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南华集团控股(00413) - 2018 - 年度财报
SC HOLDINGSSC HOLDINGS(HK:00413)2019-04-26 08:39

Financial Performance - For the year ended December 31, 2018, South China Holdings Company Limited reported revenue of HKD 4,228,000,000, an increase of 8% from HKD 3,902,000,000 in 2017, and a profit of HKD 140,700,000, a decrease of 43% from HKD 248,100,000 in 2017[24]. - The trading and manufacturing segment saw revenue increase by 9% to HKD 4,007,000,000, with operating profit rising by 51% to HKD 137,800,000[27]. - The OEM toy business achieved record revenue of HKD 3,602,000,000, a 6% increase year-on-year, attributed to improved customer loyalty and trust[28]. - The footwear trading business revenue rose by 52% to HKD 371,600,000, with an overall profit of HKD 8,900,000 due to increased sales and gross margin[36]. - The property investment and development segment reported an 8% increase in revenue to HKD 211,200,000, but operating profit decreased by 31% to HKD 356,400,000 due to the absence of property sale gains[37]. - In 2018, the agricultural segment reported revenue of HKD 9,700,000, a decrease of 32% compared to 2017, while operating loss increased by 21% to HKD 58,700,000[40]. Operational Developments - Rental income remained stable, with significant contributions from the Xinghui Plaza shopping center in Shenyang, which is a leading fur mall in Liaoning Province[38]. - The Zhongyuan Plaza project, with a total construction area of over 500,000 square meters, is under development, with over 70% of pre-sold residential and serviced apartment units already sold[39]. - The ongoing development of the Central Plaza project in Shenyang is on schedule, with plans to sell remaining units of a residential building and a serviced apartment building in 2019[62]. - The group currently leases over 530,000 acres (approximately 353,000,000 square meters) of forest land, farmland, fish ponds, and lakes in various major provinces in mainland China, focusing on the cultivation of high-margin fruit and crops, as well as livestock farming[70]. Financial Ratios and Risks - As of December 31, 2018, the group's current ratio was 1.3 and the debt-to-equity ratio was 41.8%, compared to 1.9 and 42.0% in 2017[41]. - The group faced foreign exchange risks primarily related to RMB and USD, managing these risks through close monitoring and timely forward contracts[42]. - The group faces risks related to the macroeconomic environment, including potential declines in consumer discretionary income due to economic downturns, credit crises, and economic stagnation[73]. - Rising costs due to raw material and transportation price increases, as well as compliance with minimum wage legislation, may impact profit margins on products sold[74]. - The group is exposed to risks associated with the real estate market in mainland China, including policy changes, currency fluctuations, interest rate changes, and supply-demand imbalances[75]. - The agricultural business is vulnerable to natural disasters and adverse weather conditions, which could lead to reduced yields or production delays[77]. Legal Matters - The group is pursuing legal action against Nanjing Qingtian Technology Co., Ltd. for copyright infringement, seeking compensation of RMB 210,400,000 for damages[85]. - The Jiangsu High Court ruled that 13 software copyrights should belong to the group, based on evidence that Nanjing Qingtian lacked the necessary conditions to develop the software[86]. - The group is exploring all possible legal avenues to reclaim ownership of 31 software copyrights and prevent further sales or use by Nanjing Qingtian and/or China Qingtian[88]. - The company has initiated legal actions against various parties to confirm malicious collusion and to seek compensation for the infringement of rights related to the 290,000 square meters of land[97]. - The company has filed multiple administrative lawsuits regarding issues in the issuance of land use certificates, with some cases dismissed due to procedural grounds[98]. - The company is preparing to appeal to the Supreme People's Court regarding the dismissals of its administrative lawsuits, asserting unfair treatment in the judicial process[98]. Corporate Governance - The company emphasizes its commitment to environmental protection and compliance with relevant regulations in its operations[102]. - The company has a strong focus on corporate governance, with independent non-executive directors actively participating in audit and remuneration committees[122][123]. - The company has recognized the contributions of its board members, with several having significant experience in finance and law, which supports its strategic initiatives[121][124]. - The company has a diverse board with members holding degrees from prestigious institutions such as the University of Illinois and the University of Cambridge, enhancing its governance and strategic direction[117][119][120]. - The board of directors includes a mix of executive, non-executive, and independent non-executive members, ensuring diverse governance[159]. Shareholder Matters - The company's distributable reserves as of December 31, 2018, amounted to HKD 1,519,090,000, a decrease from HKD 1,627,321,000 in 2017[149]. - The company did not declare an interim dividend for the year ended December 31, 2018, consistent with 2017[134]. - The board of directors does not recommend the payment of a final dividend for the year ended December 31, 2018, also in line with 2017[134]. - The company has adopted a dividend policy aimed at distributing profits to shareholders while retaining sufficient reserves for future development[140]. Employee and Talent Management - The total employee count as of December 31, 2018, was approximately 17,461, with employee costs around HKD 1,499,000,000, slightly up from HKD 1,493,000,000 in 2017[47]. - The company aims to attract suitable talent to support its ongoing development through the Share Award Scheme[199]. - The remuneration of executive directors is determined based on market practices and the company's remuneration policy[168]. Strategic Focus - The management anticipates continued challenges in 2019 due to global economic changes and will focus on cost control and exploring opportunities in China[55]. - The group aims to enhance its competitive edge by investing in high-tech toy manufacturing processes and increasing capital input in automation[58]. - Following the establishment of new factories in Guangxi and Dongguan, the group is seeking to expand capacity and has identified suitable existing factories for future growth[59]. - The investment property portfolio in mainland China and Hong Kong totals approximately 580,000 square meters and 280,000 square feet, respectively, with expectations of rising rental income in 2019 and beyond[61]. - The group is actively considering the sale of non-core low-income properties to reallocate resources to more promising investment properties or land reserves[61].