Market Overview - The market experienced a slight decline with the Shanghai Composite Index down by 0.2%, the Shenzhen Component down by 0.62%, and the ChiNext down by 0.65% [1] - Over 4,100 stocks fell, with nearly 100 stocks dropping more than 9% [1] - The total trading volume in the Shanghai and Shenzhen markets was 1.06 trillion yuan, a decrease of 57.2 billion yuan from the previous trading day [1] Sector Performance - PEEK materials, gaming, banking, and steel sectors showed strong performance, while sectors like Hainan, real estate, tourism, and food experienced declines [1] - The banking sector, particularly Industrial and Commercial Bank of China, reached a new historical high [1][6] Key Stocks - Changjiang Electric reached a peak price of 29.92 yuan, the closest it has been to the 30 yuan mark since October 8 of the previous year [3] - Other major stocks such as Gree Electric, Sungrow Power, and Wuliangye also performed better than the market average [5] ETF Performance - Defensive sectors like banking and electricity ETFs performed well, reflecting a conservative attitude from investors as the month-end and holiday approached [6] - The banking ETF and electricity ETF, which include major stocks like Industrial and Commercial Bank and Changjiang Electric, showed strong performance [6] Banking Sector Insights - Analysts suggest that recent meetings indicate a potential acceleration in interest rate cuts and reserve requirement ratio reductions, which may support bank net interest margins [7][8] - The banking sector is expected to maintain stable earnings and dividends amid macroeconomic uncertainties [8] Energy Sector Developments - The National Energy Administration reported that by Q1 2025, the combined installed capacity of wind and solar power in China is expected to reach 743.3 million kilowatts, surpassing coal power for the first time [8] - The government is actively supporting clean energy initiatives, with significant growth in wind and solar installations [8] Technology Sector Movements - Stocks like Cambrian and Tuowei Information have attracted attention despite weaker performance in broader technology ETFs, indicating renewed interest in leading companies within the sector [9] - The recent political bureau meeting emphasized the importance of artificial intelligence, which may positively impact technology stocks moving forward [11][12]

Financial Performance - Total revenue for the year ended February 28, 2025, was HKD 1,759,316,000, an increase of 8.4% from HKD 1,623,321,000 in the previous year[3] - Net interest income reached HKD 1,347,582,000, up 7.0% from HKD 1,258,899,000 year-on-year[3] - Operating income for the year was HKD 1,649,317,000, reflecting a growth of 8.4% compared to HKD 1,520,966,000 in the prior year[3] - The annual profit attributable to the company's owners was HKD 400,478,000, representing an increase of 2.9% from HKD 392,270,000 in the previous year[5] - Earnings per share (EPS) increased to HKD 95.63 from HKD 93.67, marking a growth of 2.1%[3] - Total comprehensive income for the year amounted to HKD 384,176,000, up from HKD 368,165,000, indicating a rise of 4.3%[5] - The company reported a decrease in interest expenses to HKD 129,785,000 from HKD 108,463,000, reflecting a rise in net interest income[3] - Other income increased to HKD 19,792,000 from HKD 15,205,000, showing a growth of 30.5%[3] - The company recognized a gain from the sale of non-performing assets amounting to HKD 14,605,000, compared to HKD 12,067,000 in the previous year[3] Assets and Liabilities - Total assets decreased from HKD 5,883,689 thousand in 2024 to HKD 5,593,986 thousand in 2025, representing a decline of approximately 4.9%[7] - Total liabilities decreased from HKD 2,274,343 thousand in 2024 to HKD 1,677,543 thousand in 2025, indicating a reduction of about 26.2%[7] - Total equity increased from HKD 4,067,993 thousand in 2024 to HKD 4,251,161 thousand in 2025, reflecting an increase of approximately 4.5%[7] - Non-current assets decreased from HKD 1,935,813 thousand in 2024 to HKD 1,812,341 thousand in 2025, a decrease of about 6.4%[6] - Current assets increased from HKD 5,932,516 thousand in 2024 to HKD 5,932,516 thousand in 2025, remaining stable[6] - Current liabilities decreased from HKD 2,274,343 thousand in 2024 to HKD 1,677,543 thousand in 2025, a decrease of approximately 26.2%[7] - Cash and cash equivalents decreased from HKD 257,989 thousand in 2024 to HKD 226,220 thousand in 2025, a decline of about 12.4%[6] - The company's total borrowings increased from HKD 1,015,149 thousand in 2024 to HKD 1,239,685 thousand in 2025, an increase of approximately 22.2%[7] Dividends and Shareholder Information - For the fiscal year ending February 29, 2024, the company declared a mid-term dividend of HKD 100,504,000[8] - The company plans to distribute a final dividend of HKD 0.25 per share for the fiscal year 2025, compared to HKD 0.24 per share in 2024, representing a 4.2% increase[34] - The company maintains a stable dividend policy with a payout ratio of at least 30.0% of the consolidated net profit for the fiscal year, proposing a final dividend of HKD 0.25 per share, resulting in an annual dividend of HKD 0.49 per share with a payout ratio of 51.2%[50] - The company will suspend the registration of shareholders from June 23, 2025, to June 26, 2025, to determine eligibility for attending the annual general meeting[48] - The company will also suspend the registration of shareholders from July 9, 2025, to July 10, 2025, for eligibility to receive the proposed final dividend[49] Future Outlook and Strategic Initiatives - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[3] - The company plans to continue expanding its services in the insurance and personal loan sectors to drive future growth[26] - The group aims to enhance customer experience through a new integrated rewards platform, allowing seamless management of points from various merchants[88] - The outlook for 2025 anticipates moderate global economic growth, supported by policy measures in mainland China to stimulate local demand[86] - The group aims to improve credit assessment and monitoring methods to maintain a sustainable asset quality and accelerate approval speed[87] - New mobile payment products and self-service branch concepts will further enhance customer experience and maintain competitive advantage[88] - The group is committed to sustainable development and plans to introduce loan products that support low-carbon living[89] - The group will further invest in developing virtual card features to enhance non-contact mobile payment services in Hong Kong[90] - The group aims to leverage the potential of the Guangdong-Hong Kong-Macao Greater Bay Area to expand its customer base and enhance corporate governance[91] Customer Loans and Receivables - As of February 28, 2025, total customer loans and receivables amounted to HKD 7,329,378,000, an increase from HKD 6,960,859,000 as of February 29, 2024, representing a growth of approximately 5.3%[38] - The breakdown of customer loans and receivables shows that the first stage accounts for 95.8% of the total, with HKD 7,018,669,000, compared to 96.0% or HKD 6,682,702,000 in the previous year[38] - The impairment provision for receivables as of February 28, 2025, was HKD 264,939,000, up from HKD 247,091,000 on February 29, 2024, indicating an increase of approximately 7.2%[39] - The total amount of loans and receivables, net of impairment provisions, was HKD 7,064,439,000 as of February 28, 2025, compared to HKD 6,713,768,000 in the prior year, reflecting a growth of about 5.2%[37] - The company’s total customer loans and receivables are categorized into three stages, with the first stage being the largest contributor to the overall balance[38] Accounting Standards and Compliance - The group has adopted new accounting standards for classifying liabilities as current or non-current, effective from the current fiscal year[16] - The amendments clarify that the classification of liabilities should be based on rights existing at the end of the reporting period, not management's intentions[18] - The application of the new accounting policies has no significant impact on the consolidated financial statements for the current year[17] - The amendments provide additional guidance on assessing rights to defer settlement of liabilities for at least twelve months from the reporting date[16] - The group has implemented the revised Hong Kong Financial Reporting Standards without significant effects on past financial performance[15] - The new Hong Kong Financial Reporting Standards (HKFRS) No. 18 will replace HKAS No. 1, introducing new presentation and disclosure requirements for financial statements[20] - The implementation of HKFRS No. 18 is expected to impact the presentation of the income statement and future disclosures in financial statements[21] - The company is currently assessing the detailed impact of HKFRS No. 18 on its consolidated financial statements[21] - The new standards will take effect for annual periods beginning on or after January 1, 2027, with early application permitted[21] - The main accounting policies adopted in the consolidated financial statements are consistent with those used in the preparation of the financial statements for the year ended February 29, 2024[23] Operational Highlights - The company completed the relocation of its data center and redeployment of core system platforms to support ongoing digital transformation, with upgraded applications for credit assessment and the launch of virtual card features[53] - The overall sales revenue reached a historical high with a continuous growth of 10.5% compared to the previous fiscal year, while customer loans and accounts receivable increased by 5.3%[54] - The company secured HKD 300 million in sustainable performance-linked loans from a consortium of nine regional and local banks, demonstrating its commitment to integrating sustainability into its operations[55] - The company expanded its branch network, including the opening of a new branch in Sha Tin in June 2024, to enhance customer service and meet growing demand for face-to-face consultations[56] - The upgraded credit application processing platform facilitated the launch of virtual credit card features in the "AEON Hong Kong" mobile app, allowing customers to make purchases immediately after approval[57] - The company enhanced its credit monitoring models and data analysis tools to improve credit risk allocation and proactively identify customers needing credit consultation[58] - The core data center was relocated to a more efficient site, adhering to internationally recognized green building certification standards, enhancing the company's IT infrastructure for future product launches[59] Employee and Corporate Governance - As of February 28, 2025, the total number of employees is 596, with 380 in Hong Kong and 216 in mainland China[92] - The company maintains high standards of corporate governance, balancing the interests of shareholders, customers, employees, and other stakeholders[93] - The group celebrates the 35th anniversary of AEON Credit Financial Services in the Hong Kong market, focusing on innovative and customized products[91] - The annual performance has been reviewed by the audit committee, ensuring compliance with financial reporting standards[96] - The group will publish its annual report containing relevant information as required by listing rules at an appropriate time[98]

