Friday, November 27, 2020
 
Columnist
Martin Hennecke
 
MERRY GARDEN
HKEx Stock Code : 01237 
 
Corporate Profile
The principal activities of the Group are manufacturing and sales of outdoor wooden products, engaged in projects of outdoor wooden products including the provision of design and installation services, and retail sales of outdoor wooden products through self-operated retail shops.

Business Review - For the year ended December 31, 2012

Our Group is a wooden leisure products enterprise in the PRC covering the R&D, design, production and sale of leisure household products and timber villas, sheds and their related parts and structures. We have launched a series of wooden leisure products in order to espouse a leisure and natural lifestyle. Our own-brand of Merry Garden was recognized as ¡§Wellknown Trademark¡¨ by the State Administration for Industry & Commerce of the PRC in 2012. We offer a wide range of products and they are broadly divided into two main categories: (1) leisure household products: this category is subdivided into four sub-categories: (i) recreational products, such as play swings and play houses for children; (ii) landscape garden products, such as wooden terraces and fences; (iii) outdoor and indoor furniture products; and (iv) pet-home products; and (2) timber villas, sheds and their related parts and structures.

For the year ended 31 December 2012, the Group's revenue was RMB421.2 million, represented a growth of 37.1% from last year. The growth is driven by our growth in domestic sales, our expansion to timber trading business along with a stable international business.

Benefited from the PRC's development, particularly the strong domestic demand on leisure products along the urbanisation of China, the Group's sales in the PRC has boosted. Majority of our sales in the PRC are either on original design manufacturer (¡§ODM¡¨) basis or under our own-brand ¡§Merry Garden¡¨. We appreciate the importance of brand awareness, and hence have established self-operated stores; placed advertisements at various media; participated local and international exhibitions; and we placed billboard roadside advertisements at major highways. Benefited from our efforts in marketing and maintaining high-quality services, our sales in own-branded products boosted and achieved an outstanding result.

After the Company's listing, we have established 2 flagship stores and 5 self-operated stores at major cities in Fujian and Jiangsu including Shanghai, Xiamen, Ningbo, Suzhou, etc, where our own-branded products are sold. The Directors believe the development of tourism and leisure activities of the above locations would be beneficial to the stores.

Expanded from our own needs on imported timber for manufacturing, we grasped the domestic demand on imported timber from timber processing factories and started trading timber log and timber board. Through the trading business, we enhanced our bargaining power to large overseas suppliers and diversified our supplier base. This enables us to stabilise our timber costs through the fluctuation in foreign exchange rates; changes in climactic conditions as well as demand and supply in the suppliers' local markets. This also enables us to ensure a more stable timber supply.

Despite the uncertainties in the global economic environment, our international business remained stable. Majority of our export sales are on original equipment manufacturer (¡§OEM¡¨) basis and are exported to North America, Europe and Asia Pacific (exclusive of the PRC). In the second half of 2012, we grasped the demand on timber villa products and their related parts in North America and showed significant improvement in sales of timber villa products to North America. The improvement in sales of timber villa products smoothed the unfavourable impact from lower stock level strategy adopted by our major customers on recreational products and pet-home products in North America.

Business Outlook - For the year ended December 31, 2012

Looking ahead, the Directors are optimistic towards both the domestic market and overseas market.

In February 2013, the State Council of the PRC published the ¡§Outline of national tourism and leisure¡¨ (¡§°ê¥Á®È¹C¥ð¶¢ºõ­n¡¨) (the ¡§Outline¡¨) which set out the direction of promoting tourism and leisure facilities with traditional Chinese characteristics so as to satisfy the increasing demand on leisure activities from the public. Measures include encouraging the building of leisure and recreational space, construction of countryside villa etc. With the Outline, more emphasis would be placed on the leisure facilities along the China's urbanization. The Directors believe that the above will stimulate the demand of our timber villa products and outdoor furniture products.

In view of the upcoming opportunities, the Group will continue setting up self-operated retail stores and flagship stores in the PRC. After setting up 8 stores in Fujian, Jiangsu and Zhejiang, the Group will expand its retail network to Guangdong, Hainan and Jiangxi in 2013. The Directors believe that the stores will provide a platform for the Group to promote its products to the end-customers and enhance its brand awareness as well as market share.

The Directors believe that the export sales would be supported by the positive North American Housing starts data which reflects the starting of construction of privately owned new houses in a given period. The Directors expect that the strong sales of timber villa product to North America will continue in 2013. With our advanced wood preservation technologies and high quality products, the Group has explored new international markets like Australia and Maldives. The Group will continue to explore opportunities in the new markets and diversify our customer base and ensure a stable growth in the international markets.

With our new production lines commencing production in early April 2013 and unification of our production facilities, the management believes that the Group is well prepared to capture the opportunity of recovery and growth, as well as to achieve the sustainable development in our business.

Source: Merry Garden Hldgs (01237) Annual Results Announcement
Chairman Wu Zheyan Issued Capital (shares) 1,000M
Par Value HKD 0.01 Market Capitalisation (HKD) 1,820M
 
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