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During the year ended 31 December 2019, the Group recorded a profit attributable to equity holders of the Company of approximately HK$84.3 million, representing a surge of 65.3% from last year. Before taking into account the listing expenses, the adjusted profit increased by 28.4% to HK$91.9 million when compared with last year. Basic earnings per share were HK21.12 cents (2018: HK12.78 cents).
To share the Group's achievements with shareholders, the Board of Directors proposed a final dividend of HK9.0 cents per share.
Business Review
During the year, the Group continued to maintain good business relationships with its major OEM customers, and recorded sustainable and stable growth in revenue of the web sales business. The total revenue of both OEM products and web sales products segments increased by 2.6% to HK$1,193.6 million from last year. Driven by the increase in sales orders placed by its largest customer, an international greeting cards publisher, the sales derived from OEM products increased to approximately HK$1,090.1 million. The sales of the web sales products increased to approximately HK$103.5 million, representing an increase of around 16.3% due to an increase in playing cards products orders.
The U.S. and Europe were the two largest overseas markets of the Group, accounting for 75.3% and 11.6% of the total revenue in 2019 respectively.
Meanwhile, the gross profit of the Group increased by 29.6% to HK$365.6 million in 2019, with the gross profit margin increasing to 30.6% from 24.3% in 2018. This increment was primarily attributable to the depreciation of the Renminbi against the Hong Kong dollar during the year and the increase in tax refund rate for export products announced by the PRC tax authorities.
Operation-wise, the Group outsourced some production processes of greeting cards products to two subcontractors in Vietnam during the year, which prepared it for further expansion of production capacity in various locations. It also accelerated business development in non-US regions by appointing its first sales representative in Europe to explore the European market. In addition, the Group strived to further penetrate the online market by continuously enhancing the functions and product options of its websites and digital marketing strategies.
Prospects
The global economy is expected to be hit by higher uncertainty with the recent outbreak of COVID-19 as well as the ongoing political, economic and trade tensions presented on a number of fronts. The Group reckons that the global economy will continue to experience stages of adjustment and is cautious about the outlook in the coming years.
The Group sees the web sales business as an important growth driver in the long run. Accordingly, it plans to continuously enhance its digital marketing strategies and the features and interfaces of its websites, and to develop websites in more languages, in order to expand its customer base and achieve continuous and stable growth in the web sales business.
The Group will continue to intensify the development of Industry 4.0 through continuous enhancement of automation and data exchange in manufacturing technologies and processes, with the aim to attain manufacturing and operational excellence.
Meanwhile, expansion of manufacturing capacities in Vietnam will be one of the Group's key strategies in 2020. While the Group will continue to identify and engage subcontractors in Vietnam to perform end-to-end production, it is in the active process of identifying potential factory building for acquisition, with a target to set up its own production site in Vietnam by the end of 2021.
Mr. Cheng Wan Wai, Founder, Chairman, Executive Director and CEO of Q P Group concluded: "As a sustainable enterprise, we always try to seize every opportunity to expand our business scale and yield increased income. We also strive to diversify our production capacity in different regions in order to better cope with the challenges ahead. The Group remains confident about its prospects and expects the Listing would enhance the Group's brand awareness and reputation, and eventually help attract potential local and international customers. We will continue to grow with the market and create satisfactory returns to our shareholders."
About Q P Group Holdings Limited (Stock code: 01412)
Established in Hong Kong in 1985, Q P Group ranked first in the paper-based tabletop games and related products manufacturing market in the PRC, and second in the paper-based greeting cards manufacturing market in the PRC, both in terms of export value in 2018. It has established stable and long-term business relationships with major OEM customers including an international greeting cards publisher and multinational children educational products and toys brands. Its principal product categories include tabletop games, greeting cards, educational items and premium packaging, which are sold on an OEM basis or through its self-operated websites. It operates two key production sites in Dongguan and Heshan in the PRC.
The five major websites are:
https://www.makeplayingcards.com
https://www.boardgamesmaker.com
https://www.createjigsawpuzzles.com
https://www.printerstudio.com
https://www.gifthing.com
For more information, please visit: https://www.qpp.com/
Notes:
* Adjusted net profit is the net profit excluding listing expenses
# According to the ranking and market share of the leading manufacturers of paper-based tabletop game products and paper-based greeting cards in terms of export value, the PRC, 2018 in the CIC report
Media Enquiries
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