CHINA FORTUNE(00110)

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中国长远(00110) - 2020 - 年度财报
2021-04-29 08:35
Business Structure and Strategy - The Group's business structure includes telecommunications, resource exploration, and investment, focusing on diversified business development through mergers and acquisitions [22]. - The Group's corporate culture emphasizes a blend of Western and Eastern management philosophies, aiming to become a leading provider of wireless communication and data products in the region [9]. - The Group plans to strengthen its existing relationships with leading manufacturers to explore further cooperation opportunities in the mobile phone industry [65]. - The Group's franchise retail business in the PRC was commenced, expanding its market presence [51]. - The Group formed a joint venture with TeleChoice International Limited for the Nokia fulfillment business [32]. Financial Performance - The annual report provides a comprehensive overview of the Group's financial performance and strategic direction for future growth [4]. - The Group achieved a record annual sale of 2.1 million sets of mobile phones and a record net profit exceeding HK$60 million [26]. - For the year ended December 31, 2020, the Group's revenue decreased by approximately 25% to HK$80.9 million compared to HK$107.9 million for the year ended December 31, 2019 [62]. - The loss for the year amounted to HK$4.6 million, a significant improvement from the loss of HK$32.8 million for the year ended December 31, 2019 [62]. - The Group recorded total revenue of HK$80.9 million for the year ended 31 December 2020, a decrease of approximately HK$27.6 million or 25.4% compared to HK$108.5 million in 2019 [74]. - Revenue from mobile phone trading business contributed HK$79.7 million or 98.5% of total revenue, while revenue from the promotion of the mobile application was HK$1.2 million, representing 1.5% of total revenue [76]. - Gross profit decreased by 61.3% from HK$1.0 million in 2019 to HK$0.4 million in 2020, primarily due to reduced performance in mobile phone trading and application promotion [78]. - The gross profit margin fell from 0.9% in 2019 to 0.5% in 2020, attributed to increased bargaining power from telecommunications chain stores and underperformance in application promotion [84]. - Other income increased by HK$0.3 million or 56.1% to approximately HK$0.8 million in 2020, mainly due to higher interest income and miscellaneous income [85]. - The Group achieved a net gain of HK$11.0 million for the year ended 31 December 2020, a turnaround from a net loss of HK$12.2 million in 2019 [86]. Shareholder and Capital Management - The company has a strong shareholder background and a professional management team, established in Hong Kong in 1992 [6]. - A US$16 million syndicated loan was successfully arranged [28]. - Fortune Shanghai increased its share capital from US$6 million to US$25 million [29]. - The Company proposed a capital reorganisation on November 10, 2020, involving share consolidation and capital reduction [138]. - The Company proposed a rights issue on November 10, 2020, aiming to raise approximately HK$48.6 million by issuing 91,777,944 rights shares at a subscription price of HK$0.53 per share [140]. - The rights issue was completed on February 10, 2021, with net proceeds of approximately HK$15.6 million [141]. Market Challenges and Opportunities - The COVID-19 pandemic has adversely impacted the global wholesale and retail environment, affecting the Group's business operations [67]. - The mobile phone market in China is expected to face challenges, but the development potential remains enormous due to strong internal consumption [65]. - The mobile phone market in China is expected to continue declining in the coming years due to international trade conflicts and the impact of COVID-19, although this decline may be partially offset by 5G development [154]. - The company faces challenges in its mobile phone business due to intensified competition in the retail industry and uncertainties from the US-China trade war and COVID-19 outbreak [155]. - Customers are shifting focus from mobile phone functionality to shopping experience, requiring integrated service platforms rather than just sales [160]. Management Changes - The company has undergone significant management changes, with several directors resigning and new appointments made in September 2020 [14]. - Mr. Wang Yu, aged 55, joined the group in April 2006 and was appointed as Executive Director in November 2009 [199]. - Mr. Wang serves as the General Manager of a subsidiary, responsible for the company's mining business [199]. - Mr. Wang has over 10 years of experience in channel distribution management for computer products and mobile phones in local and multinational companies in China [199]. Mining Operations and Regulatory Challenges - The Group has been involved in mining operations but faced restrictions on exploitation activities due to permit limitations [161]. - The mining operating permit was renewed for exploration activities only, with no exploitation allowed, indicating ongoing regulatory challenges [162]. - The Group recognized a full impairment of HK$174.6 million for mining rights and HK$9.0 million for related plant and equipment due to the inability to renew the mining operating permit [167]. - The mining operating permit status was confirmed as "expired" by the Ministry of Natural Resources of the PRC, indicating it cannot be renewed [173]. - The Group's PRC lawyers have concluded that the mining operating permit will eventually be deregistered [173]. Employee and Operational Changes - As of December 31, 2020, the Group employed 15 employees, a decrease from 71 employees as of December 31, 2019 [134]. - Selling and distribution costs rose significantly to approximately HK$0.3 million in 2020 from HK$20,000 in 2019, primarily due to increased salaries and transportation expenses [87]. - Administrative expenses decreased by 10.3% to HK$15.5 million in 2020 compared to HK$17.3 million in the previous year, mainly due to lower depreciation and rental expenses [92]. Legal and Financial Recoveries - The Group obtained a final arbitral award of HK$19.8 million against the Chongqing supplier, with HK$10.2 million already repaid [175]. - A judgment of approximately HK$12.7 million was entered against the Guangzhou supplier, which has been enforced after the supplier withdrew their appeal [176]. - The total outstanding liability of the Guangzhou supplier to creditors is approximately HK$455 million [184].
