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Public company info - CSMall Group Limited , 01815.HK

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CSMall Group Limited, 01815.HK - Company Profile
Chairman CHEN He
Share Issued (share) 1,238,000,000
Par Currency U.S. Dollar
Par Value 1.0E-4
Industry Watch & Jewellery
Corporate Profile Business Summary: The principal activity of the Company is investment holding and the Group is principally engaged in the design and sales of gold, silver and jewellery products in Hong Kong and the PRC (“New Jewellery Retail”). Performance for the year: The revenue of the Group for the year ended 31 December 2020 was approximately RMB347.8 million (2019: RMB1,249.0 million), representing a significant decrease of approximately 72.2% from that of 2019, For the year ended 31 December 2020, the group recorded a loss attributable to owners of the Company of approximately RMB35.6 million (2019: RMB5.1 million). Business Review During the year, as the outbreak of the 2019 novel coronavirus pneumonia (“COVID-19”) caused the overall economic downturn and dampened the overall consumer sentiment which became was sluggish and conservative. During the pandemic, consumer spending was mainly on fresh food, daily necessities and protective equipment, while the consumption of gold and jewellery, which are non-essential products for daily life, was greatly affected and showed a cliff-like decline as compared with the previous years. The epidemic prevention and control measures caused the stagnation or delay of major operating activities including retail business, store sales, market development and supply chains. Meanwhile, the significant drop in market demand for jewellery under the influence of the macro-environment of intensified Sino-US trade disputes has led to a decline in the Group’s sales through online sales channels and offline retail and service network. Amidst such adverse environment, the Group endeavoured to overcome the impact of the epidemic and proactively responded to risks and challenges. After excluding all one-off losses, the group were still able to remain slightly profitable, demonstrating the group’s strong resilience to risks. In light of severe challenges, the Group tried its best to implement a number of short-term countermeasures, including slowing down the plan on expansion of offline stores, adjusting the strategy of offline business outlets, closing 62 stores, and carefully choosing sites for opening another 39 new stores. The acquisition of a land use right for Baiyin Town, originally planned to be developed into a tourist attraction in Huzhou, was also terminated due to the impact of COVID-19. In respect of daily operations, the Group has also cut down its operating expenses and reduced staff to improve efficiency, and if the one-off and non-cash share-based payment expenses of approximately RMB63.6 million for the year ended 31 December 2019 was excluded, the recurring administrative expenses for the year would have decreased by approximately 28.1% as compared with 2019. In recent years, the Group explored and considered suitable business opportunities inside and outside the jewellery industry from time to time, so that the Group could leverage its competitive advantages in the internet-based new retail field to diversify its businesses. At the beginning of 2020, as China’s production capacity of anti-epidemic supplies gradually rose and the export of anti-epidemic supplies became a new trend, many enterprises flexibly utilized market resources to participate in overseas epidemic control. At the beginning of the year, the Group cooperated with a pharmaceutical company in China for the pilot operation of the export and distribution of COVID-19 diagnostic kits. Later, due to various factors including the turbulent international situation, the export of the diagnostic kits was blocked and the products were scrapped upon expiry. The Group responded quickly to the significant impact of the epidemic on offline consumption. In 2020, the group focused on increasing efforts on online sales. The proportion of online sales among the overall sales has increased significantly to approximately 77.0% from approximately 64.2% in 2019. As the epidemic promoted the rapid development of e-commerce live streaming, the Group placed an emphasis on digital marketing and shifted the focus of its operations from self-operated platforms to third-party platforms. Relying on the strong traffic of third-party platforms, the Group operated through new marketing models including short video marketing, e-commerce live streaming and online celebrities (KOL). With the rapid development of short videos and e-commerce live streaming and the continuously rising spending power of young consumers, the Group’s fashion ear accessory brand, SISI, was also actively tapping into this young consumer market. In the year, the Group focused on the low-price and high-margin fashion jewellery markets with increased efforts in product design and research to keep pace with the evolving market and satisfy the demand of young consumer groups for affordable jewellery products. With the rise of Chinese traditional arts and culture, the cultural and creative industries are gradually developing into a new economic sector with enormous potential in China, with related products springing up like mushrooms and well-received by consumers. The group’s silver products are carefully processed using traditional craftsmanship to become fashionable silver jewellery and healthy silverware that meets contemporary aesthetics. The group also increased the group’s investment in design and research to expand the group’s presence in the market Prospects: China has entered a period of normalized epidemic prevention and control, and various industries are slowly recovering and self-adjusting. The epidemic in 2020 has had a negative impact on the gold and silver jewellery industry in the short term, but may also bring more opportunities to innovative enterprises like us in the medium and long term. While getting out of the current predicament, the group have also prepared ourselves well for future market changes. The Group will seize the trend and accelerate investment in new marketing modes such as short videos and e-commerce live streaming. To seize the opportunities brought by the reshuffle of the traditional jewellery industry, while expanding the offline retail network in the future, the Group will also give full play to the strengths of the innovative model of new jewellery retail. Looking forward to 2021, the government work report of the National People’s Congress and the Chinese Political Consultative Conference stated that the main expected goal of China’s economic and social development in 2021 is to increase the GDP by more than 6%. The Group is confident in the economic recovery this year. With the gradual recovery of the economy, China’s gold, silver and jewellery consumption will gradually pick up. With the advantages of new retail models and comprehensive online and offline channels, the operating performance of CSMall will follow the high-quality development of Chinese economy. The business opportunities arising from the internet traffic may gradually disappear after the epidemic, and the golden age of the development of the mobile internet dominated by the consumer internet has also passed. Correspondingly, the industrial internet represented by new technologies including artificial intelligence and blockchain is gradually rising. The Group has always paid attention to the development of new technologies and industries and closely followed the development to make corresponding planning. The group have taken advantage of its strengths as a leader among internet-based new retail enterprises to build well-developed technologies, systems and capabilities in digitization, big data, artificial intelligence and supply chain. The group utilised new technologies such as artificial intelligence and blockchain to empower the traditional jewellery industry for development towards a technological innovation platform supported by new technologies including artificial intelligence, big data and blockchain, to continuously improve the Company’s sustainable profitability and bring huge returns to its shareholders.

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