Financial Performance - For the fiscal year ending March 31, 2023, the company reported revenue of HKD 4,602.3 million, a 13.9% increase from HKD 4,040.5 million in the previous fiscal year[15]. - The net profit for the fiscal year was HKD 158.3 million, down from HKD 275.6 million in the previous year, while adjusted net profit increased by 45.3% to HKD 379.3 million[10]. - The gross profit margin decreased to 16.2% in the fiscal year 2023 from 17.5% in fiscal year 2022, with gross profit recorded at HKD 745.5 million[27]. - The company’s sales cost for the fiscal year was HKD 3,856.8 million, which includes inventory costs and direct labor costs[16]. - The group’s gross profit increased slightly by 5.6% to HKD 745.5 million, while the gross profit margin decreased from 17.5% in FY2022 to 16.2% in FY2023[51]. - The company’s financial expenses increased to HKD 43.2 million from HKD 23.9 million in the previous year, impacting overall profitability[14]. - Other income increased significantly from a loss of HKD 1.0 million to a gain of HKD 76.5 million, primarily due to currency exchange gains and the sale of fixed assets[18]. - Other income rose from HKD 20.5 million to HKD 48.9 million, an increase of 28.4 million, primarily due to a HKD 17.6 million increase in government subsidies and a HKD 13.2 million increase in insurance income[73]. Market Conditions - The company experienced a 12.9% decline in textile and apparel export value in Vietnam during the second half of the fiscal year, compared to a 14.5% growth in the previous fiscal year[8]. - The demand for textiles slowed down in the second half of FY2023 due to high inventory levels among global brand clients and concerns over global economic recession[52]. - The overall economic environment remains uncertain, impacting consumer demand and purchasing patterns in the textile industry[52]. - In the first half of the fiscal year 2023, the total export value of textile products from mainland China increased by 10.2%, but fell by 12.2% in the second half compared to a 36.4% growth in the fiscal year 2022[64]. - The company anticipates that consumer demand for clothing products in mainland China will rise to more normal levels following the easing of COVID-19 restrictions[77]. Operational Strategies - The company plans to expand its production capacity in central Vietnam to capitalize on growing opportunities in the region[11]. - The management team successfully restored production capacity at the Vietnam factory to normal levels and improved operational efficiency during FY2023[50]. - The company continues to enhance its capabilities and efficiency in Vietnam to provide better services to customers[63]. - The company plans to continue innovation and digital breakthroughs in production processes to meet changing market preferences[34]. - The company is focusing on enhancing product quality and strengthening customer relationships in its new weaving and dyeing fabric business[67]. Cost Management - Sales and distribution expenses, along with general and administrative expenses, recorded a slight decrease as a percentage of revenue, reflecting effective cost management[39]. - The group experienced cost pressures from rising raw material prices, but labor costs and subcontracting expenses as a percentage of revenue slightly decreased due to normalization of labor conditions[51]. Shareholder Returns and Dividends - The board declared a second interim dividend of HKD 0.6 per share, maintaining a stable total dividend for the year, reflecting confidence in future development[66]. - The company declared an interim dividend of HKD 0.6 per share for the year ending March 31, 2023, expected to be paid on July 25, 2023[95]. - The board plans to distribute at least 35% of distributable profits to shareholders, subject to certain conditions[118]. - The group aims to maintain stable shareholder returns through effective financial management despite market factors beyond its control[63]. Environmental and Social Responsibility - The company aims to reduce carbon emissions by 10.5% and energy consumption by 4.3% by 2031[139]. - The company has adopted an environmental protection policy to minimize its impact on the environment by reducing water and electricity consumption[131]. - The company is committed to ensuring the health and safety of its employees and complies with all occupational health and safety laws[135]. - The company provides competitive compensation and additional bonuses based on employee performance and contributions to growth[134]. - The company emphasizes equal opportunities for all employees, assessing them based on ability and performance rather than personal characteristics[134]. Corporate Governance - The company has complied with the mandatory provisions of the corporate governance code as of March 31, 2023[153]. - The company has engaged auditors to review ongoing related party transactions under raw material procurement agreements[130]. - The company has established a dividend policy but does not guarantee specific dividend payments for any given period[118]. - The company has sufficient public float as of March 31, 2023, ensuring compliance with listing requirements[127]. Stock Options and Share Capital - The company has implemented a stock option plan to incentivize eligible participants[147]. - The total number of shares that may be issued under the stock option plan is capped at 10% of the shares issued post-listing, which amounts to a maximum of 200,000,000 shares[164]. - The total number of shares available for issuance under the stock option plan is 49,504,000, accounting for 2.17% of the company's issued share capital as of March 31, 2023[183]. - The maximum number of stock options that can be granted to any eligible participant within a 12-month period cannot exceed 1% of the company's issued share capital[183]. - The exercise price of any stock option must be determined by the board and cannot be less than the higher of the closing price on the grant date or the average closing price over the preceding five trading days[168]. - The company must seek shareholder approval at a general meeting for any further grants of stock options that exceed the current cap[165]. - No stock options were granted under the stock option plan during the fiscal year ending March 31, 2023[186]. - As of March 31, 2023, the number of stock options available for grant under the plan is 110,600,000, representing approximately 4.85% of the company's existing issued share capital[186]. Shareholder Structure - Major customers accounted for 70.0% of sales, with the largest supplier contributing 29.8% to procurement[100]. - The major shareholder, Mr. Wang Ting-Chung, and his family hold over 60% of the company's shares, ensuring management control[150]. - South Xuan Investment Limited holds 1,500,000,000 shares, fully owned by Ting Huai Asset Limited, which is a trust established by Mr. Wang Ting Cong[194]. - Mr. Wang Ting Cong is recognized as having interests in the shares held by Ting Huai Trust, as he is the grantor and protector of the trust[195].
南旋控股(01982) - 2023 - 年度财报