Financial Performance - The company's revenue for 2022 was HKD 4,449,790,000, representing a growth of 7.6% compared to HKD 4,136,603,000 in 2021[11]. - The production business generated revenue of HKD 3,558,000,000, an increase of 21.5% from HKD 2,928,200,000 in the previous year[11]. - The high-end fashion retail business reported revenue of HKD 891,800,000, a decrease of 26.2% from HKD 1,208,400,000 in 2021[11]. - The gross profit for 2022 was HKD 989,076,000, slightly down from HKD 998,991,000 in 2021[9]. - The operating profit for the year was HKD 54,718,000, recovering from an operating loss of HKD 50,877,000 in 2021[9]. - The net profit attributable to equity holders was HKD 10,070,000, compared to a loss of HKD 66,416,000 in the previous year[9]. - The group's revenue for the year ended December 31, 2022, was HKD 4,449,800,000, an increase of 7.6% compared to HKD 4,136,600,000 in 2021, primarily due to increased customer orders in the production business[18]. - The gross profit margin decreased to 22.2% from 24.2% in 2021, a decline of 2.0 percentage points, mainly due to changes in the business mix[18]. - The group recorded a net profit after tax of HKD 23,600,000 for the year ended December 31, 2022, compared to a loss of HKD 69,600,000 in 2021[21]. - The operating profit was HKD 54,700,000, a turnaround from a loss of HKD 50,900,000 in 2021[21]. Assets and Financial Health - The total assets decreased to HKD 3,465,184,000 from HKD 3,945,257,000 in 2021[9]. - The current ratio improved to 1.5 from 1.4 in the previous year, indicating better short-term financial health[9]. - The group had cash and bank balances of HKD 370.5 million as of December 31, 2022, down from HKD 415.8 million in 2021[37]. - The net debt-to-equity ratio was 22.8% as of December 31, 2022, compared to 27.3% in 2021[37]. - The company aims to create stable returns for shareholders, with a dividend policy that considers financial performance and future growth reserves[114]. - The board will review the dividend policy regularly and retains the discretion to update it at any time[115]. Market Challenges and Strategies - The company faced challenges due to macroeconomic conditions, including inflation and the impact of COVID-19, particularly in the Chinese market[10]. - The company aims to leverage its diversified business structure to navigate the complex operating environment[10]. - The group anticipates a slowdown in order trends due to excess inventory issues in the sportswear market, which may take several quarters to resolve[14]. - The high-end fashion retail business will continue to focus on the mainland China market, with expectations of recovery supported by recent easing of COVID-19 restrictions[14]. - The sportswear production business is expected to face short-term impacts due to inventory backlog and reduced consumer demand in major Western markets[32]. Corporate Governance and Management - The company has a strong management team with over 45 years of experience in the garment industry, led by co-founders Li Guodong and Li Qingping[46][47]. - The CEO, Li Guoliang, has been with the company for over 30 years and is responsible for overall management and strategic planning[47]. - The CFO, Wang Zhiqiang, has over 30 years of accounting and financial experience, previously serving as CFO for several listed companies[48]. - The company emphasizes good corporate governance and risk management to ensure compliance and ethical business practices[57]. - The company has established three core values: pursuit of excellence, innovation, and collaboration for mutual success[60]. - The company is committed to sustainable development and long-term growth through a strong corporate culture[57]. - The management team includes experienced professionals from various sectors, enhancing the company's strategic capabilities[55]. - The company has a clear vision and mission focused on quality and value in its operations[58]. - The company adheres to the corporate governance code as per the listing rules, ensuring transparency and accountability[61]. - The company has a diversified board with independent directors bringing extensive industry experience[51][52]. - The board consists of four executive directors and three independent non-executive directors, ensuring a balanced composition with relevant knowledge and experience[65]. - The company has adopted a board diversity policy, achieving a gender diversity ratio of approximately 22.9% male and 77.1% female employees as of December 31, 2022[79]. - Independent non-executive directors are responsible for making independent judgments on the company's development, performance, and risk management, with a term of three years[75]. - The board has established a clear distinction between the roles of the chairman and the CEO to ensure a balance of power and authority[68]. - The company has implemented a standard code of conduct for securities trading by directors, ensuring compliance with regulations[71]. - The nomination committee evaluates candidates based on reputation, industry experience, and commitment of time, ensuring suitable candidates for board positions[77]. - The company has arranged training for board members to enhance their knowledge and skills, ensuring they can contribute effectively[73]. - The board is responsible for approving significant business matters, including dividend declarations and changes in the board's structure[74]. - The company has a policy for insider information to ensure timely and fair disclosure to the public[80]. - The management team is accountable to the board for the group's operations and is empowered to execute daily operations[70]. - The board recognizes the benefits of diversity in enhancing effectiveness and achieving high levels of corporate governance[81]. Audit and Compliance - The audit committee was established on April 18, 2006, with responsibilities including monitoring the fairness of financial statements and reviewing risk management systems[82]. - The audit committee reviewed the consolidated financial statements for the year ended December 31, 2021, and the unaudited interim financial information for the six months ended June 30, 2022[84]. - The company adopted Hong Kong Financial Reporting Standards in preparing its financial statements[104]. - The board is satisfied with the effectiveness and adequacy of the group's risk management and internal control systems[102]. - The company identified and managed risks related to its business activities and environmental, social, and governance performance[96]. - The internal control system aims to provide reasonable assurance against material misstatements or losses[100]. - The audit report confirmed that the consolidated financial statements fairly reflect the group's financial position and performance as of December 31, 2022[174]. - The audit was conducted by PwC, which will be reappointed for the fiscal year ending December 31, 2023[173]. - The audit included comparing forecasted sales performance with approved budgets and assessing the reasonableness of business plans against past performance and market trends[188]. Employee and Community Engagement - The company has provided comprehensive benefits to attract and retain employees, maintaining an acceptable turnover rate[128]. - The group made charitable and other donations totaling HKD 574,000 during the review year[139]. - The group participates in defined contribution retirement plans covering eligible employees in mainland China, Vietnam, and Cambodia, as well as mandatory provident fund schemes for Hong Kong employees[168]. Shareholder Information - As of December 31, 2022, the company's distributable reserves amounted to HKD 961,100,000, an increase from HKD 952,900,000 in 2021[132]. - The board of directors did not recommend the payment of dividends for the year ended December 31, 2022[136]. - The largest customer accounted for 55.6% of the group's sales, while the top five customers represented 70.2% of total sales[171]. - The group maintained sufficient public float as per listing rules prior to the report's publication date[172]. - The company's issued share capital was 1,284,400,000 shares, with the largest shareholder holding 57.91%[152]. - The new share option plan allows for the issuance of up to 128,440,000 shares, equivalent to 10% of the company's issued share capital as of the report date[162]. - The total number of share options under the existing plan as of December 31, 2022, is 31,000,000, with no options granted under the new share option plan prior to this date[166]. - The exercise price for share options ranges from HKD 0.946 to HKD 1.562, with various exercise periods extending until 2024 and 2025[166].
永嘉集团(03322) - 2022 - 年度财报