Samson : Financial Reporting Document

2021

Interim Report

Contents

Corporate Profile	1
Corporate Information	2
Financial Highlights	3
Management Discussion and Analysis	4
Other Information	7
Report on Review of Interim Financial	10
	Information
Interim Condensed Consolidated Statement of	11
	Profit or Loss
Interim Condensed Consolidated Statement of	12
	Comprehensive Income
Interim Condensed Consolidated Statement of	13
	Financial Position
Interim Condensed Consolidated Statement of	15
	Changes in Equity
Interim Condensed Consolidated Statement of	16
	Cash Flows
Notes to Interim Condensed Consolidated	17
	Financial Information

Corporate Profile

Since its establishment in 1995, Samson Group, including Samson Holding Ltd. (the "Company") and its subsidiaries (the "Group"), has now become a fully vertically-integrated furniture company and ranks as one of top 10 furniture wholesalers in the United States of America (the "U.S."). We currently market a wide range of our furniture products through a portfolio of brand names including Universal Furniture, Legacy Classic Furniture, Legacy Classic Kids, Craftmaster Furniture, Baker, Milling Road, McGuire, LacquerCraft Hospitality, Universal Furniture China and Athome, and licensed with Paula Deen, Rachael Ray, Miranda Kerr, Nina Magon and Coastal Living in the U.S..

In May 2016, we have successfully acquired Grand Manor Furniture Inc., a Lenoir North Carolina U.S.A. based manufacturer established in 1960s which specialises in hospitality seating design and manufacturing. Its major customers include but not limited to Marriott, Hilton, Grand Hyatt and Western hotel chains. In February 2017, we have successfully acquired Baker Interiors Group,

LTD. (formerly known as Kohler Interiors Group, LTD.) and its subsidiaries (collectively referred to as "BIG"), which owns three global luxury furniture brands, namely, "Baker", "Milling Road" and "McGuire", each with a history of leading design, quality and craftsmanship. BIG sells its products through showrooms in North America, England, and France, and furniture dealer locations across the United States, Europe, Asia and the Middle East. BIG maintains relationships with interior designers who recommend the products to consumers worldwide.

Our team of experienced executives, employees and sales force, comprising the U.S. market expertise, combining with the Vietnam and the People's Republic of China (the "PRC") manufacturing know-how, creates a globally- integrated products and services logistics platform that brings forth effective means of business operations by which we strive to maximise ultimate benefits to our customers and shareholders.

Samson Holding Ltd. Interim Report 2021

1

Corporate Information

Executive Directors

Mr. Shan Huei KUO (Chairman)

Ms. Yi-MeiLIU (Deputy Chairman)

Mr. Mohamad AMINOZZAKERI

Non-Executive Director

Mr. Sheng Hsiung PAN

Independent Non-Executive Directors

Mr. Ming-Jian KUO

Mr. Siu Ki LAU

Mr. Sui-Yu WU

Audit Committee

Mr. Siu Ki LAU (Chairman)

Mr. Sheng Hsiung PAN

Mr. Sui-Yu WU

Remuneration Committee

Mr. Ming-Jian KUO (Chairman)

Mr. Sheng Hsiung PAN

Mr. Sui-Yu WU

Nomination Committee

Mr. Shan Huei KUO (Chairman)

Mr. Ming-Jian KUO

Mr. Sui-Yu WU

Company Secretary

Mr. Kwong Cho SHEUNG

Authorized Representatives

Ms. Yi-Mei LIU

Mr. Kwong Cho SHEUNG

Registered Office

Grand Pavilion

Hibiscus Way

802 West Bay Road

P.O. Box 31119, KY1-1205

Cayman Islands

Stock Code

The Stock Exchange of Hong Kong Limited: 531

Websites

http://www.samsonholding.com/

http://www.universalfurniture.com/

http://www.legacyclassic.com/

http://www.legacyclassickids.com/

http://www.cmfurniture.com/

http://www.lacquercrafthospitality.com/

https://www.bakerfurniture.com/

2	Samson Holding Ltd. Interim Report 2021

Principal Places of Business

Vietnam:

6th Road Tam Phuoc Industrial Zone, Bien Hoa City, Dong Nai Province Vietnam

China:

China Timber Industry City Development Area

No. 2 Taicheng Road

Jia Shan County

Zhejiang Province

China, 314100

Unit 1007, 10th Floor, Haleson Building

1 Jubilee Street, Central,

Hong Kong

United States of America:

2575 Penny Road

High Point, NC 27265

U.S.A.

221 Craftmaster Road

Hiddenite, NC 28636

U.S.A.

1 Baker Way

Connelly Springs, NC 28612

U.S.A.

