统一企业中国(00220) - 2020 - 年度财报

Corporate Information This chapter provides basic information about Uni-President China Holdings Ltd., including its registered office, head office, Hong Kong business address, website, and lists of executive, non-executive, and independent non-executive directors, along with key partners such as principal bankers, auditors, legal advisors, and share registrars Corporate Information This chapter provides basic information about Uni-President China Holdings Ltd., including its registered office, head office, Hong Kong business address, website, and lists of executive, non-executive, and independent non-executive directors, as well as members of various committees (audit, nomination, remuneration), along with key partners such as principal bankers, auditors, legal advisors, and share registrars - The company is listed on the Hong Kong Stock Exchange, stock code 220[8] - Mr Lo Chih-Hsien serves as Chairman and Executive Director, and Mr Liu Hsin-Hua serves as General Manager[8] - The company's auditor is PricewaterhouseCoopers[10] Financial Summary This chapter outlines the company's key financial data from 2016 to 2020, showing robust revenue and profit growth in 2020, with total revenue up 3.4%, net profit up 19.0%, and a corresponding increase in basic earnings per share, while total assets and equity grew steadily and total liabilities slightly increased Five-Year Financial Summary This chapter outlines the company's key financial data from 2016 to 2020, showing robust revenue and profit growth in 2020, with total revenue up 3.4%, net profit up 19.0%, and a corresponding increase in basic earnings per share, while total assets and equity grew steadily and total liabilities slightly increased 2019-2020 Annual Performance Summary (RMB thousands) | Indicator | 2020 | 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 22,761,822 | 22,019,737 | +3.4% | | Gross Profit | 8,065,931 | 7,918,290 | +1.9% | | Profit before income tax | 2,326,459 | 1,971,360 | +18.0% | | Profit for the year | 1,625,703 | 1,366,212 | +19.0% | | Basic earnings per share (RMB cents) | 37.64 | 31.63 | +19.0% | 2019-2020 Year-End Balance Sheet Summary (RMB thousands) | Indicator | Dec 31, 2020 | Dec 31, 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Total Assets | 22,104,371 | 21,757,042 | +1.6% | | Total Liabilities | 8,217,838 | 8,124,112 | +1.2% | | Total Equity | 13,886,533 | 13,632,930 | +1.9% | Chairman's Statement Chairman Lo Chih-Hsien reviews 2020 performance, highlighting 3.4% revenue growth and 19.0% after-tax profit growth despite COVID-19 challenges, driven by double-digit food business growth and multi-fold increase in 'Kai Xiao Zao' premium brand, with the board proposing a final dividend of RMB 37.64 cents per share Chairman's Statement Chairman Lo Chih-Hsien reviews 2020 performance, highlighting 3.4% revenue growth and 19.0% after-tax profit growth despite COVID-19 challenges, driven by double-digit food business growth and multi-fold increase in 'Kai Xiao Zao' premium brand, with the board proposing a final dividend of RMB 37.64 cents per share 2020 Performance Highlights (RMB millions) | Indicator | Amount (RMB millions) | YoY Growth | | :--- | :--- | :--- | | Revenue | 22,761.8 | +3.4% | | After-tax Profit | 1,625.7 | +19.0% | - Food business achieved double-digit growth, with premium Chinese cuisine brand “Kai Xiao Zao” revenue growing multi-fold; beverage business, “Uni-President Assam Milk Tea” maintained market leadership and achieved positive growth[16][17] - The Board recommended a final cash dividend of RMB 37.64 cents per share, totaling approximately RMB 1.626 billion for the year ended December 31, 2020[18][19] - Future Outlook: The Group will adapt to new consumption trends such as e-commerce and the stay-at-home economy, as well as health-oriented and family-focused consumption, to innovate and develop products for various consumption scenarios[20] Management Discussion & Analysis This section provides an in-depth analysis of the Group's operational and financial performance, highlighting key business segment contributions, strategic initiatives, and financial health Business Review In 2020, the Group's total revenue grew 3.4% to RMB 22.76 billion, driven by strong food business performance, up 10.9%, while the beverage business saw a slight 1.3% decline due to the pandemic, with milk tea showing robust 7.3% growth 2020 Segment Business Revenue (RMB millions) | Business Segment | 2020 Revenue | YoY Change | | :--- | :--- | :--- | | Food Business | 9,424.5 | +10.9% | | of which: Instant Noodles | 9,055.0 | +7.2% | | Beverage Business | 12,560.4 | -1.3% | | of which: Milk Tea | - | +7.3% | | Total Group Revenue | 22,761.8 | +3.4% | Food Business Food