南旋控股(01982) - 2025 - 年度业绩

Results Announcement Summary Financial Summary and Highlights For FY2025, total revenue slightly decreased by 0.6% to HKD 4.35 billion, while gross profit increased by 1.0% to HKD 780 million, with gross margin improving to 18.0%; however, profit attributable to owners decreased by 5.4% to HKD 340 million, and adjusted net profit declined by 13.5% to HKD 340 million Financial Performance Summary | Metric | FY2025 (HKD Million) | FY2024 (HKD Million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 4,352.1 | 4,378.9 | -0.6% | | Gross Profit | 781.8 | 774.2 | +1.0% | | Gross Margin | 18.0% | 17.7% | +0.3 percentage points | | Net Profit | 355.4 | 380.7 | -6.6% | | Profit Attributable to Owners | 342.3 | 361.7 | -5.4% | | Adjusted Net Profit | 342.8 | 396.5 | -13.5% | | Adjusted Net Profit Margin | 7.9% | 9.1% | -1.2 percentage points | | Basic Earnings Per Share | 15.02 HK Cents | 15.87 HK Cents | -5.4% | - Adjusted net profit is a non-HKFRS measure, excluding impairment loss on Myanmar production base and loss from derivative financial instruments, aiming to better reflect core operating performance[3] Consolidated Financial Statements Consolidated Income Statement In FY2025, revenue slightly decreased by 0.6% to HKD 4.35 billion, while gross profit increased by 1.0% to HKD 780 million; due to a significant reduction in net other income and increased administrative expenses, operating profit decreased by 3.8% to HKD 450 million, with profit for the year ultimately declining by 6.6% to HKD 355 million Consolidated Income Statement Summary | Item (HKD Thousand) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 4,352,130 | 4,378,888 | | Gross Profit | 781,815 | 774,239 | | Operating Profit | 449,910 | 467,497 | | Profit Before Income Tax | 407,880 | 433,905 | | Profit for the Year | 355,414 | 380,704 | | Profit Attributable to Owners of the Company | 342,327 | 361,672 | - No impairment loss on the Myanmar production base was recorded in FY2025, compared to a loss of HKD 34.01 million in FY2024[4] Consolidated Statement of Comprehensive Income In FY2025, other comprehensive loss for the year increased from HKD 29.2 million to HKD 50.89 million due to expanded losses from currency translation differences, resulting in a 13.4% year-on-year decrease in total comprehensive income for the year, from HKD 352 million to HKD 305 million Consolidated Statement of Comprehensive Income Summary | Item (HKD Thousand) | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Year | 355,414 | 380,704 | | Other Comprehensive Loss for the Year (After Tax) | (50,891) | (29,201) | | Total Comprehensive Income for the Year | 304,523 | 351,503 | Consolidated Statement of Financial Position As of March 31, 2025, total assets increased to HKD 4.78 billion, total liabilities rose to HKD 2.14 billion, and total equity slightly increased to HKD 2.64 billion; asset growth was driven by increases in property, plant, and equipment and inventories, while liability growth primarily stemmed from increased bank borrowings, with net current assets remaining stable Consolidated Statement of Financial Position Summary | Item (HKD Thousand) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | ASSETS | | | | Non-current Assets | 2,550,769 | 2,399,172 | | Current Assets | 2,227,826 | 2,048,931 | | TOTAL ASSETS | 4,778,595 | 4,448,103 | | EQUITY | | | | Total Equity | 2,637,705 | 2,598,959 | | LIABILITIES | | | | Non-current Liabilities | 727,656 | 588,066 | | Current Liabilities | 1,413,234 | 1,261,078 | | TOTAL LIABILITIES | 2,140,890 | 1,849,144 | | TOTAL EQUITY AND LIABILITIES | 4,778,595 | 4,448,103 | - Inventories significantly increased from HKD 910 million to HKD 1.21 billion, while cash and cash equivalents decreased from HKD 720 million to HKD 430 million[6] Management Discussion and Analysis Market and Business Review Facing global economic slowdown and cautious consumer behavior, the company strategically expanded its Vietnam capacity to effectively counter reduced orders from mainland China; despite a 9.6% sales volume decrease in core knitwear due to delayed seasonal shifts, stable group revenue and improved gross margin were achieved, thanks to contributions from other businesses like cashmere yarn and fabrics - The company leveraged its expanded capacity in Vietnam to address the trend of order shifts to Southeast Asia, maintaining business stability[48][50] - Sales volume of men's and women's knitwear decreased by 9.6% to 29.1 million pieces, partially offset by an increase in average selling price[51] - Other businesses, such as cashmere yarn and fabrics, began to scale, contributing more significantly to group revenue and demonstrating the effectiveness of business diversification[49][52] Future Strategies and Outlook Looking ahead, the company will deepen its strategic presence in Vietnam, leveraging cost and trade advantages, while actively developing upstream businesses like traceable cashmere yarn and fabric printing to enhance vertical supply chain integration; through