Financial Performance - The company recorded revenue of HKD 959.9 million for the year ended December 31, 2022, a decrease of 21.9% compared to HKD 1,228.3 million in 2021[6]. - The gross profit margin decreased to 47.3% in 2022 from 53.0% in 2021[6]. - The company incurred a net loss of HKD 36.5 million in 2022, compared to a profit of HKD 31.6 million in 2021[6]. - Retail revenue from single-brand stores dropped by 29.5% to HKD 668.4 million, while multi-brand stores fell by 39.4% to HKD 131.9 million[14]. - Gross profit fell by 30.2% to HKD 454.2 million, with the gross margin declining from 53.0% in 2021 to 47.3% in 2022[20]. - The net loss for 2022 was HKD 36.5 million, compared to a profit of HKD 31.6 million in 2021, primarily due to a revenue decrease of HKD 268.4 million[26]. - The company reported a reserve of approximately HKD 236 million available for distribution to shareholders as of December 31, 2022, down from HKD 300 million in 2021[169]. - The board did not recommend the declaration of a final dividend for the year ended December 31, 2022, maintaining the interim dividend at zero[159]. Retail Operations - The number of retail stores remained at 184, with a total retail area exceeding 34,000 square meters[6]. - The number of retail stores decreased from 216 in 2021 to 184 in 2022, with a total of 68 stores closed[14]. - The company plans to open a new retail store, Artelli, in Macau, which combines modern gallery concepts with fashion retail, covering over 500 square meters[7]. - The company’s average sellable floor area decreased from 36,547 square meters in 2021 to 34,582 square meters in 2022 due to the closure of underperforming stores[12]. Online Sales - Online sales experienced a growth rate of 339.2% in 2022, while single-brand and multi-brand store sales decreased by 29.5% and 39.4%, respectively[12]. - Online sales surged by 339.2% to HKD 116.4 million, increasing its contribution to total revenue from 2.2% in 2021 to 12.1% in 2022[14]. - The company aims to enhance its online sales with a budget of HKD 8.0 million, which has been fully utilized[44]. Market Outlook - The company is optimistic about sales recovery with the reopening of cross-border travel and has several promising new projects in the pipeline[7]. - The company’s revenue decline was significantly impacted by a 26.0% decrease in the number of visitors to Macau and a 25.7% drop in total visitor spending[11]. - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 25%[62]. - New product launches are expected to contribute an additional $50 million in revenue, with a focus on sustainable fashion lines[62]. - The company is expanding its market presence in Southeast Asia, targeting a 30% increase in market share within the next two years[62]. Cost Management - The company aims to strengthen management and cost control measures to maintain robust cash flow and financial stability amid ongoing market challenges[11]. - Operating expenses for sales and marketing decreased by 25.0% to HKD 371.7 million, while general and administrative expenses fell by 19.3% to HKD 94.3 million[23]. - The total employee cost for 2022 was HKD 180.9 million, a decrease of 22.3% from HKD 232.8 million in 2021, with approximately 1,080 employees as of December 31, 2022, down from 1,300 in the previous year[47]. Corporate Governance - The company has maintained compliance with the corporate governance code as of December 31, 2022, ensuring transparency and accountability in its operations[83]. - The board consists of eight members, including five executive directors and three independent non-executive directors, responsible for overall strategy and financial performance review[88]. - The company emphasizes continuous professional development for all directors to maintain their knowledge and skills relevant to their roles[92]. - The company has adopted a strict code of conduct for securities trading by directors, ensuring adherence to regulatory standards[84]. - The company has established a mechanism to ensure independent opinions are received by the board, allowing independent non-executive directors to seek further information from management[101]. Risk Management - The board of directors is responsible for establishing, maintaining, and reviewing the effectiveness of the company's risk management and internal control systems[140]. - The company has conducted an annual corporate risk assessment to identify significant risks that may impact its strategic objectives, prioritizing them based on likelihood and impact[137]. - The internal audit function operates independently from management and reports to the audit committee, identifying internal control deficiencies and suggesting improvements[139]. - The board has reviewed the risk management and internal control systems and considers them effective and adequate as of December 31, 2022[140]. Sustainability and Integrity - The company is committed to environmental sustainability, focusing on energy conservation and recycling initiatives[165]. - The management team emphasized a commitment to sustainability, aiming for a 50% reduction in carbon footprint by 2025[62]. - The company is committed to maintaining high standards of business integrity and has implemented an anti-corruption policy to prevent fraud and corruption[127]. - No significant incidents of fraud or misconduct affecting the company's financial statements were reported during the review year[130]. Shareholder Communication - The company emphasizes effective communication with shareholders to enhance investor relations and understanding of business performance and strategy[144]. - The board has reviewed the implementation and effectiveness of the shareholder communication policy and considers it effective[145]. - Shareholders holding at least 10% of the voting rights can request the board to convene a special general meeting within two months of the request[147].
尚晋国际控股(02528) - 2022 - 年度财报