Financial Performance - The group's revenue for the year ended December 31, 2022, was approximately HKD 684.9 million, with a net profit of about HKD 73.1 million[8]. - Revenue for the year ended December 31, 2022, was approximately HKD 684.9 million, a decrease of about HKD 130.2 million or 16.0% compared to HKD 815.1 million in 2021[17]. - Gross profit for the year ended December 31, 2022, was approximately HKD 207.7 million, down by about HKD 62.2 million or 23.0% from HKD 269.9 million in 2021, with a gross margin of approximately 30.3% compared to 33.1% in 2021[18]. - Net profit for the year ended December 31, 2022, was approximately HKD 73.1 million, a decrease of about HKD 33.1 million or 31.2% compared to HKD 106.2 million in 2021[26]. - Other income increased to approximately HKD 3.5 million, up by about HKD 1.7 million or 94.4% from HKD 1.8 million in 2021, primarily due to additional fees from order cancellations[19]. - The company did not recommend any dividend payment for the year ended December 31, 2022[27]. Operational Highlights - Sales of scented candles decreased by approximately HKD 92.7 million or 16.3% compared to the same period in 2021, reflecting a consistent trend in the U.S. market preference for scented and colored candles[10]. - The group has established long-term relationships with customers, which, combined with an experienced management team, positions the company for future business opportunities and growth[13]. - The group has been recognized as a "Business Partner Award Winner" for its contributions to customer development in the candle product category[13]. - The company aims to provide mid-to-high-end candle products in overseas markets, primarily targeting the U.S. and U.K. markets[10]. - The group has entered into contracts with sales representatives to incentivize them for customer orders, anticipating potential future orders[11]. - The company remains optimistic about future growth despite a challenging business environment and plans to invest more resources in product development[45]. COVID-19 Impact and Response - The company has implemented effective management of raw material supply to ensure stable production amid the COVID-19 pandemic[15]. - The group has been proactive in enhancing protective measures against COVID-19 to ensure smooth production operations[15]. - The company continues to monitor the impact of COVID-19 on its operations to ensure employee safety and stable operations[15]. - The group’s main business operations in Vietnam and Hong Kong have not been adversely affected by the pandemic[15]. Assets and Liabilities - Total assets as of December 31, 2022, were approximately HKD 501.3 million, an increase from HKD 483.0 million in 2021, with total liabilities of approximately HKD 98.0 million[29]. - The current ratio as of December 31, 2022, was approximately 5.1 times, up from 2.7 times in 2021, mainly due to an increase in cash and cash equivalents and inventory[29]. - Financing costs for the year ended December 31, 2022, were approximately HKD 8.8 million, an increase of about HKD 3.9 million or 79.6% from HKD 4.9 million in 2021[23]. - The debt-to-equity ratio decreased from approximately 20.0% as of December 31, 2021, to about 13.4% as of December 31, 2022, primarily due to a reduction in bank borrowings[29]. Corporate Governance - The company emphasizes the importance of good corporate governance and has adhered to applicable codes during the reporting period[59]. - The board consists of two executive directors and three independent non-executive directors, ensuring a balanced composition[62]. - Independent non-executive directors account for at least one-third of the board at all times during the relevant period[62]. - The company complies with GEM listing rules regarding the appointment of independent non-executive directors, with at least one possessing appropriate accounting qualifications[63]. - The board has established mechanisms to ensure independent opinions are communicated, enhancing decision-making objectivity[67]. - The nomination committee reviews the governance framework annually to ensure its effectiveness[68]. - The company has implemented a diversity policy for board appointments, considering factors such as gender, age, and professional experience[70]. - Each director is required to retire and seek re-election at least once every three years[65]. - The board provides monthly updates to ensure informed decision-making regarding the company's performance and outlook[60]. - The company has a legal liability insurance plan for directors, reviewed annually for adequacy[65]. Shareholder Communication - The board has established a shareholder communication policy to ensure transparent and timely communication with shareholders[107]. - The company encourages shareholders to attend annual general meetings for direct communication with the board[108]. - The board has reviewed the implementation of the shareholder communication policy and confirmed its effectiveness during the review period[110]. - The company has a dedicated email for stakeholders to report any illegal or fraudulent activities, ensuring