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Public company info - China Ting Group Holdings Ltd. , 03398.HK
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China Ting Group Holdings Ltd., 03398.HK - Company Profile
Chairman Ting Man Yi
Share Issued (share) 2,100,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Textile & Apparels
Corporate Profile Business Summary: The Group is engaged in the (1) manufacturing and sale of garments; (2) manufacturing and retailing of branded fashion apparel; and (3) property development in the PRC. Performance for the year: During the year ended 31 December 2019, the Group’s revenue amounted to HK$1,899.0 million, representing a decrease of 16.5% when compared with the total revenue of the Group of HK$2,274.8 million in 2018. The gross profit for the year ended 31 December 2019 was HK$374.4 million, representing a decrease of 33.5% as compared with HK$563.2 million in 2018. As a result, the net loss attributable to equity holders of the Company for the year ended 31 December 2019 was HK$54.7 million and the net asset value per share as at 31 December 2019 was HK$1.2. Business Review The China-US trade tensions throughout 2019 and the slowdown of the global economy, together with the tightening external environment, have resulted in considerably greater negative impact on the Group because of its main focus on foreign trade. Meanwhile, domestic market orders in the People’s Republic of China (the “PRC”), which have been beneficial to the Group’s performance in recent years, have taken on a “synchronous deceleration” trend with international orders due to the downward pressure on the domestic economy. Against the background of the slowdown in both international and domestic businesses, the Group’s performance was undoubtedly affected, showing a trend of significant decline. In 2019, the Group’s OEM/ODM business recorded a decrease of 18.2% in total sales against the continued decline of World Economic Climate Index and continuous geo-economic tensions. In order to address this unfavorable situation, the Group started the construction of new production facilities. After a year of preparation, the Group’s Jiangxi Base and Guizhou Base in China have been substantially completed and put into use, and the overseas production facilities in Vietnam have also been put into production. Domestic production bases except the one in Hangzhou can help us reduce costs and improve the profitability, and the overseas bases can help us to avoid the risks caused by geo-economic tensions and strengthen the customer relationships. The Group believes that the OEM/ODM business after the above adjustments will definitely turn loss to a stable growth. With regards to the retail business, the Group continued to focus on the development of associate channels and the exploration implementation of new retail models in 2019, expanded online and offline market presence simultaneously, and achieved substantial growth in the e-commerce business. At the same time, the Group continued to introduce new trendy brands and successfully launched the Sprayground brand in the second half of 2019, which quickly gained market recognition by virtue of its unique trendy features. With retail business being one of the Group’s core businesses in the future, the Group will continue to improve its operating capabilities, product development and design capabilities, production support capabilities and logistics service capabilities. With regards to the weaving business, especially the woolen textile business, the Group went through the radical changes in market demand and the impact of climatic conditions such as warm winter in 2019, imposing a heavy burden in terms of inventory. In response, the Group made internal adjustments to its product mix and the research and development of new products to adapt to the drastic changes in the market. With regards to the printing and dyeing segment, the Group fully completed site relocation in 2019, fully restored production capacity and operated in good condition. Prospects: In consideration of the complexity and persistence of China-US trade tensions, and the indisputable fact that the labour costs of the Group’s production base in Hangzhou, China are much higher than other parts in the PRC, and in order to reduce costs and lower the risks caused by geopolitical tensions, the Group adjusted the production capacity allocation by opening up production bases in Hangzhou, Jiangxi, Guizhou and Vietnam, with a monthly production capacity of more than 2 million pieces and will continue to grow. Diversified production bases have ensured the continuous expansion and comparative competitive advantages of the Group’s OEM/ODM business. Hangzhou Base will also face large-scale upgrading and renovation in 2020 due to the construction of urban roads. After completion of renovation, Hangzhou Base will greatly increase the concentration of production capacity, the uniformity of management, the utilisation rate of intelligent equipment, and the level of information-based management, marking the most thorough production capacity renovation and upgrade since the park was completed and put into operation in 2002, which is bound to inject new vitality into China Ting’s Hangzhou Base and make it the most modern and intelligent production base of the Group. With the Group successfully selected as a licensed manufacturer of garments and accessories for the 2022 Hangzhou Asian Games at the end of 2019, the Group will also try to expand its business into the field of team costume customization. According to incomplete statistics, the scale of China’s customised costume market had exceeded RMB150 billion in 2018. The Group will take the Asian Games as an opportunity to try new business fields and business models to explore new paths for the performance growth of the Group. With the branded retail business as the development focus, the Group will further expand the presence in brand retail market, focus on the development of new retail business, effectively control inventory, and take advantage of big data to promote the development of the Group’s brand retail business, while taking more active measures to introduce premium international brands. At the same time, the Group and Zhejiang University of Science and Technology will also jointly invest in the establishment of an enterprise-level fashion research institute in 2020, dedicated to the incubation of new designer brands, forward-looking research on fashion trends, and scientific research projects for fashion technologies and new fabrics, to promote the all-round development of the Group’s brand retail business. With regards to the weaving business and printing and dyeing business, the Group will continuously increase the efforts on the research and development of new products to meet the changing needs in the market, while further improving the risk management and control over the inventories of raw materials and grey fabrics to ensure the healthy existence and development of the Company. China Ting Fashion Industrial Park will be expanded by new industrial plants and supporting apartments of approximately 75,000 square meters in June 2020. By then, China Ting Fashion Industrial Park will have an area of nearly 200,000 square meters. Great building conditions, mature park facilities and the geographical location as the core block in the development zone have made China Ting Fashion Industrial Park the most competitive industrial lease space in the block. Meanwhile, the Group will actively cooperate with governmental authorities on investment invitation to realize the property value of the industrial park as soon as possible. Hangzhou has provided the Group with good foundation for the operations of its industrial park. Despite the economic pressure from various neighboring industrial parks, the Group’s industrial park still managed to deliver outstanding performance because of its location and infrastructure. With the advancement of urbanization, the Group’s industrial park will enjoy a more prominent advantage in terms of transport location, thus providing more favorable conditions for the Group to further the operations of The group’s industrial park in greater depth.

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