信星集团(01170) - 2025 - 年度财报

Financial Highlights In FY2025, the company's performance significantly declined, with total revenue decreasing by 9.2% to HK$626 million, turning a profit of HK$20.22 million into a loss of HK$33.89 million, and gross margin shifting from 4.2% to -1.8% Financial Highlights Summary In FY2025, the company's performance significantly declined, with total revenue decreasing by 9.2% to HK$626 million, turning a profit of HK$20.22 million into a loss of HK$33.89 million, and gross margin shifting from 4.2% to -1.8% Key Financial Indicators for FY2025 | Indicator | FY2025 | FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 625.9 million | HKD 689.3 million | -9.2% | | Gross Profit/(Loss) | (HKD 11.38 million) | HKD 29.11 million | N/A | | Gross Profit/(Loss) Margin | (1.8)% | 4.2% | -6.0 percentage points | | Profit/(Loss) Attributable to Equity Holders | (HKD 33.89 million) | HKD 20.22 million | N/A | | Basic Earnings/(Loss) Per Share | (5.05) HK cents | 3.00 HK cents | N/A | | Total Dividends Per Share for the Year | 4.0 HK cents | 9.0 HK cents | -55.6% | - As of the end of FY2025, the company held cash and cash equivalents of approximately HK$353 million[11] - In terms of geographical distribution, Europe's revenue contribution increased from 26.4% to 35.2% in FY2025, becoming the largest market, while the US market share decreased from 26.5% to 24.4%[21][25] Chairman's Statement The Chairman's Statement addresses global economic uncertainties, strategic responses, and future outlook, emphasizing resilience and sustainable growth Macroeconomic Discussion and Outlook The global economic outlook remains highly uncertain due to US tariff policies, geopolitical risks, and low market sentiment, leading to volatile retail stocking and increased costs - Global economic visibility has decreased from low to extremely limited, with US tariff policies and geopolitical uncertainties creating significant variables for retail and manufacturing industries[34] - Brand customers are increasingly adopting short lead-time, small-batch order patterns, which will reduce manufacturing efficiency and increase production costs[36] - In the short term, the 90-day tariff reprieve stimulated inventory replenishment by retailers, leading to order growth for the group in Q1 FY2026, primarily from the more cost-competitive Cambodian factory[37][38] Strategies and Prospects The group focuses on six key strategies including customer development, capacity optimization, operational excellence, cost control, talent development, and financial stability with ESG integration - The company will prioritize six strategic action plans to adapt to the rapidly changing operating environment[45] - Expertise in high-value athletic and fashion footwear is central to the company's value growth strategy, with continuous investment in labor skills and production equipment upgrades[43] - There are no immediate plans for factory expansion; instead, the focus will be on optimizing the utilization of existing facilities in Vietnam and Cambodia to enhance economies of scale[47][48] - Cost inflation pressure will be mitigated through lean manufacturing, automation processes, and stringent cost control to maintain competitive advantage amidst market adversity[53] - Financial strength is the foundation of business resilience, with continued strict control over cash flow and capital expenditure, while integrating sustainability (ESG) as a core pillar of operations[61][62] Management Discussion and Analysis This section provides a detailed review of the group's financial performance, operational highlights, and financial position for the fiscal year Financial Results The group faced significant challenges this fiscal year, with revenue declining 9.2% to HK$626 million and a net loss of HK$34 million, primarily due to reduced sales volume, lower average selling prices, and increased labor costs Financial Results Summary | Indicator | FY2025 | FY2024 | | :--- | :--- | :--- | | Turnover | HKD 626 million | HKD 689 million | | Gross Loss/Profit | (HKD 11 million) | HKD 29 million | | Net Loss/Profit | (HKD 34 million) | HKD 20 million | | Basic Loss/Earnings Per Share | (5.05) HK cents | 3.00 HK cents | - Performance decline was primarily attributed to: - Reduced economies of scale due to lower revenue - Increased labor