中国唐商(00674) - 2024 - 年度业绩

Consolidated Financial Statements The Group reported a net loss of approximately HKD 114 million for the year ended March 31, 2024, a reversal from profit, with declining total and net assets reflecting challenging operations Consolidated Statement of Comprehensive Income Revenue grew 34.8% to HKD 877 million, but increased net losses and cost of properties sold resulted in a net loss of HKD 114 million for the year Key Data from Consolidated Statement of Comprehensive Income | Metric | 2024 (HKD) | 2023 (HKD) | Change (HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 877,472,298 | 650,769,369 | 226,702,929 | 34.8% | | Other losses, net | (157,676,223) | (9,415,351) | (148,260,872) | 1574.7% | | Cost of completed properties sold | (750,044,185) | (442,290,694) | (307,753,491) | 69.6% | | (Loss)/Profit before income tax | (176,193,139) | 121,214,202 | (297,407,341) | -245.3% | | (Loss)/Profit for the year | (113,524,321) | 79,098,494 | (192,622,815) | -243.5% | | (Loss)/Profit attributable to owners of the company | (115,060,979) | 30,366,064 | (145,427,043) | -478.9% | | Basic (loss)/earnings per share (HK cents) | (3.356) | 1.097 | (4.453) | -405.9% | Consolidated Statement of Financial Position As of March 31, 2024, total assets decreased by 27.3% to HKD 3.115 billion, with net current assets and net assets also declining, primarily due to a significant reduction in completed properties held for sale and an increase in other receivables Key Data from Consolidated Statement of Financial Position | Metric | 2024 (HKD) | 2023 (HKD) | Change (HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total assets | 3,115,074,507 | 4,289,095,740 | (1,174,021,233) | -27.3% | | Total non-current assets | 397,599,461 | 482,074,643 | (84,475,182) | -17.5% | | Total current assets | 2,717,475,046 | 3,807,021,097 | (1,089,546,051) | -28.6% | | Completed properties held for sale | 1,958,703,030 | 2,939,392,390 | (980,689,360) | -33.4% | | Other receivables | 553,855,068 | 389,462,880 | 164,392,188 | 42.2% | | Cash and bank balances | 139,113,234 | 413,280,678 | (274,167,444) | -66.3% | | Total liabilities | 2,211,442,966 | 3,247,574,074 | (1,036,131,108) | -31.9% | | Net assets | 903,631,541 | 1,041,521,666 | (137,890,125) | -13.2% | Notes to the Financial Statements The notes detail the Group's basis of preparation, accounting policy changes, segment performance, key asset and liability movements, and contingent liabilities, highlighting property development as the main revenue source but also a driver of overall loss due to impairment and fair value changes Basis of Preparation The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, using a historical cost basis (except for investment properties) and presented in HKD, despite the company's functional currency being RMB - The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Hong Kong Companies Ordinance[8] - The financial statements are prepared on a historical cost basis, except for investment properties which are measured at fair value[9] - The Company's functional currency is Renminbi, but the consolidated financial statements are presented in Hong Kong Dollars for the convenience of users of shares listed on the Stock Exchange[10] Adoption of New or Revised Hong Kong Financial Reporting Standards The revised Hong Kong Financial Reporting Standards adopted this year, such as amendments to HKAS 1 and HKAS 8, had no significant impact on the Group's financial position or performance, primarily affecting accounting policy disclosures, while other standards issued but not yet effective are also not expected to have a material impact - The amendments to Hong Kong Financial Reporting Standards adopted this year, including amendments to HKAS 1 and HKAS 8, had no significant impact on the Group's financial position and performance, primarily affecting accounting policy disclosures[11][13][15] - Hong Kong Financial Reporting Standards issued but not yet effective, such as amendments to HKAS 1 regarding classification of liabilities, are not expected to result in reclassification of the Group's liabilities and will have no significant impact on the consolidated financial statements[16][17][19] Segment Reporting The Group primarily operates in property sub-leasing and investment, property development, and money lending, with property development contributing most of the revenue in FY2024, but both major segments recorded losses, with property development turning from profit to loss mainly due to impairment provisions for other receivables - The Group primarily operates in property sub-leasing and investment, property development, and money lending businesses[22] FY2024 Revenue and Loss Before Tax by Business Segment | Business Segment | External Revenue (HKD) | Reportable Segment Loss Before Income Tax (HKD) | | :--- | :--- | :--- | | Property sub-leasing and investment business | 53,482,751 | (27,894,740) | | Property development business | 823,989,547 | (124,692,815) | | Money lending business | – | (14,424) | | Total | 877,472,298 | (152,601,979) | - Property development business revenue significantly increased, but it turned from a profit of HKD 144 million in 2023 to a loss of HKD 125 million in 2024, mainly due to a net impairment loss provision of HKD 