Auditor

Ernst & Young

Certified Public Accountants

Registered Public Interest Entity Auditor

Legal Advisers

HW Lawyers

Principal Bankers

CTBC Bank

UBP Bank

DBS Bank

MEGA Bank

SINOPAC Bank

Wells Fargo Bank

Share Registrars and Transfer Offices

Principal:

Royal Bank of Canada Trust Company (Cayman) Limited 4th Floor, Royal Bank House

24 Shedden Road, George Town Grand Cayman KY1-1110 Cayman Islands

Hong Kong Branch:

Computershare Hong Kong Investor Services Limited

Shops 1712-16, 17/F

Hopewell Centre

183 Queen's Road East

Wanchai, Hong Kong

Financial Highlights

	Six months	Six months	Six months	Six months
	ended	ended	ended	ended
	30 June	30 June	30 June	30 June
	2021	2020	2021	2020
	US$'000	US$'000	HK$'000*	HK$'000*
Operating results
Revenue	237,342	172,143	1,851,268	1,342,715
Earnings/(loss) before interest and tax	17,702	(16,253)	138,076	(126,773)
Profit/(loss) for the period	14,353	(16,592)	111,953	(129,418)
Earnings/(loss) per share attributable
to ordinary equity holders of the parent
(US/HK cent)	0.46	(0.48)	3.59	(3.74)
	As at	As at	As at	As at
	30 June	31 December	30 June	31 December
	2021	2020	2021	2020
	US$'000	US$'000	HK$'000*	HK$'000*
Financial position
Total assets	621,118	568,487	4,844,720	4,434,199
Net current assets	158,562	151,126	1,236,784	1,178,783
Shareholders' equity	309,918	295,005	2,417,360	2,301,039

• exchange rate: US$1 to HK$7.8 (for reference only)

Revenue & profit/(loss) for the period

(US$ MN)

1414

8

2

235	228	(17)	237
	172
		200

2017-1H

2018-1H

2019-1H2020-1H2021-1H

Revenue

Profit/(loss) for the period

Earnings/(loss) per share attributable to ordinary

equity holders of the parent

(US cent)

0.45

0.46

0.25

0.06

2020-1H

2017-1H

2018-1H

2019-1H

2021-1H

(0.48)

Samson Holding Ltd. Interim Report 2021

3

Management Discussion and Analysis

Business Review

Over the past decade, Samson has been devoted to transit from an OEM manufacturer to a brand-led business. Through its strategic acquisition of Baker in 2017, the Company has attained a diverse brand portfolio ranging from mid to high end, as well as mass merchant. In addition, the Group has extended its supply chain from China to other countries including Vietnam, Bangladesh, Indonesia and the U.S. Through diversified brand portfolio and globalized supply chain, Samson was able to get through the pandemic and delivered a turnaround in profits for the six months ended 30 June 2021 ("the Period").

During the Period, as the effect of the COVID-19 was mitigated, the U.S. economy had been gradually recovering with employment rate continues to grow and consumer confidence index in June 2021 hit the highest point for the past 16 months. Under such positive market environment, Samson recorded an outstanding set of results. On demand front, the Federal Reserve Board ("FED") continued to hold the interest rate to nearly zero, whilst mortgage rate started declining since mid-March 2021. These benefit the housing market, leading to an upward trend of strong orders for the furniture and home furnishing ("F&HF") industry. Benefited from aforesaid, demand in both upholstery and casegoods business remain strong, the Group captured the opportunity for further market penetration and rode on the positive momentum via its diverse offerings and strategic distribution channels. On logistics front, given the global supply chain had been picking up slowly, shipment quantity is gradually increasing, but as demand still greatly exceed supply, Samson is partnering with several shipping service providers to ensure container availability.

The COVID-19 pandemic has accelerated the growth of non-traditional channels including e-commerce, and the Company has been striving to expand partnership with online retailers. For the traditional channel, participants in High Point Market, which was postponed to June 2021, had increased comparing to last year, and most of the large retailers had participated in the event. Moreover, our mass merchant channels had been performing well throughout the Period, and it is expected to continue in the second half of 2021.

Samson is gradually completing the strategic plan for its supply chain in Asia through owning additional factory in Vietnam to face the geopolitical problem and control costs. To deal with the overwhelming orders, Samson's capacity in both Vietnam and Bangladesh has gradually resumed from the supply chain disruption due to the COVID-19 since the beginning of 2021 and Samson has maintained a strong relationship with manufacturing partners in Vietnam, ensuring the Group to have a strong grasp of its production progress. Moreover, Samson is going to invest in another factory in Vietnam in second half year which will have additional production capacity for both upholstery and casegoods products. As for the profits, the increase was mainly due to the rising demand, better cost control measures and strong management team. As Samson successfully transformed from a China-centric manufacturing process to a globally diver footprint, it is able to reduce labour cost. Through relocating the original experienced management team from China, factories in Vietnam and Bangladesh keep improving its manufacturing efficiencies with seamless transition, maintaining the outstanding standard of the Group's production. In addition, the strategic reversal of the usage of Jiashan facility also expect to see the increase in profits.

4	Samson Holding Ltd. Interim Report 2021