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Public company info - Bestway Global Holding Inc. , 03358.HK
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Bestway Global Holding Inc., 03358.HK - Company Profile
Chairman Zhu Qiang
Share Issued (share) 1,058,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Leisure & Recreation
Corporate Profile Business Summary: The Group is principally engaged in the manufacturing and sales of high quality and leisure products in Europe, North America, People’s Republic of China (the “PRC”) and other global markets. Performance for the year: The revenue of the Group rose by 6.1% from US$934.6 million for the year ended December 31, 2019 to US$991.8 million for the year ended December 31, 2020. With the growth in the revenue and the relatively stable gross profit margin of the Group, the net profit of the Group also increased by 5.0% from US$47.6 million for the year ended December 31, 2019 to US$49.9 million for the year ended December 31, 2020. Business Review In 2020, the Group further consolidated its leading market share in the world. The Group has onethird of the global market share in the inflatable sports leisure products industry, retaining a leading position in market in the subdivided geographical regions all over the world. Brand awareness and market penetration of products of the Group continued to rise in all major regions across the world, which enhanced the cooperation between the Group and its major customers (retailers) and e-commerce operators, and continuously enhanced user loyalty to its products. The Group’s Products During the year under review, the Group’s four core product groups recorded a satisfactory overall performance. In particular, the Group’s main product group, above-ground pools & portable spa demonstrated an outstanding performance with 22.6% growth. Such rapid growth was mainly attributable to the impact of the global outbreak of COVID-19 pandemic, due to which more people had to stay at home for a longer period of time as work-at-home arrangements increased and people refrained from going outdoors and joining gatherings, thereby leading to a significant increase in the market demand for such products. In the long run, the target customers of such products of the Group increased significantly during the global outbreak of COVID-19 pandemic, and the market condition after the global outbreak of COVID-19 pandemic will also be promising. In addition, the global outbreak of COVID-19 pandemic caused a decrease in outdoor activities, and accordingly a decrease in demand for recreation products and sporting products. Although the sales volume of outdoor items of camping products also reduced due to the same reason, the indoor and domestic product series launched by the Group in the past two years received satisfactory market feedback, and showed rapid growth, representing a great growth momentum in the future. The Group’s Geographical Region During the year under review, the Group maintained a positive growth momentum in major geographical regions. In the European market, the largest contributor of the Group’s revenue, the Group maintained a solid growth rate of 8.7% in terms of revenue, which was higher than the market average as a result of the absolute leading position of the Group in the region. Due to the rapid growth of the Group’s subsidiaries in Europe, and the tremendous efforts spent in further differentiating the Group’s sales channels, the Group was able to provide a more refined local service in Europe gradually over the years, which was particularly appealing to and highly favoured in the markets in Germany and France. The brand new portable spa, small- and medium-sized anti-rust frame pools are the best sellers of the Company and the sales of inflatable outdoor play center and stand-up paddle boards maintained significant growth. The Group’s revenue in the North American market demonstrated an increase by 3.7%. The trade dispute between China and the U.S., and the business suspension of some stores in U.S. in the summer due to COVID-19 pandemic affected the Group’s business in North America, but the Group endeavored to offset such negative impact by differentiating product promotion and increasing its market shares. The sales of main product lines of above-ground pools & portable spas demonstrated a solid growth. Meanwhile, the indoor and domestic inflatable products were very popular in the market, and therefore the sales of whole series of camping products recorded a rapid growth of 27.4% in North America. In the AsiaPacific region, in which the impact of COVID-19 pandemic was small, the Group recorded a rapid growth in revenue by 26.2%. In particular, the Mainland China market was the first to show signs of recovery from COVID-19 pandemic, in which the Group achieved a significant growth of 59.4% with the Group’s in-depth and detailed planning on integrated development of e-commerce channel and wholesale markets in the past few years. In order to continuously expand the Group’s global sales presence, the Group has integrated the operation and management of online sales channels, and further enhanced the Group’s promotional capability in respect of online sales. Both the third-party e-commerce platforms and the Company’s own e-commerce platform achieved rapid development in the past year. Product Innovation The Group’s 2021 sales year (for the period from May 1, 2020 to April 30, 2021) began in May 2020. During the 2021 sales year, the Group paid more attention to further expanding on sales channels by differentiating products and improving the promotion of new products to the markets, including: 1) optimizing above-ground pools and portable spa products user experience and focusing on the development of product intelligence; 2) increasing the investment into backyard and indoor products series to cope with the special situation in the market caused by the global outbreak of COVID-19 pandemic; 3) widening the application of new composite materials, such as TOUGH GUARD cloth laminating material and DURAPLUS three-layer clip net used in inflatable domestic products. The Group places high expectations on such products, and is confident that they will become another group of popular products which can lead to considerable sales amount in the next few years; 4) stocking reserve of new products to cope with the possible retaliatory re-bounce of market demand for