Topscore Fashion(SH:603608)2022-04-25 16:00Financial Performance - The net profit attributable to the parent company's shareholders for 2021 was -64,611,609 CNY, indicating a loss [4]. - The undistributed profits at the end of 2021 for the parent company were 34,161,779 CNY after accounting for a cash dividend distribution of 62,952,635 CNY [4]. - The company plans not to distribute cash dividends for the 2021 fiscal year due to negative net profits [5]. - The company's operating revenue for 2021 was CNY 1,925,410,170, representing a 2.52% increase compared to CNY 1,878,085,689 in 2020 [26]. - The net profit attributable to shareholders was a loss of CNY 64,611,609, an improvement of 86.01% from a loss of CNY 461,901,040 in 2020 [26]. - The basic earnings per share for 2021 was -CNY 0.15, showing an 86.36% increase from -CNY 1.10 in 2020 [27]. - The total assets at the end of 2021 were CNY 2,563,446,679, a decrease of 4.75% from CNY 2,691,246,326 at the end of 2020 [26]. - The company reported a net cash flow from operating activities of -CNY 48,243,197, a significant decline from CNY 242,091,317 in 2020, representing a 119.93% decrease [26]. - The weighted average return on equity for 2021 was -3.94%, an increase of 19.75 percentage points from -23.69% in 2020 [27]. - The company’s total equity attributable to shareholders decreased by 8.51% to CNY 1,560,632,307 at the end of 2021 from CNY 1,705,761,354 at the end of 2020 [26]. Share Repurchase and Dividends - The company repurchased shares amounting to 16,257,773 CNY, which accounted for 47.59% of the undistributed profits at the end of 2021 [5]. - The company has a legal reserve of 1,523,658 CNY, which is 10% of the net profit for the parent company [4]. Risks and Governance - The company has detailed potential risks in its annual report, which investors should review [10]. - The company has not reported any non-operating fund occupation by controlling shareholders or related parties [7]. - The company has not violated any decision-making procedures regarding external guarantees [8]. - The audit report issued by PwC was a standard unqualified opinion [9]. - The company has not disclosed any significant changes in its governance structure or shareholder situation [11]. - The company has established a comprehensive governance structure, ensuring clear division of responsibilities among the shareholders, board of directors, supervisory board, and management [189]. - The company has implemented a robust information disclosure system to ensure timely and accurate communication with shareholders, particularly protecting the rights of minority shareholders [193]. Market and Economic Environment - The overall economic environment in 2021 showed a high opening and low closing trend, with various industries facing different degrees of impact from the pandemic, leading to increased operational difficulties and intensified competition [34]. - The fashion footwear and apparel segment experienced a significant decline in offline store traffic due to the pandemic, negatively affecting sales performance [37]. - The overall consumer spending and retail sales showed a recovery trend, but the structural adjustments within the retail industry continued to create challenges for growth [36]. - The domestic retail sales of consumer goods reached 4.40823 trillion yuan in 2021, with a year-on-year growth of 12.5%, indicating a recovery in the market post-COVID-19 [50]. - The average annual disposable income in 2021 was 35,000 yuan, reflecting an actual growth of 8.1% compared to 2019, which supports the potential for market expansion [50]. Online and Offline Sales Performance - In 2021, the company's online channel revenue reached 544 million RMB, representing a year-on-year growth of 16.75%, accounting for 31.79% of the fashion footwear and apparel segment's revenue and 28.29% of the company's consolidated main business revenue [39]. - The online business grew by 16.75%, increasing its revenue share from 27.90% to 31.79% in the fashion footwear and apparel segment [101]. - Online sales accounted for 31.79% of total revenue, generating 543,501,539, while offline sales contributed 68.21% with 1,166,220,690 [157]. Marketing and Advertising Strategies - The company emphasized the importance of differentiated brand positioning and value, enhancing brand influence through collaborations with celebrities and IP crossovers [40]. - The mobile internet advertising sector faced challenges with limited advertising budgets from clients and rising traffic costs, leading to a continuous decline in gross profit margins for traditional internet advertising [38]. - The advertising industry is focusing on "customer acquisition" and "customer retention" as key marketing strategies due to limited marketing budgets and the need for effective marketing results [66]. - Marketing service providers are transitioning from "traffic acquisition" to "traffic operation," emphasizing efficiency and cost-effectiveness in response to rising traffic costs and the need for precise marketing [69]. Product Development and Innovation - The company has filed for 1 invention patent, 50 utility model patents, and 44 design patents, indicating a strong focus on innovation and R&D [112]. - The product development process leverages consumer insights and advanced design technologies to enhance comfort and design quality [96]. - The company aims to strengthen product core technology and innovation to provide healthier and more comfortable footwear, targeting the Z generation's demand for fashion and leisure [179]. Operational Efficiency and Supply Chain - The company has established a comprehensive digital operation platform to enhance efficiency across design, production, logistics, and marketing, aiming for improved product quality and supply chain responsiveness [41][42]. - The company maintains a self-production ratio of 55.80%, with a focus on flexible production methods to respond quickly to market demands [98]. - The logistics system can handle 50,000 to 70,000 orders per day, with a storage capacity of over 40,000 SKUs [99]. - The company is implementing a comprehensive digital and intelligent manufacturing system to improve supply chain efficiency and consumer engagement [116]. Store Operations and Market Expansion - The company opened 116 new stores and closed 222 stores, resulting in a total of 1,322 stores at the end of the reporting period [152]. - The company operates a full-channel sales model, with a total of 1,322 offline stores, including 880 direct-operated and 442 franchised stores [101]. - The company is actively expanding its multi-brand strategy, including partnerships with international fashion brands to meet diverse consumer needs [108]. Financial Management and Investments - The company executed new leasing standards, resulting in a significant increase in lease liabilities to 19,295,704 [148]. - The company plans to continue its investment strategies, as indicated by the proposal for securities investment [197]. - The company invested 99,990,000 RMB in a private equity fund, completing the subscription process by December 2021 [165]. Challenges and Future Outlook - The company faces risks from macroeconomic fluctuations that could impact consumer spending on footwear and marketing services [183]. - The company must adapt to fast-changing fashion trends in the mid-to-high-end women's shoe market to maintain brand recognition and sales performance [184]. - The company plans to enhance its strategic focus on digital transformation and consumer-centric approaches in the footwear industry [174].