恒安国际(01044) - 2023 - 年度财报

Corporate Information The report lists key corporate information including executive directors, independent non-executive directors, company secretary, legal advisors, auditors (PwC), and principal bankers - The report lists key corporate information such as the company's executive directors, independent non-executive directors, company secretary, legal advisors, auditors (PricewaterhouseCoopers), and principal bankers[3][4] Financial Highlights This section presents key financial performance indicators and revenue breakdown by product category for the year 2023 2023 Key Financial Indicators | Indicator | 2023 | 2022 | Trend | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB) | 2.415 | 1.657 | ▲ 45.7% Growth | | Net Profit Margin (%) | 11.8 | 8.5 | ▲ Improvement | | Debt Ratio (%) | 69.8 | 87.2 | ▼ Improvement | | Accounts Receivable Turnover Period (Days) | 42 | 48 | ▼ Improvement | 2023 Revenue Analysis by Product Category | Product Category | 2023 Revenue Share | 2022 Revenue Share | | :--- | :--- | :--- | | Tissue Products | 57.8% | 54.2% | | Sanitary Napkin Products | 26.0% | 27.2% | | Disposable Diaper Products | 5.3% | 5.3% | | Other | 10.9% | 13.3% | Five-Year Financial Summary This section provides a consolidated five-year overview of the company's performance, assets, and liabilities Five-Year Consolidated Performance Summary (RMB Thousand) | Indicator | 2023 | 2022 | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 23,767,936 | 22,615,878 | 20,790,144 | 22,374,001 | 22,492,845 | | Profit Attributable to Equity Holders of the Company | 2,800,533 | 1,925,249 | 3,273,601 | 4,594,815 | 3,907,723 | | Basic Earnings Per Share (RMB) | 2.415 | 1.657 | 2.786 | 3.864 | 3.285 | Five-Year Consolidated Assets and Liabilities Summary (RMB Thousand) | Indicator | 2023 | 2022 | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 40,215,901 | 42,337,242 | 42,292,748 | 44,440,925 | 43,238,775 | | Total Liabilities | 19,586,050 | 22,561,505 | 23,012,298 | 24,779,451 | 25,086,897 | | Net Assets Attributable to Equity Holders of the Company | 20,395,840 | 19,523,607 | 19,037,040 | 19,411,390 | 17,872,941 | Company Product Series The company owns multiple well-known brands covering personal and household hygiene products, categorized by product type - The company owns several well-known brands covering personal and household hygiene product markets, with main brands including: - Sanitary Napkins: “Space 7”, “An Er Le” - Diapers: “An Er Le”, “Q • MO” (baby), “An Er Kang” (adult) - Tissue Paper: “Hearttex”, “Pinno”, “Bamboo π”, “Yueshi”, “Jialaina” - Other: “Convenient Care” (first aid products), “Convenient Pass” (enema solution)[11][12][13] Chairman's Statement The Chairman's Statement reviews the 2023 operating environment, highlighting significant gross profit margin improvement through strategic focus on profitability, rational promotion, and product premiumization despite global economic challenges 2023 Performance Overview | Indicator | 2023 Amount | 2022 Amount | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | Approx. RMB 23.768 Billion | Approx. RMB 22.616 Billion | ▲ 5.1% | | Profit Attributable to Equity Holders of the Company | Approx. RMB 2.801 Billion | Approx. RMB 1.925 Billion | ▲ 45.5% | | Basic Earnings Per Share | Approx. RMB 2.415 | Approx. RMB 1.657 | ▲ 45.7% | | Full-Year Dividend | RMB 1.40 per share | RMB 1.40 per share | - Flat | - The group's three core businesses (tissue, sanitary napkins, diapers) saw revenue grow by approximately 8.0% year-on-year, demonstrating strong growth momentum[16][18] - Sales proportion from e-commerce and new retail channels increased to 30.1%, becoming a significant growth engine[17][19] - Looking ahead, the group will deepen its three core strategies: "focus on core business", "brand leadership", and "long-termism", actively promoting product premiumization and strengthening new retail channel penetration to consolidate market leadership[25][29] Chief Executive Officer's Report The CEO's report details the group's operational performance, business segment reviews, channel strategies, financial health, human resources, and future outlook Business Review In 2023, the group's overall revenue increased by 5.1% year-on-year, with core businesses growing by 8.0%, and gross profit margin significantly improved in H2 due to lower pulp costs and product upgrades, leading to a 45.5% surge in profit attributable to equity holders 2023 Financial Performance Core Data | Indicator | 2023 | 2022 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Overall Revenue | Approx. RMB 23.768 Billion | Approx. RMB 22.616 Billion | ▲ 5.1% | | Gross Profit | Approx. RMB 8.011 Billion | Approx. RMB 7.689 Billion | ▲ 4.2% | | Overall Gross Profit Margin | Approx. 