|Net Profit Up 45% to HK$225.4 Million |
Expand Vietnam Production Facilities and Further Enhance Operational Efficiency
HONG KONG, Nov 28, 2016 - (ACN Newswire) - Nameson Holdings Limited ("Nameson" or the "Group", stock code: 1982), one of the leading knitwear manufacturers in the PRC, today announced its interim results for the six months ended 30 September 2016 ("FY2017 1H" or the "Review Period").
During the Review Period, although uncertainties affected the global economy, the Group's revenue increased by 0.9% to HK$1,772.0 million (FY2016 1H: HK$1,756.4 million), which was attributable to Nameson's quality products and competitive advantages in relation to the expansion of the Vietnam production base. By optimising production facilities and processes, implementing cost control measures and actively enhancing the operational efficiency, gross profit rose by 17.4% to approximately HK$422.1 million when compared with the same period last year (FY2016 1H: HK$359.5 million). Gross profit margin also increased to 23.8%. During the Review Period, net profit grew by 45% to approximately HK$225.4 million when compared to the same period last year (FY2016 1H: HK$155.4 million). Net profit margin climbed as well to 12.7%. Adjusted net profit rose to approximately HK$226.8 million (FY2016 1H: HK$182.7 million), representing a growth of 24.1%, while the adjusted net profit margin climbed to 12.8%, up 2.4 percentage points. Basic earnings per share were HK11.1 cents.
The Group has a sound financial position. As at 30 September 2016, the Group's bank deposits, balances and cash amounted to approximately HK$785 million. To reward shareholders for their support, the Board has declared the payment of an interim dividend of HK3.8 cents per share.
Japan, North America (mainly the United States of America) and Europe remained the Group's top three markets during the Review Period, accounting for approximately 37.3%, 22.2% and 18.6% of the Group's total revenue respectively. With the first phase of the Vietnam Factory in operation since the first quarter of 2015, and given the Group's quality production technology and design and development capabilities, the Group secured more orders from the Japanese and the Chinese markets. During the Review Period, sales revenue from the Japanese and the Chinese markets increased notably by 8% and 79.4% to approximately HK$661 million and approximately HK$220 million respectively when compared to the same period last year, which in turn boosted the Group's total sales. The substantial increase in orders from the Chinese market enabled the Group's PRC Factory to maintain a high utilisation of production capacity. Nameson will continue to leverage its core competitiveness to secure more orders from the Japanese and the Chinese markets.
Mr. Wong Ting Chung, Chairman, Executive Director and Chief Executive Officer of Nameson, said, "During the Review Period, in the face of a complex and changing global economy, the Group's forward-looking strategy of expanding its production base in Vietnam has started to bring apparent benefits. Thanks to low costs advantages, stable labor supply and favourable tariff policies, as well as quality and innovative knitwear products and effective cost control measures of the Group, Nameson's overall business results have been satisfactory in the first half of Financial Year 2017."
To meet rising market demand, secure more orders from existing and new customers and enhance production flexibility and efficiency, Nameson has been pushing forward its plan to expand the Vietnam production base. The first phase of the factory commenced operation in the first quarter of 2015 and its production capacity has reached its planned level. Works on second phase expansion have been progressing as scheduled with production expected to gradually commence in the second half of FY2017. Upon completion, the Group's total designed production capacity will increase to a target of 46.90 million pieces of knitwear products per annum.
With regards to the export of products, given that there are zero tariffs for knitwear products exported to Japan under the Japan-Vietnam Economic Partnership Agreement, the Group will strive to attract new customers from Japan and thereby further reinforce its competitiveness in the Japanese market. Moreover, pursuant to the Vietnam-EU Free Trade Agreement, the textile and garment products produced in Vietnam and exported to the European Union can gradually enjoy zero tariffs within seven years after the agreement takes effect, and that will enable the Group to further tap the European market. The Group will leverage the production capacity and cost advantages of its Vietnam Factory to seize opportunities for broadening its export markets.
Looking ahead, the Group will continue improving production equipment, raise operational efficiency and enhance automation production in order to facilitate the upgrade of capacity at its Vietnam production base. Furthermore, the Group will allocate resources to strengthen its product design as well as research and development teams in a bid to produce quality products that attract more international customers.
Mr. Wong concluded, "Despite the challenging global business environment, the demand for knitwear products will remain enormous and stable. In the future, the Group will adhere to its development strategy. It will push forward its goals of internationalisation of its production facilities and automation of production technology. Also, Nameson will strengthen integration of its production bases in China and Vietnam and enhance the flexibility of production arrangement, with the objective of achieving sustainable and steady development and delivering satisfactory returns to its shareholders."
About Nameson Holdings Limited
Nameson Holdings Limited is one of the leading knitwear manufacturers in the PRC*. The Group offers a one-stop services for its customers comprising raw material development, product design, sample manufacturing, high-quality production, quality control and timely delivery of products. Its knitwear products include pullovers, cardigans, vests and accessories. Leveraging its high product quality, design development capability, timely delivery, and important one-stop services, Nameson has established long-standing and strong relationships with many renowned international apparel brands, including UNIQLO, Tommy Hilfiger and Lands' End. Currently, the Group operates two production bases, one in the PRC and the other in Vietnam.
* Source: Euromonitor - by manufacturers' revenue in 2014
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Nov 28, 2016 20:08 HKT/SGT
Source: Nameson Holdings Limited
Topic: Press release summary
Sectors: Daily Finance, Daily News
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