巨星科技：2023年年度报告(英文版)

HangzhouGreatStarIndustrialCo.,Ltd. 2023AnnualReport 2024-008 [April2024] Introduction In2023,GreatStardeliveredrecord-settingresultsbyadheringtothedevelopmentphilosophyof"remainingdevotedtoperfectionwhilekeepingthegrandvisioninmind"inthefaceofthemostseverechallengesin30yearsduetotheactivedestockinganddecliningdemandintheEuropeanandAmericanmarketsthatbeganinH22022.In2023,GreatStarachievedatotaloperatingrevenueofRMB10.929billion,anetprofitattributabletotheparentCompanyofRMB1.691billion,andanetcashflowfromoperatingactivitiesexceedingRMB2.1billion.ThankstoallGreatStaremployeesfortheirhardworkthathasallowedGreatStartokeeppushingforward.Despitethevicissitudes,GreatStarpersistedinenhancingitscomprehensivestrengthsandprovidinglong-termreturnstoshareholders.Ourjourneywillbeasvastandenduringasthestarryskyandtheboundlesssea.ThankstotheshareholdersfortheirCompanyandperseverance. About30yearsago,GreatStarstartedinanofficebuildingindowntownHangzhouwitha20-square-meteroffice,adesk,andanemployee.Afteroveradecadeofeffort,in2010,GreatStarsuccessfullywentpublic.Inthesubsequentdecadeorso,GreatStarhassteadilygrownandrewardedshareholders,achievingcompoundannualgrowthrates(CAGR)of14.49%,15.23%and14.32%intheoperatingrevenues,netprofitattributabletotheparentCompany,andnetassets,respectively.GreatStarhascontinuouslyrewardedinvestorsthroughdividends,sharebuybacks,andothermeans.WewillpersistentlyadheretotheprinciplethatthecashgeneratedfromGreatStar'soperatingactivitieswilleitherbeusedforacquiringrenownedinternationalbrandstodevelopourmainbusinesssegmentsorfordistributingdividendsandsharebuybackstorewardshareholders. GreatStarhasachievedanumberofnotableachievementsandmilestonesinitsjourney.Byreflectingonthisjourney,itisavaluableexercisetore-examinetheever-changingglobalindustriallandscape.AsWangYangmingsaid,"Lifeislikeaspiritualpractice,justlikethelotusthatcangrowinthemud.Allthedifficultiesandtribulationsintheworldareopportunitiestohoneandimprovemyself."Whateverdoesnotdefeatuswillultimatelymakeusstronger.From2010to2016,althoughChina'sannualGDPgrowthratedeclinedfrom10%to7%,itwasstillfarhigherthantheaverageGDPgrowthrateof2%inGreatStar'smainmarket,theUnitedStates.ThesubstantialcashreservesandexcellentbusinessmodelthatGreatStarpossessedduringthisperiodparadoxicallypresenteda"resourcecurse,"astheChinesemarketseemedrepletewithinvestmentopportunitiesthatpromisedgrowthfarexceedingtheoriginal10%.GreatStarmadenumerousequityinvestmentsinnon-corebusinesssegments.However,GreatStar'scompoundannualgrowthrate(CAGR)duringthosesixyearsturnedouttobeonlyslightlyabove11%.Attheendof2016andthebeginningof2017,undertheleadershipofthechairman,GreatStar'sBoardofDirectorsandManagementteamprofoundlyreflectedonandsummarizedthepastcourseofdiversification.TheyultimatelydeterminedtofocusonconsumergoodsinEuropeandtheUnitedStatesasthecorebusinessforfuturedevelopmentandhaveconsistentlyimplementedthisstrategy.However,theCompanyandtheindustryweresettobebuffetedbydramaticchallengesin2017. CoincidingwithGreatStar'srefocusingonitscorebusinessin2017,withastrongemphasisondevelopingitsoriginalbrands(OBMbusiness)andacquiringoverseasbrandsforexpansion,Chinaintroducedaseriesofimportantnewpoliciesandmeasuresforenvironmentalprotectionaimedatstrengtheningenvironmentalprotectionandecologicalcivilizationdevelopment.Thesepolicieshaveobjectivelyledtotheeliminationofoutdatedproductioncapacityinthetoolingindustry,causingashort-termsupply-demandimbalance.In2018,theUnitedStatesgovernmentreleasedalistofgoodssubjecttoincreasedtariffs,imposinganadditional10%to25%tariffoncertainChineseexportstotheUnitedStates.ThismarkedthebeginningoftheongoingUS-Chinatradedisputethathaspersisteduntiltoday,drasticallyincreasingGreatStar'soperatingcosts.GreatStarwascompelledtocommencetheglobalexpansionandintegrationofitsindustrialandsupplychains.InMay2019,theUnitedStatesgovernmentraisedthetariffratefrom10%to25%onUSD200billionworthofChinesegoodsexportedtotheUnitedStates,affectingmostofGreatStarproductsexportedtotheUnitedStates.Toaddressthisadversesituation,GreatStaracceleratedtheconstructionofthreemajormanufacturingbasesinVietnam,Cambodia,andThailandtomitigateoperationalriskstothegreatestextentpossible.In2020,thesuddenglobalblackswaneventsfirstledtoasharp decreaseinorders,necessitatingapivottotheproductionandsaleofpersonalprotectiveequipment.Later,anabruptsurgeinglobalordersresultedininsufficientproductioncapacity,requiringallemployeestoworkovertime.In2021,althoughend-marketdemandwasrobust,thesimultaneoussubstantialincreasesintheRMBexchangerate,China-USshippingcosts,andrawmaterialpricesresonatedtogether,exceedingtheCompany'sshort-termadjustmentthresholdandcausingasignificantdeclineintheoverallgrossprofitmargin.In2022,justasthecostimpacthadbeenalleviated,demandinEuropeandAmericadeclinedinthesecondhalfoftheyearduetointerestratehikesbytheUnitedStatesFederalReserve.Clientswithoverstockedinventoriesinitiatedawaveofdestocking,withordersrapidlyplummetingtoafreezingpoint. AlltheseeventsposedtremendouschallengesforGreatSta