122 million for other receivables[22][24][26] - The Group's operations are primarily located in China, with all revenue in 2024 derived from China, and the majority of non-current assets (excluding financial instruments) also located in China[32][33] Other Operating Expenses Other operating expenses significantly increased to HKD 90.1 million this year, primarily due to the write-off of other receivables amounting to HKD 61.77 million and increased property development business expenses Details of Other Operating Expenses | Item | 2024 (HKD) | 2023 (HKD) | Change (HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Write-off of other receivables | 61,767,394 | – | 61,767,394 | N/A | | Property development business expenses | 21,275,011 | 18,157,882 | 3,117,129 | 17.2% | | Property sub-leasing and investment business expenses | 2,194,318 | 8,156,248 | (5,961,930) | -73.1% | | Total | 90,098,554 | 31,892,378 | 58,206,176 | 182.5% | (Loss)/Profit Before Income Tax This year, the Group recorded a loss before income tax of HKD 176 million, a reversal from profit, mainly due to increased cost of completed properties sold, impairment provisions for other receivables, and expanded fair value losses on investment properties Key Items Affecting (Loss)/Profit Before Income Tax | Item | 2024 (HKD) | 2023 (HKD) | Change (HKD) | | :--- | :--- | :--- | :--- | | Cost of completed properties sold | 750,044,185 | 442,290,694 | 307,753,491 | | Net impairment loss provision/(reversal) for other receivables | 121,546,959 | (5,722,232) | 127,269,191 | | Fair value loss on investment properties | 50,205,403 | 22,653,200 | 27,552,203 | Income Tax Credit/(Expense) The Group recorded an income tax credit of HKD 62.67 million this year, compared to an expense of HKD 42.12 million last year, primarily due to a deferred tax credit of HKD 83.9 million offsetting PRC corporate income tax and land appreciation tax expenses Details of Income Tax Credit/(Expense) | Item | 2024 (HKD) | 2023 (HKD) | | :--- | :--- | :--- | | Current tax for the year: | | | | – Hong Kong Profits Tax | – | – | | – PRC Enterprise Income Tax | (16,443,918) | (26,258,459) | | – PRC Land Appreciation Tax ("LAT") | (4,616,706) | (15,857,249) | | Underprovision in prior years: | | | | – PRC Enterprise Income Tax | (70,386) | – | | – PRC Land Appreciation Tax | (103,723) | – | | Deferred tax | 83,903,551 | – | | Total | 62,668,818 | (42,115,708) | - No Hong Kong Profits Tax provision was made for the year as the Group had no estimated assessable profits[37] Dividends For the year ended March 31, 2024, the Company neither paid nor proposed any dividends, consistent with the prior year - For the year ended March 31, 2024, the Company neither paid nor proposed any dividends[39] (Loss)/Earnings Per Share The basic loss per share for the year was 3.356 HK cents, compared to earnings per share of 1.097 HK cents last year, primarily due to the increased loss attributable to owners of the company, with no assumed conversion of convertible bonds for diluted loss calculation as it would reduce the loss per share (Loss)/Earnings Per Share Data | Metric | 2024 | 2023 | | :--- | :--- | :--- | | (Loss)/Profit for the year attributable to owners of the Company (HKD) | (115,060,979) | 30,366,064 | | Basic (loss)/earnings per share (HK cents) | (3.356) | 1.097 | | Weighted average number of ordinary shares | 3,428,466,570 | 2,767,059,447 | - For the calculation of diluted loss per share in 2024, the conversion of convertible bonds was not assumed as their exercise would result in a reduction in loss per share[42] Investment Properties As of March 31, 2024, the value of investment properties decreased to HKD 188 million, mainly due to a recognized fair value loss of HKD 50.21 million and exchange adjustments, with all investment properties revalued by an independent valuer on a market value basis Movement in Investment Properties | Item | 2024 (HKD) | 2023 (HKD) | | :--- | :--- | :--- | | At April 1 | 246,398,830 | 279,651,299 | | Fair value loss | (50,205,403) | (22,653,200) | | Exchange adjustments | (8,558,989) | (20,528,286) | | At March 31 | 187,634,438 | 246,398,830 | - The fair value of investment properties was revalued by an independent valuer, Asia Pacific Valuers & Consultants Limited, on a market value basis[44] Finance Lease Receivables As of March 31, 2024, net finance lease receivables were HKD 261 million, a slight decrease from the prior year, primarily arising from the property sub-leasing business Net Finance Lease Receivables | Metric | 2024 (HKD) | 2023 (HKD) | | :--- | :--- | :--- | | Gross finance lease receivables | 262,067,367 | 280,308,634 | | Less: Loss allowance | (888,468) | (990,330) | | Finance lease receivables | 261,178,899 | 279,318,304 | - Finance lease receivables arise from the property sub-leasing business, where customers are obligated to settle amounts according to lease contract terms[45] Other Receivables As of March 31, 2024, other receivables significantly increased by 42.2% to HKD 554 million, mainly comprising advances to contractors and refundable deposits for various potential business development projects Details of Other Receivables | Item | 2024 (HKD) | 2023 (HKD) | Change (HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Deposits | 13,544,541 | 