(1) 補充買賣協議 主要及關連交易 香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 佈 之 內 容 概 不 負 責，對其準確性或完整性亦不發表任何聲明，並明確表示概不對因本公佈全部或 任何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 Amuse Group Holding Limited 佰 䜣 集 團 控 股 有 限 公 司 （於開曼群島註冊成立之有限公司） （股份代號：8545） 出售物業；及 (2) 延遲寄發通函 獨立董事委員會及獨立股東之獨立財務顧問 茲 提 述 佰 悅 集 團 控 股 有 限 公 司（「 本 公 司 」）日 期 為 二 零 二 五 年 六 月 十 七 日 的 公 佈 （「該公佈」），內容有關出售該物業構成的主要及關連交易。除另有指明外，本公 佈所用詞彙與該公佈所界定者具有相同涵義。 補充買賣協議 董 事會 謹此 宣 佈， 於 二零 二五 年 八月 七 日（ 交 易 時段 後 ）， 賣 方（ 本 公 司的 間接 全 資 附 屬 公 司 ）與 買 方 訂 立 補 充 買 賣 協 議（「補 充 買 賣 協 議」） ...

[Corporate Information](index=4&type=section&id=Corporate%20Information) This chapter provides essential company information, including board members, committee compositions, key officers, auditors, registered office, and principal bankers, with Mr. Li Wai Keung serving as Chairman and CEO - This section details the company's fundamental information, including board members, committee compositions, key officers, and principal bankers, with **Mr. Li Wai Keung** holding the roles of Chairman and Chief Executive Officer[11](index=11&type=chunk)[12](index=12&type=chunk)[14](index=14&type=chunk) [Chairman's Statement](index=6&type=section&id=Chairman's%20Statement) The Group maintained profitability despite declining sales amidst challenging Hong Kong retail and F&B sectors, driven by cost control and reduced new product development - Facing dual challenges from the "northbound consumption" trend and a sluggish mainland economy, Hong Kong's retail and catering sectors experienced severe pressure, leading to conservative overall consumer sentiment[17](index=17&type=chunk) - The Group effectively mitigated inventory accumulation risks by strictly controlling costs and reducing new product development, maintaining profitability despite a decline in sales[17](index=17&type=chunk) - The operating environment is expected to remain challenging, with plans to expand into other markets, particularly Southeast Asia, to offset potential negative impacts from US tariff policies on North American sales and seek new growth drivers[18](index=18&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the Group's operational performance, financial position, significant investments, and liquidity during the reporting period [Business Review](index=7&type=section&id=Business%20Review) For the year ended March 31, 2025, all toy business segments experienced significant double-digit revenue declines due to economic pressures, while only engineering project-related agency services saw growth Revenue Performance by Business Segment (Year Ended March 31) | Business Segment | FY2025 Revenue (HKD) | FY2024 Revenue (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Sales of ODM Toys | 48,324,000 | 90,316,000 | -46.5% | | Distribution of Imported Toys and Related Products | 55,592,000 | 66,802,000 | -16.8% | | Sales of Own Licensed Toys and Related Products | 35,224,000 | 59,072,000 | -40.4% | | Agency Services for Engineering Projects | 4,000,000 | 3,000,000 | +33.3% | - Despite a significant decline in ODM toy sales revenue, its gross margin increased from **7.3%** last year to **11.6%** this year, a **58.9%** rise, reflecting a market shift towards smaller order volumes but higher profit margins[23](index=23&type=chunk) [Financial Analysis](index=8&type=section&id=Financial%20Analysis) Total revenue declined **34.7%** to **HKD 143.14 million**, resulting in a net loss of **HKD 2.11 million**, despite a slight gross margin increase and significant growth in other net income Annual Financial Performance Summary (Year Ended March 31) | Financial Metric | FY2025 (Thousand HKD) | FY2024 (Thousand HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 143,140 | 219,190 | -34.7% | | Cost of Sales | (116,143) | (181,352) | -36.0% | | Gross Profit | 26,997 | 37,838 | -28.7% | | **Gross Margin** | **18.9%** | **17.3%** | **+1.6pp** | | Other Net Income | 5,786 | 2,927 | +97.7% | | Selling Expenses | (7,977) | (6,779) | +17.7% | | Administrative Expenses | (23,103) | (27,650) | -16.4% | | (Loss)/Profit Before Tax | (1,541) | 1,530 | N/A | | **(Loss)/Profit for the Year** | **(2,111)** | **486** | **N/A** | - The significant increase in other net income was primarily due to profits from securities investments and higher bank interest income resulting from generally rising interest rates during the year[42](index=42&type=chunk)[48](index=48&type=chunk) - The rise in selling expenses was mainly attributed to marketing costs for online platforms, website development fees, and enhanced digital storefronts for direct-to-consumer sales of high-end figurines[43](index=43&type=chunk)[49](index=49&type=chunk) [Significant investments held](index=10&type=section&id=Significant%20investments%20held) The Group disclosed significant investments in Grand Amuse and DongYiQuan, while completing the sale of its 45% equity in M.I.P. International Limited - The Group holds a **30%** equity interest in Grand Amuse, a joint venture primarily engaged in the manufacturing and sale of protective products, such as medical masks, in Hong Kong and mainland China[55](index=55&type=chunk) - The Group holds a **30%** equity interest in DongYiQuan, a high-tech enterprise focused on developing and applying smart healthcare industry solutions, aligning with the Group's investment objective to leverage the potential in smart eldercare services[61](index=61&type=chunk)[62](index=62&type=chunk) - On December 2, 2024, the Group completed the disposal of its **45%** equity interest in M.I.P. International Limited for **HKD 8.55 million**, after which M.I.P. ceased to be accounted for as an associate of the company[64](index=64&type=chunk)[66](index=66&type=chunk) [Liquidity and Capital Resources](index=13&type=section&id=Liquidity%20and%20Capital%20Resources) The Group maintains a robust financial position with a low debt-to-equity ratio, stable employee numbers, and a proposed post-period property disposal to the Chairman's wholly-owned company - The debt-to-equity ratio (total loans and borrowings/total equity) was approximately **0.02 times** as of March 31, 2025, consistent with 2024, indicating a sound financial position[69](index=69&type=chunk) Employee Information | Metric | As of March 31, 2025 | As of March 31, 2024 | | :--- | :--- | :--- | | Number of Employees | 35 | 35 | | Total Staff Cost (HKD) | Approx. 16,303,000 | Approx. 15,808,000 | - The Board does not recommend the payment of a dividend for the year ended March 31, 2025[77](index=77&type=chunk) - Subsequent to the reporting period, on June 17, 2025, the company entered into an agreement to dispose of a property in Tsuen Wan, Hong Kong, for **HKD 12.7 million** to a company wholly-owned by Chairman Mr. Li Wai Keung, which constitutes a connected transaction subject to EGM approval[79](index=79&type=chunk)[80](index=80&type=chunk) [Directors and Senior Management Profile](index=15&type=section&id=Directors%20and%20Senior%20Management%20Profile) This chapter details the background information of the company's executive, non-executive, and independent non-executive directors, as well as company secretary and senior management - This section provides detailed background information on the company's executive directors, non-executive directors, independent non-executive directors, company secretary, and senior management, including their age, position, responsibilities, industry experience, educational background, and other listed company directorships[86](index=86&type=chunk)[88](index=88&type=chunk)[94](index=94&type=chunk) [Corporate Governance Report](index=21&type=section&id=Corporate%20Governance%20Report) This report outlines the Group's corporate governance framework, including board structure, committee functions, risk management, internal controls, and shareholder communication practices [The Board](index=22&type=section&id=The%20Board) The Board, comprising three executive, one non-executive, and three independent non-executive directors, oversees strategy, finance, and risk, with the Chairman also serving as CEO - The roles of Chairman and Chief Executive Officer are combined and held by **Mr. Li Wai Keung**, which the Board believes provides strong leadership for the Group, though this deviates from Corporate Governance Code Provision A.2.1, an arrangement the Board will continue to review[145](index=145&type=chunk) - The Board comprises **3** executive directors, **1** non-executive director, and **3** independent non-executive directors, with independent non-executive directors accounting for **43%** of the total Board members[137](index=137&type=chunk)[139](index=139&type=chunk) [Board's Committees](index=29&type=section&id=Board's%20Committees) The Board's committees, including Audit, Remuneration, and Nomination, are composed entirely of independent non-executive directors to ensure oversight of financial reporting, compensation, and board composition - The Audit Committee consists of **three** independent non-executive directors, chaired by **Ms. Chow Chi Ling**, whose primary responsibilities include reviewing financial information, overseeing financial reporting, risk management, and internal control systems, and held **4** meetings during the year with full attendance[163](index=163&type=chunk)[164](index=164&type=chunk)[168](index=168&type=chunk) - The Remuneration Committee comprises **three** independent non-executive directors, chaired by **Mr. Yu Pei Hang**, whose main duty is to advise the Board on remuneration policies for directors