中国长远(00110) - 2020 - 中期财报
2020-09-22 13:27
Financial Performance - The total revenue for the six months ended June 30, 2020, was HKD 21,400,000, a decrease of approximately HKD 39,500,000 or 64.8% compared to HKD 60,900,000 for the same period in 2019[5] - The company's revenue for the six months ended June 30, 2020, was HKD 21,414,000, a decrease of 64.8% compared to HKD 60,867,000 for the same period in 2019[55] - Revenue from mobile application promotion was HKD 1,200,000, accounting for 5.7% of total revenue, while revenue from mobile phone trading contributed HKD 20,200,000 or 94.3%[5] - Gross profit increased by HKD 100,000 or 32.1% to HKD 700,000, with a gross profit margin rising from 0.9% to 3.4%[6] - Gross profit for the same period was HKD 728,000, representing a gross margin of approximately 3.4%[55] - The company reported a loss before tax of HKD 5,615,000, an improvement from a loss of HKD 8,592,000 in the previous year, indicating a reduction in losses by 34.5%[55] - The loss attributable to the owners of the company was HKD 2,878,000, compared to HKD 6,384,000 in the prior year, reflecting a 54.9% decrease in losses[55] - The group reported a loss of HKD 2,878,000 for the six months ended June 30, 2020, compared to a loss of HKD 6,384,000 for the same period in 2019, indicating an improvement in performance[81] - Total comprehensive income for the period was HKD (2,815,000), significantly better than HKD (8,753,000) in the previous year, indicating a 67.8% reduction in comprehensive loss[56] Cash Flow and Liquidity - Cash and cash equivalents totaled HKD 19,700,000 as of June 30, 2020, compared to HKD 18,200,000 at the end of 2019[18] - Cash and cash equivalents increased to HKD 19,721,000 as of June 30, 2020, from HKD 12,487,000 at the end of June 2019, marking a 58.5% increase[60] - Operating cash flow for the six months ended June 30, 2020, was HKD (3,952,000), an improvement from HKD (11,962,000) in the same period of 2019, showing a 66.9% reduction in cash outflow[60] - The company’s financing activities generated a net cash inflow of HKD 5,841,000 for the period, contrasting with a net outflow of HKD (2,165,000) in the previous year[60] Assets and Liabilities - Trade receivables increased by 117.3% to approximately HKD 35,900,000, primarily due to sales of approximately HKD 20,200,000 recorded near the reporting date[17] - The company's current liabilities net amount was HKD (19,896,000) as of June 30, 2020, worsening from HKD (6,917,000) in December 2019[57] - The company’s total assets as of June 30, 2020, were reported at HKD 73,098,000, including cash and cash equivalents of HKD 7,908,000[71] - The company reported total liabilities of HKD 104,944,000, with segment liabilities of HKD 73,471,000 and related party payables to Mr. Liu amounting to HKD 25,799,000[71] - The group’s total liabilities to related parties decreased to HKD 35,161,000 as of June 30, 2020, from HKD 37,020,000 as of December 31, 2019, showing a reduction of approximately 5%[86] Shareholder Information - The group has a significant shareholding structure, with Mr. Liu Xiaoying holding 20.52% of the issued shares and 48.85% in total through trusts[42] - As of June 30, 2020, major shareholders included Liu Xiaoying with a 20.52% stake and Li Wei with a 20.52% stake, collectively holding 48.85% of the issued share capital[47] Market Conditions and Outlook - The mobile phone market in China is experiencing a decline due to international trade conflicts and the impact of COVID-19, with expectations of continued decline in the coming year[29] - The group anticipates continued pressure on the consumer and retail sectors due to the dual impact of the US-China trade war and the COVID-19 pandemic, leading to an uncertain outlook for the coming years[37] - China has approximately 1.6 billion mobile phone users, with significant growth in 4G and 5G users, indicating substantial opportunities in mobile applications and commerce[37] Corporate Governance - The company has established an audit committee consisting of three members to oversee financial reporting and compliance[51] - The company has adhered to the corporate governance code, with some deviations noted regarding the roles of the chairman and CEO[49] - No violations of the securities trading code were reported among employees during the reporting period[53] Employee and Operational Information - The group employed a total of 50 employees as of June 30, 2020, down from 71 employees as of December 31, 2019[26] - The group’s employee costs increased to HKD 5,105,000 for the six months ended June 30, 2020, compared to HKD 4,508,000 in the same period of 2019, representing an increase of approximately 13.2%[80] Legal and Regulatory Matters - The group has initiated legal proceedings in Guangzhou to recover HKD 14,800,000 from a supplier, resulting