2022-06-17-深交所-巨星科技_2021年年度报告（英文版）_325页_4mb

Summary of the 2021 Annual Report of Hangzhou Great Star Industrial Co., Ltd

Core Content

This document is the 2021 Annual Report of Hangzhou Great Star Industrial Co., Ltd, with a stock abbreviation of GreatStar and a stock code of 002444 on the Shenzhen Stock Exchange. The report provides an overview of the company's operations, financial performance, and strategic development during the year, as well as key information on corporate governance, environmental and social responsibility, and changes in shares and shareholders.

Main Financial Indicators

Key Business Segments

1. Hand Tools Business

• Sales revenue in FY 2021: RMB 6.553 billion, up 14.52% year-on-year.
• The company increased its market share by leveraging a stable supply chain, R&D capabilities, and channel management.
• Launched a record number of new products, entering more product categories.
• Completed the acquisition of SK, a high-end auto repair tool brand, to strengthen its product and brand matrix.
• Transferred some Southeast Asia orders to domestic shipments to maintain growth despite the impact of the pandemic.

2. Power Tools Business

• Sales revenue in FY 2021: RMB 1.021 billion, up 453.77% year-on-year.
• Expanded its product line with the introduction of a 20V lithium battery platform.
• Acquired the BEA business in Europe, enhancing its European sales network.
• Successfully launched cost-effective products through cross-border e-commerce channels.

3. Laser Measurement Business

• Sales revenue in FY 2021: RMB 889 million, up 73.13% year-on-year.
• Gained recognition from international giants due to years of technological accumulation.
• Successfully mass-produced and launched LIDAR tools, contributing to future growth.

4. Storage Cabinet Business

• Sales revenue in FY 2021: RMB 2.371 billion, up 152.36% year-on-year.
• Acquired 100% of Kilon in July 2021, becoming a global leader in storage cabinets.
• Expanded into indoor living scenarios, making significant breakthroughs in product development.

Core Competitiveness

1. Innovation Advantages

• Invested RMB 310 million in R&D during the reporting period.
• Designed 1,838 new products and obtained over 300 new patents.
• The company's CNAS-certified laboratory was reaccredited.
• Launched products such as multi-functional pipe cutters, reversible 216-tooth ratchet wrenches, and dual-position squeeze guns.
• Won awards like the HOME DEPOT 2021 Annual Innovation Award and ProTool Innovation Award.

2. Channel Advantages

• Became one of the largest suppliers to major chains such as HOME DEPOT, WALMART, and LOWES.
• Maintained a large number of 20,000+ hardware and auto parts supermarket chains as distribution channels.
• Acquired Joh. Friedrich Behrens AG (BeA) to enhance its European sales network.
• Developed a cross-border e-commerce channel as a key sales driver, complementing traditional channels.

3. Supply Chain Advantages

• Established a global supply chain with China as the core.
• Collaborated with thousands of suppliers worldwide, ensuring quick response to market demand and timely delivery.
• Maintained 21 manufacturing bases globally, enabling the company to meet diverse market demands.

4. Brand Advantages

• Focused on building a strong brand matrix, including WORKPRO, PONY JORGENSE, DURATECH, and SWISSTECH.
• Own brands, especially e-commerce brands, showed significant growth in sales revenue.

Key Notes and Disclosures

• The Board of Directors and management affirmed the accuracy and completeness of the report.
• The Company plans not to pay cash dividends, grant bonus shares, or increase share capital through the transfer of provident fund.
• The financial report for FY 2021 does not require retroactive adjustments.
• The lower of net profit before or after non-recurring items is not negative.
• No material differences were found between financial indicators under IAS and PRC GAAP.
• The Company has no non-recurring profit or loss items listed in the Explanatory Announcement No. 1.

Strategic Development

• The global tool industry is expected to grow at an annual rate of 5% over the next five years.
• North America and Europe are the most important markets, driven by DIY culture and construction industry growth.
• The company's cross-border e-commerce channel continued to grow rapidly, with revenue exceeding USD 100 million.
• The normalization of the pandemic led to recovery in local retail distribution channels in Europe and North America.

Corporate Governance and Compliance

• The annual report is disclosed on the Shenzhen Stock Exchange website and Securities Times, Securities Daily, and CNINFO.
• The accounting firm is Pan-China Certified Public Accountants (Special General Partnership).
• The signing CPAs are Fei Fanghua and Li Qian.
• The continuing sponsor is CITIC Capital Securities Co., Ltd, with Fu Xinxiong and Li Huajun as representatives.
• The company has no financial advisors for ongoing supervision during the reporting period.

Conclusion

The report highlights the Company's strong performance in FY 2021, particularly in hand tools, power tools, laser measurement, and storage cabinets. It emphasizes innovation, global supply chain, brand development, and channel expansion as core drivers of growth. Despite the challenges posed by the pandemic, the Company maintained stability and growth, positioning itself as a leader in the global tool industry.