Company Overview - Shenzhou International is one of the largest vertically integrated knitwear manufacturers globally, producing approximately 430 million pieces of knitwear annually[9]. - The company has over 85,700 employees and operates factories covering over 5.38 million square meters[9]. - Major clients include renowned brands such as NIKE, UNIQLO, ADIDAS, and PUMA, with markets spanning China, Japan, Asia Pacific, Europe, and the US[9]. - Shenzhou International was listed on the Hong Kong Stock Exchange in November 2005 and is included in several indices, including the Hang Seng Composite Index and MSCI Index[10]. - The company has received multiple awards, including recognition as one of the "Top 100 HK Listed Companies" in 2012, 2015, and 2016[12]. - In 2019, Shenzhou International was named in the "Listed Company Awards of Excellence 2019" by Hong Kong Economic Journal[13]. Financial Performance - Total sales for 2019 reached RMB 22,665,272, an increase of 8.7% from RMB 20,950,205 in 2018[19]. - Profit for the year was RMB 4,958,536, representing a growth of 10.4% compared to RMB 4,492,543 in 2018[16]. - Gross profit margin decreased to 30.3% in 2019 from 31.6% in 2018[16]. - Net profit margin improved slightly to 21.9% in 2019 from 21.4% in 2018[16]. - Non-current assets increased to RMB 11,360,620 in 2019, up from RMB 9,411,627 in 2018[16]. - Current assets rose to RMB 20,494,238, compared to RMB 18,140,427 in the previous year[16]. - Total equity reached RMB 25,191,327, an increase from RMB 22,454,279 in 2018[16]. - Cash and cash equivalents increased to RMB 5,060,896 in 2019 from RMB 3,565,916 in 2018[16]. - The profit attributable to owners of the parent for the same period was approximately RMB 5,095,206,000, reflecting a year-on-year increase of approximately 12.2%, or approximately 14.1% when excluding the negative impact from the retail business[41]. - Earnings per share for the year were RMB 3.39, with cash and cash equivalents amounting to approximately RMB 5,060,896,000 as of 31 December 2019[41]. Market Trends and Challenges - The apparel industry in China faced a challenging operating environment in 2019, with exports of apparel products declining by approximately 4% year-on-year, particularly to the US, EU, and Japan[43]. - Despite the challenges, the Group focused on enhancing long-term competitiveness by expanding production capacity and improving efficiency in overseas factories[39]. - The current difficulties in the industry are viewed as opportunities for growth, promoting quality-oriented development and enhancing competitiveness through innovation and flexible manufacturing[43]. - The textile and apparel industry in China faced multiple pressures in 2019, including slow global economic recovery and rising operational costs[54]. - The domestic demand growth has significantly slowed, impacting market demand and export enterprises[54]. Production and Operations - The company aims to be the most competitive knitwear manufacturer globally, focusing on high-quality production through OEM and ODM methods[8]. - Shenzhou International has strategically established production bases in Ningbo, China, and Tây Ninh, Vietnam, enhancing its manufacturing capabilities[9]. - The Group's global production layout and vertical integration have mitigated the adverse impacts of COVID-19, allowing full production capacity to be resumed in a short period[45]. - The Group's operational management has matured, and resource allocation in domestic bases has been optimized, leading to reduced energy consumption levels[39]. - The Group plans to moderately increase domestic fabric production capacity to replace imports from overseas bases, aiming to balance upstream and downstream productivity[76]. Corporate Governance - The Company has complied with all code provisions of the Corporate Governance Code throughout the year ended December 31, 2019[132]. - The Board includes at least three independent non-executive directors, with one possessing appropriate professional qualifications or financial management expertise, meeting all regulatory requirements[137]. - Continuous professional development for Directors is arranged to update their knowledge on Listing Rules and related legal requirements[136]. - The Company adopted a shareholders' communication policy effective from March 26, 2012, allowing shareholders to propose candidates for Director elections[143]. - The Company has increased transparency and governance standards through continuous training for Directors and staff, and by appointing external professional advisers[131]. Sustainability and Social Responsibility - The sustainability report outlines the company's commitment to environmental protection, social responsibility, and governance practices across its major subsidiaries in China, Vietnam, and Cambodia[195]. - The company aims to become the best garment operator globally, focusing on innovation, automation, and environmental protection as key components of its future development strategy[200]. - The company is committed to creating a green enterprise and achieving sustainable development through ongoing investment in environmental protection[199]. - Stakeholder engagement is prioritized, with internal and external communication channels established to gather feedback and address major issues[197]. Future Outlook - The Group aims to improve employee living conditions and establish motivating remuneration and welfare policies[49]. - The Group emphasizes excellent corporate governance and transparent communication with shareholders and investors[47]. - The Group plans to enhance the sharing of resources between overseas and domestic production bases, improving the independent operational capabilities of overseas factories[123]. - Continuous investment in environmental protection is seen as a future competitive advantage, with plans to increase the use of clean energy sources like solar and wind energy[124][125].

