Public company info - Stone Group Holdings Ltd. , 00409.HK
Input the stock code or the company name     Search  
 
 Profile   Information   Data   Financial Ratios   Profit Loss   Cash Flow   Balance   Earnings   Dividend 

Stone Group Holdings Ltd., 00409.HK - Company Profile
Chairman DUAN Yongji
Share Issued (share) 2,007,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry
Corporate Profile Business Summary: The principal activities of the Group are the manufacturing, distribution and sale of healthcare products, electronic and electrical products, office equipment and provision of related services, and media-related business. Business Review: Core Businesses Following the financial tsunami and the Beijing Olympics, the turnover of the IT business dropped significantly, while the healthcare products business posted an impressive turnover, thanks to the success of the new product. IT Business Owing to the suspension of business activities during the Beijing Olympics, the turnover from IT business showed a declining trend in the first half of the year. Together with the global financial tsunami in mid-September, the overall turnover of IT business decreased by 15.4% to HK$1,260 million as compared with the corresponding period last year, and represented 37.0% of the Group’s total turnover. The contributions from manufacturing of electronics products, distribution of electronics products and internet cafe chain were 18.8%, 80.7% and 0.5% respectively. Overall, the gross profit of the IT business grew by 9.6% and the gross profit margin was up 2.5 percentage points from the corresponding period last year to 11.0%. In order to capture further market share, the Group expanded its distribution network and this led to an increase in distribution costs as compared with the previous year, resulting in an operating loss of HK$1.60 million for the year, which was an improvement as compared with the operating loss of HK$19.62 million of the corresponding period last year. Manufacturing of electronic products Turnover and gross profit of the Group’s self-produced electronic products decreased by 6.5% and increased by 28.6% respectively as compared with the corresponding period last year. Due to the suspension or near suspension of various business activities during the Beijing Olympics and the financial tsunami, sales of the Group’s Stone printers declined significantly during the year, while still accounted for 79.1% of the segment turnover from the manufacturing of electronic products and 5.5% of the Group’s total turnover. Sales of Stone printers lowered by 12.6% to HK$187 million, while gross profit margin rose 4.2 percentage points to 18.2% as compared with the previous year due to enhanced after-sale services. During the year, printer sales was in a difficult situation as sales campaigns of printers were substantially reduced due to limited business activities and traffic control during the Beijing Olympics. Along with the financial tsunami which prompted enterprises to spend less on new equipments as a cost-cutting measure, the total turnover of the segment inevitably decreased. However, gross profit managed to achieve a growth with the great effort of the printer division to develop the high margin after-sale services during the current hardship. During the year, sales of gold tax products represented 18.9% of the segment turnover of the manufacturing of electronic products and 1.3% of the Group’s total turnover. Such sales grew by 86.7% to HK$44.61 million as compared with the previous year, while gross profit margin fell by 12.9 percentage points. The increase in turnover was mainly attributable to the seasonality of product sales as value-added tax software needs to be replaced every 2 to 3 years and staff training is required. As such, the Group recorded a higher turnover as compared with the previous year, while the growth rate was not as high as that of 2007. The Group closed down the engineering division during the year as engineering projects tied up huge amounts of capital and had a relatively low net profit margin. As regards to the segment named “others” under the IT Business, it only represented the manufacture of electronic ballasts for fluorescent lamps and the sales accounted for 2.0% of the segment turnover of the manufacturing of electronic products and 0.1% of the Group’s total turnover. Such sales decreased by 68.2% to HK$4.84 million as compared with the corresponding period last year. In the wake of the closure of the engineering division, the segment recorded a gross profit of HK$629,000, compared to a gross loss in the previous year. Distribution of electronic products The electronic products distribution business of the Group suffered from a harder blow, with a drop of 17.2% in turnover as compared with the corresponding period last year. On the other hand, gross profit decreased by a mere 0.3% due to the improved gross profit of industrial controller products during the year. Industrial controllers remained the largest income source of this business segment and accounted for 84.6% of the segment turnover of the electronic products distribution, representing 25.3% of the Group’s total turnover. In view of the fierce competition of the distribution of industrial controllers, the management has been striving to improve the after-sale services in recent years and setting up field offices and branches since last year so as to expand the sales network and increase direct contact with clients. Such measures were proved to be effective in the first half of the year. While operating activities in Beijing were nearly suspended during the Beijing Olympics, these field offices and branches acted as important distribution channels, thus the Group achieved a growth in turnover of 20.1% to HK$501 million, in the first half of the year as compared with the corresponding period last year. However, turnover for the second half of the year was HK$359 