product innovation, lean manufacturing, and digital transformation, the company aims to improve operational resilience, capture new customer opportunities, and achieve profitable growth - Continue to expand the advantages of the Vietnam production base and seize cooperation opportunities with international clients[57] - Expand upstream by developing cashmere yarn business and venturing into fabric printing to meet both internal and external customer demands[55][56] - Committed to product design innovation, functionality and material development, and seeking breakthroughs in lean manufacturing and digitalization to adapt to market changes[58] Financial Review This fiscal year, the company's financial performance presented a complex picture: revenue slightly decreased while gross margin improved; net other income significantly declined due to reduced exchange gains and asset disposal gains; operating expenses increased; cash flow from operating activities generated net cash inflow, but overall cash levels decreased due to capital expenditures and dividend payments; the company's financial leverage increased to support business expansion Revenue Total revenue slightly decreased by 0.6% year-on-year to HKD 4.352 billion, primarily due to a 4.2% decline in men's and women's knitwear sales to HKD 3.365 billion, resulting from a 9.6% volume decrease and a 6.0% average selling price increase; Japan, mainland China, and Europe remained the top three markets - Sales volume of men's and women's knitwear decreased from 32.2 million pieces to 29.1 million pieces, primarily due to weak customer demand caused by a delayed seasonal onset of winter[60] - Average selling price of men's and women's knitwear increased from HKD 109.1 to HKD 115.6 per piece, mainly due to changes in product mix[60] Revenue by Region | Region | Proportion of Total Revenue (FY2025) | | :--- | :--- | | Japan | 25.2% | | Mainland China | 19.2% | | Europe | 19.1% | Gross Profit and Gross Margin Gross profit increased by 1.0% year-on-year to HKD 782 million, with gross margin improving from 17.7% to 18.0%, primarily driven by improved performance in the fabrics business and sustained resilience in the core knitwear business despite declining sales - The growth in gross profit and gross margin is primarily attributed to improved performance in the fabrics business and sustained resilience in the knitwear business[63] Other Income and Gains Other income increased from HKD 13.3 million to HKD 20.5 million, mainly due to HKD 10.9 million in rental income from mainland China factory premises; net other gains significantly decreased from HKD 78.2 million to HKD 41.2 million, primarily due to a HKD 21 million reduction in exchange gains and a HKD 16.4 million decrease in gains from disposal of equipment - Other income increased by 54.4%, primarily from rental income generated by leasing out part of the mainland China factory premises[52][64] - Net other gains decreased by 47.4%, mainly due to reduced exchange gains and net gains from disposal of property, plant, and equipment[52][66] Expense Analysis Sales and distribution expenses increased by 22.2% year-on-year to HKD 39.6 million, primarily due to higher transportation costs; general and administrative expenses increased by 6.7% year-on-year to HKD 354 million, mainly due to increased staff costs driven by business expansion - Sales and distribution expenses increased by HKD 7.2 million, primarily due to higher transportation costs[68] - General and administrative expenses increased by HKD 22.1 million, mainly due to higher staff costs resulting from business and customer base expansion[69] Impairment Loss on Myanmar Production Base No impairment loss on the Myanmar production base was recorded in FY2025, compared to HKD 34 million in the prior year; according to independent valuers, as of March 31, 2025, the recoverable amount of the base's assets, calculated as fair value less costs to sell, exceeded their net book value - No new impairment loss was incurred in FY2025, whereas an impairment loss of HKD 34 million was recorded in FY2024[70] - The impairment assessment used the market approach, with key assumptions including a 40% discount on property asking prices, 5% agency costs, and 10% scrap value for machinery, consistent with the prior year[73] Net Profit and Adjusted Net Profit Profit attributable to owners decreased from HKD 362 million to HKD 342 million; adjusted net profit (excluding non-recurring items like Myanmar impairment and derivative instrument losses) decreased from HKD 397 million to HKD 343 million, a 13.5% decline, with adjusted net profit margin falling from 9.1% to 7.9% - The decrease in net profit was primarily due to a HKD 37 million reduction in net other gains and a HKD 22.1 million increase in general and administrative expenses, partially offset by the HKD 34 million Myanmar impairment loss in the prior year[78] Adjusted Net Profit Reconciliation | Item (HKD Million) | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners | 342.3 | 361.7 | | Add: