截至二零二四年三月三十一日止年度之 全年業績公告 | --- | --- | --- | --- | |------------|-------|------------|------------| | | | | | | | | 二零二四年 | 二零二三年 | | | 附註 | 千元 | 千元 | | 經營溢利 | | 864,903 | 806,397 | | 財務成本 | 7(a) | (259,855) | (114,202) | | 除稅前溢利 | 7 | 605,048 | 692,195 | | 所得稅 | 8 | (46,206) | (71,600) | | 年內溢利 | | 558,842 | 620,595 | 其後可能重新分類至損益的項目 — 匯兌儲備 (333) 285 基本（仙） 9 32.93 36.56 攤薄（仙） 9 32.93 36.56 二零二四年 二零二三年 附註 千元 千元 物業、廠房及設備 112,094 88,667 無形資產 5,783 5,783 遞延稅項資產 3,761 801 其他應收款項、按金及預付款項 15,530 2,941 其他資產 55,239 ...

Interim Financial Results [Consolidated Comprehensive Income Statement](index=1&type=section&id=1.1%20Consolidated%20Comprehensive%20Income%20Statement) The Group's revenue increased by 0.9% to HKD 440 million, with profit for the period up 31.4% to HKD 303.6 million, driven by reduced finance costs and higher margin financing interest income Key Data from Consolidated Comprehensive Income Statement (For the six months ended September 30) | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | YoY Change (%) | | :----------------------- | :------------------- | :------------------- | :------------- | | Revenue | 440,016 | 436,239 | 0.9% | | Operating Profit | 453,012 | 307,616 | 47.3% | | Profit Before Tax | 330,833 | 262,186 | 26.2% | | Profit for the Period | 303,627 | 231,084 | 31.4% | | Basic Earnings Per Share | 17.89 cents | 13.61 cents | 31.4% | | Finance Costs | (122,179) | (45,430) | 168.9% | | Other Net Losses | (15,887) | (30,722) | -48.3% | [Consolidated Statement of Financial Position](index=3&type=section&id=1.2%20Consolidated%20Statement%20of%20Financial%20Position) As of September 30, 2023, total assets grew to HKD 8.05 billion, but net current assets and the current ratio declined, while increased bank borrowings led to a significant rise in the gearing ratio Key Data from Consolidated Statement of Financial Position (As of September 30) | Indicator | 2023 (HKD thousands) | March 31, 2023 (HKD thousands) | Change (%) | | :----------------------- | :------------------- | :----------------------------- | :--------- | | Total Assets | 8,050,790 | 7,729,370 | 4.2% | | Total Liabilities | (6,861,730) | (5,994,956) | 14.4% | | Total Equity | 1,189,060 | 1,734,414 | -31.5% | | Cash and Cash Equivalents | 400,866 | 504,531 | -20.6% | | Net Current Assets | 1,053,410 | 1,603,532 | -34.3% | | Current Ratio | 1.2 times | 1.3 times | -7.7% | | Gearing Ratio | 435.7% | 254.2% | 71.4% | [Notes to Interim Financial Report](index=5&type=section&id=1.3%20Notes%20to%20Interim%20Financial%20Report) This section details the financial report's preparation basis, accounting policy changes, segment performance, revenue, other gains/losses, tax, EPS, dividends, and accounts/borrowings [Basis of Preparation](index=5&type=section&id=1.3.1%20Basis%20of%20Preparation) - This interim financial report is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[45](index=45&type=chunk) [Changes in Accounting Policies](index=5&type=section&id=1.3.2%20Changes%20in%20Accounting%20Policies) - The Group has applied certain amendments issued by the Hong Kong Institute of Certified Public Accountants, including amendments to HKAS 8 and HKAS 12, which had no significant impact on the current period's results and financial position[30](index=30&type=chunk)[31](index=31&type=chunk)[46](index=46&type=chunk) - The HKICPA issued new guidance on the accounting impact of abolishing the MPF offsetting long service payment mechanism, and the Group has assessed and decided to change the relevant accounting policies, expected to be applied retrospectively in the financial statements for the year ending March 31, 2024[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[77](index=77&type=chunk) [Segment Reporting](index=7&type=section&id=1.3.3%20Segment%20Reporting) - The Group's business is divided into three reportable segments: securities brokerage, commodities and futures brokerage, and spot gold trading, with segment performance assessed by profit before finance costs and tax (EBIT)[35](index=35&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[57](index=57&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) Reportable Segment Revenue and Profit (For the six months ended September 30) | Segment | 2023 Revenue (HKD thousands) | 2023 EBIT (HKD thousands) | 2022 Revenue (HKD thousands) | 2022 EBIT (HKD thousands) | | :----------------------------- | :--------------------------- | :------------------------ | :--------------------------- | :------------------------ | | Securities Brokerage | 331,843 | 378,571 | 308,052 | 245,730 | | Commodities and Futures Brokerage | 104,805 | 64,713 | 124,262 | 55,733 | | Spot Gold Trading | 3,200 | 1,831 | 3,509 | 2,137 | | **Total** | **439,848** | **445,115** | **435,823** | **303,600** | [Revenue](index=11&type=section&id=1.3.4%20Revenue) Revenue by Major Categories (For the six months ended September 30) | Revenue Category | 2023 (HKD thousands) | 2022 (HKD thousands) | YoY Change (%) | | :--------------------------------- | :------------------- | :------------------- | :------------- | | Brokerage Commissions | 234,599 | 299,589 | -21.7% | | Margin Financing Interest Income | 201,770 | 132,300 | 52.5% | | Spot Gold Trading Income | 3,200 | 3,509 | -8.8% | | Leveraged Foreign Exchange Trading Income | 425 | 605 | -29.8% | | IPO Financing Interest Income | 22 | 236 | -90.7% | | **Total Revenue** | **440,016** | **436,239** | **0.9%** | [Other Income](index=12&type=section&id=1.3.5%20Other%20Income) Other Income Details (For the six months ended September 30) | Income Category | 2023 (HKD thousands) | 2022 (HKD thousands) | YoY Change (%) | | :-------------------------------------------- | :------------------- | :------------------- | :------------- | | Interest Income calculated using effective interest method | 147,056 | 46,745 | 214.6% | | Interest Income calculated using other methods | 19,960 | 19,082 | 4.6% | | Handling and Clearing Fees | 37,360 | 43,114 | -13.3% | | Dividend Income | 1,860 | 2,075 | -10.4% | | Government Grants | — | 2,615 | -100.0% | | Miscellaneous Income | 5,879 | 6,784 | -13.3% | | **Total** | **212,115** | **120,415** | **76.1%** | [Other Net Losses](index=13&type=section&id=1.3.6%20Other%20Net%20Losses) Other Net Losses Details (For the six months ended September 30) | Loss Category | 2023 (HKD thousands) | 2022 (HKD thousands) | YoY Change (%) | | :---------------------------------------------- | :------------------- | :------------------- | :------------- | | Realized/Unrealized Losses on Financial Assets at FVTPL | (8,531) | (15,819) | -46.0% | | Net Foreign Exchange Losses | (7,350) | (14,165) | -48.1% | | Loss on Disposal of Property, Plant and Equipment | (9) | (67) | -86.6% | | Error Trades | (20) | (13) | 53.8% | | Others | 23 | (658) | -103.5% | | **Total** | **(15,887)** | **(30,722)** | **-48.3%** | [Profit Before Tax](index=14&type=section&id=1.3.7%20Profit%20Before%20Tax) Finance Costs and Other Operating Expenses (For the six months ended September 30) | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | YoY Change (%) | | :---------------------------------------- | :------------------- | :------------------- | :------------- | | Finance Costs | 122,179 | 45,430 | 168.9% | | Other Operating Expenses | 83,981 | 103,401 | -18.8% | | - Advertising and Promotion Expenses | 5,983 | 7,233 | -17.3% | | - Brokerage Commissions, Handling and Clearing Fees | 38,911 | 51,948 | -25.1% | | - Information and Communication Expenses | 19,527 | 23,122 | -15.5% | [Income Tax](index=15&type=section&id=1.3.8%20Income%20Tax) Income Tax Expense (For the six months ended September 30) | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | YoY Change (%) | | :---------------------------- | :------------------- | :------------------- | :------------- | | Total Tax Expense for the Period | 27,206 | 31,102 | -12.5% | | Provision for Hong Kong Profits Tax | 29,268 | 33,051 | -11.5% | | Deferred Tax | (2,062) | (1,949) | 5.8% | [Earnings Per Share](index=16&type=section&id=1.3.9%20Earnings%20Per%20Share) Earnings Per Share (For the six months ended September 30) | Indicator | 2023 (cents) | 2022 (cents) | | :------------------- | :----------- | :----------- | | Basic Earnings Per Share | 17.89 | 13.61 | | Diluted Earnings Per Share | 17.89 | 13.61 | - There were no dilutive potential ordinary shares during the period, thus diluted earnings per share were the same as basic earnings per share[95](index=95&type=chunk) [Dividends](index=16&type=section&id=1.3.10%20Dividends) - The Board did not recommend the payment of an interim dividend for the six months ended September 30, 2023 (2022: nil)[96](index=96&type=chunk) [Accounts Receivable](index=17&type=section&id=1.3.11%20Accounts%20Receivable) Accounts Receivable Details (As of September 30) | Accounts Receivable Category | 2023 (HKD thousands) | March 31, 2023 (HKD thousands) | | :-------------------------------- | :------------------- | :----------------------------- | | Receivables from Clearing Houses, Brokers and Dealers | 1,489,309 | 1,123,268 | | Receivables from Cash Clients | 381,121 | 382,430 | | Receivables from Margin Clients | 5,531,798 | 5,466,015 | | Receivables from IPO New Shares | 8,330 | — | | **Total** | **7,410,558** | **6,971,713** | - Receivables from cash clients are collateralized by a securities portfolio with a total market value of **HKD 1.81 billion** (March 31, 2023: HKD 2.18 billion), which management believes to be fully recoverable[71](index=71&type=chunk) - Margin loans from margin clients are repayable on demand, with insignificant overdue amounts, and are collateralized by securities with a total market value of **HKD 20.88 billion** (March 31, 2023: HKD 22.71 billion)[129](index=129&type=chunk) [Accounts Payable](index=19&type=section&id=1.3.12%20Accounts%20Payable) Accounts Payable Details (As of September 30) | Accounts Payable Category | 2023 (HKD thousands) | March 31, 2023 (HKD thousands) | | :------------------------ | :------------------- | :----------------------------- | | Payables to Cash Clients | 261,283 | 447,948 | | Payables to Margin Clients | 936,234 | 892,294 | | Payables to Clearing Houses | 131,265 | 1,288 | | Payables to Brokers | 247,667 | 122,585 | | **Total** | **1,576,449** | **1,464,115** | - All accounts payable are expected to be settled within one year or are repayable on demand, with no aging analysis disclosed[102](index=102&type=chunk)[131](index=131&type=chunk) [Bank Loans](index=19&type=section&id=1.3.13%20Bank%20Loans) Bank Loans Details (As of September 30) | Loan Category | 2023 (HKD thousands) | March 31, 2023 (HKD thousands) | | :--------------- | :------------------- | :----------------------------- | | Secured Loans | 4,106,000 | 3,465,000 | | Unsecured Loans | 1,075,000 | 944,000 | | **Total** | **5,181,000** | **4,409,000** | - All bank loans are repayable within one year, primarily secured by securities pledged by margin clients, with **HKD 4.106 billion** in utilized bank facilities and re-pledged collateral fair value of **HKD 7.287 billion**[75](index=75&type=chunk)[103](index=103&type=chunk) Management Discussion and Analysis [Market Review](index=20&type=section&id=2.1%20Market%20Review) Global economic challenges, including geopolitical tensions and high interest rates, led to a slow Hong Kong recovery, weak stock market performance, and a decline in IPO fundraising - Global economic recovery was hindered by US-China relations, geopolitical conflicts, and a high-interest rate environment, leading to a slower-than-expected recovery in Hong Kong's economy, with Q2 GDP growing **1.5%** year-on-year, significantly below market expectations[76](index=76&type=chunk) - The Hong Kong stock market remained sluggish, with average daily turnover shrinking and the IPO market performing poorly, as total fundraising in the first three quarters decreased by **15%** year-on-year, falling to eighth globally[136](index=136&type=chunk) - Hong Kong experienced significant talent outflow, impacting productivity and competitiveness across industries, with small and medium-sized brokerages facing closures; **26** securities firms ceased operations in the first three quarters[135](index=135&type=chunk)[137](index=137&type=chunk) [Operating Results](index=22&type=section&id=2.2%20Operating%20Results) Despite market challenges, the Group's revenue grew 0.9% and profit for the period increased 31.4%, primarily driven by margin financing interest income, alongside steady customer growth and platform optimization [Overall Performance](index=22&type=section&id=2.2.1%20Overall%20Performance) Overall Financial Performance for the Period (For the six months ended September 30) | Indicator | 2023 (HKD millions) | 2022 (HKD millions) | YoY Change (%) | | :---------------------------------------- | :------------------ | :------------------ | :------------- | | Revenue | 440.0 | 436.2 | 0.9% | | Profit for the Period | 303.6 | 231.1 | 31.4% | | Total Comprehensive Income Attributable to Equity Holders | 303.3 | 231.5 | 31.0% | - The Group achieved strong results despite challenging market conditions, primarily due to long-term customer support and continuous optimization of its trading platform and product services[137](index=137&type=chunk) [Customer Accounts and Assets](index=23&type=section&id=2.2.2%20Customer%20Accounts%20and%20Assets) Customer Accounts and Assets Data (As of September 30) | Indicator | 2023 | 2022 | Increase (%) | | :-------------------- | :------ | :------ | :----------- | | Total Customer Accounts | 555,568 | 547,742 | 1.4% | | Customer Assets (HKD billions) | 533 | 530 | 0.6% | - The Group actively expanded, implemented seven-day operations, integrated online and offline services, and offered 24-hour account opening, deposits, and trading functions via two major mobile applications, successfully attracting customers and maintaining steady growth[111](index=111&type=chunk) [Revenue Analysis by Business Segment](index=24&type=section&id=2.2.3%20Revenue%20Analysis%20by%20Business%20Segment) Revenue by Business Segment (For the six months ended September 30) | Business Segment | 2023 (HKD thousands) | Share of Total Revenue | 2022 (HKD