Shareholding Structure - As of December 31, 2023, Mr. Xu holds 301,500,000 shares through a controlled corporation, representing 40.28% ownership, and an additional 74,482,760 shares as a beneficial owner, totaling 50.23%[9] - Ms. Xu, as Mr. Xu's spouse, is deemed to have an interest in the shares held by Mr. Xu, which also totals 50.23%[9] Contractual Arrangements and Control - The company has established a mechanism to control Beijing Yihe's economic interests through exclusive operating and consulting service agreements[14] - The company is limited to holding no more than 50% of Beijing Yihe's equity due to foreign ownership restrictions, necessitating contractual arrangements for control[16] - The exclusive purchase rights agreement allows the company to acquire all or part of the equity or assets of Beijing Yihe at the minimum price permitted by applicable Chinese laws[19] - The company has the right to exercise all shareholder voting rights and other rights of Beijing Yihe's shareholders through a voting rights proxy agreement[24] - The company believes that the contractual arrangements allow it to consolidate the financial performance of Beijing Yihe as if it were a subsidiary[33] - The company has confirmed that the contractual arrangements are established on normal commercial terms and in the overall interest of the company and its shareholders[45] - The company may face significant penalties or be forced to relinquish benefits obtained through the contractual arrangement if the Chinese government deems it non-compliant with foreign investment regulations[66] - The company has taken measures to ensure effective operation and compliance with the contractual arrangement following its implementation[74] - The company has received legal opinions supporting specific measures to comply with the Foreign Investment Law, which may impact its operations and financial condition[43] - The company acknowledges significant uncertainties regarding the interpretation and application of current and future laws and regulations in China, which may affect its contractual arrangements[36] - The company has committed to hiring external legal or other professional advisors to review the implementation of contractual arrangements if necessary[44] Financial Performance - Revenue for the year 2023 reached RMB 323,301 thousand, an increase of 12.5% compared to RMB 287,499 thousand in 2022[139] - Gross profit for 2023 was RMB 94,122 thousand, up from RMB 83,860 thousand in 2022, reflecting a gross margin improvement[139] - Operating profit decreased to RMB 42,181 thousand in 2023 from RMB 47,599 thousand in 2022, indicating a decline of 11.5%[139] - Net profit for the year was RMB 27,578 thousand, down 18.4% from RMB 33,814 thousand in the previous year[139] - Basic and diluted earnings per share for 2023 were RMB 3.68, compared to RMB 4.87 in 2022, representing a decrease of 24.5%[139] - The company reported a total comprehensive income of RMB 27,532 thousand for 2023, down from RMB 32,934 thousand in 2022[139] Assets and Liabilities - Total assets as of December 31, 2023, amounted to RMB 258,614 thousand, an increase from RMB 215,542 thousand in 2022[140] - Cash and cash equivalents increased significantly to RMB 165,252 thousand in 2023 from RMB 118,572 thousand in 2022, showing a growth of 39.3%[140] - Current liabilities rose to RMB 48,402 thousand in 2023 from RMB 44,197 thousand in 2022, indicating a 4.9% increase[140] - The company's equity increased to RMB 261,179 thousand in 2023 from RMB 233,647 thousand in 2022, reflecting a growth of 11.8%[140] Employee and Operational Metrics - The group had 201 employees as of December 31, 2023, an increase from 177 employees in 2022[116] - Employee costs for the year amounted to approximately RMB 24.5 million, compared to RMB 19.0 million in 2022, reflecting a year-on-year increase of about 29.5%[116] Customer and Supplier Concentration - The company's five largest suppliers accounted for approximately 58.9% of total procurement, down from 66.6% in 2022[51] - The five largest customers accounted for approximately 29.8% of the total revenue for the year, compared to 32.2% in 2022[80] - Major customers accounted for approximately 15.5% of total group procurement, down from 16.8% in 2022[112] Acquisitions and Investments - The acquisition agreement dated September 10, 2021, involves the conditional purchase of 100% of the issued share capital of the target company for RMB 72,000,000 (approximately HKD 86,400,000), to be settled through the issuance of new shares at HKD 0.18 per share[48] - The company has entered into a purchase agreement to acquire all issued share capital of Youpinhui Investment Holdings Limited for HKD 18,500,000, which was completed on June 1, 2022[78] - The acquisition of the target company was completed on April 27, 2022, resulting in the group holding 100% equity of the target company[109] - The total consideration for the acquisition was RMB 20,571,430, which included the issuance of 74,482,760 new shares[109] Compliance and Governance - The company has not entered into any significant contracts with its major shareholders as of December 31, 2023[4] - The company has not entered into, updated, or renewed any new contractual arrangements with Chinese contractual entities for the fiscal year ending December 31, 2023[46] - There have been no significant violations or non-compliance with applicable laws and regulations as of December 31, 2023[79] - The independent auditor's report confirmed that the consolidated financial statements fairly reflect the group's financial position as of December 31, 2023[122] - The group has maintained sufficient public float as required by GEM listing rules as of the report date[114] - The company has not changed auditors in the past three years, indicating stability in its financial oversight[164] Future Outlook and Strategy - The company plans to change the VIE structure to allow Beijing Youpinhui to hold the maximum permitted equity in Beijing Yihe, with a proposed ownership split of 50% each between Beijing Youpinhui and individual registered shareholders[47] - The company plans to distribute dividends contingent on profitability and stable operating conditions, with the decision dependent on various financial performance metrics[167] - The annual general meeting is scheduled for May 31, 2024, where shareholders will discuss the company's performance and future strategies[166] - The management team believes the company is well-positioned to compete against industry rivals amid future challenges[196] - The company aims to consolidate its market position and implement business plans to expand market share[196] - Maintaining product safety and environmental friendliness, brand promotion, expanding sales channels, and product customization are key growth drivers for the disposable plastic food container business[196] - The company continues to face external opportunities and challenges, including the popularity of eco-friendly disposable plastic food containers and competition from alternatives made of other materials[196] Risk Management - The company has established measures to protect individual registered shareholders in cases of death, bankruptcy, or divorce[27] - The group emphasizes the importance of maintaining good relationships with stakeholders, with no significant disputes reported during the year[117] - The company has maintained directors' and senior officers' liability insurance to cover potential costs and liabilities arising from claims[84]
易和国际控股(08659) - 2023 - 年度财报