million, down 23.6% from the corresponding period last year, due to the impact of the financial tsunami. During the year, as several suppliers offered price cuts, gross profit recorded a growth of 23% as compared with the corresponding period last year and gross profit margin was up by 1.6 percentage points from last year to 7.2%. Like the engineering project mentioned above, the UPS products division had a relatively low gross profit and tied up huge amounts of capital. As such, the management closed down the division and ceased the sales agency business of digital graphic products. Therefore, the turnover of the two products only represented the disposal of the remaining inventory during the year. Electronic products distribution also includes the distribution of semi-conductors, computer parts, computer application software, electronic lighting equipments, electrical ancillaries, health equipments and control systems for automatic doors, etc. In view of the late settlement for goods by certain customers amidst the impact of the financial tsunami, the management considered it inadvisable for the Group to further approve credit and increase receivables under the economic downturn, and that the Group should consider further distribution of such products only after long-term receivables are collected on schedule. Accordingly, for the year ended 31 March 2009, turnover of these products decreased by 44.3% to merely HK$155 million as compared with the corresponding period last year, and accounted for 15.2% of the segment turnover from distribution of electronic products and 4.5% of the Group’s total turnover. Gross profit margin was approximately 9.5%. Internet Cafe Chain Given the impact of the Beijing Olympics, the visit rate of internet cafes in last August was relatively low. As such, both turnover and gross profit recorded a decline of 9.9% from the corresponding period last year to HK$7.32 million and HK$6.49 million respectively, while gross profit margin remained flat. The segment contributed an operating profit of HK$0.76 million to the Group. As at the year-end date, the total number of chain internet cafes reached 80 with more than 16,000 terminals installed, while the daily computer users in cafes exceeded 72,000. Healthcare Product Business As at 31 March 2009, turnover of healthcare products business reached HK$2,144 million, representing 63.0% of the Group’s total turnover. Turnover surged 43.0% from the corresponding period last year, while gross profit margin increased by 3.3 percentage points from the corresponding period last year to 65.7%. The sharp increase in sales was mainly attributable to the launch of the Group’s new product, Golden Wine, in mid-October last year. The product has been wellreceived by the market since its launch and made a contribution of HK$488 million to the turnover of the Group in a mere five months. In addition, with a massive advertising campaign, sales of Naobaijin and GoldPartner recorded a single-digit growth, and that of Huang Jin Xue Kang also multiplied by folds given its relatively small base figure. As a result, overall sales of healthcare products business experienced such remarkable increase. Despite the leap in sales, the target output rate of the original inputted advertising expenses was yet to be achieved. Therefore, the healthcare products business only recorded an operating profit of HK$31.88 million, representing a decline of 77.8% as compared with the HK$144 million in the corresponding period last year. Naobaijin Benefiting from considerable advertising effort, the vast sales of Naobaijin continued in 2008, the 11th sales year, and reached HK$949 million, accounting for 44.3% of the segment turnover of healthcare products business and 27.9% of the Group’s total turnover. It represented an increase of 9.7% over the turnover for the corresponding period last year, with gross profit margin rose by 12.5 percentage points to approximately 71.6% as compared with the previous year, which contributed a gross profit of HK$679 million to the Group. The slogan “Naobaijin, your gift of choice” has permeated through consumers and is instrumental in maintaining a sales growth of Naobaijin, which once again became the champion of the National Sales of Healthcare Products in the PRC in 2008. This is the eighth time the product was accredited this honour. The growth of 12.5 percentage points in gross profit margin of Naobaijin was due to the entering into an agreement between the management and the suppliers in late 2007. Pursuant to the agreement, with effective from January last year, the Group assumed a larger part of advertising expenses and the suppliers accordingly offered a lower ex-factory price for Naobaijin, by which the Group reduced its direct costs and increased its gross profit to cover the extra advertising expenses. Given that the measure has just commenced in January last year, the time period for which the direct costs of Naobaijin being affected last year was only three months, while the direct costs of Naobaijin for the current year was measured at the reduced ex-factory price on a full year basis, which resulted in an increase in gross profit margin. GoldPartner The Group recorded a growth of 46.8% in turnover of GoldPartner from the previous year following a repositioning strategy. During the year, the management continued last year’s strategies to focus on both effectiveness and the gift market. This successfully led to a 3.6% growth in sales of GoldPartner to HK$645 million for the year after its high-growth years. Sales accounted for 30.1% of the turnover of healthcare products business and 18.9% of the Group’s total turnover. In 2008, GoldPartner maintained its position as one of the top three sellers of the National Sales of Healthcare Products in the PRC for 6 consecutive years. GoldPartner’s gross profit margin improved to approximately 70.2% from 66.9% in the previous year and it