泰升集团(00687) - 2022 - 年度财报

Chairman's Statement Financial Summary and Dividends The Group turned loss into profit in 2022, recording a profit attributable to equity holders of 5 million HKD and 12.2% revenue growth, with a proposed final dividend of 0.015 HKD per share Key Financial Indicators for 2022 | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Turnover | 2.474 Billion HKD | 2.204 Billion HKD | | Profit/(Loss) Attributable to Equity Holders | 5 Million HKD | (0.1 Million HKD) | | Earnings/(Loss) Per Share | 0.134 HK cents | (0.003 HK cents) | Dividend Distribution | Dividend Type | Amount Per Share (HKD) | Payment Date | | :--- | :--- | :--- | | Interim Dividend | 0.01 | - | | Proposed Final Dividend | 0.015 | July 3, 2023 | Business Review and Outlook The foundation piling business, a key revenue and profit driver, saw increased turnover and profit, with strong future demand expected from government projects despite labor shortages and competition Foundation Piling Segment Performance | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Turnover | 2.459 Billion HKD | 2.164 Billion HKD | | Segment Profit | 94 Million HKD | 73 Million HKD | - The Group's business benefited from the lifting of COVID-19 restrictions and strong tender volumes from both public and private sectors, with major government projects like the Northern Metropolis expected to drive sustained robust demand[17] - Key challenges for the Group include a long-term shortage of skilled labor in the construction industry and intense peer competition, which have impacted business volume and profit margins[33] - The Group's major contracts on hand include various commercial, residential, and public projects such as Kai Tak, Gage Street, Graham Street, Sai Sha, Fanling, and West Kowloon Cultural District[15] Financial Position As of the end of 2022, the Group maintained a sound financial position with ample cash on hand and a zero gearing ratio, with an increase in interest-bearing borrowings and capital expenditure primarily for machinery and equipment purchases funded by internal resources Summary of Financial Position as at December 31, 2022 | Indicator | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash on Hand | 770 Million HKD | 651 Million HKD | | Total Assets | 2.128 Billion HKD | 2.081 Billion HKD | | Net Assets | 1.343 Billion HKD | 1.415 Billion HKD | | Interest-bearing Borrowings | 153 Million HKD | 58 Million HKD | | Gearing Ratio | Zero (Net Cash Position) | - | - The Group maintains a prudent financing and financial policy, with surplus funds deposited in leading banks and borrowings denominated in HKD at floating interest rates[37] - Capital expenditure for the year was approximately 53 million HKD, primarily for the purchase of machinery and equipment, funded by internal resources[38] Biographies of Directors and Senior Management Overview of Directors and Senior Management This section details the diverse backgrounds and extensive experience of the company's Executive, Non-executive, and Independent Non-executive Directors, along with Senior Management, providing professional support for strategic development - The Executive Director team comprises Mr. Fung Chiu Chak, Daniel (Vice Chairman), Mr. Chiu Chin Hung (President of Foundation Engineering Division), and Mr. Lau Kin Fai (President of Property Development and Investment Division), possessing decades of experience in engineering, construction management, and property development[44][25][59] - Non-executive Directors primarily from Blackstone include Mr. Wei Zengpeng (Chairman), Mr. Vikram Garg, Ms. Yuan Bo Wen, Ms. Gu Ye, and Ms. Hou Xiangjia, focusing on real estate investment and management in Greater China[60][47][28][61][48] - Independent Non-executive Directors include Mr. Lung Chee Ming, George, Mr. Li Kit Chee, Ms. Chow Wai Lee, and Ms. Kwok Man Wai, who possess deep qualifications in insurance, accounting, construction, and finance, providing independent judgment to the Board[50][31][64][51] - The Senior Management team includes seasoned professionals in areas such as foundation engineering, finance, and company secretarial services, supporting the Group's daily operations and management[53][66][67] Corporate Governance Report Board Governance The Board, comprising 12 directors with a third being independent, ensures power balance and diversity, overseeing strategy and financial performance while fully complying with Listing Rules - The Board of Directors consists of 12 directors, with Independent Non-executive Directors accounting for one-third, complying with Listing Rules requirements and ensuring the Board's independence[71][72] - The roles of the Chairman (Mr. Wei Zengpeng) are separated from those of the Vice Chairman (Mr. Fung Chiu Chak, Daniel) and other Executive Directors responsible for daily business operations, ensuring a balance of power[96][79] - The Board holds at least four meetings annually, with five meetings held during the reporting period. The