Financial Performance - For the nine months ending November 30, 2024, the company reported a total revenue of HKD 1,304,551,000, an increase from HKD 1,192,889,000 in the same period last year, representing a growth of approximately 9.36%[2] - The net interest income for the current period was HKD 1,008,263,000, compared to HKD 928,720,000 in the previous year, reflecting an increase of about 8.58%[2] - Operating income for the nine months was HKD 1,217,802,000, up from HKD 1,115,111,000, indicating a growth of approximately 9.19%[2] - The company reported a profit before tax of HKD 328,748,000, slightly down from HKD 339,443,000, showing a decrease of about 3.06%[2] - The net profit for the period was HKD 275,307,000, compared to HKD 282,263,000 in the previous year, a decline of approximately 2.93%[2] - The basic earnings per share decreased to HKD 65.74 from HKD 67.40, reflecting a decline of about 2.47%[2] - Total comprehensive income for the period was HKD 267,664,000, an increase from HKD 243,410,000, representing a growth of approximately 9.97%[16] Assets and Liabilities - The total assets as of November 30, 2024, were HKD 2,042,612,000, compared to HKD 2,007,847,000, indicating an increase of about 1.73%[20] - The company’s total liabilities were HKD 2,322,924,000, up from HKD 1,677,543,000, reflecting a significant increase of approximately 38.54%[20] - The net amount of current assets was HKD 3,539,623,000, down from HKD 3,875,842,000, indicating a decrease of about 8.66%[20] - Total equity increased to HKD 4,134,649 thousand as of November 30, 2024, compared to HKD 4,067,993 thousand in the previous period, reflecting a growth of approximately 1.64%[24] - The total liabilities decreased to HKD 5,582,235 thousand from HKD 5,883,689 thousand, indicating a reduction of approximately 5.11%[24] Cash Flow - For the nine months ending November 30, 2024, the net cash generated from operating activities was HKD 24,855,000, compared to a net cash outflow of HKD 559,966,000 for the same period in 2023[26] - The cash and cash equivalents at the end of the period were HKD 229,386,000, down from HKD 284,126,000 at the end of the previous year[26] - The company reported a net cash outflow from investment activities of HKD 38,385,000 for the nine months ending November 30, 2024, compared to HKD 85,961,000 in the same period of 2023[26] - The company incurred a net cash outflow of HKD 44,694,000 for lease liabilities and paid interest during the nine months ending November 30, 2024[26] Customer Loans and Receivables - The total customer loans and receivables as of November 30, 2024, amounted to HKD 7,354,369,000, with HKD 5,458,623,000 in customer loans and HKD 7,135,907,000 in receivables[47] - The total customer loans and receivables balance as of November 30, 2024, was HKD 7,354,369,000, representing a 5.7% increase from HKD 6,960,859,000 as of February 19, 2024[53] - The first stage loans, which have not shown significant increases in credit risk, accounted for 95.6% of total customer loans and receivables as of November 30, 2024[53] - The second stage loans, indicating a significant increase in credit risk, represented 0.9% of total customer loans and receivables as of November 30, 2024[54] - The third stage loans, which have experienced credit loss events, accounted for 3.5% of total customer loans and receivables as of November 30, 2024[55] Impairment and Provisions - The company reported a decrease in impairment provisions for receivables, with HKD 268,200,000 as of November 30, 2024, compared to HKD 247,091,000 as of February 29, 2024[49] - The total expected credit loss remeasurement during the period was HKD 338,885,000, with significant contributions from the third stage loans[51] - Impairment losses and provisions increased by 28.8% or HKD 76.1 million to HKD 340.2 million, up from HKD 264.1 million in the previous year[79] Marketing and Business Strategy - The company plans to continue expanding its services and improving its product offerings to enhance market presence[35] - The marketing strategy focused on targeted promotional activities to attract customers and drive local and international sales growth[62] - The group successfully implemented targeted marketing plans, leading to continuous growth in credit card and personal loan receivables despite slow local consumer recovery[71] - The company has prioritized the digitization of operations, enhancing call center capabilities and developing data analytics tools to improve marketing and credit management[64] Economic Outlook - The economic outlook in mainland China has improved, which is expected to enhance consumer confidence and positively impact local market sentiment[60] - The overall business environment in Hong Kong is gradually improving due to U.S. interest rate cuts and stimulus measures in mainland China[93] - The local consumption market is expected to continue a slow recovery, with a focus on overseas and online sales growth[94] Sustainability and Innovation - The company is committed to reducing carbon footprint and energy consumption through digital payment solutions and energy-saving measures[95] - The new credit card design reflects the company's commitment to innovation and sustainability, incorporating contactless payment and recycled plastic features[64] - The introduction of online private loan confirmation programs will enhance customer convenience and reduce paper consumption[95]

Financial Performance - Revenue for the six months ended August 31, 2024, was HKD 7.1 billion, an increase of 10.6% compared to the previous period[5]. - Net profit for the period was HKD 170.4 million, a decrease of 11.0% compared to the previous half-year[5]. - Total comprehensive income for the period was HKD 158.5 million, slightly up from HKD 156.7 million year-on-year[7]. - The company reported a pre-tax profit of HKD 203,211,000 for the period from March 1, 2024, to August 31, 2024, compared to HKD 230,865,000 for the same period in 2023, showing a decrease of about 12%[23][25]. - The group’s net profit for the reporting period was HKD 170.4 million, a decrease of 11.0% or HKD 21.1 million from HKD 191.4 million in the same period last year[89]. - The group's revenue for the first half of the fiscal year 2024/25 was HKD 860.3 million, representing a growth of 9.9% or HKD 77.2 million compared to HKD 783.1 million in the previous year[90]. Income and Expenses - Interest income reached HKD 734.5 million, up 11.7% year-on-year[5]. - The company reported a net interest income of HKD 670 million, compared to HKD 611 million in the previous period[6]. - Total operating expenses increased by 7.6% to HKD 378,200,000, while the cost-to-income ratio improved from 48.0% to 47.0%[93]. - The total interest expense for the period from March 1, 2024, to August 31, 2024, was HKD 64,537,000, compared to HKD 46,721,000 in the same period of 2023, indicating an increase of approximately 38%[29]. - The group recorded a slight decrease of 1.0% in commission income, totaling HKD 62.1 million, compared to HKD 62.7 million in the previous year[91]. Customer Loans and Receivables - Total customer loans and receivables amounted to HKD 72 billion, reflecting a growth of 3.8%[5]. - As of August 31, 2024, the total amount of customer loans and receivables was HKD 7,225,325,000, an increase from HKD 6,960,859,000 as of February 29, 2024[42]. - Customer loans and receivables rose by 3.8% to HKD 7,225,300,000, with credit card receivables increasing to HKD 5,339,900,000[95]. - Non-credit impaired customer loans amounted to HKD 723,887,000 in 2024, up from HKD 651,073,000 in 2023, reflecting an increase of approximately 11.1%[27]. Dividends - The company declared an interim dividend of HKD 0.24 per share, with a payout ratio of 59.0%[5]. - The company declared a final dividend of HKD 0.24 per share, totaling HKD 100,504,000, for the fiscal year ending August 31, 2023, compared to HKD 92,128,000 for the previous year[37]. Assets and Liabilities - The total assets as of August 31, 2024, were HKD 5.77 billion, an increase from HKD 5.55 billion[9]. - Total assets less current liabilities increased from 5,883,689 thousand HKD to 5,901,177 thousand HKD, an increase of about 0.3%[11]. - Total equity rose from 4,067,993 thousand HKD to 4,126,038 thousand HKD, reflecting an increase of approximately 1.4%[11]. - The company reported a net increase in customer loans and receivables of HKD 492,483,000 for the period ending March 1, 2024[43]. Risk Management - The group has established a robust risk management framework to address various risks, including credit, operational, market, and liquidity risks[114]. - The group has implemented policies and systems to monitor and manage credit risk, significantly reducing the credit risk exposure[119]. Corporate Governance - The company is actively involved in corporate governance, adhering to the guidelines set forth in the corporate governance code[137]. - The board of directors has undergone changes, with new appointments and resignations effective June 26, 2024[131]. Strategic Initiatives - The group plans to enhance customer relationship management and marketing strategies, including large-scale promotions for credit cards and personal loans, to adapt to changing consumer behaviors[103]. - The company is considering strategic acquisitions to bolster its market position, with a budget of $100 million allocated for potential deals[138]. - The group aims to diversify revenue sources through the development of acquiring and insurance intermediary businesses[102]. Market Performance - The average financing cost rose from 3.9% in the previous year to 4.1% in the first half of the fiscal year 2024/25 due to increased bank borrowings and higher market interest rates[90]. - Hong Kong business revenue increased by 9.3% from HKD 770.2 million to HKD 841.9 million, while performance decreased by 12.3% from HKD 229.6 million to HKD 201.4 million due to high borrowing costs and low consumer confidence[102].