Impairment Loss on Myanmar Production Base | – | 34.0 | | Add: Loss from Derivative Financial Instruments | 0.4 | 0.8 | | Adjusted Net Profit | 342.8 | 396.5 | Liquidity and Financial Resources The Group's gearing ratio significantly increased from 8.9% in the prior year to 20.1%, reflecting increased debt to support business expansion; at year-end, cash and cash equivalents totaled HKD 431 million, primarily denominated in USD, RMB, and HKD, with capital expenditures mainly allocated to the construction of the new Vietnam production base and equipment procurement - Gearing ratio (net debt/total capital) increased from 8.9% to 20.1%[85] - Capital expenditures for the year amounted to approximately HKD 467 million, primarily for machinery and equipment purchases and new base construction in Vietnam[87] - As of March 31, 2025, the Group's capital commitments were approximately HKD 157 million[88] Cash Flow Analysis This fiscal year, net cash generated from operating activities was HKD 223 million, but net cash outflow from investing activities (primarily equipment purchases) was HKD 238 million, and from financing activities (primarily dividend payments) was HKD 272 million, resulting in a net decrease of HKD 287 million in cash and cash equivalents Cash Flow Summary | Cash Flow Item (HKD Million) | FY2025 | | :--- | :--- | | Net Cash Generated from Operating Activities | 222.9 | | Net Cash Used in Investing Activities | (238.3) | | Net Cash Used in Financing Activities | (272.1) | | Net Decrease in Cash and Cash Equivalents | (287.5) | Financial Risk Management The Group primarily faces foreign currency risk (RMB), interest rate risk, credit risk, and liquidity risk; the company manages these through close monitoring, not entering into forward foreign exchange contracts for RMB risk, using interest rate swap contracts for some interest rate risk, conducting credit assessments for customers, and utilizing cash flow forecasts to ensure financial stability - Foreign Currency Risk: Primarily arises from RMB-denominated operating expenses and USD-denominated sales, though USD risk is considered minimal; no forward contracts are entered into to hedge RMB risk[94] - Interest Rate Risk: Primarily stems from floating-rate bank borrowings; HKD interest rate swap contracts have been entered into to mitigate part of this risk[95] - Credit Risk: Managed by conducting regular credit assessments of customers, with bank deposits placed in financial institutions of high credit quality[96] - Liquidity Risk: Monitored through cash flow forecasts to ensure sufficient cash and bank financing are available to support operations[96] Human Resources As of March 31, 2025, the Group employed approximately 15,400 full-time staff across Vietnam, mainland China, and Hong Kong; total staff costs for the fiscal year (including directors' emoluments) amounted to HKD 1.024 billion; the company implements a performance and experience-linked remuneration policy and provides training to enhance employee skills Human Resources Metrics | Metric | Value | | :--- | :--- | | Total Full-time Employees (March 31, 2025) | Approx. 15,400 | | Total Staff Costs FY2025 | 1,023.9 HKD Million | Other Information Dividends The Board has declared a second interim dividend of 1.5 HK Cents per share for the year ended March 31, 2025, bringing the total annual dividend to 11.3 HK Cents per share (including the interim dividend of 9.8 HK Cents per share already paid), representing a payout ratio of 75% Dividend Declaration | Dividend Item | Amount Per Share (HK Cents) | | :--- | :--- | | FY2025 Interim Dividend | 9.8 | | FY2025 Second Interim Dividend | 1.5 | | FY2025 Total Dividend | 11.3 | - The full-year dividend payout ratio is 75%[53] - The second interim dividend will be paid on or about July 23, 2025[98] Use of Proceeds from Initial Public Offering The approximately HKD 635 million net proceeds from the company's 2016 IPO have been fully utilized as planned, disclosed in the prospectus and subsequent announcements, for purposes including Vietnam factory construction, loan repayment, design capability enhancement, ERP system upgrades, and working capital supplementation - As of March 31, 2025, the approximately HKD 635 million net proceeds from the IPO have been fully utilized[100][101] Corporate Governance During the reporting period, the company consistently complied with the Corporate Governance Code in the Listing Rules; the company adopted a standard code for directors' securities transactions, confirmed to be adhered to by all directors upon inquiry; the Audit Committee, comprising four independent non-executive directors, reviewed the annual financial statements - The company complied with all mandatory provisions of the Corporate Governance Code during the reporting period[104] - The Audit Committee comprises four independent non-executive directors, chaired by Mr. Fan Chun Wah, Andrew[105] - PricewaterhouseCoopers, the auditor, has reconciled the financial data in the results announcement with the audited accounts[106]