outdoor leisure products after the global outbreak of COVID-19 pandemic calms down. Once the pandemic becomes under control, the prepared new products will be launched swiftly to increase the market share held by the Company and meet customers’ demand. During the year under review, the Group made continuous investment in product innovation and material R&D, with R&D related costs reaching approximately US$20.0 million, which was approximately 25.0% higher than US$16.0 million of last year. As of December 2020, in China, the U.S. and Europe, 298 patents had been obtained by the Group (among them, 72 patents were obtained during the year under review), and another 134 patent applications had been made, including invention patents and structural design patents. The patents held have strengthened the competitiveness of BESTWAY brand products within the industry. Production Facility The Group operates a vertically integrated business model with the Group’s product production, manufacturing and supply chain completed by ourselves. The Group’s manufacturing sites in operation during the year under review are located in (i) Yancheng, Jiangsu; (ii) Haian, Jiangsu; (iii) Rugao, Jiangsu; (iv) Shanghai; and (v) Tien Giang Province, Vietnam. At present, all manufacturing sites cover a total area of 1,483,848 square meters of land, and 1,187,755 square meters of factories and warehouses are in operation, including 76,382 square meters of factories and warehouses newly constructed in 2020. In addition, 185,525 square meters of factories and warehouses are under construction currently. The capital expenditure of the Group during the year under review was US$58.7 million, which was mainly used for the aforementioned capacity expansion. During the year under review, Phase 1 the Group’s manufacturing site in Vietnam, located in Long Jiang Industrial Park near Ho Chi Minh City, has officially commenced operation since January 2020. Phase 1 of the manufacturing site, which covers 51,240 square meters of land with 35,000 square meters of factory, achieved actual production capacity of about US$30 million in 2020. This production facility mainly produces the air mattresses for the camping products of the Group’s four core product groups. Phase 2 of the manufacturing site, which covers 93,240 square meters of land with 101,525 square meters of factory and warehouse, is expected to commence operation in December 2021. With the improvement of production efficiency of Phase 1 and the official commencement of operation of Phase 2, the manufacturing site of the Company in Vietnam is expected to achieve an annual production capacity of US$200 million after reaching its normal production efficiency. After the expansion of production capacity of the Group’s existing manufacturing sites, and commencement of operation of the newly built manufacturing site in Vietnam, a production capacity of over US$2 billion is expected to be achieved in 2022 sales year (for the period from May 1, 2021 to April 30, 2022), which will be sufficient to enable the Group to fully meet the current rapid growth of sales orders. Prospects: Looking ahead into the following year, the global economy is unstable, the impact of COVID-19 pandemic is expected to continue, and the China-U.S. trade conflict has not been settled yet. The Group will actively respond to the rapid change in the market, and focusing on the rapid growth in sales of backyard and domestic products will bring us another year with significant growth in sales volume. The Group’s 2022 sales year (for the period from May 1, 2021 to April 30, 2022) will be kick-started in May 2021, and the Group remain optimistic about the continuous and rapid growth in sales revenue, and have made sufficient preparations in product development, capacity expansion, logistic support and other aspects. In terms of cost, the Group will further optimize the structure of raw material suppliers and effectively control the cost of raw materials procurement. The Group will further optimize the Group’s administrative expenses through economies of scales. In terms of foreign exchange, the Group have exercised strict internal control on implementing the foreign exchange (FOREX) hedging policies and tools and will continue to maintain such practice. In 2021, the Group’s R&D efforts on both in-house developed materials and innovative products will remain in full force. On materials, the Group will continue to upgrade new materials to be used in air mattresses, e.g. DURAPLUS three-layer clip net and TOUGH GUARD cloth laminating material; and further expand the coverage of exclusive design patents of the anti-erosion protection device for stainless steel used for the frame of above-ground pools. On products invention, the Group will continue to replenish and upgrade over 20% of new product offerings each year. In particular, the Group’s newly launched large outdoor inflatable play center for backyard and new LED SPA are expected to have the most outstanding performance. Meanwhile, the Group’s smart phone APP-controlled indoor air mattresses are expected to attract significant consumer demand as an alternative furniture. In 2021, the Group will continue to increase offline marketing channel penetration in mature markets such as Europe and North America. In light of the global outbreak of COVID-19 pandemic, the Group’s marketing efforts on e-commerce and social media are becoming more important, and the marketing departments set up across the world will continue to promote the Group’s brand and products on social media platforms around the globe. In addition, the Group have also continued to expand the collaboration with global e-commerce operators, and will further strengthen the Group’s relationship with renowned local third party e-commerce operators around the globe. Meanwhile, the Group will further promote the Group’s own e-commerce platforms in China and Europe. In terms of manufacturing, Phase 1 of the manufacturing site in Vietnam has started production in January 2020, and Phase 2 has also been included in the expansion plan. The Group will monitor the production efficiency of the production facilities closely and determine any future expansion plan. The Group will also continue to invest in production facility automation, artificial intelligence and other aspects, so as to improve the production efficiency continuously.

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