Financial Performance - The company reported a net interest income of HKD 860,321 thousand for the six months ending August 31, 2024, compared to HKD 783,109 thousand for the same period in 2023, representing an increase of approximately 9.8%[1] - The operating profit before impairment losses was HKD 425,969 thousand, up from HKD 381,297 thousand in the previous year, indicating a growth of about 11.7%[1] - The net profit for the period was HKD 170,361 thousand, a decrease of 11.0% from HKD 191,426 thousand in the same period last year[2] - The company’s total assets amounted to HKD 5,901,177 thousand as of August 31, 2024, compared to HKD 5,883,689 thousand as of February 29, 2024, reflecting a slight increase[3] - The company’s operating expenses increased to HKD 378,246 thousand from HKD 351,383 thousand, indicating a rise of approximately 7.6%[1] - The total comprehensive income for the period was HKD 158,549 thousand, slightly up from HKD 156,683 thousand year-over-year[2] - Total revenue for the six months ended August 31, 2024, was HKD 860,321,000, representing an increase from HKD 783,109,000 in the same period last year, a growth of approximately 9.9%[12] - Interest income increased to HKD 734,492,000 for the six months ended August 31, 2024, compared to HKD 657,771,000 for the same period in 2023, reflecting a growth of about 11.6%[12] Customer Loans and Receivables - Customer loans and receivables reached HKD 1,572,145 thousand, up from HKD 1,512,414 thousand, marking an increase of approximately 3.9%[3] - The total amount of customer loans and receivables as of August 31, 2024, was HKD 7,225,325,000, representing a 3.8% increase from HKD 6,960,859,000 as of February 29, 2024[25] - The first stage of customer loans and receivables accounted for 95.7% of the total, indicating stable credit risk without significant increases[25] - The second stage of customer loans and receivables accounted for 0.9%, showing a slight increase in credit risk[26] - The third stage of customer loans and receivables accounted for 3.4%, indicating the occurrence of credit loss events[26] Impairment and Provisions - The provision for impairment as of August 31, 2024, was HKD 269,509,000, compared to HKD 247,091,000 as of February 29, 2024, indicating an increase of 9.1%[27] - The total impairment provision amounted to HKD 269,509,000, an increase from HKD 234,495,000 as of August 31, 2023, representing a growth of approximately 14.94%[28] - Impairment losses and provisions increased by 43.4% to HKD 236,100,000 from HKD 164,600,000 in the previous year[46] Dividends and Shareholder Returns - The company paid dividends amounting to HKD 100,504 thousand during the period, up from HKD 92,128 thousand in the previous year, representing an increase of approximately 9%[7] - The interim dividend declared for October 16, 2024, is HKD 0.240 per share, an increase from HKD 0.220 per share for the same period in 2023, totaling HKD 100,504,000[22] - The group maintained a dividend payout of HKD 0.24 per share, with a payout ratio of 59.0%, consistent with its policy of distributing at least 30.0% of net profit as dividends[39] Credit Card and Personal Loan Performance - Credit card income from card issuance decreased to HKD 19,386,000 from HKD 31,223,000, a decline of approximately 38.0% year-over-year[12] - The group’s total income from credit cards for the six months ended August 31, 2024, was HKD 668,977,000, compared to HKD 624,052,000 in the same period last year, indicating a growth of approximately 7.2%[13] - The group’s total income from personal loans for the six months ended August 31, 2024, was HKD 175,961,000, compared to HKD 148,001,000 in the same period last year, reflecting an increase of about 18.9%[13] - Credit card business accounted for 77.8% of total revenue, down from 79.7% in the previous year, while personal loan business increased to 20.5% from 18.9%[49] Operational Developments - The company established a new branch in Sha Tin in June 2024 to diversify its branch network and meet the growing demand for face-to-face consultation services[36] - The group successfully relocated its core data center to a new facility in Jiangjun Ao, enhancing operational reliability and sustainability[38] - The company has implemented various measures to drive sales and improve receivables growth during the reporting period, responding to a slower-than-expected economic recovery[36] Taxation and Compliance - Hong Kong profits tax for the period ending August 31, 2024, amounted to HKD 37,868,000, an increase of 26.5% from HKD 29,899,000 for the same period in 2023[20] - The effective tax rate for Hong Kong profits tax was calculated at 16.5% based on estimated taxable profits[20] - The company confirmed compliance with the standards for securities trading by its directors throughout the review period[35] Workforce and Corporate Governance - The group has a total of 581 employees as of August 31, 2024, compared to 567 employees as of February 29, 2024, indicating growth in workforce[58] - The company has maintained a high level of corporate governance, adhering to applicable corporate governance codes during the reporting period[34] Future Outlook and Strategies - The company anticipates a downward trend in market interest rates following a 50 basis point cut in September, which may alleviate funding cost pressures[52] - The company plans to enhance customer relationship management and marketing strategies to adapt to changing consumer behavior[53] - The group intends to leverage its strong liquidity and management capabilities to capitalize on the recovery opportunities in the consumer finance market[54]

Revenue Performance - In the first quarter of the fiscal year 2024/2025, revenue from personal loan business increased by 21.9% to HKD 86,100,000 compared to HKD 70,700,000 in the same period last year[1]. - Revenue from Hong Kong operations rose by 12.0% to HKD 418,300,000, up from HKD 373,300,000 in the first quarter of the fiscal year 2023/2024, while segment profit decreased by 20.8% to HKD 98,000,000[2]. - Revenue from the mainland China business increased to HKD 8,300,000, a rise of 24.2% from HKD 6,600,000 in the same quarter last year, with segment profit slightly increasing to HKD 1,400,000[3]. - Revenue for the period from March 1, 2024, to May 31, 2024, was HKD 426,547, an increase from HKD 379,953 in the same period last year, representing a growth of approximately 12.3%[19]. - For the three months ending May 31, 2024, the company reported revenue of HKD 426,547,000, an increase of 12.2% compared to HKD 379,953,000 for the same period in 2023[29]. - The group reported a total income of HKD 379,953,000 across its segments, with credit card income at HKD 303,693,000, personal loans at HKD 70,661,000, and insurance at HKD 5,599,000[70]. - Revenue for the first quarter of the fiscal year 2024/25 was HKD 426,500,000, an increase of 12.3% or HKD 46,600,000 compared to HKD 380,000,000 in the first quarter of the fiscal year 2023/24[78]. Profitability and Losses - The company recorded a loss of HKD 2,200,000 in the first quarter of fiscal year 2024/2025, contrasting with a profit of HKD 14,100,000 in the same quarter of the previous year[1]. - The operating profit before tax for the same period was HKD 99,351, compared to HKD 117,458 in the previous year, indicating a decrease of about 15.4%[19]. - The company reported a profit for the period of HKD 83,255,000, down from HKD 96,967,000, indicating a decrease of 14.2%[29]. - The group recorded a profit before tax of HKD 99,400,000, a decrease of 15.4% or HKD 18,100,000 compared to the same period last year[75]. - The group's net profit after tax decreased by 14.1% or HKD 13,700,000 to HKD 83,300,000 from HKD 97,000,000 in the same period last year[75]. Expenses and Costs - Employee costs, including director remuneration, increased to HKD 60,795 from HKD 53,042, reflecting a rise of approximately 14.0%[13]. - The total operating expenses increased by HKD 12,500,000 from HKD 176,800,000 to HKD 189,300,000, but the expense-to-revenue ratio improved from 50.0% to 47.3% due to increased operating income[97]. - Interest expenses rose by 54.8% or HKD 11,200,000 to HKD 31,600,000 from HKD 20,400,000 in the same period last year[79]. - Marketing and promotional expenses increased by HKD 1,600,000 to HKD 26,900,000 during the reporting period, while depreciation and amortization rose by HKD 1,300,000 compared to the same period last year[96]. Assets and Liabilities - Total assets as of May 31, 2024, were HKD 2,029,347,000, an increase from HKD 2,007,847,000 as