OROWN International Crown International Corporation Limited 皇冠環球集團有限公司 (Incorporated in Hong Kong with limited liability) (在香港註冊成立之有限公司) Stock code 股份代號: 727 American III 健康中國 2030 宏健園康養集團 Interim Rep 2020/20 Contents 目錄 Pages | --- | --- | --- | |-------------------------------------------|----------------------|-------| | Corporate Information | 公司資料 | | | Condensed Consolidated Statement of | 簡明綜合損益及 | | | Profit or Loss and Other Comprehensive | 其他全面收益表 | | | Income (Unaudited) | （未經審核） | | | Condensed ...

Financial Performance - As of March 31, 2020, the total assets of the Group reached approximately HK$3,280 million, with a profit attributable to shareholders of approximately HK$9.4 million, representing an increase of approximately HK$5.6 million or 147% compared to the previous financial year[12]. - Revenue for the year ended March 31, 2020, amounted to approximately HK$14.9 million, representing an increase of approximately HK$9.5 million or 177.7% compared to approximately HK$5.4 million for the previous year[87]. - Profit attributable to owners of the Company for the year was HK$9.4 million, compared to HK$3.8 million in the previous year, indicating a significant increase[86]. - The Group's cash and bank balances decreased to HK$13.7 million from HK$167.1 million in the previous year[86]. - Other operating expenses decreased by approximately HK$12.1 million or 52.2% to approximately HK$11.1 million, primarily due to the adoption of HKFRS 16 which changed the accounting treatment of leasing expenses[91]. - The Group's net borrowings to net assets attributable to owners of the Company ratio increased to 30.8% from 21.3% in the previous year[86]. - The new business segment of comprehensive healthcare planning and management services contributed approximately HK$0.3 million to the Group's revenue for the current year[87]. - The Group recorded a net profit attributable to owners of approximately HK$9.4 million, an increase of approximately HK$5.6 million compared to last year[93]. Property Development Projects - The Group's property development project, Golden Beach No. 1, is expected to have a total gross floor area of approximately 195,000 square meters, with over 1,600 apartment suites and 360 car parking spaces[20]. - The expected completion time for the Golden Beach No. 1 Project has been delayed to the second half of 2021 due to the outbreak of coronavirus[20]. - The aggregate market value of the Golden Beach No. 1 Project is estimated to be approximately RMB2.26 billion, assuming completion at the current stage[21]. - The Weihai Property, originally expected to be completed in Q4 2020, has been delayed to the second half of 2021 due to COVID-19, covering a total area of approximately 195,000 square meters, providing over 1,600 serviced apartments and 360 parking spaces[22]. - The estimated total market value of the Weihai Property project is approximately RMB 2.26 billion, based on current real estate market prices in Weihai[22]. - The pre-sale of the Golden Beach No. 1 Project phase I commenced in Q3 2018, but completion is now delayed to the second half of 2021 due to COVID-19, with revenue recognition expected in the 2021/22 financial year[116][117]. - The hotel portion of the Golden Beach No. 1 Project phase I is expected to be completed and operational in the second half of 2021, becoming the first international five-star hotel in Weihai[118]. Investment Properties - All three investment properties of the Group have been leased out, with long-term lease agreements signed for periods ranging from nine to approximately fifteen years[19]. - The Group's investment properties, including Zhongshan Daxing Garden, Yingkou Excellence Building, and Jinggangshan Hotel, are fully leased with long-term leases ranging from 9 to 15 years, securing stable rental income[22]. - The Yingkou Property, a 16-story commercial building in Yingkou, Liaoning Province, has a total construction area of approximately 10,740 square meters and is fully occupied due to two lease agreements[44][47]. - The annual rental for the Yingkou Property is RMB1.68 million for the first five years and RMB1.764 million for the remaining five years, with a lease term of ten years[47]. - The Jinggangshan Property, a hotel complex in Jiangxi Province, has a gross floor area of approximately 9,600 square meters and is leased for ten years starting from December 8, 2017[50]. - The annual rental for the Jinggangshan Property is RMB1.8 million for the first three years, RMB1.9 million for the next three years, RMB2.0 million for the following three years, and RMB2.1 million for the last year[50][53]. - The local lessee of the Jinggangshan Property is required to invest at least RMB10 million in renovation expenditures, which the Group will reimburse over the lease