company ensures directors receive timely and sufficient information and can independently seek professional advice[100][101] - The company provides continuous professional development training for directors and has adopted a standard code governing directors' securities transactions[86][107][111] Board Committees The Board's Audit, Remuneration, and Nomination Committees, all chaired by Independent Non-executive Directors, fulfill their duties in financial oversight, compensation, and director nominations, adhering to diversity policies - The Audit Committee comprises four Independent Non-executive Directors, with Mr. Li Kit Chee as Chairman, responsible for reviewing financial statements, risk management, and internal control systems. Three meetings were held during the reporting period[133][132][114] - The Remuneration Committee is chaired by Independent Non-executive Director Mr. Lung Chee Ming, George, responsible for advising the Board on compensation policies for directors and senior management. Three meetings were held during the reporting period[119][118][141] - The Nomination Committee is chaired by Chairman Mr. Wei Zengpeng, responsible for reviewing the Board's structure, size, and diversity, and advising on director appointments and succession planning. Two meetings were held during the reporting period[124][144][145] - The company has adopted a Board Diversity Policy and is committed to maintaining a minimum of 33% female directors. As of the end of 2022, the proportion of female directors was 33%[168][149] Risk Management, Internal Control and Shareholder Communication The Group has established a COSO-compliant risk management and internal control system, deemed effective by the Board, and prioritizes shareholder communication through various channels to protect shareholder rights - The Group has adopted a risk management system encompassing risk identification, assessment, management, and monitoring, and implemented an internal control system based on the COSO framework[183][184] - The Board, through the Audit Committee, conducts annual reviews of the effectiveness of the risk management and internal control systems, deeming them effective and complete during the reporting period[210] - The company has formulated a shareholder communication policy to ensure timely dissemination of information to shareholders and encourages shareholder participation in company affairs through various channels, including general meetings, the company website, and direct contact with the company secretary[193][194][195] - The company has clarified shareholders' rights and procedures for convening extraordinary general meetings and proposing resolutions, with relevant documents published on the company website[247][221] Report of the Directors Business and Financial Review This report outlines the Group's 2022 business, primarily investment holding and foundation piling, with no significant changes, compliance with regulations, dividend payments, and a five-year financial overview - The Company's principal business is investment holding, with major subsidiaries engaged in foundation piling, property development, and investment with no significant changes during the year[229][256] - The Group has paid an interim dividend of 0.01 HKD per share and proposed a final dividend of 0.015 HKD per share[236] Five-Year Financial Summary (Thousand HKD) | Indicator | 2022 | 2021 | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | | Profit/(Loss) Attributable to Equity Holders | 4,525 | (107) | (104,882) | (766,655) | 360,908 | | Total Assets | 2,128,153 | 2,080,696 | 2,267,268 | 4,899,657 | 17,337,359 | | Total Liabilities | 784,964 | 665,604 | 834,141 | 2,577,791 | 5,174,696 | | Equity Attributable to Equity Holders | 1,343,189 | 1,415,092 | 1,433,127 | 2,321,866 | 12,162,665 | Share Capital, Share Options and Major Interests The report details no changes in share capital, share option movements for directors and employees, and major shareholder interests, with Blackstone Group holding approximately 70% - There were no changes in the company's share capital during the year, nor were any of the company's listed securities purchased, redeemed, or sold[239][240] - Under the share option scheme, as of year-end, three Executive Directors collectively held 43,000,000 outstanding share options. During the year, 4,500,000 share options granted to other employees lapsed[272][299][291] - Blackstone Group is the company's ultimate holding company, indirectly holding approximately 70% of the shares through its subsidiaries[314][778] - Other major shareholders include the Estate of Chen Din Hwa (approximately 6.98%), China Communications Construction Company Limited (approximately 5.08%), and Executive Director Mr. Fung Chiu Chak, Daniel (approximately 5.66%)[306][779][780][798] Independent Auditor's Report Audit Opinion and Key Audit Matters The auditor issued an unmodified opinion on the 2022 consolidated financial statements, highlighting revenue recognition