SUNEVISION(01686)2022-09-23 09:30Financial Performance - Revenue for the period ending June 30, 2022, was HKD 2,085,845, an increase from HKD 1,873,950 in the previous year, representing a growth of approximately 11%[6] - EBITDA for the data center business reached HKD 786,035, reflecting an increase from HKD 747,046 in the previous year, which is a growth of about 5%[6] - The company reported a net profit attributable to shareholders of HKD 436,493 for the period, up from HKD 410,338 in the previous year, marking an increase of about 6%[6] - Operating profit for the period was HKD 538,468, compared to HKD 504,112 in the previous year, indicating a growth of approximately 7%[6] - Revenue for the year ended June 30 increased by 11% to HKD 2.086 billion, driven by demand from existing and new customers for data centers[15] - EBITDA rose by 10% to HKD 1.501 billion, or 11% when excluding COVID-19 related subsidies[16] - Profit attributable to shareholders increased by 8% to HKD 847 million, or 9% when excluding COVID-19 related subsidies[16] - The group reported a revenue increase of 11% year-on-year to HKD 2.086 billion, driven by demand from existing and new customers in data centers and IT facilities[29] - The operating profit rose by 8% year-on-year to HKD 1.043 billion, with data center and IT facilities contributing to a 9% increase in operating profit before corporate expenses, interest, and tax[29] - The EBITDA increased by 10% year-on-year to HKD 1.501 billion, maintaining a strong EBITDA margin of 72% due to economies of scale and cost efficiency improvements[29] Data Center Operations - The total floor area of data centers is approximately 3 million square feet, with a market share of around 26%[8] - The company operates 6 data centers, with a total floor area of 1.5 million square feet, contributing significantly to its revenue stream[8] - Two new data centers are under construction, with a total floor area of 1.4 million square feet and power capacity increasing from 80 MW to over 280 MW[10] - The company plans to expand its data center capabilities, leveraging government-designated land for high-end data center use in Tseung Kwan O[8] - Demand for "hyperscale" capacity remains strong, with most cloud service customers expanding their capacity in the company's data centers[16] - The company has a strong growth plan, with total data center floor area in Hong Kong expected to expand from 1.5 million square feet to nearly 3 million square feet after the completion of new projects[19] - Power capacity will increase from the current 80 MW to over 280 MW to meet growing customer demand[19] - MEGA IDC, the flagship project in Tseung Kwan O, aims to become the largest single data center in Hong Kong with a first phase floor area of approximately 500,000 square feet, targeting a 2023 opening[19] - The second phase of MEGA IDC will have a floor area of approximately 700,000 square feet, with a target opening in 2026[19] - The company is recognized as the largest telecommunications-neutral and cloud-neutral data center operator in Hong Kong, well-positioned to benefit from the ongoing demand growth in the data center market[20] Financial Position and Debt - Total assets as of June 30, 2022, were HKD 18,142,782, with total liabilities of HKD 13,551,246, resulting in total equity of HKD 4,591,536[7] - As of June 30, 2022, the group's bank balance and deposits were HKD 310 million, with bank loans totaling HKD 8.087 billion, resulting in net bank loans of approximately HKD 7.777 billion, a 7% increase from HKD 7.292 billion on December 31, 2021[31] - The group's debt ratio (net debt to equity attributable to shareholders) was 253% as of June 30, 2022; excluding the HKD 3.8 billion long-term unsecured shareholder loan from Sun Hung Kai Properties, the ratio was 170%[32] - The adjusted debt ratio, considering the fair value of completed data centers, would significantly reduce to 42% and 28% with and without shareholder loans, respectively[33] - The financing costs increased by 33% year-on-year to HKD 30 million, primarily due to higher loan levels[29] - The group successfully secured a HKD 3 billion 5-year term loan and revolving loan financing in November 2021 to fund multiple data center projects[32] Shareholder and Dividend Information - The company plans to distribute a final dividend of HKD 0.208 per share, subject to approval at the annual general meeting[17] - The company proposed a final dividend of HKD 0.208 per share for the year ended June 30, 2022, an increase from HKD 0.194 per share in 2021, totaling HKD 0.208 for the full year[61] - The board of directors emphasized a stable dividend policy, contingent on the group's financial performance, capital needs, and overall economic conditions[61] Corporate Governance and Management - The board of directors is responsible for the overall leadership and strategic direction of the company, ensuring compliance with corporate governance standards[130] - The company emphasizes high business ethics and corporate governance standards as a key objective to enhance shareholder value[128] - The board consists of 17 members, including 2 female directors, representing approximately 12% of the board[132] - The company aims to increase the proportion of female members on the board when suitable candidates are available[132] - The company has established formal service agreements for executive and non-executive directors, ensuring clarity in their roles and responsibilities[134] - The company has mechanisms in place to ensure the board receives independent viewpoints, enhancing the board's independence and decision-making[133] - The company has a code of conduct that outlines standards for employees to perform their duties with honesty and integrity[159] Risk Management - The company has implemented a risk management policy to effectively identify, assess, mitigate, report, and monitor key business risks across all business units[153] - The risk management committee identifies risks that could adversely affect the achievement of business objectives at least once a year[153] - The ongoing COVID-19 pandemic poses a risk of operational disruptions, particularly if there are strict lockdowns affecting data center operations and staff availability[154] - The political instability from the US-China trade war is creating uncertainty for the company's clients and future business prospects[154] Employee and Director Compensation - The company reported a director's remuneration of HKD 52,500 for the position of Vice Chairman and committee member as of the fiscal year ending June 30, 2022[37] - The CEO's total compensation, including basic salary, bonuses, and retirement benefits, amounted to approximately HKD 8,908,000 for the fiscal year ending June 30, 2022[38] - The company has a discretionary bonus system that considers overall group performance and individual contributions when determining bonuses[94] - The company provides medical, provident fund, and vacation benefits to ensure basic needs for employees[93] Shareholder Transactions and Interests - The company engaged in several transactions with Sun Hung Kai Properties and its affiliates during the year, with certain directors abstaining from voting to avoid conflicts of interest[70] - The company has identified significant related party transactions during the fiscal year, which are disclosed in the financial statements[101] - Major shareholders include Sunco Resources Limited and HSBC Trustee (C.I.) Limited, holding 1,719,427,500 shares each, representing approximately 147.02% and 147.11% of the issued share capital respectively[99][100]