Financial Performance - The company recorded revenue of HKD 5,344,700,000 for the year, a decrease from HKD 6,252,900,000 in 2022, reflecting the impact of geopolitical conflicts and economic challenges[16]. - Gross profit increased to HKD 1,344,700,000, with a gross margin rising by 5.4 percentage points to 25.1% compared to 19.7% in 2022[16]. - Net profit attributable to shareholders rose by 20.8% to HKD 829,800,000, with a net profit margin increasing to 15.5% from 11.0% in the previous year[16]. - The plush toy segment grew by 19.6% to HKD 2,737,200,000, accounting for 51.1% of total revenue, driven by strong orders from theme parks[17]. - The plastic model segment's revenue fell to HKD 1,927,900,000, a decrease from HKD 3,232,900,000 in 2022, representing 36.0% of total revenue[17]. - The company plans to expand sales of sustainable waterproof covers globally, with revenue from this segment at HKD 393,100,000, down from HKD 485,900,000 in 2022[19]. - The injection molding products segment saw a revenue increase of 19.4% to HKD 294,200,000, representing 5.6% of total revenue[20]. - North America remains the largest regional market, contributing 44.9% of total revenue, followed by Japan at 25.6% and China at 17.0%[21]. Operational Strategy - The company focused on optimizing production processes and improving profitability through strategic initiatives in raw material procurement and production[9]. - The company invested significantly in automating production processes to enhance productivity, efficiency, and quality[12]. - The company has established long-term partnerships with suppliers to ensure stable raw material supply at competitive costs[9]. - The company is adapting to industry competition by maintaining strong relationships with existing customers and seizing emerging opportunities[8]. - The company is constructing a new factory in Indonesia, expected to commence operations in 2025, as part of its strategy to diversify regional risks and enhance production flexibility[25]. Sustainability and Corporate Responsibility - The company emphasized sustainability by sourcing renewable and recyclable materials, aligning with market demand for sustainable products[12]. - The company is committed to corporate social responsibility and has made progress in environmental, social, and governance management[12]. - The company has implemented measures to reduce carbon emissions, focusing on energy consumption reduction[152]. - The company aims to minimize environmental impact through resource management and compliance with applicable environmental laws and regulations[139]. - The group has received multiple certifications for social compliance standards, including ICTI Care Program and Disney International Labor Standards[135]. Shareholder Returns - The company maintained profitability despite economic challenges, proposing a final dividend to shareholders[8]. - The company reported a mid-term dividend of HKD 0.20 per share, an increase from HKD 0.10 per share in 2022[47]. - The proposed final dividend for the year ending December 31, 2023, is HKD 0.35 per share, up from HKD 0.30 per share in 2022[47]. - The total reserves available for distribution to equity shareholders amounted to HKD 1,120,854,000, a decrease from HKD 1,260,613,000 in 2022[55]. Risk Management - The company is facing pressures from global economic challenges, rising raw material prices, and operational costs, prompting a dual strategy to expand business scale and increase revenue[31]. - The company has maintained a cautious approach to foreign exchange risk management, with no hedging arrangements in place as of December 31, 2023[34]. - The risk management working group has reported on significant risks and appropriate measures to mitigate or transfer identified risks[118]. - The company is actively monitoring climate-related risks and has established emergency plans for extreme weather events[164]. Governance and Management - The board of directors consists of four executive directors and three independent non-executive directors, ensuring a diverse governance structure[83]. - The roles of the chairman and CEO are distinct, with the chairman focusing on strategy and governance while the CEO manages the business operations[97]. - The audit committee has reviewed the accounting policies and financial reporting matters for the fiscal year ending December 31, 2023[77]. - The company has adopted a written guideline for employee securities trading that meets or exceeds the standards set forth in the listing rules[85]. - The company ensures that shareholders receive detailed information about director elections prior to the annual general meeting[95]. Employee and Community Engagement - The total number of employees decreased to 26,210 from 28,924 in the previous year, with total employee costs amounting to HKD 1,324,300,000[26]. - Employee turnover rate for the year was reported at 14.7%, with a total workforce of 19,593 employees across 11 subsidiaries in China and Vietnam[168]. - The company made charitable donations totaling HKD 116,000 for the year ended December 31, 2023, down from HKD 691,000 in 2022[54]. - Community investment focuses on areas such as education, environment, labor needs, health, culture, and sports[4]. Environmental Performance - The company aims to replace all existing lighting with LED equipment, contributing to energy efficiency improvements[144]. - The company has installed wastewater treatment facilities in its factories, ensuring compliance with local discharge standards[156]. - The company reported a total energy consumption of 105,000,000 kWh, an increase from 97,235,192 kWh in 2022[141]. - The company has not reported any corruption lawsuits against its employees during the reporting period, indicating effective anti-corruption measures[3].
德林国际(01126) - 2023 - 年度财报