易站绿色科技(08475) - 2024 - 年度业绩

Company Overview and Significant Changes This section details the company's name and presentation currency changes, along with its primary business activities Company Information and Name Change The company, registered in the Cayman Islands and listed on GEM, officially changed its name on March 8, 2024 - The company's name changed from 'K Group Holdings Limited' to 'E-STATION GREEN TECHNOLOGY GROUP CO., LIMITED', effective March 8, 2024[16] - The company's shares are listed on the GEM of The Stock Exchange of Hong Kong Limited[16] Change in Presentation Currency The company changed its presentation currency from SGD to HKD to better reflect its listing and trading status on the Stock Exchange - The company's presentation currency changed from Singapore Dollars (SGD) to Hong Kong Dollars (HKD) to more accurately reflect the Group's financial performance, with comparative figures restated[17] Principal Business Activities During the year, the Group primarily engaged in restaurant operations, ingredient sales, and food supply chain services - The Group's principal business activities during the year included restaurant operations, ingredient sales, and food supply chain services[18] Consolidated Financial Statements This section presents the consolidated financial performance and position, highlighting the shift from loss to profit and changes in liquidity Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended August 31, 2024, the Group turned from a loss to a profit, driven by a significant increase in other income and gains, despite a substantial decline in revenue Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (Thousand HKD) | Metric | 2024 | 2023 (Restated) | | :--- | :--- | :--- | | Revenue | 3,277 | 34,291 | | Other income and gains and (losses), net | 51,080 | 1,583 | | Profit/(Loss) before tax | 40,412 | (13,116) | | Profit/(Loss) for the year | 40,073 | (13,879) | | Total comprehensive income/(expense) for the year | 40,351 | (14,676) | | Profit/(Loss) for the year attributable to owners of the parent | 40,244 | (13,382) | | Earnings/(Loss) per share attributable to ordinary equity holders of the parent—basic and diluted (HKD) | 0.700 | (0.294) | Consolidated Statement of Financial Position As of August 31, 2024, the Group's net current liabilities and net liabilities decreased but remained negative, indicating ongoing liquidity pressure, while total assets less current liabilities and asset deficiency improved Consolidated Statement of Financial Position Summary (Thousand HKD) | Metric | August 31, 2024 | August 31, 2023 (Restated) | | :--- | :--- | :--- | | Non-current assets | 1,887 | 192 | | Current assets | 6,377 | 9,247 | | Current liabilities | 30,835 | 43,090 | | Net current liabilities | (24,458) | (33,843) | | Total assets less current liabilities | (22,571) | (33,651) | | Non-current liabilities | 1,189 | 15,167 | | Net liabilities | (23,760) | (48,818) | | Equity attributable to owners of the Company | (24,444) | (42,569) | | Asset deficiency | (23,760) | (48,818) | Notes to the Financial Statements This section provides detailed explanations and breakdowns of the financial statements, covering company information, accounting policies, and specific financial line items Company and Group Information This note reiterates the company's name change, presentation currency change, and the Group's principal business activities, including restaurant operations, ingredient sales, and food supply chain services - The company's name changed from 'K Group Holdings Limited' to 'E-STATION GREEN TECHNOLOGY GROUP CO., LIMITED'[16] - The presentation currency changed from Singapore Dollars to Hong Kong Dollars to enhance the relevance of financial statements[17] - The Group is principally engaged in restaurant operations, ingredient sales, and food supply chain services[18] Basis of Presentation (Going Concern) The Group faces significant uncertainties regarding net current liabilities and net liabilities, raising doubts about its ability to continue as a going concern, but management has taken measures to improve liquidity - The Group has net current liabilities of HKD 24,458,000, net liabilities of HKD 23,760,000, and cash and bank balances of only HKD 626,000, indicating significant going concern uncertainty[20] - A revolving loan facility of approximately HKD 65,000,000 has been obtained from an independent third party, valid until January 31, 2025[20] - The Group is expanding its food supply chain business for diversification and enhanced cash flow, while continuing to implement strict cost controls[21] Basis of Preparation and Application of Accounting Standards