Hengdeli Announces 2021 Interim Results

Sound and Steady Operations and Seeking Sustainable Development

HONG KONG, Aug 26, 2021 - (ACN Newswire) - Hengdeli Holdings Limited ("Hengdeli" or the "Company" and, together with its subsidiaries, the "Group"; stock code: 3389), a high-end consuming accessories manufacturer and service provider, announced its interim results for the six months ended 30 June 2021 (" the period under review").

Results Summary:
-- Recorded revenue of RMB 450,749,000, representing a year-on-year decrease of 30.8%.
-- Gross profit margin was approximately8.5%, representing a year-on-year decrease of 400bps.
-- Loss for the period amounted to approximately RMB21,885,000.
-- Loss attributable to equity shareholders of the Company amounted to RMB16,975,000.

In the first half year of 2021, the pandemic was well-controlled in Mainland China, the overall economy began to recover, and the recovery continued to expand. Globally, however, the coronavirus pandemic was still fluctuating, the financial environment was still unpredictable, and the economy recovery of various country showed a trend of divergence, resulting in an extremely unstable economic environment. Under the principle of "sound, steady and long-term operations", the Group adapted to market conditions, adjusted, and deployed its business in a timely manner, and enhanced the management level in response to the challenging environment, so as to ensure the survival and health of the enterprise, aiming to achieve long-term development in the future.

For the six months ended 30 June 2021, the Group recorded revenue of RMB 450,749,000, representing year-on-year decrease of 30.8 %; high-end consuming accessories business recorded revenue of RMB210,787,000, which is similar to that in the same period last year; watches retail and trading sales amounted to RMB 64,518,000, resenting a year-on-year decease of 83.9 %. Commodity trading recorded revenue of RMB 175,444,000, representing a year-on-year increase of 304.5 %. During the period under review, the Group recorded a loss amounting to RMB 21,885,000. Loss attributable to equity shareholders amounted to RMB 16,975,000. The loss was mainly due to the decrease in the revenue and inventory provisions affected by the economic environment.

During the period under review, in accordance with the established strategy, the Group continued to close the remaining watch retail stores in Hong Kong and generally ended the operations of retail business of renowned watches and therefore shifted its main focus to the high-end consuming accessories business. The global economic situations remain, however, ever-changing, and unpredictable; surge of raw materials, logistics and labor costs led to a larger increase in costs. The overall revenue of high-end consuming accessories services was similar to that in the same period last year, but the overall net profit recorded a sharper decrease.

At present, from a global perspective, although the coronavirus pandemic has eased, it has not been effectively controlled, and the trend of political unrest is also obvious. However, as the pandemic was well-controlled in Mainland China, the Group expect the economy in Mainland China to sustain its steady trend. In the second half of the year, the Group will continue to adhere to the principle of "sound, steady and long-term operations". The Group will leverage on the stable environment of economic development in Mainland China to focus on expanding the development in manufacturing of high-end accessories for renowned watches and engage in deeper cooperation with brands and international counterparts in various ways, striving to become an indispensable independent segment in the global industrial ecological chain of high-end watch groups. The Group will continue to enhance the service standard of its integrated services for commercial space in Mainland China and international markets. The Group will also embark on a limited number of diversified business activities to include the manufacturing of high-end product accessories in other high-end lifestyle products such as jewelry, cosmetics, and mobile phones, and to expand its commercial space beautification services to include living space beautification services. At the same time, the Group will adapt to market changes, continue to explore new profit models, and achieve new breakthroughs in corporate development.

Breakdown of Revenue

For the six months ended 30 June
RMB (Thousand) 2021 % 2020 %
High-end Consuming Accessories 210,787 46.8 208,502 32.0
Watches Retail and Trading Business 64,518 14.3 399,959 61.4
Commodity Trading 175,444 38.9 43,370 6.6
Total 450,749 100 651,831 100

Hengdeli Holdings Limited
Hengdeli Holdings Limited (the "Company" or "Hengdeli") and its subsidiaries (collectively as the "Group") a high-end consuming accessories manufacturer and service provider. The Group's shareholders include: the Zhang family; the reputable watch manufacturer and distributor SWATCH Group.

The Group 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. To engaging in deeper cooperation with brands and international counterparts in various ways, striving to becoming an indispensable independent segment in the global industrial ecological chain of high-end watch groups. The Group will continue to enhance the service standard of its integrated services for commercial space in domestic and international markets. The Group will also embark on a limited number of diversified business activities to include the production of high-end product accessories in other high end lifestyle products such as jewellery, cosmetics and mobile phones, and to expand its commercial space beautification services to include living space beautification services, so as to truly establish the Group as a platform for business-friendly and home-friendly lifestyle services.

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.

For enquiries, please contact:

Hengdeli Holdings Limited
Ms. Claudia Wang +852 2921 9667 / 5135 1016 [email protected]
Fax: +852 2375 8010

Porda Havas International Finance Communications Group
Ms. Kelly Fung +852 3150 6763 / 9289 2974 [email protected]
Ms. June Tuo +852 3150 6755 / 9707 5784 [email protected]
Fax: +852 3150 6728


Source: Hengdeli Holdings Ltd

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