wages, with direct labor costs rising from 19.3% to 27.1% of revenue[93] - Lower average selling prices due to sluggish retail market conditions[94] - Expanded fair value loss from investment property revaluation to approximately HK$16 million[93] Key Financial Ratios | Indicator | FY2025 | FY2024 | | :--- | :--- | :--- | | Inventory Turnover Days | 95 days | 109 days | | Net Cash on Hand | HKD 353 million | HKD 416 million | | Gearing Ratio | 0% | 0% | | Current Ratio | 2.7 | 3.2 | | Quick Ratio | 2.3 | 2.8 | Operational Review The group navigated a challenging year with weak demand and rising costs, maintaining skilled labor, expanding customer base, and optimizing manufacturing operations while benefiting from stable investment property income - To address macroeconomic challenges, the group maintained stability in its skilled labor force while actively developing new customers, adding three new European fashion and athletic brands this year[103][104][106] Manufacturing Operations The group operates 21 production lines in Vietnam and Cambodia with an annual capacity of approximately 7 million pairs of shoes, utilizing 55.7% of capacity this year, while diversifying market presence with Europe becoming the largest market Production and Market Distribution | Indicator | FY2025 | FY2024 | | :--- | :--- | :--- | | Number of Production Lines | 21 lines | - | | Annual Production Capacity | Approx. 7 million pairs | - | | Capacity Utilization Rate | 55.7% | 57.5% | | US Market Revenue Share | 24.4% | 26.5% | | Europe Market Revenue Share | 35.2% | 26.4% | | Other Markets Revenue Share | 40.4% | 47.1% | Product Category Revenue Contribution | Product Category | FY2025 Share | FY2024 Share | | :--- | :--- | :--- | | Casual Footwear | 75.9% | 78.6% | | Premium Casual Footwear | 16.8% | 15.2% | | Infant and Toddler Footwear | 7.3% | 6.2% | Investments in Associates The 40%-owned associate in Vietnam, producing footwear for leading brands, saw increased turnover to HK$1.339 billion but a slight decrease in profit contribution due to higher R&D and trial production costs Associate Performance Contribution | Indicator | FY2025 | FY2024 | | :--- | :--- | :--- | | Associate Turnover | Approx. HKD 1.339 billion | Approx. HKD 1.024 billion | | Group's Share of Profit | Approx. HKD 23 million | Approx. HKD 24 million | - The associate anticipates strong orders and plans to expand capacity in phases over the next two to three years, with capital expenditures primarily funded by internal resources[131] Investment Properties The investment property portfolio generated stable rental income of approximately HK$26 million this year, slightly down from the previous year, with successful leasing of the Zhuhai plant - This year, the investment property portfolio generated total rental income of approximately HK$26 million, a decrease from HK$28 million in FY2024[135] Financial Review The group maintains a robust financial position with HK$353 million in cash and no interest-bearing bank borrowings, supported by strong liquidity ratios and share repurchases to enhance shareholder value Liquidity and Financial Resources | Indicator | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | Approx. HKD 353 million | Approx. HKD 416 million | | Interest-Bearing Bank Borrowings | None | None | | Gearing Ratio | 0% | 0% | | Current Ratio | 2.7 | 3.2 | Share Repurchase Details | Period | Shares Repurchased | Total Consideration (Excl. Transaction Costs) | | :--- | :--- | :--- | | April 2024 | 3,222,000 | HKD 2.655 million | | January 2025 | 204,000 | HKD 0.129 million | | February 2025 | 4,036,000 | HKD 3.173 million | | March 2025 | 1,462,000 | HKD 1.208 million | | Total | 8,924,000 | HKD 7.165 million | - As of March 31, 2025, the group had approximately 6,400 employees, with remuneration policies based on market levels and individual performance, complemented by share option and share award schemes[160] Environmental, Social and Governance Report This report details the group's commitment to sustainability, outlining its governance structure, social performance, and environmental initiatives ESG Governance and Strategy The group has established a multi-tiered ESG governance structure, from the Board to working groups, and identified 16 key ESG issues through materiality assessment to guide its sustainability strategy - The