and senior management, and held **1** meeting during the year with full attendance[169](index=169&type=chunk)[170](index=170&type=chunk)[174](index=174&type=chunk) - The Nomination Committee consists of **three** independent non-executive directors, chaired by **Mr. Tung Man**, whose primary responsibilities include reviewing the Board's structure, size, and diversity, and making recommendations on director appointments or re-elections, and held **1** meeting during the year with full attendance[179](index=179&type=chunk)[180](index=180&type=chunk)[183](index=183&type=chunk) [Risk Management and Internal Control](index=33&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board is responsible for the Group's risk management and internal control systems, which were reviewed by external consultants and deemed adequate and effective for the year - The Board is directly responsible for the Group's risk management and internal control systems, which were reviewed by external independent consultants during the year and deemed adequate and effective[185](index=185&type=chunk)[188](index=188&type=chunk) - The company has adopted a whistleblowing policy to provide confidential channels for employees and relevant third parties to report any misconduct related to the Group, with the Audit Committee Chairman designated to receive such complaints[186](index=186&type=chunk)[187](index=187&type=chunk) [Shareholders' Rights](index=36&type=section&id=Shareholders'%20Rights) The company is committed to transparent investor communication and safeguarding shareholder rights, outlining procedures for convening extraordinary general meetings and shareholder inquiries - Shareholders holding **10%** or more of the company's total issued share capital, individually or collectively, have the right to request the Board in writing to convene an extraordinary general meeting[213](index=213&type=chunk) [Report of the Directors](index=39&type=section&id=Report%20of%20the%20Directors) This statutory report covers the company's principal activities, business review, compliance, financial performance, share capital changes, key customers and suppliers, director information, and related party transactions - This statutory report covers the company's principal business (investment holding), business review, compliance with laws and regulations, performance and dividends (no dividend recommended), share capital movements, major customers and suppliers, director and senior management information, and connected transactions[223](index=223&type=chunk)[226](index=226&type=chunk)[231](index=231&type=chunk) Major Customer and Supplier Concentration (Year Ended March 31, 2025) | Category | Concentration Metric | Percentage of Total (%) | | :--- | :--- | :--- | | **Customers** | Top Five Customers | 52.3% | | | Largest Customer | 34.4% | | **Suppliers** | Top Five Suppliers | 80.3% | | | Largest Supplier | 27.3% | - Chairman and Executive Director Mr. Li Wai Keung holds **204,640,000** shares, representing **17.16%** of the issued share capital, through his wholly-owned company, Infinite Force Holdings Ltd[288](index=288&type=chunk) [Independent Auditor's Report](index=51&type=section&id=Independent%20Auditor's%20Report) The independent auditor, ZHONGZHENG TIANHENG CPA Limited, issued an unmodified opinion on the consolidated financial statements, highlighting key audit matters related to revenue recognition and trade receivables impairment - The auditor, ZHONGZHENG TIANHENG CPA Limited, issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2025, affirming that the statements present a true and fair view of the Group's financial position, performance, and cash flows[316](index=316&type=chunk) - Key audit matters include: - **Timing of Revenue Recognition from Product Sales**: Due to varying terms across sales contracts, there is a risk of misstatement, and revenue is a key performance indicator, potentially subject to manipulation to meet targets[323](index=323&type=chunk)[331](index=331&type=chunk) - **Impairment Assessment of Trade Receivables**: Determining lifetime expected credit losses involves significant management judgment, and trade receivables are material to the financial statements[334](index=334&type=chunk)[341](index=341&type=chunk) [Consolidated Financial Statements](index=60&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's comprehensive financial statements, including the statement of profit or loss, financial position, changes in equity, cash flows, and detailed explanatory notes [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=60&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended March 31, 2025, the Group reported a **34.7%** revenue decrease to **HKD 143.14 million**, resulting in a net loss of **HKD 2.11 million** and a basic loss per share of **HKD 0.0018** Consolidated Statement of Profit or Loss Summary (Year Ended March 31) | Item | FY2025 (Thousand HKD) | FY2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 143,140 | 219,190 | | Gross Profit | 26,997 | 37,838 | | Operating (Loss)/Profit | (1,224) | 1,898 | | (Loss)/Profit Before Tax | (1,541) | 1,530 | | **(Loss)/Profit for the Year** | **(2,111)** | **486** | | **Basic (Loss)/Earnings Per Share (HK Cents)** | **(0.18)** | **0.04** | [Consolidated Statement of Financial Position](index=61&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2025, the Group's total assets stood at **HKD 230.13 million**, with total liabilities of **HKD 35.64 million**, resulting in total equity of **HKD 194.49 million** Consolidated Statement of Financial Position Summary (As of March 31) | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Non-current Assets | 26,049 | 43,845 | | Current Assets | 204,078 | 178,036 | | **Total Assets** | **230,127** | **221,881** | | Current Liabilities | 34,670 | 25,225 | | Non-current Liabilities | 968 | 56 | | **Total Liabilities** | **35,638** | **25,281** | | **Net Assets (Total Equity)** | **194,489** | **196,600** | [Consolidated Statement of Changes in Equity](index=63&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) As of March 31, 2025, the Group's total equity decreased from **HKD 196.60 million** to **HKD 194.49 million**, primarily due to the net loss incurred during the year Total Equity Movement (Year Ended March 31) | Item | Amount (Thousand HKD) | | :--- | :--- | | Balance as of April 1, 2024 | 196,600 | | Loss and Total Comprehensive Expense for the Year | (2,111) | | **Balance as of March 31, 2025** | **194,489** | [Consolidated Statement of Cash Flows](index=64&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) The Group generated **HKD 12.40 million** in net cash from operating activities and **HKD 20.80 million** from investing activities, leading to a year-end cash and cash equivalents balance of **HKD 53.12 million** Consolidated Statement of Cash Flows Summary (Year Ended March 31) | Item | FY2025 (Thousand HKD) | FY2024 (Thousand HKD) | | :--- | :--- | :--- | | Net Cash From/(Used in) Operating Activities | 12,396 | (28,146) | | Net Cash From/(Used in) Investing Activities | 20,796 | (60,565) | | Net Cash Used in Financing Activities | (3,584) | (4,270) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 29,608 | (92,981) | | **Cash and Cash Equivalents at Year-End** | **53,122** | **23,514** | [Notes to the Consolidated Financial Statements](index=65&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides comprehensive supplementary information to the consolidated financial statements, detailing accounting policies, critical estimates, segment information, and financial risk management [Particulars of Properties](index=161&type=section&id=Particulars%20of%20Properties) This chapter lists the Group's two wholly-owned properties in Tsuen Wan, Hong Kong, utilized as a director's dormitory and a warehouse - This section details the Group's two wholly-owned properties, both located in Tsuen Wan, Hong Kong, with one used as a director's dormitory and the other as a warehouse[825](index=825&type=chunk) [Financial Summary](index=162&type=section&id=Financial%20Summary) This section provides a five-year financial performance overview, including revenue, gross profit, profit/loss for the year, and net assets Five-Year Financial Performance Summary | Item (Thousand HKD) | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 143,140 | 219,190 | 235,963 | 216,485 | 211,467 | | Gross Profit | 26,997 | 37,838 | 45,736 | 34,873 | 37,964 | | (Loss)/Profit for the Year | (2,111) | 486 | 5,762 | 1,481 | 8,677 | | Net Assets | 194,489 | 196,600 | 196,114 | 180,352 | 178,871 |

