Fenbo Holdings Limited (the "Company" or "Fenbo"), an established
original equipment manufacturer (OEM) for a global home essential
company, producing electrical hair styling products under the
"Remington" brand which are currently sold to overseas markets,
today announced its financial results for the full year ended
December 31, 2023.
Full Year 2023 Financial Highlights
- Revenue remained
relatively stable at HK$119.1 million (US$15.2 million) for the
fiscal year ended December 31, 2023, slightly decreasing by HK$0.6
million, or 0.5% from HK$119.7 million for the same period in
2022.
- Gross profit was
HK$22.1 million (US$2.8 million) for the fiscal year ended December
31, 2023, an increase of HK$3.3 million or 17.6% from HK$18.8
million for the same period in 2022, which, combined with an
increase of general and administrative expenses, resulted in losses
from operations of HK$0.4 million, a decrease in losses from
operations of HK$2.1 million from the prior year.
- Gross profit
margin for fiscal year ended December 31, 2023 rose to 18.6% as
compared to gross profit margin of 15.7% for the fiscal year ended
December 31, 2022.
- Net cash
provided by operating activities was HK$9.7 million for fiscal year
ended December 31, 2023, compared to HK$5.7 million during the same
period in 2022.
Mr. Allan Li, Chairman and CEO of the Company
commented: "We delivered another year of stable operation and
financial performance for 2023, posting revenue of HK$119.1 million
(US$15.2 million) for 2023, compared to HK$119.7 million for 2022.
This increase in gross profit of HK$3.3 million combined with an
increase in general and administrative costs, resulted in losses
from operations decreasing by HK$2.1 million from the prior year to
HK$0.4 million. Our gross margin also improved by nearly 3
percentage points for 2023 fiscal year."
"We closely monitor market dynamics, supply
trends, and cost movements, enabling us to make informed decisions
and optimize our purchasing strategies. We have successfully
managed cost fluctuations in the past and expect to continue doing
so in the future. Recognizing the importance of continuous
improvement, we are committed to enhancing our product mix and
quality to strengthen our competitive advantage and achieve higher
margins. We’ll also enhance collaboration with our valuable client
to expand in new and existing geographical markets in 2024."
"Looking ahead, we are confident in our ability
to navigate market developments and proactively adjust our
strategies to mitigate any adverse effects on our business, results
of operations, and financial condition. We believe that our
resilient approach will allow us to sustain our growth trajectory
despite external challenges."
"We are optimistic about the opportunities that
lie ahead. As our loss from operations continue to narrow, the
Company is confident in our ability to improve profitability during
2024 through a combination of product optimization, quality
enhancements, and strategic inventory management. We’ll also
continue our efforts in the research and development of environment
friendly products and packaging, and these positive steps should
improve our financial performance and position us for growth in the
long term."
Full Year 2023 Selected Financial Results
Revenues
Revenue decreased by HK$0.6
million, or 0.5%, to HK$119.1 million (US$15.2 million) for the
fiscal year ended December 31, 2023 compared to HK$119.7 million
for the same period in 2022 primarily because of the decrease in
revenue for our curling wands and irons products.