The Group has adopted several new and revised Hong Kong Financial Reporting Standards for the first time, but these applications have no significant impact on its financial performance or position - New and revised standards, including HKFRS 17, HKAS 1, and HKFRS Practice Statement 2 (Revised), were first applied this year[26] - The application of new and revised HKFRSs had no significant impact on the Group's financial performance and position for current and prior periods, but affected accounting policy disclosures[26][27] Revenue Analysis The Group's revenue significantly decreased from HKD 34,291 thousand in 2023 to HKD 3,277 thousand in 2024, primarily due to reduced restaurant operations revenue, though food supply chain services contributed new revenue Revenue Breakdown (Thousand HKD) | Revenue Source | 2024 | 2023 | | :--- | :--- | :--- | | Restaurant operations | 2,854 | 33,985 | | Sale of food ingredients | – | 306 | | Food supply chain services | 423 | – | | Total | 3,277 | 34,291 | Operating Segment Information This year, the Group added a new food supply chain services segment, operating in China and Hong Kong, while Singapore's restaurant operations revenue significantly declined, and segment assets and liabilities changed due to business adjustments - The Group commenced food supply chain services in China in 2024, recognized as a new reportable operating segment[36] Segment Revenue and Results (2024, Thousand HKD) | Segment | Restaurant operations | Food supply chain services | Total | | :--- | :--- | :--- | :--- | | External sales | 2,854 | 423 | 3,277 | | Segment loss | (1,036) | (384) | (1,420) | | Profit before tax | | | 40,412 | Segment Assets and Liabilities (Thousand HKD) | Metric | 2024 | 2023 (Restated) | | :--- | :--- | :--- | | Restaurant operations assets | 1,854 | 9,439 | | Food supply chain services assets | 6,273 | – | | Consolidated assets | 8,264 | 9,439 | | Restaurant operations liabilities | 1,278 | 58,257 | | Food supply chain services liabilities | 6,315 | – | | Consolidated liabilities | 32,024 | 58,257 | Revenue Breakdown by Geographical Location (Thousand HKD) | Region | 2024 | 2023 (Restated) | | :--- | :--- | :--- | | Singapore | 708 | 34,291 | | China | 423 | – | | Hong Kong | 2,146 | – | | Total | 3,277 | 34,291 | Other Income and Gains and (Losses), Net Other income and gains, net, significantly increased to HKD 51,080 thousand this year, primarily due to a gain of HKD 51,267 thousand from the disposal of a subsidiary, partially offset by goodwill impairment loss Other Income and Gains and (Losses), Net (Thousand HKD) | Item | 2024 | 2023 (Restated) | | :--- | :--- | :--- | | Gain on disposal of a subsidiary | 51,267 | – | | Gain on termination of leases | – | 1,109 | | Government grants | – | 589 | | Impairment loss on goodwill | (526) | – | | Total | 51,080 | 1,583 | Finance Costs Finance costs significantly decreased from HKD 1,028 thousand in 2023 to HKD 105 thousand in 2024, mainly due to reduced interest on other interest-bearing borrowings and lease liabilities Finance Costs Breakdown (Thousand HKD) | Item | 2024 | 2023 (Restated) | | :--- | :--- | :--- | | Interest on other interest-bearing borrowings | 30 | 664 | | Interest on lease liabilities | 75 | 364 | | Total | 105 | 1,028 | Profit/(Loss) Before Tax and Income Tax Expense The Group's profit before tax turned from a loss of HKD 13,116 thousand in 2023 to a profit of HKD 40,412 thousand in 2024, with income tax expense primarily comprising deferred income tax expense Profit/(Loss) Before Tax and Income Tax Expense (Thousand HKD) | Metric | 2024 | 2023 (Restated) | | :--- | :--- | :--- | | Profit/(Loss) before tax | 40,412 | (13,116) | | Income tax expense | 339 | 763 | | - Current income tax expense | – | 763 | | - Deferred income tax expense | 339 | – | - Staff welfare expenses (excluding directors' and chief executive's emoluments) decreased from HKD 17,550 thousand in 2023 to HKD 4,834 thousand in 2024[59] Dividends and Earnings/(Loss) Per Share No dividends were paid or proposed for the year, and basic and diluted earnings per share turned from a loss of HKD 0.294 in 2023 to a profit of HKD 0.700 in 2024 - No dividends were paid or proposed for the year ended August 31, 2024[63] Earnings/(Loss) Per Share (HKD) | Metric | 2024 | 2023 (Restated) | | :--- | :--- | :--- | | Earnings/(Loss) per share attributable to ordinary equity holders of the parent—basic and diluted | 0.700 | (0.294) | - Diluted earnings/(loss) per share was the same as basic earnings/(loss) per share as there were no potential dilutive ordinary shares in issue during the year[64] Trade and Other Receivables, Deposits and