[Financial Performance](index=2&type=section&id=Financial%20Performance) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In FY2025, the company turned from profit to a net loss of HKD 2.111 million, compared to a profit of HKD 0.486 million in the prior year, primarily due to a 34.7% year-over-year revenue decline from HKD 219.19 million to HKD 143.14 million Key Profit and Loss Data Comparison FY2024-2025 | Metric | FY2025 (HKD thousands) | FY2024 (HKD thousands) | Year-over-year Change | | :--- | :--- | :--- | :--- | | **Revenue** | 143,140 | 219,190 | -34.7% | | **Gross Profit** | 26,997 | 37,838 | -28.7% | | **Loss/Profit Before Tax** | (1,541) | 1,530 | Turned from Profit to Loss | | **Loss/Profit for the Year** | (2,111) | 486 | Turned from Profit to Loss | | **Basic Loss/Earnings Per Share (HK cents)** | (0.18) | 0.04 | Turned from Profit to Loss | [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2025, total assets slightly increased to HKD 230.1 million from HKD 221.8 million, while total equity marginally decreased from HKD 197 million to HKD 194 million, with net current assets improving from HKD 153 million to HKD 169 million Asset and Liability Position Comparison as of March 31, 2024-2025 | Metric | March 31, 2025 (HKD thousands) | March 31, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | **Non-current Assets** | 26,049 | 43,845 | -40.6% | | **Current Assets** | 204,078 | 178,036 | +14.6% | | **Total Assets** | 230,127 | 221,881 | +3.7% | | **Current Liabilities** | 34,670 | 25,225 | +37.4% | | **Net Current Assets** | 169,408 | 152,811 | +10.9% | | **Total Equity** | 194,489 | 196,600 | -1.1% | [Notes to the Financial Statements](index=5&type=section&id=Notes%20to%20the%20Financial%20Statements) [General Information and Accounting Policies](index=5&type=section&id=General%20Information%20and%20Accounting%20Policies) Baiyue Group Holdings Limited, an investment holding company listed on GEM, primarily engages in designing, marketing, distributing, and retailing toys and related products, with its financial statements prepared under HKFRS, and new standards having no significant impact - The company is an investment holding company, with core businesses in designing, marketing, distributing, and retailing toys and related products, and providing agency services[8](index=8&type=chunk) - Financial statements adhere to Hong Kong Financial Reporting Standards, with newly adopted accounting standards having no material impact on this year's financial results[9](index=9&type=chunk)[10](index=10&type=chunk) [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) Total revenue for FY2025 significantly decreased by 34.7% to HKD 143.1 million, with all toy business segments experiencing declines, particularly ODM toy sales and self-owned licensed toy sales, and a nearly halved revenue from Japan Revenue Breakdown by Business Line (HKD thousands) | Business Line | FY2025 | FY2024 | Year-over-year Change | | :--- | :--- | :--- | :--- | | Sales of ODM Toys | 48,324 | 90,316 | -46.5% | | Distribution of Imported Toys and Related Products | 55,592 | 66,802 | -16.8% | | Sales of Self-owned Licensed Toys and Related Products | 35,224 | 59,072 | -40.4% | | Revenue from Engineering Project Related Agency Services | 4,000 | 3,000 | +33.3% | | **Total** | **143,140** | **219,190** | **-34.7%** | Revenue Breakdown by External Customers by Region (HKD thousands) | Region | FY2025 | FY2024 | Year-over-year Change | | :--- | :--- | :--- | :--- | | Japan | 51,296 | 96,745 | -47.0% | | Mainland China | 43,569 | 40,823 | +6.7% | | Hong Kong | 20,858 | 31,090 | -32.9% | | United States | 8,272 | 24,266 | -65.9% | | Others | 19,145 | 26,266 | -27.1% | | **Total** | **143,140** | **219,190** | **-34.7%** | - Revenue from the largest customer A decreased by **48%** year-over-year from **HKD 94.68 million** to **HKD 49.25 million**, indicating high reliance risk on key customers[20](index=20&type=chunk) [Notes on Key Financial Items](index=9&type=section&id=Notes%20on%20Key%20Financial%20Items) This chapter details key items from the profit and loss statement and balance sheet, noting a significant increase in other income due to higher bank interest and investment gains, reduced income tax expense due to lower profit, no dividends recommended for two consecutive years, a substantial decrease in trade receivables consistent with revenue decline, and a notable increase in trade deposits within prepayments [Other Income and Gains](index=9&type=section&id=Other%20Income%20and%20Gains) Other income and gains significantly increased by 97.7% to HKD 5.786 million, primarily driven by higher bank interest income and gains from the disposal of financial assets - Other income and gains increased by **97.7%** year-over-year, primarily driven by increased bank interest income and gains from the disposal of financial assets[20](index=20&type=chunk) [Dividends](index=11&type=section&id=Dividends) The Board of Directors did not recommend a dividend for the years ended March 31, 2025, and 2024 - The company did not recommend dividends for two consecutive financial years[24](index=24&type=chunk) [Earnings/(Loss) Per Share](index=11&type=section&id=Earnings%2F%28Loss%29%20Per%20Share) Basic loss per share was HKD 0.18 cents, a shift from a profit of HKD 0.04 cents in the prior year, with diluted loss per share being consistent due to no potential dilutive shares Basic Loss/Earnings Per Share Calculation | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Loss/Profit attributable to owners of the Company (HKD thousands) | (2,111) | 486 | | Weighted average number of ordinary shares | 1,192,307,692 | 1,192,307,692 | | **Basic Loss/Earnings Per Share (HK cents)** | **(0.18)** | **0.04** | [Trade Receivables](index=12&type=section&id=Trade%20Receivables) Net trade receivables significantly decreased by 51.2% to HKD 10.674 million, consistent with the decline in revenue, with a notable portion of receivables over 61 days - Net trade receivables significantly decreased by **51.2%** year-over-year to **HKD 10.674 million**[27](index=27&type=chunk) [Prepayments, Deposits and Other Receivables](index=13&type=section&id=Prepayments%2C%20Deposits%20and%20Other%20Receivables) The total amount for this item increased from HKD 45.625 million to HKD 60.496 million, primarily due to a substantial increase in trade deposits - Trade deposits significantly increased from **HKD 35.361 million** to **HKD 48.023 million**, being the primary driver for the increase in this item[31](index=31&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=15&type=section&id=Business%20Review) All core toy business segments faced significant challenges and revenue declines this year, with only the new engineering project agency services business showing growth [Sales of ODM Toys](index=15&type=section&id=Sales%20of%20ODM%20Toys) ODM toy sales revenue sharply declined by 46.5% to HKD 48.32 million, primarily due to economic pressures in the Japanese market, despite an improved gross profit margin - Revenue decreased by approximately **46.5%** to **HKD 48.324 million**, primarily due to a weak Japanese market[38](index=38&type=chunk) - Gross profit margin increased from **7.3%** to **11.6%**, driven by a shift towards small-batch, high-margin products[38](index=38&type=chunk) [Distribution of Imported Toys](index=15&type=section&id=Distribution%20of%20Imported%20Toys) Revenue from the largest distribution business segment fell by 16.8% to HKD 55.59 million, attributed to economic uncertainty, inflation, and market saturation in collectible action figures - Revenue decreased by **16.8%** to **HKD 55.592 million**[39](index=39&type=chunk) - The revenue decline is attributed to economic uncertainty, inflation, and a highly saturated collectibles market[39](index=39&type=chunk) [Sales of Self-owned Licensed Toys](index=15&type=section&id=Sales%20of%20Self-owned%20Licensed%20Toys) Sales of self-owned licensed toys, including "SENTINEL/千值练," significantly decreased by 40.4% to HKD 35.22 million, impacted by inflation, stagnant wages, and increased costs from global supply chain issues - Revenue significantly decreased by **40.4%** to **HKD 35.224 million**[40](index=40&type=chunk) - The revenue decline is attributed to inflation, stagnant wages, and increased costs due to supply chain disruptions[41](index=41&type=chunk) [Engineering Project Agency Services](index=16&type=section&id=Engineering%20Project%20Agency%20Services) This new business segment, launched in 2022, generated HKD 4 million in revenue, a 33.3% increase from HKD 3 million last year, making it the only growing business segment - Revenue from this new business increased from **HKD 3 million** to **HKD 4 million**, achieving year-over-year growth[42](index=42&type=chunk) [Financial Analysis](index=16&type=section&id=Financial%20Analysis) The Group's overall financial performance was poor this year, with revenue down 34.7% and gross profit down 28.7%, resulting in a shift from profit to loss, despite controlled cost of sales and administrative expenses - Revenue decreased by **34.7%** year-over-year, primarily due to significant sales declines across all toy business segments[43](index=43&type=chunk) - Gross profit decreased by **28.7%** year-over-year, but gross profit margin increased from **17.3%** to **18.9%**[45](index=45&type=chunk) - Selling expenses increased by **17.7%** year-over-year, mainly due to increased marketing and development costs for online platforms[47](index=47&type=chunk) - Administrative expenses decreased by **16.4%** year-over-year to **HKD 23.103 million**[49](index=49&type=chunk) [Significant Investments and Financial Position](index=18&type=section&id=Significant%20Investments%20and%20Financial%20Position) The Group holds significant investments in Kangbai (30%) and Dongyiquan (30%), completed the disposal of Wanpu International, maintains a very low debt-to-asset ratio of 0.02, and faces unhedged foreign exchange risks from USD and JPY - Holds a **30%** equity interest in Kangbai, a joint venture engaged in protective products, and a **30%** equity interest in Dongyiquan, engaged in smart healthcare[53](index=53&type=chunk)[55](index=55&type=chunk) - Completed the disposal of its **45%** equity interest in Wanpu International Limited, an IT solutions provider, on December 2, 2024[57](index=57&type=chunk)[58](index=58&type=chunk) - The debt-to-asset ratio