Financial Performance - In 2018, China Shun Ke Long Holdings Limited achieved sales revenue of over RMB 987 million, reflecting a growth despite a challenging market environment[9]. - The gross profit for 2018 was RMB 143.274 million, with a gross margin reflecting the company's operational efficiency[7]. - The net profit attributable to shareholders for 2018 was RMB 11.247 million, indicating a stable performance amidst rising costs[7]. - For the fiscal year 2018, the company's revenue was approximately RMB 987.0 million, a slight increase of about RMB 32.8 million or 3.4% compared to the fiscal year 2017[29]. - The retail store business generated revenue of approximately RMB 725.9 million, an increase of about RMB 48.9 million or 7.2% from the previous year, primarily due to new store sales in Foshan and increased sales of imported fresh fruits[29]. - The wholesale distribution business revenue was approximately RMB 261.1 million, a decrease of about RMB 16.1 million or 5.8%, mainly due to a significant reduction in average procurement amounts from corporate clients[29]. - The company's gross profit margin for fiscal year 2018 was 14.5%, down from 15.4% in fiscal year 2017, attributed to lower profits from promotional activities and sales of imported fresh fruits[31]. - The company's other operating income for fiscal year 2018 was approximately RMB 55.0 million, a decrease of about RMB 0.6 million from the previous year, mainly due to reduced promotional income from suppliers[33]. - The sales and distribution costs for fiscal year 2018 were approximately RMB 142.2 million, an increase of about RMB 1.2 million or 0.9%, primarily due to increased promotional costs for direct sales and online advertising[34]. - The group's net profit attributable to shareholders for the fiscal year 2018 was approximately RMB 11.4 million, a slight decrease of about RMB 0.5 million or 4.2% compared to 2017, mainly due to increased sales and distribution costs[39]. - The total comprehensive income attributable to shareholders for the fiscal year 2018 was approximately RMB 13.8 million, an increase of about RMB 5.4 million or 64.3% from 2017[40]. Retail Expansion - The company expanded its retail presence by opening 8 new stores in Foshan, bringing the total number of retail and franchise stores in Guangdong Province and Macau to 70[9]. - The company opened 8 new retail stores and closed 2, resulting in a total of 70 retail stores by the end of fiscal year 2018, with 67 located in Guangdong Province and 3 in Macau[20][22]. - The company decided to slow down the opening of new retail stores due to the recent slowdown in China's economic growth, reallocating funds to enhance existing stores and reduce bank borrowings[176]. Marketing and Promotions - The F2C (Factory to Consumer) initiative successfully generated over RMB 2 million in sales during the first Shun Ke Long Appliance Festival, with plans to continue this annual event[10]. - Promotional activities, including two 79% discount sales, contributed an increase of over RMB 26 million in sales for the year[10]. - The introduction of new imported products, such as skincare items and durian, led to significant sales, with durian sales exceeding RMB 37 million in 2018[10]. Strategic Partnerships - The company initiated the Taoxian Da project with Alibaba, which not only contributed to revenue growth but also helped accumulate valuable online data and attract younger customers[11]. - The company plans to deepen cooperation with Taoxian Da in 2019 to enhance customer service and experience in the Greater Foshan area[11]. Financial Position - Total assets as of December 31, 2018, amounted to RMB 444.69 million, with total liabilities of RMB 264.732 million, showcasing the company's financial position[7]. - As of December 31, 2018, the group had cash and cash equivalents of approximately RMB 121.7 million, down from approximately RMB 164.5 million as of December 31, 2017[42]. - The group had bank borrowings of approximately RMB 108.0 million as of December 31, 2018, compared to RMB 92.0 million as of December 31, 2017[46]. - The group reported a return on equity of 4.1% for the fiscal year 2018, down from 4.5% in 2017[49]. - The group had a current ratio of 1.7x as of December 31, 2018, compared to 1.6x in 2017[49]. Corporate Governance - The company has maintained compliance with the corporate governance code as of December 31, 2018, ensuring high standards of governance to protect shareholder interests[91]. - The board of directors held a total of 10 meetings during the year, with the attendance records indicating active participation from executive and non-executive members[94]. - The company has a strong board of directors with members holding degrees in economics, finance, and accounting, ensuring robust governance and oversight[83][84][86][87]. - The company has adopted a standard code for securities trading by directors, confirming adherence to these standards for the fiscal year ending December 31, 2018[92]. - The board is committed to continuous improvement in corporate governance practices to meet evolving shareholder and investor expectations[91]. - The company has arranged appropriate liability insurance for directors and senior officers against