Financial Performance - Nissin Foods achieved a 22.2% increase in net profit attributable to shareholders for the fiscal year ending December 31, 2019, despite challenges from social unrest in Hong Kong and US-China trade disputes [8]. - Revenue for the fiscal year 2019 increased by 3.0% to HKD 3,087.8 million, compared to HKD 2,998.8 million in 2018 [24]. - Gross profit rose by 8.6% to HKD 1,013.4 million, with a gross margin of 32.8%, up from 31.1% in the previous year [24]. - Profit attributable to the company's owners increased by 22.2% to HKD 251.0 million, resulting in a net profit margin of 8.1% [24]. - Adjusted EBITDA grew by 11.7% to HKD 455.4 million, with an EBITDA margin of 14.7% [24]. - The company reported a net profit of HKD 205,448 thousand for the year, compared to HKD 230,582 thousand in the previous year, a decrease of 10.9% [163]. - Total revenue for 2019 was HKD 3,087,781, an increase of 2.9% from HKD 2,998,828 in 2018 [158]. - Gross profit for 2019 reached HKD 1,013,430, up 8.6% from HKD 933,399 in 2018 [158]. - Profit before tax increased to HKD 352,638, representing a growth of 17.5% compared to HKD 300,008 in the previous year [158]. - Basic earnings per share for 2019 were HKD 23.36, compared to HKD 19.13 in 2018, reflecting a growth of 22.9% [158]. Market Expansion and Product Development - The company's revenue from its China operations recorded double-digit growth for the second consecutive year, indicating strong consumer demand and purchasing power [8]. - Nissin Foods plans to continue investing in talent and business localization to enhance competitiveness and achieve sustainable profit growth [11]. - The company aims to expand its distribution channels and product offerings, including innovative and diverse products like Cup Noodles and Demae Iccho, to provide more value to stakeholders [11]. - The company will focus on developing new instant noodle products and improving quality while promoting internal production to reduce sales costs [10]. - The company recognizes the importance of adapting to changing consumer tastes and preferences to maintain steady business growth [9]. - The company plans to launch a strategic partnership to expand its product offerings and explore new revenue sources in the Chinese market [32]. - The company is focused on expanding its operations in China, with dedicated management overseeing sales and marketing functions in the region [50][52]. - The company is actively pursuing market expansion strategies, particularly in Southern China, to enhance its sales performance [52]. - The company launched four new flavors of instant noodles under the Nissin Raoh brand, enhancing the product experience for customers in Hong Kong [26]. - The company introduced eight new products in the ramen and udon categories, leveraging an upgraded production line announced in March 2019 [28]. Financial Position and Assets - The company maintained a strong financial position with total assets of HKD 4,633.9 million and a current ratio of 3.5 as of December 31, 2019 [33]. - The company has no external borrowings and a capital debt ratio of zero as of December 31, 2019 [33]. - The company's available reserves as of December 31, 2019, were approximately HKD 546.2 million, up from HKD 508.6 million in 2018 [112]. - The company reported a foreign exchange loss of HKD 42,564, an improvement from a loss of HKD 91,618 in 2018 [158]. - Non-current assets increased to HKD 1,638,712 thousand in 2019 from HKD 1,521,626 thousand in 2018, representing a growth of 7.7% [160]. - Current assets rose to HKD 2,995,218 thousand in 2019, compared to HKD 2,922,746 thousand in 2018, marking an increase of 2.5% [160]. - Total equity increased to HKD 3,712,318 thousand in 2019 from HKD 3,595,173 thousand in 2018, reflecting a growth of 3.3% [161]. - The company's cash and bank balances reached HKD 1,505,261 thousand in 2019, up from HKD 1,384,707 thousand in 2018, an increase of 8.7% [160]. Corporate Governance - The company has maintained compliance with the corporate governance code, with the exception of the separation of the roles of Chairman and CEO, which are currently held by the same individual, Akira Ando [56]. - The board consists of a mix of executive and independent non-executive directors, ensuring a balance of power and accountability [59]. - The company has adopted a board diversity policy to ensure a balance of skills, experience, and perspectives among board members [62]. - The board has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with specific responsibilities [68]. - The board is responsible for reviewing and monitoring compliance with legal and regulatory requirements, ensuring adherence to governance standards [67]. - The company emphasizes the importance of product planning and marketing strategies to drive growth in the competitive food industry [52]. - The board has confirmed that all directors have adhered to the securities trading standards set forth in the listing rules during the year [57]. - The company encourages continuous professional development for directors, including training on legal and regulatory updates [66]. - The board has a structured process for handling potential conflicts of interest, ensuring independent non-executive directors are present to address such matters [61]. - The company is committed to regular reviews of its corporate governance practices to ensure effective decision-making and strategic direction [56]. Risk Management - The company has established a risk management policy to identify, assess, and manage key risks, including five core processes: risk identification, risk assessment and prioritization, risk response, risk monitoring, and risk reporting [77]. - The company emphasizes that the risk management and internal control systems are designed to manage risks rather than eliminate them, providing reasonable assurance but not absolute assurance against significant losses [78]. - The internal audit department assists the board and audit committee in evaluating the risk management processes and internal controls, providing recommendations for improvements [78]. - The company has adopted the COSO risk management framework, ensuring oversight by the board, audit committee, and dedicated risk management team [77]. - The risk management team is required to identify risks that could adversely affect the company's objectives at least once a year and develop mitigation plans for significant risks [78]. Environmental and Social Responsibility - The company is committed to reducing its environmental impact at every business stage [135]. - The company has implemented policies to monitor pollutant emissions and promote recycling in its operations [135]. - The company reported a charitable donation of HKD 100,000 during the year [135]. - The company is dedicated to fulfilling its social responsibility by ensuring food supply even in challenging circumstances, reflecting the founder's philosophy [8]. Shareholder Communication - The company has a shareholder communication policy to ensure that shareholders and investors receive balanced and comprehensible information [84]. - The company is committed to maintaining open communication with investors through various engagement activities, including roadshows and one-on-one meetings [88]. - The company held over 320 meetings with more than 550 institutional investors and research analysts in 2019, compared to 220 meetings with 370 investors in 2018 [88]. - The company encourages shareholders to review corporate communications available on its website for deeper insights [90].
日清食品(01475) - 2019 - 年度财报