business revenue reached RMB 9.425 billion in 2020, a 10.9% increase, with instant noodle revenue growing 7.2% to RMB 9.055 billion, and premium brand 'Kai Xiao Zao' achieving multi-fold revenue growth through celebrity endorsements and product innovation - Instant noodle business revenue increased by 7.2% to RMB 9.055 billion[24] - “Tang Da Ren” brand achieved double-digit or higher revenue growth for 12 consecutive years, demonstrating high market recognition[29] - Premium Chinese cuisine brand “Kai Xiao Zao” rapidly expanded brand awareness driven by brand ambassador Xiao Zhan, achieving multi-fold revenue growth in 2020[35] Beverages Business Beverage business revenue was RMB 12.560 billion in 2020, a 1.3% decrease, with tea beverages gradually recovering post-pandemic, juice revenue at RMB 1.578 billion, and 'Uni-President Assam Milk Tea' showing strong performance with 7.3% growth, maintaining market leadership Revenue by Major Beverage Categories (RMB millions) | Category | 2020 Revenue | Notes | | :--- | :--- | :--- | | Tea Beverages | 5,444.0 | Gradually recovered post-pandemic | | Juice | 1,578.2 | Adapting to consumption upgrade trends | | Milk Tea | - | “Uni-President Assam Milk Tea” grew by 7.3% | - “Uni-President Assam Milk Tea” revenue increased by 7.3% in 2020, enhancing brand recognition through multi-scenario consumption and collaborations with popular dramas[53] - Mid-to-high-end natural mineral water brand “ALKAQUA” continued to cultivate new generations and middle-class consumers by emphasizing the efficacy of “metasilicic acid”[55][56] Research and Development & Food Safety The R&D center capitalized on new home consumption opportunities during the pandemic, launching 'Kai Xiao Zao' self-heating hotpot and 'Uni-President Na Jie Na Xiang' local specialty instant food series, holding 106 authorized patents by year-end 2020, and maintaining robust food safety controls across the supply chain - Launched “Kai Xiao Zao” self-heating hotpot and “Na Jie Na Xiang” series of local specialty food products for home consumption scenarios[63][65] - As of December 2020, the R&D center held 106 authorized patents with another 51 pending applications, continuously building technological barriers[67] - The Group places high importance on food safety, with 28 subsidiaries certified with ISO9001 and 26 subsidiaries with ISO22000 food safety management system certification[69] Financial Review & Analysis In 2020, the Group demonstrated solid financial performance with a gross profit margin of 35.4%, operating profit up 16.7% to RMB 2.108 billion, and profit attributable to equity holders increasing 19.0% to RMB 1.626 billion, maintaining a healthy cash flow and a net cash position 2020 Key Financial Indicators (RMB millions) | Indicator | 2020 | 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 22,761.8 | 22,019.7 | +3.4% | | Gross Profit | 8,065.9 | 7,918.3 | +1.9% | | Gross Profit Margin | 35.4% | 36.0% | -0.6pp | | Operating Profit | 2,108.3 | 1,806.3 | +16.7% | | Profit attributable to equity holders | 1,625.7 | 1,366.2 | +19.0% | | Earnings per share (RMB cents) | 37.64 | 31.63 | +19.0% | - Selling and marketing expenses slightly decreased to RMB 5.350 billion, and administrative expenses reduced to RMB 958 million, primarily due to government tax and fee reductions and social security contribution adjustments[71] 2020 Operational Efficiency Indicators (Days) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Trade receivables turnover days | 9 | 9 | | Inventory turnover days | 45 | 41 | | Trade payables turnover days | 44 | 42 | - As of the end of 2020, the Group was in a net cash position with a net cash balance of RMB 5.536 billion and a capital gearing ratio of -66.30%[74] - As of December 31, 2020, the Group had a total of 30,430 employees, with total employee costs of RMB 3.372 billion, a slight decrease from the previous year[81] Report of the Directors This section provides an overview of the company's principal activities, dividend policy, continuing connected transactions, and key risks and uncertainties affecting the Group's performance Principal Activities and Dividends This chapter states that the company's principal activities are the production and sale of beverages and instant noodles in China, with the Board proposing a final dividend of RMB 37.64 cents per share, totaling approximately RMB 1.626 billion, for the year ended December 31, 2020, subject to shareholder approval - The Group's principal activities are the production and sale of beverages and instant noodles in China[82] - The Board recommended a final dividend of RMB 37.64 cents per share, totaling approximately RMB 1.626 billion[82] Continuing Connected Transactions This chapter discloses the Group's