Prepayments Total trade and other receivables, deposits, and prepayments decreased from HKD 7,029 thousand in 2023 to HKD 5,727 thousand in 2024, with a significant increase in net trade receivables and a substantial decrease in net other receivables Trade and Other Receivables, Deposits and Prepayments Summary (Thousand HKD) | Item | 2024 | 2023 (Restated) | | :--- | :--- | :--- | | Trade receivables, net | 4,071 | 1,132 | | Other receivables, net | 1,172 | 4,189 | | Rental and other deposits | 443 | 1,435 | | Prepayments | 41 | 273 | | Total | 5,727 | 7,029 | - The Group grants credit periods of 30 to 60 days to restaurant operation customers and an average of 0 to 30 days to food supply chain services customers[69][70] - The provision for impairment loss on trade receivables was zero at the end of 2024, compared to HKD 1,778 thousand at the end of 2023, mainly due to reversal upon disposal of a subsidiary[74] Trade and Other Payables and Accrued Expenses Total trade and other payables and accrued expenses decreased from HKD 35,486 thousand in 2023 to HKD 29,570 thousand in 2024, primarily due to changes in amounts due to a major shareholder and a former director Trade and Other Payables and Accrued Expenses Summary (Thousand HKD) | Item | 2024 | 2023 (Restated) | | :--- | :--- | :--- | | Trade payables | 4,091 | 3,067 | | Accrued expenses | 2,126 | 8,998 | | Other payables | 961 | 9,671 | | Amount due to Mr. Lai, a major shareholder | – | 7,424 | | Amount due to Mr. Chow, a former director of the Company | 22,360 | – | | Total | 29,570 | 35,486 | - The amount due to Mr. Chow, a former director of the Company, is HKD 22,360 thousand, of which approximately HKD 15,720 thousand is repayable by November 30, 2024, with the remainder being non-trade in nature, unsecured, interest-free, and repayable on demand[80] Other Interest-Bearing Borrowings The Group fully repaid all other interest-bearing borrowings, which amounted to HKD 3,933 thousand in 2023 and bore a fixed annual interest rate of 48%, during the year ended August 31, 2024 Other Interest-Bearing Borrowings (Thousand HKD) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Unsecured other borrowings | – | 3,933 | - The Group has repaid all other interest-bearing borrowings during the year ended August 31, 2024[83] Acquisition of a Subsidiary (PDR's Dining Limited) On January 31, 2024, the company acquired a 51% equity interest in PDR's Dining Limited for HKD 1,000 thousand (paid in shares), aiming to enter and expand its restaurant business in Hong Kong - On January 31, 2024, the Company acquired a 51% equity interest in PDR's Dining Limited for HKD 1,000 thousand (paid in shares)[84] - PDR's Dining Limited primarily operates restaurants in Hong Kong, with the acquisition aiming to enter the Hong Kong catering market and diversify and expand the Group's business[85][86] - The acquisition generated goodwill of HKD 526 thousand, attributed to synergies that will enhance and expand the Group's restaurant business in Hong Kong[89][90] Disposal of a Subsidiary (K Investment Holdings Limited) On August 28, 2024, the company sold its entire equity interest in K Investment Holdings Limited, a wholly-owned subsidiary primarily engaged in restaurant business in Singapore, for a cash consideration of HKD 60 thousand, resulting in a gain of HKD 51,267 thousand - On August 28, 2024, the Company disposed of its entire equity interest in K Investment Holdings Limited for a cash consideration of HKD 60 thousand[95] - The subsidiary primarily engaged in restaurant business in Singapore, and the disposal generated a gain of HKD 51,267 thousand[95][97] Gain on Disposal of a Subsidiary Breakdown (Thousand HKD) | Item | Amount | | :--- | :--- | | Cash consideration | 60 | | Liabilities disposed of | 33,120 | | Reversal of capital reserve | 25,255 | | Reversal of non-controlling interests | (6,372) | | Reversal of exchange reserve | (796) | | Gain on disposal of a subsidiary | 51,267 | Extracts from Independent Auditor's Report This section highlights the auditor's disclaimer of opinion due to insufficient audit evidence, primarily concerning the Group's going concern ability Disclaimer of Opinion The auditor disclaimed an opinion on the consolidated financial statements due to insufficient appropriate audit evidence, mainly related to the going concern ability - The auditor disclaimed an opinion on the Group's consolidated financial statements due to insufficient appropriate audit evidence[99] Basis for Disclaimer of Opinion The basis for the disclaimer is significant uncertainty regarding the Group's going concern ability, including net current liabilities, net