remains at a low level of approximately **0.02 times**, indicating a sound and stable financial position[59](index=59&type=chunk) - The Group faces foreign exchange risks from USD and JPY but currently does not engage in hedging[60](index=60&type=chunk) [Other Disclosures](index=20&type=section&id=Other%20Disclosures) [Employee and Dividend Information](index=20&type=section&id=Employee%20and%20Dividend%20Information) As of March 31, 2025, the Group maintained 35 employees in Hong Kong, with total staff costs, including directors' emoluments, slightly increasing to approximately HKD 16.3 million, and no dividend recommended - The number of employees is **35**, consistent with the prior year; total staff costs are approximately **HKD 16.303 million**[62](index=62&type=chunk) - The Board of Directors did not recommend a dividend for the year ended March 31, 2025[63](index=63&type=chunk) [Events After the Reporting Period](index=20&type=section&id=Events%20After%20the%20Reporting%20Period) Post-reporting period, the company plans to sell a property in Tsuen Wan, Hong Kong, for HKD 12.7 million to its Chairman and CEO, Mr. Li Wai Keung, a connected transaction subject to EGM approval - The company intends to sell a property to Mr. Li Wai Keung, Chairman and Executive Director, for a total consideration of **HKD 12.7 million**[65](index=65&type=chunk) - This disposal constitutes a connected transaction for the company, subject to approval at an extraordinary general meeting, and may not proceed[66](index=66&type=chunk) [Corporate Governance](index=21&type=section&id=Corporate%20Governance) The company is committed to maintaining high corporate governance standards, adhering to the GEM Listing Rules, with its Audit Committee, composed of three independent non-executive directors, having reviewed the annual results - The company has applied and complied with the code provisions of the Corporate Governance Report as set out in Appendix 15 to the GEM Listing Rules[68](index=68&type=chunk) - The Audit Committee, comprising three independent non-executive directors, has reviewed the draft consolidated annual results[70](index=70&type=chunk)

Company Overview - Baiyue Group Holdings Limited is a Hong Kong toy company engaged in the design, marketing, distribution, and retail of toys and related products [2] - The company's product portfolio includes high-end and mass-market models based on popular ACG characters owned by third parties, as well as related products like pens and hair ties [2] - Revenue sources include ODM toys manufactured according to specific customer requirements, imported toys procured by foreign licensees, and self-developed licensed toys based on multiple entertainment and toy brand licenses from the United States [2] Financial Performance - As of September 30, 2024, Baiyue Group reported total revenue of 53.23 million yuan, a year-on-year decrease of 42.86% [1] - The net profit attributable to the parent company was 1.3851 million yuan, showing a significant year-on-year increase of 346.95% [1] - The gross profit margin stood at 19.42%, and the debt-to-asset ratio was 15.8% [1] Market Position and Valuation - Baiyue Group's price-to-earnings (P/E) ratio is 16.23, ranking 32nd in the household appliances and supplies industry, where the average P/E ratio is 14.11 [1] - The industry median P/E ratio is 3.8, with other companies in the sector showing significantly lower P/E ratios, such as Lian International at 1.54 and Kaifushan Group Holdings at 1.61 [1] Upcoming Events - The company is scheduled to disclose its fiscal year 2024 annual report on June 27, 2025 [2]

Company Overview - Baiyue Group Holdings Limited is a Hong Kong toy company engaged in the design, marketing, distribution, and retail of toys and related products [2] - The company's product portfolio includes high-end and mass-market models based on popular ACG characters owned by third parties, as well as related products like pens and hair ties [2] - Revenue sources include ODM toys manufactured according to specific customer requirements, imported toys procured by foreign licensees, and self-developed licensed toys based on multiple entertainment and toy brands from the United States [2] Financial Performance - As of September 30, 2024, Baiyue Group reported total revenue of 53.23 million HKD, a year-on-year decrease of 42.86% [1] - The net profit attributable to the parent company was 1.3851 million HKD, showing a significant year-on-year increase of 346.95% [1] - The gross profit margin stood at 19.42%, and the debt-to-asset ratio was 15.8% [1] Market Position and Valuation - Baiyue Group's price-to-earnings (P/E) ratio is 16.69, ranking 32nd in the household appliances and supplies industry, which has an average P/E ratio of 13.64 [1] - The industry median P/E ratio is 3.61, with other companies in the sector showing significantly lower P/E ratios, such as Kaifushan Group Holdings at 1.58 and Lianian International at 1.63 [1]

Financial Performance - The unaudited condensed consolidated results for the six months ended September 30, 2024, have been announced, with comparative figures for the same period in 2023[9]. - Revenue for the six months ended September 30, 2024, was HK$59,027,000, a decrease from HK$103,294,000 in the same period last year, representing a decline of approximately 42.8%[10]. - Gross profit for the same period was HK$11,461,000, down from HK$18,041,000, indicating a decrease of about 36.5%[10]. - The company reported a profit of HK$1,536,000 for the period, with a profit per share of HK$0.13[10]. - The consolidated profit before taxation for the six months ended September 30, 2024, was HK$2,290,000, compared to a loss of HK$ (428,000) in 2023, indicating a recovery in profitability[45]. - Other income for the period was HK$2,480,000, compared to a loss of HK$ (534,000) in the previous year, showing a positive turnaround[45]. - The Group's revenue decreased by approximately 42.9% to approximately HK$59,027,000 for the Period from approximately HK$103,294,000 for the Corresponding Period[113]. - Gross profit decreased by approximately 36.5% to approximately HK$11,461,000 for the Period from approximately HK$18,041,000 for the Corresponding Period, with a gross profit margin increase to 19.4%[114]. Cash Flow and Assets - Net cash generated from operating activities was HK$16,606,000, compared to a cash outflow of HK$10,349,000 in the previous year, showing a significant turnaround[16]. - Cash and cash equivalents at the end of the period increased to HK$89,707,000 from HK$23,514,000 at the beginning of the period, marking a substantial increase[16]. - Total assets as of September 30, 2024, were HK$198,725,000, slightly up from HK$196,656,000 as of March 31, 2024[11]. - The net current assets stood at HK$157,895,000, compared to HK$152,811,000 as of March 31, 2024, reflecting a positive trend[11]. - Cash at bank and on hand increased to HK$119,433,000 as of September 30, 2024, compared to HK$102,696,000 as of March 31, 2024[94]. - Bank deposits with maturities over three months rose to HK$89,707,000 as of September 30, 2024, from HK$23,514,000 as of March 31, 2024[94]. Expenses - The company incurred selling expenses of HK$10,223,000 and administrative expenses of HK$12,727,000 during the period[10]. - Selling expenses decreased sharply by approximately 44.0% to approximately HK$2,386,000 for the Period from approximately HK$4,260,000 for the Corresponding Period[121]. - Administrative expenses decreased by approximately 19.7% to approximately HK$10,223,000 from approximately HK$12,727,000 in the corresponding period[122]. - Staff costs, including directors' remuneration, totaled HK$6,510,000 for the period, down from HK$7,980,000 in the previous year, representing a reduction of approximately 18.4%[54]. Shareholder Information - As of September 30, 2024, the Company’s issued ordinary share capital was HK$11,923,077, divided into 1,192,307,692 shares[143]. - Mr. Li Wai Keung holds 204,640,000 shares, representing 17.16% of the Company’s issued share capital[142]. - Ms. Fong Wing Yan, as the spouse of Mr. Li, also holds 204,640,000 shares, equating to 17.16% of the issued share capital[148]. - Ms. Lam Hoi Yan is a beneficial owner of 65,000,000 shares, which is 5.45% of the issued share capital[148]. Corporate Governance - The Audit Committee reviewed the unaudited condensed consolidated financial statements for the six months ended 30 September 2024, confirming compliance with applicable accounting standards and GEM Listing Rules[156]. - The Company has complied with the Corporate Governance Code during the period, except for a deviation regarding the roles of the chairman and CEO[154]. - The Board composition includes Mr. Li Wai Keung as Chairman and Executive Director, with other executive and non-executive directors listed[158]. - The Company has not reported any conflicts of interest among its directors during the period[151]. Market and Operational Insights - The Group's principal activities include design, marketing, distribution, and retail sales of toys and related products, as well as providing agency services[32][35]. - The Group plans to expand its network beyond the ACG figure toys market to diversify income sources and enhance shareholder value[136]. - The Group's financial performance may be significantly impacted by the failure to obtain new orders[134]. - Ineffective quality control over suppliers and products could adversely affect the Group's business operations[135].