continuing connected transactions with its controlling shareholder, Uni-President Enterprises Corporation, including framework agreements for sales, purchases, logistics, and technical support services, all within the annual caps and confirmed fair and reasonable by independent non-executive directors and auditors 2020 Summary of Continuing Connected Transactions (RMB millions) | Transaction Type | Actual Transaction Amount | Annual Cap | | :--- | :--- | :--- | | Framework Sales Agreement | 104.8 | 431.0 | | Framework Purchase Agreement | 3,641.5 | 5,950.0 | | Framework Logistics Services Agreement | – | 54.5 | | Framework Technical Support Services Agreement | 56.9 | 60.0 | - The company's independent non-executive directors and auditors have reviewed the continuing connected transactions, deeming them to be on normal commercial terms, in the overall interest of the company and shareholders, and within the annual caps[107][108] Business Review and Risk Factors This chapter provides a fair business review and identifies key risks and uncertainties affecting the Group's performance, including consumer preference, intense market competition, macroeconomic and financial market risks, and supply chain risks, while also outlining the company's dividend and environmental policies - Key risks include: - Consumer Preference Risk: Inability to predict or respond to changes in consumer tastes may lead to decreased demand - Competition Risk: The food and beverage industry is highly competitive, and competitors may have larger market shares or stronger resources - Economic and Financial Market Risk: Macroeconomic slowdowns may reduce consumer confidence and disposable income - Supply Chain Risk: Reliance on third-party suppliers for packaging materials, where supply disruptions could impact production[115][116][117] - The company's dividend policy aims to distribute a final dividend of not less than 20% of the Group's audited consolidated profit attributable to shareholders[130] Directors' and Senior Management's Profile This section provides detailed biographical information for the company's directors and senior management, highlighting their extensive experience and roles within the Group and other organizations Directors' and Senior Management's Profile This chapter details the backgrounds, experiences, and appointments of the company's executive, non-executive, independent non-executive directors, and senior management team members within the Group and other companies, highlighting the core management's extensive experience in the food and beverage industry - Chairman and Executive Director Mr Lo Chih-Hsien has over 35 years of experience in the food and beverage industry[138] - General Manager Mr Liu Hsin-Hua joined the Group in 1994 and has 27 years of strategic marketing experience in the food and beverage industry[138] - Chief Financial Officer Mr Liu Tzu-Chiang joined the Group in 1998 and has over 27 years of experience in financial management[150] Corporate Governance Report This report details the company's corporate governance framework and practices, confirming compliance with regulatory codes and outlining the roles of the Board and its committees in overseeing risk management, internal controls, and shareholder engagement Corporate Governance Overview This report outlines the company's corporate governance structure and practices, confirming compliance with all Code Provisions of the Corporate Governance Code in 2020, detailing the Board's composition, responsibilities, committee functions, and policies on risk management, internal control, and shareholder communication - The company complied with all Code Provisions of the Hong Kong Stock Exchange's Corporate Governance Code during the reporting year[158] - The Board is responsible for leading and overseeing the company, with four committees: Audit, Nomination, Remuneration, and Investment, Strategy and Development[160] - The Board is collectively responsible for maintaining sound and effective risk management and internal control systems for the Group, reviewing them annually, and deeming them effective and adequate[182][183] 2020 Attendance at Board and Committee Meetings | Name | Board | Audit Committee | Nomination Committee | Remuneration Committee | | :--- | :--- | :--- | :--- | :--- | | Lo Chih-Hsien | 4/4 | – | 2/2 | 2/2 | | Liu Hsin-Hua | 4/4 | – | – | – | | Chen Kuo-Hui | 4/4 | – | – | – | | Su Chung-Ming | 4/4 | 3/3 | – | – | | Chen Sheng-Te | 4/4 | 3/3 | – | 2/2 | | Chen Chih-Hung | 4/4 | 3/3 | 2/2 | – | | Fan Jen-Ta | 4/4 | 3/3 | – | 2/2 | | Lu Chia-Hsing | 4/4 | 3/3 | 2/2 | – | Independent Auditor's Report This section presents PricewaterhouseCoopers' unqualified opinion on the company's 2020 consolidated financial