Financial Performance - The company achieved a revenue growth of approximately 63.8% in 2021, reaching a historical high of about $143.7 million[10] - Net profit increased 40 times compared to the previous year, benefiting from the post-pandemic recovery in apparel sales[10] - Over 60% of the revenue growth was attributed to strategic acquisitions made in 2020, which expanded the company's market share[10] - The company's revenue increased by approximately 63.8% from about $87.7 million in 2020 to about $143.7 million in 2021, primarily due to a strong rebound post-COVID-19 and strategic acquisitions[20] - Revenue from online-native customers rose from approximately $34.8 million in 2020 to about $49.6 million in 2021, marking an increase of approximately 42.8%[20] - Revenue from traditional high-end customers surged from about $50.0 million in 2020 to approximately $85.3 million in 2021, reflecting a growth of about 70.8%[21] - The cost of sales increased by approximately 68.3% from about $61.8 million in 2020 to about $104.0 million in 2021, with the cost of sales as a percentage of total revenue rising from approximately 70.4% to 72.4%[24] - Gross profit increased from about $25.9 million in 2020 to approximately $39.7 million in 2021, a growth of about 52.9%[25] - The company's net profit improved significantly from approximately $0.1 million in 2020 to about $4.3 million in 2021, an increase of about $4.2 million[29] - Cash and cash equivalents stood at approximately $19.9 million as of December 31, 2021, up from $17.8 million in 2020[30] - The current ratio for 2021 was approximately 1.6, compared to 2.0 in 2020, indicating a relatively stable financial position[30] Strategic Acquisitions and Growth - The company is focused on organic growth by acquiring new customers and increasing market share during economic growth periods[13] - The company plans to continue seeking strategic acquisitions to supplement business growth, despite rising valuations making acquisitions more challenging[13] - The sports/outdoor apparel segment accounted for approximately 20.5% of the company's revenue in 2021, with plans for further strategic acquisitions in this area[10] - Cash reserves have reached record levels, providing a strong foundation for future strategic acquisitions despite challenges in the current economic environment[13] Supply Chain and Operational Challenges - Supply chain challenges persisted, with rising freight costs impacting profitability, although the flexible asset-light business model helped fulfill delivery commitments[11] - The company anticipates that freight costs will stabilize at higher levels, while factory shutdowns due to the pandemic are expected to decrease, aiding profit margins in 2022[11] - The company expects to maintain a stable cost base for raw materials, as inflationary pressures can typically be passed on to customers[11] Corporate Governance and Board Structure - The board of directors consists of three executive directors, one non-executive director, and four independent non-executive directors, ensuring a balance of skills and knowledge[50] - The board has appointed four independent non-executive directors, constituting 50% of the board, in compliance with listing rules[57] - The audit committee held four meetings during the year ended December 31, 2021, to review the financial performance and internal controls[64] - The remuneration committee conducted five meetings to review the company's remuneration policies and structures for directors and senior management[67] - The nomination committee held five meetings to evaluate the board's composition and recommend candidates for directorships[69] - The company aims to appoint two female directors by the end of 2022 to enhance gender diversity on the board[59] - The board diversity policy was reviewed to ensure a balance of skills, experience, and perspectives among members[58] - The audit committee is responsible for monitoring the company's financial reporting and risk management systems[64] - The remuneration committee ensures transparency in the remuneration process for directors and senior management[65] - The company has established a practice of holding at least four board meetings annually to discuss financial performance and strategic development[70] - The board will continue to assess the independence of its directors annually to mitigate risks related to conflicts of interest[56] Risk Management and Internal Controls - The company has established a risk management framework involving the board of directors, audit committee, and senior management to oversee risk management and internal control systems[89] - Independent internal control consultants provide annual reports on internal audits and enterprise risk assessments to the audit committee and board of directors[90] - The board reviews the effectiveness of the risk management and internal control systems annually, ensuring they are adequate and effective as of December 31, 2021[92] - The company aims to manage risks rather than eliminate them, providing reasonable assurance against significant misstatements or losses[92] Environmental, Social, and Governance (ESG) Initiatives - The ESG report highlights the company's commitment to sustainable development and social responsibility, showcasing its performance in these areas[110] - The ESG report covers the environmental and social performance of the company for the year from January 1, 2021, to December 31, 2021[111] - The audit committee has appointed third-party ESG professionals to manage the company's ESG performance and identify significant issues[117] - The company emphasizes the importance of stakeholder engagement in its environmental and social development efforts[118] - The company has established communication channels with stakeholders to understand their expectations regarding ESG issues[120] - The company is committed to complying with emission regulations and promoting energy conservation and environmental protection[124] - The company conducts materiality assessments to prioritize ESG issues that are significant to stakeholders and its business[125] - Key ESG issues identified include climate change, energy management, and employee welfare[128] Employee Engagement and Training - The total employee compensation for the year ended December 31, 2021, was stable at approximately $13.7 million, up from $11.4 million in 2020, with a total of 341 full-time employees[36] - The average training hours per employee in 2021 were 0.8 hours for senior employees (40% trained), 28.8 hours for intermediate employees (54% trained), and 3.0 hours for junior employees (86% trained)[168] - The employee turnover rate in 2021 was 23% for female employees and 12% for male employees, a significant decrease from 56% and 83% in 2020 respectively[178] - The company employed a total of 341 employees as of December 31, 2021, with a gender distribution of 68.9% male and 31.1% female[171] - The company conducted various training programs, including hardware skills training and case studies on customer service and corporate liquidity[168] - The company emphasizes employee performance and productivity as key to business success, conducting regular performance evaluations[166] Sustainability and Waste Management - The company generated 120.8 tons of non-hazardous waste in 2021, an increase from 112.6 tons in 2020, with a density of 0.35 tons per employee[156] - Hazardous waste amounted to 23.0 kg in 2021, down from 27.5 kg in 2020, with a density of 0.07 kg per employee[156] - Total water consumption increased to 3,451.0 cubic meters in 2021 from 1,993.1 cubic meters in 2020, with a density of 10.03 cubic meters per employee[157] - The company has implemented strict measures to control the use of toxic chemicals in production and conducts rigorous chemical management audits[152] - The company promotes the 3R principles (Reduce, Reuse, Recycle) among employees to minimize waste generation[153] - The company has received a B rating in the CDP 2021 Water Security Report, indicating transparency in water resource management[157] Community Engagement - The group organized three clothing donation events, donating nearly 3,000 pieces of clothing to various NGOs to support the community[199] - The group has been supporting the HER health project in Vietnam since 2019, aimed at improving female workers' health awareness and capabilities through one-on-one guidance[199]
利华控股集团(01346) - 2021 - 年度财报