Financial Performance - For the six months ended September 30, 2024, the company reported revenue of HKD 59,027 thousand, an increase from HKD 47,566 thousand in the same period last year, representing a growth of approximately 24%[4] - The gross profit for the same period was HKD 11,461 thousand, down from HKD 18,041 thousand, indicating a decline of about 36%[4] - The company recorded a net profit of HKD 1,536 thousand for the period, compared to a loss of HKD 622 thousand in the previous year, marking a significant turnaround[4] - Basic and diluted earnings per share were HKD 0.13, compared to a loss per share of HKD 0.05 in the prior year[4] - The group reported a total revenue of HKD 59,027,000 for the six months ended September 30, 2024, compared to HKD 103,294,000 for the same period in 2023, reflecting a decrease of approximately 42.9%[18] - Revenue from ODM toy sales to licensed holders was HKD 27,789,000 for the six months ended September 30, 2024, down from HKD 51,738,000 in the same period last year, representing a decline of about 46.3%[18] - Revenue from self-branded licensed toys was HKD 9,588,000 for the six months ended September 30, 2024, compared to HKD 16,285,000 in the previous year, indicating a decrease of approximately 41.2%[18] - The group’s gross profit decreased by approximately 36.5% to about HKD 11,461,000, with a gross profit margin increasing from approximately 17.5% to 19.4%[59] Assets and Liabilities - Total assets as of September 30, 2024, were HKD 198,725 thousand, slightly up from HKD 196,656 thousand as of March 31, 2024[5] - The company’s total liabilities increased to HKD 36,578 thousand from HKD 25,225 thousand, representing a rise of approximately 45%[5] - As of September 30, 2024, total equity decreased to HKD 195,492 thousand from HKD 196,114 thousand as of April 1, 2023, reflecting a loss of HKD 622 thousand during the period[8] - The group’s total current assets, excluding financial instruments, amounted to HKD 17,263,000 as of September 30, 2024, compared to HKD 18,213,000 in the previous year[21] - Trade receivables decreased to HKD 11,647 thousand from HKD 21,892 thousand, indicating a reduction of about 47%[5] - The company’s retained earnings decreased to HKD 108,372 thousand from HKD 108,994 thousand, indicating a reduction in accumulated profits[8] Cash Flow - Net cash generated from operating activities was HKD 16,606 thousand, a significant improvement compared to a net cash outflow of HKD 10,349 thousand in the same period last year[9] - Cash and cash equivalents increased to HKD 89,707 thousand at the end of the period, up from HKD 23,514 thousand at the beginning of the period[9] - The company reported a net cash inflow from investing activities of HKD 51,377 thousand, compared to HKD 15,803 thousand in the previous year[9] - Interest income received during the period was HKD 1,984 thousand, an increase from HKD 830 thousand in the same period last year[9] Business Strategy and Operations - The company plans to continue focusing on market expansion and new product development to drive future growth[4] - The company continues to focus on its core business of designing, marketing, distributing, and retailing toys and related products[10] - The group is currently evaluating the impact of newly issued but not yet effective Hong Kong Financial Reporting Standards on its financial statements[16] - The group aims to leverage its advantages, particularly its diverse high-end toy product range, to achieve further business breakthroughs in the future[74] Governance and Compliance - The company’s board has approved the financial results after reasonable inquiries, ensuring the accuracy and completeness of the information provided[2] - The financial report indicates that the company is adhering to the same accounting policies as in the previous fiscal year, with no significant changes expected[12] - The board believes that the dual role of the chairman and CEO is beneficial for the management and business development of the group[85] - The audit committee has reviewed the unaudited condensed consolidated financial statements and believes they comply with applicable accounting standards and GEM listing rules[86] - The company has adhered to the corporate governance code and has not encountered any non-compliance issues during the reporting period[85] Employee and Customer Information - The group employed 33 employees in Hong Kong as of September 30, 2024, down from 35 employees on March 31, 2024[70] - Major customer A generated revenue of HKD 28,298 million for the six months ended September 30, 2024, down from HKD 53,712 million in the same period in 2023[25] - The group’s top five customers accounted for approximately 60% of total revenue, a slight decrease from 62% in the same period last year[18] Share Capital and Dividends - As of September 30, 2024, the issued share capital of the company is HKD 11,923,077, divided into 1,192,307,692 shares[77] - The board does not recommend the payment of an interim dividend for the period, consistent with the previous year[71] - The company has not declared or paid any dividends as of September 30, 2024, and September 30, 2023[51]

[Corporate Information](index=4&type=section&id=Corporate%20Information) This section details key corporate information, including board members, committees, and advisors, noting significant board composition changes - The report details key corporate information including the board of directors, committee structures, principal bankers (Hang Seng Bank), auditors (Privatco CPA Limited), and legal advisors[48](index=48&type=chunk)[49](index=49&type=chunk) - Multiple changes occurred in board membership during the reporting period, including the retirement of Non-executive Directors Mr. Li Ming Yeung and Mr. Ngai Ching on August 11, 2023, and the resignation and appointment of several Independent Non-executive Directors[48](index=48&type=chunk) [Chairman's Statement](index=6&type=section&id=Chairman%27s%20Statement) The Chairman acknowledges economic challenges, affirms stable performance, and outlines strategic adjustments for future growth - The Chairman acknowledges the Group faced significant economic difficulties during a challenging period, particularly impacted by the COVID-19 pandemic, but affirmed stable performance was maintained under these circumstances[26](index=26&type=chunk)[53](index=53&type=chunk) - Facing a severe economic climate, the Group is actively adjusting its business strategies, exploring new development opportunities, maintaining prudent operations, and optimizing internal management to enhance efficiency and reduce costs for sustainable development[27](index=27&type=chunk)[54](index=54&type=chunk) - The Group will continue to focus on its core businesses, advance diversified layouts, and believes that agile and flexible development strategies will enable it to turn crises into opportunities, enhancing competitiveness and risk resilience[30](index=30&type=chunk)[52](index=52&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's business performance, financial results, investments, and liquidity position [Business Review](index=7&type=section&id=Business%20Review) The Group primarily designs, markets, distributes, and retails toys, with proprietary licensed toy sales growing despite ODM decline, and is diversifying into smart healthcare and IT solutions Revenue Performance by Business Segment (Year Ended March 31) | Business Segment | FY2024 Revenue (HKD) | FY2023 Revenue (HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales of ODM Toys | 90,316,000 | 114,835,000 | -21.4% | | Distribution of Imported Toys and Related Products | 66,802,000 | 68,645,000 | -2.7% | | Sales of Proprietary Licensed Toys and Related Products | 59,072,000 | 49,099,000 | +20.3% | | Agency Services for Engineering Projects | 3,000,000 | 3,384,000 | -11.3% | - While ODM toy sales decreased, they remain the largest portion of sales, with gross profit margin declining from **7.8% to 7.3%** primarily due to increased production costs from Chinese suppliers passed on to the Group[32](index=32&type=chunk) - The Group developed licensed toys using proprietary brands like 'SENTINEL/千值练', 'TOPI', and 'FLAME TOYS', with the delivery of a series of popular high-end robot figures driving significant revenue growth in this segment[32](index=32&type=chunk) [Financial Analysis](index=8&type=section&id=Financial%20Analysis) The Group's total revenue decreased by **7.1%** to **HKD 219.19 million**, impacting gross profit and margin, though net other income significantly increased Financial Performance Summary (Year Ended March 31) | Financial Metric | FY2024 (HKD) | FY2023 (HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 219,190,000 | 235,963,000 | -7.1% | | Cost of Sales | 181,352,000 | 190,227,000 | -4.7% | | Gross Profit | 37,838,000 | 45,736,000 | -17.3% | | Gross Profit Margin | 17.3% | 19.4% | -2.1pp | | Net Other Income | 1,837,000 | 651,000 | +182.2% | | Selling Expenses | 6,779,000 | 9,187,000 | -26.2% | | Administrative Expenses | 26,560,000 | 27,993,000 | -5.1% | | Finance Costs | 368,000 | 234,000 | +57.3% | | Income Tax Expense | 1,044,000 | 1,861,000 | -43.9% | - Net other income significantly increased by **182.2%**, primarily due to reduced foreign exchange losses from a slower appreciation of the US dollar and increased bank interest income from generally rising interest rates[59](index=59&type=chunk)[36](index=36&type=chunk)[91](index=91&type=chunk) - Selling expenses decreased by **26.2%**, mainly due to reduced expenditures on traditional marketing channels during the