statements, confirming their true and fair presentation and detailing key audit matters such as revenue recognition and deferred income tax assets Independent Auditor's Report PricewaterhouseCoopers issued an unqualified opinion on the company's 2020 consolidated financial statements, affirming they present a true and fair view of the Group's financial position and performance, with key audit matters including revenue recognition and deferred income tax assets - The auditor's opinion is unqualified, stating that the consolidated financial statements present a true and fair view of the Group's financial position and performance in accordance with Hong Kong Financial Reporting Standards[197] - Key Audit Matter One: Revenue Recognition. Due to the high volume of transactions, the auditor focused on testing internal controls, information systems, sampling supporting documents, and assessing whether revenue was recognized in the correct reporting period[198][200] - Key Audit Matter Two: Deferred Income Tax Assets. As recognition involves significant judgment and estimation of future taxable profits, the auditor assessed the reasonableness of management's internal controls and profit forecasts, and verified the existence and amount of tax losses[198][202] Consolidated Financial Statements This section presents the Group's comprehensive financial statements, including the income statement, balance sheet, cash flow statement, and detailed notes, providing a complete overview of its financial performance and position Consolidated Income Statement The Consolidated Income Statement shows 2020 revenue of RMB 22.76 billion, up 3.4%, with gross profit at RMB 8.07 billion (35.4% margin), operating profit significantly increasing 16.7% to RMB 2.11 billion, and net profit attributable to equity holders rising 19.0% to RMB 1.63 billion 2019-2020 Consolidated Income Statement (RMB thousands) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 22,761,822 | 22,019,737 | | Cost of sales | (14,695,891) | (14,101,447) | | Gross profit | 8,065,931 | 7,918,290 | | Operating profit | 2,108,273 | 1,806,321 | | Profit before income tax | 2,326,459 | 1,971,360 | | Income tax expense | (700,756) | (605,148) | | Profit for the year | 1,625,703 | 1,366,212 | Consolidated Balance Sheet As of December 31, 2020, the Group's total assets were RMB 22.10 billion, up 1.6% year-on-year, with total liabilities at RMB 8.22 billion and total equity at RMB 13.89 billion, characterized by a significant portion of non-current assets and current liabilities 2019-2020 Year-End Consolidated Balance Sheet (RMB thousands) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Total Assets | 22,104,371 | 21,757,042 | | Non-current assets | 15,943,328 | 14,739,130 | | Current assets | 6,161,043 | 7,017,912 | | Total Liabilities | 8,217,838 | 8,124,112 | | Non-current liabilities | 551,817 | 483,010 | | Current liabilities | 7,666,021 | 7,641,102 | | Total Equity | 13,886,533 | 13,632,930 | Consolidated Cash Flow Statement In 2020, the Group generated strong net cash inflow of RMB 3.22 billion from operating activities, with net cash outflows of RMB 1.70 billion from investing and RMB 2.08 billion from financing activities, resulting in a net decrease of RMB 570 million in cash and cash equivalents 2019-2020 Consolidated Cash Flow Statement (RMB thousands) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Net cash generated from operating activities | 3,215,227 | 2,869,341 | | Net cash used in investing activities | (1,700,794) | (1,469,822) | | Net cash used in financing activities | (2,083,963) | (1,905,391) | | Net decrease in cash and cash equivalents | (569,530) | (505,872) | | Cash and cash equivalents at beginning of year | 1,056,780 | 1,563,945 | | Cash and cash equivalents at end of year | 486,300 | 1,056,780 | Notes to the Consolidated Financial Statements The notes provide detailed explanations and supplementary information to the consolidated financial statements, covering accounting policies, key estimates, detailed analyses of financial statement items, related party transactions, commitments, and contingent liabilities Segment Revenue (RMB thousands) | Segment | 2020 | 2019 | | :--- | :--- | :--- | | Beverages | 12,560,400 | 12,730,490 | | Food | 9,424,487 | 8,500,711 | | Others | 776,935 | 788,536 | | Total | 22,761,822 | 22,019,737 | Segment Profit/(Loss) (RMB thousands) | Segment | 2020 | 2019 | | :--- | :--- | :--- | | Beverages | 1,814,524 | 1,614,295 | | Food | 517,079 | 490,015 | | Others | 72,620 | 48,964 | | Unallocated | (295,950) | (346,953) | | Total | 2,108,273 | 1,806,321 | - The Board recommended a final dividend of RMB 37.64 cents per ordinary share, totaling RMB 1.626 billion for the year ended December 31, 2020[399]