15,813,656 | (2,269,115) | -14.4% | | Prepayments and other receivables | 540,310,527 | 373,649,224 | 166,661,303 | 44.6% | | Total | 553,855,068 | 389,462,880 | 164,392,188 | 42.2% | - The balance primarily includes advances to contractors and refundable deposits for various potential business development projects[47] Trade and Other Payables As of March 31, 2024, trade and other payables significantly decreased by 66.4% to HKD 104 million, mainly due to a substantial decline in trade payables, with a higher proportion of trade payables overdue by more than 90 days Details of Trade and Other Payables | Item | 2024 (HKD) | 2023 (HKD) | Change (HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 34,445,473 | 184,448,066 | (150,002,593) | -81.3% | | Accrued expenses | 2,999,511 | 3,900,341 | (900,830) | -23.1% | | Other payables | 38,568,354 | 88,986,647 | (50,418,293) | -56.7% | | Other deposits received | 27,530,759 | 30,429,120 | (2,898,361) | -9.5% | | Total | 103,544,097 | 307,764,174 | (204,210,077) | -66.4% | - In 2024, trade payables overdue by more than 90 days amounted to HKD 32.28 million, whereas there were no such amounts in 2023[48] Convertible Bonds As of March 31, 2024, the liability component of convertible bonds increased to HKD 184 million, primarily from bonds issued in March 2023 for the acquisition of 100% equity in Zhi Rong Holdings Limited, which remained outstanding and unconverted during the year Movement in Convertible Bonds Liability Component | Item | 2024 (HKD) | 2023 (HKD) | | :--- | :--- | :--- | | Carrying amount at April 1 | 170,283,454 | – | | Issue of convertible bonds | – | 187,949,336 | | Actual interest expense | 13,653,692 | 850,004 | | Derecognition upon conversion by bondholders | – | (18,515,886) | | Carrying amount at March 31 | 183,937,146 | 170,283,454 | - The convertible bonds with a total principal amount of HKD 249 million issued in March 2023 for the acquisition of 100% equity in Zhi Rong Holdings Limited remained outstanding and unconverted as of March 31, 2024[55][57] Contingent Liabilities As of March 31, 2024, the Group's guarantees to financial institutions on behalf of property unit purchasers amounted to approximately HKD 735 million, a significant decrease from the prior year, with no provision made as directors consider the likelihood of loss from these guarantees to be low Contingent Liabilities | Item | 2024 (HKD) | 2023 (HKD) | Change (HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Guarantees to financial institutions on behalf of purchasers of property units | 735,275,915 | 1,211,274,630 | (475,998,715) | -39.3% | - The directors believe it is unlikely that the Group will incur losses from these guarantees, as in the event of default, the Group can take over and sell the related properties at a higher price, thus no provision has been made[60] Management Discussion and Analysis This section reviews the Group's FY2024 financial performance and business operations, outlining future strategies; despite revenue growth, the Group turned to a loss due to impairment and fair value changes, necessitating a cautious operating approach, enhanced sales, and new project identification to improve profitability Financial Review The Group's FY2024 revenue increased by 34.8% to HKD 877.5 million, but due to write-offs and expected credit losses on other receivables, and reduced revenue recognition from property development, the Group recorded a loss of HKD 113.5 million for the year, a significant deterioration from the prior year's profit Consolidated Results Overview | Metric | 2024 (HKD) | 2023 (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 877,500,000 | 650,800,000 | 34.8% | | (Loss)/Profit for the year | (113,500,000) | 79,100,000 | -243.5% | - The significant increase in loss was primarily due to the recognition of write-offs and expected credit losses on other receivables, and reduced revenue recognition from the property development business[62] - The Board considers the fair value loss on investment properties to be a non-cash item with no impact on the Group's operating cash flow[63] Business Review The Group's main businesses include property sub-leasing and investment, property development, and financial services; property development is the primary revenue source but, affected by market conditions, the overall business segment turned to a loss, while the financial services business currently has no interest income and has surrendered its securities licenses to focus on other segments Property Sub-leasing and Investment Business In FY2024, revenue from this business grew 3.3% to HKD 53.5 million, but increased fair value losses on investment properties led to an expanded loss of HKD 27.9 million Performance of Property Sub-leasing and Investment Business | Metric | 2024 (HKD) | 2023 (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 53,500,000 | 51,800,000 | 3.3% | | Loss | (27,900,000) | (10,300,000) | 170.9% | - The increase in loss was primarily due to increased losses arising from the fair value of investment properties[64] Property Development Business In FY2024, property development business revenue grew to HKD 824 million, mainly from the Dongguan Tangshang Hanlinju and Puning Tangshang Central Garden projects; however, this segment turned