contributed a gross profit of HK$453 million to the Group. Huang Jin Xue Kang Sales for the year remained at a relatively small scale and scope since the management had yet to have full confidence in the market of Huang Jin Xue Kang. The percentage growth in sales was prominent with a history of low turnover and turnover for the year reached HK$61.85 million, representing a growth of 448.7% as compared with the corresponding period last year, while the gross profit margin was 66.8%, which was approximate to that of last year. The product contributed a gross profit of HK$41.34 million to the Group. Golden Wine Golden Wine is a new product of the Group which was developed under years of research and repeated examinations with Wuxi Giant Biotech Co., Ltd (“Wuxi Giant”), a healthcare product supplier, and co-produced by Health Spirits Co., Ltd of Sichuan Yibin Wuliangye Group, a well-known PRC company in the industry. An agreement was reached between the Group and Wuxi Giant, whereby the Group acts as the general agent of the product who shall be responsible for the market launch of Golden Wine with Wuxi Giant and the profit and loss of the product will be equally shared. The product has been wellreceived by the market since its launch and generated a turnover of HK$488 million in a mere five months. The gross profit margin was 48.1% and the product contributed a gross profit of HK$234 million for the Group. Investment Business In view of the rumors that went around about the outburst of the subprime mortgage bubble in the U.S., the management disposed of all the 2,502,274 SINA shares held at an average price of approximately US$45 per share during the rebound of the U.S. stock market between June and July 2008, thereby realising a gain of HK$178 million and a profit attributable to shareholders of HK$90.78 million (after minority interests) for the Group. Later, the global financial tsunami put a damper on both the PRC and Hong Kong stock markets. China Railway Erju A share, which then held by the Group, once dipped to a low close of RMB3.82 per share. Although the stock markets in the PRC and Hong Kong have resumed stability and commenced to rebound with the implementation of a series of measures by the PRC government, the management was of the opinion that the global financial tsunami had a profound effect and the recovery of the two stock markets might be temporary. As such, the Group gradually disposed of its entire 24,275,556 China Railway Erju A shares at an average price of approximately RMB8.86 per share during the period from December last year to January this year, resulting in a book loss of HK$19 million. As at the year-end date, the Group retained few Hong Kong shares in hand. As stated above, given the overwhelming impact of the financial tsunami, Cayman MTY, a company held by the Group and engaging in mobile communication services and automobile navigation services, has been hard hit. It has been lossmaking over the past few years since the imposition of restrictions on mobile communication by the PRC government. The promotion expenses spent on the GPS navigators developed by Beijing MTY and introduced last year were to no avail due to the plunging sales of high-end value-adding equipments in the deteriorating economy. Further, with news about the bankruptcy of a number of conglomerates in the car manufacturing industry, Cayman MTY called a deferment to the yearslong plan of automobile navigation services. In view of the fact that Cayman MTY has been loss-making for years and the delay in the launch of the automobile navigation services with immense potential, the management decided, after due consideration, to make a full impairment loss on the goodwill and the carrying value of such investment. The share of loss of MTY Group together with full impairment loss on the carrying value and the goodwill of such investment amounted to HK$130 million in aggregate. China Cable Media Group Limited (“CCMG”), a company in which the Group holds 36.12% equity interest, is an investment holding company holding 33.3% equity interest in China Cable Network Co., Ltd. (“CCN”). CCN is engaged in nationalwire cable television network services and operates cable networks in 18 cities in affluent coastal areas in China. It has a customer base of over 3 million and is one of the largest cable television operators in China. While CCN’s business has been stable and profitable in the past few years, CCN’s capital expenditure requirements have been significant. In the past few years, the Group has made capital injections of more than US$17 million, with a total carrying value of more than HK$300 million, into CCN via CCMG. Besides the above investments, a bio-chemical company in which the Group made an investment of US$5 million before recorded a loss and did not yield the Group’s target return on its investment as the commercial value of a product named bio-butanol to be launched by the company decreased due to tumbling oil prices. Furthermore, the unexpected legal procedures regarding the application for relevant building certificates of a Shandong property project, in which the Group increased its equity interest to 47.62% in the first half of the year, caused disruption to the original construction schedule and the use of funding. The requisite construction permit was recently granted and the construction work is expected to resume at the end of the year upon the grant of bank loans and to be entirely completed in the middle of next year. As for Stone Resources Limited (“Stone Resources”) in which the Group made an investment in 2007, negotiation formed the predominant part of the work last year. In Yemen, after the granting of the provisional exploration license to Stone Resources and a domestic company two years ago, the parties have not reached any agreement in respect of the detailed terms for the establishment of a joint venture, through which Stone Resources is required