of February 29, 2024[37]. - The company’s total liabilities were HKD 1,839,682,000, compared to HKD 1,677,543,000, representing an increase of 9.7%[37]. - Total equity as of May 31, 2024, was HKD 4,141.864 million, up from HKD 4,067.993 million[50]. - The total liabilities, including non-current bank loans and lease liabilities, amounted to HKD 1,721.033 million, a decrease from HKD 1,815.696 million[50]. - Total assets increased to HKD 7,702,600,000 as of May 31, 2024, compared to HKD 7,561,200,000 on February 29, 2024[83]. Customer Loans and Receivables - Total receivables for credit card accounts as of May 31, 2024, were HKD 5,237,155, compared to HKD 5,188,549 as of February 29, 2024[5]. - Total receivables for personal loans increased to HKD 1,600,695 from HKD 1,573,989 over the same period[5]. - The total amount of customer loans and receivables reached HKD 7,037,828, up from HKD 6,960,859[7]. - Customer loans and receivables rose by 1.1% or HKD 77,000,000 to HKD 7,037,800,000 as of May 31, 2024, from HKD 6,960,900,000 on February 29, 2024[84]. - Credit impairment for customer loans and receivables increased to HKD 254,700,000, representing 3.6% of total customer loans and receivables as of May 31, 2024, up from 3.5% on February 29, 2024[84]. Strategic Initiatives - The company is focusing on improving the financial performance of its Shenzhen micro-lending subsidiary and diversifying its loan products[3]. - The company plans to continue expanding its market presence and enhancing its product offerings in response to the increasing receivables[2]. - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency[29]. - The group plans to continue investing resources to enhance consumer finance services and expand its customer base with innovative and customized products[88]. - The company plans to enhance its mobile application and traditional marketing channels to promote credit cards and personal loans, with the introduction of a virtual card feature in the second quarter[100]. - The company has completed the upgrade of its credit application processing platform and is enhancing its call center platform for real-time customer interaction[101]. Foreign Exchange and Impairment - The company reported a foreign exchange loss of HKD 9,130 related to bank loans, compared to a loss of HKD 6,225 in the previous year, indicating a worsening of approximately 46.0%[4]. - The net foreign exchange loss from other instruments was HKD 13, a decrease from a gain of HKD 116 in the previous year, indicating a significant decline in performance[4]. - Impairment losses and provisions increased to HKD 117,600,000, up HKD 49,600,000 from HKD 68,000,000 in the same period last year[82]. - The impairment provision increased to HKD 254,749 as of May 31, 2024, compared to HKD 247,091 as of February 29, 2024[8].

[Key Highlights](index=4&type=section&id=Key%20Highlights) The group achieved robust financial growth in FY2023/24, driven by strong performance in core business segments and strategic expansion [Financial Performance Highlights](index=4&type=section&id=Financial%20Performance%20Highlights) The group achieved robust financial growth in FY2023/24, with significant increases in revenue and profit, alongside expanded loan portfolios and a stable dividend payout Key Financial Indicators for FY2023/24 | Indicator | Amount/Ratio | YoY Change | | :--- | :--- | :--- | | Revenue | HKD 1,623.3 million | +31.8% | | Annual Profit | HKD 392.3 million | +5.0% | | Operating Profit | HKD 807.9 million | +45.1% | | Total Loans and Receivables | HKD 7.0 billion | +19.3% | | Expense to Revenue Ratio | 46.9% | -6.9 percentage points | | Dividend Payout Ratio | 51.2% | N/A | | Final Dividend | HKD 0.24 per share | N/A | [Segment Performance and Growth Strategies](index=5&type=section&id=Segment%20Performance%20and%20Growth%20Strategies) The group's core businesses, credit cards and personal loans, demonstrated strong revenue growth driven by effective marketing and channel expansion, supported by strategic focus on digitalization and Greater Bay Area development - Credit card business revenue reached **HKD 1.2838 billion**, a **33.3% year-on-year increase**, primarily benefiting from enhanced brand awareness and well-received marketing programs[18](index=18&type=chunk)[98](index=98&type=chunk)[11](index=11&type=chunk) - Personal loan business revenue was **HKD 313.3 million**, a **29.6% year-on-year increase**, with receivables balance growing by **24.5%**, driven by personalized marketing via electronic media and expanded branch network[26](index=26&type=chunk)[24](index=24&type=chunk)[101](index=101&type=chunk) - The group's future growth strategies include strengthening peripheral businesses, expanding sales channels, accelerating office digitalization, and reinforcing the foundation for Greater Bay Area business development[18](index=18&type=chunk)[26](index=26&type=chunk) [Five-Year Financial Summary](index=6&type=section&id=Five-Year%20Financial%20Summary) The group's financial performance and asset base have shown consistent growth over the past five years, culminating in record highs in FY2024 [Consolidated Results and Balance Sheet](index=6&type=section&id=Consolidated%20Results%20and%20Balance%20Sheet) In the past five years, the group's revenue and annual profit have shown an overall upward trend amidst fluctuations, reaching their highest points in FY2024, while total assets and equity have steadily expanded Five-Year Consolidated Results Summary (HKD Thousands) | Fiscal Year | 2020 | 2021 | 2022 | 2023 | 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,297,686 | 1,089,858 | 1,049,589 | 1,231,631 | 1,623,321 | | Profit Before Tax | 444,930 | 357,946 | 397,973 | 449,294 | 472,528 | | Annual Profit | 370,083 | 301,575 | 342,592 | 373,611 | 392,270 | | Earnings Per Share | HKD 0.8837 | HKD 0.7202 | HKD 0.8181 | HKD 0.8922 | HKD 0.9367 | | Dividend Per Share | HKD 0.4400 | HKD 0.4000 | HKD 0.4400 | HKD 0.4400 | HKD 0.4800 | Five-Year Consolidated Assets and Liabilities Summary (HKD Thousands) | As at Fiscal Year-End | 2020 | 2021 | 2022 | 2023 | 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 5,729,718 | 5,083,366 | 5,089,556 | 6,457,680 | 7,561,232 | | Total Liabilities | (2,416,176) | (1,661,336) | (1,456,014) | (2,565,220) | (3,493,239) | | Total Equity | 3,313,542 | 3,422,030 | 3,633,542 | 3,892,460 | 4,067,993 | [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the group's business operations, financial performance, risk management framework, and future strategic outlook [Business and Operations Review](index=9&type=section&id=Business%20and%20Operations%20Review) Despite challenging macroeconomic conditions, the group achieved a 12.4% sales growth and a 19.3% increase in loans and receivables in FY2023, successfully launching new systems and accelerating digital transformation while effectively managing credit risk - During the reporting year, the group's overall sales increased by **12.4%**, and total loans and receivables balance grew by **19.3%** year-on-year[43](index=43&type=chunk) - The group successfully launched new credit card and loan systems, revamped its website and mobile application, accelerating digital transformation, with over **400,000** cumulative mobile application users[42](index=42&type=chunk)[46](index=46&type=chunk) - Credit risk management was effective, with the proportion of higher credit risk receivables decreasing from **4.3%** in the previous year to **4.0%** in the reporting year[43](index=43&type=chunk) - For its Mainland China business, the company injected **RMB 50 million** into Shenzhen AEON Microfinance to support the growth needs of its personal loan business[48](index=48&type=chunk) [Financial Review](index=10&type=section&id=Financial%20Review) In FY2023, the group's revenue increased by 31.8% to HKD 1.623 billion, driven by a 32.5% rise in interest income, leading to an improved cost-to-income ratio despite increased operating expenses, with after-tax profit growing by 5.0% Consolidated Income Statement Key Items Analysis (HKD Millions) | Item | FY2023 | FY2022 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,623.3 | 1,231.6 | +31.8% | | Interest Income | 1,367.4 | 1,032.1 | +32.5% | | Interest Expense | (108.5) | (44.1) | +146.0% | | Net Interest Income | 1,258.9 | 988.0 | +27.4% | | Operating Income | 1,521.0 | 1,204.2 | +26.3% | | Operating Expenses | (713.0) | (647.5) | +10.1% | | Operating Profit (before impairment) | 807.9 | 556.7 | +45.1% | | Impairment Losses and Provisions | (374.0) | (172.7) | +116.6% | | Profit Before Tax | 472.5 | 449.3 | +5.2% | | Annual Profit | 392.3 | 373.6 | +5.0% | - Total customer loans and receivables increased from **HKD 5.836 billion** to **HKD 6.961 billion**, a **19.3%** increase[95](index=95&type=chunk) Performance by Business Segment (HKD Millions) | Business Segment | Revenue (FY2023) | Revenue (FY2022) | Results (FY2023) | Results (FY2022) | | :--- | :--- | :--- | :--- | :--- | | Credit Card | 1,283.8 | 963.4 | 421.0 | 337.6 | | Personal Loan | 313.3 | 241.7 | 40.9 | 99.7 | | Insurance Brokerage | 26.3 | 26.5 | 11.6 | 20.7 | [Risk Management](index=15&type=section&id=Risk%20Management) The group manages market, credit, liquidity, and operational risks through a comprehensive framework, utilizing derivative instruments for market risk, stringent policies for credit risk, continuous monitoring for liquidity, and measures for emerging risks like cyber and climate change - Market Risk: Primarily exposed to foreign currency exchange and interest rate risks, which are hedged using derivative financial instruments (currency swaps, interest rate swaps) not for speculative purposes[154](index=154&type=chunk)[193](index=193&type=chunk) - Credit Risk: Primarily arises from customer loans and receivables, managed through policy formulation, credit limit approval, monitoring procedures, and impairment assessment using the Expected Credit Loss (ECL) model[159](index=159&type=chunk)[197](index=197&type=chunk) - Liquidity Risk: Managed by continuously monitoring forecasted and actual cash flows, maintaining sufficient reserves, and bank financing to meet short, medium, and long-term funding needs[198](index=198&type=chunk)[556](index=556&type=chunk) - Emerging Risks: The group has incorporated cyber and climate risks into its management framework, developing corresponding defense measures and business continuity plans[201](index=201&type=chunk)[600](index=600&type=chunk) [Outlook and Strategies](index=15&type=section&id=Outlook%20and%20Strategies) Looking ahead, the group anticipates a sustained high-interest rate environment, focusing on enhancing operational efficiency and credit risk management, while accelerating digital transformation and expanding market reach in the Greater Bay Area - The group will focus on operational efficiency and credit risk management to address the ongoing high-interest rate environment[105](index=105&type=chunk) - Digitalization is a core strategy, with continued investment in virtual cards, e-wallets, and plans to apply artificial intelligence in credit operations[106](index=106&type=chunk)[132](index=132&type=chunk) - Market strategy will focus on large-scale promotional activities and new offers targeting cross-border travel and consumption trends in the Greater Bay Area[128](index=128&type=chunk) - The group is actively promoting sustainable development (ESG), adopting more paperless and virtual payment solutions, and enhancing ESG disclosures[131](index=131&type=chunk) [Corporate Sustainability Report](index=24&type=section&id=Corporate%20Sustainability%20Report) The report details the group's commitment to sustainable development, encompassing governance, ethical practices, customer engagement, environmental stewardship, and social responsibility [Sustainability Governance and Strategy](index=27&type=section&id=Sustainability%20Governance%20and%20Strategy) The group's sustainability approach, centered on the "AEON Basic Principles," aims to create long-term value, with the Board overseeing ESG matters and a dedicated committee setting and evaluating goals based on stakeholder materiality assessments - The sustainability governance structure is led by the Board of Directors, with a Sustainability Committee responsible for formulating and overseeing ESG strategies and objectives[216](index=216&type=chunk)[217](index=217&type=chunk) - Through annual materiality assessments, six key sustainability issues most important to the business and stakeholders were identified, including business ethics, customer satisfaction, cybersecurity, digital transformation, risk management, and climate change[254](index=254&type=chunk)[260](index=260&type=chunk)[609](index=609&type=chunk) [Business Ethics and Customer Commitment](index=33&type=section&id=Business%20Ethics%20and%20Customer%20Commitment) The group upholds high standards of business ethics through comprehensive policies and training, prioritizes customer satisfaction via digital services and complaint handling, ensures data privacy and security, and integrates ESG criteria into supply chain management - The group has established a comprehensive anti-corruption and anti-money laundering framework, providing employees with annual compliance training and ICAC lectures[266](index=266&type=chunk)[267](index=267&type=chunk)[269](index=269&type=chunk) - During the reporting year, **175 customer commendations** were received, a **29.6% year-on-year increase**, primarily related to branch services; **97 complaints** were received and processed according to procedures[367](index=367&type=chunk)[368](index=368&type=chunk) - The group strictly protects customer data, complying with Payment Card Industry Data Security Standard (PCI DSS) and obtaining ISO 27001 Information Security Management System certification[374](index=374&type=chunk)[375](index=375&type=chunk) - ESG assessments are integrated into supply chain management to ensure suppliers meet environmental, social, health and safety, and labor practice standards[386](index=386&type=chunk)[426](index=426&type=chunk) [Environmental Commitment](index=42&type=section&id=Environmental%20Commitment) The group, ISO 14001 certified since 2009, actively addresses climate change by setting emission reduction targets and implementing various initiatives such as energy conservation, digitalization to reduce paper, waste recycling, and adopting eco-friendly materials FY2023 Environmental Performance Data | Indicator | Unit | Total | | :--- | :--- | :--- | | Total GHG Emissions | tonnes CO2e | 510.10 | | GHG Emission Intensity | tonnes CO2e/sq ft | 0.0069 | | Total Energy Consumption | kWh | 1,034,388.88 | | Energy Consumption Intensity | kWh/sq ft | 13.97 | | Water Consumption | cubic meters | 4,426.56 | | Non-Hazardous Waste Generated | tonnes | 183.13 | - The group has set a target to reduce greenhouse gas emission intensity (Scope 1 and 2) and headquarters office electricity consumption intensity by **5%** by FY2025 (based on FY2023)[442](index=442&type=chunk) - Eco-friendly credit cards made from recycled plastic (rPVC) were launched, reducing approximately **40%** of CO2 equivalent per card, and new uniforms made from eco-friendly fabric were provided to employees[462](index=462&type=chunk)[505](index=505&type=chunk) [Social Commitment (Employees and Community)](index=50&type=section&id=Social%20Commitment%20(Employees%20and%20Community)) The group values its employees as its most precious asset, fostering a diverse, inclusive, and safe work environment, and actively contributes to the community through donations and volunteer services focused on environmental protection and youth education Employee Profile (FY2023) | Indicator | Data | | :--- | :--- | | Total Employees | 567 people | | Female Employee Ratio | 59.6% | | Employee Turnover Rate | 21.3% | | Trained Employee Ratio | 100% | | Average Training Hours Per Employee | 21.9 hours | | Work-Related Fatalities | 0 | - The group donated approximately **HKD 2.136 million** and organized **180 hours** of volunteer services during the reporting year, primarily dedicated to environmental protection and youth education[399](index=399&type=chunk)[568](index=568&type=chunk) [Corporate Governance Report](index=73&type=section&id=Corporate%20Governance%20Report) This report outlines the company's corporate governance framework, including board structure, committee functions, risk management, internal controls, and shareholder communication practices [Board and Committees](index=74&type=section&id=Board%20and%20Committees) The company is committed to high standards of corporate governance, with a diverse nine-member Board overseeing four specialized committees to ensure checks and balances and effective decision-making - The Board of Directors comprises **9 members**, including **4 independent non-executive directors**, exceeding the one-third requirement of the Listing Rules[704](index=704&type=chunk) - Female representation on the Board is approximately **33%**, meeting the Board Diversity Policy's target of not less than **30%** female representation[706](index=706&type=chunk) - The Board has four committees: Audit Committee, Nomination