term[50][53]. - The renovation work for the Jinggangshan Property has been completed, and the hotel complex has commenced operations, entering a stable operational stage[51]. - The Group does not expect any material changes to the operations of both the Yingkou and Jinggangshan Properties for the duration of their respective leases[51][52]. - The Zhongshan Property was leased for a term from January 1, 2020, to March 31, 2034, with an initial annual rent of RMB 33.0 million, increasing by 3.5% every three years[58]. Economic and Market Conditions - The Group faced challenges due to the Sino-US trade issues and the impact of the coronavirus outbreak on the global economy[14]. - The Group's operations have been significantly affected by strict isolation measures implemented worldwide to combat the coronavirus outbreak[14]. - The central banks of various countries have introduced massive bailout measures to support the weak economy, but recovery is expected to be gradual[14]. - The outbreak of COVID-19 has severely impacted the global economy, but the Group believes that recovery is expected once the epidemic stabilizes[121]. - The Group's main risks are related to the demand and economic performance in China, particularly in the property investment and development sectors[127][129]. - The Chinese government's macro-control policies on the real estate industry pose significant risks, with potential regulatory changes based on economic conditions[129]. - The COVID-19 pandemic significantly impacted normal operations, leading to a severe contraction in demand, but the Group anticipates benefiting from government stimulus measures aimed at economic recovery in the real estate sector[131]. - The real estate industry in China is subject to a wide range of taxes, and any changes in taxation policies could significantly affect the Group's profitability[133][138]. - The exchange rate of RMB to HKD fell by 6.3% from RMB100 to HK$116.82 at the beginning of the financial year to RMB100 to HK$109.45 at the end, resulting in a decline in the Group's total and net assets reported in HKD[134][138]. Healthcare Services - The Group launched a new business segment in comprehensive healthcare planning and management services, targeting the growing elderly population in China, projected to reach 248 million by 2020[24]. - The health service industry in China is expected to grow from RMB 3.8 trillion in 2015 to RMB 16 trillion by 2030, indicating a fourfold increase in industry scale[24]. - The Group plans to identify existing properties for conversion into high-end healthcare projects and may also develop new projects through land development[24]. - The Group's comprehensive healthcare services include planning, research, establishment, staff training, and post-establishment management for healthcare operators[39]. - The Group anticipates that the comprehensive healthcare business will contribute to future revenue and earnings[120]. Corporate Governance - The company emphasizes the importance of good corporate governance as a key component in striving for the highest returns to shareholders[167]. - The company has maintained a high standard of corporate governance, complying with the applicable code provisions set out in the Corporate Governance Code, except for the deviation regarding the roles of chairman and CEO[167]. - The roles of chairman and CEO are currently held by the same individual, which deviates from code provision A.2.1, but the board considers this arrangement suitable under current circumstances[167]. - The board is structured with a balance of power, including an Executive Committee comprised of four executive directors, to protect the interests of the company and shareholders[167]. - The company is committed to continuously improving corporate governance practices and fostering an ethical corporate culture[167]. - The Board consists of seven members, including four executive Directors and three INEDs, ensuring a balanced composition in terms of diversity of experience and expertise[171]. - The Company adopted a board diversity policy on September 4, 2013, recognizing the importance of diversity in enhancing performance and achieving strategic objectives[173]. - The Company has established procedures for the nomination, appointment, and re-appointment of Directors, empowering shareholders to nominate candidates[177]. - Directors' emoluments are determined based on individual responsibilities and prevailing market conditions, with liability insurance purchased for all Directors[183][187]. - The Board is committed to continuous professional development, ensuring Directors are updated on the latest regulatory requirements[183]. - The Company emphasizes meritocracy in Director appointments while considering diversity factors such as gender, age, and professional