - The company emphasizes compliance with environmental laws and regulations, with no significant violations reported during the reporting period[121]. Community Engagement and Social Responsibility - The company donated approximately RMB 1,511,000 to support community sustainable development during the reporting period[161]. - The company provided 7,500 medical masks valued at RMB 45,000 to a local charity in response to the COVID-19 outbreak[166]. - The company donated 10,000 disinfectant sprays and 10,000 air disinfectants worth RMB 780,000 to a local charity during the pandemic[166]. - The company actively engages in community investment and has organized various activities for employees, including charity donations and outreach events[161]. Employee Management and Development - Employee turnover rates were 30% for males and 23% for females, with the highest turnover rate of 47% among employees aged 30 or below[137]. - 100% of employees received training during the reporting period, with average training hours of 11.56 for males and 12.34 for females[141]. - The company has established a safety department to comply with labor and safety laws, conducting regular safety training for employees[138]. - No significant non-compliance incidents related to health and safety laws were reported during the period[139]. - The company has a total of 375 suppliers, with 369 from China, 3 from Japan, 2 from Hong Kong, and 1 from South Korea[151]. - The company has not encountered any issues related to child labor or forced labor during the reporting period[145]. - The company is committed to managing environmental and social risks within its supply chain[184]. - The company has a community investment policy to engage with local communities and address their needs[184]. Quality Control and Assurance - The company has established a quality assurance team to implement quality control procedures for suppliers and raw materials[154]. - The company has received multiple certifications for its quality management systems, including ISO9001:2015 and ISO14001:2015[152]. - The company has a policy for handling product complaints and has not faced disputes regarding product quality during the reporting period[163]. - The company conducts random and sampling tests on finished products to ensure quality control[162]. Management and Leadership - The company’s executive director has been with the group since 2000, focusing on business strategy and development[187]. - The company has been expanding its board with experienced directors since 2000, enhancing governance and oversight capabilities[188]. - The procurement and human resources management are overseen by an executive director with over 7 years of experience in aerosol and non-aerosol product development[191]. - The sales and marketing department is led by an executive director who has over 5 years of experience in product design and development, focusing on both domestic and international markets[189]. - The company emphasizes quality control and product development, with a director having over 18 years of experience in aerosol manufacturing and quality management[191]. - Independent directors with extensive experience in corporate management and finance provide independent advice to the board, ensuring diverse perspectives[192][194]. - The company is actively involved in the aerosol industry, with key personnel holding leadership positions in relevant associations and committees[189]. - The board includes members with significant experience in public administration and corporate governance, enhancing strategic decision-making[196]. - The company has a strong focus on training and development, with directors participating in various educational and professional development programs[196]. - The management team is composed of individuals with advanced degrees and professional qualifications, contributing to the company's strategic direction[194]. Corporate Restructuring - The company underwent a restructuring plan in May 2018 to streamline its corporate structure, becoming the holding company for its subsidiaries on May 15, 2019[200]. - The financial manager has been responsible for overseeing the overall management of the company's financial and accounting activities, including strategic planning and budgeting[198]. - The senior sales manager is tasked with managing sales and marketing in the Chinese market, focusing on enhancing service levels and achieving sales targets[198].