Q P Group Holdings Limited (“Q P Group” or the “Group”; Stock code: 1412), one of the leading manufacturers of paper-based tabletop games and paper-based greeting cards in the People’s Republic of China (the “PRC”), today announced its annual results for the year ended 31 December 2021 (“FY2021” or the “Reporting Year”).
During FY2021, the Group recorded total revenue of approximately HK$1.39 billion, representing an increase of around 12.7% from approximately HK$1.23 billion for the year ended 31 December 2020 (“FY2020”). The increase was mainly attributable to the increase in the original equipment manufacturer (“OEM”) sales to its major customers on the back of the recovery of the global retail market, and increased web sales, primarily due to the surge in demand for playing cards. Net profit recorded approximately HK$119.0 million for FY2021 (FY2020: HK$129.3 million). Basic earnings per share was approximately HK22.38 cents (FY2020: HK24.57 cents).
The Board of Directors has proposed a final dividend of HK11.0 cents per share (FY2020: HK12.0 cents) for FY2021. Together with the interim dividend of HK2.0 cents (FY2020: HK2.0 cents) that was already paid, the total dividend for FY2021 was HK13.0 cents (FY2020: HK14.0 cents).
Business Review
Revenue from the Group’s OEM sales increased by approximately 10.8% to approximately HK$1.19 billion for FY2021. The Group continued to see the strong demand momentum for tabletop game products that had begun following the outbreak of COVID-19 throughout the Reporting Year. Its sustained business development efforts to increase its market presence and awareness enabled it to capture additional tabletop game orders derived from the rising demand for tabletop games from consumers. Although the Group’s OEM sales were affected by the global shipping disruption in the first half of 2021, which delayed its order fulfilments and hence the realisation of sales revenue, the situation eased slightly later in the year and the impact on the Group’s sales performance softened.
Meanwhile, the Group further enhanced its web sales business through the launch of digital marketing campaigns and new products, quality improvement and new website development. During the Reporting Year, its web sales business yielded an approximately 25.8% increase in revenue to approximately HK$198.7 million from approximately HK$158.0 million for FY2020. The number of active registered user accounts of its major websites increased by approximately 14.2% to approximately 54,700 as at 31 December 2021.
Prospects
The Group continues to implement various development strategies to expand its customer base and capture the opportunities arising from the growth of the global online market. The development of the Q P Market Network (“QPMN”) is intended to extend the Group’s online print-on-demand solutions to worldwide online business operators and customers without being restrained by geographical and cultural boundaries. To effectively promote QPMN, the Group intends to leverage its well-established business relationships with its existing customers and launch online collaboration projects.
With regard to the consolidation of the OEM business, the Group will focus on business development and product diversification. Leveraging the experience gained through the Group’s successful efforts to enlarge its customer base in Europe, it will continue to seize business opportunities in the tabletop game market in the region, where the Group sees considerable room for growth. In addition, the Group will seek to expand its product offerings for existing customers to better cater to their business needs while achieving business diversification.
One of Q P Group’s key strategies in terms of production capacity expansion and operational risk diversification is developing the supply chain in Vietnam as its additional manufacturing location. The Group entered into a contract with a lessor in December 2021 regarding the sublease of land and the lease of infrastructure in an industrial park in Ha Nam Province, Vietnam for the purpose of establishing a self-owned production plant outside of the PRC. In order to formulate best practices for the future Vietnam plant, the Group is working on improving the standards of different areas of operations in its current subcontracted production base in Vietnam. At the same time, the Group will continue to apply new supply chain technologies in its operations to optimise the overall efficiency.
Mr. Cheng Wan Wai, Founder, Chairman and CEO of Q P Group concluded: “The growing revenue in both the OEM sales and web sales businesses demonstrates the considerable potential of these segments. We remain confident in the growth of the overseas tabletop game market and web sales business. We will continue to devote resources to the relevant business units to enhance the Group’s competitive advantages. Meanwhile, we will continue to monitor and assess the development of the operational uncertainties and take appropriate measures to mitigate their impacts. Moving forward, we will actively explore further business opportunities, achieve business diversification and generate sustainable and satisfactory returns for our shareholders.”
About Q P Group Holdings Limited (Stock code: 1412)
Established in Hong Kong in 1985, Q P Group is one of the leading paper-based tabletop games and paper-based greeting cards manufacturers in the PRC. Its principal product categories include tabletop games, greeting cards, educational items and premium packaging, which are sold on an OEM basis or through online sales channels. It has established stable and long-standing business relationships with its major OEM customers including an international greeting cards publisher and multinational children’s educational products and toys brands. It operates two key production sites in Dongguan and Heshan in the PRC.
Q P Group’s major websites are:
www.makeplayingcards.com
www.boardgamesmaker.com
www.createjigsawpuzzles.com
www.printerstudio.com
www.gifthing.com
www.maketotebags.com
For more information, please visit: https://www.qpp.com/