Financial Performance - Revenue for the fiscal year reached HKD 5,362,474,000, a 33.4% year-on-year increase[8][9] - Net profit attributable to shareholders was HKD 625,509,000, up 82% compared to the previous year[8][9] - Gross profit margin improved to 29.2%, a 1.5% increase from the previous year[9] - Operating profit increased by 54.0% to HKD 792,515,000, with an operating profit margin of 14.8%[9] - Revenue for the fiscal year 2022 increased to 5,362,474 thousand HKD, up from 4,021,206 thousand HKD in 2021, representing a growth of approximately 33.4%[94] - Gross profit rose to 1,566,400 thousand HKD in 2022, compared to 1,115,283 thousand HKD in 2021, reflecting a 40.5% increase[94] - Net profit attributable to the company's owners surged to 625,509 thousand HKD in 2022, up from 343,667 thousand HKD in 2021, marking an 82.1% growth[94] - Earnings per share (basic) for 2022 stood at 45.6 HKD cents, up from 26.2 HKD cents in 2021, reflecting a 74.0% increase[94] - Total comprehensive income attributable to the company's owners reached 795,363 thousand HKD in 2022, up from 510,357 thousand HKD in 2021[95] Asset and Liability Growth - Total assets grew by 38.7% to HKD 7,599,524,000, while net assets increased by 50.5% to HKD 3,702,999,000[10] - Total assets expanded to 7,599,524 thousand HKD in 2022, a significant increase from 5,478,376 thousand HKD in 2021, indicating a 38.7% rise[91] - Total equity grew to 3,702,999 thousand HKD in 2022, up from 2,461,272 thousand HKD in 2021, showing a 50.5% increase[91] - Total liabilities increased to 3,896,525 thousand HKD in 2022, compared to 3,017,104 thousand HKD in 2021, showing a 29.1% rise[92] - Total equity increased to 3,702,999 thousand HKD as of March 31, 2022, compared to 2,461,272 thousand HKD in the previous year[97] Market and Revenue Breakdown - Overseas market revenue was HKD 971,171,000, a 6.0% year-on-year increase, driven by recovery in Europe[12] - Revenue from the Chinese market surged by 41.4% to HKD 4,391,303,000, supported by strong demand in the automotive sector[12] - New energy vehicle production and sales in China reached 3.545 million and 3.521 million units respectively, a 1.6-fold increase year-on-year[12] - The penetration rate of new energy passenger vehicles in China rose to 14.8% in 2021, up from 5.8% in 2020[12] - Revenue from external sales for Die Casting Machines was 3,816,178 thousand HKD, Injection Molding Machines was 1,365,111 thousand HKD, and CNC Machining Centers was 181,185 thousand HKD for the year ended March 31, 2022[198] - Total revenue from external sales across all segments was 5,362,474 thousand HKD for the year ended March 31, 2022[198] Cost and Expense Management - Financing costs decreased by 44.7% to HKD 26,851,000 due to reduced bank loans[12] - The company's supply chain system for new energy vehicles has grown significantly, leading to cost reductions and improved product quality[13] - Employee costs amounted to HKD 873,032,000 (2021: HKD 614,622,000)[76] - Administrative expenses were 37,126 thousand HKD for the year ended March 31, 2022[198] - Finance income was 6,721 thousand HKD for the year ended March 31, 2022[198] Corporate Governance and Leadership - The company's CEO, Liu Zhuoming, has extensive experience in business operations and management, holding a Bachelor's degree in Computer Science from Oregon State University[14] - The company's Chairman, Zhang Qiaoying, has over 34 years of management experience and is responsible for strategic planning, administration, and human resources[14] - The company's Executive Director, Xie Xiaosi, has over 32 years of experience in production management, sales, and marketing[14] - The company's Independent Non-Executive Director, Liu Shaoji, has over 30 years of teaching and research experience in mechanical engineering[14] - The company's Independent Non-Executive Director, Lu Dong, has over 30 years of experience in asset investment analysis in Hong Kong and China's stock markets[16] - The Board of Directors consists of 3 executive directors and 4 independent non-executive directors, ensuring a balanced structure and independent judgment[19] - The roles of Chairman and CEO are separated, with Ms. Zhang Qiaoying serving as Chairman and Mr. Liu Zhuoming as CEO[22] Risk Management and Internal Controls - The company has a robust risk management and internal control system in place to achieve strategic objectives and protect shareholder investments[32] - The company's risk management framework includes an annual enterprise risk assessment conducted by the Group Risk Director[34] - The internal audit department plays a crucial role in monitoring the effectiveness of the company's internal control systems[35] - The company's risk management and internal control systems were reviewed and deemed effective and sufficient by the Board of Directors[36] - The company has established an insider information disclosure policy to ensure compliance with securities and futures regulations and listing rules[37] Dividend and Shareholder Returns - The company's dividend policy aims to distribute at least 30% of the annual distributable profits as dividends, subject to the Board's discretion[38] - The company paid an interim dividend of 6 HK cents per share for the period ended September 30, 2021, and proposed a final dividend of 4 HK cents per share for the year ended March 31, 2022[40] - The company issued bonus shares at a ratio of 1 new bonus share for every 10 existing shares held by shareholders as of September 15, 2021[41] - Dividends paid during the year amounted to 120,121 thousand HKD, reflecting the company's commitment to shareholder returns[97] Research and