剑虹集团控股(01557) - 2024 - 年度业绩

Annual Results Announcement Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group's revenue decreased by 28.6% to HKD 175 million, but a HKD 90 million compensation significantly narrowed the annual loss to HKD 51.56 million Key Indicators of Consolidated Statement of Profit or Loss | Indicator | 2024 (HKD thousands) | 2023 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 175,174 | 245,349 | -28.6% | | Gross Loss | (31,039) | (28,983) | +7.1% | | Other Income | 90,925 | 10,239 | +788.0% | | Loss from Operations | (42,381) | (63,794) | -33.6% | | Loss Before Tax | (51,560) | (74,115) | -30.4% | | Loss for the Year | (51,560) | (74,115) | -30.4% | | Total Comprehensive Loss for the Year | (56,490) | (74,115) | -23.8% | | Basic Loss Per Share (HK cents) | (12.2) | (18.5) | -34.1% | Consolidated Statement of Financial Position As of March 31, 2024, the Group's total assets decreased to HKD 202 million, resulting in net current liabilities and a shift to net liabilities of HKD 25.76 million Key Indicators of Consolidated Statement of Financial Position | Indicator | March 31, 2024 (HKD thousands) | March 31, 2023 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 12,667 | 50,953 | -75.1% | | Current Assets | 189,322 | 389,082 | -51.3% | | Total Assets | 201,989 | 440,035 | -54.1% | | Current Liabilities | 227,597 | 373,598 | -39.1% | | Non-current Liabilities | 156 | 65,411 | -99.8% | | Total Liabilities | 227,753 | 439,009 | -48.1% | | Net Current (Liabilities)/Assets | (38,275) | 15,484 | N/A | | Net (Liabilities)/Assets | (25,764) | 1,026 | N/A | Summary of Notes to Financial Statements The notes reveal significant going concern uncertainties due to losses, net liabilities, and winding-up petitions, despite a HKD 90 million compensation - The Group faces significant going concern uncertainties, primarily due to an annual loss of approximately HKD 51.56 million, net current liabilities of approximately HKD 38.28 million, net liabilities of approximately HKD 25.76 million, and two winding-up petitions filed by a bank for outstanding credit facilities[7] - Other income significantly increased to HKD 90.93 million, primarily from a HKD 90 million compensation provided by the former ultimate holding company, New Grace Gain, for losses on certain foundation projects[32][33] - Post-reporting period, The Bank of East Asia Limited filed a winding-up petition against the Company and its wholly-owned subsidiary, Kim Hung Foundation, involving an outstanding credit facility of approximately HKD 11.6 million plus accrued interest[56] Basis of Preparation and Going Concern Despite being prepared on a going concern basis, the financial statements highlight significant uncertainties due to losses, net liabilities, and winding-up petitions - As of March 31, 2024, the Group incurred a loss of approximately HKD 51.56 million, with net current liabilities of approximately HKD 38.28 million and net liabilities of approximately HKD 25.76 million, alongside two winding-up petitions, indicating significant going concern uncertainties[7] - To address liquidity issues, the Company has obtained financial support letters from Mr. Chan Yung Sang, the ultimate controlling shareholder, the former ultimate holding company, and a subsidiary director, pledging financial resources or not demanding repayment of amounts due[10] Segment Information The Group's main segments are Foundation and Building Services, which incurred a HKD 32.62 million loss, and the smaller Chemical Product Sales, with most revenue from Hong Kong Segment Performance Summary (2024) | Segment | Revenue (HKD thousands) | Results (HKD thousands) | | :--- | :--- | :--- | | Provision of Foundation and Building Services | 171,856 | (32,615) | | Chemical Product Sales | 3,318 | (3,089) | | Others | — | (217) | | Total | 175,174 | (35,921) | - Geographically, the Hong Kong market contributed the vast majority of revenue, reaching HKD 172 million, accounting for 98.1% of total revenue[28] Contract Assets and Liabilities Contract assets significantly decreased to HKD 65.68 million due to project completion and compensated write-offs, while new contract liabilities of HKD 11.96 million arose - Contract assets significantly decreased from HKD 249 million to HKD 65.68 million, primarily due to the write-off of approximately HKD 65.93 million in contract assets, which was compensated by the former ultimate holding company[43][44] - New contract liabilities of HKD 11.96 million arose during the year, primarily due to customer prepayments received for the provision of construction services[47][48] Events After Reporting Period On June 21, 2024, The Bank of East Asia filed a winding-up petition against the Company and its subsidiary for approximately HKD 11.6 million in unpaid credit facilities, posing a severe threat - On June 21, 2024, The Bank of East Asia Limited filed a winding-up petition against the Company and its wholly-owned subsidiary, Kim Hung Foundation, involving outstanding credit facility principal of approximately HKD 11.6 million plus accrued interest[56] Management Discussion and Analysis Management reviewed a challenging year with a 28.6% revenue decrease, but net loss narrowed due to compensation; strategic focus shifted to cash flow improvement and diversification - Overall Group revenue decreased by 28.6% to HKD 175 million, primarily due to reduced completed works following the completion of several large foundation and building projects[62] - To address uncertain economic conditions, the Group's strategic focus shifted from aggressive bidding to improving liquidity, including measures such as selling unprofitable machinery, redeeming life insurance policies, and reducing debt and administrative expenses[86] - The Group has initiated chemical product trading as a pilot and is actively researching and deploying the feasibility of development in new energy materials, environmental recycling, and other fields to explore new revenue and profit growth points[87] Financial Review Revenue decreased by 28.6% and gross loss expanded by 7.1%, but a HKD 90 million compensation narrowed net loss to HKD 51.56 million Financial Performance Summary | Item | Reason for Change | | :--- | :--- | | Revenue Decrease | Reduced completed works after the completion of several large projects[62] | | Gross Loss Increase | Increased construction costs incurred at the completion stage of certain projects[63] | | Other Income Increase | Recognition of HKD 90 million compensation from the former ultimate holding company[65] | | Increase in Write-off of Contract Assets | Final agreements with customers on long-outstanding projects for lower amounts, and management adopting a more prudent estimation[68] | | Net Loss Decrease | Primarily due to compensation from the former holding company[71] | Liquidity, Financial Resources and Capital Structure The Group's liquidity is extremely tight with a 0.8 current ratio and an equity deficit; total debt significantly decreased to HKD 25.67 million Liquidity and Capital Structure Indicators | Indicator | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Bank and Cash Balances (HKD thousands) | 84,497 | 98,074 | | Total Debt (HKD thousands) | 25,667 | 211,686 | | Current Ratio | 0.8 | 1.0 | | Debt-to-Asset Ratio | Not Applicable | 20,632.2% | Outlook Despite challenges in the Hong Kong construction industry, the Group remains cautiously optimistic, prudently expanding core businesses while vigorously exploring new growth areas like new energy and recycling - Facing challenges in Hong Kong's construction industry, the Group's primary focus has shifted from aggressive bidding to improving liquidity, including strategic asset sales and debt reduction[86] - The Group is optimistic about the development potential of new energy materials and environmental recycling industries, having initiated chemical product trading as a pilot and planning further development in this area to explore new revenue and profit growth points[87] Corporate Governance The Company largely complied with corporate governance codes, though Chairman and CEO roles are not separated, and no independent internal audit department exists - The Company complied with most provisions of the Corporate Governance Code, but with deviations: the roles of Chairman and Chief Executive Officer are not segregated, and the Company has no Chief Executive Officer position[89] - The Company has not established an independent internal audit department, but the Board believes that internal audit functions are fulfilled through close monitoring by executive directors and senior management, and by engaging external independent consultants for review[90][92]