year[37](index=37&type=chunk)[60](index=60&type=chunk) [Significant Investments and Future Plans](index=10&type=section&id=Significant%20Investments%20and%20Future%20Plans) The Group disclosed no new significant investments this year, focusing on existing joint ventures in protective products, smart healthcare, and IT solutions for diversification and growth - The Group holds a **30%** equity interest in Grand Amuse Limited, a joint venture primarily engaged in the manufacturing and sale of protective products such as medical masks[68](index=68&type=chunk) - The Group holds a **30%** equity interest in DongYiQuan Network Technology Co., Ltd., which focuses on smart healthcare industry solutions, aiming to capitalize on the growth potential in smart eldercare services[45](index=45&type=chunk) - The Group acquired a **45%** equity interest in M.I.P. International Limited, which provides IT solutions to hotels, property developers, and the government in Hong Kong[97](index=97&type=chunk) [Liquidity, Financial Resources and Other Information](index=13&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Other%20Information) The Group maintains a sound financial position with a low debt-to-equity ratio and sufficient liquidity, with **35** employees, no dividend proposed, and no significant post-reporting events - The debt-to-equity ratio (total loans and borrowings/total equity) remained stable at approximately **0.02x**, indicating a sound and robust financial position[98](index=98&type=chunk) - As of March 31, 2024, the Group had **35** employees in Hong Kong, with total annual staff costs (including directors' emoluments) of approximately **HKD 15,808,000**, a decrease from **HKD 17,266,000** last year[98](index=98&type=chunk) - The Board of Directors does not recommend the payment of a dividend for the year ended March 31, 2024 (2023: Nil)[72](index=72&type=chunk)[99](index=99&type=chunk) - At the end of the reporting period, the Group had no significant contingent liabilities, and no material events occurred subsequent to the reporting period[73](index=73&type=chunk)[100](index=100&type=chunk) [Directors and Senior Management Profile](index=15&type=section&id=Directors%20and%20Senior%20Management%20Profile) This section provides biographical details and key responsibilities of the Group's executive, non-executive, and independent non-executive directors [Executive Directors](index=15&type=section&id=Executive%20Directors) The executive director team, led by Chairman and CEO Mr. Li Wai Keung, oversees business development, strategic planning, finance, and daily operations - Mr. Li Wai Keung, Group founder, serves as Chairman and Chief Executive Officer, possessing over **18** years of experience in the ACG toy industry[75](index=75&type=chunk)[103](index=103&type=chunk) - Mr. To Hoi Bun, Executive Director and Company Secretary, has over **23** years of experience in accounting and financial management[76](index=76&type=chunk)[104](index=104&type=chunk) - Ms. Li Kwai Fong, Executive Director and General Manager, joined the Group in 2006 and is primarily responsible for managing its general operations[81](index=81&type=chunk)[83](index=83&type=chunk) [Non-executive Directors](index=16&type=section&id=Non-executive%20Directors) Non-executive directors provide external perspectives and expertise to the Board, with Mr. Chu Wai Tak possessing extensive operational management experience, and two members retired during the period - Mr. Chu Wai Tak, appointed as a Non-executive Director in December 2021, has extensive experience in the operational management of biotechnology companies[81](index=81&type=chunk)[109](index=109&type=chunk) - Mr. Li Ming Yeung and Mr. Ngai Ching retired as Non-executive Directors on August 11, 2023[139](index=139&type=chunk)[113](index=113&type=chunk) [Independent Non-executive Directors](index=18&type=section&id=Independent%20Non-executive%20Directors) Independent non-executive directors provide independent judgment on company strategy, performance, and risk management, with diverse backgrounds ensuring board diversity and effective oversight, noting membership changes - Mr. Yu Pui Hang, Chairman of the Remuneration Committee, is a practicing solicitor in Hong Kong with extensive experience in legal and financial fields[117](index=117&type=chunk)[145](index=145&type=chunk) - Ms. Chow Chi Ling, Chairman of the Audit Committee, is a practicing accountant with over **15** years of experience in the auditing and financial management industry[149](index=149&type=chunk)[123](index=123&type=chunk) - Mr. Dong Wen was appointed as an Independent Non-executive Director on April 27, 2023, possessing over **26** years of experience in the banking and finance industry[152](index=152&type=chunk)[126](index=126&type=chunk) - Ms. Kwok Wai Ling and Mr. Cheng Pak Lam resigned as Independent Non-executive Directors on April 3, 2023, and April 27, 2023, respectively[156](index=156&type=chunk)[184](index=184&type=chunk) [Corporate Governance Report](index=22&type=section&id=Corporate%20Governance%20Report) This section details the Group's corporate governance practices, including Board structure, committees, risk management, internal controls, and shareholder relations, ensuring compliance [Board of Directors](index=23&type=section&id=Board%20of%20Directors) The Board oversees the Group's strategy, financial performance, risk management, and internal controls, adhering to governance codes, with the combined Chairman and CEO roles providing strong leadership, supported by three committees and regular meetings - The Company complied with the Corporate Governance Code, with the sole deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. Li Wai Keung, which the Board believes provides strong and consistent leadership to the Group[390](index=390&type=chunk)[365](index=365&type=chunk) - The Board has established three committees: the Audit Committee, Remuneration Committee, and Nomination Committee, to assist in fulfilling its responsibilities[368](index=368&type=chunk)[370](index=370&type=chunk) - During the reporting period, the Board held **eight** meetings, with detailed attendance records for each director provided in the report[372](index=372&type=chunk)[400](index=400&type=chunk) [Board Committees](index=30&type=section&id=Board%20Committees) The Company has three Board committees—Audit, Remuneration, and Nomination—with significant independent non-executive director involvement, overseeing financial reporting, internal controls, executive remuneration, and board nominations - The Audit Committee comprises three Independent Non-executive Directors, with Ms. Chow Chi Ling as Chairman, responsible for reviewing financial information, overseeing the financial reporting system, and internal controls[375](index=375&type=chunk)[402](index=402&type=chunk) - The Remuneration Committee consists of three Independent Non-executive Directors, chaired by Mr. Yu Pui Hang, responsible for advising the Board on remuneration policies for directors and senior management[378](index=378&type=chunk) - The Nomination Committee comprises three Independent Non-executive Directors, with Mr. Dong Wen as Chairman, responsible for reviewing the Board's structure, size, composition, and diversity, and identifying suitable director candidates[408](index=408&type=chunk)[382](index=382&type=chunk) [Risk Management and Internal Control](index=34&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board is responsible for the Group's internal control and risk management systems, deemed adequate and effective after independent review, complemented by whistleblowing and anti-corruption policies - The Board considers the Group's risk management and internal control systems to be adequate and effective for the year, with an annual review conducted by an independent external professional consultant[411](index=411&type=chunk)[441](index=441&type=chunk) - The Company has established a whistleblowing policy, providing confidential channels for employees and external parties to report any misconduct[416](index=416&type=chunk)[417](index=417&type=chunk) - The Group has formulated an anti-corruption policy prohibiting any form of corrupt practices, integrating it as part of its corporate governance framework[444](index=444&type=chunk)[445](index=445&type=chunk) [Shareholder Rights and Investor Relations](index=37&type=section&id=Shareholder%20Rights%20and%20Investor%20Relations) The Company maintains high transparency in investor relations through regular communication and timely online financial disclosures, outlining procedures for shareholder meetings and providing contact for inquiries - The Company is committed to maintaining high transparency and regularly holds meetings with institutional investors and analysts[419](index=419&type=chunk)[421](index=421&type=chunk) - The report details the procedures for shareholders holding **10%** or more of the shares to request the convening of an extraordinary general meeting[453](index=453&type=chunk)[478](index=478&type=chunk) - The Board is responsible for fulfilling corporate governance functions, including formulating and reviewing company policies, monitoring director training, and ensuring legal compliance[427](index=427&type=chunk) [Report of the Directors](index=40&type=section&id=Report%20of%20the%20Directors) This report outlines the Group's principal activities, dividend policy, major customer and supplier concentrations, and significant shareholdings, providing an overview of key operational and ownership aspects - During the reporting period, the Company's principal activity was investment holding, with