Financial Performance - The total revenue for BaWang International for the year ended December 31, 2020, was approximately RMB 276.0 million, representing an increase of approximately 6.9% from RMB 258.2 million in 2019[26]. - The operating loss for the year ended December 31, 2020, reduced to approximately RMB 2.8 million, compared to an operating loss of approximately RMB 12.9 million in 2019[26]. - The net loss for the Group was approximately RMB 4.0 million for the year ended December 31, 2020, down from a net loss of approximately RMB 6.1 million in 2019[26]. - Gross profit margin for 2020 was 39.2%, a decrease from 44.6% in 2019[5]. - The loss attributable to owners of the Company for 2020 was RMB 4.0 million, with a net loss ratio of 1.5%[5]. - The basic and diluted loss per share for 2020 was RMB 0.1277, an improvement from RMB 0.1929 in 2019[5]. - The Group's revenue from the Bawang brand was RMB 260.9 million in 2020, compared to RMB 241.5 million in 2019[14]. - Revenue from the core brand, Bawang, was approximately RMB 261.0 million, accounting for approximately 94.6% of the Group's total revenue, with an increase of approximately 8.1% compared to 2019[75]. - Revenue from the conventional sales channel increased by approximately 16.3% compared to 2019, while online sales revenue remained stable[70]. - The cost of sales in 2020 amounted to approximately RMB 167.9 million, an increase of approximately 17.3% from RMB 143.1 million in 2019, with the cost of sales as a percentage of revenue rising from approximately 55.4% in 2019 to approximately 60.8% in 2020[84]. - The group's gross profit decreased to approximately RMB 108.1 million in 2020, a decline of approximately 6.0% from RMB 115.0 million in 2019, with the gross profit margin decreasing from approximately 44.6% in 2019 to approximately 39.2% in 2020[84]. - Other income increased to RMB 3.7 million in 2020, representing a 23.3% increase compared to 2019[85]. - Selling and distribution costs decreased to approximately RMB 84.5 million in 2020, a decrease of approximately 19.3% compared to 2019, with selling and distribution costs as a percentage of revenue decreasing from approximately 40.5% in 2019 to 30.6% in 2020[85]. - Administrative expenses for 2020 amounted to approximately RMB 27.3 million, a decrease of approximately 10.8% compared to RMB 30.6 million in 2019, with administrative expenses as a percentage of revenue at approximately 9.9% in 2020 compared to 11.9% in 2019[92]. - The Group recognized impairment losses of approximately RMB 2.8 million in respect of trade receivables for the year under review[93]. - There was no income tax expense for the year ended December 31, 2020, compared to an over-provision for income tax in prior years of approximately RMB 9.1 million written back in 2019[95]. - The Group recorded a loss of approximately RMB 4.0 million for 2020, an improvement from a loss of approximately RMB 6.1 million in 2019[96][97]. Revenue Breakdown - Revenue from shampoo and hair-care products was RMB 249.2 million in 2020, up from RMB 234.1 million in 2019[8]. - Revenue from other household and personal care products increased to RMB 24.9 million in 2020, compared to RMB 22.2 million in 2019[8]. - Revenue from skincare products was RMB 1.9 million in 2020, slightly up from RMB 1.8 million in 2019[8]. - The branded Chinese herbal anti-dandruff hair-care series, Royal Wind, generated approximately RMB 4.9 million in revenue, representing a decrease of approximately 30.0% compared to 2019[76]. - The natural-based branded shampoo, shower gel, and laundry detergent products series, Litao, generated approximately RMB 7.6 million in revenue, reflecting an increase of approximately 1.3% compared to 2019[77]. - The branded Chinese herbal skin-care series, Herborn, generated approximately RMB 2.0 million in revenue, representing an increase of approximately 11.1% compared to 2019[78]. - The revenue for the hair care and body wash product line was approximately RMB 7.6 million, accounting for 2.8% of the group's total revenue in 2020, an increase of about 1.3% from 2019[80]. - The revenue for the herbal skincare brand, Ben Cao Tang, was approximately RMB 2.0 million, representing 0.7% of the group's total revenue in 2020, with an increase of approximately 11.1% compared to 2019[80]. Market Strategy and Product Development - The Group launched a new Bawang-branded antiseptic sanitary product series, including disinfectant floor cleaner liquid, sanitizing laundry detergents, liquid handwash, and anti-bacterial hand gel, to meet consumer demand during the pandemic[39]. - The Group introduced value-for-money family size packaging series to satisfy consumer demand for hair-care products amid increased health awareness[39]. - The Group successfully rolled out gift-pack product series during major online shopping festivals, which were well-received by consumers[43]. - The Group appointed a young brand ambassador to create a youthful brand image and attract young female consumers[43]. - The Group utilized social media platforms and advertising in metro stations to increase product visibility and consumer engagement[43]. - The Group plans to strengthen its management team to regain sales growth momentum and improve profitability in the short term[33]. - The long-term strategy includes maintaining a multi-brand and multi-product approach to capture market share from competitors in the household and personal care sectors[33]. - The Group plans to roll out new Bawang-branded amino acid products in Walmart and Yonghui to increase sales revenue[113]. - The Group intends to enhance brand influence through interactive promotional activities and appoint internet celebrities as brand ambassadors[113][114]. - For the Royal Wind brand, the Group plans to introduce new hair-care products primarily through live streaming and online channels[116]. - The Group aims to streamline Herborn product offerings and introduce new