from a profit last year to a loss of HKD 124.7 million, with completed properties held for sale/lease accounting for 62.9% of total assets at period-end Performance of Property Development Business | Metric | 2024 (HKD) | 2023 (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 824,000,000 | 598,900,000 | 37.6% | | Loss/Profit | (124,700,000) | 143,600,000 | -186.8% | - The increase in revenue primarily came from the Dongguan Tangshang Hanlinju and Puning Tangshang Central Garden projects, with approximately 79,000 square meters of gross floor area delivered and recognized as revenue during the year[65] - As of March 31, 2024, completed properties held for sale/lease amounted to HKD 1.959 billion, representing 62.9% of total assets[66] Financial Services Business The money lending business did not recognize interest income in FY2024, and the Group surrendered its securities, futures, and asset management licenses in November 2020 to focus on other business segments, having not yet identified suitable business opportunities - The money lending business did not recognize interest income in FY2024, and management will continue to seek new opportunities[67] - The Group surrendered its securities, futures, and asset management licenses in November 2020 to focus on other business segments[68] Liquidity and Financial Resources As of March 31, 2024, the Group had no bank borrowings, maintained a net cash position, and the capital gearing ratio was not applicable; with net current assets of HKD 1.239 billion and a current ratio of 1.8, the financial position is robust, and the Group uses no financial instruments for hedging nor faces exchange rate risk - As of March 31, 2024, the Group had no bank borrowings, maintained a net cash position, and the capital gearing ratio was not applicable[69][71] Liquidity Ratios | Metric | 2024 (HKD) | 2023 (HKD) | | :--- | :--- | :--- | | Net current assets | 1,239,300,000 | 1,417,000,000 | | Current ratio | 1.8 | 1.6 | - The majority of the Group's revenue is denominated in RMB and HKD, with no financial instruments used for hedging and no exposure to exchange rate risk[71] Fundraising Activities The Group has historically raised capital through convertible bond issuances for money lending, general working capital, and potential acquisitions; the HKD 249.2 million convertible bonds issued in 2023 for the acquisition of Zhi Rong Holdings Limited remained outstanding and unconverted as of March 31, 2024 - The Group previously issued convertible bonds in 2018 and 2017, with proceeds used for money lending business, general working capital, and potential acquisitions, and subsequently converted into ordinary shares or used to pay acquisition consideration[72][73][76] - Convertible bonds with a total principal amount of approximately HKD 249.2 million were issued in 2023 for the acquisition of the entire issued share capital of Zhi Rong Holdings Limited, and as of the year ended March 31, 2024, these bonds remained outstanding and unconverted[75] Pledges As of March 31, 2024, the Group had no bank borrowings, pledges, or guarantees - As of March 31, 2024, the Group had no bank borrowings, pledges, or guarantees[77] Contingent Liabilities (Management Discussion and Analysis) The Management Discussion and Analysis reiterates contingent liabilities, with specific details provided in Note 14, primarily concerning guarantees granted to financial institutions on behalf of property purchasers - Details of the Group's significant contingent liabilities are set out in Note 14 to this announcement[78] Remuneration Policy As of March 31, 2024, the Group employed 30 staff with total staff remuneration of approximately HKD 10.5 million; the remuneration policy is based on performance, experience, and industry practice, with directors' and senior management's remuneration determined by the Remuneration Committee, and the share option scheme expired on December 22, 2023 Employee and Remuneration Overview | Metric | 2024 | 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Number of employees | 30 | 47 | -36.2% | | Staff remuneration (HKD) | 10,500,000 | 9,700,000 | 8.2% | - The remuneration policy is based on employee performance, experience, and industry practice, with directors' and senior management's remuneration determined by the Remuneration Committee[79] - The share option scheme adopted by the Company expired on December 22, 2023[79] Major Investments, Acquisitions and Disposals For the year ended March 31, 2024, the Group had no major investments held, nor any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - For the year ended March 31, 2024, the Group had no major investments held, nor any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[80] Prospects Facing macroeconomic challenges in China's real estate market, the Group will adopt a more cautious operating strategy, enhance management efficiency, strengthen sales efforts, and actively seize marketing windows; management will continuously review business expansion, identify new projects to improve financial profitability, and strive for sustainable growth and maximized shareholder value - The Group faces macroeconomic challenges in China's real estate market and will adopt a more cautious operating strategy to enhance management efficiency[81] - The