Company Overview - Sitoy Group is a leading manufacturer of high-end and luxury handbags, small leather goods, travel goods, and footwear products, with a focus on the Greater China market[3]. - The company owns three self-owned brands: Tuscan's, Fashion & Joy, and Duffy, and has exclusive distribution rights for Cole Haan in mainland China, Hong Kong, and Macau[4]. - Sitoy Group entered the rapidly growing China handbag retail market in 2011, becoming a vertically integrated company in this sector[4]. - The company emphasizes design, research, development, manufacturing, sales, retailing, and wholesales of its products, alongside providing advertising and marketing services[3]. - Sitoy Group's brands target different consumer segments, with Fashion & Joy focusing on modern, practical travel bags for young fashion enthusiasts[8]. - The company aims to blend traditional craftsmanship with modern innovation in its product offerings, particularly through the Duffy brand[9]. Strategic Focus and Market Position - Sitoy Group's strategic focus includes expanding its market presence and enhancing brand recognition in the luxury segment[3]. - The company is committed to maintaining high-quality standards and unique designs across its product lines[8]. - Future outlook includes potential new product launches and market expansion strategies to capture a larger share of the luxury goods market[3]. - The company is considering establishing a representative office in Europe to broaden its customer base and increase sales orders[24]. - The company plans to expand its retail network into Southeast Asia through platforms like Douyin and Xiaohongshu, aiming for significant growth in the retail segment in the coming years[24]. Financial Performance - The company reported a revenue of approximately HKD 1,606.5 million for the fiscal year 2024, a decrease of 12.1% compared to the previous year[19]. - Gross profit decreased by 5.5% to approximately HKD 572.3 million, with a gross margin of 35.6%[19]. - Profit attributable to ordinary equity holders was approximately HKD 101.9 million, with basic earnings per share of HKD 0.1058[19]. - The board proposed a final dividend of HKD 0.04 per share for the fiscal year 2024, down from HKD 0.11 in the previous year[19]. - The company experienced a decline in revenue across its major markets, particularly in Mainland China, Hong Kong, Macau, Taiwan, and North America[14]. - The company’s operating profit before tax was HKD 128.2 million, significantly lower than HKD 258.7 million in the previous year[14]. Operational Highlights - Retail segment revenue increased by 11.9% to approximately HKD 527.7 million, with a pre-tax profit of about HKD 26.8 million, down from HKD 29.4 million last year due to increased discounts post-pandemic[21]. - Manufacturing segment revenue recorded approximately HKD 1,066.3 million with a pre-tax profit of about HKD 110.2 million, supported by the expansion of production facilities to Indonesia[22]. - The company has acquired approximately 22,000 square meters of land in Indonesia to establish a factory exceeding 15,000 square meters, which is currently in trial production[22]. - Approximately 80% of the rental floors in the Times Center are leased, generating stable rental income, although the property investment segment recorded a pre-tax loss of about HKD 3.4 million due to revaluation losses[23]. Management and Governance - The company has a strong management team with extensive experience in corporate governance, financial management, and risk control, with some members having over 30 years of experience in executive roles[44]. - The company is committed to establishing good corporate governance practices to enhance transparency and accountability to shareholders[50]. - The board focuses on risk management, internal controls, and fair disclosure to ensure business transparency and accountability[50]. - The company has a commitment to environmental, social, and governance (ESG) practices, as evidenced by the establishment of relevant committees[44]. Risk Management - Key risks in the retail business include reduced consumer spending and potential inventory issues due to changing fashion trends[116]. - The manufacturing segment faces risks related to government policy changes and fluctuations in the cost of goods and materials[117]. - The property investment segment is exposed to risks from government policy changes and potential difficulties in finding acceptable tenants[117]. Shareholder Information - The company declared a final dividend of HKD 19,284,000 for the year, down from HKD 67,532,000 in the previous year, indicating a significant reduction in dividend payout[139]. - The top five customers accounted for 56.5% of the total revenue in fiscal year 2024, with the largest customer contributing 18.3%[87]. - The company will suspend share transfer registration from November 11, 2024, to November 18, 2024, to determine shareholder rights for the annual general meeting[83]. Compliance and Reporting - The company adheres to environmental, social, and governance (ESG) reporting guidelines, with a report available on its website[90]. - The company has implemented strict anti-corruption and reporting policies, ensuring high standards of business integrity and compliance training for employees[91]. - The company has adopted corporate governance practices in compliance with the Listing Rules, ensuring adherence to the corporate governance code[51]. Financial Reporting and Audit - The audit opinion confirms that the consolidated financial statements present a true and fair view of the group's financial position as of June 30, 2024[121]. - The auditors provided reasonable assurance that the financial statements are free from material misstatement, although such assurance cannot guarantee the detection of all errors[128]. - The company must assess its ability to continue as a going concern and disclose relevant matters accordingly[127]. Employee and Social Responsibility - The group established a defined contribution mandatory provident fund retirement benefit plan for all employees, with contributions based on a percentage of employees' basic salaries, amounting to 14% to 15% of payroll costs for subsidiaries in mainland China[191]. - The company is committed to promoting a diverse work environment and equal opportunities for all employees[64]. - The gender ratio of employees, including senior management, is approximately 38% male and 62% female as of June 30, 2024[64].
时代集团控股(01023) - 2024 - 年度财报