Development - The company is focusing on R&D breakthroughs in die-casting machines, injection molding machines, and CNC machining centers to meet evolving customer needs[13] - The company is contributing to the innovation of new energy vehicle manufacturing processes, leveraging the rapid growth of the global new energy vehicle sector[13] Capital and Financing Activities - The company completed a placement and subscription of 60,000,000 shares at a price of HKD 9.50 per share, representing a discount of approximately 9.00% to the last closing price of HKD 10.44[68] - The net proceeds from the placement and subscription amounted to approximately HKD 562,546,000, with HKD 386,150,000 allocated to enhancing production efficiency and capacity, and HKD 176,396,000 for general working capital[70] - As of March 31, 2022, HKD 358,521,000 of the net proceeds had been utilized for enhancing production efficiency and capacity, with HKD 258,618,000 spent on property, plant, and equipment, and HKD 99,903,000 on land use rights and deposits[71] - The remaining HKD 27,629,000 of the net proceeds is planned to be used for purchasing property, plant, and equipment at Fuxin Jingda Precision Machinery Co., Ltd. over the next 24 months[71] Inventory and Trade Receivables - Inventory held by the company amounted to HKD 1,713,348,000 as of March 31, 2022, up from HKD 1,147,324,000 in 2021[84] - Inventory impairment provisions were HKD 128,467,000 in 2022, a decrease from HKD 147,108,000 in 2021[85] - Accounts receivable totaled HKD 1,672,937,000 as of March 31, 2022, an increase from HKD 1,195,060,000 in 2021[83] - Impairment provisions for accounts receivable were HKD 137,005,000 in 2022, compared to HKD 135,297,000 in 2021[83] - The company's trade receivables are subject to an expected credit loss model, with provisions based on historical credit loss rates adjusted for macroeconomic factors[165] Segment Reporting - The company operates in three main reportable segments: Die Casting Machines, Injection Molding Machines, and CNC Machining Centers[197] - Revenue from external sales for Die Casting Machines was 3,816,178 thousand HKD, Injection Molding Machines was 1,365,111 thousand HKD, and CNC Machining Centers was 181,185 thousand HKD for the year ended March 31, 2022[198] - Segment performance for Die Casting Machines was 660,866 thousand HKD, Injection Molding Machines was 152,148 thousand HKD, and CNC Machining Centers was 16,627 thousand HKD for the year ended March 31, 2022[198] - Total segment performance across all segments was 829,641 thousand HKD for the year ended March 31, 2022[198] Cash Flow and Liquidity - Operating cash flow from business activities decreased to HK$182.7 million in 2022 from HK$771.1 million in 2021[99] - Net cash used in investing activities increased significantly to HK$601.9 million in 2022 from HK$228.5 million in 2021, primarily due to increased purchases of property, plant, and equipment (HK$461.7 million) and land use rights (HK$85.2 million)[99] - Net cash from financing activities improved to HK$396.2 million in 2022 from a net cash outflow of HK$706.0 million in 2021, driven by share placement proceeds of HK$562.5 million[99] - Cash and cash equivalents decreased by HK$22.9 million in 2022, ending the year at HK$576.8 million[99] Accounting and Financial Reporting - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards (HKFRS) and the Hong Kong Companies Ordinance[102] - The company adopted revised standards related to interest rate benchmark reform and COVID-19-related rent concessions effective April 1, 2021[103] - Several new and amended accounting standards and interpretations have been issued but not yet adopted, with effective dates starting from April 1, 2022, and April 1, 2023[105] - The company is evaluating the impact of adopting new and amended standards and interpretations, but does not expect them to have a significant impact on current or future reporting periods[105] Shareholder and Equity Information - Girgio holds 848,078,004 shares, representing 61.62% of the company's equity[52] - HSBC International Trustee Limited, as trustee of the Liu Family Trust, holds 95% of Full Profit Asset Limited, which owns 95% of Girgio, giving it an indirect 61.62% stake in the company[53] - Cantrust (Far East) Limited holds 132,264,999 shares, representing 9.61% of the company's equity[52] - Zhang Qiaoying holds 3,105,000 shares directly, representing 0.23% of the company's equity[49] - Liu Zhuoming holds 1,000,000 shares directly, representing 0.07% of the company's equity[49] - Liu Xiangshang, Zhang Qiaoying's spouse, holds 5,722,750 shares, representing 0.42% of the company's equity[49] - Xie Xiaosi holds 50,000 shares through his spouse's stock options, representing 0.004% of the company's equity[49] Stock Options and Compensation - The company granted a total of 27,540,000 stock options to 390 eligible individuals on September 24, 2021[55] - The company granted stock options to several directors and employees, with specific numbers and exercise periods detailed for each individual[57][59] - The total number of shares that may be issued upon the exercise of all stock options granted under the plan and any other plans of the group shall not exceed 113,326,500 shares, representing 10% of the company's issued share capital as of the approval date of the stock option plan[64] - The maximum number of shares that may be issued upon the full exercise of all stock options granted but not yet exercised under the stock option plan and any other plans of the group shall not exceed 30% of the company's issued shares from time to time[64] - The exercise price of any specific stock