thousands) | Share of Total Revenue | Increase / (Decrease) (%) | | :--------------------------------- | :------------------- | :--------------------- | :------------------- | :--------------------- | :------------------------ | | Securities Brokerage | 123,612 | 28.1% | 166,273 | 38.1% | (25.7%) | | Hong Kong Futures and Options Brokerage | 61,911 | 14.1% | 63,969 | 14.7% | (3.2%) | | Global Futures Brokerage | 42,636 | 9.7% | 60,104 | 13.8% | (29.1%) | | Precious Metals Trading | 3,200 | 0.7% | 3,509 | 0.8% | (8.8%) | | Leveraged Foreign Exchange Trading | 425 | 0.1% | 605 | 0.1% | (29.8%) | | Stock Options Brokerage | 6,252 | 1.4% | 7,147 | 1.6% | (12.5%) | | IPO Brokerage | 188 | 0.0% | 2,096 | 0.5% | (91.0%) | | IPO Financing Interest Income | 22 | 0.0% | 236 | 0.1% | (90.7%) | | Margin Financing Interest Income | 201,770 | 45.9% | 132,300 | 30.3% | 52.5% | | **Total** | **440,016** | **100.0%** | **436,239** | **100.0%** | **0.9%** | - Margin financing interest income significantly increased by **52.5%** to **HKD 201.8 million**, driven by rising HIBOR, becoming the primary contributor to revenue for the period[145](index=145&type=chunk) - Securities brokerage commission income decreased by **25.7%** to **HKD 123.6 million** due to sluggish Hong Kong stock market turnover; IPO-related business revenue significantly declined by over **90%** due to market contraction[112](index=112&type=chunk)[145](index=145&type=chunk) [Operating Expenses and Net Profit Margin](index=26&type=section&id=2.2.4%20Operating%20Expenses%20and%20Net%20Profit%20Margin) Operating Expenses Details (For the six months ended September 30) | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | Increase / (Decrease) (%) | | :---------------------------------------- | :------------------- | :------------------- | :------------------------ | | Staff Costs | 63,388 | 76,235 | (16.9%) | | Amortization and Depreciation | 34,834 | 37,531 | (7.2%) | | Net Expected Credit Losses | 1,029 | 1,149 | (10.4%) | | Finance Costs | 122,179 | 45,430 | 168.9% | | Advertising and Promotion Expenses | 5,983 | 7,233 | (17.3%) | | Auditor's Remuneration | 726 | 800 | (9.3%) | | Brokerage Commissions, Handling and Clearing Fees | 38,911 | 51,948 | (25.1%) | | Information and Communication Expenses | 19,527 | 23,122 | (15.5%) | | Rent, Rates and Building Management Fees | 2,972 | 2,265 | 31.2% | | Legal and Professional Fees | 906 | 856 | 5.8% | | Miscellaneous Expenses | 14,956 | 17,177 | (12.9%) | | **Total** | **305,411** | **263,746** | **15.8%** | - Operating expenses for the period increased by **15.8%** year-on-year to **HKD 305.4 million**, primarily due to a **168.9%** surge in finance costs, although staff costs, advertising, brokerage commissions, and information and communication expenses all decreased[118](index=118&type=chunk)[119](index=119&type=chunk) - The Group's net profit margin increased to **69.0%** (2022: 53.0%), indicating improved profitability[118](index=118&type=chunk) [Proprietary Investment Performance](index=25&type=section&id=2.2.5%20Proprietary%20Investment%20Performance) - As of September 30, 2023, the Group held an investment portfolio of Hong Kong listed securities, bonds, and futures contracts totaling **HKD 58.6 million**, recording an investment loss of **HKD 8.5 million** for the period (2022: HKD 15.8 million loss)[146](index=146&type=chunk) [Future Plans](index=27&type=section&id=2.3%20Future%20Plans) The Group plans to address future market challenges by investing in FinTech, enhancing platform security, diversifying global products, and strengthening investor education to boost competitiveness [Strategic Focus and Market Expansion](index=27&type=section&id=2.3.1%20Strategic%20Focus%20and%20Market%20Expansion) - The Group anticipates that the aftermath of US interest rate hikes, geopolitical issues, RMB exchange rates, and mainland China's property market will continue to impact Hong Kong's economy, emphasizing the need for Hong Kong to strive for self-improvement and rebuild confidence in its stock market[120](index=120&type=chunk) - The Group will continue its "people-oriented" approach, strengthen core FinTech, fully develop integrated online and offline investment services, and continuously seek prime locations to open new branches and expand its sales network[2](index=2&type=chunk)[120](index=120&type=chunk)[152](index=152&type=chunk) - The Group will continue to hold recruitment days to attract elite talent, aiming to enhance service quality and cultivate the next generation of industry professionals[2](index=2&type=chunk) [Technology Enhancement and Security](index=27&type=section&id=2.3.2%20Technology%20Enhancement%20and%20Security) - As a FinTech pioneer, the Group invests significant resources annually to expand online trading channels, independently develops trading systems with emergency anti-disconnection features, and offers Hong Kong's first automatic connection service for four major trading systems[167](index=167&type=chunk) - The Group is committed to enhancing online trading security by relocating its central computer equipment to HKEX's central machine room, regularly conducting high-load simulation tests, and implementing "two-factor authentication" security measures[151](index=151&type=chunk) - The Group's computer systems automatically send real-time emails or app push notifications to alert clients about account and transaction activities, while also closely monitoring fraudulent websites and taking legal action against them[124](index=124&type=chunk) [Product Diversification and Investor Education](index=28&type=section&id=2.3.3%20Product%20Diversification%20and%20Investor%20Education) - The Group continuously innovates, offering diversified global financial products including Hong Kong stocks, US stocks, Shanghai-Shenzhen-Hong Kong Stock Connect A-shares, Japanese stocks, Taiwanese stocks, Singaporean stocks, Australian stocks, UK stocks, and various futures products[3](index=3&type=chunk)[149](index=149&type=chunk) - To meet growing investor interest in US stocks, the "Bright Smart Baby APP" added a "US Stock Pre-market Trading" function, and launched a "One Account, Five Futures" service, allowing trading of Hong Kong futures products with **20%** margin[3](index=3&type=chunk)[169](index=169&type=chunk) - The Group collaborated with a renowned Hong Kong bank to launch the HKMA-approved "24-hour (eDDA) Direct Debit Service," enabling round-the-clock deposits and global stock and futures trading[169](index=169&type=chunk) - The Group undertakes the important task of investor education, establishing the "Bright Smart Finance Channel" live broadcast, and actively organizing free investment seminars and simulated competitions to popularize financial knowledge[121](index=121&type=chunk) [Overall Strategy and Outlook](index=30&type=section&id=2.3.4%20Overall%20Strategy%20and%20Outlook) - The Group aims to promote the digitalization and intelligence of client trading services, combining online and offline marketing strategies to reduce costs, increase efficiency, expand client base, enhance client experience, and solidify its industry leadership[170](index=170&type=chunk) - Adhering to the philosophy of "customer-centric, service first," the Group maintains its market positioning of "affordable, high-quality, efficient, and fast," adopting a balanced offensive and defensive strategy, continuously optimizing platform performance, and strengthening promotional efforts[152](index=152&type=chunk) Financial Management [Capital Management](index=32&type=section&id=3.1%20Capital%20Management) The Group maintains ample liquidity and manages its capital structure, ensuring compliance, despite decreased net current assets and increased bank borrowings, with sufficient unutilized bank facilities - The Group maintains ample liquidity, with bank deposits, bank balances, and cash totaling **HKD 400.9 million** as of September 30, 2023 (March 31, 2023: HKD 504.5 million)[7](index=7&type=chunk) - The Group's total bank borrowings amounted to **HKD 5.181 billion** (March 31, 2023: HKD 4.409 billion), primarily bearing interest at floating rates and secured by securities pledged by margin clients[7](index=7&type=chunk) - Unutilized bank facilities amounted to **HKD 16.456 billion** (March 31, 2023: HKD 17.637 billion), with net current assets decreasing by **34.3%** to **HKD 1.0534 billion**, and a current ratio of **1.2 times**[7](index=7&type=chunk) - The Company provided corporate guarantees of **HKD 16.4851 billion** for subsidiaries engaged in securities and futures brokerage businesses, of which **HKD 3.805 billion** has been utilized[174](index=174&type=chunk) - As of September 30, 2023, and March 31, 2023, the Group's assets were not subject to any charges[8](index=8&type=chunk)[154](index=154&type=chunk) [Risk Management](index=33&type=section&id=3.2%20Risk%20Management) The Group employs comprehensive risk management policies, including credit, liquidity, interest rate, foreign currency, and price risks, through strict assessment and monitoring [Credit Risk](index=33&type=section&id=3.2.1%20Credit%20Risk) - Credit risk primarily arises from receivables from clients, brokers, and clearing houses, with management establishing and continuously monitoring credit policies[156](index=156&type=chunk) - All clients undergo individual credit assessments; cash clients are required to deposit margins, and margin clients must pledge securities collateral, with management daily monitoring market conditions and collateral adequacy[10](index=10&type=chunk) - The Group transacts with reputable brokers and clearing houses, resulting in very low credit risk and no significant concentration of credit risk[157](index=157&type=chunk)[175](index=175&type=chunk) [Liquidity Risk](index=34&type=section&id=3.2.2%20Liquidity%20Risk) - The Group regularly monitors liquidity needs, complies with borrowing covenants, and ensures sufficient cash reserves and committed credit facilities to meet both short-term and long-term liquidity requirements[12](index=12&type=chunk) [Interest Rate Risk](index=34&type=section&id=3.2.3%20Interest%20Rate%20Risk) - The Group faces floating interest rate risk primarily from margin loans, bank deposits, and bank borrowings, mitigating this risk by continuously monitoring market interest rate changes and adjusting client interest rates[159](index=159&type=chunk) [Foreign Currency Risk](index=34&type=section&id=3.2.4%20Foreign%20Currency%20Risk) - The Group is exposed to currency risk from financial instruments denominated in USD, RMB, AUD, SGD, JPY, and GBP, but the risk is minor due to the HKD's peg to the USD[178](index=178&type=chunk) - Management daily monitors all foreign currency positions and, when necessary, buys or sells foreign currencies at spot rates to address short-term imbalances[178](index=178&type=chunk) [Price Risk](index=34&type=section&id=3.2.5%20Price%20Risk) - The Group is exposed to price risk from changes in the fair value of financial assets at FVTPL (listed equity investments and futures contracts), as well as price risk from changes in the fair value of collateral for receivables from margin, cash, and IPO clients[14](index=14&type=chunk)[15](index=15&type=chunk)[160](index=160&type=chunk)[179](index=179&type=chunk) Corporate Governance and Other Information [Employees and Remuneration Policy](index=35&type=section&id=4.1%20Employees%20and%20Remuneration%20Policy) As of September 30, 2023, the Group had 198 employees and offers competitive remuneration, bonus schemes, and training to attract and retain talent Number of Employees | Date | Number of Employees | | :------------ | :------------------ | | Sep 30, 2023 | 198 | | Mar 31, 2023 | 206 | - The Group's remuneration policy aims to provide competitive compensation and benefits to recruit, retain, and motivate capable employees, including bonus schemes and appropriate training and development[162](index=162&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=35&type=section&id=4.2%20Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[181](index=181&type=chunk) [Compliance with Corporate Governance Code and Standard Code for Securities Transactions by Directors](index=35&type=section&id=4.3%20Compliance%20with%20Corporate%20Governance%20Code%20and%20Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company fully complied with the Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers during the period - The Company has fully complied with the Code Provisions of the Corporate Governance Code and Corporate Governance Report set out in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[17](index=17&type=chunk) - All Directors fully complied with the required standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers during the period[164](index=164&type=chunk) [Publication and Review of Interim Financial Information](index=36&type=section&id=4.4%20Publication%20and%20Review%20of%20Interim%20Financial%20Information) The interim results announcement is published online, with the report to be dispatched to shareholders, and the Audit Committee reviewed the unaudited consolidated results with KPMG - This results announcement has been published on the websites of Hong Kong Exchanges and Clearing Limited and the Company, and the interim report will be dispatched to shareholders in due course[19](index=19&type=chunk)[165](index=165&type=chunk) - The Company's Audit Committee has reviewed the Group's unaudited consolidated results and financial reporting matters of the interim report for the six months ended September 30, 2023, with the external auditor, KPMG[21](index=21&type=chunk)[183](index=183&type=chunk)

加強網上交易安全度 本集團投放大量資源提高網上交易系統處理交易的效率及容量，以滿足客戶 需要。為使網上交易平台更快捷穩定，本集團早前已耗資巨額提升交易系統， 更將電腦中樞設備系統遷往位於將軍澳的港交所中央機樓，並會為所有交易 系統進行大規模測試，包括定期進行比現時港交所高峰期交易量高五倍的模 擬測試，以持續優化現有的證券及期貨交易平台的效率與穩健程度。 網絡技術和移動通信技術已是生活上不可缺少的一部份，互聯網金融迅猛發展， 網上交易安全的問題亦隨之而生。投資者對風險的警覺性愈來愈高，愈來愈重 視網上交易的安全。本集團深明網上交易安全是投資者的首要關注，故一直致 力確保交易的穩健與安全。本集團成功自行研發緊急防斷系統，特設四款交易 平台供買賣全球股票，任君選擇，包括：耀才證券（寶寶）APP、耀才證券(MH) APP、電腦（網頁版）以及電腦（專業版），各大平台既能互相支援，亦可防斷互 – 29 – 補，為客戶提供四重保障。此外，本集團特設3大期貨同2大槓桿式外匯交易平 台，可買賣全球期貨同槓桿式外匯產品，各大平台同時防斷互補，九重保障， 大幅提高安全性。 利率風險 – 33 – 本集團承受的外匯風險主要源自以美元 ...