in a judgment of approximately HKD 12,700,000, which is now enforceable[35] - The group has no contingent liabilities or guarantees as of June 30, 2020[23] Investments and Acquisitions - The group has not made any significant acquisitions or disposals of subsidiaries or associates during the six months ended June 30, 2020[24] - The group has not made any significant investments during the six months ended June 30, 2020[25] - The group has a capital expenditure of HKD 200,000 related to leasehold improvements as of June 30, 2020, unchanged from December 31, 2019[22] Financial Instruments and Fair Value - The fair value of financial assets measured at fair value through profit or loss included listed equity investments of HKD 921,000 as of June 30, 2020[91] - The fair value of Level 3 financial instruments decreased from HKD 5,350,000 at the beginning of the year to HKD 4,831,000 by June 30, 2020, reflecting a fair value change of HKD 221,000[93] - The carrying amount of financial instruments measured at amortized cost was similar to their fair value as of June 30, 2020, due to their short-term nature[94]
中国长远(00110) - 2019 - 中期财报
2019-09-16 08:43
Revenue and Profitability - The total revenue for the six months ended June 30, 2019, was HKD 60,900,000, an increase of approximately HKD 21,400,000 or 1.5 times compared to HKD 39,500,000 for the same period in 2018[6] - Revenue from Zhejiang contributed HKD 55,800,000, accounting for 91.6% of total revenue, while revenue from Shanghai contributed HKD 5,100,000 or 8.4%[6] - Gross profit for the period was HKD 600,000, with a gross margin decrease from 1.4% in 2018 to 0.9% in 2019 due to increased bargaining power of telecom chain stores and mobile operators[7] - Other income for the six months ended June 30, 2019, was approximately HKD 300,000, a decrease of HKD 100,000 from HKD 400,000 in the same period of 2018[8] - The net loss attributable to the owners of the company for the period was HKD 6,400,000, compared to a loss of HKD 17,600,000 in the same period of 2018[14] - Basic loss per share was HKD 0.70, improved from HKD 1.92 in the previous corresponding period[15] - The net loss for the six months ended June 30, 2019, was HKD 8,687,000, a significant improvement from a net loss of HKD 19,266,000 in the prior year, representing a reduction of 54.9%[49][51] - The company reported a total comprehensive loss of HKD 8,753,000 for the period, compared to HKD 18,561,000 in the previous year, showing a 52.9% improvement[51] Assets and Liabilities - Total assets as of June 30, 2019, were HKD 57,488,000, down from HKD 72,811,000 at the end of 2018, reflecting a decrease of 21.1%[52] - Current liabilities decreased to HKD 51,657,000 from HKD 60,243,000, indicating a reduction of 14.3%[52] - The group's current assets net value decreased from approximately HKD 12.6 million on December 31, 2018, to approximately HKD 5.8 million on June 30, 2019[22] - The group's debt-to-equity ratio increased from 0.43 on December 31, 2018, to 0.52 on June 30, 2019[22] - The company's total liabilities as of June 30, 2019, were HKD 17,695,000, a slight increase from HKD 17,566,000 as of December 31, 2018, reflecting a stable liability position[53] Cash Flow and Financial Position - Cash and cash equivalents totaled HKD 12,500,000 as of June 30, 2019, down from HKD 26,600,000 as of December 31, 2018[20] - The net cash used in operating activities for the six months ended June 30, 2019, was HKD (11,962,000), compared to HKD (8,324,000) for the same period in 2018, indicating a worsening cash flow situation[55] - The company's cash and cash equivalents decreased to HKD 12,487,000 as of June 30, 2019, down from HKD 26,563,000 at the beginning of the year, reflecting a net decrease of HKD 13,567,000[55] - The company reported a net cash inflow from investing activities of HKD 560,000 for the six months ended June 30, 2019, compared to HKD 91,000 in the same period of 2018, indicating a positive trend in investment cash flow[55] - The company's financing activities resulted in a net cash outflow of HKD (2,165,000) for the six months ended June 30, 2019, compared to a net inflow of HKD 4,240,000 in the same period of 2018, indicating a shift in financing strategy[55] Employee and Administrative Expenses - Administrative expenses increased to HKD 9,200,000 for the six months ended June 30, 2019, from HKD 6,700,000 in the previous year, primarily due to depreciation and employee costs[11] - The group employed a total of 33 employees as of June 30, 2019, compared to 25 employees on December 31, 2018[26] - The group’s employee costs rose to HKD 4,508,000 for the six months ended June 30, 2019, compared to HKD 3,534,000 for the same period in 2018, reflecting a 27.6% increase[84] Market and Business Environment - The mobile phone market in China is experiencing