option shall be determined by the board at its absolute discretion at the time of granting the relevant stock option, but shall not be lower than the highest of: (i) the par value of the company's shares; (ii) the closing price of the company's shares on the offer date[64] - The stock options are subject to vesting conditions, with 40% vesting after the second anniversary of the grant date, 30% after the third anniversary, and 30% after the fourth anniversary, provided that specific performance indicators for the applicable fiscal year are met[61] - The company's stock option plan aims to provide eligible individuals with the opportunity to own shares in the company, incentivize them to enhance their future performance and efficiency, and reward their past contributions[63] Environmental and Social Responsibility - The company made charitable donations totaling HKD 683,000 during the year[43] Foreign Exchange and Interest Rate Sensitivity - The company's pre-tax profit would decrease/increase by HKD 8,139,000/HKD 10,886,000 if interest rates increase/decrease by 100 basis points, based on the sensitivity analysis as of March 31, 2022[161] - A 5% depreciation/appreciation of RMB against HKD would result in a decrease/increase of approximately HKD 4,741,000 in pre-tax profit for the year ended March 31, 2022[162] - A 5% depreciation/appreciation of USD against RMB would result in a decrease/increase of approximately HKD 982,000 in pre-tax profit for the year ended March 31, 2022[163] - The company does not have a foreign currency hedging policy but monitors forex risks and may hedge significant exposures if needed[163] Audit and Compliance - The company's auditor, PwC, confirmed that the consolidated financial statements were prepared in accordance with Hong Kong Financial Reporting Standards[79] - Key audit matters identified included the recoverability of trade receivables and inventory write-down provisions[82] - The company's auditor, PwC, confirmed its independence from the company and compliance with professional ethical responsibilities[81] Property, Plant, and Equipment - Property, plant, and equipment increased to 1,476,984 thousand HKD in 2022, up from 1,173,530 thousand HKD in 2021, marking a 25.9% rise[91] - Property, plant, and equipment are recorded at historical cost less depreciation, with subsequent costs capitalized only if future economic benefits are probable and costs can be reliably measured[118] - Depreciation is allocated on a straight-line basis over the estimated useful lives of assets, with buildings having a useful life of up to 50 years[120] Investment Properties - Investment properties are measured at fair value, with changes in fair value recognized in the consolidated income statement as part of "other net income"[119] - Revaluation gains on property, plant, and equipment transferred to investment properties amounted to 84,315 thousand HKD in 2022, a new addition compared to the previous year[95] Goodwill and Intangible Assets - Goodwill is allocated to cash-generating units and tested for impairment annually or when events indicate potential impairment[121] - Trademarks are amortized on a straight-line basis over a useful life of no more than 10 years[122] - Development costs are capitalized as intangible assets only if future economic benefits are probable, with amortization over a useful life of no more than 5 years[123] - Land use rights are amortized on a straight-line basis over the lease term, which ranges from 44 to 50 years[124] Financial Instruments - Financial assets are classified into categories based on their measurement criteria: fair value through profit or loss, fair value through other comprehensive income, and amortized cost[126] - Debt instruments are measured based on the company's business model and cash flow characteristics, with three measurement categories: amortized cost, fair value through other comprehensive income, and fair value through profit or loss[129] - Equity investments are subsequently measured at fair value, with fair value gains and losses recognized in other comprehensive income if elected by management[130] - The company assesses expected credit losses for debt instruments measured at amortized cost using a forward-looking approach[131] - Financial assets and liabilities can be offset if there is a legally enforceable right to set off and the intention to settle on a net basis[132] Inventory and Trade Payables - Inventories are measured at the lower of cost and net realizable value, with cost determined using the FIFO method[133] - Trade receivables are initially recognized at the unconditional amount due, unless there is a significant financing component, in which case they are recognized at fair value[134] - Trade payables and other payables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method[136] Borrowings and Financial Liabilities - Borrowings are initially recognized at fair value less transaction costs and subsequently measured at amortized cost, with any difference between the proceeds and redemption value recognized in the comprehensive income statement using the effective interest method[139] - Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets are capitalized as part of the cost of those assets until they are substantially ready for their intended use or sale[140] Taxation - Current tax expense is calculated based on taxable income at the applicable tax rates in each jurisdiction, adjusted for changes in deferred tax assets and liabilities arising from temporary differences and unused tax losses[141] - Deferred tax is recognized for temporary differences between the tax base and the
力劲科技(00558) - 2022 - 年度财报