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Public company info - Casablanca Group Ltd. , 02223.HK
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Casablanca Group Ltd., 02223.HK - Company Profile
Chairman Cheng Sze Kin
Share Issued (share) 258,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Textile & Apparels
Corporate Profile Business Summary: The principal activities of the Group is manufacture and trading of home textile products and trading of home accessories and furniture. Performance for the year: For the Year, the Group recorded revenue of HK$378.9 million (2018: HK$337.6 million), representing an increase of 12.2%. Gross profit of HK$228.8 million for 2019 increased by 7.2% as compared to HK$213.3 million for 2018. The gross profit margin for 2019 was 60.4% which was lower than 63.2% for 2018. Profit attributable to owners of the Company for 2019 was HK$18.5 million, representing an increase of 136.0% when compared to HK$7.8 million for 2018. Business Review During the Review Period, the Group consistently adhered to the principle of maintaining profitability while striving for better results, and prudently formulated plans for broadening revenue streams and developing new products for its business. For the year ended 31 December 2019, the Group’s total revenue was HK$378.9 million, representing an increase of 12.2% as compared with HK$337.6 million in the corresponding period of 2018. The profit attributable to owners of the Company was HK$18.5 million, a surge of 136.0% as compared with HK$7.8 million in the corresponding period of 2018, which was mainly attributable to: (1) the increase in total sales; and (2) no share-based payment expenses. Since the publication of the interim results for the six months ended 30 June 2019, there had been no material changes in the Group’s operational and segmental information. Comprehensive Enhancement of Sales Channels The income from self-operated retail sales continued to be the Group’s main source of revenue. The ongoing restructuring of the development of the Group’s offline points of sales (“POS”) network in recent years has almost been completed. The number of POS in Hong Kong, Macau and Mainland China remained substantially stable. As at 31 December 2019, the Group had a total of 229 POS (31 December 2018: 224), among which 125 were self-operated POS and 104 were distributor-operated POS, covering a total of 65 cities in the Greater China Region. Regarding the self-operated business in Mainland China, the Group closed down some of the non-profitable POS during the year. The Group adopted the “cross-sector alliance” strategy in Mainland China to share cross-sector membership resources with enterprises from industries engaging in wedding dress, beauty, fitness centers and interior design-related activities, through which it has actively expanded the sales channels for corporate gifts, and has achieved satisfactory results as expected. Regarding the Hong Kong market, the Group’s department store concession counter business was affected to a certain extent by the interior renovation of several department stores during the Year and the social incidents in the second half of the year. In order to reduce the reliance on retail income, the Group has continued its active expansion in the commercial-customer market during the Review Period. Apart from receiving purchase orders from the Hong Kong government, the Group offered items to various commercial customers for their point redemption loyalty schemes, including personal care chain stores, food chain stores, personal care product brands, telecommunications network providers, credit card centres of banks, infant and healthy food brands and electrical appliances brands. During the Review Period, the revenue contributed by the online sales business in Mainland China as well as Hong Kong increased significantly, which is mainly attributable to the measures taken for broadening the sources of income and improving cost control. These measures included the adoption of wholly-owned direct sales management for online sales business, streamlining manpower, strategic promotional activities and increasing the proportion of products with higher gross margin. In addition to contribution to sales revenue, the official eShop in Hong Kong was also positioned as one of the channels for building up the Group’s brand image. Moreover, the Group sold its products through various renowned retail sales websites for consumer goods in Hong Kong, attaining a satisfactory sales performance. In 2019, the Group’s revenue from the export business recorded substantial growth. During the Review Period, apart from export orders from original equipment manufacturers (OEM), the Group also sold products under its own brands on a wholesale basis to overseas markets, such as Taiwan and Canada, so as to provide its branded products with a greater reach of overseas consumers, thereby enhancing the brand recognition abroad. By actively participating in largescale industry exhibitions in Hong Kong and Mainland China, the Group has also introduced its brands to procurement personnel from all over the world, which was considered to be a great foundation for future cooperation. Enhanced Product Mix The Group adhered to the core principle of “Contemporary, Innovative and Functional” for its product design with a view to providing the market with well-designed quality bedding products with health functions and further strengthening its image as a “Healthy Sleeping Expert”. In the first quarter of 2019, it launched the revolutionary Sleeptech Pillow Series (科技枕頭系列). The series includes a total of three products featuring various technological fabrics and quality latex rubber imported from Thailand, namely, the Universe ThermoculesTM Pillow (恆溫宇宙枕), the Auto-Sanitised Protect Pillow (納米淨化枕) and the Magnetic Stress-Relief Pillow (零壓磁療枕). All of these new products have received a highly encouraging response from the market. In respect of product planning for the Mainland China market, the Group has enhanced its presence in high-end markets by increasing the sales proportion of imported products during the Review Period. In addition, the Group has added more duvet items in the series of “warmthpreserving system” products, including the introduction of premium duvets produced from quality materials and down quilts directly imported from Eastern Europe, in order to offer consumers with an even wider range of duvet product options. During the Year, the Group introduced new licensed products, including Coca-Cola, the world renowned beverage brand, “BT21” and “Kakao Friends”, famous trendy cartoon characters from Korea, and “Chibi Maruko-chan”, a well-known Japanese cartoon character, providing consumers with more diversified cartoon product offerings. Apart from bedding products, the Group also designed and launched various travelling products for certain authorised cartoon characters and collaborated with a hotel in Hong Kong to launch cartoon-themed rooms, with highly positive effects in terms of promoting the Group’s brand image. In respect of the “Healthy Lifestyle Store” business, the Group continued to provide one-stop shopping experiences for customers seeking bedding and customised furniture products with the goal of “Full House Output (全屋輸出)”. During the first half of 2019, the Group participated in a renowned furniture exhibition organised by the interior design industry in Guangdong Province, which not only enhanced recognition of its “Healthy Lifestyle Store” business in the industry, but also attracted interior designers to engage in in-depth cooperation, thus further enhancing its brand position. Optimised Marketing Strategies During the Review Period, apart from the application of traditional promotion channels, the Group has also actively promoted its brands through online promotion channels such as Facebook, Instagram and WeChat, to enhance its interaction with target consumer groups. At the same time it has increased the broadcast frequency of the promotional video clips featuring various artists, thereby attracting more young consumers to become more interested in the Group’s brands. In December 2019, the Group held a grand opening event of a concession counter with its brandnew image at one of the key department stores in Hong Kong and, for the first time, invited a young pop group to be the guest performer which aroused the attention of a large number of young consumers. In response to the theme of “Global Tour” on that day, various quality products from around the world were exhibited in order to promote the Group’s vision of continuous innovation and commitment to create a comfortable living environment for consumers. The Group has always placed great emphasis on contributing to society and supporting charitable events. During the Review Period, the Group collaborated with the Crossroads Foundation, a nonprofit organisation in Hong Kong, and launched the first “Bedding Products Recycling Scheme (床品回收計劃)” in Hong Kong to encourage consumers to donate used bedding products that are in good condition to people in need. During the Year, the Group also proactively supported the environmental activities organised by charitable institutions, including the sponsorship of “Charity Hike”, a charitable fundraising event organised by the Green Sense, the donation of proceeds from products to the Society for the Prevention of Cruelty to Animals, as well as the participation and donation of “Yan Chai’s Care of Elderly (仁濟安老送關懷)” and “Yan Chai Charity Walk 2019”. All of the above measures have positive effects on the Group’s image. Prospects: With the signing of the Phase I Trade Deal between China and the US in January 2020, the SinoUS trade conflict has temporarily de-escalated. However, the outbreak of COVID-19 during the same month has resulted in a sharp decrease of economic activities in various cities across Mainland China. The manufacturing industrial chain and the consumption market were among the worst hit, which looks set to adversely affect the development of the Chinese economy in the first half of 2020. With regard to the Hong Kong retail sector, after the social incidents, coupled with the outbreak of COVID-19, people avoided going to public places for the time being. It is expected that the Hong Kong economy will remain under pressure with the sluggish consumer and retail spending in the market. During this period of operational difficulties for retail business in both Mainland China and Hong Kong, the Group will actively promote innovative bedding products with health enhancing functions to demonstrate the superiority of its brands in the market. At the same time it will consistently work on the development of online sales channels, access commercial customers and build its export business with a view to overcoming the impact of the expected contraction of retail business on the Group’s revenue. Expand Sales Channels In order to minimise the impact of changes in the operating environment of individual markets on revenue, the Group will devote greater resources to expand its export business in 2020. In addition to actively seeking export orders for OEM, the