太兴置业(00277) - 2024 - 中期业绩

Financial Performance Summary Consolidated Statement of Profit or Loss For the six months ended September 30, 2023, the Group turned profitable, recording a profit attributable to shareholders of HK$10.5 million, compared to a loss of HK$14.5 million in the prior period, primarily due to increased turnover and reduced financial asset-related losses, with turnover growing 11.8% year-on-year to HK$28.7 million Key Consolidated Statement of Profit or Loss Metrics (For the six months ended September 30) | Metric | 2023 (HK$'000) | 2022 (HK$'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Turnover | 28,687 | 25,669 | +11.8% | | Gross Profit | 25,743 | 24,730 | +4.1% | | Operating Profit (Loss) | 12,075 | (7,643) | Turned Profitable | | Profit (Loss) Before Tax | 12,464 | (11,807) | Turned Profitable | | Profit (Loss) for the Period Attributable to Owners of the Company | 10,506 | (14,528) | Turned Profitable | | Basic Earnings (Loss) Per Share | HK$3.79 cents | (HK$5.24 cents) | Turned Profitable | - The primary reasons for the turnaround to profitability include a narrower decline in investment property fair value, a significant reduction in revaluation losses on equity securities, and a substantial increase in impairment loss reversals on debt instruments[125][109][126] Consolidated Statement of Financial Position As of September 30, 2023, the Group's total assets were HK$2,680.2 million and net assets were HK$2,593.3 million, a slight decrease from HK$2,644.3 million as of March 31, 2023, with investment properties constituting the vast majority of non-current assets Financial Position Summary | Metric | September 30, 2023 (HK$'000) | March 31, 2023 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Assets | | | | | Investment Properties | 2,066,572 | 2,083,782 | -0.8% | | Total Assets | 2,702,577 | 2,753,605 | -1.9% | | Liabilities | | | | | Secured Bank Borrowings | 45,958 | 47,312 | -2.9% | | Total Liabilities | 109,243 | 109,310 | -0.1% | | Equity | | | | | Net Assets (Total Equity) | 2,593,334 | 2,644,295 | -1.9% | - The decrease in shareholders' funds was primarily due to a net loss of HK$46.1 million arising from the revaluation of 'debt instruments at fair value through other comprehensive income'[150] Consolidated Statement of Changes in Equity For the six months ended September 30, 2023, total shareholders' equity decreased from HK$2,644.3 million at the beginning of the period to HK$2,593.3 million at the end, primarily due to a HK$46.1 million fair value loss on debt instruments within 'other comprehensive expenses', partially offset by a HK$10.5 million profit for the period Summary of Changes in Equity (For the six months ended September 30, 2023) | Item | Amount (HK$'000) | | :--- | :--- | | Equity at beginning of period (as at April 1, 2023) | 2,644,295 | | Profit for the period | 10,506 | | Total other comprehensive expenses | (58,140) | | Of which: Net loss arising from revaluation of debt instruments | (46,100) | | Dividends paid | (3,327) | | Equity at end of period (as at September 30, 2023) | 2,593,334 | Notes to the Financial Statements Company Information and Basis of Preparation The Company is an investment holding company incorporated in Hong Kong, primarily engaged in property and securities investments, with these interim financial statements prepared in accordance with HKAS 34 'Interim Financial Reporting' and presented in HKD, reviewed by the audit committee but unaudited - The Group's principal activities are property investment and securities investment[43] - The interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting'[10] - The statements are unaudited by the Company's auditors but have been reviewed by the Company's Audit Committee[25] Operating Segments The Group's operations are divided into 'Property Investment' and 'Financial Investment' segments, with property investment being the primary revenue source contributing all turnover and most operating profit, while financial investment recorded operating profit mainly from interest income and impairment reversals, but also generated other comprehensive losses from fair value changes Segment Results (For the six months ended September 30, 2023) | Metric (HK$'000) | Property Investment | Financial Investment | Total | | :--- | :--- | :--- | :--- | | Turnover | 28,687 | – | 28,687 | | Segment Operating Profit (Loss) | (1,035) | 13,110 | 12,075 | | Profit (Loss) for the period | (1,867) | 12,373 | 10,506 | Segment Assets and Liabilities (As at September 30, 2023) | Metric (HK$'000) | Property Investment | Financial Investment | Total | | :--- | :--- | :--- | :--- | | Segment Assets | 2,653,865 | 48,712 | 2,702,577 | | Segment Liabilities | (63,033) | (46,210) | (109,243) | | Net Assets | 2,590,832 | 2,502 | 2,593,334 | Notes on Key Financial Items This section details the composition of key financial data, with turnover entirely from rental income, growing 11.8% year-on-year, and the Board declared an interim dividend of HK$0.3 cents per share; investment properties recorded fair value losses due to market revaluation, and the financial asset portfolio, primarily debt instruments, saw significant disposals and fair value losses, alongside substantial impairment reversals Turnover and Operating Profit Turnover for the period was approximately HK$28.7 million, entirely from property rental income, representing an 11.8% year-on-year increase, with operating