The following table presented the Company’s
revenues by product types for the fiscal years ended December 2023
and 2022:
|
|
For the years ended December 31, |
|
|
|
|
|
2023 |
|
2022 |
|
|
|
Revenues |
|
HK$ Million |
|
HK$ Million |
Variance % |
Products |
|
|
|
|
|
|
|
|
|
Curling Wands and Irons |
|
HK$ |
32.8 |
|
HK$ |
38.3 |
|
(14.5 |
)% |
Flat Irons and Hair
Straighteners |
|
|
82.8 |
|
|
78.6 |
|
5.3 |
% |
Others |
|
|
3.5 |
|
|
2.8 |
|
27.6 |
% |
Total revenues |
|
|
119.1 |
|
|
119.7 |
|
(0.5 |
)% |
The following table presented the Company’s
revenues by geographical areas based on the location of our sole
customer for the fiscal years ended December 31, 2023 and 2022:
|
|
For the years ended December 31, |
|
|
|
|
|
2023 |
|
2022 |
|
|
|
Revenues |
|
HK$ Million |
|
HK$ Million |
Variance % |
Geographical
areas |
|
|
|
|
|
|
|
|
|
Europe |
|
HK$ |
65.4 |
|
HK$ |
66.7 |
|
(1.9 |
)% |
North America |
|
|
48.4 |
|
|
45.1 |
|
7.3 |
% |
South America |
|
|
- |
|
|
2.7 |
|
(100 |
)% |
Asia and others |
|
|
5.3 |
|
|
5.2 |
|
1.7 |
% |
Total revenues |
|
|
119.1 |
|
|
119.7 |
|
(0.5 |
)% |
Cost of sales
Cost of sales decreased to
HK$97.0 million (US$12.4 million) for the fiscal year ended
December 31, 2023, representing a decrease by HK$3.9 million from
HK$100.9 million in the same period in 2022. The fluctuation of
cost of sales was in line with the decrease in our revenue during
the same period.
Gross profit
Gross profit for the fiscal
year ended December 31, 2023, was HK$22.1 million (US$2.8 million),
an increase of HK$3.3 million from HK$18.8 million for the same
period in 2022.
During our fiscal year ended December 31, 2023,
the COVID-19 Pandemic has been successfully brought under control
and the adverse impacts of the pandemic have been gradually
dissipating as economic activities resume to normal. The supply and
prices of raw materials became stable during the year, and thus led
to the decrease in the company’s average unit costs and increase in
gross profit for the year.
The Company’s gross profit margin for fiscal
year ended December 31, 2023 rose to 18.6% as compared to gross
profit margin of 15.7% for the fiscal year ended December 31,
2022.
Selling and marketing expenses
Selling and marketing expenses
was HK$2.0 million (US$0.3 million) for the fiscal year ended
December 31, 2023, which decreased by HK$0.1 million from HK$2.1
million in the same period in 2022. The decrease during the fiscal
year ended December 31, 2023 from the same period in 2022 was due
mainly to a decrease in overall level of shipping of products.
General and administrative expenses
General and administrative
expenses increased by HK$1.3 million to HK$20.5 million
(US$2.6 million) for the fiscal year ended December 31, 2023 from
HK$19.2 million for the fiscal year ended December 31, 2022. This
increase was due mainly to the increase in staff costs and motor
vehicles and travelling expenses as the travel restrictions of
China and Hong Kong were lifted gradually during the fiscal year
ended December 31, 2023.
Income (loss) from operations
Loss from operations decreased
by HK$2.1 million to HK$0.4 million for the fiscal year ended
December 31, 2023, from the loss from operations of HK$2.5 million
for the fiscal year ended December 31, 2022. The improvement in the
financial performance from operations during the fiscal year ended
December 31, 2023 were primarily due to the combined effects of
increase of gross profit of HK$3.4 million and the decrease of
general and administrative expenses of HK$1.3 million during the
fiscal year ended December 31, 2023.
Other income (expense), net
Major components of other income (expense) are
exchange gain and loss, gain on disposal of property, plant and
equipment, sundry income, government grant and bank interest
income.
Other net income was HK$0.8
million (US$0.1 million) for the fiscal year ended December 31,
2023, which decreased by HK$12.2 million from HK$13.0 million in
the same period in 2022. The decrease was due mainly to the
decrease in gain on disposal of property, plant and equipment
recognized during the fiscal year ended December 31, 2023.
Net income
The net income decreased by
HK$10.1 million from a net income of HK$8.6 million for the year
ended December 31, 2022 to a net loss of HK$1.5 million (US$0.2
million) for the fiscal year ended December 31, 2023. The decrease
in the net income during the year ended December 31, 2023 was
mainly attributable to the cumulative effect of the reasons set out
above.
Recent development
The Company announced the closing of its initial
public offering of 1,000,000 ordinary shares (the "Ordinary
Shares") at a public offering price of $5.00 per share for total
gross proceeds of $5,000,000, before deducting underwriting
discounts and other offering expenses. The Ordinary Shares began
trading on Nasdaq Capital Market on November 30, 2023, under the
ticker symbol "FEBO".
