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Public company info - Prosperous Industrial (Holdings) Limited , 01731.HK

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Prosperous Industrial (Holdings) Limited, 01731.HK - Company Profile
Chairman Herman Yeung Shu Kin
Share Issued (share) 1,120,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Accessories & Leather Goods
Corporate Profile Business Summary: The Group is principally involved in the manufacturing and sale of sport bags, handbags and luggage bags. Performance for the year: Total revenue for the Year remained stable at approximately US$223.2 million, representing a slight increase of approximately US$1.4 million or 0.6% from approximately US$221.8 million as recorded in 2018..Loss attributable to Shareholders for the Year amounted to US$0.6 million, as compared to profit of approximately US$7.4 million for 2018. Loss per share for the year amounted to 0.05 US cent, as compared to earnings per share of 0.76 US cent for 2018. Business Review The Group is a leading manufacturer that designs, develops and manufactures recreational bags and packs, mainly backpacks, it also provides quality supply chain management services for renowned multinational sports and lifestyle brands. During the year ended 31 December 2019 (the “Year”), the Group faced a challenging business environment as global trade tension escalated, slowing down the world trade growth. The global economy recorded its lowest growth of the decade at 2.3% for the Year, according to the World Economic Situation and Prospects 2020 of the United Nations. Increasing production costs together with the impacts under the USA-China trade war (the “Trade War”) caused significant operating pressure to the manufacturers in the PRC. The Group’s customers have been cautious in placing orders with the Group’s PRC production bases, at the same time requesting for more production capacity from the Group’s Vietnam and Cambodia production bases. The management of the Company, having reviewed the Group’s multi-regional manufacturing platform, decided to reallocate the Group’s production capacity by scaling down the operation in the PRC production bases and expanding its Vietnam and Cambodia production bases (the “Reallocation”). During the Year, the Group ceased the operation of three production plants in the PRC, while expanding Vietnam production base with additional webbing department, and ramping up the production capacity in Cambodia with more production lines. By the end of 2019, the Cambodia production base housed 68 production lines, up from 48 at the end of 2018, partially compensating the loss of capacity in the PRC. The Reallocation inevitably affected the Group’s financial performance in the short-term, however, the Group believes such moves should bring cost benefits to the Group and foster its relationship with customers in the long run. Prospects: In addition to the uncertainties caused by the Trade War, the recent outbreak of novel coronavirus pandemic poses greater challenges to the global economy. While all of the Group’s production plants are operating at full capacity up to date of this announcement, it is noted that some of the Group’s customers have temporarily closed down their physical stores in certain countries amid the novel coronavirus pandemic. The suspension of retail business, together with the consumer sentiment being affected by the coronavirus, are expected to have a negative impact on the upper stream manufacturing industry, and may eventually affect the Group’s performance in 2020. However, the Group is not able to estimate the financial effect at the date of this announcement. The Group will continue to monitor the risks and uncertainties in connection with the epidemic and work closely with its suppliers and customers to mitigate the adverse impact arising therefrom. Over the last decade, the Group has been successfully diversifying risks by expanding its production platform to Vietnam and Cambodia. Looking ahead, the Group will continue to leverage through its multi-regional manufacturing platform to enjoy preferential import tariffs and international trading policy benefits, as well as to achieve a sustainable business growth and returns for the shareholders of the Company (the “Shareholders”).

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