Public company info - Hang Ten Group Holdings Ltd. , 00448.HK
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Hang Ten Group Holdings Ltd., 00448.HK - Company Profile
Chairman Chan Wing Sun
Share Issued (share) 982,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Apparel
Corporate Profile Business Summary: The Company acts as an investment holding company. The principal activities of its subsidiaries are the design, marketing, retail and wholesale of apparels and trademark licensing. Performance for the year: Turnover for the year ended 31 March 2011 increased by 14.9% and amounted to HK$2,363.5 million (2010: HK$2,056.4 million). The improvement in sales and gross margin enabled the Group to record an increase in operating profit by 53.2% to HK$292.1 million. During the year, the corporate income tax rate of Taiwan decreased from 25% to 17%, hence the effective tax rate of the Group reduced. Profit attributable to shareholders amounted to HK$239.1 million, increased by 67.2% comparing to the previous year. Basic earnings per share increased to HK24.35 cents for the current year from HK14.56 cents for the previous year. This represents an increase of HK9.79 cents per share. Business Review: The Group had 792 retail stores with a floor area of about 643,300 square feet. Revenue from retail and distribution of apparel contributed to 99% of the Group’s turnover with the remaining 1% contributed from the Group’s licensing operation. Retail and Distribution of Apparel Retail and distribution of apparel generated revenue of HK$2,341.5 million (2010: HK$2,036.7 million) for the year ended 31 March 2011, showing a growth of 15%. Because the Philippines retail operation had sustained operating losses in past years and the economic environment in the Philippines had not shown any significant improvement, the Group disposed of its retail operation in the Philippines at the beginning of the year. The Philippines operation only contributed to less than 2% of the Group’s total turnover in the previous year and the disposal did not have significant impact to the Group. The Group has engaged a licensee and distributor to distribute its products in Philippines. Taiwan Taiwan is one of the major markets of the Group. Being one of the largest casual wear retailers in the market and with its extensive retail network, the Group had been able to reap the benefit of a strengthening economy. Both the Hang Ten and Arnold Palmer brands recorded a growth in sales. Revenue from retail and distribution of apparel in Taiwan contributed to about 46.0% of the turnover of the Group and increased by 19.0% for the year. Sales generated from the Arnold Palmer contributed to about 14% of the Group’s sales in Taiwan. Operating profit for the year was HK$142.0 million, representing an increase of 202.8% on a year-on-year basis. However, if the accrual for additional value added tax and penalties of approximately HK$60.3 million made during the previous year in respect of a claim by the Taiwan Tax Authority was excluded from the previous year’s operating profit, the increase in operating profit generated from the Taiwan operation when comparing to the previous year would be 32.5%. The Group had 226 Hang Ten stores and 53 Arnold Palmer stores at the end of March 2011 in Taiwan. South Korea Korea contributed to about 37.7% of the Group’s turnover. With the economy gradually improving,the Group had opened a number of new stores in Korea and there was a net increase of 26 stores at the end of the fiscal year. Sales for the year ended 31 March 2011 amounted to HK$890.5 million,representing an increase of 16.2%. Sales of Hang Ten brand merchandise and H&T brand products accounted for about 75% and 25% respectively of the sales in Korea. Gross margin increased as the Group had been able to enhance its products mix with more higher-margin items. Increase in gross margin was also attributed to a decrease in the cost of imported merchandise relative to the previous year as Korean Won appreciated against the United States Dollars in which a large portion of purchases were denominated. Operating profit grew by 33.8% to HK$95.1 million. The Group had 245 Hang Ten stores and 77 H&T stores at the end of March 2011 in South Korea. Singapore and Malaysia The Group’s operation in Singapore and Malaysia continued to improve. Sales for the year grew by 14.0% to HK$178.6 million. Operating profit amounted to HK$24.5 million, showing an increase of 94.4%. There were a total of 40 stores in Singapore and Malaysia as at 31 March 2011. Mainland China The Group continued to expand its store network in Mainland China. During the year, the Group added a number of new shops. It had also consolidated its retail network by relocating or closing a number of its under-performing shops during the middle and second half of the year. Sales for the whole year increased slightly to HK$101.5 million. As the Group had employed more marketing and administrative staff and obtained more office spaces for implementation of the Group’s expansion plan coupling with expenditure incurred in consolidating the network, selling and administrative expenses increased by HK$6.5 million causing an increase in operating loss for the year to HK$6.2 million. Hong Kong and Macau The performance of the Hong Kong and Macau operation continued to improve. During the year,the Group added a total of 4 new stores in these markets. Sales for the year amounted to HK$83.2 million and operating profit amounted to HK$6.3 million for the year. Included in the operating profit was an amount of compensation received for early surrendering of shop premises of about HK$5 million which had been accounted for in the first half of the year. Licensing Operation The licensing operation continued to provide a steady royalty income stream to the Group. For the year ended 31 March 2011, total royalty income amounted to about HK$22.0 million. Prospects: The Group will continue to expand its network and enhance its product design and development to provide attractive merchandise to our customers. Effort will also be made to strengthen the position of the more fashionable H&T brand and the more up-market Arnold Palmers brand and fine tune our product mix to improve margins. The Group’s major markets, Taiwan and South Korea have shown satisfactory performance for the year ended 31 March 2011. With the continuing improvement in the economic conditions in these markets, the Group is optimistic on the prospects of retail markets in these territories. To utilise the Group’s operating leverage in these markets, the Group will further expand its retail network in Taiwan and South Korea to increase their profit contribution. The Group has made steady progress on its development of the Mainland China market with over 130 shops presently. The Group has already set up shops in a number of cities including Beijing,Chengdu, Chongqing, Guangzhou, Shanghai, Shenzhen, Wuhan, Xian and Zhuhai. The Group will continue to expand its retail network in China. The Group has already introduced our fashion brand H&T in China and the Group plans to open more H&T shops to target the rising youth and teenager market. The Group believes that with the expansion in the retail network, the contribution from the Mainland China market will become more significant. The Group’s other markets including Singapore, Malaysia, Hong Kong and Macau have shown encouraging results. The management believes that the momentum can be fostered by continuing its strategies of improving efficiency, careful selection of store locations to avoid sustaining high rental costs and continuing enhancement of merchandise in these markets.

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