About Fenbo Holdings Limited
Headquartered Hong Kong and through its
operating subsidiaries in Hong Kong and Guangdong Province, Fenbo
represents over 30 years of experience producing personal care
electric appliances (principally electrical hair styling products)
and toys products to overseas markets. The Company, since 2006 also
has been served as an OEM and ODM for Spectrum Brands, a global
home essential company, and its sole customer, producing electrical
hair styling products, under the "Remington" brand which Spectrum
Brands has the right of the use of, and which are currently sold to
Europe, United States and Latin America. For more information,
please visit: http://www.fenbo.com.
Forward-Looking Statement
This press release contains forward-looking
statements. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, future events or
performance, and underlying assumptions and other statements that
are other than statements of historical facts. When the Company
uses words such as "may, "will, "intend," "should," "believe,"
"expect," "anticipate," "project," "estimate" or similar
expressions that do not relate solely to historical matters, it is
making forward-looking statements. These forward-looking statements
include, without limitation, the Company's statements regarding the
expected trading of its Ordinary Shares on the Nasdaq Capital
Market and the closing of the Offering. Forward-looking statements
are not guarantees of future performance and involve risks and
uncertainties that may cause the actual results to differ
materially from the Company's expectations discussed in the
forward-looking statements. These statements are subject to
uncertainties and risks including, but not limited to, the
uncertainties related to market conditions and the completion of
the initial public offering on the anticipated terms or at all, and
other factors discussed in the "Risk Factors" section of the
registration statement filed with the SEC. For these reasons, among
others, investors are cautioned not to place undue reliance upon
any forward-looking statements in this press release. Additional
factors are discussed in the Company's filings with the SEC, which
are available for review at www.sec.gov. The Company undertakes no
obligation to publicly revise these forward-looking statements to
reflect events or circumstances that arise after the date
hereof.
For more information, please contact:
Investor RelationsWFS Investor Relations Inc.Janice Wang,
Managing PartnerEmail: services@wealthfsllc.comPhone: +86
13811768599+1 628 283 9214
FENBO HOLDINGS
LIMITEDCONSOLIDATED BALANCE
SHEETS(Amount in thousands, except for share and
per share data, or otherwise noted)
|
|
|
|
As of December 31, |
|
|
|
Note |
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
|
|
|
|
HK$’000 |
|
|
|
HK$’000 |
|
|
|
US$’000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Note) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
|
|
|
13,853 |
|
|
|
46,342 |
|
|
|
5,933 |
|
Accounts receivable, net |
|
3 |
|
|
32,938 |
|
|
|
31,486 |
|
|
|
4,031 |
|
Deferred initial public
offering cost |
|
|
|
|
1,903 |
|
|
|
- |
|
|
|
- |
|
Inventories |
|
4 |
|
|
15,860 |
|
|
|
14,088 |
|
|
|
1,804 |
|
Prepaid expenses and other
current assets |
|
5 |
|
|
6,767 |
|
|
|
6,017 |
|
|
|
770 |
|
Total current
assets |
|
|
|
|
71,321 |
|
|
|
97,933 |
|
|
|
12,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net |
|
6 |
|
|
1,498 |
|
|
|
1,244 |
|
|
|
159 |
|
Right-of-use assets |
|
7 |
|
|
7,117 |
|
|
|
3,801 |
|
|
|
487 |
|
Total non-current
