EAGLE NICE(02368)2022-12-01 08:38Revenue and Profit Growth - Revenue for the six months ended September 30, 2022, increased to HKD 2,547,555 thousand, up 26.2% from HKD 2,018,830 thousand in the same period last year[2] - Gross profit rose to HKD 523,788 thousand, a 41.7% increase compared to HKD 369,672 thousand in the prior year period[2] - Profit before tax grew to HKD 331,587 thousand, up 44.0% from HKD 230,242 thousand in the previous year[2] - Net profit attributable to owners of the company increased to HKD 239,111 thousand, a 42.6% rise from HKD 167,676 thousand in the same period last year[2] - Basic earnings per share increased to 44.79 HK cents, up from 31.52 HK cents in the prior year period[2] - Net profit for the period was 245,857 thousand HKD, up 41.4% YoY from 173,875 thousand HKD[13] - Total sales increased by 26.2% to a record HKD 2,547,600,000, with a gross profit increase of 41.7% to HKD 523,800,000 and a gross margin rise from 18.3% to 20.6%[46] - Pre-tax profit surged by 44.0% to HKD 331,600,000, with the pre-tax profit margin increasing from 11.4% to 13.0%[46] - The company's net profit attributable to owners rose by 42.6% to HKD 239,100,000, with a net profit margin increase from 8.3% to 9.4%[49] Regional Revenue Performance - Revenue from mainland China increased to 1,195,852 thousand HKD, up 10.2% YoY from 1,084,721 thousand HKD[13] - Revenue from Europe grew significantly to 574,996 thousand HKD, a 63.3% increase YoY from 352,033 thousand HKD[13] - US revenue rose to 457,970 thousand HKD, up 41.8% YoY from 323,055 thousand HKD[13] - Total revenue from sportswear and apparel sales reached 2,547,555 thousand HKD, a 26.2% increase YoY from 2,018,830 thousand HKD[15] Financial Position and Cash Flow - Total assets increased to HKD 1,823,431 thousand as of September 30, 2022, compared to HKD 1,796,972 thousand as of March 31, 2022[5] - Net cash generated from operating activities was HKD 167,903 thousand, a decrease of 18.3% from HKD 205,471 thousand in the prior year period[9] - Cash and cash equivalents at the end of the period stood at HKD 452,100 thousand, compared to HKD 464,213 thousand at the end of the previous year[9] - Accounts receivable increased to HKD 855,164 thousand as of September 30, 2022, compared to HKD 393,843 thousand as of March 31, 2022, with 80.5% of receivables within 30 days[25][26] - Accounts payable stood at HKD 322,892 thousand as of September 30, 2022, with 93.0% due within 90 days[27] - Bank loans increased to HKD 701,615 thousand as of September 30, 2022, from HKD 648,557 thousand as of March 31, 2022, with interest rates ranging from 2.61% to 4.42%[29][30] - The company held cash and bank balances of HKD 452,100,000 as of September 30, 2022, compared to HKD 455,800,000 as of March 31, 2022[50] - The company's bank loan facility was HKD 992,100,000 as of September 30, 2022, with HKD 701,600,000 utilized, up from HKD 648,600,000 utilized as of March 31, 2022[50] - The company's debt-to-equity ratio increased to 14.2% as of September 30, 2022, from 11.2% as of March 31, 2022[51] Expenses and Costs - Sales and distribution expenses increased by 27.6% to HKD 4,800,000, while administrative expenses rose by 36.0% to HKD 46,300,000 due to wage adjustments and increased staffing[48] - Interest expenses increased by 204.6% to HKD 5,200,000 due to higher loan interest rates and increased bank borrowings for capacity expansion[48] - The company benefited from the depreciation of non-USD currencies (RMB, IDR, VND), which reduced manufacturing costs[47] Dividends and Shareholder Information - Interim dividend per share increased to 0.30 HKD, up 36.4% YoY from 0.22 HKD[21] - Basic earnings per share rose to 0.45 HKD, up 42.6% YoY from 0.32 HKD[22] - The company declared an interim dividend of HKD 0.30 per share, up from HKD 0.22 per share in the previous year[49] - The company declared an interim dividend of 30 HK cents per share for the six months ended September 30, 2022, compared to 22 HK cents in the same period last year[76] - The company's issued share capital remained unchanged at 533,800,000 