potential legal claims[97]. - All directors are required to disclose their other positions, ensuring transparency and accountability within the board[98]. - New directors receive formal training to understand the company's operations and their responsibilities under listing rules[99]. - The board's decision-making includes significant matters such as policy, strategy, budget, and risk management, ensuring comprehensive oversight[98]. - The company encourages ongoing professional development for directors to enhance their contributions to the board[99]. Environmental and Social Responsibility - The company emitted approximately 6,968 tons of carbon dioxide in 2018[59]. - Total water consumption for the company in 2018 was about 44,472 cubic meters[61]. - The company consumed approximately 8.82 million kilowatt-hours of electricity in 2018[63]. - The company distributed 10,888 kilograms of shopping bags and packaging materials to customers in 2018[63]. - The company has implemented various training programs for employees to ensure career development and performance evaluation[70]. - The company strictly adheres to labor laws and has no records of child or forced labor as of December 31, 2018[71]. - The company emphasizes food safety and regularly trains procurement and retail staff on relevant laws and regulations[73]. - The company has a volunteer team that engages in community service and donations to support local communities[77]. - The company has a strong anti-corruption policy that all employees and business partners must adhere to[76]. Management and Leadership - The company appointed Mr. Meng Hanting as CEO and Executive Director on March 2, 2018, bringing experience from Deloitte and Global Capital Investment Limited[80]. - Mr. Han Wei was appointed as Executive Director and Chief Financial Officer on September 13, 2017, with extensive experience in financial management across various companies[81]. - The Chief Financial Officer has over 20 years of experience in accounting and corporate secretarial fields, enhancing the company's financial oversight capabilities[89]. - The company appointed a new CEO, Mr. Meng Hanting, on March 2, 2018, and the chairman position was held by Mr. Wang Zheng until August 30, 2018, when Mr. Sun Qianhao took over[121]. Shareholder Engagement - The company aims to maintain effective communication with shareholders, particularly through annual general meetings[161]. - The company allows shareholders holding at least 10% of the paid-up capital to request a special general meeting[158]. - The company confirmed that there are no significant uncertainties that may cast doubt on its ability to continue as a going concern[150]. Agreements and Contracts - The total amount paid or payable under the 2018 procurement renewal agreement for the year ended December 31, 2018, was approximately RMB 40.7 million, within the annual cap of RMB 48.0 million set for that year[197]. - The total amount received or receivable under the 2018 sales renewal agreement for the year ended December 31, 2018, was approximately RMB 6.4 million, within the annual cap of RMB 9.0 million set for that year[198]. - The 2018 procurement renewal agreement allows the group to exclusively procure fresh meat and other agricultural products from the Lecong Group, effective from January 1, 2018[197]. - The 2018 sales renewal agreement allows the group to continue selling daily necessities, food, and stationery to the Lecong Group, effective from January 1, 2018[198]. - The agreements with the Lecong Group were renewed for three years starting January 1, 2018, and are based on historical transaction prices, current market prices, and bulk purchase discounts[194]. Stock Options and Incentives - The company has established a share option scheme to incentivize and reward eligible participants, with a maximum limit of 10% of the total shares issued post-global offering, amounting to 28,647,700 shares[185]. - The company must seek shareholder approval for any further grants of stock options exceeding 1% of the issued shares as of the grant date[187]. - The exercise price for any specific stock options granted must not be lower than the highest of the closing price on the grant date or the average closing price over the five trading days preceding the grant date[192]. - The exercise period for stock options will be determined by the board but cannot exceed ten years from the grant date[188]. - There is no minimum holding period required before exercising stock options[189]. - The company must pay HKD 1.0 as the consideration for accepting the stock options[190]. - The company has not granted any share options under the share option scheme as of the report date[181]. Future Outlook - The company is continuously evaluating the retail market outlook and the economic situation in China to determine the most effective allocation of resources[176]. - The company aims to increase the proportion of direct procurement from production sites to reduce costs and improve gross margins[28]. - The company plans to enhance its "new retail" business by strengthening partnerships with e-commerce platforms and improving logistics capabilities, including setting up front warehouses[27][28].
中国顺客隆(00974) - 2018 - 年度财报