assets |
|
|
|
|
8,615 |
|
|
|
5,045 |
|
|
|
646 |
|
TOTAL
ASSETS |
|
|
|
|
79,936 |
|
|
|
102,978 |
|
|
|
13,184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loan – current |
|
9 |
|
|
11,000 |
|
|
|
11,000 |
|
|
|
1,408 |
|
Accounts payable |
|
|
|
|
13,798 |
|
|
|
18,482 |
|
|
|
2,366 |
|
Other payables and accrued
liabilities |
|
8 |
|
|
5,799 |
|
|
|
7,049 |
|
|
|
904 |
|
Lease liabilities –
current |
|
7 |
|
|
5,626 |
|
|
|
4,060 |
|
|
|
520 |
|
Amounts due to related
parties |
|
10 |
|
|
5,117 |
|
|
|
2,413 |
|
|
|
309 |
|
Total current
liabilities |
|
|
|
|
41,340 |
|
|
|
43,004 |
|
|
|
5,507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease liabilities –
non-current |
|
7 |
|
|
2,552 |
|
|
|
198 |
|
|
|
25 |
|
TOTAL
LIABILITIES |
|
|
|
|
43,892 |
|
|
|
43,202 |
|
|
|
5,532 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preference shares US$0.0001
par value per share; 3,000,000 authorized capital; nil shares
issued and outstanding |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Ordinary shares US$0.0001 par
value per share; 300,000,000 authorized capital; 11,000,000 shares
issued and outstanding (2022: 10,000,000 shares issued and
outstanding) |
|
13 |
|
|
8 |
|
|
|
9 |
|
|
|
1 |
|
Additional paid-in
capital |
|
|
|
|
2,492 |
|
|
|
28,494 |
|
|
|
3,648 |
|
Statutory reserve |
|
13 |
|
|
2,806 |
|
|
|
2,806 |
|
|
|
359 |
|
Retained earnings |
|
|
|
|
30,183 |
|
|
|
28,721 |
|
|
|
3,677 |
|
Accumulated other
comprehensive income |
|
|
|
|
555 |
|
|
|
(254 |
) |
|
|
(33 |
) |
Total shareholders’
equity |
|
|
|
|
36,044 |
|
|
|
59,776 |
|
|
|
7,652 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
79,936 |
|
|
|
102,978 |
|
|
|
13,184 |
|
FENBO HOLDINGS
LIMITEDCONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME(Amount in thousands, except
for share and per share data, or otherwise noted)
|
|
|
|
For the year ended December 31, |
|
|
|
Note |
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
|
|
|
HK$’000 |
|
|
HK$’000 |
|
|
US$’000 |
|
|
|
|
|
|
|
|
|
|
|
(Note) |
|
Revenues |
|
|
|
|
119,728 |
|
|
|
119,110 |
|
|
|
15,249 |
|
Cost of sales |
|
|
|
|
(100,892 |
) |
|
|
(97,004 |
) |
|
|
(12,419 |
) |
Gross profit |
|
|
|
|
18,836 |
|
|
|
22,106 |
|
|
|
2,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses |
|
|
|
|
(2,057 |
) |
|
|
(1,961 |
) |
|
|
(251 |
) |
General and administrative
expenses |
|
|
|
|
(19,239 |
) |
|
|
(20,535 |
) |
|
|
(2,629 |
) |
Total operating expenses |
|
|
|
|
(21,296 |
) |
|
|
(22,496 |
) |
|
|
(2,880 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
|
|
(2,460 |
) |
|
|
(390 |
) |
|
|
(50 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange (loss) gain, net |
|
|
|
|
- |
|
|
|
213 |
|
|
|
27 |
|
Gain (loss) on disposal of
property, plant and equipment |
|
|
|
|
12,458 |
|
|
|
(1 |
) |
|
|
- |
|
Interest income |
|
|
|
|
20 |
|
|
|
84 |
|
|
|
11 |
|
Interest expense |
|
|
|
|
(1,581 |
) |
|
|
(1,708 |
) |
|
|
(219 |
) |
Government grant |
|
|
|
|
- |
|
|
|
205 |
|
|
|
26 |
|
Other income, net |
|
|
|
|
528 |
|
|
|
266 |
|
|
|
34 |
|
Total other (expense)
income |
|
|
|
|
11,425 |
|
|
|
(941 |
) |
|
|
(121 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (expense) before tax
expense |
|
|
|
|
8,965 |
|
|
|
(1,331 |
) |
|
|
(171 |
) |
Income tax expense |
|
12 |
|
|
(312 |
) |
|
|
(131 |
) |
|
|
(17 |
) |
Net income
(loss) |
|
|
|
|
8,653 |
|
|
|
(1,462 |
) |
|
|
(188 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
loss, net of taxes |
|
|
|
|
(2,575 |
) |
|
|
(809 |
) |
|
|
