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Public company info - Smartac International Holdings Limited , 00395.HK

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Smartac International Holdings Limited, 00395.HK - Company Profile
Chairman YANG Xin Min
Share Issued (share) 5,636,000,000
Par Currency Hong Kong Dollar
Par Value 0.05
Industry E-Commerce & Internet Services
Corporate Profile Business Summary: The Group is principally engaged in (i) software sales and O2O sonsultation services by O2O solutions segment; (ii) electronic payment solutions and services by integrated digital marketing (“IDM”) solutions segment; and (iii) management, operation and market strategy of online shops and e-commerce platforms by E-commerce solutions segment. Performance for the year: The Group recorded a significant revenue increase of 642.9% from approximately RMB25,797,000 for the year ended 31 December 2019 to approximately RMB191,648,000 for the year ended 31 December 2020. In light of vaccine rollouts, control of the COVID-19 pandemic is expected in the future, which in turn will boost consumption sentiment. The management therefore anticipates the global economy will return to a positive trajectory. While the virus will eventually be defeated, one trend that will continue is the shift towards online consumption, an area that the Group has invested considerable resources into developing over the past year. Business Review: The Company is an investment holding company, and its subsidiaries mainly provide (i) O2O commerce, and (ii) electronic payment solutions and related services. (i) O2O commerce segment During the year ended 31 December 2020, the Group integrated the online and offline operations in Hong Kong and the PRC with a view to consolidate its resources and concentrate its efforts to enhance the Group’s capabilities as an e-commerce service provider. The O2O commerce segment is mainly involved in (i) provision of integrated online and offline commerce solutions for licensed brands; (ii) provision of innovative e-tailing solutions for the sales and distribution of branded goods; and (iii) provision of customised supply chain management solutions for enterprises. With regard to the e-tailing solutions business, online retailing has increased in popularity in the wake of social distancing measures implemented since the COVID-19 outbreak. To capitalise on this trend, the Group has been proactively exploring opportunities by way of launching new products, optimizing its existing product offerings and expanding its clientele by cooperating with leading brands from around the world, along with major e-commerce platforms such as T-mall and JD.com and suppliers. Moreover, the Group has built an experienced e-commerce team in the PRC in early 2020, which is tasked with setting up retail outlets and conducting promotions on the internet. Worth noting as well is the Group’s signing of franchise agreements with the international luxury lifestyle brand Stella McCartney in March 2020 to sell its fashion apparel and accessories in the PRC. Furthermore, the Group entered into a distribution agreement with Nutronic Healthcare Company Limited and Nutronic Biomedical Group Limited (wholly-owned subsidiaries of Huakang Biomedical Holdings Company Limited (HKEX stock code: 8622)) in September 2020 for the exclusive right to sell, market and distribute fertilityenhancing supplements under the Nutronic brands. On the brick-and-mortar front, the softening of the rental market and decline in staff costs, as well as travel restrictions that have driven local consumption, have combined to create the perfect opportunity for the Group to enter the Hong Kong retail market. The Group has thus established physical presence in the city since October 2020 by introducing two international beauty brands, namely, Grace Cole and Mimi Luzon. Four pop-up stores and one concept store have been opened in popular shopping malls and department stores respectively. As a leading British brand renowned for its fragrant bath and body products, Grace Cole was well received not only in Hong Kong, but also in Southeast Asia. As for Mimi Luzon, a top skincare brand from Israel, although the products received encouraging response, the concept store was intermittently closed as part of measures to halt the spread of the COVID-19 virus. The Group also actively explored new business opportunities, including from the Hong Kong Government’s Distance Business Programme under the Anti-epidemic Fund. In addition to providing online and offline WeChat Pay services for merchants under the electronic payment solutions segment, the Group also assisted them in expanding their online and offline presence through setting up of WeChat official accounts, WeChat Mall(s) and WeChat mini programs, which enhance the reach and visibility of the Group’s O2O commerce business among the population. Segment revenue for the year ended 31 December 2020 soared by 860.3% to approximately RMB188,916,000 (2019: approximately RMB19,672,000), representing approximately 98.6% of the Group’s total revenue. The upsurge was mainly due to the addition of supply chain solutions business and e-tailing solutions business when online consumption began to accelerate amid the COVID-19 outbreak. (ii) Electronic payment solutions segment The electronic payment solutions segment provides mobile payment services in Hong Kong through a subsidiary of the Company, Haihai, to merchants with payment access, settlement and marketing functions offered by WeChat Pay. Haihai has been working with merchants principally engaged in retailing, including medical and pharmaceutical services, cosmetics and beauty, jewelry, apparel, food and beverage, etc., so as to offer customers a more convenient and fast mobile payment option when making both online and offline purchases. Segment revenue for the year ended 31 December 2020 slipped by 43.0% to approximately RMB1,950,000 (2019: approximately RMB3,424,000). The decline was mainly due to the drop in WeChat Pay transaction value as a result of significantly fewer tourists and reduced local spending during the pandemic. Prospects: In light of vaccine rollouts, control of the COVID-19 pandemic is expected in the future, which in turn will boost consumption sentiment. The management therefore anticipates the global economy will return to a positive trajectory. While the virus will eventually be defeated, one trend that will continue is the shift towards online consumption, an area that the Group has invested considerable resources into developing over the past year. In terms of product categories, the management has set its sights on health supplements and beauty products, which possess great market potential in the PRC and Hong Kong, especially the former, driven by the public’s heightened concerns over their health since the pandemic. Consequently, the Group will source more brands from Hong Kong and overseas that have been eyeing the vast PRC online market. Leveraging the initial success of Grace Cole in Hong Kong and Southeast Asia, the Group’s e-commerce team has within a short time period, i.e. in January 2021, set up a flagship store for Grace Cole on T-mall, which is a testament to the Group’s effective business strategy of incubating international brands in Hong Kong before making a push into the PRC market. With the maturing e-commerce business, supported by an experienced team of professionals, the management is confident that this business will grow steadily, and the Group will be able to reap its rewards. As regards the WeChat Pay business, the entry restrictions in Hong Kong and the PRC will be lifted once the pandemic is under control, which will lead to a revival of inbound tourists. Looking ahead, the Group aspires to offer integrated online and offline one-stop solutions to a portfolio of high-quality overseas brands, and acquire a group of high-value customers, so as to ultimately create greater value for its shareholders.

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