Company Overview - Shenzhou International is one of the largest vertically integrated knitwear manufacturers globally, producing approximately 400 million pieces of knitwear annually[6]. - The company has over 82,700 employees and operates factories covering over 5,250,000 sq.m. in locations including Ningbo, Vietnam, and Cambodia[7]. - Major clients include international brands such as NIKE, UNIQLO, ADIDAS, and PUMA, with products distributed across markets in China, Japan, Asia Pacific, Europe, and the US[8]. - Shenzhou International was listed on the Hong Kong Stock Exchange in November 2005 and has been included in various indices, including the Hang Seng Index and FTSE China 50[8]. - The company has received multiple awards, including being named one of the "Top 1000 Asian Companies" and recognized for its corporate governance and investor relations[10][11]. Financial Performance - Shenzhou International's financial performance has shown consistent growth, positioning it as a leader in the knitwear manufacturing sector[12]. - Total sales for the year 2018 reached RMB 20,950,205, an increase of 15.8% from RMB 18,085,247 in 2017[16]. - Profit for the year 2018 was RMB 4,492,543, representing a growth of 19.5% compared to RMB 3,759,951 in 2017[16]. - Gross profit margin improved to 31.6% in 2018, up from 31.4% in 2017[16]. - Net profit margin increased to 21.4% in 2018, compared to 20.8% in 2017[16]. - Non-current assets rose to RMB 9,411,627 in 2018, up from RMB 8,886,726 in 2017[16]. - Current assets increased to RMB 18,140,427 in 2018, compared to RMB 15,206,479 in 2017[16]. - Total equity reached RMB 22,454,279 in 2018, an increase from RMB 19,824,653 in 2017[16]. - International sales accounted for 69.9% of total sales in 2018, with significant contributions from Europe (18.1%) and the US (15.5%)[18]. - Sports wear sales were RMB 14,275,643, making up 68.1% of total sales in 2018[16]. Production and Operations - The company has strategically expanded its production capabilities and market reach, enhancing its position in the global textile industry[5]. - Shenzhou International's factories are strategically located to optimize production efficiency and meet international demand[7]. - The Group continued to enhance production automation, improving production efficiency[27]. - The expansion of overseas production bases helped alleviate capacity supply pressure[27]. - The Group's efforts in upgrading facilities led to a continuous decrease in resource consumption levels[29]. - The Group plans to enhance its focus on new product research and development, automation applications, and digital management to improve operational efficiency[36]. - The Group aims to expand the production scale of overseas factories while strengthening local management and technical talent training[36]. Market Trends and Challenges - The textile and apparel industry faced major operating pressures from increasing costs and tightened environmental regulations[27]. - The ongoing China-US trade conflict has created uncertainty in the textile and apparel industry, with over 30% of US apparel imports coming from Mainland China[60][61]. - The labor supply in the Chinese manufacturing industry is tightening, leading to rising labor costs and a shift towards automation[42]. - The Chinese government introduced a series of tax and fee reduction policies to alleviate operating pressures on enterprises, particularly in the textile and apparel sector[32]. Environmental Commitment - The company has committed to environmental protection as a primary social responsibility, aligning with government policies to enhance sustainability[180]. - The Group emphasizes the importance of environmental protection, with many non-compliant textile enterprises being ordered to rectify or shut down[42]. - The Group's hazardous waste emissions totaled 679 tons in 2018, an increase of approximately 5.90% compared to the previous year, with major emissions being waste fluorescent lights and waste ink[187]. - The total electricity consumption of the Group for the year was 586,290,671 kWh, representing a year-on-year increase of 15.20%[187]. - The Group has complied with all relevant laws and regulations regarding environmental protection and emissions during the reporting period[184]. Corporate Governance - The Group is committed to maintaining high transparency and effective communication with shareholders and investors[34]. - The Board proposed a final dividend of HK$0.90 per share, totaling HK$1.75 per share for the year including the interim dividend[30]. - The Company has ensured that at least three independent non-executive directors are on the board, meeting the requirements of the Listing Rules[113]. - The Group's corporate governance functions include developing and reviewing governance policies and ensuring compliance with legal and regulatory requirements[117]. - The Company has established a shareholders' communication policy to facilitate shareholder engagement and proposals for Director elections[119]. Future Strategies - The Group aims to integrate industrial resources from different countries and enhance its capabilities in environmentally friendly production and automation[61]. - The Group aims to increase production capacity at overseas bases to better support customers and mitigate risks from trade environment changes[107]. - The Group plans to invest between USD 100 million and USD 150 million in a new garment factory in Phnom Penh, Cambodia over the next two years[101]. - The Group is committed to continuous technological and management advancements to enhance corporate and social value, as well as sustainable development capabilities[107].