liabilities, insufficient cash balances, and the inability to assess the financial capability of the revolving loan facility provider - The Group has net current liabilities of HKD 24,458,000, net liabilities of HKD 23,760,000, and cash and bank balances of only HKD 626,000, with its ability to continue as a going concern dependent on sustained financing[100] - The auditor could not obtain sufficient documentary evidence to assess the financial capability of the independent third party providing the approximately HKD 65,000,000 revolving loan facility[100] - Should the Group be unable to continue as a going concern, adjustments would be required to the carrying amounts of assets, provisions for liabilities, and classification of assets and liabilities, which are not reflected in the consolidated financial statements[102] Management Discussion and Analysis This section reviews the Group's business transformation, financial performance, liquidity, capital structure, and future plans, addressing key risks and auditor concerns Business Review The Group has closed its original self-operated restaurant business in Singapore, actively transforming and diversifying its operations, now owning a Western restaurant in Hong Kong and vigorously developing its food supply chain business, with future plans to expand its restaurant network into Hong Kong and China - The Group has closed its original self-operated restaurant business in Singapore, actively seeking transformation and diversified business expansion[103] - As of August 31, 2024, the Group owns a Western restaurant (Windmill) operating in Hong Kong and has established food supply chain trading companies and wine trading companies in mainland China[103][113] - Future plans include continued focus on developing restaurant businesses (Southeast Asia, Guangdong-Hong Kong-Macao Greater Bay Area, and mainland China), developing more restaurant brands, and vigorously expanding the food supply chain business[114] Financial Performance Analysis This year, revenue significantly decreased, but the disposal of the Singapore restaurant business led to substantial profit, with effective cost control measures resulting in reduced staff, depreciation, rental, and finance costs Revenue Composition and Changes (Thousand HKD) | Revenue Source | 2024 | Share (%) | 2023 | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Restaurant operations | 2,854 | 87.1 | 33,985 | 99.1 | | Sale of food ingredients | – | – | 306 | 0.9 | | Food supply chain services | 423 | 12.9 | – | – | | Total | 3,277 | 100.0 | 34,291 | 100.0 | - Restaurant operations revenue decreased by 91.6%, primarily due to the termination of self-operated restaurant operations in Singapore[118] - Cost of inventories used decreased by 89.5% to HKD 861 thousand, proportionate to the revenue decrease[120] - Gross profit decreased from HKD 26,123 thousand to HKD 2,416 thousand, with gross margin remaining stable (from 76.2% to 73.7%)[121] - Other income and gains, net, increased to HKD 51,080 thousand, mainly due to a HKD 51,267 thousand gain from the disposal of the Singapore restaurant business[122] - Staff costs decreased to HKD 5,749 thousand (2023: HKD 19,086 thousand), primarily due to the cessation of self-operated restaurant business, salary adjustments, and headcount reductions[124] - Depreciation and amortization decreased by 89.2% to HKD 562 thousand, rental and related expenses decreased by 82.3% to HKD 561 thousand, and finance costs decreased by 89.8% to HKD 105 thousand, all primarily due to the disposal of the Singapore restaurant and related businesses[125][126][130] - The Group recorded a profit of HKD 40,073 thousand for the year (2023: loss of HKD 13,879 thousand), primarily attributable to the gain from the disposal of the Singapore restaurant business[132] Liquidity and Financial Resources The Group's current ratio is 0.2, net gearing ratio is -1.2, and net current liabilities and net liabilities, though improved, remain negative; management has implemented measures including a revolving loan facility, business expansion, and strict cost controls to address liquidity challenges Liquidity Ratios | Metric | August 31, 2024 | August 31, 2023 | | :--- | :--- | :--- | | Current ratio | 0.2 | 0.2 | | Net gearing ratio | -1.2 | -1.1 | | Net current liabilities (Thousand HKD) | 24,458 | 33,843 | | Net liabilities (Thousand HKD) | 23,760 | 48,818 | | Total liabilities (Thousand HKD) | 32,024 | 58,257 | - Management has secured a HKD 65,000,000 revolving loan facility and plans to expand profitable restaurant businesses in Hong Kong and China, while implementing strict cost controls to ensure sufficient working