KERRY LOG NET(HK:00636)2020-04-27 09:35Financial Performance - The company's revenue for 2019 reached HKD 41,139 million, an increase of 7.9% compared to HKD 38,139 million in 2018[14]. - Operating profit for 2019 was HKD 5,201 million, representing a significant increase of 49% from HKD 3,492 million in 2018[14]. - The net profit attributable to shareholders for 2019 was HKD 3,788 million, up 55% from HKD 2,440 million in 2018[14]. - The company reported a core profit of HKD 1,374 million for 2019, slightly up from HKD 1,326 million in 2018[14]. - The company's revenue increased by 8% to HKD 41.139 billion in 2019, compared to HKD 38.139 billion in 2018[30]. - Core operating profit rose by 17% to HKD 2.765 billion in 2019, up from HKD 2.364 billion in 2018[30]. - Core net profit increased by 4% to HKD 1.374 billion in 2019, compared to HKD 1.326 billion in 2018[30]. - The overall logistics business recorded a segment profit growth of 15% in 2019[33]. - The Hong Kong logistics business achieved a 6% growth despite social unrest, with segment profit rising by 23%[34]. - The mainland China logistics business saw a segment profit increase of 22% due to cost efficiency improvements[34]. - The international freight business recorded a segment profit growth of 13%, contributing 20% to total segment profit[37]. Assets and Investments - Total assets as of 2019 amounted to HKD 38,223 million, an increase from HKD 30,714 million in 2018[14]. - The group completed the acquisition of 49% stake in Apex, a global third-largest non-vessel carrier, for approximately USD 176 million, with 30% paid in cash and 70% through share issuance[44]. - As of December 31, 2019, the group's bank loan total was HKD 81.22 billion, with 66% of the loans being foreign currency denominated[44]. - The group has approximately HKD 118.01 billion in unused bank loans and overdraft facilities available for significant capital expenditures as of December 31, 2019[46]. - The group plans to complete a 646,000 square feet logistics center in Guangzhou by Q4 2021 and an 827,000 square feet logistics center in Dubai by Q2 2021[43]. Logistics and Operations - The company has over 10,000 self-owned operational vehicles, enhancing its logistics capabilities[3]. - The company operates in 55 countries and regions, indicating a broad international presence[3]. - The logistics facilities cover an area of 7,500 square feet, supporting operational efficiency[3]. - The total owned floor area of logistics facilities is approximately 6,366,549 square feet, with a 79.9% occupancy rate for Kerry Siam Seaport in Thailand[24]. - The logistics center in Shanghai has a total area of 1,196,734 square feet, fully occupied at 100%[24]. - The logistics center in Zhengzhou, China, has a total area of 358,979 square feet, also fully occupied at 100%[25]. - The logistics center in Wuhan, China, has a total area of 629,007 square feet, fully occupied at 100%[22]. - The logistics center in Vietnam's Da Nang has a total area of 116,444 square feet, fully occupied at 100%[23]. - The logistics center in Chengdu, China, has a total area of 608,097 square feet, fully occupied at 100%[24]. - The logistics center in Shenzhen, China, has a total area of 464,741 square feet, with a 55.0% occupancy rate[24]. - The logistics center in Longkou, Taiwan, has a total area of 473,087 square feet, with a 49.7% occupancy rate[24]. - The logistics center in Bangkok, Thailand, has a total area of 410,959 square feet, fully occupied at 100%[24]. - The logistics center in Kunshan, China, has a total area of 203,990 square feet, fully occupied at 100%[25]. Employee and Corporate Governance - The group has about 47,200 employees, with a competitive salary structure and performance-based compensation policies[47]. - The company emphasizes the importance of employee development and retention, offering career development opportunities and a supportive work environment[57]. - The company has established a competitive compensation mechanism based on performance, providing additional benefits such as insurance, medical coverage, and sponsorship for further education or training programs[57]. - The company has received written confirmations of independence from all independent non-executive directors, affirming their compliance with independence requirements[129]. - The company has established five committees, including the remuneration committee, audit and compliance committee, nomination committee, finance committee, and risk management committee, to oversee specific areas of governance[131]. - The company has implemented a regular review of its corporate governance practices