Sanxiong Aurora: Net profit increased by 36% in 2019, declined in Q1

Sanxiong Aurora released its 2019 annual report. During the reporting period, the company achieved revenue of RMB 2.504 billion, a year-on-year (YoY) increase of 2.94%; net profit attributable to shareholders of the listed company was RMB 245 million, a year-on-year (YoY) increase of 36.04%; basic earnings per share were RMB 0.88. The company proposes to distribute a cash dividend of RMB 3 (including tax) for every 10 shares to all shareholders.

The announcement stated that during the reporting period, the company strengthened its marketing (Sales) channel construction, fully leveraged its leading advantages in the professional lighting market, and continuously expanded market space in new industry sectors while consolidating its position in traditional industry markets. For example, the company has been rated as a Vanke Class A supplier for consecutive years, with sales revenue from commercial project products increasing by 13.71%; the company achieved significant breakthroughs in industries such as high-end hotels and rail transit, resulting in noticeable sales revenue growth. Last year, the company also implemented a series of management reform measures, improving overall communication and operational efficiency. By the end of the reporting period, inventory decreased by 12%, cost control achieved significant results, and product gross profit margin increased by more than three percentage points.

To further enhance the penetration capability of sales terminals, the company promoted the下沉 of its marketing network channels, focusing on expanding marketing network construction and hardware channels in third- and fourth-tier cities. During the reporting period, the company completed the construction of over 400 commercial and residential specialty stores and zones, and developed nearly 8,000 hardware sales terminals. By the end of the reporting period, the company's total number of sales terminals nationwide exceeded 20,000, including more than 4,000 specialty stores, 98 decorative lighting stores, and 15 national flagship stores. This has formed a nationwide sales terminal system that combines online and offline channels, with broad coverage and deep penetration, providing strong support for the company's business development.

Regarding the outlook for 2020, Pak Group stated that China's lighting industry faces a difficult start and a highly uncertain and complex market environment. Market competition will be extremely fierce, increasing the likelihood of elimination for small and medium-sized brands and companies with weaker capabilities, while industry concentration is expected to continue rising. However, due to the partially rigid nature of lighting demand and the accelerated promotion of infrastructure investment projects after the pandemic, demand in the lighting industry will gradually return to normal, and some segments may even enter a stage of rapid demand growth. Pak Group will continue to leverage its advantages and fully utilize resources to enhance its industry position and market share in key sectors such as real estate, education, rail transit, and supermarkets.

Pak also released its Q1 2020 report, showing revenue of RMB 227.5 million in the first quarter, a Year-on-year (YoY) decrease of 44.19%; net profit attributable to shareholders of the listed company was RMB 5.4529 million, a Year-on-year (YoY) decrease of 11.42%.

Pak Group stated that during the reporting period, the company's production and business operations were significantly restricted due to the impact of the COVID-19 pandemic, which had a noticeable effect on market sales, leading to a decline in sales and revenue. Due to epidemic prevention and control requirements, the domestic resumption of work and production was greatly affected, logistics and sales were constrained, and the market remained sluggish with weak demand, resulting in a significant drop in the company's operating performance in the first quarter of 2020.