capital[134][136] Capital Structure and Share Capital Movements As of August 31, 2024, the total number of issued ordinary shares increased to 58,382,280, primarily due to the exercise of share options and the issuance of consideration shares for the acquisition of PDR's Dining Limited Total Number of Issued Ordinary Shares | Date | Number of Shares | | :--- | :--- | | August 31, 2024 | 58,382,280 | | August 31, 2023 | 52,800,000 | - The increase in share capital was primarily due to the exercise of share options (2,112,000 shares and 1,888,000 shares) and the issuance of 1,582,280 consideration shares for the acquisition of a 51% interest in PDR's Dining Limited[137][138] Change of Company Name, Stock Short Name and Logo The company changed its name on March 8, 2024, its stock short name on April 3, 2024, and adopted a new company logo on March 27, 2024, while the stock code remained unchanged - The company's English name changed from 'K Group Holdings Limited' to 'E-STATION GREEN TECHNOLOGY GROUP CO., LIMITED', and its Chinese name from '千盛集團控股有限公司' to '易站綠色科技集團有限公司', effective March 8, 2024[141] - The stock short name changed from 'K GROUP HLDGS' to 'E-STATION GTECH' in English and from '千盛集團控股' to '易站綠色科技' in Chinese, effective April 3, 2024, with stock code '8475' remaining unchanged[142] - The company adopted a new company logo effective March 27, 2024[143] Key Risks and Uncertainties The Group faces various business risks, including failure to develop new brands, product liability or food safety claims, changes in customer preferences, intense market competition, and increased labor and rental costs - Key risks include failure to successfully develop new brands, product liability or food safety claims, changes in customer preferences, and intense market competition[149] - Operations may be adversely affected by increased staff costs in the labor market, rising rental expenses, and the inability to renew leases on acceptable terms[149] Treasury Policy and Foreign Currency Risk Management will continue to manage cash balances prudently and maintain robust liquidity; the Group's operations are primarily denominated in RMB and HKD, with foreign exchange risk not significant, and currently no foreign currency hedging policy - Management will follow a prudent policy to manage cash balances and maintain robust liquidity[151] - The Group's operations are primarily denominated in RMB and HKD, with foreign exchange risk not significant, and currently no foreign currency hedging policy[150] Significant Investments, Acquisitions and Disposals Apart from the disclosed acquisition of PDR's Dining Limited and disposal of K Investment Holdings Limited, the Group made no other significant investments, acquisitions, or disposals during the year - Save as disclosed in this announcement, the Group made no other significant investments or material acquisitions and disposals of subsidiaries, associates, or joint ventures during the year[153] Capital Commitments and Future Plans As of August 31, 2024, the Group had no capital commitments and currently has no specific plans for future significant investments or capital assets - As of August 31, 2024, the Group had no capital commitments[154] - As of the date of this announcement, the Group has no specific plans for future investments or acquisitions of capital assets[155] Measures to Address Auditor's Disclaimer of Opinion To address the going concern uncertainties highlighted by the auditor's disclaimer, the Board has considered measures including securing a revolving loan facility, expanding the food supply chain business, and implementing strict cost controls to improve liquidity - The Board has carefully considered the Group's future liquidity and performance, securing an approximately HKD 65,000,000 revolving loan facility valid until January 31, 2025[158] - The Group is expanding its food supply chain business for diversification and enhanced cash flow, while continuing to implement strict cost controls[158][159] - Management believes these measures, if successful, can improve liquidity, but it is currently uncertain whether the audit modification can be removed in the next financial year[160] Corporate Governance and Other Information This section covers the company's adherence to corporate governance codes, non-compliance issues, securities trading, and significant post-year-end events Compliance with Corporate Governance Code The company has adopted and complied with all applicable code provisions of the Corporate Governance Code as set out in the GEM Listing Rules throughout the year - The company has adopted the code provisions of the Corporate Governance Code as set out in