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Public company info - Litu Holdings Limited , 01008.HK
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Litu Holdings Limited, 01008.HK - Company Profile
Chairman Chen Xiao Liang
Share Issued (share) 1,568,000,000
Par Currency Hong Kong Dollar
Par Value 0.005
Industry Printing, Publishing & Packaging
Corporate Profile Business Summary: The principal activities of the Group are engaged in provision of the printing of cigarette package, manufacturing of laminated papers, manufacturing and sales of radio frequency identification (“RFID”) products, printing of packages and decoration matters, research and development on printing technology, wholesale, import and export of the packaging products and other related services. Performance for the year: For the year ended 31 December 2019, the Company achieved revenue of approximately HK$1,495.8 million with profit attributable to owners amounting to approximately HK$175.9 million and basic earnings per share of approximately HK11 cents. Business Review： For the year ended 31 December 2019, the Company achieved revenue of approximately HK$1,495.8 million with profit attributable to owners amounting to approximately HK$175.9 million and basic earnings per share of approximately HK11 cents. In 2019, global growth recorded its weakest pace since the global financial crisis a decade ago, reflecting common influences across countries. The year was haunted with vengeful lifts on tariffs and painstaking trade talks between US and China, the world’s two biggest economies. Trade conflicts and associated uncertainty has taken a brief break in December after phase one of the trade deal was agreed and central banks racing for reversal of monetary policy back to quantitative easing. Despite the trade war and other economic headwinds, China managed to meet the growth rate of 6.1% in the year of 2019. Meanwhile, signs of economic challenge became more visible in term of falling profit in manufacturing sector and over gearing in finance sector. It was also comparatively a quiet year of major economic reforms by Chinese government except for the cut on value-added tax (VAT) rates and increased the scope of VAT deductions in order to boost consumption and stimulate economy. After years of destocking, the production and sales of China cigarette industry showed exciting exuberance in the first quarter with steady cool-off for the remaining months, resulting in a low single-digit annual growth in quantity. This was consistent with China National Tobacco Corporation’s strategy to balance between reasonable sustainable growth, tight balance and quantity control. On the other hand, the industry has recorded a historic high tax contribution to the government. During the year, the industry in general was marked with enhancement in product mix into high tier product and rapidly growing importance of cigarette of various size, length and features. Printing and Manufacturing of Cigarette Package and Related Materials The Group’s cigarette package business has recorded a restorative growth during the year mainly in terms of business volume from the conventional cigarette package direct customers. The Company has proved its ability to outlive the continuous price pressure brought by mandatory tendering system and achieved improved profitability across all product tiers with simultaneous volume increase. The strategic vertical integration into package materials manufacturing has successfully helped lower the core costs within the supply chain which not only enhanced the Company’s position in the tendering process on one hand but also reached into the business opportunities and markets untouched before on the other. Manufacturing of Laminated Papers The short-term decrease in business volume with major local customer has dampened the profitability in this segment. Sales of RFID products During the year, the profitability of RFID business has suffered due to the shake-up of a major foreign customer and the new retail project relating to unmanned stores and online shopping has not progressed at an expected pace. The Group’s maneuver into replacement geographical markets has yet to yield better returns. Prospects: China has suffered deep economic damage from the coronavirus pandemic. According to figures recently released by the National Bureau of Statistics (NBS), retail sales of consumer goods dropped 20.5% year on year in January and February. Online sales of physical consumer goods increased 3%, accounting for about a fifth of overall retail sales. Industrial production fell 13.5%, while fixed-asset investment fell 24.5% in January-February, compared with 2019. The contraction in January and February data implies negative first quarter GDP growth. Analysts expect the government’s 6% GDP growth target in 2020 be revised down significantly given domestic economic disruptions and the risk of global recession. The National Bureau of Statistics also indicated that urban unemployment rate in February jumped to 6.2%, the highest since the official records were published. The Chinese Government’s stern urge for maintaining employment in addition to commitment to President Xi’s 2020 socioeconomic goal is expected to pervade various restorative measures on the financial sector, fiscal policy, businesses capital expenditure and consumer spending for the rest of the year. After an extended Lunar New Year holiday and the gradual release of lockdowns in various China major cities after taming of epidemic, the Company’s various major manufacturing facilities in China, to a large extent, have resumed business since mid-February gradually. The most affected Hubei facilities have also become up and running again in midMarch. Though the Group’s business in the first quarter of 2020 was inevitably affected, it is expected that the Group will undergo a satisfactory catchup in the second quarter from the conventional cigarette package market to cover up the lag in the first quarter. Amid the double challenge from pandemic and trade war, the Group will keep striving for widening and deepening the existing conventional cigarette direct market by expanding its facilities in eastern and southern China for boutique package printing which has been on rapid growth in cigarette package market while also extrapolating these facilities into the other non-cigarette package arena. It is the Group’s corporate mission to continue to explore ways to improve its financial performance, to equip the Group with growth momentum, to diversify its operations internationally into new and more profitable businesses and to broaden the sources of revenue within acceptable risk level. Hence, the Company does not rule out the possibility of investing in or diversifying into other profitable business as long as it is in the interests of the Company and its shareholders as a whole. Looking ahead, the Group will continue to seek investment and business opportunities with a view to achieving a sustainable growth, increasing profitability and ultimately maximising the return to the shareholders of the Company.

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