Company Overview - Fountain Set Group is one of the world's largest fabric manufacturers, producing knitted fabric and garments through vertically integrated operations[5]. - The company operates 8 production facilities in the PRC, Sri Lanka, and Indonesia, employing close to 7,600 staff globally[6]. - Chinatex Corporation Limited has been the largest shareholder since 2012, being a wholly-owned subsidiary of COFCO Corporation[7]. - The company has a strong global network with marketing and representative offices in 4 countries[6]. Research and Development - The company emphasizes research and development, collaborating with brands to create innovative fabric and garment products[6]. - Continuous investment in research and development will focus on functional fabrics, multi-fiber composite fabrics, and fabrics for green environmental clothing[182]. - The Group plans to enhance its capabilities in technological innovation, product upgrade, production capacity coordination, and market cultivation to maintain competitiveness[178]. Financial Performance - Revenue for 2020 decreased to HK$4,943.2 million, down 25.1% from HK$6,605.7 million in 2019[16]. - Profit attributable to owners of the Company fell to HK$85.7 million, a decline of 39.3% compared to HK$141.1 million in 2019[16]. - Profit margin decreased to 1.7% in 2020 from 2.1% in 2019[16]. - Basic and diluted earnings per share were both HK$7.0, down from HK$11.6 in the previous year[16]. - Total assets increased to HK$5,425.7 million in 2020, up from HK$5,296.9 million in 2019[16]. - The gross profit for the year was HK$611,132,000, down from HK$760,952,000 in 2019, resulting in a gross profit margin of 12.4%[141]. - The overall profit for the year 2020 was HK$101,591,000, representing a reduction of only 39.1% from HK$166,814,000 in 2019, despite a loss in the first half of the year[102]. Operational Challenges - The Fountain Set Group faced significant operational challenges due to the global Pandemic, resulting in a sharp reduction in orders and severe operating conditions for textile and apparel export companies[109]. - The Pandemic caused a substantial decline in production and exports from April to June 2020, with major customers significantly reducing orders during this period[110]. - The global textile supply chain was interrupted, leading to acute operational difficulties for the Fountain Set Group and similar companies[109]. - The lengthy impact of the Pandemic on export textile companies was unexpected, leading to overall losses in February 2020[112]. Recovery and Future Outlook - By the end of Q2 2020, the Fountain Set Group achieved recovery growth in operating results, stabilizing and improving its operating conditions[115]. - The Group remains optimistic about the recovery of the retail apparel industries in the US, Europe, and China as the COVID-19 situation stabilizes[73]. - Future outlook includes potential market expansion and new product development initiatives[11]. - The Group anticipates favorable policies from the Chinese government that will positively impact the textile industry moving forward[81][85]. Sustainability Initiatives - The Group has established a "Sustainability Development and Enhancement Committee" to drive sustainability objectives and goals[74]. - The centralized heat supply project aims to reduce emissions of nitrogen oxide, sulfur dioxide, and other pollutants by replacing 28 coal-fired heaters[75]. - The Group's concentrated heating project in Sha Tin is expected to reduce emissions from 28 remaining coal-fired boilers, contributing to cleaner air in the community[78]. - The Group is committed to achieving sustainable green development through technological and management innovation during the 14th Five-Year Plan period[179]. Corporate Governance - The company maintains a high standard of corporate governance, consistently complying with the Corporate Governance Code as per the Listing Rules[189]. - The board is responsible for the leadership and control of the company, focusing on strategic direction and monitoring financial performance[196]. - The board has established a formal list to regularly review specific matters that should be handled by the board or delegated to management[199]. Market Strategy - The Group aims to increase its share in the overseas market and develop industrial textiles as a new growth segment, particularly focusing on medical textiles[181]. - The company is planning to adjust its development strategy to facilitate transformation and high-quality development during the 14th Five-Year Plan[126]. - The company aims to leverage innovation to navigate unprecedented challenges in the global textile industry[130].
福田实业(00420) - 2020 - 年度财报