Appendix C1 to the GEM Listing Rules[162] - The Board believes the company has complied with all applicable code provisions of the Corporate Governance Code throughout the year[162] Non-Compliance with GEM Listing Rules Due to a former director's resignation, the company failed to meet GEM Listing Rules requirements regarding the number of independent non-executive directors and audit committee members and is actively seeking suitable candidates - Following the resignation of a former director on October 15, 2024, the company failed to comply with GEM Listing Rules 5.05(1), 5.05A, and 5.28 regarding the number of independent non-executive directors and audit committee members[163] - The company is currently identifying suitable candidates to fill the vacancies and will make appointments as soon as practicable[163] Dealings in Listed Securities Neither the company nor its subsidiaries redeemed, purchased, or sold any listed securities during the year and up to the announcement date - Neither the company nor any of its subsidiaries redeemed, purchased, or sold any of its listed securities during the year and up to the date of this announcement[165] Directors' Securities Transactions The company adopted the required standard of securities dealing as per GEM Listing Rules, and all directors confirmed compliance throughout the year - The company has adopted the required standard of securities dealing as set out in Rules 5.48 to 5.67 of the GEM Listing Rules[166] - All directors confirmed compliance with the required standard of dealing throughout the year[166] Significant Events After Reporting Period Several significant events occurred after the reporting period, including debt repayment by share issuance, Mr. Chow Bo's subscription for new shares to raise working capital, and the acquisition of a 51% equity interest in Nanjing Huayi Investment Development Co., Ltd - On October 9, 2024, the company entered into a settlement agreement with Mr. Chow Bo and Ms. Lam Wai Yee to allot and issue a total of 7,776,360 new shares at HKD 0.315 per share to repay the Group's debts to the subscribers, completed on November 1, 2024[167][168][169][170] - On October 9, 2024, the company entered into a subscription agreement with Mr. Chow Bo to subscribe for 2,001,360 new shares at HKD 0.315 per share, with expected net proceeds of approximately HKD 0.6 million intended for general working capital, completed on November 1, 2024[170][171][173] - On November 22, 2024, a subsidiary of the company agreed to acquire a 51% equity interest in Nanjing Huayi Investment Development Co., Ltd. for a total consideration of HKD 3.4 million, to be paid by issuing promissory notes, with the acquisition not yet completed as of the announcement date[173][174] Audit Committee Report The Audit Committee reviewed the audited consolidated financial statements, deeming them prepared in compliance with applicable accounting standards, GEM Listing Rules, and other legal requirements, with sufficient disclosures - The Audit Committee reviewed the audited consolidated financial statements, deeming them prepared in compliance with applicable accounting standards, GEM Listing Rules, and other legal requirements, with sufficient disclosures[178] - The Audit Committee currently comprises two independent non-executive directors, namely Mr. Chow Wing Nam (Chairman) and Ms. Wong Wai Ngan[176] Auditor's Scope of Work and Publication of Announcement The company's auditor confirmed the consistency of financial figures in the preliminary announcement with the audited consolidated financial statements, though their work does not constitute an assurance engagement; the full-year results announcement and annual report will be published on the company and Stock Exchange websites - The Group's auditor agreed that the financial figures in the preliminary announcement are consistent with those in the audited consolidated financial statements for the year, but their work does not constitute an assurance engagement[179] - The full-year results announcement is published on the company's website and the Stock Exchange's website, and the annual report will be dispatched to shareholders and published on the website in due course[180] Acknowledgement The Board extends its sincere gratitude to all shareholders, customers, suppliers, banks, business partners, and the staff team for their support, trust, and contributions - The Board extends its sincere gratitude to all shareholders, customers, suppliers, banks, and business partners[182] - Appreciation is extended to the dedicated staff team for their valuable services and contributions during the year ended August 31, 2024[182]