HARSON(SH:603958)2017-04-26 16:00Financial Performance - The company's operating revenue for 2016 was approximately CNY 1.68 billion, a decrease of 13.21% compared to CNY 1.94 billion in 2015[18]. - The net profit attributable to shareholders for 2016 was CNY 80.49 million, down 32.43% from CNY 119.12 million in 2015[18]. - The basic earnings per share for 2016 was CNY 0.423, a decline of 42.13% from CNY 0.731 in 2015[20]. - The cash flow from operating activities for 2016 was negative CNY 3.90 million, a significant decrease of 109.53% compared to positive CNY 40.95 million in 2015[18]. - The company reported non-recurring gains of RMB 27.67 million for 2016, down from RMB 32.56 million in 2015[24]. - The company achieved operating revenue of CNY 1,682,455,208.46 in 2016, a decrease of 13.21% compared to the previous year[37]. - Net profit for the year was CNY 7,702.71 million, down 34.49% year-on-year, with net profit attributable to shareholders decreasing by 32.43% to CNY 8,049.02 million[35]. - Domestic sales revenue reached CNY 1,413,137,722.05, a decline of 12.97%, while export sales revenue was CNY 269,317,486.41, down 14.45%[35]. - The gross profit margin for the wholesale and retail business was 50.55%, with a slight increase of 2.32 percentage points compared to the previous year[39]. - The company reported a significant decrease in cash flow from operating activities, with a net outflow of CNY 3,903,125.57, down 109.53% year-on-year[37]. Assets and Liabilities - The total assets at the end of 2016 were CNY 1.49 billion, an increase of 21.30% from CNY 1.23 billion at the end of 2015[19]. - The net assets attributable to shareholders increased by 82.65% to CNY 1.17 billion at the end of 2016 from CNY 640.90 million at the end of 2015[19]. - The company's total assets increased from 1,227.26 million RMB to 1,488.71 million RMB, while total liabilities decreased from 568.27 million RMB to 303.46 million RMB, resulting in a reduction of the debt-to-asset ratio from 46.30% to 20.38%[109]. - Total liabilities decreased to CNY 303,458,415.30 from CNY 568,265,852.20, a significant reduction of about 46.4%[153]. - The equity attributable to shareholders increased to CNY 1,170,623,997.25 from CNY 640,902,708.65, marking an increase of approximately 83.1%[154]. Dividends and Share Capital - The company plans to distribute a cash dividend of CNY 2.6 per 10 shares, totaling CNY 56.51 million, based on a total share capital of 21.736 million shares as of December 31, 2016[2]. - The company did not issue bonus shares or increase capital reserves in the 2016 fiscal year, opting instead to retain undistributed profits for the next fiscal year[70]. - The company issued 54.36 million shares of ordinary shares, increasing the total share capital from 163 million to 217.36 million shares[102]. - The company has a registered capital of CNY 217,360,000.00, with a total of 21,736,000 shares issued as of December 31, 2016[181]. Market and Competition - The footwear market in China is expected to grow, driven by rising disposable income and urbanization[26]. - The company faces increasing competition from Southeast Asian countries, which have lower labor costs and established manufacturing infrastructure[27]. - The company began to expand into the children's shoe market in 2016 to diversify its product offerings[34]. Operational Strategy - The company plans to invest more in product research and development, including advanced equipment and design software[65]. - The company intends to strengthen its marketing network across major cities in China and optimize existing store performance[65]. - The company has acknowledged potential risks in its operations, which are detailed in the report[5]. - The company plans to monitor store operations in real-time, reduce initial order quantities, and increase inventory promotion efforts to mitigate inventory control risks[68]. Corporate Governance - The company has established a governance structure that complies with modern corporate governance standards and ensures the independence of its operations[136]. - The financial statements were approved by the board of directors on April 26, 2017, ensuring compliance with regulatory requirements[183]. - The company has maintained strict compliance with information disclosure regulations, ensuring timely and accurate communication with shareholders[138]. Social Responsibility - The company emphasizes its commitment to social responsibility, actively investing in environmental protection, resource conservation, and social welfare initiatives[96]. Employee Management - The total number of employees in the parent company is 4,192, while the total number of employees in major subsidiaries is 3,813, resulting in a combined total of 8,005 employees[131]. - The company has established a competitive incentive mechanism for employee remuneration, which will continue to improve as the company grows[132]. - The company aims to strengthen skills training for existing personnel and improve overall employee quality[133].