to make an application for the formal exploration license to the local government before conducting exploration. In Tanzania, the staff of Stone Resources has identified certain mines and is in negotiation with the respective owners. However, it is unlikely that any agreement will be reached shortly. Prospects: Other than the year of 2006/07, the IT business has recorded operating losses for the past few years. During the past few years, the management disposed of, closed down or consolidated a number of divisions or operating entities with a view to seeking methods of profit-making for this business segment. A few years ago, the Group sold the management its substantial equity interests in certain field branches with operational inefficiency, but the said arrangement did not bring many benefits to the Group. During the year, the Group had closed down the engineering projects division, the integrated electronic products division and the digital graphic division. However, the IT business segment still faced difficult business conditions and eventually recorded an operating loss for the year. In particular, sales of the main products of the IT business segment, namely industrial controller products, printers and computer products, recorded a decrease in the midst of the financial tsunami. These products represented approximately 85% of the turnover of the IT business. Should the business conditions remain unimproved or even deteriorate in the coming year, it is believed that the segment will consistently incur losses in the coming two to three years, unless new businesses are identified. For the healthcare products business, the turnover has been increasing in recent years and the future of Golden Wine seems to be promising. However, when reviewing the results for the past few years, it is noted that the healthcare products business recorded an average net profit of HK$170 million in the first two years when the profit was guaranteed, but the profit before interests and taxation for the third and the fourth year dropped to HK$118 million and HK$143 million respectively and that for the year even worsened to HK$31.88 million. It is concerned that massive advertisements will be necessary for the healthcare products business to capture market share. As such, this business may not be able to generate reasonable returns for our shareholders in the coming few years. Nevertheless, the management will study the ratio of advertising expenses to turnover in detail in order to grasp a better balancing point. In order to maintain competitiveness, CCN will have to increase funding for converting its TV broadcasting format from analogue to digital. Moreover, it will expand its corporate size and increase its number of subscribers through mergers and acquisitions of other cable TV operators in other regions, which requires considerable funding. In view of this, the management believes that CCN may be required to raise funds from its shareholders in the coming few years. In the event that the Group fails to inject new capital into CCMG, the Group’s shareholdings may be diluted. On the other hand, the new capital injection may put the Group under intense financial pressure. Given the long recovery period of this investment, it is necessary for the management to consider the future direction on handling this investment in the coming year. As for the Shandong property project, the management believes that the project will be completed in 2010. However, it is anticipated that the property market is not likely to be fully recovered in the short term due to the financial tsunami. The Group will consider the disposal of its equity interests in such property depending on its internal financial situation. The management believes that oil price will not resume to a higher level in the short term under the global economic recession and therefore the Group’s investment in a bio-chemical company is not likely to be profitable within two years, and that the returns of such investment will not be realised in near future. As for the mineral resources business, the negotiations have not yet been finalised due to various reasons and, in the opinion of Stone Resources, there might not be any major breakthrough in the second half of the year without compromises between the relevant parties. As such, the management anticipates that the Group will not make any new investment in the mineral resources business in the second half of the year. Given that the mineral resources business is still at a preliminary stage, it is unlikely to generate substantial profits for the Group in the near term. On the whole, the management anticipates that in light of the unlikeliness of improvement in the general economic conditions in the near future, the principal businesses of the Group will be affected to a certain extent and more time may be needed for the investment business to realise its returns. It is believed that with the solid unity and concerted effort of our staff, the Group will get through the cold winter soon.

Information from the financial statements of listed companies

Mobile | Full
Forum rule | About Us | Contact Info | Terms & Conditions | Privacy Statment | Disclaimer | Site Map
Copyright (C) 2026Suntek Computer Systems Limited. All rights reserved
Disclaimer : In the preparation of this website, 88iv endeavours to offer the most current, correct and clearly expressed information to the public. Nevertheless, inadvertent errors in information and in software may occur. In particular but without limiting anything here, 88iv disclaims any responsibility and accepts no liability (whether in tort, contract or otherwise) for any direct or indirect loss or damage arising from any inaccuracies, omissions or typographical errors that may be contained in this website. 88iv also does not warrant the accuracy, completeness, timeliness or fitness for purpose of the information contained in this website.