hair-care products, focusing on offline supermarkets and online sales[116]. - The Group plans to adjust the product categories for the Ben Cao Tang brand by adding hair care products alongside skincare, primarily selling through offline supermarkets and e-commerce channels[119]. - The Group aims to launch a new anti-dandruff product series under the Chasing Wind brand to boost sales[119]. Distribution and Sales Channels - Bawang brand distribution network comprised approximately 838 distributors and six key retailers, covering 27 provinces and four municipalities in China as of December 31, 2020[48]. - Royal Wind brand distribution network included approximately 178 distributors and six key retailers, also covering 27 provinces and four municipalities in China as of December 31, 2020[48]. - Litao products distribution network consisted of approximately 54 distributors, maintaining coverage in 27 provinces and four municipalities in China as of December 31, 2020[48]. - The Group established 12 online retailing platforms for Bawang, Royal Wind, and Herborn branded products, with two platforms launched during the year[52]. - The Group aims to achieve stable sales growth in its online sales channel by optimizing operations and creating hot-selling product series such as anti-hair fall and hair-care products[125]. - The Group plans to horizontally develop the market by introducing a second series of hot-selling items like hair masks and shower gels to increase market share[125]. - The Group will enhance sales revenue by providing tailor-made products to key online distributors and maintaining operations of its direct-operating channel[125]. - The Group is open to exploring potential business opportunities with overseas distributors for launching branded products in other countries[127]. Operational Challenges and Responses - The Group faced challenges due to rising labor costs and the impact of the COVID-19 pandemic, leading to temporary disruptions in operations[58]. - The Group's strategy includes reducing production costs in response to industry challenges and the pandemic's impact[58]. - The Group's financial management policies remain conservative, ensuring a solid financial position[132]. - The Group continues to monitor foreign exchange exposure and is prepared to take hedging measures if necessary[135]. - The Group will continue to enhance production efficiency and quality through flexible supply chain management and training for workers[127]. Corporate Governance and Management - The Board of Directors comprised six members as of December 31, 2020, including the Chairman and the CEO, ensuring a separation of roles to reinforce independence[162]. - The Group's human resources policies are aimed at maintaining a stable workforce through promising career prospects and good staff remuneration[157]. - The Board held nine meetings in 2020, with full attendance from all members[165]. - The Company has adopted a Dividend Policy intending to declare dividends semi-annually, with an aggregate amount not exceeding 30% of anticipated consolidated net annual profits[173]. - The Board will consider various factors, including operations, earnings, and financial condition, when deciding on dividend proposals[173]. - The Nomination Committee will assess candidates based on personal integrity, experience relevant to the Group's business, and Board diversity[172]. - The Diversity Policy considers aspects such as gender, cultural background, and professional experience in Board appointments[173]. - The Company has a structured process for nominating candidates for election at shareholders' meetings, ensuring compliance with Listing Rules[172]. - The Board is committed to maintaining sufficient reserves to support the Group's development strategy while sharing profits with shareholders[173]. - The Company has not been made aware of any shareholders waiving dividends[177]. - The Nomination Committee may nominate candidates not proposed by Board members, ensuring a broad selection process[172]. - The Board's decision-making process includes regular reviews to ensure alignment with the Group's needs[167]. - The Company will continue to review its Dividend Policy periodically, with no assurance of dividends in specific periods[176]. - The Group's internal audit and risk management functions were assessed for effectiveness and implementation[196]. Employee Management and Training - The total personnel expenses for the Group in 2020 were approximately RMB 55.9 million, compared to approximately RMB 54.7 million in 2019[151]. - The Group employed approximately 477 employees as of December 31, 2020, a decrease from approximately 594 employees in the previous year[152]. - The number of full-time employees increased slightly to 200 in 2020 from 197 in 2019, while contract personnel decreased from 302 to 277[154]. - The Group is committed to providing training and development for employees, with various internal training courses conducted in 2020 to enhance soft skills[150]. - As of December 31, 2020, the Directors received approximately 246.5 hours of training across various fields, averaging about 41 hours per person[182]. - The company encourages all Directors to participate in relevant training courses, with costs covered by the company[182]. Compliance and Risk Management - The Group updated its internal control manual on cash and treasury management on April 1, 2020[197]. - The Group provided training on Listing Rules compliance to management and finance department members in 2020[197]. - The Group consulted with external legal advisors regularly on regulatory compliance matters throughout 2020[197]. - Remedial measures for investments into wealth management products were implemented by the Group during the year under review[197]. - The external auditor's independence and the effectiveness of the auditing process were reviewed by the Audit and Risk Management Committee[196].
霸王集团(01338) - 2020 - 年度财报