Group will deepen the cooperation with existing overseas customers to expand the overseas distribution business of its branded products. The Group anticipates that the export business will realise growth in 2020 and beyond. The Group will accelerate the development of the online sales business. Towards that end, it will strengthen the cooperation with online shopping platforms in Mainland China, and intends to cooperate with famous internet celebrities to promote the concept of its “CASA-V” brand and conduct direct sales of its hero products. With regard to the Hong Kong market, the Group plans to enrich the exclusive product offering on its official eShop in Hong Kong with periodic launches of “flash sales” events and themed promotion campaigns. It is anticipated that the optimisation of the back-office system of the official eShop in Hong Kong will be completed in the second quarter of 2020, which will then improve its data analytics capability. The delivery efficiency and logistics arrangement of the warehouse will also be upgraded simultaneously with a view to gaining more market share in online sales of bedding products in Hong Kong. The Group will pursue opportunities to sell products to commercial customers in Hong Kong and Mainland China. In respect of the Mainland China market, it will continue to adopt the strategy of “cross-sector alliance” to share cross-sector membership resources. It will provide exclusive products to banks as their point redemption gifts, at the same time strenuously expanding the sales channels for corporate gifts. In addition, greater efforts will be devoted to expand the businesses with hotel customers in Mainland China, including the provision of the relevant textile and furniture products for hotel guest rooms, restaurants and lounges and bars. For the Hong Kong market, the Group will actively explore diversified cooperation opportunities with its existing commercial customers, including the launch of free gifts or redemption schemes in various forms, rebates for online purchases, etc. Moreover, it will proactively establish cooperation with new customers from industries such as personal care product brands, cosmetic brands, supermarkets, chain food stores and major home appliances brands. Enhance Product Mix To keep pace with the consumption upgrade in Mainland China in recent years, the Group has increased the sales proportion of imported goods in Mainland China and developed more luxury bedding products with simple design with a view to increasing its penetration in the high-end market. With the consumers’ increasing concern about a healthy lifestyle and environmental protection, the Group will step up its efforts in the research and development of more products with 5A features. In respect of the Hong Kong market, the Group will carry out research and development of products that embody green concepts and health enhancing functions. At the beginning of 2020, it launched the Royal Dragonfly Quilt（御蜓暖芯被）that is suitable for all seasons and has effectively promoted the concept of green living. In order to offer more choices to consumers, the Group will also seek collaboration with illustrators in Hong Kong so as to support local original creative culture as well as increase the market share of the Group’s brands. The Group has placed strong emphasis on the development of the “Healthy Lifestyle Store” business and successfully invited business personnel with extensive experience in the furniture industry to join the relevant management team at the end of 2019. The “Healthy Lifestyle Store” business will focus mainly on attracting potential distributors. Catering for the demand of the mainstream market, the Group will develop more high-quality furniture products with affordable prices, while enhancing its competitiveness by optimising the furniture ordering process and strengthening its after-sales services. Strengthen Brand Leadership In light of the frequent environmental pollution and epidemic outbreak in recent years, the Group will actively promote its products under “CASA-V” brand with 5A features to improve the sleeping environment of its customers. It will focus on the marketing of the “CASA-V” brand and the healthy sleeping environment concept. In addition, it will step up its promotional efforts in e-commerce platforms, and increase the use of short videos featuring popular artists or internet celebrities to promote the Group’s brand philosophy and products in tandem with the market trends. At the beginning of 2020, the Group’s official eShop in Hong Kong collaborated with a Hong Kong television channel targeting the youth market for the first time. Customers may enjoy the paid services of the television channel free-of-charge for three months upon spending a certain amount in the Group‘s official eShop, while members of this television channel may enjoy year-round shopping discounts in the Group’s official eShop in Hong Kong. As a new initiative of the Group, this collaboration with the television channel was believed to be effective in nurturing young members for both parties and increasing their spending. Striving to incorporate “Contemporary, Innovative and Functional” features in all of its products, the Group will endeavour to provide consumers with quality bedding products that are fashionably designed and reasonably priced, and home accessories that are trendy yet practical. The Group will also continue to broaden revenue streams and enhance its brand value to bring satisfactory returns to shareholders over the long term.

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