Revenue Growth - The company's revenue increased by approximately 57.2% from about $37.1 million in the first half of 2020 to approximately $58.4 million in the same period of 2021[10]. - Revenue for the six months ended June 30, 2021, was $58,390,044, representing an increase from $37,136,205 in the same period of 2020, which is a growth of approximately 57%[82]. - Revenue from online native customers increased from approximately $16.8 million in the same period of 2020 to about $20.6 million, representing a growth of approximately 22.1%[20]. - Revenue from traditional customers surged from approximately $20.3 million in the same period of 2020 to about $37.8 million, a significant increase of approximately 86.4%, with the revenue share rising from about 54.7% to 64.8%[21]. - Revenue from the United States reached $33,394,391, up 39.5% from $23,926,641 in the previous year[106]. - Revenue from Europe increased to $12,639,103, a rise of 123.5% compared to $5,665,804 in 2020[106]. - The company reported a total of $15,431,855 in shirt sales, up from $12,992,832 in the previous year, reflecting a growth of 18.7%[104]. - The outerwear category saw a dramatic increase in revenue to $14,446,156 from $2,219,835, marking a growth of 551.5%[104]. Profitability and Financial Performance - The company has successfully transitioned from a loss to profitability during the reporting period[10]. - Net profit for the six months ended June 30, 2021, was approximately $1.7 million, compared to a loss of $2.2 million in the same period of 2020, primarily due to strategic acquisitions and recovery from COVID-19 impacts[26]. - The company reported a profit before tax of $2,073,415, a significant recovery from a loss of $2,175,619 in the previous year[82]. - The group reported a profit of $1,716,894 for the six months ended June 30, 2021, compared to a loss of $(2,221,172) in the same period of 2020[118]. - Basic and diluted earnings per share for the period were both $0.27, recovering from a loss of $0.35 per share in the same period last year[82]. Strategic Acquisitions and Growth Initiatives - The strategic acquisitions made in the second half of 2020 and the first half of 2021 were crucial for the revenue growth, allowing the company to rebound from the negative impacts of COVID-19[10]. - The company is actively seeking further strategic acquisition opportunities to support future growth[13]. - Jonathan Seliger has been appointed as the Executive Director, President, and Chief Commercial Officer to drive digitalization and organic growth, bringing over 25 years of management experience in the luxury and fashion sectors[14]. Digitalization and Innovation - The company is focusing on digitalization and has been enhancing its digital procurement platform to better serve its growing client base, including the online-native brand Shein[13]. - The company aims to establish a digital apparel procurement platform to simplify the purchasing process for clients, similar to how Uber operates[13]. Cost and Expenses - Cost of sales increased by approximately 55.1% from about $26.6 million in the first half of 2020 to approximately $41.3 million, while the cost of sales as a percentage of total revenue decreased from about 71.6% to 70.7%[22]. - Gross profit rose from approximately $10.5 million and a gross margin of 28.4% in the first half of 2020 to about $17.1 million and a gross margin of 29.3%, representing increases of approximately 62.5% and 0.9% respectively[24]. - The company incurred sales and distribution expenses of $8,835,424, up from $6,855,856 in the previous year, reflecting increased operational activities[82]. - Administrative expenses were $5,993,002, slightly higher than $5,843,326 in the previous year, indicating stable management costs[82]. - The cost of inventory recognized as an expense was $41,257,322, up from $26,595,552 in the prior year, indicating a significant increase in production costs[115]. Supply Chain and Operational Challenges - The supply chain disruptions caused by COVID-19 have led to increased input costs and eroded profit margins, affecting the entire apparel value chain[11]. - The ongoing supply shortages are expected to persist throughout the remainder of 2021, impacting production capabilities[11]. Financial Position and Stability - As of June 30, 2021, the company had cash and cash equivalents of approximately $15.6 million, down from $17.8 million as of December 31, 2020, with a current ratio of about 2.1 times[27]. - The company had approximately $39.4 million in available bank financing, with about $22.5 million unutilized, deemed sufficient to support operations[29]. - The debt-to-equity ratio as of June 30, 2021, was approximately 38.1%, down from 44.5% as of December 31, 2020, indicating improved financial stability[30]. - The company’s total equity increased from $31,372,387 to $33,128,326, reflecting a growth of about 5.6%[86]. - Cash and cash equivalents decreased from $17,762,584 to $15,627,445, a decline of approximately 12.0%[84]. Governance and Management - The company has established a risk management framework to oversee its financial reporting and internal control systems[79]. - An independent internal control consultant was appointed to assist in monitoring the effectiveness of the risk management and internal control systems[80]. - The company has adopted a corporate governance code and has established various committees, including the Audit Committee and the Remuneration Committee, to enhance governance practices[73][76]. - The board of directors remained unchanged as of June 30, 2021[51]. Employee and Compensation - The company employed a total of 335 full-time employees as of June 30, 2021, with total employee compensation of approximately $6.0 million, a decrease of about 6.8% from the same period in 2020[38]. - Total employee costs for the period were $6,042,397, a decrease from $6,483,782 in the previous year, with director remuneration at $595,079[115]. - The remuneration for key management personnel totaled $551,578 for the six months ended June 30, 2021, a decrease of 64% from $1,529,329 for the same period in 2020[145]. Shareholder Information - The company’s major shareholders include Imaginative Company Limited and Lever Style Holdings, each holding 317,436,000 shares, representing approximately 49.67% of the company[65]. - The total number of shares issued as of June 30, 2021, was 639,100,000[61]. - The issued and fully paid ordinary shares remained at 639,100,000 shares with a par value of HKD 0.01 as of June 30, 2021[133]. - The company granted 6,400,000 stock options to a qualified individual, the sales director, on June 1, 2021[57]. - The company granted 6,400,000 share options during the period, with the fair value of the options determined to be HKD 908,958[137]. Dividends and Distributions - As of June 30, 2021, the company did not recommend the payment of an interim dividend[49]. - The group did not declare any dividends during the interim period, as the board resolved not to pay any dividends[116].
利华控股集团(01346) - 2021 - 中期财报