33.7% | Approx. 34.0% | ▼ 0.3 percentage points | | H2 Gross Profit Margin | 36.5% | 32.8% | ▲ 3.7 percentage points | | Operating Profit | Approx. RMB 3.978 Billion | Approx. RMB 2.869 Billion | ▲ 38.6% | | Profit Attributable to Equity Holders of the Company | Approx. RMB 2.801 Billion | Approx. RMB 1.925 Billion | ▲ 45.5% | - E-commerce and new retail channel sales increased by approximately 17.7% year-on-year, raising their proportion of overall sales from 26.9% to 30.1%[35][36] - After deducting an operating exchange loss of approximately RMB 150 million after tax, profit attributable to equity holders of the company increased by approximately 4.3% year-on-year[38][41] Business Segments Review In 2023, the group's core business segments showed mixed but overall positive performance, with strong growth in tissue, steady growth in diapers, and stable performance in sanitary napkins despite intense competition Sanitary Napkin Business The sanitary napkin business achieved stable growth with a 0.4% year-on-year revenue increase, consolidating market leadership through premium product promotion and new retail channel expansion, with H2 gross profit margin recovering to 66.0% Sanitary Napkin Business Financial Data | Indicator | 2023 | 2022 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | Approx. RMB 6.178 Billion | Approx. RMB 6.156 Billion | ▲ 0.4% | | Revenue Share | Approx. 26.0% | Approx. 27.2% | ▼ | | Full-Year Gross Profit Margin | Approx. 63.8% | Approx. 66.8% | ▼ | | H2 Gross Profit Margin | Approx. 66.0% | - | - | - Sales of "Pants-style" products increased by over 73.4% year-on-year, indicating significant growth potential[51][55] Tissue Paper Business The tissue paper business demonstrated strong performance with a 12.2% revenue increase and leading market share, benefiting from lower pulp costs and product upgrades, resulting in improved gross profit margins Tissue Paper Business Financial Data | Indicator | 2023 | 2022 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | Approx. RMB 13.748 Billion | Approx. RMB 12.248 Billion | ▲ 12.2% | | Revenue Share | Approx. 57.8% | Approx. 54.2% | ▲ | | Full-Year Gross Profit Margin | Approx. 21.7% | Approx. 20.7% | ▲ | | H2 Gross Profit Margin | 26.1% | 18.5% | ▲ | - Sales revenue of the premium "Cloud Soft" series exceeded RMB 1.3 billion, growing by approximately 26.6% year-on-year, while wet wipes business sales revenue was approximately RMB 931 million, growing by nearly 10.5%[58][59] - E-commerce and new retail channel sales grew by approximately 26.1%, accounting for 35.3% of the overall tissue business sales[58][59] Disposable Diapers Business The disposable diapers business saw a 4.3% revenue increase, driven by premium baby diapers "Q • MO" and adult diapers, with gross profit margin rising to 38.1% due to lower raw material prices and a higher proportion of high-margin products Disposable Diapers Business Financial Data | Indicator | 2023 | 2022 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales Revenue | Approx. RMB 1.254 Billion | Approx. RMB 1.202 Billion | ▲ 4.3% | | Revenue Share | Approx. 5.3% | Approx. 5.3% | - | | Full-Year Gross Profit Margin | Approx. 38.1% | Approx. 