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Public company info - Justin Allen Holdings Limited , 01425.HK
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Justin Allen Holdings Limited, 01425.HK - Company Profile
Chairman Tam Kwok Pui
Share Issued (share) 1,250,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Apparel
Corporate Profile Business Summary: The Group is principally engaged in the manufacturing and sales of sleepwear products, loungewear product, greige fabric and processing services. Performance for the year: For the year ended 31 December 2020, the revenue of the Group recorded approximately HK$857.43 million, representing an increment of approximately 22.3% as compared with the same period of last year. The profit attributable to the owners of the Company increased by approximately 32.9% from approximately HK$79.49 million (excluding listing expenses) for the year ended 31 December 2019 to approximately HK$105.61 million for the year ended 31 December 2020. Business review The Group primarily engages in the business of OEM garment manufacturing, specialising in the production of sleepwear and loungewear products. The Group have a vertically integrated business operation, which is comprised of (1) raw materials sourcing and greige fabric production, (2) raw materials and fabric development, (3) garment design, (4) customer consultation on product design and fabric use, (5) conducting key garment production processes with the Group’s production facilities, and (6) carrying out quality control at various key production stages and on finished garment products. As such, in addition to the individual services listed above, the Group offers the Group’s customers a one-stop solution, from apparel inception to finalised production and shipment. The Group owns production facilities in each of Henan Province, the People’s Republic of China (“PRC”) and Phnom Penh, Cambodia. In Vietnam, the Group at this stage operates production via sub-contractors with long-term relationship. In early 2020, the outbreak of the 2019 coronavirus (“COVID-19”) epidemic seriously affected the global economy. According to the data of Organization for Economic Cooperation and Development (OECD), in 2020, the gross domestic product (GDP) declined by approximately 3.3% in the G20 area. COVID-19 has brought upon unprecedented disruptions to businesses worldwide with no exception to the Group, the Group’s customers and the Group’s suppliers alike. COVID-19 has also changed the way of how the Group live and work globally. Working from home has become a new norm, plus minimizing travelling outside. On the other hand, this also brought an opportunity to the Group, which increased the demand of loungewear and sleepwear products. For the year ended 31 December 2020, the sales volume of sleepwear and loungewear products of the Group was approximately 21.37 million pieces, which recorded an increment of approximately 14.2% as compared to the sales volume for the year ended 31 December 2019. As stated in the prospectus of the Company dated 19 November 2019 (the “Prospectus”), part of the use of proceeds raised by the Group would be used to expand the Group’s production capacity vertically and horizontally, including the expansion of the Group’s factory in Henan, PRC and also establish production base in Vietnam. During 2020, the Group already acquired certain production machineries and equipment for the Group’s Henan factory, and was also under in-depth discussion about the plan of establishing a production base in Vietnam. The management of the Group will visit Vietnam and finalize the planning with related parties after the epidemic once travel restrictions are lifted. For the year ended 31 December 2020, the Board declared a final dividend of HK$0.036 per share, representing a dividend ratio of approximately 42.6% out of the profit attributable to the owners of the Company. As stated above, the COVID-19 epidemic slowed down the expansion of the Group’s production facilities, and the Group has surplus capital being unutilized. In view of this, the Board decided to declare dividend at a relatively high dividend ratio to shareholders of the Company for sharing the good results with them and as an appreciation for their support. Prospects: As the COVID-19 epidemic swept the world in 2020, the global economy has been hit hard. It is also expected that in the coming years it will bring different side effects and make the operating environment in manufacturing industry and international supply chain more challenging, such as the rise of raw material costs and tight shipment schedule. Also more restrictions are expected to be imposed on the export sales to United States, for example, stricter restrictions on the source of raw materials may be imposed. These may be challenges for the Group to maintain a constant gross profit level. On the other hand, benefiting from the proactive implementation of business strategy, the Group is able to cope with these challenges and capture post-epidemic opportunities available in the market. Other than the plan in Vietnam, the Group is also exploring the possibilities to set up production base or engage subcontractors in other continents such as Africa and Central America in order to diversify the social, economic and political risks. It may also allow us to provide more flexible reactions to deal with different scenarios arising from the changing market situations. The Group is also working hard to explore new customers and develop new product pipeline to maintain stable growth in revenue. At the same time, the management of the Group is looking for different ways to shorten the implementation time of upgrading and addition of production facilities and also establishing the production base in Vietnam, in order to get prepared for the opportunities available when the economic and social environment recovers. Under the rapid changing business environment, the Group will continue to manage various operational and financial risks and take appropriate measures to minimise and combat these risks. Leveraging its solid foundation and committed management team, the Group has full confidence in overcoming all the difficulties ahead of us, get well prepared for capturing the future opportunities and providing fruitful return to the Group and all shareholders.

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