Profit before Taxation Amounts to 1.874 Million
Loan Facilitation Business Emerges as Growth Driver
Hong Kong, March 23, 2019 /PRNewswire/ -- Jimu Group Limited (the "Company", stock code: 8187.HK, or together with its subsidiaries collectively referred to as the "Group"), focusing on businesses of footwear design and development and loan facilitation, is pleased to announce the annual results of the Company for the year ended 31 December 2018 (the "Period") today.
Various uncertainties continue to cloud the global economy. Under this depressed retail market, the sales revenue of the Company's footwear business dropped significantly. However, the Company's loan facilitation business has achieved remarkable result which has reduced the impact from the depressed retail market. As a result, during the Period, the Group recorded revenue of approximately HK$219,353,000, a slight decrease of 7.3% compared year-on-year, and profit before taxation of HK$1,874,000. The Group also posted net loss of HK$3,991,000, significantly narrowed from 2017's HK$9,009,000 million loss, resulted with a loss per share at HK$0.83 cents. Among which, benefited from the growing loan facilitation business, the Company achieved turnaround and recorded quarterly profit in the third quarter of 2018, and the profit further increased to HK$14,410,000 in the fourth quarter. The Board do not recommend the payment of annual dividends this year (2017: No dividends).
Accomplishments of Loan Facilitation Business
The Group started the loan facilitation business in April 2018. The business sector had a strong growing momentum in 2018, which had already recorded profit in the third quarter, and further expanded the profit to HK$19,911,000 in the fourth quarter. Overall, this business sector recorded annual revenue of approximately HK$96,226,000, and generated profit of HK$24,296,000.
The Group mainly provides consulting and credit assessment services to customers in the third and fourth tier cities in China to help them to obtain financing at reasonable cost. Through personal outreach to small and micro enterprise owners, continuous education on financing solutions, data collection and analysis and consultation, the Group aims to assist the customers to obtain appropriate financing solutions from third parties such as financial institutions and/ or other financing platforms, and also provide continuous customer support.
As the end of December 2018, the Group has already set up over 40 branch offices across different regions in China to provide assistance to customers with financing needs, with a particular focus on small and micro enterprise owners in third and fourth tier cities in China, who in general, compared to the small and micro enterprise owners in first tier cities, have weaker knowledge or access of financing solutions available in the market, and shows greater market potentials.
Mr. Dong Jun, Executive Director and Chairman said, "We believe that China government's emphasis on the development of facilitating inclusive finance is going to pose ample opportunities for the Group; therefore we are optimistic about the future development of the loan facilitation business and would be willing to devote more resources into it."
Footwear Business Facing Downward Pressure
The Group offers formal and casual footwear for men, women and children to its customers. Resulting from various global uncertainties, in particular, the continuous impact of the Brexit, sluggish economic growth in the EU and the US-China trade dispute which adversely affected customer sentiment, as well as more intense competitions in the footwear industry which led to declining revenue and depressing profit margins.
The Group continued to strive for a better footwear business performance. In the fourth quarter in 2018, the footwear business made improvements and recorded revenue growth and thus relatively mild quarterly loss as compared with the first three quarters. However, the footwear business still recorded a net loss in 2018. During the Period, the footwear business suffered from a great reduction in revenue to HK$123,127,000, resulting in a net loss of HK$10,135,000.
Riding on the financial services experiences and skills accumulated by the controlling shareholders of the Group in mainland China, the Group actively participated in the microfinance services market in mainland China. Its loan facilitation business, which was newly launched in 2018, has already been the major driving force of the Group's business.
Although we anticipate 2019 will be a challenging year due to the economic uncertainties, the Group is optimistic about the future development of the loan facilitation business and will devote more resources into it, including but not limited to increasing geographical coverage, expanding target customer group and other upstream/ downstream expansion.
For its footwear business, the Group adopted certain cost-cutting measures and slowed down certain business plan for the footwear business in view of declining revenue and business performance. In future, the Group will evaluate the current business model and viability of the footwear business in the long-term so as to create the most value for its shareholders.
Mr. Dong Jun said, "Looking forward, we are actively modifying the business model for the footwear business, and, based on the development of the loan facilitation business, seeking for more opportunities in the financial sector to strive for diversification growth and sustainable development."
About Jimu Group Limited（Stock code: 8187.HK）
Jimu Group Limited, formerly EverSmart International Holdings Limited ("EverSmart"), listed on the GEM of Stock Exchange of Hong Kong Limited in 2016. The Company is principally engaged in the design, development and production of footwear, and is also engaged in the provision of logistics management service and financial services. Hitherto, the Company achieved outstanding business development with its business sectors and partners now covering Hong Kong, mainland China and about 30 other countries and regions in the world.
In October 2017, the Asia Matrix Investments Limited, the controlling shareholder of EverSmart, entered into a sale and purchase agreement with Jimu Group Holdings Limited, selling 350,400,000 shares of the Company to Jimu Group Holdings, which accounted for 73.00% of the issued shares of the Company. Jimu Group Holdings acquired 50% or more of the voting rights of the Company. In March 2018, Ever Smart declared its change of company name, logo, stock short names and company websites to "Jimu Group Limited" to replace "Ever Smart International Holdings Limited", which had been used for identification purpose only.
The Company is principally engaged in the design, development and production of footwear, as well as logistics services. Currently, the Group has already built a diverse global customer portfolio and developed close relationship with manufacturers in the major footwear processing regions in PRC, and reaching sales orders from dozens of countries across the world.
Starting from 2018, the Group entered into a new journey by providing loan facilitation services to customers in relatively underserved markets. It successfully leveraged on the experience and understanding of its shareholders, quality customer services and strong analytics skills to have set up significant number of loan facilitation branch offices across China to serve micro-enterprises, individual businessmen and cultivators in third and fourth tier cities with efficient and pragmatic loan facilitation service, and assist them to obtain appropriate financing solutions from third parties such as financial institutions and/ or other financing platforms. With the wide coverage of its services across cities in China, its venture has yielded very encouraging results which is believed to be one of the driving forces of the Company to further strengthen the Group's business diversity strategy and future sustainable development.