36.9% | ▲ | - Sales of premium product "Q • MO" increased by nearly 21.8% year-on-year, raising its proportion in the diaper business to approximately 36.4%[63][65] - Adult diaper business grew by approximately 11.5% year-on-year, accounting for 25.4% of the overall diaper business sales[63][65] Other Income and Household Products Business Other business revenue decreased by 14.0% year-on-year, primarily due to a reduction in raw material trading to secure production, and household product revenue also declined due to reduced export business Other Business Financial Data | Indicator | 2023 | 2022 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Other Business Revenue | Approx. RMB 2.587 Billion | Approx. RMB 3.009 Billion | ▼ 14.0% | | Raw Material Trading Revenue | Approx. RMB 1.4 Billion | Approx. RMB 1.6 Billion | ▼ 13.6% | | Household Products Business Revenue | Approx. RMB 250 Million | Approx. RMB 326 Million | ▼ 23.4% | International Business Development The group's overseas channels, including Malaysia's Royal Group, generated approximately RMB 1.951 billion in revenue, accounting for 8.2% of total sales, with Malaysia's Royal Group business steadily recovering - Overseas channels generated approximately RMB 1.951 billion in full-year revenue, accounting for 8.2% of the group's overall sales[74][75] - Malaysia's Royal Group business revenue increased by approximately 6.3% to RMB 438 million[76][77] Channel Strategies and Financials The group achieved significant channel expansion, with e-commerce and new retail sales surging over 17.7% to exceed 30% of total sales, while maintaining robust financial health with improved debt ratio and net cash position - E-commerce and new retail channel sales revenue grew over 17.7% to approximately RMB 7.16 billion, increasing their proportion of the group's overall sales to 30.1%[79][81] - Selling and administrative expenses as a percentage of total revenue slightly decreased from 21.6% to 21.3%[84][88] - Operating exchange losses significantly narrowed from approximately RMB 913 million to approximately RMB 180 million due to a substantial decrease in RMB dividend amounts receivable from domestic subsidiaries[85][89] Financial Position Indicators | Indicator | December 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and Bank Balances, etc. | Approx. RMB 19.628 Billion | Approx. RMB 21.563 Billion | | Bank and Other Borrowings | Approx. RMB 14.238 Billion | Approx. RMB 17.030 Billion | | Debt Ratio | Approx. 69.8% | Approx. 87.2% | | Net Debt Ratio | Approx. -26.4% (Net Cash) | Approx. -23.2% (Net Cash) | Human Resources and Corporate Social Responsibility As of year-end 2023, the group employed approximately 23,000 staff, continuously improving HR systems, and demonstrated strong commitment to ESG, achieving a BBB MSCI ESG rating and multiple awards for quality, low-carbon practices, and talent development - As of December 31, 2023, the group employed approximately 23,000 staff[99][100] - The group established an ESG Committee at the board level in June 2023, and its MSCI ESG rating improved from BB to BBB[102][103][106] - In environmental protection, the group promoted distributed photovoltaic power generation projects, with greenhouse gas emission intensity at 0.66 tons of CO2 equivalent per RMB 10,000 sales, and the papermaking segment's unit product energy consumption and water consumption per ton of paper are significantly better than national standards[111][113] Outlook For 2024, despite external uncertainties, the group anticipates stable pulp prices and will adhere to a "stable price" strategy, deepening its core strategies of "focus on core business," "brand leadership," and "long-termism" through product premiumization, channel expansion, and organizational optimization, while planning capacity expansion in several provinces - Pulp prices are expected to remain stable in 2024, which will benefit the group's operations[130][132] - The group will continue to implement three core strategies: "focus on core business" (tissue, sanitary napkins, diapers), "brand leadership" (product premiumization), and "long-termism" (channel expansion and organizational optimization)[134][137] - Plans include capacity expansion and technological upgrades in Neikeng (Fujian), Xiaogan (Hubei), Hunan, and Yunfu (Guangdong), with some new capacity expected to commence production in 2024[139][141] Directors and Senior Management Profiles This section provides detailed background information on the company's executive directors, independent non-executive directors, and senior management, including age, position, responsibilities, industry experience, education, and other public company or social organization affiliations - The board comprises experienced founding shareholders