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Thursday, 21 March 2019, 08:40 HKT/SGT
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Source: Hengdeli Holdings Ltd
Hengdeli Announces 2018 Annual Results
Maintaining Stable Growth and Healthy Development

HONG KONG, Mar 21, 2019 - (ACN Newswire) - Hengdeli Holdings Limited ("Hengdeli" or the "Company" and, together with its subsidiaries, the "Group"; stock code: 3389), an international retailer of renowned brand watches and manufacturer of watch accessories, announced its annual results for the year ended 31 December 2018 (" the year under review").

Results Summary:
- Recorded revenue of RMB2,687,248,000, representing a year-on-year increase of 10.2%
- Gross profit margin approximately 17.2%, representing a year-on-year increase of 140 percentage points
- Profit of the year amounted to approximately RMB79,249,000, representing a year-on-year increase of 148%
- Profit attributable to equity shareholders of the Company amounted to RMB68,746,000, representing a year-on-year increase of 129.1%

In 2018, The Group has adhered to its established policy of steady and healthy growth, proactively sought breakthroughs by making the best use of opportunities. As at 31 December 2018, the Group recorded revenue of RMB2,687,248,000, representing a year-on-year ("YOY") increase of 10.2%; the gross profit margin was 17.2%, representing a YOY increase of 140 percentage points, which was mainly due to the further improvement of management level such as the control of discounts; profit for the year amounted to RMB79,249,000, representing a YOY increase of 148%; profit attributable to equity shareholders of the Group amounted to RMB68,746,000, representing a YOY increase of 129.1%, increase in the profit was mainly due to the increase in revenue and gross profit margin, and decrease in non-recurring financial costs.

Leveraging on high level refined and scientific management, the operation of renowned watches of the Group maintained healthy and stable growth, with desirable increase in both sales and profits. During the year, the Group successfully acquired the renowned watch business of Watchshoppe, a well-known local watch retailer in Malaysia, thereby expanding its operations to Southeast Asia. The Group believes that such acquisitions will not only bring new revenue to the Group, but also make Malaysia an important base for the Group to expand the market in places with large Chinese population such as Southeast Asia.

The Group took proactive strategies towards its industry value chain for watch accessories. The Group's customer resources have been enriched continuously and its cooperation with brands has become even closer and deeper through timely updates to product design, further perfection of service standards, optimization of product techniques as well as constant improvement in automation and informatization. Therefore, both manufacture and sales aspects of each business have kept blooming. The total turnover of the industrial group represented a year-on-year increase of 17.2% and principal business profits also increased rapidly. During the year, the industrial group also proactively sought new development opportunities, expanded its production bases in order to lay a solid foundation for long-term development.

At present, the situations of global politics and economy are complicated, while the real economy is still subject to certain risks of growing. However, the sound and stable fundamentals in China's economic development remain unchanged, while the overall steady and rising momentum in the long term continues as well. The Group believes that with consumption upgrading, the developing trend of the Chinese economy at a medium and high speed will continue. The construction of Guangdong-Hong Kong-Macau Greater Bay Area will also enable the Group to maintain stability and progress of the operating environment and revenue. The Group will continuously adhere to the principle of "maintaining stable and healthy growth and seeking sustainable development". With pragmatic attitude, we will strive for progress while maintaining stability, by leveraging its core competitiveness, the Group will continue to respond to the market and to explore to constantly seek new opportunities in an environment where opportunities and challenges co-exist. We will also put our heads together to engage in more in-depth cooperation with brand suppliers and international peers through various ways, and expand the scope and models of our operation for newer and broader development, so as to create greater value for both our shareholders and community at large.

Breakdown of Revenue
For the year ended 31 December
2018 % 2017 %
Retail Business
Hong Kong RMB (Thousand) 1,898,353 70.6 1,777,065 72.9%
Taiwan/ Malaysia RMB (Thousand) 195,499 7.3 166,242 6.8%
Industrial group and others RMB (Thousand) 593,396 22.1 495,715 20.3%
Total RMB (Thousand) 2,687,248 100 2,439,022 100%

Breakdown of Retail Network

As at 31 December 2018
Hong Kong and Macau Taiwan/ Malaysia Total
Elegant 5 1 6
Hengdeli/ Watchshoppe 1 35 36
Brand boutiques 8 17 25
Total 14 53 67

Hengdeli Holdings Limited
Hengdeli Holdings Limited (the "Company" or "Hengdeli" and its subsidiaries, collectively as the "Group") is a recognised retailer of internationally renowned brand watches and manufacturer of watch accessories. The Group's shareholders include: the Zhang family; the prestigious watch manufacturer and distributor SWATCH Group; and internationally respected luxury goods conglomerate LVHM Group.

The Group owns an extensive retail network comprised of: "Elegant" (top internationally renowned brand watches), "Hengdeli" / "Watchshoppe" (mid and mid-to-high end internationally renowned brand watches), as well as single-brand boutiques. As at 31 December 2018, the Group had 67 retail outlets, selling watches from more than 50 internationally renowned brands in Hong Kong, Macau, Taiwan and Malaysia etc, and provides comprehensive after-sales services for internationally renowned brand watches.

The Group also owns a number of watch accessories manufacturing enterprises, including the manufacturing of furniture and items used for watch sales and watch packaging products, commercial space design, production and decoration, serving customers throughout the greater China region, Asia Pacific and other countries and regions such as Switzerland and the United States.

The Group has maintained sound and in-depth collaborations with many world-renowned premier brand suppliers including SWATCH Group, LVMH Group, RICHEMONT Group, and KERING Group etc..

The Company has been listed on the Main Board of the Hong Kong Stock Exchange since 2005 under stock code 3389. The abbreviated stock name is: Hengdeli




Mar 21, 2019 08:40 HKT/SGT
Topic: Press release summary
Sectors: Daily Finance, Daily News
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