shares with a nominal value of HKD 0.01 per share, totaling HKD 5,338 thousand[31] - The company's major shareholder, Pou Hing Industrial Co. Ltd., holds 192,000,000 shares, representing 35.96% of the issued share capital[60] - The company's executive director, Mr. Chung Yu-sing, holds 72,650,000 shares through Time Easy Investment Holdings Limited, representing 13.61% of the issued share capital[57] - The company's executive director, Mr. Wong Wing-biu, holds 32,320,000 shares through Excel Skill International Limited, representing 6.05% of the issued share capital[57] - The company's executive director, Mr. Chan Siu-ying, holds 36,500,800 shares, representing 6.84% of the issued share capital[57] - The company's executive director, Mr. Chung Chi-kit, holds 8,500,000 shares, representing 1.59% of the issued share capital[57] Corporate Governance and Compliance - The company's audit committee reviewed the unaudited condensed interim financial statements for the six months ended September 30, 2022, including accounting principles, risk management, and internal control matters[72] - The company's remuneration committee consists of two independent non-executive directors and one executive director, with Mr. Chan Cheuk Ho as the chairman[73] - The company's nomination committee consists of two independent non-executive directors and one executive director, with Mr. Chung Yu Sing as the chairman[74] - The company's chairman, Mr. Chung Yu Sing, has been serving as both the chairman and CEO since June 30, 2013, which is a deviation from the corporate governance code[69] - The company's directors confirmed that they have complied with the standard code of conduct for securities transactions during the six months ended September 30, 2022[70] - The company's directors have no interests in any businesses that directly or indirectly compete with the company's business, except for the disclosed interests[66] - The company's interim report is available on its website and the Hong Kong Exchanges and Clearing Limited's issuer website[78] Acquisitions and Related Party Transactions - The company acquired 100% equity of Beyond Top Co., Ltd. for USD 6,692,000 (approximately HKD 52,500,000), with identifiable net assets at fair value of HKD 52,500 thousand[32] - Related party transactions included rental expenses of HKD 4,144 thousand and service fees of HKD 4,670 thousand with Pouyuen Vietnam, a company indirectly controlled by a major shareholder[33] - The company recognized a right-of-use asset of HKD 11,514 thousand and a lease liability of HKD 11,682 thousand related to a lease with a related party as of September 30, 2022[34] - Payables to Pouyuen Vietnam decreased to HKD 3,159 thousand as of September 30, 2022, from HKD 4,121 thousand as of March 31, 2022, and were unsecured, interest-free, and repayable on demand[36] Operational Performance and Expansion - The Vietnam production base outperformed, with sales and revenue significantly surpassing pre-pandemic levels[42] - The company expanded production capacity by acquiring factories in West Java, Indonesia, Foshan, China, and Long An, Vietnam[43] - The company employed approximately 15,000 staff as of September 30, 2022, unchanged from March 31, 2022[55] Government Subsidies and Other Income - Government subsidies increased to 10,284 thousand HKD, up 93.2% YoY from 5,322 thousand HKD[16] - The company received government incentives and subsidies totaling HKD 10,300,000, contributing to other income and gains[49] Contingent Liabilities and Share Capital Activities - The company has no significant contingent liabilities as of September 30, 2022[54] - The company did not engage in any share capital fundraising activities during the six months ended September 30, 2022[67] - The company did not purchase, redeem, or sell any of its listed securities during the six months ended September 30, 2022[68] Comprehensive Income and Foreign Exchange Impact - Total comprehensive income for the period decreased to HKD 109,297 thousand, down 44.4% from HKD 196,570 thousand in the previous year due to foreign exchange losses[4]