to ensure compliance with accepted standards[115]. - The board of directors is responsible for overseeing the company's major policies, strategies, and budgets[116]. - The company has established a whistleblowing policy to allow employees and stakeholders to confidentially raise concerns about potential misconduct[153]. Sustainability and Social Responsibility - The company is committed to sustainable development, focusing on creating value in talent, customer service, supply chain, and environmental aspects[48]. - The company's overall sustainability assessment score reached B+, indicating satisfactory performance in managing sustainability practices across strategy, governance, social, and environmental aspects[56]. - The company has implemented an environmental management system certified to ISO 14001 standards across its business units in Hong Kong, China, and Singapore[83]. - The company has installed solar panels on the rooftops of its warehouses in Beijing, saving approximately 40,000 kWh of electricity monthly and reducing related greenhouse gas emissions[84]. - The company plans to install solar panels at nine logistics centers in Taiwan, expected to provide about 3,000,000 kWh of electricity annually, reducing nearly 3,000 kg of carbon emissions[84]. - The company has received the 5-year Plus "Caring Company" logo from the Hong Kong Council of Social Service, highlighting its commitment to corporate social responsibility[76]. - The company supports various charitable activities, including fundraising events and community service initiatives, to promote children's rights and health[77]. - The company donated a total of 236 books and 1,307 pieces of clothing to impoverished individuals in southern Xinjiang, China[78]. - The company has a systematic approach to sustainability practices, ensuring effective management and reporting of its sustainability performance[56]. Technology and Innovation - The company is developing a visual driving assistance system (VDA) in Taiwan to improve driving safety[59]. - The company has installed mobile digital video recorders (MDVR) in its trucks to enhance driver visibility and safety[59]. - The company has established a fully automated smart warehouse in Xiamen, integrating AI and robotics to improve operational efficiency and reduce labor costs in mainland China[65]. - The introduction of IoT technology in international freight aims to provide comprehensive supply chain transparency and security measures, enhancing decision-making for international clients[65]. - The company launched KerrierVISION, a real-time internet-based solution for tracking inventory and shipments, which includes ePOD and Track & Trace systems to monitor delivery status and reduce paper consumption[65]. - The company is investing heavily in R&D, allocating $H million towards new technology development, aiming for a breakthrough in the next fiscal year[168]. Market Expansion and Strategy - The company is expanding its market presence in Southeast Asia, targeting a growth rate of F% in that region over the next year[166]. - The company has a clear strategy for market expansion, particularly in Southeast Asia, leveraging its established presence in the region[162]. - The company is focused on integrating logistics services, including freight forwarding, warehousing, and cold chain logistics[177]. - The company has been focusing on enhancing its supply chain capabilities through strategic acquisitions and partnerships, aiming for improved operational efficiency[161]. - The company is committed to improving operational efficiency and overall business performance through innovative strategies[177]. Awards and Recognition - The company has received the "Best Third Party Logistics in Asia" award for the sixth time at the Supply Chain Asia Awards in 2019[64]. - The company has been recognized with the "Platinum Award" at The Asset ESG Corporate Awards for two consecutive years[64]. - The company was recognized as the Best Third-Party Logistics Service Provider in the Asia-Pacific region by Frost & Sullivan[110]. - The company has received multiple industry awards and recognitions for its leadership in the Asian logistics services sector[185]. Future Outlook - Overall, the company remains optimistic about future growth, citing strong market demand and strategic initiatives as key drivers[165]. - The company provided guidance for the next quarter, expecting revenue to be between $B million and $C million, indicating a projected growth rate of D%[170]. - Recent acquisitions are expected to enhance operational efficiency, potentially increasing profit margins by G%[169].