(104 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
income (loss) |
|
|
|
|
6,078 |
|
|
|
(2,271 |
) |
|
|
(292 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share attributable to ordinary shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted (cents) |
|
13, 14 |
|
|
86.53 |
|
|
|
(14.50 |
) |
|
|
(1.86 |
) |
Weighted average
number of ordinary shares used in computing net income (loss) per
share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
13, 14 |
|
|
10,000,000 |
|
|
|
10,084,932 |
|
|
|
10,084,932 |
|
FENBO HOLDINGS
LIMITEDCONSOLIDATED STATEMENTS OF CASH
FLOWS(Amount in thousands, except for share and
per share data, or otherwise noted)
|
|
For the year ended December 31, |
|
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
|
|
HK$’000 |
|
|
HK$’000 |
|
|
US$’000 |
|
|
|
|
|
|
|
|
|
(Note) |
|
Operating
activities |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
8,653 |
|
|
|
(1,462 |
) |
|
|
(188 |
) |
Adjustments to reconcile net
income to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
702 |
|
|
|
506 |
|
|
|
65 |
|
Amortization of right to use
assets |
|
|
4,862 |
|
|
|
5,410 |
|
|
|
693 |
|
Interest on lease
liabilities |
|
|
469 |
|
|
|
313 |
|
|
|
40 |
|
(Gain) loss on disposal of
property, plant and equipment |
|
|
(12,458 |
) |
|
|
1 |
|
|
|
- |
|
Change in operating assets and
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Change in accounts
receivable |
|
|
10,228 |
|
|
|
789 |
|
|
|
101 |
|
Change in inventories |
|
|
4,217 |
|
|
|
1,475 |
|
|
|
189 |
|
Change in prepaid expenses and
other current assets |
|
|
(2,977 |
) |
|
|
2,526 |
|
|
|
323 |
|
Change in accounts
payable |
|
|
(2,253 |
) |
|
|
5,073 |
|
|
|
649 |
|
Change in other payables and
accrued liabilities |
|
|
267 |
|
|
|
1,398 |
|
|
|
179 |
|
Payments on lease |
|
|
(6,015 |
) |
|
|
(6,301 |
) |
|
|
(807 |
) |
Net cash provided by
operating activities |
|
|
5,695 |
|
|
|
9,728 |
|
|
|
1,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities |
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property, plant
and equipment |
|
|
(554 |
) |
|
|
(284 |
) |
|
|
(36 |
) |
Net cash used in
investing activities |
|
|
(554 |
) |
|
|
(284 |
) |
|
|
(36 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of
ordinary shares |
|
|
- |
|
|
|
26,003 |
|
|
|
3,329 |
|
Advances (to) from related
parties |
|
|
5,034 |
|
|
|
(2,704 |
) |
|
|
(346 |
) |
Net cash provided by
financing activities |
|
|
5,034 |
|
|
|
23,299 |
|
|
|
2,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in
cash |
|
|
10,175 |
|
|
|
32,744 |
|
|
|
4,191 |
|
Effect on exchange rate change
on cash |
|
|
(318 |
) |
|
|
(255 |
) |
|
|
(34 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash as of beginning of the
year |
|
|
3,996 |
|
|
|
13,853 |
|
|
|
1,776 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash as of the end of
the year |
|
|
13,853 |
|
|
|
46,342 |
|
|
|
5,933 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary Cash
Flows Information |
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest |
|
|
1,581 |
|
|
|
1,708 |
|
|
|
219 |
|
Cash paid (refund) for
taxes |
|
|
3,492 |
|
|
|
(196 |
) |
|
|
(25 |
) |
Supplemental schedule of
non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Dividend made by addition to
the amount due to related parties |
|
|
(10,000 |
) |
|
|
- |
|
|
|
- |
|
Consideration for the sale of
property to the shareholder settled by deduction from the amount
due to the related parties |
|
|
13,880 |
|
|
|
- |
|
|
|
- |
|
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