Economic Overview - In the first half of 2022, the number of visitors to Hong Kong was only 76,000, representing a 125% increase compared to the previous year, but less than 1% of the pre-pandemic level of almost 35 million visitors in the first half of 2019[12]. - Total retail sales in the first seven months of 2022 decreased by 1.7% compared to the same period last year[12]. - Hong Kong's GDP fell year-on-year by 3.9% in the first quarter and by 1.3% in the second quarter, with the actual GDP growth rate for the year expected to be adjusted downward to between -0.5% and 0.5%[12]. - The consumer price index in September 2022 rose by 4.4% year-on-year, higher than the increase of 1.9% in August[12]. - Excluding one-off government bailouts, the basic inflation rate in September would return to 1.8%[12]. - The Federal Reserve increased interest rates by a total of 3% from January to September 2022, leading to banks in Hong Kong raising the prime rate[12]. - Residential property prices in Hong Kong faced declines due to interest rate hikes and a wave of migration[12]. Financial Performance - For the six months ended September 30, 2022, the Group recorded revenue of HK$436.2 million, a year-on-year decrease of 23.0% from HK$566.5 million[21]. - Profit for the Period was HK$231.1 million, reflecting a decline of 21.6% compared to HK$294.9 million in the previous year[21]. - The average daily turnover for Hong Kong stocks during the Period was approximately HK$113.01 billion, a decrease of approximately 28.7% from HK$158.54 billion in the same period last year[21]. - The Group's total comprehensive income attributable to equity shareholders amounted to HK$231.5 million, a decline of 21.5% from HK$294.8 million in the previous year[21]. - The board of directors does not recommend the payment of any interim dividend for the Period, consistent with the previous year[21]. - The Group recorded revenue of HK$436.2 million, a year-on-year drop of 23.0% from HK$566.5 million[27]. - Commission income from securities brokerage was HK$166.3 million, a decrease of 28.9% year-on-year, accounting for 38.1% of total revenue[28][29]. - Commission income from Hong Kong futures and options brokerage increased by 9.9% to HK$64.0 million, accounting for 14.7% of total revenue[30][31]. - Global futures brokerage commission income rose by 74.1% to HK$60.1 million, representing 13.8% of total revenue[32][35]. - IPO brokerage commission income decreased by 82.5% to HK$2.1 million, with interest income from IPO financing down 99.4% to HK$236,000[33][36]. - Average daily margin borrowings decreased by 36.7% to HK$6.84 billion, with interest income from margin financing at HK$132.3 million, a decrease of 25.6%[34]. - The Group's investment losses from financial assets at fair value through profit or loss were HK$15.8 million, an improvement from a loss of HK$21.6 million in the previous year[39]. - Operating expenses decreased by 15.8% year-on-year to HK$263.7 million, while the net profit margin slightly increased to 53.0% from 52.1%[40]. - Staff costs decreased by 1.3% to HK$76.2 million, while finance costs saw a significant reduction of 44.2% to HK$45.4 million[42]. Client and Market Activity - The number of companies listed in Hong Kong for financing in the first half of the year decreased by 48% year-on-year to 24, with financing amount dropping 92% to HK$17.8 billion[15]. - The Hang Seng Index dropped approximately 50% from its high to low since 2021, hitting a 13-year low below 15,000 points[15]. - The total number of client accounts increased to 538,629, representing a growth of 5.4% from 510,957 as of September 30, 2021, with 27,672 new accounts opened during the period[24][25]. - Client assets decreased by 22.6% to approximately HK$53.0 billion as of September 30, 2022, down from approximately HK$68.5 billion as of September 30, 2021[24][25]. - The average daily trading volume during the period was approximately HK$113.01 billion, a decrease of about 28.7% compared to HK$158.54 billion in the same period last year[23]. Strategic Initiatives - The Group invested heavily in the research and development of one-stop mobile trading apps, BS Securities and BS Futures, anticipating a rapid increase in investor demand for financial technology[21]. - The Group maintained services of physical stores across Hong Kong Island, Kowloon, and New Territories, providing all-round, one-stop, and 24-hour services to investors[17]. - The Group's strategies were adjusted in response to changes in market conditions, aiming to retain customers with high-quality service despite adverse market conditions[17]. - The Group plans to enhance its online trading systems and improve the speed of order placement through regular updates to its trading apps[46]. - The Group aims to expand its branch network by identifying prime locations with high pedestrian traffic, currently operating 14 outlets[46]. - Future strategies include attracting talents, technology, and capital to strengthen the Group's position in the securities industry[43]. - The Group emphasizes the importance of stable and reliable trading channels to avoid disruptions during trading[46]. - The Group is committed to nurturing the next generation of industry elites through regular job fairs, regardless of market conditions[46]. - The Group launched a live streaming channel "Bright Smart Finance Channel" to provide real-time financial information and investor education[49]. - The Group's online trading platforms connect to global markets, offering a wide range of financial products including Hong Kong stocks, US stocks, and various futures[53]. - The Group introduced a "one for five" futures account, allowing investors to trade with a margin of 20%, which has gained popularity since its launch in June[53]. - Significant investments were made in developing two mobile trading apps, BS Securities (Baobao) and BS Futures (Doudou), equipped with AI 3.0 features[55]. - The Baobao app now includes premarket trading for US stocks, allowing clients to trade before 4 PM Hong Kong time[55]. - The Group won seven awards from HKEX, including five "Top Broker" awards, reflecting its strong market position and service quality[58]. - The Group's mobile apps received recognition as "Outstanding One-Stop Mobile Application for Securities and Futures Trading" by industry organizations[58]. - The Group is committed to enhancing financial literacy among the public through various educational initiatives and partnerships with renowned financial institutions[49]. - The introduction of the "24-hour Electronic Direct Debit Authorisation (eDDA) Service" allows clients to deposit and trade anytime, breaking traditional industry constraints[55]. - The Group's efforts in fintech and service upgrades have significantly boosted client confidence and brand reputation in the market[58]. Financial Position and Liquidity - As of September 30, 2022, the Group maintained a strong cash position with total bank deposits, bank balances, and cash amounting to HK$570.7 million, an increase from HK$524.7 million as of March 31, 2022[71]. - The Group's total bank borrowings decreased to HK$4,255.0 million as of September 30, 2022, down from HK$5,162.2 million as of March 31, 2022, resulting in a gearing ratio of 168.0%[71]. - The net current assets of the Group increased by 3.8% to HK$2,384.2 million as of September 30, 2022, compared to HK$2,296.3 million as of March 31, 2022[71]. - The Group's current ratio improved to 1.4 times as of September 30, 2022, compared to 1.3 times as of March 31, 2022[71]. - The Group's unutilized banking facilities amounted to HK$17,825.1 million as of September 30, 2022, compared to HK$16,048.8 million as of March 31, 2022[71]. - The Group's asset-liability ratio was 168.0% as of September 30, 2022, down from 208.9% as of March 31, 2022[74]. - The Group's liquidity position is strong, with unused bank financing of HK$17,825.1 million as of September 30, 2022, compared to HK$16,048.8 million as of March 31, 2022[74]. - Corporate guarantees provided by the Company for banking facilities to subsidiaries amounted to HK$16,492.8 million as of September 30, 2022, up from HK$15,724.5 million as of March 31, 2022[79]. - As of September 30, 2022, the subsidiaries utilized HK$3,525.0 million of the aggregate banking facilities, down from HK$4,063.7 million as of March 31, 2022[81]. - The Group maintains a policy of regular monitoring of liquidity requirements and compliance with loan covenants to ensure sufficient cash reserves[86]. Risk Management - The Group actively manages foreign currency risk by monitoring positions daily and addressing short-term imbalances as necessary[93]. - The Group's interest-bearing assets and liabilities are primarily priced based on floating rates, mainly linked to HIBOR[90]. - The Group is exposed to price risk from listed equity investments and futures contracts classified as financial assets at fair value through profit or loss[95]. - The fair value of accounts receivable from margin, cash, and IPO clients is referenced against the fair value of collaterals, exposing the Group to price risk[96]. - The Group manages foreign currency risk primarily from financial instruments denominated in USD, RMB, AUD, SGD, JPY, and GBP, with daily monitoring of foreign currency positions[94]. Corporate Governance - The company has fully complied with the Corporate Governance Code during the reporting period[113]. - The company confirmed that all directors complied with the Model Code for Securities Transactions during the period[115]. - The interim financial report has been reviewed by KPMG, confirming compliance with the relevant accounting standards[140]. - The Audit Committee, along with external auditor KPMG, reviewed the financial reporting processes and internal control procedures for the six months ended September 30, 2022[111]. Employee and Workforce - The Group's workforce decreased to 217 employees as of September 30, 2022, from 262 employees as of March 31, 2022[93]. - The Group's remuneration policy aims to provide competitive compensation to attract and retain talented employees, including a bonus plan for executives[99].

Corporate Achievements - The Group was invited by NASDAQ to appear on the huge screen in Times Square, New York, becoming the first Hong Kong-funded securities company to achieve this milestone[10]. - The Group sponsored the Bright Smart Securities Hong Kong Squash Championships 2021, the largest squash competition in Hong Kong, to support the sustainable development of the sports industry[12]. - The Group was awarded the Gold Prize under the ESG Rising Star and Silver Prize under Special Awards at the ESG Achievement Awards 2020, affirming its commitment to sustainable development[13]. - BS Securities (Baobao) and BS Futures (Doudou) were recognized as "Excellent Securities and Futures Trading Apps" at the Elite Enterprise Awards, highlighting the Group's innovation in financial technology[14]. - The Group was awarded the Top 20 Partner for trading over one billion CME Group Micro Contracts by the Chicago Mercantile Exchange, demonstrating its strong industry presence[17]. - The Group was granted the Most Popular Brokerage Brand Award by TVB Weekly, reflecting its reputation for professional and reliable services[22]. - The Group won seven awards at the HKEX Awards 2021/2022, marking a historical high and recognition for contributions to Hong Kong's investment markets[28]. - Awards included Top Broker in various categories such as Equity Index Futures & Options and Stock Futures & Options, highlighting the Group's market leadership[38]. - The Group received multiple awards, including "Most Active Stock Futures Broker" and "Outstanding Social Caring Organisation Award," highlighting its industry recognition[71][75]. Employee Engagement and Social Responsibility - The Group provided preferential treatment to all employees, allowing them to subscribe to five lots of iBond 2021 without deposit and interest fees, recognizing their hard work[11]. - The Group distributed bonuses to all employees, with outstanding employees receiving bonuses up to 37 months, and organized a trip to Disneyland for staff[22]. - The Group's performance remained strong despite challenges, with notable contributions from employees recognized through bonuses and rewards[23]. - The Yip Mow Lum Charity Fund donated HK$10 million to the Hospital Authority in 2022, totaling HK$30 million over three years to support COVID-19 efforts[25]. - The Group's commitment to social responsibility was recognized with multiple awards, including the ESG Achievement Awards[38]. - The Group has been actively involved in charitable activities, donating a total of HK$30 million to the Hospital Authority over three years to support medical workers[75][77]. Market Performance and Economic Outlook - Revenue for the year ended March 31, 2022, was HK$1,068.0 million, a decrease of 16.9% from HK$1,285.2 million in 2021[43]. - Profit for the year was HK$561.5 million, down 20.2% from HK$703.9 million in the previous year[44]. - Basic earnings per share decreased to HK$33.08 from HK$41.47, reflecting a decline of 20.2%[43]. - The final dividend per share was reduced to HK$10.00 from HK$13.00, a decrease of 23.1%[43]. - The economic growth forecast for Hong Kong in 2022 was revised down to 2%-3.5% due to pandemic uncertainties, compared to an expected growth of 6.4% in 2021[45]. - The total number of confirmed COVID-19 cases in Hong Kong exceeded 1.2 million, with over 9,200 deaths reported by the end of April 2022[45]. - The International Monetary Fund cut the global economic growth forecast for 2022 to 4.4%, citing risks from the pandemic resurgence[45]. - Supply chain disruptions in Mainland China have led to increased commodity prices and inflation, impacting economic outlook[48]. - Tensions in Sino-US relations and the ongoing Russia-Ukraine conflict are contributing to an unpredictable international economic environment[49]. - The company anticipates that the Mainland economy will remain robust, supported by fiscal and monetary policies despite global challenges[48]. Client Growth and Trading Activity - The total number of client accounts reached 526,849, reflecting a 9.2% increase from 482,413 accounts as of March 31, 2021[56]. - Client assets, including cash and stocks, decreased by 13.1% year on year to approximately HK$64.5 billion, down from approximately HK$74.2 billion[56]. - The number of downloads of the Baobao and Doudou apps rose by approximately 35% compared to the prior year[59]. - The number of accounts opened through Baobao and Doudou apps increased by approximately 20% compared to the prior year[59]. - The number of orders on the Baobao app was approximately 24 million, representing an increase of approximately 50% compared to the prior year[59]. - The total number of orders on all platforms exceeded 31 million, representing an increase of approximately 47.8% compared to the prior year[59]. - The average daily turnover for the fiscal year was approximately HK$147.50 billion, a decrease of 4.9% from HK$155.06 billion in the prior year[104]. - The total turnover of securities on HKEX for the year was HK$36,431.7 billion, a year-on-year decrease of 4.9%[114]. Financial Performance and Revenue Breakdown - Brokerage commission income fell by 13.0% year on year to HK$690.8 million, compared to HK$793.8 million in the previous year[55]. - Interest income from margin lending increased by 20.2% to HK$326.1 million, up from HK$271.2 million in the prior year[55]. - Commission income from the Group's securities brokerage business was HK$437.2 million, accounting for 40.9% of total revenue, a decrease of 15.5% from the previous year[114]. - Revenue from Hong Kong futures and options brokerage increased to HK$125.0 million, up 3.8% from HK$120.4 million in 2021, representing 11.7% of total revenue[118]. - Interest income from margin financing was HK$37.7 million, a significant decrease of 81.3% from HK$201.7 million in the previous year[112]. - Commission income from IPO brokerage decreased by 71.7% to HK$13.3 million, while interest income from IPO financing dropped by 81.3% to HK$37.7 million[130]. Technology and Innovation - The Group invested heavily in the research and development of mobile trading apps, BS Securities (Baobao) and BS Futures (Doudou), anticipating a rapid increase in investor demand for financial technology[104]. - The Group launched a new service for pre-market trading in U.S. stocks, allowing clients to trade earlier at 4 PM (summer) and 5 PM (winter) Hong Kong time[67]. - The Group is investing in digitalizing investment services with the development of two apps featuring AI 3.0 capabilities[150]. - The Group has developed new features for the Baobao and Doudou apps, including position gain/loss tracking, automatic odd lot selling, and a month-long trading record view[151]. - The Group has implemented a "dual password" security measure for online trading, enhancing client security and compliance with regulatory requirements[158]. - An anti-disruption system has been developed, featuring four trading platforms to ensure seamless trading of global stocks and futures[162]. - The Group's focus on fintech and software development aims to strengthen its core competitiveness and leadership in the industry[156]. Risk Management and Financial Health - The Group's credit risk from receivables is considered low due to individual evaluations based on collateral for all clients, including cash and margin clients[187]. - The Group regularly monitors its liquidity requirements and maintains sufficient cash reserves and committed lines of funding from major financial institutions[191]. - Interest charged on margin and cash clients is based on the cost of funding plus a mark-up, with financial assets primarily at floating rates, indicating minimal interest rate risk[194]. - The Group is exposed to currency risk primarily from financial instruments denominated in multiple currencies, but considers the risk between HKD and USD as insignificant[196]. - The management monitors all foreign currency positions daily to address short-term imbalances and maintain acceptable net exposure levels[200].

[Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides fundamental corporate information, including executive leadership, board committees, and key external partners like auditors and principal bankers [Corporate Executives and Partners](index=3&type=section&id=Corporate%20Executives%20and%20Partners) This section details the company's key corporate information, including board members, registered office, and principal business partners - The company's Chairman is Mr. Yip Mau Lam, and the Chief Executive Officer is Mr. Hui Yuk Bun[6](index=6&type=chunk) - The company's auditor is KPMG[9](index=9&type=chunk) - The company maintains business relationships with several major banks, including Bank of China (Hong Kong), Bank of Communications, Hang Seng Bank, and HSBC[9](index=9&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the market, operating performance, client growth, detailed revenue analysis, investment outcomes, operating expenses, and future strategic plans [Market Review](index=6&type=section&id=MARKET%20REVIEW) Hong Kong's economy recovered amid global improvements, with robust financial markets and significant IPO activity, despite challenges from inflation and geopolitical uncertainties - In the first three quarters of 2021, Hong Kong's total IPO fundraising reached **HK$285.9 billion**, a new high for the period, with full-year projections up to **HK$500 billion**[14](index=14&type=chunk) - As of June 2021, Hong Kong's stock market capitalization grew **39%** year-on-year to **HK$52.8 trillion**, primarily driven by the return of Chinese concept stocks[12](index=12&type=chunk) - In Q2 and Q3, Hong Kong's average daily stock trading volume stabilized at **HK$158.5 billion**, a year-on-year increase of approximately **24%**[14](index=14&type=chunk) - Tightening mainland regulatory policies and ongoing US-China tensions are identified as key uncertainties impacting future market trends[16](index=16&type=chunk)[18](index=18&type=chunk) [Operating Results](index=8&type=section&id=OPERATING%20RESULTS) For the six months ended September 30, 2021, the Group's revenue decreased by **2.8%** to **HK$567 million**, and profit for the period fell **14.8%** to **HK$295 million**, with increased investment in mobile trading applications Operating Results Summary | Metric | Six Months Ended September 30, 2021 | Six Months Ended September 30, 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Revenue** | HK$566.5 million | HK$582.9 million | -2.8% | | **Profit for the Period** | HK$294.9 million | HK$346.1 million | -14.8% | | **Basic Earnings Per Share** | 17.38 HK cents | 20.39 HK cents | -14.8% | | **Interim Dividend** | Not Distributed | Not Distributed | - | - The Group actively responded to market changes by increasing investment in FinTech, focusing on developing the 'Bright Smart Securities (Baobao)' and 'Bright Smart Futures (Doudou)' mobile applications, which successfully attracted hundreds of thousands of investors[23](index=23&type=chunk)[24](index=24&type=chunk) [Total Client Accounts and Assets](index=10&type=section&id=TOTAL%20CLIENT%20ACCOUNTS%20AND%20ASSETS) As of September 30, 2021, the Group's client base expanded, with total client accounts growing **25.9%** year-on-year to approximately **510,000** and total client assets increasing **27.8%** to approximately **HK$68.5 billion**, indicating strong growth in client acquisition and asset management Client Accounts and Assets Summary | Metric | September 30, 2021 | September 30, 2020 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | **Total Client Accounts** | 510,957 | 405,761 | +25.9% | | **Client Assets** | Approx. HK$68.5 billion | Approx. HK$53.6 billion | +27.8% | - During the reporting period, the Group opened **28,544** new accounts (net of closed accounts)[25](index=25&type=chunk)[26](index=26&type=chunk) [Revenue Analysis](index=11&type=section&id=REVENUE) Total revenue for the period was **HK$567 million**, a slight **2.8%** year-on-year decrease, driven by growth in securities brokerage (**+6.4%**) and margin financing interest income (**+55.9%**), while futures brokerage and IPO-related revenues significantly declined [Revenue Breakdown](index=11&type=section&id=Revenue%20Breakdown) The Group's total revenue decreased by **2.8%** year-on-year, with securities brokerage and margin financing interest income as primary sources, while IPO-related brokerage and financing interest income significantly declined by **44.1%** and **60.9%** respectively Revenue Composition | Revenue Source | 2021 H1 (HK$ '000) | Proportion | 2020 H1 (HK$ '000) | Proportion | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Securities Brokerage | 233,969 | 41.3% | 219,990 | 37.7% | +6.4% | | Hong Kong Futures and Options Brokerage | 58,220 | 10.3% | 62,460 | 10.7% | -6.8% | | Global Futures Brokerage | 34,525 | 6.1% | 53,754 | 9.2% | -35.8% | | IPO Brokerage | 11,972 | 2.1% | 21,416 | 3.7% | -44.1% | | IPO Financing Interest | 37,290 | 6.6% | 95,321 | 16.4% | -60.9% | | Margin Financing Interest Income | 177,908 | 31.4% | 114,092 | 19.6% | +55.9% | | **Total** | **566,523** | **100.0%** | **582,891** | **100.0%** | **-2.8%** | [Securities Brokerage](index=12&type=section&id=I.%20Securities%20brokerage) Benefiting from a **22.8%** year-on-year increase in Hong Kong's overall stock market turnover, the Group's securities brokerage commission income grew steadily by **6.4%** to **HK$234 million**, increasing its proportion of total revenue to **41.3%** - Securities brokerage commission income was **HK$234 million**, a year-on-year increase of **6.4%**[31](index=31&type=chunk)[32](index=32&type=chunk) [Hong Kong Futures and Options Brokerage](index=13&type=section&id=II.%20Hong%20Kong%20futures%20and%20options%20brokerage) Due to a contraction in Hong Kong's futures market, with a **14.5%** year-on-year decrease in HKEX derivatives contract turnover, the Group's Hong Kong futures and options brokerage commission income fell **6.8%** to **HK$58.2 million** - Hong Kong futures and options brokerage commission income was **HK$58.2 million**, a year-on-year decrease of **6.8%**[34](index=34&type=chunk)[35](index=35&type=chunk) [Global Futures Brokerage](index=13&type=section&id=III.%20Global%20futures%20brokerage) Global futures brokerage commission income significantly declined by **35.8%** year-on-year to **HK$34.5 million**, with its proportion of total revenue decreasing from **9.2%** to **6.1%** - Global futures brokerage commission income was **HK$34.5 million**, a year-on-year decrease of **35.8%**[36](index=36&type=chunk)[37](index=37&type=chunk) [IPO Brokerage and Financing](index=14&type=section&id=VII.%20IPO%20brokerage%20and%20IPO%20financing) IPO market-related business revenue significantly contracted, with IPO brokerage commission income falling **44.1%** to **HK$12 million** and IPO financing interest income sharply decreasing **60.9%** to **HK$37.3 million** - IPO brokerage commission income decreased by **44.1%** year-on-year to **HK$12 million**[41](index=41&type=chunk)[45](index=45&type=chunk) - IPO financing interest income decreased by **60.9%** year-on-year to **HK$37.3 million**[41](index=41&type=chunk)[45](index=45&type=chunk) [Margin Financing](index=15&type=section&id=VIII.%20Margin%20financing) Margin financing business performed strongly, becoming a key revenue growth driver, with average daily margin loans surging **74.5%** to **HK$10.8 billion**, boosting related interest income by **55.9%** to **HK$178 million** - Margin financing interest income was **HK$177.9 million**, a year-on-year increase of **55.9%**[46](index=46&type=chunk)[48](index=48&type=chunk) - Average daily margin loans increased by **74.5%** year-on-year to **HK$10.8 billion**[46](index=46&type=chunk)[48](index=48&type=chunk) [Investment Loss](index=15&type=section&id=INVESTMENT%20LOSS) During the reporting period, the Group recorded an investment loss of **HK$21.6 million** from financial assets, compared to a **HK$7.2 million** gain in the prior period, with a period-end book value of **HK$60.3 million** for investments - Investment loss from financial assets at fair value through profit or loss (including realized and unrealized losses) was **HK$21.6 million**, compared to a **HK$7.2 million** gain in the prior period[47](index=47&type=chunk)[49](index=49&type=chunk) [Operating Expenses and Net Profit Margin](index=15&type=section&id=OPERATING%20EXPENSES%20AND%20NET%20PROFIT%20MARGIN) Operating expenses decreased by **4.9%** to **HK$313 million**, primarily due to reduced finance costs and advertising, but the net profit margin declined from **59.4%** to **52.1%** due to lower revenue and investment losses Operating Expenses and Net Profit Margin Summary | Metric | 2021 H1 | 2020 H1 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Operating Expenses** | HK$313.4 million | HK$329.6 million | -4.9% | | **Net Profit Margin** | 52.1% | 59.4% | -7.3 percentage points | - The decrease in expenses was primarily due to reductions in finance costs (**-17.8%**), advertising and promotion expenses (**-28.2%**), and information and communication fees (**-12.3%**), partially offset by increases in staff costs (**+20.3%**) and miscellaneous expenses (**+23.0%**)[53](index=53&type=chunk) [Future Plans](index=17&type=section&id=FUTURE%20PLANS) The Group plans an aggressive development strategy, focusing on optimizing digital services, diversifying global financial products, expanding client base through enhanced marketing, and strengthening transaction system security and investor education - Strategic focus includes aligning with China-Hong Kong policies (e.g., Greater Bay Area plan), adopting an aggressive development strategy, and innovating products, services, and market offers to expand the client base[56](index=56&type=chunk)[60](index=60&type=chunk) - Continued investment in FinTech aims to enhance the 'Bright Smart Securities (Baobao)' and 'Bright Smart Futures (Doudou)' apps, including adding US stock pre-market trading and launching '24-hour eDDA Direct Debit Service' to improve client experience[64](index=64&type=chunk)[65](index=65&type=chunk) - Commitment to strengthening online trading security involves relocating the central computer system to HKEX's central data center and implementing security measures like 'two-factor authentication'[70](index=70&type=chunk)[71](index=71&type=chunk) - The company undertakes investor education through its 'Bright Smart Finance Channel' live broadcasts, free investment seminars, and simulated competitions[59](index=59&type=chunk)[61](index=61&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=24&type=section&id=CAPITAL%20STRUCTURE,%20LIQUIDITY%20AND%20FINANCIAL%20RESOURCES) The Group maintains a robust financial position, primarily funded by equity, operating cash flow, and bank borrowings, with ample cash and bank balances, a reduced debt-to-asset ratio, and effective management of various financial risks Capital Structure, Liquidity and Financial Resources Summary | Metric | September 30, 2021 | March 31, 2021 | | :--- | :--- | :--- | | **Bank Deposits, Balances and Cash** | HK$630.7 million | HK$418.5 million | | **Total Bank Borrowings** | HK$7.6208 billion | HK$11.4360 billion | | **Debt-to-Asset Ratio** | 338.3% | 425.7% | | **Net Current Assets** | HK$2.0109 billion | HK$1.9439 billion | | **Current Ratio** | 1.2x | 1.1x | - The Group's credit risk primarily stems from receivables from clients, brokers, and clearing houses, managed through strict credit policies, collateral requirements, and daily monitoring[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - As of September 30, 2021, the Group had **259** employees, with a compensation policy designed to offer competitive remuneration to motivate and retain talent[98](index=98&type=chunk)[100](index=100&type=chunk) [Other Information](index=28&type=section&id=Other%20Information) This section details directors' and major shareholders' interests, and confirms the company's adherence to corporate governance standards [Interests of Directors and Corporate Governance](index=28&type=section&id=Interests%20of%20Directors%20and%20Corporate%20Governance) This section discloses directors' and major shareholders' interests, with Chairman Mr. Yip Mau Lam holding approximately **63.85%** of shares, and confirms the company's full compliance with corporate governance codes and securities dealing standards during the period - Chairman Mr. Yip Mau Lam, through his wholly-owned companies and personal beneficial ownership, collectively holds approximately **63.85%** of the company's issued shares[105](index=105&type=chunk)[107](index=107&type=chunk) - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[102](index=102&type=chunk)[103](index=103&type=chunk) - The company confirmed full compliance with the Corporate Governance Code and the Model Code for Securities Transactions by Directors during the reporting period[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - The company's Audit Committee reviewed this interim financial report with external auditor KPMG[117](index=117&type=chunk)[119](index=119&type=chunk) [Financial Statements](index=33&type=section&id=Financial%20Statements) This section presents the consolidated financial statements, including the statement of comprehensive income, financial position, cash flows, and detailed notes [Consolidated Statement of Comprehensive Income](index=33&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended September 30, 2021, the Group reported revenue of **HK$567 million** (**-2.8%** YoY), operating profit of **HK$429 million** (**-14.3%** YoY), and profit after tax of **HK$295 million** (**-14.8%** YoY), with basic earnings per share at **17.38 HK cents** Consolidated Statement of Comprehensive Income Summary | Item (HK$ '000) | 2021 H1 | 2020 H1 | | :--- | :--- | :--- | | Revenue | 566,523 | 582,891 | | Operating Profit | 428,587 | 500,176 | | Profit Before Tax | 347,122 | 401,037 | | Profit for the Period | 294,911 | 346,053 | [Consolidated Statement of Financial Position](index=34&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of September 30, 2021, total assets decreased to **HK$11.839 billion** from **HK$15.858 billion**, primarily due to reduced receivables, while total liabilities decreased to **HK$9.634 billion**, and total equity increased to **HK$2.205 billion** Consolidated Statement of Financial Position Summary | Item (HK$ '000) | September 30, 2021 | March 31, 2021 | | :--- | :--- | :--- | | Total Non-Current Assets | 198,221 | 194,818 | | Total Current Assets | 11,641,036 | 15,663,569 | | Total Current Liabilities | 9,630,139 | 13,719,716 | | Net Current Assets | 2,010,897 | 1,943,853 | | Net Assets | 2,204,869 | 2,130,675 | | Total Equity | 2,204,869 | 2,130,675 | [Condensed Consolidated Cash Flow Statement](index=37&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) Net cash inflow from operating activities was **HK$4.348 billion**, primarily due to reduced receivables, while financing activities resulted in a net outflow of **HK$4.173 billion**, leading to a net increase in cash and cash equivalents of **HK$205 million** to **HK$631 million** at period-end Condensed Consolidated Cash Flow Statement Summary | Item (HK$ '000) | 2021 H1 | 2020 H1 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 4,347,536 | (21,466,443) | | Net Cash from Investing Activities | 30,583 | 82,666 | | Net Cash (Used in)/from Financing Activities | (4,173,255) | 21,301,756 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 204,864 | (82,021) | | Cash and Cash Equivalents at End of Period | 630,658 | 407,312 | [Notes to the Unaudited Interim Financial Report](index=38&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) The notes detail financial statement preparation, accounting policies, and item specifics, highlighting securities brokerage as the primary profit source, adequately collateralized margin client receivables, and significant related party transactions with the controlling shareholder - Segment reporting indicates that securities brokerage is the Group's primary profit source, contributing **HK$424 million** in reportable segment profit (EBIT) during the period[171](index=171&type=chunk) - Receivables from margin clients amounted to **HK$9.03 billion**, collateralized by securities with a total market value of **HK$29.18 billion**[182](index=182&type=chunk)[185](index=185&type=chunk) - The Group has significant related party transactions with companies owned by Director and controlling shareholder Mr. Yip, primarily for office property leases, with right-of-use assets and lease liabilities of **HK$25.47 million** and **HK$25.15 million** respectively[242](index=242&type=chunk)[245](index=245&type=chunk) [Independent Auditor's Review Report](index=68&type=section&id=Independent%20Auditor's%20Review%20Report) This section contains the independent auditor's review report on the interim financial statements [Independent Auditor's Review Report](index=68&type=section&id=Independent%20Auditor's%20Review%20Report_Section) KPMG reviewed this interim financial report under Hong Kong Standard on Review Engagements, noting that the scope is less than an audit, thus no audit opinion is expressed; based on the review, no material non-compliance with HKAS 34 was identified - Review Conclusion: Based on the review, the auditors did not note any matter that causes them to believe the interim financial report is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting'[259](index=259&type=chunk)[260](index=260&type=chunk)

耀 才 40 證券 BRIGHT SMART SECURITIES 耀才證券金融集團有限公司 Bright Smart Securities & Commodities Group Limited 24 小 時 eDDA 存 款 服 務 2 4 小 時 買 賣 全 球 產 品 | --- | --- | --- | --- | --- | --- | --- | --- | |-------------------------------------------------------------|-------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | (於開曼群島註冊成立之有限公司) | | | | | | | | | (Incorporated in the Cayman Islands with limited liability) | | | | | | | | | 股份代號 Stock Code: 1428 | | | | | | | | | | | | | | | | | | | | | | | | ...

Corporate Information [Directors and Committees](index=3&type=section&id=Directors%20and%20Committees) The report lists the company's executive and independent non-executive directors and committee members, with Mr. Yip Mau Lin as Chairman and Mr. Hui Yik Bun as CEO - The company's Chairman is **Mr. Yip Mau Lin**, and the Chief Executive Officer is **Mr. Hui Yik Bun**[5](index=5&type=chunk) - The chairmen of the Audit, Remuneration, and Risk Management Committees are all **Mr. Yu Yan Kong**, an independent non-executive director[4](index=4&type=chunk)[5](index=5&type=chunk)[7](index=7&type=chunk) [Corporate Offices and Advisors](index=4&type=section&id=Corporate%20Offices%20and%20Advisors) This section provides key operational information including the company's registered office, principal place of business, share registrar, principal bankers, and auditor, KPMG - The company's head office and principal place of business are located at 10th and 23rd Floors, Wing On House, 71 Des Voeux Road Central, Hong Kong[7](index=7&type=chunk)[9](index=9&type=chunk) - The company's auditor is **KPMG**[12](index=12&type=chunk) Management Discussion and Analysis [Market Review](index=6&type=section&id=Market%20Review) Despite H1 2020 economic weakness, the Hong Kong stock market saw significant growth in trading volume and a 57.9% increase in IPO fundraising, driven by returning Chinese concept stocks and loose monetary policies - In H1 2020 (Q2 and Q3), the average daily turnover of Hong Kong stocks was approximately **HKD 128.08 billion**, a significant year-on-year increase of approximately **49.9%**[24](index=24&type=chunk)[26](index=26&type=chunk) - In the first nine months of 2020, Hong Kong's IPO market raised **HKD 211.4 billion**, a **57.9%** year-on-year increase, primarily benefiting from the return of Chinese concept stocks[24](index=24&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - The "stay-at-home economy" and strong online investment demand due to the pandemic, coupled with loose monetary policies globally, led to Hong Kong's banking system balance exceeding **HKD 450 billion**, driving active stock market trading[21](index=21&type=chunk)[23](index=23&type=chunk) [Operating Results](index=9&type=section&id=Operating%20Results) For the six months ended September 30, 2020, the Group achieved strong growth with total revenue increasing by 48.0% to HKD 583 million and profit attributable to shareholders surging by 63.6% to HKD 346 million, driven by active market trading and the IPO boom Key Performance Indicators for H1 FY2020/21 | Indicator | For the Six Months Ended September 30, 2020 | For the Six Months Ended September 30, 2019 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Revenue** | HKD 582.9 million | HKD 393.8 million | +48.0% | | **Profit Attributable to Shareholders** | HKD 346.1 million | HKD 211.5 million | +63.6% | | **Basic Earnings Per Share** | 20.39 HK cents | 12.46 HK cents | +63.6% | - The Board does not recommend the payment of an interim dividend for the period[30](index=30&type=chunk)[31](index=31&type=chunk) [Client Accounts and Assets](index=10&type=section&id=Client%20Accounts%20and%20Assets) During the period, the Group's client base and assets under management continued to expand, driven by the launch of mobile trading applications, resulting in significant year-on-year growth in both metrics Client Data Growth | Indicator | September 30, 2020 | September 30, 2019 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | **Total Client Accounts** | 405,761 accounts | 300,555 accounts | +35.0% | | **Client Assets Under Management** | approx. HKD 53.6 billion | approx. HKD 42.1 billion | +27.3% | - During the period, **67,957 new accounts** were opened (net of closed accounts)[36](index=36&type=chunk)[37](index=37&type=chunk) [Revenue Breakdown](index=12&type=section&id=Revenue%20Breakdown) The Group's total revenue grew by 48.0%, primarily driven by explosive growth in securities brokerage, IPO brokerage, and IPO financing interest income, with securities brokerage becoming the largest revenue source and IPO-related businesses surging over 16 times, while margin financing interest income decreased by 24.2% due to lower interest rates Revenue Overview by Business Segment (For the Six Months Ended September 30) | Business Segment | 2020 (HKD thousand) | 2019 (HKD thousand) | Increase/Decrease | | :--- | :--- | :--- | :--- | | Securities Brokerage | 219,990 | 113,080 | +94.5% | | IPO Brokerage | 21,416 | 3,857 | +455.1% | | IPO Financing Interest | 95,321 | 2,693 | +3,439.6% | | Margin Financing Interest | 114,092 | 150,421 | -24.2% | | Hong Kong Futures and Options Brokerage | 62,460 | 62,393 | +0.1% | | Global Futures Brokerage | 53,754 | 46,606 | +15.3% | | **Total** | **582,891** | **393,757** | **+48.0%** | [Operating Expenses and Net Profit Margin](index=16&type=section&id=Operating%20Expenses%20and%20Net%20Profit%20Margin) Total operating expenses increased by 24.1% to HKD 329.6 million, but the net profit margin improved from 53.7% to 59.4% due to stronger revenue growth, with increased financial costs, advertising, and brokerage fees contributing to the expense rise - Net profit margin increased by **5.7 percentage points** from **53.7%** to **59.4%** year-on-year[60](index=60&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) Key Operating Expense Changes (For the Six Months Ended September 30) | Expense Item | 2020 (HKD thousand) | 2019 (HKD thousand) | Increase/Decrease | | :--- | :--- | :--- | :--- | | Financial Costs | 99,139 | 55,967 | +77.1% | | Advertising and Promotion Expenses | 15,707 | 5,148 | +205.1% | | Brokerage Commissions, Handling Fees and Clearing Charges | 66,406 | 40,252 | +65.0% | | Staff Costs | 64,199 | 71,365 | -10.0% | | **Total Operating Expenses** | **329,641** | **265,643** | **+24.1%** | [Future Plans](index=18&type=section&id=Future%20Plans) The Group plans to diversify global financial products, invest in FinTech for digital trading, enhance online security, expand into mainland China, optimize branch networks, recruit talent, and boost brand competitiveness - The Group will continue to develop new features for the "Bright Smart Securities (Baby)" and "Bright Smart Futures (Doudou)" apps, advancing client trading services towards digitalization and intelligence[75](index=75&type=chunk)[77](index=77&type=chunk)[79](index=79&type=chunk) - Plans include expanding into the mainland China market through diversified online channels and enhancing brand recognition domestically[83](index=83&type=chunk)[85](index=85&type=chunk) - Continuous investment in enhancing the efficiency, capacity, and security of online trading systems, including simulation tests exceeding five times the current peak transaction volume[80](index=80&type=chunk)[82](index=82&type=chunk) - The Group will continue to explore more global financial products to meet market demand for Hong Kong stocks, US stocks, A-shares, various futures, and foreign exchange products[74](index=74&type=chunk)[76](index=76&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=23&type=section&id=Capital%20Structure%2C%20Liquidity%20and%20Financial%20Resources) The Group relies on equity, cash flow, and bank borrowings for funding, maintaining ample liquidity; as of September 30, 2020, bank balances were HKD 407 million, total bank borrowings surged to HKD 23.765 billion, resulting in a 1340.4% gearing ratio and 1.1x current ratio Financial Position Indicators | Indicator | September 30, 2020 | March 31, 2020 | | :--- | :--- | :--- | | **Bank Deposits, Balances and Cash** | HKD 407.3 million | HKD 477.7 million | | **Total Bank Borrowings** | HKD 23.7651 billion | HKD 2.8588 billion | | **Gearing Ratio** | 1,340.4% | 150.3% | | **Current Ratio** | 1.1 times | 1.4 times | | **Unutilized Bank Facilities** | HKD 11.6478 billion | HKD 18.0496 billion | [Risk Management](index=24&type=section&id=Risk%20Management) The Group has established a comprehensive risk management framework to address credit, liquidity, interest rate, foreign currency, and price risks, managing credit risk through client assessment and collateral, and liquidity risk by monitoring funding needs and maintaining sufficient cash and bank facilities - **Credit Risk**: Primarily arises from amounts due from clients, brokers, and clearing houses, managed by individual credit assessments, requiring securities collateral or cash deposits, and daily monitoring of margin levels[96](index=96&type=chunk)[97](index=97&type=chunk)[99](index=99&type=chunk) - **Liquidity Risk**: The Group regularly monitors liquidity requirements, ensuring sufficient cash reserves and adequate committed financing facilities from major financial institutions[103](index=103&type=chunk)[104](index=104&type=chunk) - **Price Risk**: Primarily arises from listed equity investments, futures contracts, and receivables linked to the fair value of client collateral; the Group regularly monitors investment portfolio performance[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk) [Employees and Remuneration Policies](index=26&type=section&id=Employees%20and%20Remuneration%20Policies) As of September 30, 2020, the Group had 261 employees and implements a market-competitive remuneration policy, including bonus schemes, to attract, retain, and motivate staff, while also providing appropriate training and development programs - As of September 30, 2020, the Group had **261 employees**, a slight decrease from **263** as of March 31, 2020[111](index=111&type=chunk)[113](index=113&type=chunk) Other Information [Directors' and Substantial Shareholders' Interests](index=27&type=section&id=Directors%27%20and%20Substantial%20Shareholders%27%20Interests) The report discloses the shareholdings of directors and substantial shareholders as of September 30, 2020, indicating that Mr. Yip Mau Lin, the company's Chairman, is the controlling shareholder, holding approximately 68.67% of the shares through his wholly-owned Bright Smart Holdings Limited and personal beneficial ownership Substantial Shareholders' Shareholdings (September 30, 2020) | Shareholder Name | Nature of Interest | Number of Shares | % of Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Yip Mau Lin | Interest in Controlled Corporation | 900,000,000 | 53.02% | | Mr. Yip Mau Lin | Beneficial Owner | 265,746,280 | 15.65% | | Bright Smart Holdings Limited | Beneficial Owner | 900,000,000 | 53.02% | [Corporate Governance](index=30&type=section&id=Corporate%20Governance) During the reporting period, the company fully complied with the Corporate Governance Code set out in Appendix 14 of the Listing Rules, adopted the Model Code for directors' securities transactions, and confirmed all directors' compliance, with the Audit Committee having reviewed the interim financial report - The company fully complied with the code provisions of the **Corporate Governance Code** during the reporting period[138](index=138&type=chunk)[142](index=142&type=chunk) - The Audit Committee, together with external auditor KPMG, reviewed the Group's unaudited consolidated results and this interim report[140](index=140&type=chunk)[144](index=144&type=chunk) Consolidated Financial Statements [Consolidated Statement of Comprehensive