group has established a top-down ESG governance structure, with the Board bearing ultimate responsibility, supported by a Sustainability Committee and working groups, ensuring ESG factors are integrated into strategic decisions[175][178][181] - Through materiality assessment, the group identified 16 key ESG issues, with "Energy Consumption," "Packaging Materials," "Health and Safety," and "Development and Training" deemed the most significant to stakeholders and the company[194][197][198] Social Performance The group employs 6,050 staff across Vietnam and Cambodia, adheres to labor laws, provides training, manages 304 suppliers, and contributes to the community, while reporting 18 work-related injuries this year Workforce Statistics (As of March 31, 2025) | Category | 2024/25 Period | 2023/24 Period | | :--- | :--- | :--- | | Total Employees | 6,050 | 6,100 | | Female Employee Ratio | 78.1% | 80.3% | | Vietnam Employee Ratio | 51.4% | 49.2% | | Cambodia Employee Ratio | 48.6% | 50.8% | | Total Employee Turnover Rate | 13% | 13% | Health and Safety Data | Indicator | 2024/25 Period | 2023/24 Period | | :--- | :--- | :--- | | Number of Work Injuries | 18 | 19 | | Lost Workdays | 163 | 54 | Employee Training Data (2024/25 Period) | Category | Percentage of Employees Trained | Average Training Hours Per Employee | | :--- | :--- | :--- | | Total | 53.6% | 24.3 hours | | Male | 24.5% | 13.4 hours | | Female | 75.5% | 12.9 hours | - This year, the group donated HK$162,000 to the community to fulfill its social responsibilities[283][287] Environmental Performance The group's total GHG emissions increased to 7,899.6 tonnes CO2e, energy consumption rose by 24%, and water usage by 12%, but hazardous and non-hazardous waste generation significantly decreased by 39.6% and 24.1% respectively Greenhouse Gas Emissions (tonnes of CO2e) | Scope | 2024/25 Period | 2023/24 Period | | :--- | :--- | :--- | | Scope 1 (Direct) | 166.8 | 153.4 | | Scope 2 (Indirect - Electricity) | 7,293.3 | 6,584.0 | | Scope 3 (Other Indirect) | 439.5 | 24.5 | | Total Emissions | 7,899.6 | 6,761.9 | Resource Consumption and Waste Generation | Indicator | Unit | 2024/25 Period | 2023/24 Period | Change | | :--- | :--- | :--- | :--- | :--- | | Total Energy Consumption | kWh | 14,781,110.6 | 11,965,023.7 | +23.5% | | Total Water Consumption | Cubic Meters | 338,166.0 | 301,431.0 | +12.2% | | Hazardous Waste | kg | 57,683.5 | 95,536.5 | -39.6% | | Non-Hazardous Waste | kg | 540,447.9 | 712,170.4 | -24.1% | - The group identified physical risks from climate change (e.g., extreme weather leading to supply chain disruptions) and transition risks (e.g., increased costs due to climate regulation changes), and has developed corresponding response strategies[364][366][368] Corporate Governance Report This report details the company's adherence to high corporate governance standards, including board structure, committee functions, and risk management practices Corporate Governance Practices The company maintained high corporate governance standards, fully complying with the HKEx Listing Rules' Corporate Governance Code throughout the review period, with the Audit Committee overseeing governance responsibilities - The company applied and complied with all code provisions of the Corporate Governance Code throughout the entire review period[426] - The company has adopted a code of conduct for directors' securities transactions that does not deviate from the Model Code, and all directors have confirmed compliance upon inquiry[427] Board of Directors The Board comprises 9 members, including 3 executive, 3 non-executive, and 3 independent non-executive directors, ensuring clear responsibilities, independent oversight, and continuous professional development - The Board consists of 9 members, including 3 executive directors, 3 non-executive directors, and 3 independent non-executive directors, meeting the Listing Rules' requirements for the number of independent non-executive directors[430][432][433][434] - The roles of Chairman (Ms. Wong Sau Ngan) and Chief Executive Officer (Mr. Chan Yik Mo) are separate, with clearly defined responsibilities, in compliance with Corporate Governance Code provision C.2.1[434] - All directors participate in continuous professional development, and newly appointed independent non-executive director Mr. Lo Ka Kin