experience[173]. - The Board regularly reviews its composition to maintain a good balance of skills and experience[174]. - The Company provides sufficient resources for Directors to fulfill their duties, including access to independent professional advice[189]. - The Board currently comprises three Independent Non-Executive Directors (INEDs), with one possessing accounting expertise as required under Rule 3.10(2) of the Listing Rules[194]. - The Company received written confirmations of independence from each INED, satisfying the requirements of the Listing Rules[194]. - The Board is committed to maintaining unbiased judgment and conscience in decision-making through the independence of its members[194]. Leadership and Management - Mr. LIU Hong Shen has been with the company since May 2014, serving as Vice Chairman and a member of the Executive Committee[150]. - Mr. LIU has extensive experience in real estate development, focusing on both residential and commercial properties[151]. - Mr. LIU's educational background includes a bachelor's degree in Chinese Literature from Yunnan University[150]. - Mr. LIU has played a significant role in expanding the company into a diversified national group under his leadership[152]. - Mr. MENG Jin Long joined the company in May 2012 and has experience in land and property development, shopping mall leasing, and management[155]. - Mr. LONG Tao, aged 67, has extensive knowledge in corporate finance, accounting, and audit, having served in various prestigious roles[157]. - Mr. LONG has held positions at KPMG and the China Securities Regulatory Commission, enhancing his expertise in financial matters[158]. - The company has a strong leadership team with diverse backgrounds in finance, real estate, and corporate governance[156]. - The company is focused on expanding its operations in real estate and cultural tourism investments[152]. - The leadership team is committed to leveraging their extensive experience to drive the company's growth and diversification strategies[156].

Financial Performance - Revenue for the six months ended September 30, 2019, was HK$2,599,000, an increase of 8.8% compared to HK$2,388,000 for the same period in 2018[10]. - Operating profit for the period was HK$13,224,000, significantly up from HK$6,732,000 in the previous year, representing a growth of 96.5%[10]. - Profit for the period decreased to HK$2,308,000 from HK$2,516,000, reflecting a decline of 8.3% year-over-year[10]. - Total comprehensive loss for the period was HK$118,022,000, compared to a loss of HK$73,949,000 in the same period last year, indicating a deterioration in overall financial performance[12]. - Basic and diluted earnings per share remained stable at HK$0.07 for both periods[12]. - Profit for the period attributable to owners of the Company was HK$2,308,000, a decrease of 8.3% from HK$2,516,000 in the same period of 2018[100]. - The company recorded a profit attributable to owners of approximately HKD 2.3 million for the interim period, compared to approximately HKD 2.5 million in the same period last year[199]. Asset and Liability Management - Total assets as of September 30, 2019, amounted to HK$3,196,726, a decrease from HK$3,270,544 as of March 31, 2019, representing a decline of approximately 2.2%[14]. - Net current assets decreased to HK$686,024 as of September 30, 2019, compared to HK$870,305 as of March 31, 2019, indicating a decline of about 21.1%[15]. - Non-current liabilities decreased to HK$886,301 as of September 30, 2019, from HK$1,018,951 as of March 31, 2019, a reduction of about 13%[15]. - The equity attributable to owners of the company was HK$1,909,799 as of September 30, 2019, down from HK$2,027,821 as of March 31, 2019, indicating a decrease of approximately 5.8%[15]. - Cash and cash equivalents at September 30, 2019, were HK$14,061, down from HK$140,323 at March 31, 2019, showing a decrease of approximately 90%[19]. - The company reported a net cash used in operating activities of HK$123,807 for the six months ended September 30, 2019, compared to HK$23,376 for the same period in 2018, reflecting a significant increase in cash outflow[19]. Investment and Development Activities - The company has engaged in property investment, development, hotel operations, and financial consultancy services, indicating a diversified business model[22]. - The Group's current investment in property development includes approximately 1,400 serviced apartment units in Weihai city, Shandong province[142]. - The Group aims to utilize its properties in Yingkou, Jinggangshan, and Zhongshan for rental or capital appreciation purposes, indicating a strategic focus on property investment[70]. - The property development segment is actively involved in property development and sales, contributing to the Group's diversified