Committee, Remuneration Committee, and the Strategy Committee newly established on June 29, 2023[71](index=71&type=chunk) [Risk Management, Internal Control and Shareholder Communication](index=85&type=section&id=Risk%20Management,%20Internal%20Control%20and%20Shareholder%20Communication) The Board is ultimately responsible for the group's risk management and internal control systems, which are annually assessed and supported by a three-lines-of-defense model, while effective communication with shareholders is maintained through various channels - The group has established a three-lines-of-defense risk management model, comprising operating units, risk management department/committee, and internal audit department/audit committee, to identify, assess, and monitor various risks[167](index=167&type=chunk) - The company has formulated whistleblowing and anti-corruption policies, establishing multiple confidential channels for employees and external parties to report misconduct[170](index=170&type=chunk) - Shareholder rights are protected, with clear procedures for shareholders holding **5%** of shares to request a general meeting, and for shareholders holding **2.5%** or **50 shareholders** to propose resolutions[234](index=234&type=chunk)[235](index=235&type=chunk) [Directors' Report](index=93&type=section&id=Directors'%20Report) The report provides an overview of the group's business activities, financial results, dividend distribution, board composition, shareholder interests, and details of continuing connected transactions [Business Review, Results and Dividends](index=93&type=section&id=Business%20Review,%20Results%20and%20Dividends) This report outlines the group's primary business activities in consumer finance services, detailing the interim and proposed final dividends for the period, and noting the net debt to equity ratio as of February 29, 2024 - The group primarily engages in consumer finance services, including credit cards, personal loans, payment processing, and insurance agency businesses[241](index=241&type=chunk) FY2023/24 Dividend Distribution | Dividend Type | Amount Per Share (HK cents) | Total Amount (HKD) | | :--- | :--- | :--- | | Interim Dividend (Paid) | 24.0 | 100,504,000 | | Final Dividend (Proposed) | 24.0 | 100,504,000 | - As of February 29, 2024, the net debt to equity ratio was **0.7**, an increase from **0.4** in the previous year[243](index=243&type=chunk) [Directors and Shareholders' Interests](index=95&type=section&id=Directors%20and%20Shareholders'%20Interests) The report lists the Board members for the year and at the reporting date, confirms their eligibility for re-election, and discloses the shareholdings of directors and major shareholders in the company and its associated corporations - Pursuant to the Securities and Futures Ordinance, major shareholder AEON Co., Ltd. (AEON Japan) is deemed to hold **286,088,000 shares**, representing **68.32%** of the company's issued share capital[291](index=291&type=chunk) - Directors Mr. Tomoharu Fukayama and Mr. Yuk Kwong Lai hold **100,000 shares** and **20,000 shares** of the company, respectively[285](index=285&type=chunk) [Continuing Connected Transactions](index=98&type=section&id=Continuing%20Connected%20Transactions) The group engaged in various ongoing transactions with connected parties, including commission collection, gift voucher procurement, and IT/consultancy services, all conducted within annual caps and reviewed by independent non-executive directors for fairness and reasonableness - The group conducted in-network commission transactions and off-network acquiring transactions with AEON Stores, totaling **HKD 25,282,000** for the year, which did not exceed the annual cap of **HKD 36,900,000**[345](index=345&type=chunk)[346](index=346&type=chunk) - The group paid **HKD 6,538,000** for IT services and **HKD 9,671,000** for business consultancy fees to AEON Financial Service Co., Ltd. (AFS), both within their respective annual caps[346](index=346&type=chunk)[348](index=348&type=chunk) [Independent Auditor's Report](index=101&type=section&id=Independent%20Auditor's%20Report) The independent auditor issued an unqualified opinion on the financial statements, highlighting the impairment assessment of customer loans and receivables as a key audit matter [Audit Opinion and Key Audit Matters](index=101&type=section&id=Audit%20Opinion%20and%20Key%20Audit%20Matters) Deloitte Touche Tohmatsu issued an unqualified audit opinion on the group's consolidated financial statements for the year ended February 29, 2024, affirming their fair presentation, with the impairment assessment of customer loans and receivables identified as the most significant key audit matter - The auditor issued an **unqualified opinion**, stating that the consolidated financial statements fairly and truthfully reflect the group's financial position and performance in accordance with Hong Kong Financial Reporting Standards[403](index=403&type=chunk) - The key audit matter is the "Impairment assessment of customer loans and receivables" because its carrying amount is approximately **HKD 6.714 billion**, representing about **89%** of total assets, and its impairment assessment involves significant management judgment based on the Expected Credit Loss (ECL) model[409](index=409&type=chunk) [Consolidated Financial Statements](index=105&type=section&id=Consolidated%20Financial%20Statements) This section presents the group's consolidated financial statements, including the statement of profit or loss, financial position, cash flows, and detailed explanatory notes [Consolidated Statement of Profit or Loss](index=105&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the year ended February 29, 2024, the group reported revenue of HKD 1.623 billion, a 31.8% increase from the previous year, with profit before tax at HKD 473 million and annual profit at HKD 392 million, representing a 5.0% year-on-year growth Consolidated Statement of Profit or Loss Summary (HKD Thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | 1,623,321 | 1,231,631 | | Net Interest Income | 1,258,899 | 988,005 | | Profit Before Tax | 472,528 | 449,294 | | Annual Profit | 392,270 | 373,611 | | Earnings Per Share — Basic | HKD 0.9367 | HKD 0.8922 | [Consolidated Statement of Financial Position](index=107&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of February 29, 2024, the group's total assets significantly increased to HKD 7.561 billion from HKD 6.458 billion in the prior year, with total liabilities rising to HKD 3.493 billion and total equity to HKD 4.068 billion, primarily driven by an increase in customer loans and receivables Consolidated Statement of Financial Position Summary (HKD Thousands) | Item | February 29, 2024 | February 28, 2023 | | :--- | :--- | :--- | | Non-current Assets | 2,007,847 | 1,589,787 | | Current Assets | 5,553,385 | 4,867,893 | | **Total Assets** | **7,561,232** | **6,457,680** | | Current Liabilities | 1,677,543 | 1,190,832 | | Non-current Liabilities | 1,815,696 | 1,374,388 | | **Total Liabilities** | **3,493,239** | **2,565,220** | | **Total Equity** | **4,067,993** | **3,892,460** | [Consolidated Statement of Cash Flows](index=110&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) This year saw a net cash outflow of HKD 637 million from operating activities due to a significant increase in customer loans, a net outflow of HKD 121 million from investing activities, and a net inflow of HKD 644 million from financing activities, resulting in a net decrease of HKD 114 million in cash and cash equivalents Consolidated Statement of Cash Flows Summary (HKD Thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (637,397) | (1,015,785) | | Net Cash Used in Investing Activities | (121,199) | (9,145) | | Net Cash Generated from Financing Activities | 644,485 | 827,418 | | Net Decrease in Cash and Cash Equivalents | (114,111) | (197,512) | | Cash and Cash Equivalents at Beginning of Year | 387,507 | 588,963 | | Cash and Cash Equivalents at End of Year | 271,658 | 387,507 | [Notes to the Consolidated Financial Statements](index=112&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the group's accounting policies, key estimates such as customer loan impairment, and a breakdown of financial statement items, covering revenue recognition, segment information, financial instrument risk management, related party transactions, and share capital structure - The notes detail the group's significant accounting policies, including basis of consolidation, revenue recognition, financial instruments, leases, and taxation, ensuring compliance with Hong Kong Financial Reporting Standards[547](index=547&type=chunk) - Impairment provisions for customer loans and receivables are a key accounting estimate, utilizing the Expected Credit Loss (ECL) model, which involves judgment on probability of default, loss given default, and forward-looking information[818](index=818&type=chunk)[820](index=820&type=chunk) - Note 39 provides detailed disclosures on the financial risks faced by the group, including market risk (interest rate, foreign exchange), credit risk, and liquidity risk, along with corresponding management objectives and policies[985](index=985&type=chunk)