has received legal training on the responsibilities of listed company directors[452][454] Board Committees The company has established Remuneration, Nomination, and Audit Committees to assist the Board in overseeing executive compensation, board composition and diversity, and financial reporting and internal controls, respectively - The Remuneration Committee comprises 1 executive director and 3 independent non-executive directors, responsible for reviewing and approving remuneration packages for directors and senior management, including share options and share awards[467][468][472] - The Nomination Committee is responsible for reviewing the Board's structure, size, and composition, and has adopted a Board Diversity Policy and Nomination Policy to ensure a balanced mix of skills and experience on the Board[478][479][486] - The Audit Committee consists of 1 non-executive director and 3 independent non-executive directors, responsible for reviewing financial statements, internal control systems, and fulfilling corporate governance duties[499][500][503] Risk Management and Internal Controls The Board is responsible for maintaining robust risk management and internal control systems, reviewed annually, employing a 'three lines of defense' framework to address key risks like global economic uncertainty and rising operational costs - The group adopts a "three lines of defense" corporate governance structure, including daily monitoring by operational management, risk oversight by the finance and compliance team, and independent internal audit by external professional institutions[532] Key Risk Identification | Risk Area | Primary Risks | | :--- | :--- | | Strategic Risk | Increasingly uncertain global economic outlook | | Operational Risk | Increased operational cost pressure | | Financial Risk | No significant risks identified | | Compliance Risk | No significant risks identified | - The Board, through the Audit Committee, conducted an annual review of the risk management and internal control systems and deemed them effective and adequate for FY2025[518][539] Report of the Directors This report provides an overview of the group's business activities, financial position, and corporate affairs for the fiscal year, including share repurchases and significant customer concentration Business Overview and Financial Review The report details the group's footwear manufacturing and property investment activities, noting a loss for the year, a proposed special final dividend, share repurchases, and high customer concentration with 91.8% of sales from the top five clients - The Board recommends a special final dividend of 2.0 HK cents per share, bringing the total annual dividend to 4.0 HK cents per share when combined with the interim dividend already paid[617] - During the year, sales to the top five customers accounted for 91.8% of total sales, with the largest customer contributing as much as 71.5%, indicating significant customer concentration risk[642] Annual Share Repurchase Summary | Period | Shares Repurchased | Total Consideration (HKD thousand) | | :--- | :--- | :--- | | April 2024 | 3,222,000 | 2,655 | | January 2025 | 204,000 | 129 | | February 2025 | 4,036,000 | 3,173 | | March 2025 | 1,462,000 | 1,208 | | Total | 8,924,000 | 7,165 | Directors' and Chief Executives' Interests in Shares As of March 31, 2025, the Chairman, Ms. Wong Sau Ngan, held 39.37% of the company's shares, with King Strike Limited as a major shareholder, and all disclosures comply with SFO requirements - The Chairman of the Board, Ms. Wong Sau Ngan, held a total of 264,460,041 shares, representing 39.37% of the issued shares, through personal holdings and controlled corporations, including King Strike Limited[667][669] - King Strike Limited, as a substantial shareholder, held 263,960,041 shares, representing 39.29% of the company's issued share capital[687] - Other than the disclosed information, no other interests or short positions in shares, underlying shares, or debentures were required to be recorded by the company's directors and substantial shareholders under the Securities and Futures Ordinance[673][689] Audited Financial Statements This section presents the group's audited financial statements, including the independent auditor's report, consolidated statements, and detailed notes, providing a comprehensive view