Company Overview - Fountain Set Group is one of the world's largest fabric manufacturers, producing knitted fabric and garments through vertically integrated operations[4]. - The company operates 8 production facilities in the PRC, Sri Lanka, and Indonesia, employing close to 9,000 staff globally[5]. - Chinatex Corporation Limited has been the largest shareholder since 2012, indicating strong backing from a state-owned enterprise[6]. - The company emphasizes research and development, collaborating with brands to create innovative fabric and garment products[5]. - Fountain Set Group has a strong global marketing presence with offices in 5 countries[5]. - The company is committed to expanding its market reach and enhancing its product offerings through continuous innovation[5]. Financial Performance - Revenue for 2018 reached HK$7,510.8 million, an increase of 8.6% from HK$6,913.8 million in 2017[29]. - Profit attributable to owners of the Company was HK$160.8 million, slightly up from HK$156.8 million in the previous year[29]. - Profit margin decreased to 2.1% in 2018 from 2.3% in 2017[29]. - Basic and diluted earnings per share were both HK$0.133, compared to HK$0.130 in 2017[29]. - Proposed final dividend per share increased to HK$0.1064 from HK$0.1040 in 2017, with a dividend payout ratio of 90.0%[29]. - Total assets as of December 31, 2018, were HK$5,664.5 million, up from HK$5,589.0 million in 2017[29]. - Net bank borrowings stood at HK$(191.1) million, compared to HK$(127.4) million in 2017[29]. - Capital expenditure for the year was HK$242.7 million, an increase from HK$231.3 million in 2017[29]. - Return on equity improved to 5.0% in 2018 from 4.9% in 2017[29]. - Inventory turnover period decreased to 81 days in 2018 from 86 days in 2017[29]. Market Environment - Global GDP growth decreased from 3.1% in 2017 to 3% in 2018, below the June forecast of 3.1%[61]. - The textile industry faced increased production costs due to rising prices of cotton, dyes, and chemicals, alongside weak consumer demand[61]. - Trade tensions among major economies remained elevated, affecting the overall market environment[61]. - The company experienced operational challenges due to the dual pressures from upstream and downstream in the industry chain[61]. Operational Efficiency - The company maintains a diverse network of production and trading offices across key markets, enhancing its operational efficiency[13]. - The Group achieved a historical peak in turnover during the year under review, successfully overcoming challenges posed by the Sino-U.S. trade dispute and increased manufacturing costs in China[62]. - The Group's centralized procurement management system has been crucial in mitigating the impact of rising raw material prices, particularly for cotton yarn, dyes, and chemicals[98]. - Unified production scheduling has been implemented to stabilize operations, balancing production and demand amidst fluctuations in order sizes and categories[99][100]. Sustainability Initiatives - The Group has established a "Sustainability Development and Enhancement Committee" to drive sustainability objectives and set ambitious targets for improvement since 2016[64]. - The centralized heat supply project is a key initiative aimed at reducing emissions and contributing to cleaner air in the community by decreasing the number of coal-fired boilers in the area[62]. - The Group's environmental initiatives include inviting qualified advisors to evaluate and recommend improvements for environmental protection measures in its factories[64]. Governance and Board Structure - The Board of Directors as of December 31, 2018, comprised 9 members, with non-executive and independent non-executive directors representing about 56% of the Board[170]. - The Company has consistently complied with the Corporate Governance Code throughout 2018, reinforcing its corporate governance principles[170]. - New executive directors were appointed on August 28, 2018, including Mr. Liu Xianfu, Mr. Tao Yongming, and Mr. Yau Hang Tat Andrew[170]. - The number of independent non-executive directors continuously represents one-third of the Board, in compliance with Listing Rules[170]. - The Board has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, with their terms of reference reviewed and approved[194].
福田实业(00420) - 2018 - 年度财报