The latest financial report of VTech Group shows that the annual net profit innovation is as high as 231 million US dollars

VTech Group (00303) announced its results for the year ended March 31, 2021. Revenue increased by 9.5% to a record high of US$2.372 billion. Profit attributable to the company’s shareholders increased by 21.1% to a record high of US$231 million. Earnings per share were 91.6 In US cents, the final dividend was 74.0 US cents per common share. The total dividend for the year was a record high of 91.0 US cents, an increase of 71.7% year-on-year. The announcement stated that the increase in revenue was mainly due to the increase in sales in North America, Europe and the Asia-Pacific region, which offset the decline in revenue in other regions. The increase in profit was mainly due to the increase in revenue and the decrease in operating expenses as a percentage of the group's sales. The gross profit margin for the year was 30.6%, the same as the previous fiscal year. This was mainly due to the significant increase in material prices in the fourth quarter of the current financial year, changes in product mix, increased direct labor costs and increased freight costs, which offset the decline in production expenditures and the benefits of further improvements in productivity. Other data showed that the product mix improved significantly during the period, which drove sales growth. Products with higher average selling prices performed well in all markets, including tablets, VTech Touch u0026 Learn Activity Desk, and Leap Start reading system. Products with particularly significant educational significance, such as Leap Frog's Learning Friends 100 Words Book series, are also very popular. Leap Frog Academy’s subscriptions have risen sharply. Cartoon Collection Go! Go! Cory Carson's first three seasons were successful on Netflix, driving sales of related toy suits and toy cars. In the 2021 fiscal year, the sales of standalone products and platform products accounted for 82% and 18% of the total sales of e-learning products, respectively. Group Chairman Huang Zixin said that the global supply chain was blocked in the first half of the year and the supply of electronic components was in short supply in the fourth quarter, which still recorded positive results. Celebrating the 45th anniversary of the group, it implements the strategy of focusing on sustainable development and pays more attention to digitalization. The group is set to launch a series of environmentally friendly e-learning products made of plant-derived plastics and recycled plastics based on plastics that will no longer be refined from fossils in 2030. It will also launch a new series of wooden toys. Looking ahead, the Group's revenue in the 2022 fiscal year is difficult to predict. The order situation of all product lines of VTech is very stable. However, despite the Group's best efforts, the unstable situation of global material supply may affect the Group's ability to meet demand. At present, the global shortage of electronic parts is widespread, especially for semiconductors and LCD (liquid crystal display) screens. Some of the confirmed order suppliers of the group still failed to deliver on schedule. At the same time, due to tight supply, rising freight rates and rising material prices caused by the appreciation of the renminbi, gross profit margins are expected to fall. VTech has taken measures to mitigate the impact, including diversifying supply sources, redesigning products, negotiating new shipping contracts and increasing prices. In addition, the group's capital expenditures in fiscal year 2022 will be $49 million, which is similar to fiscal year 2021. Source: Sina Hong Kong Stocks, Caihua.com, Hong Kong Stocks Research Agency, etc.