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锦兴国际控股(02307) - 2023 - 年度财报
KAM HING INT'LKAM HING INT'L(HK:02307)2024-04-29 13:39

Financial Performance - The overall revenue for the year 2023 decreased by 12.2% to approximately HKD 3,604,400,000 compared to the previous year[21]. - The company reported a net loss attributable to ordinary shareholders of approximately HKD 132,900,000 for 2023[21]. - EBITDA for 2023 was HKD 239,379,000, down from HKD 300,078,000 in 2022[7]. - The gross profit margin for 2023 was 8.2%, a decline from 8.6% in 2022[8]. - The net profit margin for 2023 was -3.7%, compared to -1.3% in 2022[8]. - The company's overall revenue for 2023 decreased by approximately 12.2% to about HKD 3,604,400,000, with gross profit declining by about 16.7% to approximately HKD 295,200,000[29]. - The company recorded a net interest expense of approximately HKD 24,600,000 in 2023 due to significant interest rate hikes[32]. - Financing costs increased by approximately 78.6% to about HKD 104,700,000, up from HKD 58,600,000 in 2022, primarily due to higher average borrowing rates[38]. - The net loss attributable to ordinary shareholders was approximately HKD 132,900,000, compared to HKD 58,000,000 in 2022, mainly due to declining sales and gross margin[42]. - As of December 31, 2023, the net current assets were about HKD 764,400,000, down from HKD 1,472,300,000 in 2022, largely due to early repayment of HKD 1,300,000,000 in syndicated loans[43]. - The total bank borrowings amounted to approximately HKD 1,261,500,000, compared to HKD 1,462,300,000 in 2022[45]. - Capital expenditures for the year were about HKD 170,400,000, significantly up from HKD 79,200,000 in 2022, with 62.9% allocated for purchasing factories[52]. - The company reported a significant increase in impairment losses, with a net impairment loss of HKD 702 in 2023 compared to a loss of HKD 6,689 in 2022[199]. - Administrative expenses decreased slightly to HKD 294,348 in 2023 from HKD 297,615 in 2022, a reduction of 1.4%[199]. - Sales and distribution expenses were HKD 98,259 in 2023, down from HKD 107,276 in 2022, indicating a decrease of 8.4%[199]. Business Strategy and Outlook - The company has secured substantial orders for the first quarter of 2024, aligning with industry trends[22]. - The company plans to focus on establishing strategic partnerships with local manufacturers in Southeast Asia instead of building a new production base in Vietnam[19]. - The company remains cautiously optimistic about 2024, anticipating a recovery in the global economy[22]. - The company anticipates a cautious but optimistic growth outlook for 2024, with a significant increase in order volume at the beginning of the year[33]. - The company is exploring potential collaborations with manufacturers in Malaysia and other Asian regions to strengthen its global production layout[23]. - The company is actively seeking potential acquisition targets or business partners to accelerate its expansion in Southeast Asia[34]. - The company aims to enhance competitiveness by focusing on product quality, innovative materials, and production technologies[24]. Operational Changes - The company incurred a one-time severance cost of approximately HKD 17,300,000 due to the restructuring of dyeing and weaving capacity[20]. - A one-time tax payment of approximately HKD 17,400,000 was made due to past tax adjustments in mainland China[20]. - The company closed its dyeing production capacity in Nansha due to low utilization, which is expected to enhance efficiency and profitability in the long run[30]. - The company has established a strategic partnership with a manufacturer in Vietnam to quickly build production capacity, complementing existing facilities in China and Cambodia[23]. Market Conditions - The U.S. apparel import volume and value significantly decreased by 21.7% compared to the previous year, reflecting a cautious consumer sentiment[28]. - Sales from the five major regions (South Korea, Mainland China, Hong Kong, Singapore, and Taiwan) accounted for approximately 77.1% of total sales, with South Korea being the largest market at 39.7%[55]. - Fabric sales dropped by about 10.6% to approximately HKD 2,944,800,000, down from HKD 3,293,000,000 in 2022[35]. Governance and Compliance - The board of directors held four meetings and one annual general meeting during the year, with 100% attendance from all directors[71]. - The company has complied with listing rules, ensuring that independent non-executive directors constitute at least one-third of the board[73]. - The board composition consists of 62.5% executive directors and 37.5% independent non-executive directors, exceeding the requirement for at least one-third to be independent[85]. - The company has established mechanisms to ensure independent viewpoints from directors, including annual independence confirmations[84]. - The company has a policy for board member diversity, considering various factors such as gender, age, and professional experience[83]. - The independent non-executive directors received fixed fees for their roles, with no equity-based or incentive-based compensation plans to maintain objectivity and independence[89]. - The external auditor, Ernst & Young, charged approximately HKD 3,600,000 for audit services and HKD 500,000 for non-audit services during the year[95]. - The audit committee held three meetings during the year, with all members attending 100% of the meetings[96]. - The board confirmed its responsibility for preparing consolidated financial statements that fairly reflect the group's financial position and performance[92]. - The internal control system was reviewed, and no significant failures in financial, operational, or compliance monitoring were reported during the review period[98]. - The company has implemented a budget management system to better monitor business and financial performance[98]. - The board encourages independent views and opinions from non-executive directors during meetings[91]. - The board has established and maintained an effective risk management system to monitor and control various business risks, ensuring reasonable assurance against significant misstatements or losses[100]. - The board reviewed the risk management system this year and found no significant issues adversely affecting the group's financial condition or operations, deeming the system effective and sufficient[102]. - The company has adopted a dividend policy that emphasizes retaining sufficient cash reserves for operational needs and future growth, with no predetermined dividend rate[103]. - The board has revised the company's articles of association to comply with updated listing rules, allowing for electronic or hybrid shareholder meetings[104]. - The company has implemented a shareholder communication policy to ensure timely and equal access to information for shareholders and stakeholders[108]. Corporate Social Responsibility - The company donated a total of HKD 799,000 in charitable contributions during the year[146]. - The company encourages reporting of any unethical or fraudulent behavior through a whistleblowing policy, allowing confidential and anonymous reporting[111]. - The company maintains a zero-tolerance policy towards bribery and corruption, ensuring high levels of business integrity and transparency in all transactions[112]. - The board regularly reviews the company's environmental, social, and governance (ESG) strategies, considering the adequacy of resources and training related to ESG performance[113]. - The company is committed to enhancing internal sustainability governance to create value for stakeholders[113]. - The board's oversight includes regular assessments of the nature and severity of significant ESG risks since the last review[113]. Shareholder Information - The company has not made any changes to its share capital or stock options during the year[142]. - There were no purchases, redemptions, or sales of the company's listed securities by the company or its subsidiaries during the year[144]. - As of December 31, 2023, the company's distributable reserves amounted to HKD 1,047,214,000, which includes share premium and capital reserves totaling HKD 848,112,000[145]. - Sales to the top five customers accounted for 36.1% of total sales, an increase from 31.7% in 2022, with the largest customer contributing 14.4%[148]. - Purchases from the top five suppliers represented 38.5% of total purchases, down from 42.8% in 2022, with the largest supplier accounting for 10.1%[148]. - The company has confirmed that at least 25% of its total issued share capital is held by the public as of the report date[177].