confidentiality and protection for whistleblowers[104]. - The company has a zero-tolerance policy towards corruption and continuously enhances its internal monitoring and oversight systems[104]. Management and Board Composition - The company appointed Ms. Liang Ruibing as the company secretary effective December 1, 2021, with a background in listing services management[114]. - Mr. Huang Weijie, the chairman and executive director, has over 20 years of experience in candle manufacturing and oversees the overall strategic planning of the group[117]. - Mr. Huang Wenchie, the CEO and executive director, is responsible for the group's business operations and overall sales and marketing strategies[118]. - The company has a strong governance structure with independent directors providing oversight and independent judgment on strategic and performance issues[120][123]. - The board includes members with diverse backgrounds and expertise, enhancing the company's decision-making capabilities[120][123]. Environmental and Social Responsibility - The group has committed to enhancing environmental protection and minimizing operational impact, focusing on clean operating methods and resource efficiency[156]. - An independent ESG report is expected to be published simultaneously with the annual report on the stock exchange and the company's website[157]. - The group views employees as valuable assets and adheres to labor laws, providing good benefits and ongoing professional training[159]. Future Plans and Developments - The company plans to upgrade existing production facilities and expects to complete renovations in 2023[50]. - The company has paid approximately 9.2 million HKD for new machinery to meet anticipated customer orders[53]. - The company has installed an Enterprise Resource Planning (ERP) system, with approximately 1.2 million HKD paid as a deposit and related expenses[54]. Shareholder Structure - As of December 31, 2022, Mr. Wong Wai Kit and Mr. Wong Man Kit each hold 643,500,000 shares, representing 58.5% of the issued shares through AVW International Limited[181]. - AVW International Limited is equally owned by Mr. Wong Wai Kit and Mr. Wong Man Kit, each holding 50%[182]. - Other major shareholders include Wah Yat Si Enterprises Limited and Wah Yat Si Management Limited, each holding 181,500,000 shares, which is approximately 16.5% of the issued shares[184]. Stock Option Plan - The company has adopted a share option scheme on June 23, 2018, allowing the issuance of shares up to 30% of the total issued shares for eligible participants[188]. - The stock option plan allows for a maximum of 110,000,000 shares to be issued upon exercise, representing 10% of the total shares issued as of the listing date and the date of the annual report[190]. - The stock option plan is effective for a period of 10 years from June 23, 2018, and will expire on June 23, 2028, with approximately 5 years remaining[190]. - The exercise price for each share under the stock option plan must be at least the higher of the closing price on the day of the offer or the average closing price over the preceding five trading days[191]. Miscellaneous - The group faced significant risks and uncertainties, which are detailed in the annual report[136]. - The company was registered as an exempted company in the Cayman Islands on July 5, 2017, and completed a group reorganization on September 13, 2017, in preparation for its listing[134]. - The group primarily engages in the manufacturing and sale of candle products, with its headquarters located in Hong Kong and operations in Vietnam[135]. - The financial summary of the group's performance, assets, and liabilities for the past fiscal year is detailed on page 122 of the annual report[141]. - The board aims to create sustainable returns for shareholders while retaining sufficient reserves for future development[140]. - The group has complied with all relevant laws and regulations in Hong Kong and Vietnam, with no significant violations reported for the year ended December 31, 2022[158]. - There were no significant related party transactions during the year ended December 31, 2022, as per the board's knowledge[175]. - The company has maintained appropriate directors' and senior officers' liability insurance, which is currently in effect[177]. - The controlling shareholders have complied with non-competition commitments during the year ended December 31, 2022[179]. - The annual general meeting is scheduled for June 9, 2023, with a notice to be sent to shareholders in due course[195]. - There have been no significant events affecting the group after the reporting period up to the date of the annual report[196]. - The auditor for the financial statements for the years ended December 31, 2022, and 2021, is to be reappointed at the upcoming annual general meeting[197]. - Share transfer registration will be suspended from June 1, 2023, to June 9, 2023, to determine the eligibility of shareholders to attend and vote at the annual general meeting[198]. - The company has not experienced any changes in auditors over the past three years[197].
凯富善集团控股(08512) - 2022 - 年度财报