In the past year, COVID-19 swept across the globe, leading to disruptions not only to businesses, but also to the daily lives of people worldwide. Our major geographic markets inevitably suffered from the effects of the pandemic and various lockdown measures implemented by governments across the world. Many malls and shops were closed, and consumers were forced to stay home for a long period of time. While retailers encountered their fiercest challenge of the past few decades, manufacturers’ businesses were also threatened. In view of the fast-changing and increasingly complicated operating environment, our Group reviewed our business model a decade ago and consequently mapped out a two-pronged strategy to establish a stronger foundation while creating room for further growth and business diversification, in order to prepare for the ups and downs ahead. We are glad to note that the effectiveness of this strategy has resulted in our relatively stable performance in such a turbulent year.
Following the Group’s continued efforts over the last few years, the plastic figures segment has grown to a reasonable scale and, together with the plush stuffed toys segment, have become strong pillars of the Group, providing sizable orders and stable revenue, as well as a top-tier customer base for cross-selling opportunities. This in turn has allowed us to further unleash the potential of respective businesses. With such a reliable foundation, we have been able to further enrich our product portfolio in recent years, with the addition of baby dolls, die-casting products, and the tarpaulin business which was acquired in 2020 and is less sensitive to consumer market performance. All these newly added elements recorded growth during the year under review, effectively mitigating the pressure from other segments on the Group’s revenue. In addition, we are proud of being one of the first movers in the toy industry to have established a production base in Vietnam, which has set us in a better position under the US-China trade conflict as well as allowed us to enjoy lower production costs amid the competitive market, particularly in 2020.
Looking ahead, while COVID-19 and the US-China trade tensions continue to pose uncertainty to the economy, the development of several vaccines definitely presents hope for the near future. Seeing initial signs of recovery, we remain prudently optimistic about our prospects and will continue to exercise our effective strategies to tackle challenges while also grasping emerging opportunities. In the coming year, in addition to the existing products we are working on, we will develop other new initiatives, including the launch of fashion dolls under our baby doll business. For this new business in particular, we entered into a bundle arrangement with the customer to reserve sufficient capacity for the committed volume. We also diversified the portfolio of die-casting products to include more non-seasonal items, such as remote-controlled cars and walkie-talkies, as a strategic move to capture opportunities arising from the latest customer demand and achieve a higher utilization rate of overall production capacity. In view of the new normal which encouraged a “stay-at-home” economy, we will utilize existing resources and introduce home-living products such as cushions and slippers, for further diversification.
To exploit the advantages brought by our renowned and extensive customer base, we will conduct regular reviews with our customers to identify potential business opportunities to stay ahead of the competition. We have prepared and will revisit our plan to expand existing factories and build new ones once the market is revived, thus maintaining our leading position within the industry. Stringent cost control measures will continue to be in place and automation will be applied, when appropriate, to boost our productivity, efficiency and profitability. As always, we will closely monitor and swiftly respond to market conditions in order to mitigate any adverse impacts and maintain our growth momentum.
On behalf of the Board, I would like to thank our shareholders, business partners and customers for their continuous and unwavering support. I would also like to express my appreciation to the management team and the entire staff for their steadfast commitment and constant contribution to helping the Group’s business thrive.