its subsidiaries primarily engaged in the design, marketing, distribution, and retail of toys, and the provision of agency services[482](index=482&type=chunk) - The Board of Directors does not recommend the payment of a dividend for the year ended March 31, 2024[482](index=482&type=chunk) - For the year ended March 31, 2024, revenue from the Group's five largest customers accounted for approximately **53.8%** of total revenue, with the largest customer contributing **43.2%**; purchases from the five largest suppliers accounted for approximately **79.4%** of total purchases, with the largest supplier contributing **31.7%**[459](index=459&type=chunk)[484](index=484&type=chunk) - As of March 31, 2024, Chairman Mr. Li Wai Keung held **180,800,000** shares through his wholly-owned company, Infinite Force Holdings Ltd, representing **15.16%** of the Company's issued share capital[505](index=505&type=chunk) [Independent Auditor's Report](index=52&type=section&id=Independent%20Auditor%27s%20Report) This report presents the independent auditor's opinion on the Group's consolidated financial statements, highlighting key audit matters and confirming a true and fair view of the financial position and performance - Auditor Privatco CPA Limited issued an unmodified opinion on the Group's consolidated financial statements, affirming they present a true and fair view of the Group's financial position and performance[561](index=561&type=chunk) - A key audit matter identified was 'Timing of revenue recognition from sales of products', due to varying terms in sales contracts and revenue being a key performance indicator, posing risks of misstatement or manipulation, which the auditor addressed by examining key customer contracts and sampling transaction vouchers[563](index=563&type=chunk)[544](index=544&type=chunk)[545](index=545&type=chunk) [Consolidated Financial Statements](index=59&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's comprehensive financial statements, including profit or loss, financial position, cash flows, and detailed notes, providing a complete overview of its financial performance and health [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=59&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's profitability significantly declined this fiscal year, with reduced total revenue, gross profit, and profit attributable to equity holders, leading to lower basic earnings per share Consolidated Statement of Profit or Loss Summary (Year Ended March 31) | Item | FY2024 (HKD thousands) | FY2023 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 219,190 | 235,963 | | Gross Profit | 37,838 | 45,736 | | Profit Before Tax | 1,530 | 7,623 | | **Profit for the Year** | **486** | **5,762** | | **Basic Earnings Per Share (HK cents)** | **0.04** | **0.49** | [Consolidated Statement of Financial Position](index=60&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2024, the Group's total assets, liabilities, and net assets remained largely consistent with the prior year, with increased net current assets indicating improved short-term solvency Consolidated Statement of Financial Position Summary (As of March 31) | Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Non-current Assets | 43,845 | 57,049 | | Current Assets | 178,036 | 199,793 | | **Total Assets** | **221,881** | **256,842** | | Current Liabilities | 25,225 | 56,618 | | Non-current Liabilities | 56 | 4,110 | | **Total Liabilities** | **25,281** | **60,728** | | **Net Assets (Total Equity)** | **196,600** | **196,114** | [Consolidated Statement of Cash Flows](index=63&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) This fiscal year, the Group's cash and cash equivalents decreased, with a net cash outflow from operating activities, continuous net outflow from investing activities primarily for bank deposits, and stable financing cash outflow Consolidated Statement of Cash Flows Summary (Year Ended March 31) | Item | FY2024 (HKD thousands) | FY2023 (HKD thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | (28,146) | 10,262 | | Net Cash Used in Investing Activities | (60,565) | (42,664) | | Net Cash Used in Financing Activities | (4,270) | (2,743) | | **Net Decrease in Cash and Cash Equivalents** | **(92,981)** | **(35,145)** | | Cash and Cash Equivalents at End of Year | 23,514 | 116,495 | [Notes to the Consolidated Financial Statements](index=64&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide detailed explanations for financial statement items, covering accounting policies, segment reporting, revenue recognition, asset/liability details, related party transactions, and risk management, including revenue segmentation and risk exposure analysis Revenue from External Customers by Geographical Location (HKD thousands) | Region | FY2024 | FY2023 | | :--- | :--- | :--- | | Japan | 96,745 | 134,877 | | People's Republic of China | 40,823 | 31,144 | | Hong Kong | 31,090 | 25,300 | | United States | 24,266 | 17,180 | | Taiwan | 10,839 | 12,371 | | Others | 15,427 | 15,091 | | **Total** | **219,190** | **235,963** | - The Group's major customers are toy distributors in Japan, with the five largest customers contributing approximately **54%** of revenue for the year ended March 31, 2024 (2023: **65%**)[203](index=203&type=chunk)[221](index=221&type=chunk) - The Group is exposed to foreign currency risk, primarily involving the US dollar, Japanese Yen, and Renminbi, with the report detailing net exposures in these currencies[922](index=922&type=chunk)[939](index=939&type=chunk) [Particulars of Properties](index=161&type=section&id=Particulars%20of%20Properties) This section lists the Group's owned properties in Hong Kong, including a director's dormitory and a warehouse - The report lists two properties held by the Group in Hong Kong, one used as a director's dormitory and the other as a warehouse[1100](index=1100&type=chunk) [Financial Summary](index=162&type=section&id=Financial%20Summary) This section provides a concise overview of the Group's financial performance and position over the past five fiscal years, including key metrics like revenue, profit, and net assets Five-Year Financial Performance Summary (HKD thousands) | Fiscal Year | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 219,190 | 235,963 | 216,485 | 211,467 | 206,965 | | Profit for the Year | 486 | 5,762 | 1,481 | 8,677 | 7,450 | | Net Assets | 196,600 | 196,114 | 180,352 | 178,871 | 170,194 |

[Financial Highlights](index=2&type=section&id=Financial%20Highlights) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's total revenue decreased by 7.1% to HKD 219 million, with gross profit down 17.3% and profit attributable to owners of the Company significantly declining by 91.6% | Metric | 2024 (thousand HKD) | 2023 (thousand HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 219,190 | 235,963 | -7.1% | | Gross Profit | 37,838 | 45,736 | -17.3% | | Operating Profit | 1,898 | 7,857 | -75.8% | | Profit Before Tax | 1,530 | 7,623 | -79.9% | | Profit for the Year | 486 | 5,762 | -91.6% | | Basic Earnings Per Share (HK cents) | 0.04 | 0.49 | -91.8% | [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2024, total assets decreased to HKD 222 million, while net current assets increased and total equity remained stable, indicating a robust financial position | Metric | As of March 31, 2024 (thousand HKD) | As of March 31, 2023 (thousand HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 43,845 | 57,049 | -23.1% | | Current Assets | 178,036 | 199,793 | -10.9% | | **Total Assets** | **221,881** | **256,842** | **-13.6%** | | Current Liabilities | 25,225 | 56,618 | -55.5% | | Non-current Liabilities | 56 | 4,110 | -98.6% | | **Total Liabilities** | **25,281** | **60,728** | **-58.4%** | | **Total Equity** | **196,600** | **196,114** | **+0.2%** | [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=17&type=section&id=Business%20Review) The Group's core business performance showed divergence, with ODM toy sales declining, imported toy distribution slightly down, and self-licensed toy sales achieving strong growth - The Group is primarily engaged in the design, marketing, distribution, and retail of toys and related products, and provides agency services[50](index=50&type=chunk) Revenue by Business Segment | Business Segment | 2024 Revenue (thousand HKD) | 2023 Revenue (thousand HKD) | YoY Change | Summary | | :--- | :--- | :--- | :--- | :--- | | Sales of ODM Toys | 90,316 | 114,835 | -21.4% | Both revenue and gross margin decreased, primarily due to rising production costs from Chinese suppliers | | Distribution of Imported Toys | 66,802 | 68,645 | -2.7% | Revenue slightly decreased, with high-end robot figures as the main category | | Sales of Self-Licensed Toys | 59,072 | 49,099 | +20.3% | Revenue significantly increased due to the launch of popular high-end robot figure toys | | Engineering Project Agency Services | 3,000 | 3,384 | -11.3% | Contributed stable but small revenue | [Financial Analysis](index=18&type=section&id=Financial%20Analysis) Total revenue decreased by 7.1% to HKD 219 million, primarily due to declining ODM toy sales, leading to a 17.3% drop in gross profit and weakened overall profitability - The decrease in revenue was primarily attributable to a significant decline in sales of ODM toys[56](index=56&type=chunk) - Gross profit and gross margin decreased from approximately **HKD 45.74 million (19.4%)** last year to approximately **HKD 37.84 million (17.3%)** this year[58](index=58&type=chunk) - Net other income significantly increased by **182.2%**, primarily due to reduced exchange losses and increased bank interest income[60](index=60&type=chunk) - Selling