Financial Performance - For the fiscal year ending December 31, 2019, Takbo Group Holdings Limited reported revenue of HKD 266,415,000, representing a 2.9% increase from HKD 258,782,000 in 2018[15]. - The gross profit for the same period was HKD 98,850,000, which is a 12.9% increase from HKD 87,521,000 in the previous year, resulting in a gross margin of 37.1%[15]. - Net profit for the year was HKD 33,053,000, reflecting a 2.5% increase compared to HKD 32,249,000 in 2018[15]. - Earnings per share increased to HKD 0.083, up from HKD 0.081, marking a 2.5% growth[15]. - For the year ended December 31, 2019, the company's revenue was approximately HKD 266.4 million, an increase of about 2.9% compared to the previous year[19]. - The gross profit for the year ended December 31, 2019, was approximately HKD 98.9 million, representing a 12.9% increase, with the gross profit margin rising from approximately 33.8% to 37.1%[20]. - The company's net cash and cash equivalents as of December 31, 2019, were approximately HKD 114.2 million, up from HKD 103.6 million in 2018[21]. - Administrative expenses increased by approximately HKD 10.4 million (or about 34.5%) to approximately HKD 40.6 million for the year ended December 31, 2019[23]. - Sales expenses rose by approximately HKD 4.2 million (or about 16.6%) to approximately HKD 29.6 million, primarily due to increased tariff costs for products shipped to the United States[24]. - The company had no outstanding borrowings or other debts as of December 31, 2019, resulting in no debt-to-asset ratio being presented[21]. Business Strategy and Market Conditions - The company faced challenges due to the US-China trade war and local social unrest but managed to achieve stable growth by strengthening relationships with existing clients and participating in local and global beauty exhibitions[9][12]. - The overall economic uncertainty and challenges from the trade war did not deter the majority of US clients from sourcing products from China due to high-quality standards[12]. - Takbo Group's core business and revenue structure remained unchanged during the fiscal year, focusing on the design, development, production, and sales of beauty products and cosmetic bags[13]. - The company engaged in various marketing activities and exhibitions, including the China Beauty Expo 2019 in Shanghai, to secure more contracts despite economic difficulties[13]. - The company negotiated with US clients to share the burden of additional tariffs, receiving positive feedback that contributed to stable business performance[13]. Human Resources and Employee Management - The company employed 160 full-time employees as of December 31, 2019, an increase from 139 employees in the previous year[36]. - The total employee costs for the year ended December 31, 2019, were approximately HKD 20.6 million, compared to HKD 16.1 million in the previous year[36]. - Employee talent is considered the most valuable asset, with efforts made to create a supportive work environment and competitive compensation[75]. Corporate Governance and Management - The company has a strong management team with over 17 years of experience in the beauty product manufacturing and sales industry[48]. - The independent non-executive director has extensive experience in corporate finance and has been involved in significant corporate transactions, including IPOs and mergers[50]. - The company has a focus on corporate governance and has appointed experienced professionals to its board, including members with backgrounds in law and finance[52]. - The CFO has over 20 years of experience in financial management, accounting, and auditing, previously working with major firms like KPMG and Deloitte[54]. - The management team has a strong educational background, with members having attended prestigious institutions such as Harvard University[57]. - The company has established a solid foundation in strategic planning and new business initiatives, led by experienced executives[48]. - The board includes members who are actively involved in family business consulting and wealth management for high-net-worth clients[52]. - The company has a diverse board composition, with independent directors bringing a wealth of knowledge from different sectors[50]. - The management team is focused on expanding the company's market presence and enhancing its operational capabilities[48]. Risk Management and Compliance - The company has implemented policies to ensure compliance with applicable laws and regulations, with no significant non-compliance issues reported during the year[69]. - The company faces significant risks related to customer performance, particularly in the U.S. market, which could adversely affect sales and profitability[77]. - Labor shortages and rising labor costs in China may hinder the company's expansion plans, impacting business and financial performance[78]. Shareholder Information and Capital Structure - The company has not declared a final dividend for the year, consistent with the previous year[82]. - The largest supplier accounts for 8.8% of total purchases, while the top five suppliers collectively account for 26.6%[91]. - The largest customer represents 21.3% of total sales, with the top five customers accounting for 77.9% of sales[91]. - The company has issued 400,000,000 shares as of December 31, 2019[84]. - The company has no distributable reserves as of December 31, 2019, consistent with the previous year[89]. - Classic Charm Investments Limited holds 300,000,000 shares, representing 75% of the company's issued voting shares[156]. - The beneficial ownership of the 300,000,000 shares is distributed among Mr. Ko (50.8%), Ms. Zhu (39.7%), and Ms. Chan (9.5%)[156]. - The company maintains a public float of at least 25% of its issued shares as required by GEM listing rules[160]. Related Party Transactions - The company has ongoing related party transactions, with actual payments not exceeding the previously disclosed annual caps in the prospectus[135]. - The company has a significant related party transaction with a supplier, where both parties are held by the same controlling shareholder[134]. - The company has confirmed that all ongoing related party transactions are conducted under normal commercial terms[135]. Board Committees and Meetings - The company has established three board committees: Audit Committee, Remuneration Committee, and Nomination Committee to oversee specific aspects of its affairs[186]. - The Audit Committee held four meetings during the year to review the financial statements, quarterly reports, and internal controls, ensuring compliance with relevant regulations[190]. - The Remuneration Committee reviewed the group's remuneration policies and proposed recommendations to the board regarding executive compensation and independent non-executive director fees[194]. - The Nomination Committee assessed the current board structure and diversity policy, and made recommendations for the re-election of retiring directors at the upcoming annual general meeting[197]. - The company encourages directors to participate in professional development courses to enhance their knowledge and skills, with costs covered by the company[185]. Future Plans and Investments - The company has slowed down the expansion of its Hong Kong headquarters due to the current unstable economic conditions and social environment[37]. - Upgrading of production hardware and facilities has been largely completed, with plans to fully utilize the remaining proceeds within the next 18 months[40]. - The company plans to allocate HKD 5 million for the expansion of its Hong Kong headquarters, with HKD 3.072 million already utilized[40]. - The company has engaged in local and global exhibitions with a planned expenditure of HKD 1.68 million, of which HKD 2.08 million has been utilized[40].
德宝集团控股(08436) - 2019 - 年度财报