Financial Performance - The Group's total revenue for the year ended December 31, 2019, was approximately HK$1,251.1 million, representing a year-on-year increase of approximately 30.3% compared to HK$959.9 million in 2018[7]. - The Group recorded a gross profit of approximately HK$313.4 million with a gross profit margin of approximately 25.0%, compared to a gross profit of HK$237.8 million and a margin of 24.8% in 2018[7]. - Profit attributable to owners of the Company was approximately HK$127.2 million, up from HK$75.8 million in 2018, with basic earnings per share of approximately HK20.52 cents compared to HK12.80 cents in the previous year[7]. - Revenue for the year ended December 31, 2019, was approximately HK$1,251.1 million, representing an increase of approximately HK$291.2 million, or approximately 30.3%, from approximately HK$959.9 million for the year ended December 31, 2018[17]. - The integrated plastic solutions segment revenue for the year ended December 31, 2019, was approximately HK$391.2 million, accounting for approximately 31.3% of the total revenue, representing a decrease of approximately HK$83.1 million, or approximately 17.5%, from segment revenue of HK$474.3 million for the year ended December 31, 2018[17]. - The e-cigarettes products segment revenue for the year ended 31 December 2019 was approximately HK$859.9 million, accounting for approximately 68.7% of total revenue, representing an increase of approximately HK$374.2 million, or approximately 77.0%, from HK$485.7 million for the year ended 31 December 2018[19]. - Gross profit for the year ended 31 December 2019 was approximately HK$313.4 million, with a gross profit margin of 25.0%, compared to HK$237.8 million and 24.8% in 2018[19]. - Segment gross profit for e-cigarettes products for 2019 was approximately HK$216.2 million, with a gross profit margin of 25.1%, down from 26.3% in 2018, primarily due to higher production costs of new model e-cigarettes[19]. Capital Expenditure and Investments - Capital expenditure for the year amounted to approximately HK$149.0 million, including HK$85.2 million for new machines and HK$49.1 million for new factory premises[9]. - Capital expenditure for the year ended December 31, 2019, was approximately HK$149.0 million, including HK$85.2 million for the purchase of new machinery and HK$49.1 million for the construction of new factory premises[12]. - The construction of new factory premises is expected to provide room for additional new product production lines and achieve automated production[10]. - The Group's ongoing investments in new site construction in Huizhou, Guangdong province, reflect a strategic focus on growth and market expansion[182]. Market and Operational Challenges - The Group's operations were impacted by the Sino-US trade war and social unrest in Hong Kong during 2019, yet it managed to strengthen partnerships with business associates[7]. - The outbreak of COVID-19 is anticipated to adversely affect global business for a substantial time in 2020, leading to adjustments in strategies to mitigate expected downward risks[14]. - The Huizhou Operations were suspended due to COVID-19 outbreak, resuming on February 13, 2020, but faced temporary production capacity drop due to transportation limitations[51]. - Management expects delays in resuming original production schedules and late product deliveries in the coming months[51]. - The Group has not been able to estimate the financial impact of the COVID-19 events but considers there to be no significant adverse effects on its financial position[51]. Corporate Governance - The company has adopted the principles and code provisions of the Corporate Governance Code to ensure proper regulation of business activities and decision-making processes[64]. - The company has complied with all applicable code provisions of the Corporate Governance Code, except for code provision A.2.1[65]. - The company is committed to maintaining high standards of corporate governance to safeguard shareholder interests and enhance corporate value[64]. - The Board currently comprises 6 members, including 3 executive Directors and 3 independent non-executive Directors[70]. - The Chairman and Chief Executive Officer is Mr. Chan Tsan Lam, who holds both positions despite the CG Code recommendation for separation, due to his extensive experience[73]. - The Company has complied with the CG Code throughout the year ended December 31, 2019[73]. - The Board has met the requirements of having three independent non-executive Directors, representing at least one third of the Board[73]. - The Company has a structured process for the appointment, re-election, and removal of Directors as outlined in its Articles of Association[75]. - The Company aims to ensure compliance with the CG Code and enhance transparency in its corporate governance report[80]. Financial Position and Risk Management - As of December 31, 2019, the Group had cash and cash equivalents of approximately HK$85.6 million, an increase from HK$61.4 million in 2018[24]. - Interest-bearing borrowings as of December 31, 2019, were approximately HK$103.2 million, down from HK$148.6 million in 2018, with a weighted average effective interest rate of approximately 4.18%[24]. - The Group's gearing ratio as of December 31, 2019, was 39.8%, a decrease from 52.7% in 2018[24]. - Net current liabilities increased to approximately HK$52.9 million as of December 31, 2019, compared to HK$13.9 million in 2018, primarily due to the acquisition of new machines and construction of a new factory[24]. - The Group's internal control and risk management systems were deemed effective during the year ended 31 December 2019, with no material issues identified that required significant rectification[122]. - The Group faced market risks due to fluctuations in raw material prices, which may adversely affect business and financial conditions[138]. - The financial risk management objectives and policies of the Group are detailed in Note 29 of the consolidated financial statements[138]. Shareholder Information - The Board recommends a final dividend of HK1.5 cents per share for the year ended December 31, 2019, subject to shareholder approval[54]. - The register of members will be closed from June 24 to June 26, 2020, for determining entitlement to the final dividend[141]. - The Company maintains a dividend policy to ensure sufficient cash reserves for operational needs and future business growth[150]. - The largest customer contributes 72% to the Group's total revenue, while the five largest customers together account for 93%[171]. - The largest supplier accounts for 43% of the Group's total purchases, and the five largest suppliers together represent 63%[171]. Management and Directors - Mr. Wu Chen-Tong, aged 63, oversees the development and manufacturing of new products and quality control in the R&D department[61]. - Mr. Chan Tsz Wai, aged 25, is responsible for the development and marketing of new products[61]. - Mr. Ng Chi Wai has over 15 years of experience in auditing, accounting, and corporate management[59]. - Mr. Hung Chun Leung has approximately 20 years of experience in handling legal matters in various areas[59]. - Mr. Chan Bing Kai has over 40 years of experience in the manufacturing industry of electronic products[59]. Audit and Compliance - The Audit Committee, established on February 8, 2018, is responsible for recommending the appointment and remuneration of the external auditor[102]. - The audit committee held two meetings during the period to review the company's annual financial statements and the effectiveness of financial controls, internal monitoring, and risk management systems[104]. - The external auditors, Mazars CPA Limited, received a total of HK$1,625,000 for audit and non-audit services for the year ended December 31, 2019, including HK$1,200,000 for audit services and HK$425,000 for audit-related services[115]. - The directors confirmed their responsibilities for preparing consolidated financial statements that provide a true and fair view of the group's financial position and comply with relevant laws and listing rules[116]. - The audit opinion states that the financial statements give a true and fair view of the Group's financial performance and cash flows for the year ended December 31, 2019[178].
天长集团(02182) - 2019 - 年度财报