and a new generation of management with professional backgrounds, while the core management team possesses decades of experience in consumer product manufacturing, distribution, finance, and corporate management[142][144][150] Corporate Governance Report This report outlines the company's corporate governance structure, board composition, and the functions of its various committees, emphasizing adherence to governance codes and internal control effectiveness Board of Directors and Committees The report details the company's corporate governance structure, with a board of 8 executive and 4 independent non-executive directors, separate Chairman and CEO roles, and various committees predominantly composed of independent non-executive directors with defined mandates - The Board of Directors consists of 12 directors, including 8 executive directors and 4 independent non-executive directors, complying with listing rules[203][205] - The company has established a Remuneration Committee, Audit Committee, Nomination Committee, Share Incentive Committee, and Environmental, Social and Governance (ESG) Committee to fulfill specialized oversight functions[244][251][262][269][273] - The company largely complied with the Corporate Governance Code in 2023, except for one executive director's inadvertent trading during a blackout period[196][241] Accountability and Risk Management This section emphasizes the board's responsibility for the truth and fairness of financial reporting and outlines the company's risk management and internal control systems, which are reviewed annually by the Audit Committee and deemed sound and effective - The Board of Directors confirms its oversight responsibility for preparing true and fair financial statements[282][283] - The group has established a risk management framework with tiered responsibilities across business units, management, and the Board, ensuring effective risk control[294][296] - The Board has reviewed the internal control system for 2023 and considers it effective and sufficient[290][293] Shareholder Communication and Rights The company has adopted a shareholder communication policy, ensuring equal and timely access to information through various channels, and outlines procedures for shareholders to convene meetings and propose resolutions, alongside whistleblowing and anti-corruption policies - The company has established a shareholder communication policy to ensure equal and timely access to company information for shareholders[316] - Shareholders holding not less than 10% of the voting shares may request to convene an extraordinary general meeting[304][308] - The company has adopted whistleblowing and anti-corruption policies, establishing dedicated channels for related matters[321][325] Report of the Directors This report details the group's principal activities, business review by segment and region, financial performance, dividend distribution, share schemes, and major customer and supplier relationships Principal Activities and Business Review This section outlines the group's primary business of manufacturing, distributing, and selling personal hygiene products in China, with the Chinese market contributing over 90% of revenue, and provides a breakdown of business by product segment and region 2023 Revenue and Operating Profit Contribution by Business Segment (RMB Thousand) | Business Segment | Revenue | Operating Profit Contribution | | :--- | :--- | :--- | | Sanitary Napkin Products | 6,178,438 | 2,317,022 | | Disposable Diaper Products | 1,254,070 | 194,302 | | Tissue Products | 13,748,172 | 243,739 | | Other | 2,587,256 | 129,601 | | Total | 23,767,936 | 2,884,664 | Results and Dividend During the reporting period, the Board declared an interim dividend of RMB 0.70 per share and proposed a final dividend of RMB 0.70 per share, totaling RMB 1.40 per share for the full year, consistent with the previous year 2023 Dividend Distribution | Dividend Type | Amount Per Share (RMB) | Total Amount (RMB Thousand) | | :--- | :--- | :--- | | Interim Dividend (Paid) | 0.70 | 813,485 | | Final Dividend (Proposed) | 0.70 | 813,485 | | Full-Year Total | 1.40 | 1,626,970 | Share Schemes This section details the company's share option scheme and share award scheme, noting 