of financial performance and position Independent Auditor's Report Ernst & Young issued an unmodified opinion on the consolidated financial statements for the year ended March 31, 2025, highlighting key audit matters such as investment property fair value, tax provisions, and non-financial asset impairment assessments - The auditor believes that the consolidated financial statements truly and fairly reflect the group's financial position and performance in accordance with Hong Kong Financial Reporting Standards, and have been properly prepared[698] - Key audit matters include: - Estimation of fair value of investment properties: Involves judgments highly dependent on estimates and assumptions regarding rental values and market yields[701][706] - Taxation: The determination of tax provisions involves complex judgments due to the group's operations across multiple tax jurisdictions[712] - Impairment assessment of non-financial assets: The assessment of recoverable amounts for property, plant, and equipment and right-of-use assets involves significant judgments on future cash flows, growth rates, and discount rates[719] Consolidated Financial Statements As of March 31, 2025, the group reported total assets of HK$1.394 billion, total liabilities of HK$323 million, and total equity of HK$1.072 billion, with a net loss attributable to equity holders of HK$33.89 million Consolidated Statement of Profit or Loss For the year, the group reported revenue of HK$625.9 million, a gross loss of HK$11.38 million, and a loss attributable to equity holders of HK$33.89 million, primarily due to sales costs exceeding revenue and other expenses Consolidated Statement of Profit or Loss Summary (HKD thousand) | Item | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenue | 625,876 | 689,269 | | Gross Profit/(Loss) | (11,384) | 29,106 | | Profit/(Loss) Before Tax | (44,424) | 12,622 | | Profit/(Loss) for the Year Attributable to Owners of the Company | (33,890) | 20,221 | Consolidated Statement of Financial Position As of March 31, 2025, total assets were HK$1.394 billion, with non-current assets at HK$778 million (including HK$467 million in investment properties), total liabilities at HK$323 million, and net assets of HK$1.072 billion, indicating strong short-term solvency Consolidated Statement of Financial Position Summary (HKD thousand) | Item | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Non-Current Assets | 778,213 | 788,325 | | Total Current Assets | 616,004 | 721,120 | | Total Assets | 1,394,217 | 1,509,445 | | Total Current Liabilities | 225,904 | 226,197 | | Total Non-Current Liabilities | 96,728 | 97,648 | | Total Liabilities | 322,632 | 323,845 | | Total Equity | 1,071,585 | 1,185,600 | Consolidated Statement of Cash Flows Net cash from operating activities significantly decreased to HK$4.03 million, while investing activities generated HK$67.35 million, and financing activities resulted in a net outflow of HK$75.14 million, leading to a net decrease in cash and cash equivalents of HK$3.76 million Consolidated Statement of Cash Flows Summary (HKD thousand) | Item | FY2025 | FY2024 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 4,031 | 45,041 | | Net Cash Flows from Investing Activities | 67,354 | 2,907 | | Net Cash Flows Used in Financing Activities | (75,141) | (28,816) | | Net Increase/(Decrease) in Cash and Cash Equivalents | (3,756) | 19,132 | Notes to Financial Statements The notes provide detailed explanations of the financial statements' basis of preparation, accounting policies, key judgments, and estimates, with in-depth analysis of segment information, revenue, investment property valuation, and receivables - Segment Information: The group operates in two main segments: "Manufacturing and Sales of Footwear Products" and "Property Investment," with footwear contributing the vast majority of revenue but incurring a loss, while property investment provides stable rental income and profit[968][972] - Investment Properties: As of March 31, 2025, investment properties had a fair value of HK$467 million, with a revaluation fair value loss of HK$15.57 million recorded for the year[1068] - Trade Receivables: Net trade receivables decreased from HK$167 million to HK$112 million, with the vast majority of balances aged within 90 days, indicating good collection performance[1091][1094]