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Hung Fook Tong group Holdings limiTed ᒿ၅ੀණྠછٰϞࠢʮ̡
(Incorporated in the Cayman Islands with limited liability)
(stock Code: 1446)
VolunTArY AnnounCemenT
CessATion oF operATion oF reTAil Business in mAinlAnd CHinA
This announcement is made by Hung Fook Tong Group Holdings Limited (the "Company") and its subsidiaries (collectively the "group") on a voluntary basis. The purpose of this announcement is to keep the Company's shareholders (the "shareholders") and potential investors informed of the latest business development of the Company.
CessATion oF operATion oF reTAil Business in mAinlAnd CHinA
Having considered the rapid changing retail sales environment in the wellness drinks market and the unsatisfying performance of certain retail stores in Mainland China in recent years, the board of directors (the "Board") of the Company has resolved to cease the operation of all existing retail stores in Mainland China (the "prC retail"). As at the announcement date, the PRC Retail comprises 12 retail stores, all of them are self-operated and located in Guangzhou City, Guangdong Province. The operation of different PRC Retail stores will cease on different dates starting from mid-December 2018. It is expected that all existing PRC Retail stores will cease operation by early January 2019.
The segment results of the PRC Retail for the years ended 31 December 2016, 31 December 2017 and six months ended 30 June 2018 are as follows:
For the | For the | For the | |
year ended | year ended | six months | |
31 december | 31 december | ended 30 June | |
2016 | 2017 | 2018 | |
HK$'000 | HK$'000 | HK$'000 | |
Segment revenue | 14,463 | 12,160 | 4,540 |
Segment loss | (3,808) | (2,192) | (2,071) |
It is expected that the Group will incur one-off expenses of approximately HK$1.3 million in relation to the closure of the existing PRC Retail Stores.
reAlloCATion oF resourCes
Subsequent to the cessation of the operation of the PRC Retail, the Group will focus its resources on the development of its retail business in Hong Kong, and its wholesale business in Hong Kong, Mainland China and other parts of the world; as well as the new production plant in Kaiping City, Guangdong Province as disclosed in the Company's 2016, 2017 annual reports and 2018 interim report.
The Board is of the view that the cessation of the operation of the PRC Retail will enable the Group to better allocate and utilize its human, financial and operational resources to other segments and will not have a material adverse effect on the Group's financial results. The Board considers that such decision is in the best interests of the Company and the Shareholders as a whole. The Board will from time to time continue to explore new business opportunities with immense potentials, including re-entering the retail market in Mainland China, and update the Shareholders and potential investors of the Company as and when appropriate in accordance with the Rules Governing the Listing of Securities on the Stock Exchange.
shareholders and potential investors are advised to exercise caution when dealing in the shares of the Company.
On behalf of the Board of
Hung Fook Tong group Holdings limited
Tse po Tat
Chairman and Executive Director
Hong Kong, 20 September 2018
As at the date of this announcement, the Board comprises Mr. Tse Po Tat, Ms. Wong Pui Chu, Mr. Kwan Wang Yung and Dr. Szeto Wing Fu as executive Directors, and Mr. Kiu Wai Ming, Professor Sin Yat Ming and Mr. Andrew Look as independent non-executive Directors.