Income](index=32&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended September 30, 2020, the Group reported revenue of HKD 583 million (+48%), operating profit of HKD 500 million (+70.9%), profit before tax of HKD 401 million (+69.4%), and profit for the period (net profit) of HKD 346 million (+63.6%) Consolidated Statement of Comprehensive Income Summary (For the Six Months Ended September 30) | Item (HKD thousand) | 2020 | 2019 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Revenue** | 582,891 | 393,757 | +48.0% | | **Operating Profit** | 500,176 | 292,695 | +70.9% | | **Profit Before Tax** | 401,037 | 236,728 | +69.4% | | **Profit for the Period** | 346,053 | 211,505 | +63.6% | [Consolidated Statement of Financial Position](index=33&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of September 30, 2020, total assets significantly increased to HKD 28.513 billion, mainly due to a substantial rise in receivables from IPO financing; total liabilities also increased to HKD 26.740 billion due to higher bank loans, while total equity decreased to HKD 1.773 billion from HKD 1.902 billion primarily due to dividends paid Consolidated Statement of Financial Position Summary (HKD thousand) | Item | September 30, 2020 | March 31, 2020 | | :--- | :--- | :--- | | **Total Non-Current Assets** | 214,091 | 260,390 | | **Total Current Assets** | 28,299,166 | 6,198,745 | | **Total Current Liabilities** | 26,697,700 | 4,490,487 | | **Net Assets (Total Equity)** | 1,772,972 | 1,902,306 | [Condensed Consolidated Cash Flow Statement](index=36&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) For the six months ended September 30, 2020, the Group reported a net cash outflow of HKD 21.466 billion from operating activities, primarily due to increased client financing for IPOs, while financing activities generated a net cash inflow of HKD 21.302 billion from new bank loans, with cash and cash equivalents at period-end totaling HKD 407 million Cash Flow Statement Summary (For the Six Months Ended September 30, HKD thousand) | Item | 2020 | 2019 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | (21,466,443) | 510,202 | | **Net Cash from Investing Activities** | 82,666 | 80,531 | | **Net Cash from Financing Activities** | 21,301,756 | (584,409) | | **Net (Decrease)/Increase in Cash and Cash Equivalents** | (82,021) | 6,324 | | **Cash and Cash Equivalents at End of Period** | 407,312 | 400,863 | Notes to the Unaudited Interim Financial Report [Note 11 Segment Reporting](index=44&type=section&id=Note%2011%20Segment%20Reporting) The Group's operations are divided into three reportable segments: securities brokerage, commodities and futures brokerage, and spot gold trading, with securities brokerage being the largest contributor to revenue and EBIT, generating HKD 459 million in revenue and HKD 442 million in EBIT during the period Segment Performance Summary (For the Six Months Ended September 30, 2020, HKD thousand) | Segment | Reportable Segment Revenue | Reportable Segment Profit (EBIT) | | :--- | :--- | :--- | | **Securities Brokerage** | 458,526 | 441,928 | | **Commodities and Futures Brokerage** | 117,420 | 49,304 | | **Spot Gold Trading** | 6,682 | 4,263 | | **Total** | **582,628** | **495,495** | [Note 13 Accounts Receivable](index=49&type=section&id=Note%2013%20Accounts%20Receivable) As of September 30, 2020, total accounts receivable surged from HKD 5.645 billion to HKD 27.861 billion, primarily driven by HKD 18.712 billion in financing for IPO subscriptions, with margin client receivables also increasing from HKD 4.386 billion to HKD 7.438 billion Accounts Receivable Composition (HKD thousand) | Item | September 30, 2020 | March 31, 2020 | | :--- | :--- | :--- | | Receivables from Clearing Houses, Brokers and Dealers | 1,283,237 | 995,494 | | Receivables from Cash Clients | 427,473 | 263,480 | | Receivables from Margin Clients | 7,437,894 | 4,385,813 | | Receivables for IPO Subscriptions | 18,712,291 | — | | **Total** | **27,860,895** | **5,644,787** | [Note 18 Bank Loans](index=54&type=section&id=Note%2018%20Bank%20Loans) To support business expansion, especially IPO financing, the Group's total bank loans significantly increased from HKD 2.859 billion to HKD 23.765 billion, including HKD 16.8 billion specifically for IPOs, with most loans secured by client securities as re-pledged collateral Bank Loan Composition (HKD thousand) | Item | September 30, 2020 | March 31, 2020 | | :--- | :--- | :--- | | Secured Bank Loans | 4,830,130 | 2,423,789 | | Secured IPO Bank Loans | 16,800,000 | — | | Unsecured Bank Loans | 2,135,000 | 435,000 | | **Total** | **23,765,130** | **2,858,789** | Independent Auditor's Review Report [Auditor's Conclusion](index=69&type=section&id=Auditor%27s%20Conclusion) KPMG, the auditor, reviewed the interim financial report in accordance with Hong Kong Standard on Review Engagements and found no matters suggesting it was not prepared in all material respects according to HKAS 34 "Interim Financial Reporting" - The auditor concluded that nothing came to their attention to suggest the interim financial report was not prepared in all material respects in accordance with **HKAS 34 "Interim Financial Reporting"**[259](index=259&type=chunk)[260](index=260&type=chunk)

[Corporate Information](index=3&type=section&id=Corporate%20Information) [Directors and Committees](index=3&type=section&id=Directors%20and%20Committees) The report lists the company's executive directors, independent non-executive directors, and members of key committees (Audit, Remuneration, Nomination, Risk Management), with Mr Yip Mau Lam as Chairman and Mr Hui Yuk Pun as Chief Executive Officer - Executive Directors include **Mr Yip Mau Lam** (Chairman), **Mr Hui Yuk Pun** (Chief Executive Officer), and **Mr Chan Wing Shing**[5](index=5&type=chunk) - Independent Non-executive Directors include **Mr Yu Yan Kong**, **Mr Szeto Wai Sun**, and **Mr Ling Kwok Fai**[5](index=5&type=chunk) - The company has established Audit, Remuneration, Nomination, and Risk Management Committees, chaired by **Mr Yu Yan Kong** and **Mr Yip Mau Lam** respectively[5](index=5&type=chunk)[6](index=6&type=chunk) [Corporate Offices and Advisors](index=4&type=section&id=Corporate%20Offices%20and%20Advisors) The report provides information on the company's registered office in the Cayman Islands, head office and principal place of business in Hong Kong, and lists key share registrars, principal bankers, and auditor (KPMG) - The company's head office is located at Wing On House, 71 Des Voeux Road Central, Hong Kong[6](index=6&type=chunk) - The company's auditor is **KPMG**[9](index=9&type=chunk) [Major Accomplishments](index=6&type=section&id=Major%20Accomplishments) [2019 Major Accomplishments](index=6&type=section&id=2019%20Major%20Accomplishments) In 2019, the Group launched two award-winning trading apps, 'Bright Smart Securities (Baby)' and 'Bright Smart Futures (Doudou)', actively engaged in philanthropy, and sponsored the Hong Kong Squash Championships - Launched 'Bright Smart Securities (Baby)' and 'Bright Smart Futures (Doudou)' trading apps, exceeding **30,000 downloads** in the first month, and awarded 'Outstanding Stock and Futures Trading App Program Development' by Capital Magazine[11](index=11&type=chunk) - Group Chairman **Mr Yip Mau Lam** donated over **HKD 1 million** to The Community Chest of Hong Kong and other charitable activities[13](index=13&type=chunk) - Received the 'Caring Company' award from The Hong Kong Council of Social Service for **nine consecutive years**[15](index=15&type=chunk) - Awarded 'Hong Kong All-round Securities Brokerage Jun Ding Award' by mainland media Securities Times and Securities China[16](index=16&type=chunk) [2020 Major Accomplishments](index=13&type=section&id=2020%20Major%20Accomplishments) In 2020, the Group declared a special dividend for its tenth anniversary, Chairman **Mr Yip Mau Lam** personally donated **HKD 10 million** for COVID-19 relief, and the Group maintained service quality with its backup office while winning three 'Top 3 Most Active' broker awards from HKEX - Declared a one-off special dividend of **80.00 HK cents per share** to celebrate the tenth listing anniversary[25](index=25&type=chunk) - Group Chairman **Mr Yip Mau Lam**, through 'Yip Mau Lam Charitable Foundation', donated **HKD 10 million** to the Hospital Authority for anti-epidemic efforts[27](index=27&type=chunk) - The Kowloon backup office, established **five years ago**, played a crucial role during the pandemic, ensuring service continuity[29](index=29&type=chunk) - Awarded three first-place prizes by Hong Kong Exchanges and Clearing Limited (HKEX): 'Top 3 Most Active Stock Futures Brokers', 'Top 3 Most Active Stock Options Brokers', and 'Top 3 Most Active Weekly Index Options Brokers'[31](index=31&type=chunk) [Branch Network](index=17&type=section&id=Branch%20Network) [Branch Locations](index=17&type=section&id=Branch%20Locations) The Group operates an extensive branch network across Hong Kong, Kowloon, and New Territories, totaling **15 business locations** (including headquarters), with most branches open seven days a week, and has launched the 'Bright Smart Teaching Vehicle' to provide mobile services across Hong Kong - The company has **15 business outlets** across Hong Kong, Kowloon, and New Territories, including Hong Kong Headquarters and Kowloon Headquarters[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - Most branches operate **seven days a week** to provide more convenient customer service[38](index=38&type=chunk) - Launched the innovative 'Bright Smart Teaching Vehicle', providing services across Hong Kong[37](index=37&type=chunk)[38](index=38&type=chunk) [Awards](index=19&type=section&id=Awards) [Awards and Recognitions](index=19&type=section&id=Awards%20and%20Recognitions) During the reporting period, the Group received numerous significant industry awards across social responsibility, derivatives trading, mobile application development, and corporate excellence, demonstrating its leading position and comprehensive strength in the industry - Awarded three major prizes by Hong Kong Exchanges and Clearing Limited (HKEX), including 'Top 3 Most Active Weekly Index Options Brokers', 'Top 3 Most Active Stock Options Brokers', and 'Top 3 Most Active Stock Futures Brokers'[43](index=43&type=chunk)[44](index=44&type=chunk) - Received 'Outstanding Securities and Futures Trading Mobile App Award' from Sky Post and 'Outstanding Stock and Futures Trading App Program Development Award' from Capital Magazine for its excellent trading app performance[43](index=43&type=chunk)[44](index=44&type=chunk) - Received 'Hong Kong Outstanding Enterprise Award' from Economic Digest and 'Listed Company Excellence Award' from Hong Kong Economic Journal for **consecutive years**[43](index=43&type=chunk)[44](index=44&type=chunk) - Received 'Caring Company' and 'Social Care Enterprise Excellence Award' honors in social responsibility[43](index=43&type=chunk)[44](index=44&type=chunk) [Financial Highlights](index=21&type=section&id=Financial%20Highlights) [Key Financial Performance](index=21&type=section&id=Key%20Financial%20Performance) For the year ended March 31, 2020, the Group's total revenue increased by **4.1%** to **HKD 864 million**, profit for the year grew by **6.8%** to **HKD 471 million**, basic earnings per share were **27.75 HK cents**, and the company declared a special dividend of **80 HK cents per share** and increased final dividend by **259%** to **28 HK cents per share** to celebrate its tenth listing anniversary FY2019/20 Key Financial Data (HKD thousands) | Metric | FY2020 (HKD thousands) | FY2019 (HKD thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Revenue** | 864,017 | 830,305 | +4.1% | | **Operating Profit** | 667,089 | 639,785 | +4.3% | | **Profit for the Year** | 470,978 | 440,928 | +6.8% | | **Basic EPS (HK cents)** | 27.75 | 25.98 | +6.8% | | **Final Dividend per Share (HK cents)** | 28.00 | 7.80 | +259.0% | | **Special Dividend per Share (HK cents)** | 80.00 | — | N/A | [Chairman's Statement](index=22&type=section&id=Chairman%27s%20Statement) [Performance and Market Environment](index=22&type=section&id=Performance%20and%20Market%20Environment) The Chairman's report highlights that despite severe challenges in FY2019/20 from the US-China trade war, Hong Kong social unrest, and the COVID-19 pandemic, which led to a **4.1%** decline in average daily turnover of the Hong Kong stock market, the Group outperformed the market with counter-cyclical growth in total revenue and net profit, attributed to its forward-looking strategy and stable operations - The market faced multiple challenges including the US-China trade war, Hong Kong social unrest, and the COVID-19 pandemic, leading to an approximate **4.1% year-on-year decrease** in average daily turnover of Hong Kong stocks[49](index=49&type=chunk)[52](index=52&type=chunk)[54](index=54&type=chunk) FY2019/20 Performance Overview (HKD millions) | Metric | FY2020 (HKD millions) | FY2019 (HKD millions) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | 864.0 | 830.3 | +4.1% | | **Brokerage Commission Income** | 516.2 | 496.3 | +4.0% | | **Margin Lending Interest** | 302.5 | 301.5 | +0.3% | | **Profit for the Year** | 471.0 | 440.9 | +6.8% | | **Basic EPS (HK cents)** | 27.75 | 25.98 | +6.8% | - Total client accounts increased by **19.3%** to **337,804**, but client assets decreased by **9.1%** to **HKD 41.9 billion** due to market conditions[57](index=57&type=chunk)[59](index=59&type=chunk) [Competitive Advantages and Operating Strategies](index=24&type=section&id=Competitive%20Advantages%20and%20Strategies) The Group's success is attributed to its proactive backup office, popular trading apps, and market-responsive strategies, alongside an integrated online-offline approach with **15 branches** and a 'Teaching Vehicle', diverse global financial products, robust cybersecurity, and continuous investor education - Core advantages include: - **Forward-looking layout**: Established a backup office exceeding **20,000 sq ft** as early as **2015**, ensuring business continuity during the pandemic, a unique initiative in Hong Kong - **Technological innovation**: Self-developed 'Baby' and 'Doudou' trading apps performed exceptionally, driving significant growth in online transactions and account openings - **Market strategy**: Launched attractive offers such as high margin ratios, low interest rates, free shares for new accounts, commission waivers, and platform fee waivers to attract clients[58](index=58&type=chunk)[60](index=60&type=chunk)[63](index=63&type=chunk)[66](index=66&type=chunk) - In Q1 2020, 'Baby' trading