Financial Performance - Revenue for 2023 was RMB 3,307,839,000, a decrease of 13.6% from RMB 3,828,984,000 in 2022[5] - Gross profit for 2023 was RMB 1,469,365,000, resulting in a gross profit margin of 44.4%, down from 49.0% in 2022[5] - Operating profit for 2023 was RMB 378,051,000, a significant recovery from an operating loss of RMB 607,975,000 in 2022[5] - Profit for the year was RMB 290,483,000, compared to a loss of RMB 901,050,000 in the previous year[5] - Adjusted profit for the year was RMB 346,985,000, down from RMB 606,660,000 in 2022[5] - Basic earnings per share for 2023 was 7.23 RMB cents, recovering from a loss of 32.65 RMB cents in 2022[5] - Net cash generated from operating activities was RMB 965,266,000, an increase from RMB 798,746,000 in 2022[5] - Total equity decreased to RMB 14,271,137,000 from RMB 14,557,438,000 in 2022[5] - The company maintained a dividend payout ratio of 106.9% for the year, with a total dividend per share of 8.5 HK cents[5] - The debt ratio improved to 3.6% from 5.4% in the previous year, indicating a stronger financial position[5] Market Position and Strategy - The Group is a market leader in China's flavours & fragrances industry, owning several well-known brands such as "Huabao Flavours" and "Hedon" with a significant market share[8] - The Group has established a comprehensive industry chain covering raw materials, processing, and consumption, enhancing its competitive strength in the taste-based fast-moving consumer goods sector[13] - The Group plans to leverage its industry advantages to build a leading aroma raw materials production base in Asia and globally[11] - The Group aims to consolidate its leading role in the condiment industry by enhancing its product mix and establishing it as a growth point[15] - The Group's strategic focus includes exploring new markets through product and technology innovation while maintaining its existing market share in flavours and fragrances[15] Production and Technology - In 2022, the Group completed the construction of a factory in Indonesia to produce heat-not-burn RTL, aiming to capitalize on the global development of HNB cigarettes[10] - The Group's production technology for tobacco raw materials has reached advanced international levels, with its major technical parameters recognized as the highest in domestic production[10] - The Group implemented a "Lean Production" program, which resulted in significant progress in production cost reduction and product quality improvement across pilot companies[20] - The Group plans to promote the "Lean Production" model across all companies to enhance production efficiency and product competitiveness[20] Research and Development - The Group's R&D capabilities are supported by multiple production bases and technology centers located in regions including Shanghai, Guangdong, and Germany[8] - R&D investment was approximately RMB 253 million, accounting for 7.7% of revenue, up from 7.0% in 2022, with all R&D expenses fully expensed[62] - The Group obtained 12 patents in the field of flavors and fragrances, showcasing its R&D capabilities and innovation in food and tobacco products[62] - The Group applied for three invention patents related to core products and compound condiments, indicating ongoing innovation in the condiment sector[65] Market Trends and Economic Environment - The overall economic environment remains challenging, with potential geopolitical conflicts and insufficient consumer confidence impacting market demand[22] - In 2023, China's cigarette production volume reached 48.855 million cases, representing a year-on-year increase of 0.4%[26] - The tobacco industry realized industrial and business tax and profit amounting to RMB 1,521.7 billion, a year-on-year increase of 5.6%[26] - The fiscal income of the tobacco industry was RMB 1,502.8 billion, reflecting a year-on-year increase of 4.3%[26] Segment Performance - Revenue from the F&F and Food ingredients business decreased to approximately RMB1,464 million, accounting for approximately 44.3% of the Group's total revenue[38] - The revenue from the tobacco raw materials business was approximately RMB465 million, representing a year-on-year increase of 2.3% and accounting for approximately 14.0% of the Group's total revenue[49] - The Group's condiment business revenue was approximately RMB754 million in 2023, a year-on-year increase of 31.6% from RMB573 million in 2022, accounting for 22.8% of total revenue[57] - Revenue from the aroma raw materials business decreased by 32.4% to approximately RMB 625 million, accounting for about 18.9% of total revenue, with an operating loss of approximately RMB 83.41 million[53] Corporate Governance - The Company has adopted corporate governance practices to enhance transparency and accountability, continuously improving its governance standards[120] - The Company has complied with the corporate governance code provisions throughout the financial year ended December 31, 2023, except for specific disclosures[121] - The Company has a balanced Board consisting of six Executive Directors and three Independent Non-Executive Directors (INEDs) as of the report date[129] - The primary objective of the Board is to maximize profitability and enhance long-term value for shareholders[135] Leadership and Management - The company has a strong leadership team with diverse backgrounds in finance, management, and industry expertise, enhancing its strategic capabilities[107] - The Group's focus on innovation and product development is supported by experienced professionals in flavour and fragrance industries[115] - The leadership team includes members with significant experience in both local and international markets, contributing to the company's growth strategy[110] Sustainability and ESG - An ESG strategy and execution team was established to prioritize sustainable development and improve the Group's ability to meet ESG-related requirements from customers[21] - The Group's management system for sustainable development was improved to enhance its ability to cope with climate risks[24] - The effective management of ESG risks is a key focus, integrated with other business and operational risks under the risk management framework[183] Employee and Workforce - As of December 31, 2023, the Group employed a total of 3,995 employees, an increase from 3,875 employees as of December 31, 2022[67] - The Group's workforce as of December 31, 2023, includes 2,503 male employees (62.7%) and 1,492 female employees (37.3%), compared to 2,492 male (64.3%) and 1,383 female (35.7%) as of December 31, 2022[173] Risk Management - The internal control system is designed to provide reasonable assurance against material misstatement or loss, safeguarding assets and ensuring compliance with relevant legislation[181] - The Company has established an Internal Audit Department with its scope of work advised by the Audit Committee to enhance risk management[182] - The Company has adopted a risk management and internal control policy to safeguard assets and ensure compliance with relevant laws and regulations[188]
华宝国际(00336) - 2023 - 年度财报