intensified competition, with major manufacturers reducing distribution layers to enhance profitability[27] - The group has faced challenges in its mobile phone business due to the ongoing US-China trade tensions and the evolving business model in the retail sector[28] - The group anticipates that uncertainties in the Chinese economy, particularly due to ongoing US-China trade conflicts, will continue to impact consumer and retail businesses[33] Segment Performance - For the six months ended June 30, 2019, the mobile phone business reported revenue of HKD 60,867,000, an increase from HKD 39,479,000 for the same period in 2018, representing a growth of 54%[80] - The total reported segment loss for the mobile phone business was HKD 2,623,000, while the mining business reported a loss of HKD 901,000, leading to a combined segment loss of HKD 3,524,000[74] - Total reported segment assets amounted to HKD 60,107,000, with the mobile phone business contributing HKD 56,496,000 and the mining business contributing HKD 3,611,000[75] Legal and Compliance - The company has maintained compliance with the corporate governance code, although the roles of Chairman and CEO are held by the same individual[45] - The audit committee has reviewed and approved the interim results, ensuring adherence to financial reporting standards[46] Shareholder Information - As of June 30, 2019, the chairman holds 20.52% of the company's issued shares, with a total beneficial ownership of 48.85%[36] - The average number of shares issued remained constant at 917,779,442 for both periods, indicating no dilution in share capital[85] - The company did not declare an interim dividend for the six months ended June 30, 2019, and June 30, 2018[104] Financial Instruments and Valuation - The fair value of financial assets measured at fair value through profit or loss amounted to HKD 5,886,000, with HKD 536,000 classified under Level 1 and HKD 5,350,000 under Level 3[101] - The fair value of Level 3 financial assets decreased from HKD 5,350,000 at the beginning of the period to HKD 5,051,000 at the end of the period, reflecting a fair value change of (HKD 251,000) and foreign exchange adjustments of (HKD 48,000)[101] - The company adopted HKFRS 9 for the first time, which impacted the valuation of financial assets[101]
中国长远(00110) - 2018 - 年度财报
2019-04-25 09:14
Company Overview - China Fortune Holdings Limited primarily sells and distributes mobile phones and digital products in the People's Republic of China[6]. - The Group was first listed on the GEM Board on February 16, 2000, and successfully transferred to the Main Board on January 26, 2004[6]. - In 2007, the Group acquired Zhuhai Reminda Telecom Equipment Company Limited, enhancing its telecommunications equipment business[7]. - In 2009, the Group entered the natural resource industry by acquiring a Strontium mining site in the PRC[7]. - The corporate culture emphasizes a blend of Western and Eastern management philosophies, aiming to become a leading provider in wireless communication and data products[8]. - The Group's business structure includes telecommunications, resource exploration, and investment activities[21]. - The Group aims for diversified business development through investments, mergers, and acquisitions[21]. - The Group's registered office is located in Bermuda, with a significant operational presence in Hong Kong and mainland China[14][16]. Financial Performance - The Group achieved a record annual sale of 2.1 million sets of mobile phones and a net profit exceeding HK$60 million[25]. - The Group's revenue for the year ended 31 December 2018 increased by approximately 28 times to approximately HK$216.1 million compared to the previous year[56]. - Profit for the year attributable to owners of the Company amounted to HK$7.8 million, a significant recovery from a loss of HK$111.7 million in the previous year[56]. - For the year ended December 31, 2018, the Group recorded total revenue of HK$216.1 million, approximately 28 times higher than the revenue of HK$7.4 million reported in 2017[70]. - The Group's gross profit increased by approximately 6.4 times, from HK$0.3 million in 2017 to HK$2.1 million in 2018[73]. - The gross profit margin decreased from 3.9% in 2017 to 1.0% in 2018 due to increased bargaining power from telecommunications chain stores and mobile carriers[77]. - Other income for the year ended December 31, 2018, was approximately HK$0.9 million, representing a decrease of 11.7% compared to HK$1.0 million in 2017[78]. - The Group had a net gain of HK$23.0 million in 2018, compared to a net loss of HK$38.2 million in 2017, primarily due to recovery of bad debts and write back of interest payables[79]. - Selling and distribution costs were approximately HK$11 thousand in 2018, a decrease of 97.3% compared to HK$0.4 million in 2017[80]. - Administrative