HARSON(SH:603958)2018-05-23 16:00Financial Performance - The company's operating revenue for 2017 was approximately CNY 1.50 billion, a decrease of 11.03% compared to CNY 1.68 billion in 2016[20]. - The net profit attributable to shareholders for 2017 was CNY 18.17 million, down 77.42% from CNY 80.49 million in 2016[20]. - The total assets at the end of 2017 were approximately CNY 1.44 billion, reflecting a decrease of 3.42% from CNY 1.49 billion at the end of 2016[21]. - The net assets attributable to shareholders decreased by 3.28% to approximately CNY 1.13 billion at the end of 2017, compared to CNY 1.17 billion at the end of 2016[21]. - Basic earnings per share decreased by 80.24% to CNY 0.084 compared to CNY 0.423 in the previous year[22]. - The company reported a net loss of CNY 22.78 million in Q3, with a significant drop in net profit attributable to shareholders in Q2 and Q3[26]. - The total revenue for the year was CNY 1.49 billion, with quarterly revenues of CNY 412.55 million, CNY 362.65 million, CNY 298.97 million, and CNY 422.70 million respectively[26]. - The company's net profit attributable to shareholders was CNY 18,171,400, a decrease of 77.42% compared to the previous year[45]. - The company's total revenue for the reporting period was CNY 1,494,158,731.93, a decrease of 11.19% compared to the previous year[50]. Cash Flow and Dividends - The cash flow from operating activities for 2017 was CNY 84.73 million, a significant improvement from a cash outflow of CNY 3.90 million in 2016[21]. - The company plans to distribute a cash dividend of CNY 2.6 per 10 shares, totaling CNY 57.18 million for the year[5]. - The net cash flow from operating activities was ¥84,729,548.57, a significant improvement compared to a net cash outflow of ¥3,903,125.57 in the same period last year[60]. - The net cash flow from investing activities was -¥133,310,284.53, an improvement from -¥201,857,294.48 year-on-year, primarily due to the purchase of bank wealth management products[60]. - The net cash flow from financing activities decreased by 118.58% to -¥56,622,026.83, compared to a positive cash flow of ¥304,725,672.01 in the previous year, mainly due to dividend distribution[60]. Sales and Market Trends - The retail market for clothing and footwear grew by 10.2% in 2017, with online retail sales increasing by 28.0%[34]. - The average export price for footwear decreased by 1.86% to USD 4.74, continuing a downward trend for two consecutive years[34]. - Domestic sales revenue reached CNY 1,341,212,500, a decline of 5.09% year-on-year, while export revenue was CNY 152,946,200, down 43.21%[45]. - The footwear industry in China faced challenges with rising production costs and shrinking market share in Europe and the US[34]. - The company operates a multi-brand strategy, with brands like HARSON and KADINA, and has established a strong marketing network with 1,697 physical stores[40]. Operational Challenges and Risks - The company has disclosed potential risks in its operations, which are detailed in the report[7]. - The company faced a significant drop in export orders due to clients shifting to lower-cost regions, impacting the overall business performance[36]. - The company is focusing on enhancing product quality and comfort while controlling costs to meet market demand effectively[87]. - The company faces risks related to inventory control, with a focus on improving inventory turnover and reducing excess stock through promotions and strict assessments[88]. - The company reported a significant decline in export revenue due to clients shifting orders to Southeast Asia and Central America, indicating potential ongoing challenges in the export market[89]. Brand and Product Development - The company operates multiple brands, including HARSON and KADINA, and is in the process of acquiring the ROBERTA brand[31]. - The company aims to enhance its brand strength by expanding operations of brands like PIKOLINOS and exploring shopping center business[44]. - The company is implementing a multi-brand strategy, focusing on brand development for Harsen, Cardina, and Nobida to meet diverse consumer demands[85]. - The company is exploring the expansion of shopping center channels and improving collaboration between offline stores and online platforms[87]. Employee and Management Structure - The total number of employees in the parent company is 3,505, while the total number of employees in major subsidiaries is 3,263, resulting in a combined total of 6,768 employees[156]. - The company has established a comprehensive talent cultivation and incentive system based on national laws and industry characteristics[157]. - The company has a training plan that includes skills training and collaboration with well-known colleges to recruit talented individuals[158]. - The total pre-tax compensation for the board members and senior management during the reporting period amounted to 6.1125 million CNY[146]. - The company is led by a team with extensive experience in the leather and footwear industry, with key members holding various leadership roles in related organizations[148]. Compliance and Governance - The company has maintained compliance with environmental regulations and has not faced any penalties for environmental violations during the reporting period[123]. - The company strictly adhered to information disclosure obligations, ensuring all shareholders had equal access to information[163]. - The independent directors actively participated in decision-making and provided objective and independent opinions on relevant proposals[162]. - The company’s financial statements were audited and deemed to fairly reflect its financial position and operating results for the year ended December 31, 2017[172]. - The company has confirmed that it will adhere to regulatory requirements regarding share transfers by directors and senior management[93].