Jin Rong Jie·2025-07-21 10:07Core Viewpoint - The company reported a revenue growth of 4.1% to HKD 5.585 billion for the fiscal year ending March 31, 2025, but net profit attributable to ordinary equity holders decreased by 12.1% to HKD 116 million, indicating challenges in profitability despite revenue growth [1][3][4]. Financial Performance - Total revenue increased by 4.1% to HKD 5.585 billion, while net profit fell by 12.1% to HKD 116 million [1][3]. - The gross profit margin declined from 26.3% to 23.6%, a decrease of 2.7 percentage points, primarily due to the expansion of the factory in Vietnam and changes in the product mix [1][4]. Cost Factors - Non-operating factors impacted performance, including financing costs of HKD 20 million from the acquisition and expansion of the Vietnam factory, HKD 22 million in carbon emission costs, and increased shipping costs of HKD 15 million due to the Red Sea crisis [3][4]. - The company received HKD 89 million from the seizure of a warehouse in Guangzhou, which somewhat alleviated cost pressures [3]. Strategic Initiatives - The company is implementing a "China +1" strategy to mitigate geopolitical risks by optimizing production facilities in Dongguan and Vietnam, enhancing order acquisition capabilities from North American and European retailers [5][6]. - Upgrades at the Vietnam factory have prepared it for producing more complex and higher-priced products, potentially increasing product value and profitability in the future [5]. Digital Transformation and Market Expansion - The retail and distribution business is undergoing significant transformation, with confidence in gradually restoring profitability through strategic adjustments [7]. - E-commerce performance has been encouraging, and the optimization of the physical store network in mainland China and Hong Kong is laying the groundwork for future synergies [7]. - The company is pursuing digital transformation to enhance efficiency and reduce costs, with plans to expand into new regional markets beyond existing ones [7].