SUNEVISION(01686)2023-09-22 09:30Financial Performance - Revenue for the period from January 1, 2023, to June 30, 2023, was HKD 1,237,780,000, an increase from HKD 1,108,123,000 in the previous period[6] - Gross profit for the same period was HKD 690,181,000, compared to HKD 630,619,000 in the prior period, reflecting a growth of approximately 9.5%[6] - EBITDA for the data center business reached HKD 886,367,000, up from HKD 815,900,000, indicating a year-over-year increase of about 8.6%[6] - Profit attributable to shareholders for the period was HKD 472,241,000, an increase from HKD 433,124,000, representing a growth of approximately 9%[6] - Operating profit before financial costs was HKD 634,310,000, compared to HKD 558,156,000 in the previous period, marking an increase of around 13.7%[6] - The company reported a pre-tax profit of HKD 563,698,000, up from HKD 519,996,000, which is an increase of about 8.4%[6] - Revenue for the year ended June 30, 2023, reached HKD 2,345,903, an increase of 12.4% compared to HKD 2,085,845 in 2022[7] - Annual underlying profit increased to HKD 889,840, up 5.1% from HKD 846,831 in the previous year[7] - The company reported a total comprehensive income of HKD 902,761 thousand for 2023, slightly up from HKD 895,492 thousand in 2022[170] - The company's profit for the year increased to HKD 905,365,000, up from HKD 846,831,000 in the previous year, representing a growth of approximately 6.5%[174] Data Center Operations - The company continues to focus on expanding its data center operations, which are a significant contributor to its revenue growth[6] - The company operates 7 data centers with a total floor area of 1.7 million square feet, capturing approximately 29% of the high-end data center market in Hong Kong[8] - A new data center, MEGA IDC, is set to be completed in Q4 2023, with a total floor area of 1.212 million square feet and a power capacity increase from 100 MW to over 280 MW[9] - The company is developing two submarine cable landing stations, enhancing connectivity and routing diversity for future growth[10] - The MEGA Plus data center, completed in 2017, is positioned as a high-end flagship data center with significant cloud service capabilities[8] - The company has a strategic focus on expanding its data center footprint to meet increasing demand in the cloud era[9] - The flagship MEGA IDC project will offer around 1.2 million square feet of floor space and support up to 180 megawatts of IT power capacity, with the first phase expected to be completed in Q4 2023[19] - The total floor space of the company's data centers in Hong Kong will expand from 1.7 million square feet as of June 30, 2023, to nearly 3 million square feet upon full activation of new facilities[19] Financial Position and Equity - Total assets amounted to HKD 20,777,612, while total liabilities were HKD 16,121,791, resulting in total equity of HKD 4,655,821[7] - The total equity increased from HKD 4,591,536 in 2022 to HKD 4,655,821 in 2023, reflecting a growth of 1.4%[7] - The total equity of the group as of June 30, 2023, was HKD 4.7 billion, which could increase to HKD 29.8 billion based on independent property valuations[13] - The company’s total equity as of June 30, 2023, was HKD 4,655,821,000, compared to HKD 4,591,536,000 in the previous year, marking an increase of about 1.4%[172] Debt and Financing - The company is committed to maintaining a cost-effective capital structure while managing debt prudently in a high-interest environment[13] - The company’s net bank loans increased by 6% to approximately HKD 9.498 billion as of June 30, 2023[25] - The company’s debt-to-equity ratio was 286%, which improved to 204% when excluding a long-term unsecured shareholder loan of HKD 3.8 billion[25] - The company’s financial costs increased significantly to HKD 108,772,000 from HKD 29,715,000, indicating a rise of about 265%[174] - A financing agreement was signed with Bank of China (Hong Kong) for up to HKD 1.5 billion in term loans and up to HKD 1.5 billion in revolving loans[121] - The company entered into a financing agreement with HSBC for a total amount not exceeding HKD 3 billion, consisting of HKD 2 billion in term loan financing and HKD 1 billion in revolving loan financing[123] Dividend Policy - The company plans to distribute a final dividend of HKD 0.112 per share, with a payout ratio of approximately 50%, a decrease from the previous years' payout ratio of around 100%[12] - The proposed final dividend is HKD 0.112 per share for the year ended June 30, 2023, down from HKD 0.208 per share in 2022[55] - Total annual dividend for the year ended June 30, 2023, is HKD 0.112 per share, compared to HKD 0.208 per share in 2022[55] - The company continues to monitor and review its dividend policy, considering various factors including interest rates and capital expenditure needs[12] Governance and Management - The company has a structured governance framework with various committees led by experienced directors[34] - The board of directors consists of 17 members, including 2 female directors, representing approximately 12% of the board[129] - The company emphasizes the importance of performance-based bonuses for its directors, which are determined based on operational performance and individual contributions[30] - The board is responsible for setting corporate goals, developing strategies, and monitoring their implementation[130] - The company has established a clear delegation of authority to management for daily operations, with management required to report to the board and seek approval for certain decisions[138] Risk Management - The company has established a risk management policy to effectively identify, assess, mitigate, report, and monitor key business risks across all business units[149] - The audit committee and internal audit department have reviewed the effectiveness of the risk management and internal control systems for the fiscal year ending June 30, 2023, finding them adequate[153] - The company identifies key risks including project development risks related to timely completion of new data centers and upgrades to existing ones[151] - Geopolitical risks may impact the company's operations, including potential delays in international submarine cable connections to Hong Kong[151] Compliance and Regulations - The company is committed to compliance with various legal regulations, which may incur additional operational costs[56] - The company has confirmed that the continuing connected transactions are conducted on normal commercial terms and are in the overall interest of shareholders[112] - The company adheres to regulations regarding the disclosure of inside information, ensuring timely public announcements when necessary[154] - The company has mechanisms in place to ensure the board receives independent viewpoints and regularly reviews these mechanisms for effectiveness[147] Share Options and Compensation - The company has a stock option plan that allows for the issuance of options, which are treated as non-listed securities derivatives[66] - The company’s stock options plan aims to attract and retain high-performing participants for future development and expansion[80] - The group maintains a competitive compensation policy, regularly conducting market benchmark surveys[86] - The group has implemented a discretionary bonus system based on overall performance and individual contributions[87] Construction and Contracts - The total contract amount for the construction contract signed on May 5, 2020, is HKD 821,143,855, which is subject to adjustments[95] - The major contract signed on March 17, 2023, has a total contract amount of HKD 142,791,000 plus a 10% contingency[96] - The total project management fee for the projects is HKD 11,000,000, which includes HKD 7,000,000 for the Tsuen Wan project and HKD 4,000,000 for the Chai Wan project[97] Audit and Financial Reporting - The auditor's report for the fiscal year ended June 30, 2023, was reviewed by the audit committee and issued an unqualified opinion[119] - The financial statements were prepared in accordance with Hong Kong Financial Reporting Standards, ensuring compliance with disclosure requirements[161] - The auditors assessed the appropriateness of the accounting policies adopted by the directors and the reasonableness of accounting estimates and related disclosures[167]