CABBEEN Announces: Personnel Changes In Group Company

A few days ago, CABBEEN Clothing Co., Ltd. (hereinafter referred to as CABBEEN) announced that Wu Shaoqiang needed more time and energy to deal with family matters and resigned as chief executive officer of the company. He will continue to serve as executive director and chairman and remuneration committee member of the Corporate Governance Committee of the board of directors. Yang Ziming, chairman and executive director of the board, has been appointed chief executive since 2. It came into force in 020 March 12th.

CABBEEN said that Yang Ziming will also act as chairman and chief executive officer of the company at the same time, which deviates from the code of corporate governance code A.2.1 contained in Appendix 14 of the listing rules, which stipulates that the role of the chairman and chief executive of the company should be differentiated and should not be concurrently held by the same person. After assessing the group's current situation and taking into account Yang Ziming's extensive experience in the industry and his in-depth understanding of the business of the group, the Board considered that the same person as chairman and chief executive officer of the company at the same time is appropriate and accords with the company's superior interests because it helps to implement the group's business strategy and improve its operational efficiency.

The announcement shows that Yang Ziming, 48, a founder of CABBEEN group and chairman of the company, was appointed as executive director in 30 in November 2011. Yang Ziming is mainly responsible for the overall company strategy, planning and business development, and leads the group's design and R & D team.

According to the existing service agreement signed by Yang Ziming and CABBEEN, the executive director will serve for a period of 3 years from October 28, 2019. According to the above service agreement, CABBEEN's remuneration to Yang Ziming's directors is HK $1 million 397 thousand per year. The original service agreement has been supplemented by the supplemental agreement dated March 11, 2020, in order to include him as CEO of the company.

On the date of this announcement, Yang Ziming owns about 60.64% of all issued shares of CABBEEN.

On the same day, CABBEEN announced its 2019 performance. Last year, its revenue increased by 0.1% to 1 billion 274 million yuan, and operating profit decreased 21.7% to 243 million yuan over the same period. The profit in the year decreased by 24.8% to 158 million yuan. CABBEEN said the group's performance report was mainly influenced by promotional activities and retail discount, while the growth of e-commerce business continued to slow down.

CABBEEN also said that the outbreak of a new coronavirus pneumonia outbreak in January will have adverse effects on the company's performance.

Between January 28th and February 9th, CABBEEN distributors closed over 90% retail outlets briefly, and about 17% of the retail outlets remained closed as of the date of this report. CABBEEN's business performance in 2020 is expected to be seriously adversely affected by the continued disruption of business and reduced customer traffic due to the epidemic.

Affected by these factors, CABBEEN has begun to cut procurement orders for the 2020 summer products, and shelved new shops and other major investments. At the same time, it will also strengthen control costs and extend the credit period to distributors.