51,606,000 unexercised share options as of year-end 2023 and the adoption of a new share award scheme in September 2023, with shares subsequently purchased by the trustee in the secondary market - As of December 31, 2023, a total of 51,606,000 share options remained unexercised under the share option scheme[378] - The company adopted a new share award scheme on September 11, 2023, with a limit of 5% of the company's issued share capital, and as of January 19, 2024, the trustee had cumulatively purchased 17,800,000 company shares[385][391][398] Major Customers and Suppliers The group maintains a diversified customer and supplier base, with sales to the top five customers accounting for less than 30% of total revenue in 2023, and the largest supplier representing 12.9% of total purchases - Sales to the top five customers accounted for less than 30% of total revenue[430] - The largest supplier accounted for 12.9% of total purchases, and the top five suppliers collectively accounted for 33.1%[430] Independent Auditor's Report PricewaterhouseCoopers issued an unmodified opinion on the group's 2023 consolidated financial statements, affirming their true and fair representation of the group's financial position and performance, with "revenue recognition - goods sales" identified as a key audit matter - The auditor issued an unmodified opinion on the financial statements, deeming them to truly and fairly reflect the group's financial position[451] - "Revenue recognition - goods sales" was identified as a key audit matter due to the high volume of transactions, diverse product range, and broad customer base, which the auditor addressed through assessing internal controls, examining major customer agreements, and sample testing[452][453][454] Consolidated Financial Statements This section presents the group's consolidated financial statements, including the profit or loss, balance sheet, and cash flow statements, providing a comprehensive overview of its financial performance and position Consolidated Statement of Profit or Loss For 2023, the group achieved revenue of RMB 23.768 billion, a 5.1% increase; gross profit of RMB 8.011 billion, up 4.2%; operating profit surged 38.6% to RMB 3.978 billion; and annual profit reached RMB 2.807 billion, a 44.0% increase 2023 Consolidated Statement of Profit or Loss Summary (RMB Thousand) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Revenue | 23,767,936 | 22,615,878 | | Gross Profit | 8,010,688 | 7,689,499 | | Operating Profit | 3,977,931 | 2,869,154 | | Profit Before Income Tax | 3,605,404 | 2,833,286 | | Profit for the Year | 2,807,404 | 1,949,300 | Consolidated Balance Sheet As of year-end 2023, the group's total assets were RMB 40.216 billion, total liabilities significantly decreased to RMB 19.586 billion, and total equity increased to RMB 20.630 billion, indicating an optimized balance sheet structure and more robust financial health Consolidated Balance Sheet Summary (RMB Thousand) | Item | December 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 13,405,939 | 14,228,720 | | Current Assets | 26,809,962 | 28,108,522 | | Total Assets | 40,215,901 | 42,337,242 | | Equity and Liabilities | | | | Total Equity | 20,629,851 | 19,775,737 | | Non-current Liabilities | 525,764 | 2,167,403 | | Current Liabilities | 19,060,286 | 20,394,102 | | Total Liabilities | 19,586,050 | 22,561,505 | Consolidated Cash Flow Statement In 2023, the group generated strong net cash flow of RMB 3.875 billion from operating activities, with investing activities shifting to a net inflow of RMB 3.584 billion primarily due to changes in time deposits, while financing activities resulted in a net outflow of RMB 5.549 billion mainly for debt repayment and dividend payments, leading to a net increase of RMB 1.910 billion in cash and cash equivalents at year-end Consolidated Cash Flow Statement Summary (RMB Thousand) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 3,875,375 | 3,809,862 | | Net Cash Generated From/(Used In) Investing Activities | 3,583,922 | (6,065,909) | | Net Cash Used In Financing Activities | (5,549,268) | (4,137,416) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 1,910,029 | (6,393,463) | | Cash and Cash Equivalents at Year-End | 8,021,756 | 6,088,603 |