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Public company info - Daohe Global Group Limited , 00915.HK

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Daohe Global Group Limited, 00915.HK - Company Profile
Chairman ZHOU Xijian
Share Issued (share) 1,510,000,000
Par Currency U.S. Dollar
Par Value 0.0133
Industry Apparel
Corporate Profile Business Summary: The Group’s principally engaged in the trading and supply chain management services, and operation of online social platforms. Performance for the year: During the year ended 31 December 2019, the Group’s revenue declined by approximately 38.9% to approximately US$65.7 million (2018: approximately US$107.5 million) due to weaker performance by both the trading and supply chain management services business and online social platforms operation Gross profit was approximately US$14.5 million, representing a contraction of approximately 47.5% from approximately US$27.7 million recorded in 2018. The significant decline in gross profit was mainly attributable to the drop in revenue from the two principal business segments as well as a change in the sales mix. Loss for the year narrowed to approximately US$15.5 million (2018: approximately US$84.2 million). Business Review During the year, the Group terminated the money lending business in order to focus its resources on developing its core businesses. Consequently, the Group’s business comprises two operating segments only, namely: (i) trading and supply chain management services; and (ii) the operation of online social platforms. (i) Trading and supply chain management services During the year, shipment value for trading and supply chain management services reached approximately US$146 million, a decline of approximately 21.1% from approximately US$185.0 million in 2018. This was mainly due to a decline in orders from certain Australian and US customers. Shipments to North America dropped by approximately 15.8% to approximately US$85.8 million due to a decline in orders from US customers as the US-China trade dispute escalated. Nevertheless, North America remained the largest market for the Group, accounting for approximately 58.8% of the Group’s total shipment value (2018: approximately 55.1%). Shipments to Europe fell by approximately 14.6% to approximately US$41.0 million, and accounted for approximately 28.1% of the Group’s total shipment value (2018: approximately 25.9%). Shipments grouped under“Others”, comprising mainly shipments to the southern hemisphere represented approximately 13.1% of total shipment value (2018: approximately 19.0%). The decline was mainly due to fewer orders from certain Australian customers The trading and supply chain management services segment recorded revenue of approximately US$35.3 million (2018: approximately US$64.0 million), representing approximately 53.8% of the Group’s total revenue (2018: approximately 59.5%). The significant decline in revenue of approximately 44.7% was mainly due to the weak performance of the trading of merchandise business, which saw revenue drop by approximately US$26.8 million during the year. (ii) Operation of online social platforms During the year, the online social platforms operation generated approximately US$30.3 million in revenue, representing a decline of approximately 30.3% from approximately US$43.5 million recorded in 2018. This was mainly due to a tighter government policy in place and intense competition in the PRC. In August 2018, the Public Information Network Security Supervision Branch of the Public Security Bureau of Shenzhen (深圳市公安局公共信息網絡安全監察分局) implemented a new government policy pursuant to which the identities of all online users have to be verified with valid mobile numbers, and the content of online social platforms including live streaming presented to the public are to abide by monitoring and control measures. As a result, revenue from gamified social and online entertainment business decreased by approximately 56.0% year-on-year to approximately US$17.1 million (2018: approximately US$38.9 million). Such decline was partially offset by the surge in advertising services income and others, which increased by approximately 187% year-on-year to approximately US$13.2 million (2018: approximately US$4.6 million). Prospects: Looking ahead, the upcoming financial year is expected to remain challenging, if not more so than in 2019. Just as the Sino-US trade war took a positive turn with the signing of a phase 1 trade deal in mid-January, the outbreak of the COVID-19, which has since become a pandemic as of March, looks set to seriously dampen global economic growth. As increasing number of nations close their borders, the global supply chain will invariably be affected. The group therefore expect shipment delays in the first half of 2020, resulting in a global manufacturing recession. Customers have also exercised greater caution. With obstacles on the horizon, The group will chart a prudent course that allows us to navigate through the uncertain economic conditions. The group will closely monitor the development of the situation, while also maintaining close contacts with The group’s business partners. With regard to The group’s online social platforms business, The group will look to build on the progress made by the advertising services segment in the coming year. At the same time, in view of the rise of a “stay-at-home economy” resulting from COVID-19, The group will focus on developing new mobile games to alleviate pressures of a restless public. Despite the many challenges to come, The group will remain vigilant and look forward to making every effort to prepare for a turnaround. In bolstering all facets of operation and seizing opportunities through the guidance of The group’s experienced management team, The group will pave the way to long-term growth.

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