Company Overview - Shenzhou International is one of the largest vertically integrated knitwear manufacturers globally, producing approximately 440 million pieces of knitwear annually[7]. - The Group has over 89,100 employees and operates factories covering over 5.55 million sq.m. in China, Vietnam, and Cambodia[7]. - Major clients include international brands such as NIKE, UNIQLO, ADIDAS, and PUMA, with products distributed across Mainland China, Japan, Asia Pacific, Europe, and the US[8]. - Shenzhou International was listed on the Hong Kong Stock Exchange in November 2005, with stock code 2313, and has been included in various indices including the Hang Seng Composite Index since March 2010[9]. Awards and Recognition - The Group has received multiple awards for corporate governance and investor relations, including "Best Investor Relations Listed Company 2017" by Ta Kung Pao[11]. - In 2018, Shenzhou International was recognized as one of "Asia's 50 Top Listed Companies" by Forbes Asia[12]. - The Group's commitment to sustainability and corporate governance has been acknowledged through various awards, including the "Award for Sustainability Excellence" in 2018[12]. Financial Performance - Total sales for the year ended December 31, 2020, reached RMB 23,030,648, an increase of 1.6% from RMB 22,665,272 in 2019[18]. - Profit for the year was RMB 5,082,645, representing a growth of 2.5% compared to RMB 4,958,536 in 2019[15]. - Gross profit margin improved to 31.2% in 2020 from 30.3% in 2019[15]. - Net profit margin increased to 22.1% in 2020, up from 21.9% in 2019[15]. - Current assets rose to RMB 23,553,850, a 14.5% increase from RMB 20,494,238 in 2019[15]. - Non-current assets increased to RMB 13,297,911, up from RMB 11,360,620 in 2019[15]. - The gearing ratio significantly increased to 24.2% in 2020 from 15.8% in 2019[15][16]. - Cash and cash equivalents increased to RMB 8,227,060, a rise of 62.5% from RMB 5,060,896 in 2019[15]. Market Trends and Challenges - In 2020, China's textile and apparel exports grew by 9.6%, largely due to effective pandemic control and a well-established supply chain[39]. - Despite the growth in exports, the apparel sector faced challenges with declining demand and rising costs, leading to increased profit pressure for many exporters[39]. - The pandemic has tested the Group's resilience, but it has successfully maintained operations and laid a foundation for future growth[37]. - The pandemic has led to significant operational pressure on the textile and apparel industry, resulting in reduced capacity utilization and increased operational costs[53]. Production and Capacity Expansion - The Group plans to expand production capacity at overseas bases and upgrade domestic facilities to enhance sustainable development capabilities[36]. - The Group's competitive advantages were highlighted during the pandemic, particularly in supply chain stability and rapid response capabilities[36]. - The Group optimized production bases to better match domestic and overseas market demands amid the pandemic[84]. - The Group's digital management advancements facilitated smooth business communication with customers despite pandemic-related travel restrictions[84]. Corporate Governance - The Company has complied with all code provisions of the Corporate Governance Code throughout the year ended 31 December 2020[137]. - The Board includes at least three independent non-executive directors, with one possessing appropriate professional qualifications or financial management expertise, in compliance with Listing Rules[141]. - Continuous professional development for Directors is arranged to update knowledge on Listing Rules and related legal requirements[140]. - The Company adopted a shareholders' communication policy effective from 26 March 2012, allowing shareholders to propose candidates for Director elections[147]. Sustainability and Innovation - The company aims to transform the industry towards high-quality development driven by technology and innovation, enhancing the value chain and promoting low-carbon green production[47]. - The Group intends to improve its sustainable development capabilities by increasing the proportion of clean energy consumption and enhancing resource utilization efficiency[132]. - The Group will actively pursue low-carbon practices in its production model in response to increasing environmental protection requirements and legislation[125]. Employee and Operational Management - The Group's total staff costs accounted for approximately 26.7% of the Group's sales, an increase of 0.4 percentage points compared to 2019[113]. - The domestic bases implemented significant salary increases to stabilize the workforce amid rising order demand[81]. - The Group faced challenges in meeting order demands due to employee shortages in domestic bases at the beginning of the year[86]. Risk Management and Internal Controls - The Group's risk management system aims to enhance operational efficiency and safeguard assets against misappropriation[185]. - The Internal Audit Department plays a crucial role in monitoring internal governance and has unrestricted access to information for comprehensive reviews[188]. - The Board believes that the risk management and internal control systems were effective and adequate as of December 31, 2020[187].
申洲国际(02313) - 2020 - 年度财报