Financial Performance - Total revenue for the fiscal year 2020 was HKD 505.99 million, a decrease of 27.8% compared to HKD 700.76 million in 2019[11]. - The company recorded a loss attributable to equity holders of HKD 61.13 million, a decline of 212.1% from a profit of HKD 54.52 million in 2019[7]. - Adjusted EBITDA was HKD (35.64) million, a decrease of 136.1% from HKD 98.62 million in the previous year[7]. - The group's revenue for the fiscal year 2020 was approximately HKD 506.0 million, a decrease of 27.8% from HKD 700.8 million in 2019, resulting in a loss of HKD 61.0 million compared to a profit of HKD 54.5 million in the previous year[24]. - Revenue from the distribution business decreased by 57.6% to HKD 274.3 million, down from HKD 646.9 million in 2019, while retail store revenue fell by 62.2% to HKD 7.0 million from HKD 18.5 million[31]. - Gross profit fell to HKD 83.8 million from HKD 191.1 million, with a gross margin decrease of 10.7 percentage points to 16.6%, attributed to a shift towards lower-margin e-commerce sales and increased competition in the market for pandemic-related products[36]. - General and administrative expenses increased by 70.3% to HKD 93.5 million from HKD 54.9 million, influenced by inventory write-offs and increased legal and compliance costs following the company's IPO[39]. - Shareholders' loss amounted to HKD 61.1 million, compared to a profit of HKD 54.5 million in the previous fiscal year[43]. E-commerce Growth - E-commerce revenue surged to HKD 224.69 million, representing a growth of 535.4% from HKD 35.36 million in the previous year[7]. - E-commerce sales revenue reached HKD 224.7 million, a sixfold increase from HKD 35.4 million in the previous fiscal year, reflecting the success of the dual online and offline sales strategy[27]. - The group's e-commerce revenue surged sixfold to HKD 224.7 million in the fiscal year, up from HKD 35.4 million in the previous fiscal year, primarily driven by increased online purchases from mainland Chinese consumers due to COVID-19 restrictions[32]. - The COVID-19 pandemic has shifted consumer behavior towards online shopping, leading to growth in the company's e-commerce business during this period[93]. - The company aims to strengthen its e-commerce presence by partnering with major platforms like JD.com and Tmall.com to expand its product distribution[93]. Business Expansion and Strategy - The company plans to expand its e-commerce operations by increasing the mainland e-commerce team and establishing more online stores[15]. - A joint venture with China Resources Pharmaceutical Group is expected to commence operations in Q2 2021, focusing on distributing quality health products in mainland China[15]. - The group plans to continue seeking and obtaining distribution rights for new health, skincare, and personal care products to diversify its product offerings[27]. - The group has expanded its workforce and office space in mainland China to support the growth of its e-commerce business[27]. - The group aims to leverage its existing distribution channels in Macau to benefit from the region's economic recovery[27]. - Future marketing strategies will focus on digital marketing and social media to promote the group's own brand products[97]. - The group plans to actively expand its O2O business model and enhance supply chain and retail management in mainland China[97]. - A new subsidiary has been established in Japan to negotiate exclusive operating and distribution rights for more quality health and beauty product brands[97]. Financial Position and Assets - Total assets increased by 69.2% to HKD 619.91 million from HKD 366.36 million in 2019[7]. - Total liabilities rose by 32.8% to HKD 329.47 million compared to HKD 248.00 million in 2019[7]. - As of December 31, 2020, the group held cash and bank balances of approximately HKD 119.3 million, up from HKD 50.4 million a year earlier, with a debt-to-equity ratio of 68.3%[47]. - The group's borrowings included secured bank loans of approximately HKD 92.9 million and unsecured bank loans of HKD 39.0 million as of December 31, 2020[48]. Shareholder Information and Dividends - The company declared a special dividend of HKD 0.02 per share for the fiscal year 2020[12]. - The board declared a special dividend of HKD 0.02 per share for the fiscal year, compared to a total dividend of HKD 50.0 million in the previous fiscal year[79]. - The board does not recommend any other dividends for the year ended December 31, 2020, aside from the special dividend[129]. - The company adopted a dividend policy effective from April 15, 2020, allowing for the declaration of interim or special dividends[130]. - As of December 31, 2020, the company's distributable reserves amounted to HKD 711.5 million, an increase from HKD 478.0 million in 2019[141]. Market Conditions and Challenges - The retail and distribution sectors faced significant challenges due to COVID-19, with a reported 50% decline in total sales value for drug and cosmetic retailers in Hong Kong[11]. - The total retail sales value of drugs and cosmetics in Hong Kong for the fiscal year 2020 was estimated at HKD 21.5 billion, a decline of 50.0% compared to the previous year[24]. - The number of visitors to Hong Kong in 2020 was 3.6 million, a significant drop of 93.6% from 55.9 million in 2019, severely impacting the retail market[20]. - The decline in offline sales was mitigated in the second half of the fiscal year, indicating a potential recovery trend[27]. - The company remains optimistic about the health industry outlook despite the challenges posed by the COVID-19 pandemic, anticipating increased demand for health and preventive products[91]. Acquisitions and Investments - The group acquired 80% of the shares in Jetfly Macau Limited, which holds a license for the import and wholesale of drugs in Macau, to expand its business in that region[28]. - The company agreed to acquire a 49% stake in Corning Holdings for HKD 41.7 million, enhancing its offline retail presence in Hong Kong and expanding sales channels[55]. - The acquisition of Corning Holdings is expected to increase market penetration and provide access to valuable market information for new product development[58]. - The company subscribed for shares in JBM Group for a total cash consideration of HKD 20.0 million, acquiring approximately 2.2% of JBM's issued shares[60]. - The strategic relationship with JBM Group is anticipated to broaden the product portfolio and enhance competitiveness in the health and wellness sector[60]. - The company acquired 80% of Jetfly for HKD 37.4 million, which is expected to leverage Jetfly's distribution channels in Macau[63]. - The acquisition of Jetfly will facilitate better access to consumers in Macau and strengthen the company's brand presence in the Greater Bay Area[64]. - Jetfly is required to achieve a net profit of at least HKD 14.0 million over two fiscal years to avoid price adjustments on the acquisition[65]. Corporate Governance and Compliance - The board expressed gratitude to shareholders for their continued support during a challenging year[128]. - The company has not entered into any management contracts with any individuals or entities for the management or operation of its business during the year ended December 31, 2020[157]. - The board confirmed that there were no interests held by directors in any business that competes or may compete with the group as of December 31, 2020[156]. - The company has purchased directors' liability insurance to provide appropriate protection for its directors[155]. - The company has complied with the disclosure requirements of the Listing Rules regarding related party transactions[158]. - The independent non-executive directors confirmed that the related transactions were conducted in the ordinary course of business and on normal commercial terms[169]. Risk Factors - The company has identified risks related to consumer preferences and spending habits, which could significantly impact its business and financial performance[86]. - The company has no foreign currency hedging policy, exposing it to currency risk from overseas procurement[87]. - The group is currently unable to accurately estimate the full impact of the pandemic on its operations but aims to return to pre-COVID-19 levels as soon as feasible[98]. - The group will continue to monitor the pandemic's development and explore acquisition opportunities cautiously[98].
满贯集团(03390) - 2020 - 年度财报