for construction contracts and impairment assessment of trade receivables as key audit matters - The auditor believes that the consolidated financial statements fairly and truly reflect the Group's financial position and performance in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance[804] - Key Audit Matter One: Revenue recognition from construction contracts. This is considered a key audit matter due to the use of the input method for revenue recognition, which involves significant management judgment and estimation regarding total budgeted costs and progress towards completion[832][786] - Key Audit Matter Two: Impairment assessment of trade receivables and contract assets. As of year-end, these assets constituted approximately 52% of current assets, and their recoverability assessment involves significant management judgment regarding expected credit losses[788][809][834] Audited Financial Statements Consolidated Statement of Profit or Loss For 2022, the Group's revenue increased by 12.2% to 2.474 billion HKD, turning a prior-year loss into a profit of 4.53 million HKD through administrative expense control, resulting in 0.134 HK cents basic earnings per share Consolidated Statement of Profit or Loss Summary (Thousand HKD) | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Revenue | 2,473,646 | 2,204,085 | | Cost of Sales | (2,391,600) | (2,121,639) | | Gross Profit | 82,046 | 82,446 | | Administrative Expenses | (73,682) | (91,140) | | Profit/(Loss) Before Tax | 25,889 | (7,491) | | Income Tax Expense/(Credit) | (21,364) | 7,384 | | Profit/(Loss) for the Year | 4,525 | (107) | | Basic Earnings/(Loss) Per Share | 0.134 HK cents | (0.003 HK cents) | Consolidated Statement of Financial Position As of 2022 year-end, total assets slightly increased to 2.128 billion HKD, total liabilities rose due to increased borrowings, and net assets decreased to 1.343 billion HKD, maintaining robust liquidity Consolidated Statement of Financial Position Summary (Thousand HKD) | Indicator | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Non-current Assets | 281,459 | 304,379 | | Current Assets | 1,846,694 | 1,776,317 | | Total Assets | 2,128,153 | 2,080,696 | | Current Liabilities | 637,985 | 588,680 | | Non-current Liabilities | 146,979 | 76,924 | | Total Liabilities | 784,964 | 665,604 | | Net Assets | 1,343,189 | 1,415,092 | | Total Equity | 1,343,189 | 1,415,092 | Consolidated Statement of Cash Flows In 2022, the Group generated 170 million HKD net cash from operations, with investing activities resulting in 140 million HKD net outflow and financing activities a minor net outflow, increasing year-end cash to 679 million HKD Consolidated Statement of Cash Flows Summary (Thousand HKD) | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 170,480 | 25,068 | | Net Cash Flows from Investing Activities | (139,657) | (28,629) | | Net Cash Flows from Financing Activities | (891) | (52,757) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 29,932 | (56,318) | | Cash and Cash Equivalents at Beginning of Year | 650,890 | 706,570 | | Cash and Cash Equivalents at End of Year | 678,879 | 650,890 | Notes to the Financial Statements These notes detail accounting policies, estimates, and significant items, revealing foundation piling as the core revenue and profit driver, with business highly concentrated in Hong Kong and high customer concentration - The Group's principal businesses are categorized into three segments: foundation piling, property development and investment, and corporate and others. The foundation piling segment contributed the vast majority of revenue and all of the segment profit[481][516] Revenue and Segment Results by Segment (Thousand HKD) | Segment | 2022 Revenue | 2022 Segment Result | | :--- | :--- | :--- | | Foundation Piling | 2,458,718 | 93,926 | | Property Development and Investment | - | (2,489) | | Corporate and Others | 14,928 | (70,848) | - Almost all of the Group's revenue is derived from Hong Kong, accounting for 100% of total revenue[521] - The Group has a high customer concentration, with the top four customers contributing over 10% of revenue, and the largest customer A contributing 563 million HKD in revenue[373] - As of year-end, the Group's total interest-bearing bank borrowings amounted to 153 million HKD, a significant increase from 58 million HKD in the previous year[649] - The Group has contingent liabilities related to performance bonds of approximately 461 million HKD[716][752] Company Information Company Information Overview This section provides key information including the company's basic registration details, lists of Board and committee members, key senior management, auditor, legal advisors, principal bankers, stock code, and company website - The company was incorporated in Bermuda, with its principal place of business in Wong Chuk Hang, Hong Kong[963] - The company's auditor is Ernst & Young[963] - The company is listed on the Hong Kong Stock Exchange, with stock code 687[963]