expenses decreased by **26.2%**, mainly due to reduced expenditures on traditional marketing channels[61](index=61&type=chunk) [Investments, Capital Structure, and Risk Management](index=20&type=section&id=Investments%2C%20Capital%20Structure%2C%20and%20Risk%20Management) The Group maintains strategic investments for diversification, exhibits a robust financial position with a low gearing ratio, and manages foreign exchange risk without hedging - The Group holds three significant investments[68](index=68&type=chunk)[70](index=70&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) - **Comba Development Limited (30% equity interest)**: Engaged in the manufacturing and sales of protective products such as masks - **Dongyiquan (30% equity interest)**: Focused on developing and applying smart healthcare solutions - **Wanpu International Limited (45% equity interest)**: Provides information technology solutions including network infrastructure and system security - The gearing ratio as of March 31, 2024, was approximately **0.02 times**, consistent with the prior year, indicating a sound and robust financial position[75](index=75&type=chunk) - Portions of the Group's income and expenses are denominated in USD and JPY, exposing it to foreign exchange risk, but management currently does not employ foreign currency hedging policies[76](index=76&type=chunk) [Other Information](index=22&type=section&id=Other%20Information) As of March 31, 2024, the Group's employee count decreased, the Board did not recommend an annual dividend, and no significant post-reporting events occurred - As of March 31, 2024, the Group employed **35** staff in Hong Kong, a decrease from **40** in the prior year, with total annual staff costs approximately **HKD 15.81 million**[79](index=79&type=chunk) - The Board does not recommend the payment of a dividend for the year ended March 31, 2024[80](index=80&type=chunk) [Notes to the Financial Statements](index=5&type=section&id=Notes%20to%20the%20Financial%20Statements) [Note 4 & 5 Revenue and Segment Information](index=7&type=section&id=Note%204%20%26%205%20Revenue%20and%20Segment%20Information) Total revenue was HKD 219 million, primarily from ODM, imported, and self-licensed toys, with Japan as the largest market and Customer A contributing over 43% of revenue Revenue by Business Segment | Business Type | 2024 (thousand HKD) | 2023 (thousand HKD) | | :--- | :--- | :--- | | Sales of ODM Toys to Licensees | 90,316 | 114,835 | | Distribution of Imported Toys and Related Products | 66,802 | 68,645 | | Sales of Self-Licensed Toys and Related Products | 59,072 | 49,099 | | Revenue from Engineering Project Related Agency Services | 3,000 | 3,384 | | **Total** | **219,190** | **235,963** | Revenue from External Customers by Geographical Region | Region | 2024 (thousand HKD) | 2023 (thousand HKD) | | :--- | :--- | :--- | | Japan | 96,745 | 134,877 | | People's Republic of China | 40,823 | 31,144 | | Hong Kong | 31,090 | 25,300 | | United States of America | 24,266 | 17,180 | | Others | 26,266 | 27,462 | | **Total** | **219,190** | **235,963** | - During the year, revenue from Customer A amounted to **HKD 94,681,000**, representing **43.2%** of the Group's total revenue[31](index=31&type=chunk) [Note 9 & 10 Dividends and Earnings Per Share](index=12&type=section&id=Note%209%20%26%2010%20Dividends%20and%20Earnings%20Per%20Share) The Board did not recommend a dividend, and basic earnings per share significantly decreased to HKD 0.04 cents due to a substantial profit decline - The Directors do not recommend the payment of a dividend for the years ended March 31, 2024, and 2023[38](index=38&type=chunk) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Profit for the Year Attributable to Owners of the Company (thousand HKD) | 486 | 5,762 | | Weighted Average Number of Ordinary Shares | 1,192,307,692 | 1,174,394,099 | | Basic Earnings Per Share (HK cents) | 0.04 | 0.49 | [Note 11, 12, 13 Key Balance Sheet Items](index=13&type=section&id=Note%2011%2C%2012%2C%2013%20Key%20Balance%20Sheet%20Items) Net trade receivables increased to HKD 21.89 million, while trade payables significantly decreased to HKD 8.25 million, improving working capital - Net trade and bills receivables increased from **HKD 13.30 million** in 2023 to **HKD 21.89 million** in 2024[41](index=41&type=chunk) - Trade payables decreased from **HKD 17.15 million** in 2023 to **HKD 8.25 million** in 2024[43](index=43&type=chunk)[44](index=44&type=chunk) [Corporate Governance](index=22&type=section&id=Corporate%20Governance) [Audit Committee](index=23&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, oversees financial reporting, risk management, and internal controls, having reviewed the annual audited results - The Audit Committee comprises three independent non-executive Directors: Ms. Chow Chi Ling (Chairperson), Mr. Yu Pui Hang, and Mr. Dong Wen[87](index=87&type=chunk) - The Audit Committee has reviewed the Group's audited consolidated results for the year ended March 31, 2024[87](index=87&type=chunk) - The external auditor, Privatco CPA Limited, has concurred that the financial figures in this results announcement are consistent with the audited consolidated financial statements[88](index=88&type=chunk)

Financial Results - The unaudited consolidated results for the six months ended September 30, 2023, have been announced, with comparative figures for the same period in 2022 provided[17]. - The report includes the unaudited condensed consolidated statement of profit or loss and other comprehensive income for the period[18]. - The financial results have not been audited but have been reviewed and approved by the audit committee of the Company[17]. - Revenue for the six months ended September 30, 2023, was HK$103,294,000, a decrease of 14.5% compared to HK$120,838,000 in the same period of 2022[19]. - Gross profit increased to HK$18,041,000, up 6.5% from HK$16,940,000 year-over-year[19]. - Loss before taxation improved to HK$428,000, significantly better than the loss of HK$2,900,000 in the prior year[19]. - Total comprehensive loss for the period was HK$622,000, a reduction of 82.8% compared to HK$3,620,000 in the previous year[19]. - The interim financial report for the six months ended September 30, 2023, has been prepared in accordance with the accounting policies adopted in the Group's annual financial statements for the year ended March 31, 2023[40]. - The Group's unaudited condensed consolidated interim financial statements do not include all information required for a full set of financial statements prepared in accordance with Hong Kong Financial Reporting Standards (HKFRSs)[34]. Revenue Breakdown - Revenue from sales of ODM toys to license holders decreased to HK$51,738,000, down 30% from HK$73,990,000 year-on-year[54]. - Distribution of imported toys and related products generated revenue of HK$32,271,000, an increase of 14.5% compared to HK$28,118,000 in the previous year[54]. - Revenue from sales of own licensed toys and related products rose to HK$16,285,000, up 7.4% from HK$15,155,000 in the same period last year[54]. - The Group's five largest customers contributed approximately 62% of total revenue, down from 78% in the corresponding period last year[55]. - Overall revenue decreased by approximately 14.5% to approximately HK$103,294,000 from HK$120,838,000, primarily due to a decrease in revenue from sales of ODM toys to license holders[150]. Cash Flow and Assets - Cash and cash equivalents at the end of the period were HK$120,184,000, compared to HK$107,109,000 at the end of the same period last year, reflecting a net increase[25]. - Net cash used in operating activities was HK$10,349,000, an improvement from HK$14,560,000 in the previous year[25]. - The company reported a net cash inflow from investing activities of HK$15,803,000, contrasting with a net outflow of HK$28,724,000 in the prior year[25]. - Trade receivables increased to HK$35,477,000 from HK$13,296,000, indicating a significant rise in outstanding customer payments[20]. - Non-current assets decreased to HK$51,713,000 from HK$57,049,000, primarily due to a reduction in property, plant, and equipment[20]. - Total equity as of September 30, 2023, was HK$195,492,000, slightly down from HK$196,114,000 at the end of March 2023[20]. Operational Changes - The Company has undergone changes in its board of directors, with several appointments and resignations noted[10]. - The Group's main business activities include the design, marketing, distribution, and retail sale of toys and related products, as well as providing agency services[31]. - The Group employed 35 staff in Hong Kong as of September 30, 2023, down from 40 as of March 31, 2023[191]. Risks and Compliance - The Company is positioned on the GEM market, which is designed for small and mid-sized companies, indicating a higher investment risk compared to other listings[2]. - There is a risk of high market volatility for securities traded on GEM, and no assurance is given regarding the liquidity of these securities[2]. - The Company has a responsibility to provide information in compliance with the GEM Listing Rules[4]. - The Group faces risks such as failure to obtain new orders, ineffective quality control, and potential delays in customer payments, which could adversely affect financial performance[196]. Future Outlook - The Board aims to expand the Group's network beyond the ACG figure toys market to broaden income sources and enhance shareholder value[197]. - The Group believes it will achieve a breakthrough in business performance by leveraging its wide variety of high-end toy products[198].