Group will continue to strengthen sales efforts in operations, especially in cities with incentive policies, actively raise funds, and seize marketing windows[81] - Management will remain prudent while being open to identifying new projects in China to enhance the Group's financial profitability and is committed to achieving sustainable growth and maximizing shareholder value[81][83] Other Information This section covers administrative and compliance information including dividend policy, share registration arrangements, securities trading, auditor's scope of work, corporate governance, and the annual general meeting; the company does not recommend a final dividend and confirms compliance with the Corporate Governance Code (except for board meeting frequency) and the Model Code for Securities Transactions by Directors Proposed Final Dividend The Board does not recommend the payment of any final dividend for the year ended March 31, 2024, consistent with the prior year - The Board does not recommend the payment of any final dividend for the year ended March 31, 2024[84] Closure of Register of Members To determine eligible shareholders for the 2024 Annual General Meeting, the Company will suspend registration of share transfers from September 16 to September 20, 2024, requiring shareholders to complete transfer registration by 4:30 p.m. on September 13, 2024 - The Company will suspend registration of share transfers from September 16 to September 20, 2024, to determine eligible shareholders for the 2024 Annual General Meeting[85] - Shareholders wishing to attend and vote at the Annual General Meeting must complete share transfer registration by 4:30 p.m. on September 13, 2024[85] Purchase, Sale or Redemption of Listed Securities For the year ended March 31, 2024, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the year ended March 31, 2024, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[86] Scope of Work of Auditor The consolidated financial statement figures in the Group's preliminary announcement for the year ended March 31, 2024, have been agreed with the auditor, ZHONGZHENG TIANHENG CPA LIMITED, but their work does not constitute an assurance engagement, thus no assurance is provided on the preliminary announcement - The consolidated financial statement figures contained in the Group's preliminary announcement have been agreed with the auditor, ZHONGZHENG TIANHENG CPA LIMITED[88] - The auditor's work does not constitute an assurance engagement, and therefore no assurance is provided on the preliminary announcement[88] Corporate Governance Code The Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during FY2024, except for Code Provision A.1.1 (requiring at least four board meetings annually), as only two regular meetings were held, though the Board believes sufficient meetings were held and senior management provides business development information periodically - The Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during FY2024[89] - There was a deviation from Code Provision A.1.1, as the Board only held two regular meetings during the year, but the Board believes sufficient meetings were held, and senior management provides business development information periodically[89] Compliance with Model Code for Securities Transactions by Directors The Company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, and all Directors have confirmed full compliance with its required standards during the year after specific enquiry - The Company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules[90] - All Directors have confirmed full compliance with the required standards set out in the Model Code during the year after specific enquiry[90] Audit Committee The Company's Audit Committee, comprising three independent non-executive directors, has reviewed the Group's accounting principles and practices, discussed audit and financial reporting matters, and reviewed the audited financial statements for the year ended March 31, 2024 - The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's accounting principles and practices and discussed audit and financial reporting matters[91] - The Audit Committee has reviewed the Group's audited financial statements for the year ended March 31, 2024[91] Public Float Based on publicly available information and to the best of the Directors' knowledge, the Company has maintained the prescribed public float under the Listing Rules as of the date of this announcement - The Company has maintained the prescribed public float under the Listing Rules as of the date of this announcement[93] Annual General Meeting The Company will hold its 2024 Annual General Meeting on Friday, September 20, 2024, with the relevant notice to be published and dispatched in due course as required - The Company will hold its 2024 Annual General Meeting on Friday, September 20, 2024[94] Publication of Results on HKEX and Company Website The Company's annual report for the year ended March 31, 2024, will be dispatched to shareholders and made available on the websites of Hong Kong Exchanges and Clearing Limited and the Company in due course - The Company's annual report will be dispatched to shareholders and made available on the websites of Hong Kong Exchanges and Clearing Limited and the Company[95]