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Public company info - Evergreen International Holdings Ltd. , 00238.HK
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Evergreen International Holdings Ltd., 00238.HK - Company Profile
Chairman Chan Yuk Ming
Share Issued (share) 949,000,000
Par Currency Hong Kong Dollar
Par Value 0.001
Industry Textile & Apparels
Corporate Profile Business Summary: The Group was principally engaged in the manufacturing and trading of clothing and clothing accessories. Performance for the year: During the year ended 31 December 2018, the Group recorded an aggregate turnover of approximately RMB284,521,000 (2017: RMB335,469,000), representing a decrease of approximately 15.2% compared with that of the previous year. The gross profit of the Group decreased by RMB53,946,000 or 26.1%, from RMB206,805,000 for the year ended 31 December 2017 to RMB152,859,000 for the year ended 31 December 2018. The Group recorded a loss attributable to ordinary equity holders of the Company of RMB111,811,000 for the year ended 31 December 2018 (2017: a loss of RMB138,978,000) and a net loss margin for the year ended 31 December 2018 of 39.3% as compared with a net loss margin of 41.4% for the year ended 31 December 2017. Loss per share of RMB11.8 cents was recorded for the year ended 31 December 2018 (2017: loss per share of RMB14.6 cents). Business Review: Proprietary Brands The Group currently owns two proprietary brands in the menswear market of China catering to consumers with different needs, tastes and consumption patterns. V.E. DELURE offers business formal and casual menswear and accessories targeting affluent and successful men with a brand theme of “love”; while TESTANTIN offers contemporary and chic casual menswear and accessories targeting a younger and more fashion conscious age group with a brand theme of “artistic expression and simplicity”. The Group’s two proprietary brands, V.E. DELURE and TESTANTIN, recorded an overall positive same-store sales growth for the self-operated stores business of 5.68% during the year. In line with its previous years’ business strategies, the Group continued to optimise the retail and sales network based on the demand in different target market segments. The Group has strategically used a mixed business model of opening self-operated stores in high-tier cities and franchised stores by distributors in low-tier cities. Opening self-operated stores enables the Group to have direct contact and interaction with target customers so as to optimise its marketing efforts and to directly instill in the customers the brand image and philosophy of the Group. Engaging distributors to open franchised stores allows the Group to expand its retail network quickly, leverage the profound understanding and experience of the distributors in local markets in which they operated, and penetrate into the fragmented menswear market in these cities with lower capital expenditure. In view of the challenging retail environment and weak consumer sentiment, the Group adopted a more prudent approach in business development, strategically adjusted the store opening plan in response to the challenging market conditions and retail environment and consolidated stores which had been operated with low efficiency. As at 31 December 2018, the Group had a total of 103 stores in 22 provinces and autonomous regions, covering 55 cities in China. There were 47 self-operated stores in 15 cities in China. In addition, the total number of distributors of the Group amounted to 56, which operated franchised stores of V.E. DELURE in 40 cities. The number of menswear self-operated stores decreased from 58 as at 31 December 2017 to 47 as at 31 December 2018 as a result of the consolidation of underperforming stores. Franchised stores operated by the distributors of the Group decreased from 93 as at 31 December 2017 to 56 as at 31 December 2018. As at 31 December 2018, the total area of selfoperated stores was approximately 9,974 square meters (2017: 12,147 square meters), representing a decrease of 17.9% compared with that in the previous year. Licensed International brands Apart from the licensed brand business of CARTIER, the Group commenced the new business segment of high-end children’s wear and accessories products in August 2014. As at the date of this announcement, the Group has 1 mono-brand retail store in Mainland China. In addition, to cater for consumer appetite and preference, especially those of the growing number of middle-class couples, the Group has created and launched its new lifestyle concept store, Kissocool. This new concept store served as a one-stop platform offering children’s wear and accessories products from prestigious international brands and created a leisure shopping environment with recreational, entertainment and snack zones for customers. The Group is dedicated to enhancing the ultimate shopping experiences by catering to the desires of each family member under a relaxing shopping environment. This, in turn, can foster a more comprehensive and loyal customer base. The Group believes Kissocool will further strengthen the brand image and attract more brand owners to establish strategic partnerships. The Group has 5 Kissocool concept stores in the Mainland China and Hong Kong as at the date of this announcement. For the year ended 31 December 2018, the Group’s high-end children’s wear and accessories product segment recorded a total revenue of RMB28,101,000 and a net loss of RMB21,162,000. Prospects: In view of the persistent economic restructuring and reform in China, the outlook of retail sector in 2019 still remains uncertain and tough. However, as the Chinese government continues to stimulate domestic consumption to support economic growth, domestic consumption will remain as the core contributor to GDP growth and it is expected that the retail industry will achieve healthy and sustainable growth in the long run. Despite the challenging business environment in the menswear industry, the Group will continue to invest resources in refining market strategy for brand building, reinforcing customer loyalty by organising marketing events and enhancing product quality and design to increase the competitiveness of its products and brands. Furthermore, the Group will continue to enhance its retail network prudently to prepare for the long-term development. The Group plans to open approximately 39 new retail stores for menswear business in 2019, of which approximately 19 are self-operated stores with the remaining 20 being franchised stores. On the other hand, the Group will continue to consolidate inefficient stores in order to improve the operational efficiency. The Group’s effort on inventory management in 2018 brought the stock level down from RMB160.7 million as at 31 December 2017 to RMB112.5 million as at 31 December 2018. The Group will continue to implement a series of measures including outlets, temporary promotional sales fair and online business platform to speed up the process of selling the aged inventories. Given that (i) domestic consumption will remain as the core contributor to GDP growth and (ii) it is expected that there will be continuous increase in domestic household income and the pursuit for high quality products by middle-class income consumers, the Group will continue to adopt a prudent and responsive business strategy to maintain its advantageous position in the high-end menswear market in Mainland China. The Group is confident in steady and healthy development of menswear market in Mainland China, especially that of the mid-end to high-end segments. As at the date of this announcement, the Group has 1 mono-brand retail store and 5 Kissocool in Hong Kong and Mainland China for the children’s wear and accessories products of highend international fashion brands. The Group will adopt a cautiously optimistic view when it discusses with a number of shopping malls operators in Mainland China and extends its retail network in Mainland China in coming future. The Group will continue to look for other new investment opportunities which could be beneficial to its shareholders in the long run.

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