Sun Cheong Announces Its First Annual Results after Listing; Gross Profit Reaches 35.2%, Net Profit Rises by 23.4%

During the Year Under Review, sales of both "ClipFresh" products and ODM products recorded a stable growth, driving the total revenue up by 4.7% to HK$341.0 million and gross profit up by 6.4% to HK$120.1 million. Gross profit margin surged to 35.2%, mainly due to an increase in sales of "ClipFresh" brand products with a relatively higher gross profit margin. Accordingly, profit attributable to equity shareholders of the Company rose by 23.4% to HK$33.8 million. Basic earnings per share were HK7.73 cents.

In respect of year of listing, the Board has resolved to declare a final dividend of HK4.0 cents per share and a special dividend of HK3.5 cents per share for the year ended 31 December 2018.

Mr. Tong Ying Chiu, Founder, Chairman and Executive Director of Sun Cheong, said, "The listing of Sun Cheong marked the beginning of a new era for us. Although the global economic environment is challenging, the Group was able to deliver satisfactory growth in both revenue and net profit, leveraging its strong product development capability and innovative and diversified product portfolio. We also garnered the Industry Cares Award and the Hong Kong Most Outstanding Business Awards in 2018, acknowledging the Group's leading industry position as well as its high-quality brand image. We will continue to develop and expand our customer base while diversifying and enhancing the products we offer."

Business ReviewThe Group primarily designs, develops, manufactures and sells top-quality food storage products and plastic household products either under its own "ClipFresh" brand or on an ODM basis. In particular, "ClipFresh" branded products comprising plastic, glass and ceramic series target the mid-range to high-end segment in the market with even higher quality and meeting more stringent safety and certification standards. During the Year Under Review, the Group's comprehensive product offering of approximately 1,070 types of products in total, ranging from storage boxes, laundry and bathroom wares, food storage, rubbish bins, outdoor, gardenware and furniture, kitchenware, etc, were sold to over 40 regions. Besides Hong Kong, 93.4% of the total sales were generated from overseas markets such as Australia, the United Kingdom, the United States, New Zealand and Germany. The Group is also actively seeking new markets and clients, and has secured 33 new clients in 2018 in over 20 countries.

Commanding a higher gross profit margin of 56.7%, "ClipFresh" branded products recorded revenue of HK$87.9 million, representing a year-on-year growth of 6.2%, mainly driven by the increase in sales volume of the high-quality plastic series products. Revenue from ODM products increased by 4.2% to HK$253.1 million for the year, thanks to the strong performance in sales of kitchenware and storage boxes also enjoying an increase in average selling price and sales volume.

During the Year Under Review, the design and development and mould design team developed numerous new products and successfully registered 34 self-designed patents, clear testimony to the Group's innovation. To better respond to market trends, the Group has upgraded machineries by acquiring new models with higher processing speed and developed new moulds and acquired 29 intelligent injection moulding machines in 2018 to enhance production capacity and efficiency to meet the strong market demand.

OutlookLooking ahead, owing to the improvement of quality of life and rising health awareness, the global demand for better food storage and household products was increasing. As its own brand commanding a higher gross profit margin, "ClipFresh" is one of the Group's major focuses in its business expansion. It will continue to promote the brand concept of healthy living through various media channels, keep up with trends through innovative and diversified strategies and provide wider varieties of top-quality and safe food storage and household products that represent good value for money.

Innovation is a key to success in the coming years. Therefore, the Group will further develop its product design and development capability on household products with better functions, while exploring the use of eco-friendly, safer and more cost-effective raw materials, targeting to launch more than 100 new product designs with a higher perceived value under the "ClipFresh" Classic 2.0 and glass series to the worldwide market.

The Group is one of the few household product manufacturers in the PRC possessing its own mould design and creation capability, saving costs in those aspects, and ensuring prompt response to required modifications. To provide added backend support in pursuit of innovation in its product development, in 2019, the Group plans to develop or purchase 300 new moulds and related parts in line with the increase in product models and production capacity. In addition, the Group will also invest in automation of its lines for production and packing in order to boost efficiency, product quality and cost effectiveness.

Mr. Tong Bak Nam, Billy, Chief Executive and Executive Director of Sun Cheong concluded, "As the year 2019 marks the 10th anniversary of the founding of the 'ClipFresh' brand, we will continue to develop and promote the brand as a benchmark for mid-range to high end food and household storage products with artistic design and practical functionality. By seeking a balanced development of both the Clip-Fresh' and ODM business, together with our innovative products and extension of our product portfolio, the Group will be able to tap long-term growth opportunities in the household market worldwide, thus bringing the best returns to shareholders."

Topic: Press release summarySectors: Daily Finance, Daily News^[1][2] http://www.acnnewswire.com From the Asia Corporate News Network

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References

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