revenue streams[70]. - Prepayments and deposits increased significantly to HK$234,959,000 from HK$157,844,000, indicating ongoing investment in potential property development projects[107]. Financial Reporting and Standards - The Group's interim financial information is prepared in accordance with Hong Kong Financial Reporting Standards (HKFRS) and is consistent with the accounting policies adopted for the annual financial statements for the year ended March 31, 2019[33]. - The Group has adopted new and amended standards effective from April 1, 2019, including HKFRS 16 on leases, which introduces a single accounting model for lessees[43]. - The cumulative effect of the initial application of HKFRS 16 has been recognized as an adjustment to the opening balance of retained profits at April 1, 2019[43]. - The auditor's report on the financial statements for the year ended March 31, 2019, was unqualified and did not contain any emphasis of matter[29]. - The interim financial information is unaudited but has been reviewed by the Company's audit committee[28]. Financing and Borrowing - Finance costs increased to HK$3,550,000 from HK$128,000, a substantial rise indicating higher borrowing costs[10]. - The company secured a loan of RMB660 million (approximately HK$772 million) for a term of 3 years at an interest rate of 6.6% per annum[117]. - The final drawdown amount of the loan was RMB500 million (equivalent to HK$584.6 million)[117]. - The outstanding amount of bonds issued increased to HK$55,500,000 as of September 30, 2019, from HK$15,000,000 on March 31, 2019[119]. - The company issued bonds payable totaling HK$50,973,000 as of September 30, 2019, compared to HK$13,446,000 on March 31, 2019[115]. Operational Segments - The Group's operating segments include property investment, property development, hotel operations, and financial consultancy services, which are reported to the executive Directors for resource allocation decisions[66]. - The Group's hotel operations segment is engaged in hotel rental and food and beverage business in Weihai city, contributing to the overall revenue structure[70]. - The financial consultancy service segment assists customers in obtaining financing, which is a strategic focus for the Group[70]. Market Conditions and Future Outlook - The Group believes the current business model will generate stable rental income and improve cash flow by spreading renovation expenses over the lease term[153]. - Factors contributing to the increase in market value of the Zhongshan Property include the development of the Guangdong-Hong Kong-Macao Greater Bay Area and the opening of the Hong Kong-Zhuhai-Macao Bridge[162]. - The Group plans to adjust its operating model to build more financing platforms for various companies, not just real estate developers, to capture market opportunities[190].

Financial Performance - As of March 31, 2019, the total assets of the Group reached approximately HK$3,270 million, with a profit attributable to shareholders of approximately HK$3.8 million, a significant decrease from approximately HK$108.7 million in the previous year[10]. - The decrease in profit was mainly due to a one-off extraordinary gain of HK$116.0 million from the acquisition of a holding company in the previous year, which was not repeated in the current year[10]. - The Group's revenue for the Current Year was approximately HK$5.4 million, slightly up from HK$5.0 million in the Last Year, primarily derived from rental income of two investment properties[70]. - Profit attributable to owners of the Company significantly declined to approximately HK$3.8 million from HK$108.7 million in the Last Year, mainly due to a one-off bargain purchase gain of approximately HK$116.0 million recorded in the previous year[75]. - Other operating expenses increased by approximately HK$5.3 million or 30%, totaling approximately HK$23.2 million, primarily due to selling and marketing expenses related to the pre-sale of serviced apartment units[71]. - Finance costs decreased by approximately HK$1.0 million or 53%, amounting to approximately HK$0.9 million, mainly due to a reduction in imputed interest expenses[74]. Property Development - The Golden Beach No. 1 Project in Weihai, Shandong, is expected to be completed in the fourth quarter of 2020, with a total gross floor area of approximately 195,000 square meters, including over 1,600 apartment suites[15]. - Approximately 130,000 square meters of the gross floor area of the Golden Beach No. 1 Project will be available for sale as serviced apartments[15]. - The Weihai Property development project is expected to be completed by Q4 2020, covering a total construction area of approximately 195,000 square meters, providing over 1,600 serviced apartments and 360 parking spaces[18]. - The hotel portion of