app's transaction volume surged by **91.7% quarter-on-quarter**, account openings increased by **64.4% quarter-on-quarter**, and active users grew by over **57.8%**[62](index=62&type=chunk)[63](index=63&type=chunk) - Offers comprehensive global financial products, allowing clients to trade Hong Kong stocks, US stocks, A-shares, global futures, and foreign exchange through a single account[65](index=65&type=chunk)[67](index=67&type=chunk) - Prioritizes cybersecurity, implementing measures like 'second password' and 'two-factor authentication (2FA)' to safeguard client assets[72](index=72&type=chunk)[74](index=74&type=chunk) - Actively fulfills social responsibility, supporting charitable activities for **consecutive years**, with the Chairman personally making significant donations during the pandemic[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) [Outlook](index=30&type=section&id=Outlook) Looking ahead, the Chairman identifies the pandemic as key to the global economy, noting the online trading market's strong performance and the Group's unaffected operations due to its leading online platform and backup office, while anticipating new momentum from US-listed Chinese companies' secondary listings in Hong Kong, and committing to an aggressive operating model to explore new markets and products - The pandemic is key to the future economic trend, yet the online trading market stands out, with the Group's online transactions accounting for **95%** and app-based account openings nearly **70%**[85](index=85&type=chunk)[86](index=86&type=chunk) - The secondary listings of US-listed Chinese companies like **JD.com**, **Baidu**, and **NetEase** in Hong Kong are expected to be a significant catalyst for the local stock market[88](index=88&type=chunk)[90](index=90&type=chunk) - The Group will continue its aggressive operating model, seeking new breakthroughs based on existing businesses, exploring new markets, and discovering new financial products[89](index=89&type=chunk)[91](index=91&type=chunk) [Management Discussion and Analysis](index=34&type=section&id=Management%20Discussion%20and%20Analysis) [Market Review](index=34&type=section&id=Market%20Review) During the reporting period, global stock markets experienced severe volatility due to multiple 'black swan' events, including the US-China trade war and COVID-19, leading to a **4.1%** decline in Hong Kong's average daily turnover and the first annual negative GDP growth since **2009**, while the pandemic spurred the 'stay-at-home economy' and counter-cyclical growth in online transactions - Affected by multiple negative factors, HKEX's average daily turnover for the year was approximately **HKD 92.24 billion**, a year-on-year decrease of approximately **4.1%**[99](index=99&type=chunk)[101](index=101&type=chunk) - Hong Kong's economy entered a technical recession, with **GDP falling by 1.2%** in 2019 and **8.9% year-on-year** in Q1 2020[100](index=100&type=chunk)[102](index=102&type=chunk) - The pandemic accelerated the rise of the internet economy and 'stay-at-home economy', with online businesses actively expanding online sales; China's online retail sales of physical goods grew by **5.9% year-on-year** in the first quarter[118](index=118&type=chunk)[120](index=120&type=chunk) [Operational Results](index=39&type=section&id=Operational%20Results) Despite declining market turnover, the Group achieved dual growth in revenue and profit through timely strategic adjustments and a robust online trading platform, with its self-developed trading apps attracting nearly **300,000 downloads** and effectively increasing mainland client proportion, while total client accounts grew by **19.3%** to **337,804**, though client assets under management decreased by **9.1%** to **HKD 41.9 billion** FY2019/20 Operating Results | Metric | FY2020 | FY2019 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Revenue (HKD millions)** | 864.0 | 830.3 | +4.1% | | **Profit for the Year (HKD millions)** | 471.0 | 440.9 | +6.8% | | **Total Client Accounts** | 337,804 | 283,181 | +19.3% | | **Client Assets (HKD billions)** | 41.9 | 46.1 | -9.1% | - Self-developed 'Baby' and 'Doudou' apps successfully attracted nearly **300,000 downloads**, marking a significant step in expanding into the mainland market[127](index=127&type=chunk)[128](index=128&type=chunk) [Revenue Analysis](index=42&type=section&id=Revenue%20Analysis) This fiscal year's total revenue was **HKD 864 million**, a **4.1% year-on-year increase**, primarily from securities brokerage, margin financing, and Hong Kong and global futures and options brokerage, with strong growth in global futures brokerage, IPO brokerage, and financing revenue, increasing by **17.6%** and over **50%** respectively, offsetting the slight impact on securities brokerage from declining market turnover Revenue Breakdown by Business Segment (HKD thousands) | Business Segment | FY2020 (HKD thousands) | FY2019 (HKD thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Securities Brokerage** | 258,292 | 262,004 | -1.4% | | **Hong Kong Futures and Options Brokerage** | 128,358 | 125,158 | +2.6% | | **Global Futures Brokerage** | 101,424 | 86,240 | +17.6% | | **Initial Public Offering (IPO) Brokerage** | 15,730 | 10,366 | +51.7% | | **IPO Financing Interest Income** | 33,474 | 21,411 | +56.3% | | **Margin Financing Interest Income** | 302,486 | 301,462 | +0.3% | | **Total Revenue** | **864,017** | **830,305** | **+4.1%** | [Securities Brokerage](index=42&type=section&id=Securities%20brokerage) Affected by a **3.0% year-on-year decrease** in total Hong Kong stock market turnover, the Group's securities brokerage commission income was **HKD 258 million**, a slight **1.4% year-on-year decrease**, accounting for **29.9%** of total revenue - Securities brokerage commission income was **HKD 258.3 million**, a **1.4% decrease** from **HKD 262.0 million** in the previous year[137](index=137&type=chunk)[138](index=138&type=chunk) [Hong Kong Futures and Options Brokerage](index=44&type=section&id=Hong%20Kong%20futures%20and%20options%20brokerage) Despite a **3.3% decrease** in HKEX derivatives contract turnover, the Group's Hong Kong futures and options brokerage commission income grew against the trend by **2.6%** to **HKD 128 million**, driven by increased market volatility and client hedging demand - Hong Kong futures and options brokerage commission income was **HKD 128.4 million**, a **2.6% increase** from **HKD 125.2 million** in the previous year[143](index=143&type=chunk)[145](index=145&type=chunk) [Global Futures Brokerage](index=45&type=section&id=Global%20futures%20brokerage) Driven by increased global market volatility and growing investor interest in diversified investments, global futures brokerage commission income increased by **17.6% year-on-year** to **HKD 101 million**, becoming a significant growth driver - Global futures brokerage commission income was **HKD 101.4 million**, a significant **17.6% increase** from **HKD 86.2 million** in the previous year[149](index=149&type=chunk) [Initial Public Offering (IPO) Brokerage and Financing](index=46&type=section&id=IPO%20brokerage%20and%20IPO%20financing) IPO-related business performed strongly, with brokerage commission income surging by **51.7%** to **HKD 15.7 million**, and financing interest income sharply rising by **56.3%** to **HKD 33.5 million** - IPO brokerage commission income increased by **51.7% year-on-year** to **HKD 15.7 million**; IPO financing interest income increased by **56.3% year-on-year** to **HKD 33.5 million**[151](index=151&type=chunk)[154](index=154&type=chunk) [Margin Financing](index=46&type=section&id=Margin%20financing) Despite a **15.3% decrease** in average daily margin lending to **HKD 5.85 billion**, margin financing interest income still saw a slight **0.3% increase** to **HKD 302.5 million**, accounting for **35.0%** of total revenue, driven by rising HIBOR - Margin financing interest income was **HKD 302.5 million**, a slight **0.3% increase** from **HKD 301.5 million** in the previous year[152](index=152&type=chunk)[155](index=155&type=chunk) [Operating Expenses and Net Profit Margin](index=47&type=section&id=Operating%20Expenses%20and%20Net%20Profit%20Margin) This year, the Group's operating expenses were **HKD 554 million**, a **2.9% year-on-year increase**; despite increased expenses, the Group's net profit margin improved from **53.1%** to **54.5%** due to faster revenue growth, with the increase primarily driven by a significant rise in amortization and depreciation, while staff costs and finance costs decreased - Net profit margin increased from **53.1%** in the previous year to **54.5%**, an improvement of **1.4 percentage points**[159](index=159&type=chunk)[161](index=161&type=chunk) Operating Expense Details (HKD thousands) | Item | FY2020 (HKD thousands) | FY2019 (HKD thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Staff Costs** | 127,472 | 136,333 | -6.5% | | **Amortization and Depreciation** | 89,635 | 18,839 | +375.8% | | **Finance Costs** | 138,178 | 140,600 | -1.7% | | **Advertising and Promotion** | 15,595 | 7,983 | +95.4% | | **Rent, Rates and Management Fees** | 5,733 | 71,116 | -91.9% | | **Total Operating Expenses** | **554,339** | **538,876** | **+2.9%** | [Future Plans and Strategies](index=48&type=section&id=Future%20Plans%20and%20Strategies) The Group will continue its aggressive expansion strategy, planning to identify new branch locations and continuously recruit talent, with future focus on four key areas: 1) developing diversified global financial products; 2) promoting digitalization and intelligence in trading services; 3) continuously enhancing online transaction security; and 4) actively expanding its mainland business footprint to enhance brand recognition - Continue to identify prime locations for new branches and regularly hold recruitment fairs to attract talent[165](index=165&type=chunk)[166](index=166&type=chunk) - Strategic priorities include: - **Product diversification**: Continuously developing more global financial products to meet market demand - **Service intelligence**: Combining online and offline strategies, leveraging FinTech to enhance customer experience and core competitiveness - **Security first**: Continuously investing resources to improve trading system speed, capacity, and cybersecurity levels - **Mainland expansion**: Actively expanding into the domestic market to build brand recognition[169](index=169&type=chunk)[174](index=174&type=chunk)[179](index=179&type=chunk)[182](index=182&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=54&type=section&id=Capital%20Structure%2C%20Liquidity%20and%20Financial%20Resources) The Group funds its operations through shareholders' equity, operating cash, and bank borrowings, maintaining ample liquidity; as of the reporting period end, bank balances and cash were **HKD 478 million**, bank borrowings were **HKD 2.859 billion**, the debt-to-equity ratio (total bank borrowings/total shareholders' equity) increased to **150.3%** from **117.9%** in the previous year, and the current ratio was **1.4 times** Capital and Liquidity Position (As of March 31) | Metric | FY2020 | FY2019 | | :--- | :--- | :--- | | **Bank Balances and Cash (HKD millions)** | 477.7 | 401.3 | | **Bank Borrowings (HKD millions)** | 2,858.8 | 3,445.5 | | **Unutilized Bank Facilities (HKD millions)** | 18,049.6 | 17,277.3 | | **Debt-to-Equity Ratio** | 150.3% | 117.9% | | **Current Ratio** | 1.4 times | 1.6 times | [Risk Management](index=56&type=section&id=Risk%20Management) The Group systematically manages various risks, controlling credit risk primarily through strict credit policies, collateral management, and continuous monitoring, managing liquidity risk by regularly monitoring liquidity needs and maintaining sufficient cash reserves and financing facilities, while interest rate and foreign exchange risks are less significant due to business model and hedging measures, and price risk from listed equity investments and client collateral is managed through regular monitoring - **Credit Risk**: Primarily arises from receivables from clients, brokers, and clearing houses, managed through individual client assessments, requiring collateral (such as securities or cash deposits), and daily monitoring of margin levels[205](index=205&type=chunk)[206](index=206&type=chunk) - **Liquidity Risk**: Managed by regularly monitoring liquidity requirements and ensuring sufficient cash reserves and committed financing facilities from major financial institutions[214](index=214&type=chunk)[217](index=217&type=chunk) - **Interest Rate Risk**: The Group's revenue and operating cash flows are not significantly affected by interest rate risk, as financial assets and liabilities are primarily floating-rate, and margin interest is linked to funding costs[215](index=215&type=chunk)[218](index=218&type=chunk) - **Foreign Exchange Risk**: Primarily arises from foreign currency financial instruments other than USD, managed by keeping net exposure at acceptable levels through spot foreign currency transactions when necessary[216](index=216&type=chunk)[219](index=219&type=chunk) [Biographies of Directors and Senior Management](index=59&type=section&id=Biographies%20of%20Directors%20and%20Senior%20Management) [Executive Directors](index=59&type=section&id=Executive%20Directors) This section introduces the backgrounds of three Executive Directors: founder **Mr Yip Mau Lam** serves as Chairman, responsible for corporate strategy; **Mr Hui Yuk Pun** is Chief Executive Officer, overseeing overall business development and operations with over **20 years** of industry experience; and **Mr Chan Wing Shing** is Trading Director, responsible for daily trading operations - **Mr Yip Mau Lam**: Aged **68**, founder, Chairman, and controlling shareholder of the Group, responsible for formulating corporate strategy and overseeing overall management[225](index=225&type=chunk)[226](index=226&type=chunk) - **Mr Hui Yuk Pun**: Aged **46**, Chief Executive Officer, responsible for the Group's overall business development, operations, and management, with over **20 years** of experience in the securities and futures industry[228](index=228&type=chunk)[229](index=229&type=chunk) - **Mr Chan Wing Shing**: Aged **55**, Trading Director, responsible for daily trading operations of securities and futures businesses, with over **20 years** of industry experience[231](index=231&type=chunk)[233](index=233&type=chunk) [Independent Non-executive Directors](index=61&type=section&id=Independent%20Non-executive%20Directors) This section introduces the backgrounds of three Independent Non-executive