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China Creative Home's Revenue and Net Profit Rise Steadily in 2014; Gross Profit Margin Stands at 40.4%
New functions added to electric fireplaces to broaden income sources
HONG KONG, Mar 25, 2015 - (ACN Newswire) - China Creative Home Group Limited ("China Creative Home Group" or the "Group"; stock code: 1678), a leading manufacturer of branded electric fireplaces and home decor products in the PRC, has reported satisfactory growth in revenue and net profit for the year ended December 31, 2014. The Group not only launched a series of air purifiers in 2014, but also actively expanded its sales channels, bolstered its production capacity and enhanced its design capabilities; laying a solid foundation for steady development in 2015.
For the year ended December 31, 2014, the Group's revenue increased by 17.9% to RMB1,409.0 million, and profit attributable to owners of the Company rose by 17.1% to RMB354.9 million. Gross margin climbed 7.5% to RMB 569.0 million and gross profit margin stood at 40.4% (2013: 44.3%).
The Board has recommended the payment of a final dividend of HK 3.9 cents per share for the year ended December 31, 2014 (approximately equivalent to RMB 3.1 cents).
Mr. Chen Fanglin, Chairman of China Creative Home Group, said, "As the economic condition improves, the Chinese people are demanding higher quality of life. They are also becoming increasingly sophisticated in terms of choosing their home decorations, furniture and overall atmosphere of their homes, which is set to facilitate our business development. As a leading manufacturer of branded electric fireplaces and home decor products in the PRC, we have focused on strengthening our design capabilities, promoting our brand to new customers and enhancing production capacity during the year, which explains why we have been able to achieve such an outstanding performance and make notable improvements on several fronts despite the challenging macroeconomic environment."
China Creative Home Group's product lines can be divided into two major categories: branded electric fireplaces and creative home decor products. For the year ended December 31, 2014, revenue of branded electric fireplaces and creative home decor products occupied 59.8% and 36.9% of total turnover respectively (2013: 57.5% and 42.5%). The Group launched electric fireplaces with air purification function and other products under its air purifier series in 2014.The air purifier products delivered RMB 45.9 million, accounted for 3.3% of total turnover to the Group within a short period of time.
The Group sells its products under the "Allen" brand in the PRC. As at December 31, 2014, 87.4% of sales were from the PRC (2013: 90.9%), with the remaining 12.6% from other countries, including the US, Germany, Canada, France and the UK (2013: 9.1%).
The first Creative Home furnishing concept shop under the "Allen" brand had its grand opening in Fujian in October 2014, and an operations center was opened in Shenzhen during the year. The Group also increased its investment in e-commerce in order to establish a new distribution network.
Phase one of the Group's Anhui production facilities was completed in mid-2014, contributing an additional 100,000 units of electric fireplaces per annum. Moreover, expansion of production facilities in Luojiang, Fujian was completed in late 2014, resulting in additional capacity of approximately 50,000 units of electric fireplaces per annum. The Luojiang production facilities are now capable of producing 327,500 electric fireplaces per annum.
In the future, aside from maintaining close ties with existing customers in coastal regions and Southwestern China, the Group will strive to secure new customers in south-western and north-western regions, as well as strengthen sales capabilities in overseas markets. Moreover, the Group will seek to open more creative home furnishing concept shops in major cities of the PRC by late 2016, including Beijing, Shanghai, Shenzhen, Chengdu, Guangzhou and Bengbu. As environmental awareness and health consciousness further grows, the Group will strive to expand its low-carbon green product lines in order to build a complete product series. Correspondingly, the Group is developing new water purifier products in 2015.
With respect to the expansion of production capacity, phase two of the Anhui production facilities began construction in the fourth quarter of 2014, and is expected for completion within the first half of this year. Phase three will start construction in the second half of 2015 and is scheduled for completion within the first half of 2016. After phase three of the Anhui production facilities is completed, annual production capacity of electric fireplaces will increase 200,000 units, from 427,500 units (late 2014) to 627,500 units.
Mr. Chen concluded, "China Creative Home Group will adhere to its pre-set development strategies, which include enhancing design capabilities, promoting the brand and expanding capacity, with the aim of fully capitalizing on its competitive edges. Although the operating environment remains challenging this year, the penetration of electric fireplaces remains very low in the PRC. Our strong brand will help us to promote our electric fireplaces and air purifier series in the PRC and overseas."
Contact:Strategic Financial Relations Limited
Ms. Brenda Chan +852 2864 4833 brenda.chan@sprg.com.hk
Ms. Isabel Kwok +852 2864 4824 isabel.kwok@sprg.com.hk
Ms. Evonne Xiao +852 2114 4981 evonne.xiao@sprg.com.hk
www.sprg.com.hk
Source: China Creative Global Holdings Limited
Sectors: Daily Finance, Daily News
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