Revenue Growth - Credit card sales increased by 33.3% from HKD 963.4 million in FY2022 to HKD 1,283.8 million in FY2023[1] - Hong Kong business revenue surged by 32.0%, increasing from HKD 1,209.7 million to HKD 1,596.2 million, with segment performance growing by 3.1% to HKD 468.4 million[3] - Total revenue for the year ending February 29, 2024, was HKD 1,623.3 million, compared to HKD 1,231.6 million in the previous year[10] - The annual profit for the year ending February 29, 2024, was HKD 392,270,000, an increase from HKD 373,611,000 in the previous year, representing a growth of approximately 4.4%[12] - Total revenue for the year ended February 29, 2024, was HKD 1,623,321,000, an increase from HKD 1,231,631,000 in the previous year, representing a growth of approximately 31.8%[51] - Credit card revenue amounted to HKD 1,283,761,000, while personal loan revenue was HKD 313,302,000, and insurance revenue was HKD 26,258,000 for the year ended February 29, 2024[51] Profitability - Net profit for the year was HKD 392.3 million, up from HKD 373.6 million[10] - Basic earnings per share increased to HKD 0.9367 from HKD 0.8922[10] - The group reported a pre-tax profit of HKD 472,528,000 for the year ended February 29, 2024, compared to HKD 449,294,000 in the previous year, indicating a growth of about 5.5%[51] - The company reported a profit before tax of HKD 66,680 million for the year 2024, down from HKD 80,270 million in 2023, reflecting a decrease of about 17%[76] Asset and Liability Management - Non-current assets increased significantly, with property, plant, and equipment valued at HKD 172,341,000 compared to HKD 84,584,000 in the previous year, reflecting a growth of approximately 103.6%[15] - Current assets also saw an increase, with customer loans and receivables rising to HKD 5,201,354,000 from HKD 4,404,568,000, marking an increase of about 18.1%[15] - The total liabilities decreased from HKD 1,190,832,000 to HKD 1,677,543,000, indicating a reduction of approximately 40.9%[16] - The company's equity increased to HKD 4,067,993,000 from HKD 3,892,460,000, representing a growth of about 4.5%[16] Cash Flow and Investments - The cash flow from operating activities showed a significant adjustment, with a net amount of HKD (22,994,000) compared to HKD 12,052,000 in the previous year[12] - The company reported a net cash flow from operating activities of HKD (637,397,000) for the year 2024, compared to HKD (1,015,785,000) in 2023, showing an improvement in cash flow management[25] - The company made substantial investments in property, plant, and equipment totaling $69,063 million, compared to $13,916 million previously[27] Credit and Risk Management - The impairment loss on loans and receivables increased to HKD 373,972,000 in 2024 from HKD 172,649,000 in 2023, reflecting a significant rise of approximately 116.5%[25] - The company reported a significant increase in the impairment provision for credit card receivables, rising to HKD 146,731,000 in 2024 from HKD 120,502,000 in 2023[88] - The total amount of non-performing loans written off was HKD 276,500,000 in 2024, reflecting ongoing challenges in credit recovery[90] Market Expansion and Digital Transformation - The company has plans for market expansion and new product development, although specific figures were not disclosed during the call[12] - The company is focusing on enhancing its digital transformation strategies to improve operational efficiency and customer engagement moving forward[12] - The group has launched a new mobile application that includes biometric authentication and one-time passwords for online transactions, enhancing customer experience[108] Regulatory and Compliance - The application of the revised Hong Kong Financial Reporting Standards is not expected to have a significant impact on the group's financial position and performance[38] - The group has implemented guidelines from the Hong Kong Institute of Certified Public Accountants regarding long service payment obligations, providing more reliable and relevant information[38] - The new regulations regarding the offsetting of mandatory contributions to long service payments will officially take effect on May 1, 2025[37] Economic Environment - The overall economic environment remains uncertain, with local GDP recovering only 3.2% after a contraction of 3.5% last year[105] - Ongoing geopolitical conflicts and economic instability are expected to pressure Hong Kong's exports until February 28, 2025[168] - An anticipated rebound in the tourism industry and related services due to an increase in visitors from mainland China and other countries[168]

Financial Performance - As of November 30, 2023, the total equity of the group was HKD 3,943,200,000, an increase of 1.3% or HKD 50,800,000 compared to HKD 3,892,500,000 on February 28, 2023[13] - The group reported a sales growth of 18.5% for the first nine months of the fiscal year 2023 compared to the same period in the previous year[30] - The company reported a total income of HKD 1,192,889,000 for the nine months ended November 30, 2023, an increase from HKD 887,361,000 for the same period in 2022, representing a growth of approximately 34.3%[48] - The pre-tax profit for the nine months ended November 30, 2023, was HKD 339,443,000, compared to HKD 299,664,000 for the same period in 2022, reflecting an increase of about 13.3%[48] - The company recorded a total comprehensive income of HKD 243,410,000 for the nine months ended November 30, 2023, compared to HKD 292,255,000 for the same period in 2022[56] - The company achieved a profit for the period of HKD 282,263 thousand, which is a 12.7% increase from HKD 250,314 thousand in the prior year[64] - The company’s credit card income for the nine months ended November 30, 2023, was HKD 945,285,000, up from HKD 694,582,000 in the same period of the previous year, marking an increase of about 36.1%[48] Customer Loans and Receivables - The group reported a significant increase in customer loans and receivables, with total loans rising from HKD 1,263,900,000 on February 28, 2023, to HKD 1,539,300,000 on November 30, 2023, representing a growth of 21.0%[13] - Customer loans and receivables increased by 16.8% compared to February 2023[30] - Total customer loans and receivables amounted to HKD 6,814,828,000 as of November 30, 2023, with a provision for impairment of HKD 254,794,000[43] - Credit card receivables stood at HKD 5,091,392,000, while personal loan receivables were HKD 1,539,278,000 as of November 30, 2023[43] - As of November 30, 2023, total customer loans and receivables amounted to HKD 6,814,800,000, representing an increase of 16.8% or HKD 978,600,000 compared to HKD 5,836,200,000 on February 28, 2023[123] Credit Risk and Impairment - The group experienced an increase in credit impairment losses, which rose from HKD 140,200,000 in the previous year to HKD 264,100,000 during the reporting period[12] - The impairment provision increased to HKD 254,794,000 as of November 30, 2023, from HKD 191,709,000 as of February 28, 2023, indicating a rise of approximately 32.9%[45] - The total amount of impaired customer loans and receivables increased from HKD 254,000,000 on February 28, 2023, to HKD 322,100,000 on November 30, 2023[123] - The proportion of higher credit risk loans and receivables rose slightly from 4.3% in February 2023 to 4.7% by November 30, 2023[30] Revenue and Income Sources - The net interest income increased, with total operating income rising, resulting in a cost-to-income ratio decreasing from 56.6% in the first nine months of 2022 to 47.8% in the same period of 2023[11] - Other income decreased by HKD 10,300,000 to HKD 7,600,000 in the first nine months of 2023 compared to the same period last year[9] - The credit card business accounted for 79.2% of the group's revenue in the first nine months of 2023, up from 78.3% in the same period last year[15] - Revenue from the Hong Kong business increased by 34.6% or HKD 301,000,000 to HKD 