Business Performance - Hong Fook Tong's retail business revenue grew by 4.2% year-on-year despite market challenges, showcasing strong brand loyalty among local consumers [27]. - The company maintained a market share of 27.8% by sales revenue and 37.8% by volume in the health beverage category in Hong Kong, according to Nielsen [24]. - The company's retail business in Hong Kong achieved a revenue growth of 4.2%, reaching HKD 581.1 million, which accounts for approximately 74.9% of total revenue [40]. - Revenue from continuing operations slightly decreased by 1.0% to HKD 775.8 million, compared to HKD 783.4 million in the previous year [38]. - Gross profit from continuing operations increased by 2.6% to HKD 488.7 million, resulting in a gross profit margin of 63.0%, up from 60.8% in the previous year [38]. - The company reported a net profit attributable to owners of the company increased by 6.8% to HKD 10 million, compared to HKD 9.4 million in the previous year [38]. - Wholesale revenue decreased by 13.7% year-on-year to HKD 194.7 million, with a segment loss of HKD 4.9 million due to declining sales and rising administrative expenses [45]. - Revenue from the mainland China wholesale business fell by 32.8% to HKD 59.7 million, primarily due to disruptions in business relationships with major clients [49]. - The group reported its audited financial statements for the year ended December 31, 2019, to shareholders [121]. Customer Engagement and Membership - The number of CLUB members surpassed 900,000, indicating a strong customer base and engagement [14]. - Membership in the in-house CLUB program increased to over 924,000, with approximately 97,000 new members added during the year, despite a generally weak retail atmosphere [43]. - The company plans to enhance its mobile app functionality to better engage members and expand its customer base in the coming year [33]. - The introduction of a new website interface and updated mobile app aimed to improve user experience and engagement [14]. - The company has encouraged customers to use its CLUB mobile app instead of physical membership cards, promoting electronic payments and reducing paper usage [90]. Product Development and Diversification - New product launches included organic chicken essence and frozen seafood products, diversifying the product range [11]. - The acquisition of a local handmade bakery aimed to attract customers interested in baked goods, indicating a strategic move towards product diversification [10]. - A new product, "Lung Cleansing Detox Drink," was launched in the first half of 2020, with plans to expand the "In-house Celebration Series" product line [56]. - New product development includes the launch of a herbal tea line, projected to contribute an additional HKD 200 million in revenue within the first year [105]. - The group launched four new beverage flavors in Vietnam and introduced Hong Kong-style milk tea in Taiwan, resulting in improved sales performance in those markets [50]. Store Expansion and Market Presence - The company opened new stores in various locations, including the Peak Galleria and MTR stations, expanding its retail footprint [13]. - The group opened nine new stores during the fiscal year, with five located in shopping malls and four in MTR stations, maintaining its position as the largest herbal product retailer in Hong Kong with a total of 115 self-operated retail stores as of December 31, 2019 [43]. - The company aims to regain market presence in mainland China by re-establishing product listings in major convenience stores [36]. - The company is expanding its market presence by opening 10 new retail locations across Hong Kong, aiming to increase market share by 5% [105]. - The company continues to expand its wholesale business in Taiwan and overseas markets to mitigate the impact of economic fluctuations in mainland China and Hong Kong [126]. Financial Management and Investments - The board proposed a final dividend of HKD 0.46 and a special dividend of HKD 0.38 per share, totaling HKD 0.84 per share, up from HKD 0.79 per share in the previous year [32]. - Capital expenditures for the year were HKD 53 million, primarily for opening new stores and renovating existing ones [72]. - The company's distributable reserves as of December 31, 2019, amounted to approximately HKD 211,800,000, which includes a share premium of about HKD 215,000,000 and other reserves of approximately HKD 108,000,000 [140]. - The company has invested HKD 50 million in technology upgrades to improve production efficiency, aiming for a 10% reduction in operational costs [105]. Corporate Social Responsibility and Environmental Initiatives - The company is committed to corporate social responsibility, conducting various activities to support employees, communities, and the environment [131]. - The company recycled about 380 tons of food waste, significantly increasing from 107 tons in 2018, which reduced greenhouse gas emissions by over 90 tons CO2 equivalent [86]. - The company aims to reduce food waste disposal by approximately 50% in the coming years, with a long-term goal of achieving zero food waste disposal [86]. - The company has implemented a plastic bottle recycling trial in two designated stores, collecting nearly 500 bottles in the first two months [86]. - Environmental initiatives have been implemented, with a goal to reduce carbon emissions by 30% over the next three years [105]. Governance and Management - The management team has extensive experience in operations, finance, and marketing, with key personnel having over 26 years of industry experience [112][113][114]. - The company emphasizes employee training and development as part of its operational strategy [112]. - The company has established a risk assessment system for selecting new suppliers, ensuring strict monitoring and compliance with food safety standards [92]. - The board of directors is responsible for establishing strategic goals and ensuring the necessary financial and human resources to achieve business objectives [197]. - The company adopted the corporate governance code as per Appendix 14 of the listing rules, emphasizing effective internal controls and risk management systems [194].
鸿福堂(01446) - 2019 - 年度财报