Golden Beach Phase I is expected to be completed and operational by Q4 2020, becoming the highest building and first international five-star hotel in Weihai[128]. - The expected initial costs for the development of the Weihai Property are approximately RMB 1.0 billion, excluding land costs[54]. - The hotel complex is currently under construction and will provide approximately 200 luxury suites and rooms upon completion[62]. Investment Properties - All three major investment properties of the Group have been leased out with long-term leases ranging from nine to fifteen years, ensuring stable rental income[14]. - The Yingkou Property, a 16-storey commercial building, has a gross floor area of approximately 10,740 square meters and is fully occupied due to two lease agreements[32][34]. - The annual rental for the Yingkou Property's lease with a bank is RMB1.68 million for the first five years, increasing to RMB1.764 million for the remaining five years[33]. - The annual rental for the local lessee of the Yingkou Property is RMB1.2 million for the first three years, with a 6% increase after every three-year period[34]. - The Group's three key investment properties are fully leased with long-term lease agreements ranging from 9 to 15 years, securing stable rental income[18]. - The Group believes that the Weihai Property will soon become a new source of income and generate stable cash flow[16][18]. Market Conditions - The Sino-US trade issues have led to substantial volatility in the financial market, reducing investors' risk appetite and cooling the domestic real estate market in the short term[10]. - The average price level of residential properties in Zhongshan has been increasing moderately, attributed to factors such as the development of the Guangdong-Hong Kong-Macao Greater Bay Area and the opening of the Hong Kong-Zhuhai-Macao Bridge[41]. - The Group's management anticipates stable and moderate growth in the selling price and leasing level of residential properties in Zhongshan due to favorable external factors[46]. - The Group's operations are exposed to risks related to changes in economic conditions and policies in the PRC, particularly in the real estate sector[124]. - Heavy tax burdens, including land value-added tax and corporate income tax, pose challenges for the Group's operations in the PRC[136][140]. Financial Position - As of 31 March 2019, the Group's bank balances and cash increased to approximately HK$167.1 million from HK$43.6 million as of 31 March 2018[80]. - The Group's net current assets rose to approximately HK$870.3 million as of 31 March 2019, compared to approximately HK$522.0 million as of 31 March 2018, with a current ratio of approximately 4.9[80]. - The net debt gearing ratio was approximately 21.3% as of 31 March 2019, up from 5.4% as of 31 March 2018, indicating a significant increase in leverage[80]. - Capital expenditure for the Current Year was approximately HK$38.0 million for fixed assets and approximately HK$1.2 million for investment properties, compared to HK$40.1 million and HK$7.8 million respectively in the Last Year[84]. - The Group plans to strengthen cash flow management and seek cooperation opportunities with domestic and foreign investors to expand project funding sources[80]. Management and Governance - The Company has adopted a board diversity policy to enhance performance quality, considering factors such as gender, age, and professional experience[178]. - All Directors participated in continuous professional development activities to stay updated on regulatory requirements and improve governance practices[177]. - The Company has complied with the Corporate Governance Code, with some deviations explained in the report[172]. - The Board consists of seven members, including four executive Directors and three independent non-executive Directors (INEDs)[179]. - The Company has purchased liability insurance for all Directors to protect against potential claims[188]. - The Board is committed to maintaining a balanced composition in terms of experience and expertise[179]. Strategic Initiatives - The Group is actively exploring opportunities in the comprehensive healthcare sector, aiming to address the aging population issue in China[17][19]. - The Group is focusing on maintaining asset quality and financial resources to support long-term development and risk management[24][26]. - The Group's financial consultancy services faced revenue challenges due to the macro environment, prompting exploration of new business opportunities[129]. - The Group is committed to exploring new technologies and products to enhance its service offerings and market competitiveness[157]. - The Group plans to leverage its properties as wellness centers, implementing a "wellness operation + property investment" strategy[131].