profit calculated after deducting items such as employee costs, depreciation, and fair value losses on financial assets - Turnover from rental income was approximately HK$28.7 million, an increase from HK$25.7 million in the prior period[53] - Key items deducted in calculating operating profit include total employee costs of HK$12.3 million and a net reversal of impairment losses on debt instruments at fair value through other comprehensive income of HK$13.7 million[55] Dividends and Earnings Per Share The Board declared an interim dividend of HK$0.3 cents per share, totaling approximately HK$0.832 million, a decrease from HK$0.5 cents per share in the prior period, with basic earnings per share at HK$3.79 cents, compared to a loss of HK$5.24 cents per share last year Interim Dividends | Item | For the six months ended September 30, 2023 | For the six months ended September 30, 2022 | | :--- | :--- | :--- | | Interim dividend per share | HK$0.3 cents | HK$0.5 cents | | Total dividends | approximately HK$832,000 | approximately HK$1,386,000 | - Earnings per share are calculated based on a profit for the period of approximately HK$10,506,000 and 277,232,883 issued shares[60] Investment Properties and Financial Assets At period-end, investment properties had a fair value of HK$2.07 billion, recording a fair value loss of HK$17.28 million during the period; regarding financial assets, the Group significantly reduced its holdings of debt instruments at fair value through other comprehensive income, but recognized approximately HK$13.75 million in impairment reversals - Investment properties recorded a fair value loss of HK$17,280,000 during the period[61] - Financial assets at fair value through other comprehensive income, primarily debt instruments, decreased from approximately HK$173 million at the beginning of the period to approximately HK$106 million at the end[18][90][92] - A net reversal of impairment losses on debt instruments of approximately HK$13,746,000 was recognized during the period[93] Secured Bank Borrowings As of September 30, 2023, the Group's total secured bank borrowings were HK$45.96 million, slightly lower than HK$47.31 million at the beginning of the period, with most borrowings being long-term loans over five years at annual interest rates ranging from 2.79% to 3.27% Carrying Amount of Secured Bank Borrowings | Repayment Period | September 30, 2023 (HK$'000) | March 31, 2023 (HK$'000) | | :--- | :--- | :--- | | Within one year | 2,758 | 2,763 | | More than one year but not exceeding five years | 11,978 | 11,922 | | More than five years | 31,222 | 32,627 | | Total | 45,958 | 47,312 | Management Discussion and Analysis Financial Review The Group's financial position is robust, having successfully turned profitable this period, with revenue growth primarily driven by increased rental income from property renewals; while interest income from debt securities decreased due to portfolio reduction, revaluation losses on equity securities significantly narrowed, and the Group maintains ample liquidity, with its current ratio improving from 12.3 times to 12.9 times and net bank balances and cash increasing to HK$195 million - Revenue increased by 11.8% to HK$28.7 million, primarily due to increased rental income upon property renewals[105] - A profit attributable to shareholders of HK$10.5 million was recorded for the period, compared to a loss in the prior period[107] Liquidity Ratios | Metric | September 30, 2023 | March 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 12.9 times | 12.3 times | | Net bank balances and cash | HK$195.3 million | HK$161.4 million | Business Review and Outlook The business review indicates that property investment benefited from economic recovery with increased rental income, though occupancy slightly decreased to 85.0%; in financial investments, the Group reduced its debt securities portfolio by 38.8% to mitigate risk, and despite global economic uncertainties, the Group, with its strong financial foundation and prudent financial management, will continue to navigate challenges and seek quality investment opportunities - Property Investment: Occupancy rate was 85.0%, a slight decrease of 4.7% from 89.7% in the previous comparable period[134] - Financial Investment: To improve liquidity and reduce risk, the Group disposed of certain debt investments, reducing the debt securities portfolio by 38.8% to HK$105.8 million compared to the beginning of the year[154][155] - Outlook: The Group maintains a strong financial foundation and low gearing, remaining vigilant to challenges and seizing investment opportunities as they arise[139][157] Corporate Governance The Group complied with the Corporate Governance Code in the Listing Rules during the reporting period, with the sole deviation being the roles of Chairman and Managing Director (Chief Executive Officer) held by the same individual, Mr. Chan Hoi Sau, which the Board believes ensures consistent leadership and efficiency, and the Audit Committee has reviewed these interim financial statements - The Audit Committee has reviewed the accounting policies and practices with management and reviewed the unaudited interim financial statements for the six months ended September 30, 2023[142] - The Group complied with the Corporate Governance Code, except that the roles of Chairman and Chief Executive Officer were not separated, with Mr. Chan Hoi Sau holding both positions[143][160]