expenses amounted to HK$14.9 million, maintaining a similar level compared to HK$14.7 million in the previous year[81]. - The Group's net profit for the year ended December 31, 2018, was HK$7.8 million, a significant improvement from a net loss of HK$111.7 million in the previous year[96][101]. - Basic earnings per share for the year ended December 31, 2018, was HK$0.85, compared to a basic loss per share of HK$12.25 in the previous year[97][102]. Business Development and Strategy - The Group is actively seeking opportunities to diversify its business and enhance shareholder value, focusing on big data, mobile operating systems, and mobile internet[55]. - The Group commenced its franchise retail business in the PRC[44]. - The Group completed the acquisition of 100% shareholdings of Synergy Technologies (Asia) Limited and disposed of 46% shareholdings of Synergy Pacific[29]. - The Group has entered into a joint venture agreement to engage in blockchain technology business, emphasizing its potential applications across various industries[61]. - The Group is pursuing opportunities in blockchain technology and 5G telecommunications networks[151]. Market Environment - The mobile phone market in China had over 1.6 billion subscribers as of the end of 2018, indicating a mature market with intense competition among manufacturers[126]. - The Group's operations faced challenges due to the evolving mobile phone market business model and uncertainties from the US-China trade war[131]. - Customers are expected to shift focus from mobile phone functionality to shopping experience, requiring integrated service platforms in retail channels[132]. - The Group expects uncertainties in the PRC economy, particularly from the US-China trade conflict, to continue affecting consumption and retail segments[151]. - There were over 1.6 billion handset subscribers in the PRC, with an increase of over 90 million subscribers in 2018[151]. - The number of 4G users in the PRC is around 1 billion, with expectations for further growth in the near future[151]. - The mobile internet user base has surpassed 1.1 billion, indicating vast opportunities in mobile applications and commerce[154]. - The demand for related equipment remains strong due to the maturation and upcoming launch of 5G communication networks[154]. Corporate Governance - The Board currently comprises two Executive Directors, one Non-executive Director, and three Independent Non-executive Directors, with independent directors constituting more than one-third of the Board[183]. - The Company has complied with most of the Code Provisions of the CG Code during the year ended 31 December 2018, with some deviations noted[174]. - The Company has adopted the Model Code for Securities Transactions by Directors, ensuring compliance by all Directors for the year ended 31 December 2018[175]. - The Nomination Committee is authorized by the Board to determine the policy for the nomination of Directors and to set out the nomination procedures[188]. - The Board collectively determines the overall strategies of the Company and monitors performance and related risks[189]. - The Company has arranged appropriate insurance cover on directors and officers liability for its directors and officers[190]. - The Board will continuously review and improve corporate governance practices to ensure proper regulation of business activities[178]. - All Non-executive Directors are subject to retirement by rotation in accordance with the Company's Bye-laws[184]. - The Company has received annual confirmations of independence from all Independent Non-executive Directors[186]. - The day-to-day management of the Company is delegated to the Executive Directors and senior management, who are required to report back to the Board[189]. - The Board held seven meetings in 2018 to review the Company's financial and operating performance and discuss future strategies[196]. - All Directors received at least 14 days' notice for regular Board meetings, ensuring they could include matters for discussion in the agenda[196]. - Mr. Lau Siu Ying attended all seven Board meetings as Chairman and Chief Executive Officer[199]. - Independent Non-executive Directors had a strong attendance record, with Dr. Law Chun Kwan attending all seven meetings[199]. - The Company has established a suitable directors and officers liability insurance for its directors and senior management[193]. - The roles of Chairman and Chief Executive Officer are currently held by the same individual, Mr. Lau Siu Ying, which is a deviation from the CG Code[200]. - The Board reviews significant matters including annual and interim financial statements and dividend proposals during meetings[196]. - The Company Secretary maintains all minutes of the Board meetings, which are available for inspection by all Directors[196].