1,172,400,000 compared to HKD 871,400,000 in the first nine months of the previous year[127] Operating Expenses and Liabilities - Operating expenses for the period totaled 532,677 thousand HKD, an increase from 497,615 thousand HKD in the previous year[40] - The company’s total liabilities were HKD 1,685,843 thousand, up from HKD 1,190,832 thousand, reflecting increased borrowing[58] - The total liabilities to equity ratio increased from 0.5 on February 28, 2023, to 0.7 on November 30, 2023, with total equity to total assets ratios of 53.4% and 60.3% respectively[6] Market and Economic Conditions - The group faced macroeconomic challenges including high inflation and rising interest rates, impacting consumer confidence[27] - The company anticipates that inbound tourism and personal consumption will continue to stimulate economic growth this year[128] Strategic Initiatives - The group aims to expand its customer base through innovative and personalized credit card services, leveraging its strong liquidity and balance sheet[20] - The company plans to continue expanding its market presence and enhancing its product offerings in the upcoming quarters[48] - The company plans to accelerate sales and accounts receivable growth while maintaining improved credit assessment techniques[113] - New non-contact payment products and digital services will continue to be launched to enhance customer experience and maintain competitive advantage[113] - The group has integrated sustainable practices by issuing credit cards made from recycled PVC, enhancing its commitment to sustainability[32] - The company aims to further reduce its carbon footprint and energy consumption by adopting more paperless payment solutions and digital solutions[129]

Financial Performance - For the first half of 2023, the company reported a pre-tax profit of HKD 230.9 million, an increase of 9.4% or HKD 19.8 million compared to the same period in 2022[62]. - The net profit after tax rose by 8.3%, from HKD 176.8 million in the first half of 2022 to HKD 191.4 million in the first half of 2023[62]. - Earnings per share increased from HKD 0.4221 to HKD 0.4571 during the reporting period[62]. - The group’s sales for the first half of 2023 increased by 24.6% compared to the same period in 2022[77]. - Total revenue for the period from March 1, 2023, to August 31, 2023, reached HKD 783,109,000, a significant increase of 37% compared to HKD 571,730,000 for the same period in 2022[146]. - Interest income for the same period was HKD 657,771,000, up 37% from HKD 479,715,000 in the previous year[150]. - The group reported a profit before tax of HKD 230,865,000 for the period, compared to HKD 211,111,000 for the same period in 2022, reflecting an increase of 9%[149]. - The profit for the period was HKD 191,426,000, an increase from HKD 176,774,000 in the previous year[98]. Customer Loans and Receivables - Private loan receivables increased by 38.5% to HKD 148 million for the first half of 2023 compared to HKD 110.9 million in the same period of 2022, despite a decline in classified performance from HKD 36.8 million to HKD 26.9 million[5]. - Total customer loans and receivables increased to HKD 6,439,903,000 as of August 31, 2023, compared to HKD 4,822,040,000 as of August 31, 2022, reflecting a growth of approximately 33.5%[176]. - The net increase in customer loans and receivables for the period was HKD 731,821,000, compared to a net increase of HKD 640,055,000 in the previous period, showing an increase of approximately 14.3%[176]. - Customer loans and receivables increased to HKD 4,780,681 thousand, up from HKD 4,404,568 thousand, representing a growth of about 8.5%[101]. - The company reported a total of HKD 4,817,439,000 in receivables from credit card accounts as of August 31, 2023, an increase from HKD 4,481,038,000[191]. Equity and Debt - The net debt to equity ratio increased to 0.6 as of August 31, 2023, compared to 0.5 on February 28, 2023, indicating a rise in leverage[9]. - The company reported a total equity of HKD 3,957 million as of August 31, 2023, compared to HKD 3,892 million on February 28, 2023[9]. - As of August 31, 2023, the company's debt consists of 59.4% equity and 40.6% direct borrowings, with a debt-to-equity ratio of 0.6, up from 0.5 on February 28, 2023[24]. - The average duration of the company's debt was 2.1 years as of August 31, 2023, compared to 1.9 years as of February 28, 2023[23]. - The total equity rose to HKD 3,957,015 thousand from HKD 3,892,460 thousand, indicating an increase of approximately 1.7%[101]. Dividends - The interim dividend declared is HKD 0.24 per share, up from HKD 0.22 per share in the first half of 2022, with a payout ratio of 52.5%[79]. - The company declared a final dividend of HKD 92,128 thousand for the fiscal year 2022/2023[121]. - The company declared a final dividend of HKD 0.22 per share, totaling HKD 92,128,000, consistent with the previous year's dividend[153]. Risk Management - The company has implemented policies to monitor and manage credit risk, significantly reducing its credit risk exposure[31]. - The company has adopted interest rate swaps to convert variable rate debt to fixed rates, mitigating cash flow interest rate risk[29]. - The company continues to utilize long-term bank loans to fund growing receivables, mitigating liquidity risk[14]. - The company has invested resources in cybersecurity risk management to enhance its network defense capabilities[47]. Sustainability and Development - The company has established key performance indicators related to sustainability for its subsidiaries, focusing on improving internal processes for greater sustainable development[7]. - The company is focusing on sustainable development, introducing new uniforms made from recycled materials to reduce carbon footprint[77]. - A strategy committee was established on June 29, 2023, to oversee strategic initiatives within the company[50]. Customer Engagement and Services - The company aims to enhance customer experience and expand its credit card services, leveraging strong liquidity and financial stability to capture growth in the consumer finance market[7]. - The company issued 81,000 AEON cards in the first year of the cash rebate loyalty program, indicating strong customer engagement[46]. - The new mobile app includes features such as biometric authentication and simplified payment options to enhance credit card services[82]. - The Tuen Mun branch was relocated to a new site with nearly double the floor area to improve customer experience[82]. Operational Performance - The operating income for the first half of 2023 was HKD 732,680,000, compared to HKD 572,265,000 in the same period of 2022[96]. - Operating expenses increased to HKD 351,383,000 from HKD 323,464,000, primarily driven by higher employee costs and administrative expenses[152]. - The company has implemented various measures to promote healthy growth in sales and receivables amidst a favorable market environment[3]. Asset Management - The company has reported a significant increase in property, plant, and equipment to HKD 172,083 thousand from HKD 84,584 thousand, marking a growth of approximately 103.5%[100]. - The company purchased property, plant, and equipment amounting to HKD 118,100,000 during the period, a significant increase from HKD 8,532,000 in the previous year[189]. - The company has issued new direct holding company loans amounting to HKD 500,000 thousand, which was not present in the previous period[101]. Cash Flow and Investments - The net cash used in operating activities for the six months ended August 31, 2023, was HKD (327,527) thousand, compared to HKD (312,019) thousand for the same period in 2022[103]. - The company incurred a net cash outflow from investing activities of HKD (68,778) thousand, compared to HKD (31,769) thousand in the prior year, indicating a worsening of approximately 116%[103]. - The cash and cash equivalents at the end of the period were HKD 346,802 thousand, compared to HKD 426,922 thousand at the end of the previous period, reflecting a decrease of about 18.7%[103]. Accounting and Compliance - The company applied new accounting standards which did not have a significant impact on the financial position and performance[124]. - The company continues to assess the impact of deferred tax assets and liabilities related to temporary differences in accordance with the revised accounting standards[126]. - The company has applied Hong Kong Accounting Standard No. 1 and the revised Practical Guidance No. 2, which will be effective for the financial year starting March 1, 2023[157].