HARSON(SH:603958)2019-05-30 16:00Financial Performance - The company's operating revenue for 2018 was CNY 1,347,678,813.40, a decrease of 9.97% compared to CNY 1,496,871,964.82 in 2017[21] - The net profit attributable to shareholders for 2018 was a loss of CNY 62,373,999.41, representing a decline of 443.25% from a profit of CNY 18,171,397.36 in 2017[21] - The net cash flow from operating activities was CNY 53,933,641.21, down 36.35% from CNY 84,729,548.57 in the previous year[21] - The total assets at the end of 2018 were CNY 1,317,716,727.01, a decrease of 8.35% from CNY 1,437,751,945.99 at the end of 2017[21] - The company's net assets attributable to shareholders decreased by 10.50% to CNY 1,013,376,149.36 at the end of 2018 from CNY 1,132,271,305.25 at the end of 2017[21] - Basic earnings per share for 2018 were CNY -0.287, a decline of 443.30% from CNY 0.084 in 2017[22] - The weighted average return on equity was -5.84% in 2018, a decrease of 7.42 percentage points from 1.58% in 2017[22] - The company reported non-recurring gains of ¥51.56 million in 2018, primarily from government subsidies and asset disposals[27] - The company achieved operating revenue of CNY 1,347,678,813.40, a decrease of 9.97% year-on-year[43] - The net profit attributable to shareholders was CNY -62,374,000, a decline of 443.25% compared to the previous year[43] - Domestic sales revenue reached CNY 1,226,507,269.84, down 8.55% year-on-year[48] - Export sales revenue was CNY 119,632,601.98, representing a decrease of 21.78% year-on-year[48] - The company reported a net profit of CNY -62.38 million for 2018, with no cash dividends distributed to shareholders[91] Operational Challenges - The company faced significant losses due to a reduction in domestic store numbers and a decline in export orders, leading to substantial layoffs in the export department[23] - The company closed a net of 109 stores during the reporting period, including 100 direct-operated stores[45] - The company experienced a significant drop in net profit after deducting non-recurring gains and losses, reporting a loss of ¥84.90 million in Q4 2018[25] - The company is facing risks related to accounts receivable due to potential payment difficulties from department stores amid increasing competition from online and shopping center channels[86] - The company plans to enhance online store operations and expand into shopping center channels to mitigate channel risk due to the decline of traditional department store advantages[84] Inventory and Assets - At the end of the reporting period, the company's inventory was CNY 5.31 billion, representing 40.29% of total assets, indicating a significant inventory control risk[85] - The company's export sales revenue decreased significantly from CNY 2.69 billion in 2016 to CNY 1.20 billion in 2018, reflecting a declining trend in international sales[86] - The company's total assets at the beginning of the reporting period were CNY 1,437.75 million, while at the end, total assets decreased to CNY 1,317.72 million, resulting in an asset-liability ratio increase from 20.44% to 22.60%[137] - The company's inventory amounted to 627.62 million RMB, accounting for 47.53% of total assets, highlighting its significance as a key asset[183] Strategic Initiatives - The company’s main business focuses on mid-to-high-end shoe brand operation, product design, production, and sales, supported by a self-owned omni-channel marketing network[30] - The company operates a multi-brand strategy, with self-owned brands including HARSON, KADINA, and ROBERTA, and has established a strong market presence[32] - The company is actively expanding online retail partnerships with platforms like Vipshop, JD, and Tmall[45] - The company aims to strengthen its e-commerce channels and partnerships with platforms like JD.com and Tmall to drive online sales growth[82] - The company has established a vertical integration business model to enhance supply chain responsiveness and improve gross margins[83] Governance and Compliance - The company appointed Da Hua Accounting Firm as the auditor for the 2018 financial report, with a remuneration of CNY 1,200,000[100] - The company has not reported any major litigation or arbitration matters that have not been disclosed in temporary announcements[102] - The company has not faced any risks of suspension or termination of its listing during the reporting period[101] - The company’s governance structure complies with the requirements of the China Securities Regulatory Commission, with no significant discrepancies noted[170] - The company emphasizes communication with investors, ensuring that minority shareholders' rights are respected and protected[170] Employee and Management Structure - The total number of employees in the parent company is 3,109, while the main subsidiaries employ 2,878, resulting in a total of 5,987 employees[163] - The company has established close ties with well-known colleges to recruit talented individuals, enhancing its talent pool[165] - The performance annual salary for senior management is determined based on annual operational performance and market conditions[164] - The compensation for directors, supervisors, and senior management is based on a model of "basic annual salary + performance annual salary"[160] Financial Management - The company plans to use up to 75 million RMB of idle raised funds and up to 400 million RMB of idle self-owned funds for purchasing financial products or structured deposits[116] - The company has invested 91 million RMB in bank financial products from idle raised funds, with a remaining balance of 12 million RMB[117] - The company has invested 358 million RMB in bank financial products from self-owned funds, with a remaining balance of 8.1 million RMB[117] - The company has not reported any overdue amounts from entrusted financial products[117] Legal Matters - The company is currently involved in a significant lawsuit regarding intellectual property, with a claim amounting to CNY 50,000,000[102] - Tibet Hason Trading Co., Ltd. has ongoing litigation cases involving unpaid goods totaling RMB 902,066.18, RMB 237,972.08, and RMB 525,261.44, with various defendants ordered to pay these amounts[104] - The company has reported difficulties in enforcing court judgments, indicating potential challenges in cash flow and receivables collection[106] Shareholder Information - The largest shareholder, Zhenxing International Co., Ltd., holds 148,359,935 shares, representing 67.46% of the total shares[140] - The total share capital increased from 217,360,000 shares to 219,906,650 shares due to the issuance of 2,546,650 restricted stock options[130] - The company has a total of 148,359,935 restricted shares held by Zhenxing International Co., Ltd., which will be locked for 36 months starting from June 29, 2019[142] - The actual controller of the company is Chen Yuzhen, who also holds 52.74% of HARRISON (BVI) and 67.46% of Zhenxing International[144]