Directors: **Mr Yu Yan Kong**, a practicing accountant, chairs the Audit and Remuneration Committees; **Mr Szeto Wai Sun**, a practicing solicitor and international notary public; and **Mr Ling Kwok Fai**, with over **20 years** of experience in accounting, finance, and administration - **Mr Yu Yan Kong**: Aged **54**, a practicing accountant, serving as Chairman of the Audit Committee, Remuneration Committee, and Risk Management Committee[233](index=233&type=chunk)[234](index=234&type=chunk) - **Mr Szeto Wai Sun**: Aged **61**, a practicing solicitor and international notary public, also serving as an Independent Non-executive Director of Taiping Insurance (Holdings) Company Limited[236](index=236&type=chunk)[237](index=237&type=chunk) - **Mr Ling Kwok Fai**: Aged **64**, with extensive experience in accounting, finance, and administration, holding dual qualifications as a Chartered Secretary and Chartered Governance Professional[240](index=240&type=chunk)[241](index=241&type=chunk) [Senior Management](index=63&type=section&id=Senior%20Management) This section introduces Senior Management members other than directors: **Ms Yip Wing Yan** serves as Assistant to Chairman, assisting in overseeing daily internal operations; **Ms Li Wan Mei** is Financial Controller, responsible for the Group's overall financial and accounting management; and **Mr Chan Kwan Pak** is Company Secretary - **Ms Yip Wing Yan**: Aged **39**, Assistant to Chairman, responsible for assisting the Chairman in overseeing daily internal operations and formulating development strategies[245](index=245&type=chunk)[246](index=246&type=chunk) - **Ms Li Wan Mei**: Aged **36**, Financial Controller, with over **10 years** of accounting experience, responsible for the Group's overall financial and accounting management[249](index=249&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) [Environmental, Social and Governance Report](index=66&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) [Environmental Aspects](index=67&type=section&id=Environmental) The Group is committed to environmental protection and energy conservation, with primary resource consumption being office electricity, water, and paper; during the reporting period, total greenhouse gas emissions were **1,363.9 tonnes of CO2 equivalent**, with **90.4%** from purchased electricity, and the Group has implemented various energy-saving and emission reduction measures, such as using energy-efficient equipment, promoting paperless operations (e-statements, mobile account opening), and recycling waste paper and printing consumables Greenhouse Gas Emissions Overview | Scope | Source | Emissions (tonnes CO2e) | Percentage | | :--- | :--- | :--- | :--- | | **Scope 1 (Direct Emissions)** | Group Vehicle Fleet Gasoline Consumption | 73.8 | 5.4% | | **Scope 2 (Indirect Emissions)** | Purchased Electricity | 1,232.6 | 90.4% | | **Scope 3 (Other Indirect)** | Paper Consumption | 57.5 | 4.2% | | **Total** | | **1,363.9** | **100.0%** | - Actively fostering a paperless work environment by implementing electronic services such as e-statements, mobile app account opening, and online account opening, as well as digitalizing internal information dissemination[274](index=274&type=chunk)[279](index=279&type=chunk) [Social Aspects](index=70&type=section&id=Social) In terms of social responsibility, the Group prioritizes employee well-being, health and safety, and career development, offering comprehensive benefits and training; in operations, it emphasizes supply chain management, product responsibility, and customer privacy protection, establishing strict anti-corruption and anti-money laundering policies; the Group actively contributes to the community, with significant donations from both the Chairman personally and the company, and continuous support for various charitable activities - **Employment and Labor**: Provides employees with benefits including life insurance, medical benefits, paid annual leave, and study allowances, along with a safe and healthy work environment and professional development training[282](index=282&type=chunk)[286](index=286&type=chunk)[287](index=287&type=chunk) - **Operating Practices**: Established comprehensive internal controls, product responsibility, customer complaint handling, personal data privacy protection, and anti-corruption/anti-money laundering procedures[293](index=293&type=chunk)[294](index=294&type=chunk)[300](index=300&type=chunk)[303](index=303&type=chunk) - **Community Investment**: Chairman **Mr Yip Mau Lam** personally donated **HKD 10 million** for anti-epidemic efforts during the pandemic; the Group donated over **HKD 1 million** to The Community Chest of Hong Kong, **HKD 1 million** to Caritas Hong Kong, and has sponsored the 'Mindset Charity Run' for **11 consecutive years**[314](index=314&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk) [Corporate Governance Report](index=78&type=section&id=Corporate%20Governance%20Report) [Board of Directors and Committees](index=78&type=section&id=Board%20of%20Directors%20and%20Committees) The company maintains high corporate governance standards, fully complying with the Corporate Governance Code, with a **six-member Board** (three executive, three independent non-executive) and separate Chairman and CEO roles, supported by Audit, Risk Management, Nomination, and Remuneration Committees, whose composition, duties, and annual work are detailed to ensure effective oversight and decision-making - The company fully complied with the Corporate Governance Code as set out in Appendix 14 of the Listing Rules during the year[323](index=323&type=chunk) - The Board of Directors comprises **three Executive Directors** and **three Independent Non-executive Directors**, achieving a balance between management and non-executive directors[325](index=325&type=chunk) - The roles of Chairman (**Mr Yip Mau Lam**) and Chief Executive Officer (**Mr Hui Yuk Pun**) are held by different individuals to ensure a balance of power and authority[361](index=361&type=chunk)[362](index=362&type=chunk) - Both the Audit Committee and Risk Management Committee are chaired by Independent Non-executive Director **Mr Yu Yan Kong**, responsible for overseeing financial reporting, internal controls, and risk management[368](index=368&type=chunk)[375](index=375&type=chunk) [Accountability, Audit, and Shareholder Rights](index=91&type=section&id=Accountability%2C%20Audit%2C%20and%20Shareholder%20Rights) The Board oversees financial statement preparation for truth and fairness, with an external company secretary appointed; the report details audit and non-audit fees from KPMG; the company has robust risk management and internal controls, an inside information handling manual, and a dividend policy, clearly outlining shareholder rights and procedures for EGMs, director nominations, and Board inquiries - The Board is responsible for ensuring the truth and fairness of financial statements and their preparation on a going concern basis[404](index=404&type=chunk) - The company has established risk management and internal control systems, including an internal audit function, which are annually reviewed by the Board and deemed effective and adequate[411](index=411&type=chunk)[415](index=415&type=chunk)[421](index=421&type=chunk) - Shareholder rights are clearly defined, including the right of shareholders holding not less than **10%** of the paid-up share capital to request an extraordinary general meeting, and specific procedures for nominating director candidates[432](index=432&type=chunk)[433](index=433&type=chunk) [Directors' Report](index=96&type=section&id=Directors%27%20Report) [Business and Financial Review](index=96&type=section&id=Business%20and%20Financial%20Review) The Directors' Report outlines the Group's principal business as providing financial services including securities, futures brokerage, and margin financing; during the reporting period, the Group declared a special dividend of **80 HK cents per share** and proposed a final dividend of **28 HK cents per share**, with total charitable donations amounting to **HKD 2.28 million** for the year, and no purchases, sales, or redemptions of company shares - The Group's principal business is providing financial services, including securities brokerage, margin financing, commodities and futures brokerage, precious metals trading, and leveraged foreign exchange trading[445](index=445&type=chunk) - Declared a one-off special dividend of **80.00 HK cents per share** and proposed a final dividend of **28.00 HK cents per share**[459](index=459&type=chunk)[460](index=460&type=chunk) - Total charitable donations for the year amounted to **HKD 2.28 million**[478](index=478&type=chunk)[479](index=479&type=chunk) [Connected Transactions](index=106&type=section&id=Connected%20Transactions) The report details several continuing connected transactions between the Group and connected persons (primarily Chairman **Mr Yip Mau Lam** and his associates), mainly involving office property lease agreements, provision of financial services such as margin and IPO financing to connected persons, and brokerage services, all conducted in the ordinary course of business on normal commercial terms, confirmed by independent non-executive directors, and supported by an unqualified opinion letter from the auditor - The Group entered into multiple office property lease agreements with companies connected to Chairman **Mr Yip Mau Lam**, with total payments amounting to approximately **HKD 51.9 million** for the year[546](index=546&type=chunk)[547](index=547&type=chunk)[551](index=551&type=chunk) - The Group provides margin and IPO financing services to directors and their associates, with annual caps of **HKD 4 billion** for IPO financing and **HKD 1 billion** for margin financing provided to Mr Yip's group[556](index=556&type=chunk) - All continuing connected transactions have been reviewed by Independent Non-executive Directors, who confirmed they were conducted on normal commercial terms, fair and reasonable, and in the overall interest of shareholders[567](index=567&type=chunk)[569](index=569&type=chunk) [Directors' and Major Shareholders' Interests](index=111&type=section&id=Directors%27%20and%20Major%20Shareholders%27%20Interests) The report discloses the interests of directors and major shareholders in the company's shares as of March 31, 2020; Chairman **Mr Yip Mau Lam** is the controlling shareholder, holding approximately **68.67%** of the company's shares through his wholly-owned companies and personal beneficial ownership; no other major shareholder interests or short positions are disclosed beyond the information provided; the company maintained sufficient public float Shareholding of Directors and Major Shareholders | Shareholder Name | Nature of Interest | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | **Mr Yip Mau Lam** | Interest in Controlled Corporation | 900,000,000 | 53.02% | | | Beneficial Owner | 265,746,280 | 15.65% | | **Total** | | **1,165,746,280** | **68.67%** | | **New Charming Holdings Limited** | Beneficial Owner | 900,000,000 | 53.02% | - The company confirmed that as of the reporting date, it maintained a public float of over **25%**, complying with Listing Rules requirements[590](index=590&type=chunk) [Financial Statements](index=122&type=section&id=Financial%20Statements) [Consolidated Statement of Comprehensive Income](index=123&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For the year ended March 31, 2020, the Group achieved total revenue of **HKD 864 million**, a **4.1% year-on-year increase**; after deducting various costs and expenses, profit before tax was **HKD 529 million**, and profit for the year was **HKD 471 million**, a **6.8% year-on-year increase** Consolidated Statement of Comprehensive Income Summary (HKD thousands) | Item | FY2020 (HKD thousands) | FY2019 (HKD thousands) | | :--- | :--- | :--- | | **Revenue** | 864,017 | 830,305 | | **Other Income** | 239,503 | 212,440 | | **Operating Profit** | 667,089 | 639,785 | | **Profit Before Tax** | 528,911 | 499,185 | | **Profit for the Year** | 470,978 | 440,928 | | **Total Comprehensive Income** | 471,211 | 441,178 | [Consolidated Statement of Financial Position](index=124&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2020, the Group's total assets were **HKD 6.459 billion**, total liabilities were **HKD 4.557 billion**, and net assets were **HKD 1.902 billion**; key assets included accounts receivable (**HKD 5.645 billion**), while major liabilities were bank loans (**HKD 2.859 billion**) and accounts payable (**HKD 1.301 billion**), with total equity decreasing from **HKD 2.923 billion** to **HKD 1.902 billion** due to the large special dividend payout Consolidated Statement of Financial Position Summary (HKD thousands) | Item | March 31, 2020 (HKD thousands) | March 31, 2019 (HKD thousands) | | :--- | :--- | :--- | | **Total Assets** | 6,459,135 | 7,851,341 | | Of which: Accounts Receivable | 5,644,787 | 7,276,782 | | **Total Liabilities** | 4,556,829 | 4,928,051 | | Of which: Bank Loans | 2,858,789 | 3,445,515 | | **Net Assets/Total Equity** | 1,902,306 | 2,923,290 | [Consolidated Cash Flow Statement](index=127&type=section&id=Consolidated%20Cash%20Flow%20Statement) This year, the Group generated **HKD 2.253 billion** in net cash from operating activities and **HKD 121 million** in net cash from investing activities; financing activities resulted in a net cash outflow of **HKD 2.281 billion** due to loan repayments and dividend payouts (including special dividends); ultimately, cash and cash equivalents increased by **HKD 92.74 million**, with an ending balance of **HKD 478 million** Consolidated Cash Flow Statement Summary (HKD thousands) | Item | FY2020 (HKD thousands) | FY2019 (HKD thousands) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | 2,252,796 | 4,538,171 | | **Net Cash from Investing Activities** | 120,739 | 149,944 | | **Net Cash Used in Financing Activities** | (2,280,792) | (4,800,272) | | **Net Increase in Cash and Cash Equivalents** | 92,743 | (112,157) | | **Cash and Cash Equivalents at End of Period** | 477,657 | 401,254 |

耀才 證 券 BRIGHT SMART SECURITIES 耀才證券金融集團有限公司 Bright Smart Securities & Commodities Group Limited (於開曼群島註冊成立之有限公司) (Incorporated in the Cayman Islands with limited liabflity) 股份代號 Stock Code: 1428 亮 麗 業 績 保 持 全 Ｎ 客 戶 支 持 YOUR TRUST OUR PRIDE 2019/20 中 期 報 告 INTERIM REPORT Contents 目錄 Corporate Information 公司資料 2 Management Discussion and Analysis 管理層討論與分析 5 Other Information 其他資料 25 Consolidated Statement of Comprehensive Income 綜合全面收益表 30 Consolidated Statement of Financial Position 綜合財務狀況表 31 Consolidated S ...