太兴置业(00277) - 2024 - 年度财报

Company Overview Company Information This section provides core company information for Tai Hing Properties Limited, including board members, committee structures, key banks, registered office, share registrar, company secretary, auditor, and legal advisors - The company's Chairman and Managing Director is Mr. Chan Hoi Sau, and the auditor is Heng Kin CPA Limited[4] Chairman's Statement In FY2024, group revenue grew 8.0% to HKD 56.0 million, but a HKD 9.8 million loss attributable to shareholders was recorded due to fair value losses on investment properties, with a proposed final dividend of 1.4 HK cents per share | Metric | 2024 Fiscal Year | 2023 Fiscal Year | | :--- | :--- | :--- | | Revenue | HKD 56.0 million | HKD 51.9 million | | Revenue Growth | +8.0% | - | | Loss Attributable to Shareholders | HKD 9.8 million | HKD 75.2 million | | Loss Per Share | HKD 4.0 cents | HKD 27.1 cents | | Dividend Type | Amount Per Share | | :--- | :--- | | Interim Dividend | HKD 0.3 cents | | Proposed Final Dividend | HKD 1.4 cents | | Total Annual Dividend | HKD 1.7 cents | - Business Outlook: Despite global economic uncertainties, the Group remains cautiously optimistic about the Hong Kong market, maintaining ample cash, extremely low debt levels, and adhering to prudent financial management principles[10] Management Discussion and Analysis This section analyzes the Group's financial and business performance, highlighting revenue growth from property investment, reduced annual loss due to lower fair value losses, strong liquidity, and a stable securities investment portfolio, while also outlining key risks Financial Review This fiscal year, property investment income increased to HKD 56.0 million, while the annual loss significantly narrowed to HKD 9.8 million due to reduced fair value losses on investment properties and a reversal of impairment loss on debt instruments, leading to a robust cash balance of HKD 292.6 million - Loss attributable to shareholders significantly decreased from HKD 75.2 million last year to HKD 9.8 million this year, primarily due to a reduction in fair value loss on investment properties from HKD 79.6 million to HKD 54.4 million, and a net reversal of impairment loss on debt instruments of HKD 15.5 million (compared to an impairment loss provision of HKD 10.0 million last year)[20] - The Group maintains ample liquidity, with bank balances and cash reaching HKD 292.6 million as of March 31, 2024, an increase of HKD 83.9 million from the previous year, mainly due to a reduction in securities investments[22] - Finance costs increased from HKD 1.1 million to HKD 1.5 million, a 36.4% year-on-year growth, primarily due to rising bank loan interest rates[23] Business Review The Group's core businesses are property and financial investments, with investment property value decreasing to HKD 2,029.4 million due to fair value adjustments, while maintaining a stable HKD 73.0 million securities portfolio and a consistent employee count - Property Investment: As of March 31, 2024, investment property value was HKD 2,029.4 million, a decrease of HKD 54.4 million from the previous year, mainly due to fair value declines of investment properties in Tsim Sha Tsui and Jordan, with no property acquisitions or disposals during the year[31] - Financial Investment: The securities and treasury products portfolio was valued at HKD 73.0 million (2023: HKD 174.7 million), comprising debt securities and listed equity investments[31] - Employees: As of March 31, 2024, the Group had 16 employees, consistent with the previous year, with total employee costs (including directors' emoluments) increasing to HKD 27.7 million from HKD 25.3 million last year[33] Our Risk Profile The Group manages business, operational, and financial risks by monitoring market trends, maintaining property competitiveness, implementing robust internal controls, and detailing financial risk management strategies in the financial statements notes - The Group identifies and manages three main types of risks: - Business risks: Addressed by monitoring market trends and regular property maintenance - Operational risks: Controlled through internal controls, segregation of duties, and external consultant reviews - Financial risks: Including market, credit, and liquidity risks, with specific management methods detailed in the financial statements notes[34][35][36] Governance and Operations Biographies of Directors and Senior Management This section details the backgrounds of the company's directors and senior management, including the founding chairman Mr. Chan Hoi Sau and his children as executive directors with extensive real estate and finance experience, alongside independent non-executive directors providing professional oversight - The executive director team comprises founder Mr. Chan Hoi Sau (Chairman and Managing Director) and his children Mr. Chan Yan Tin, Ms. Chan Yan Wai (Vice Chairman), and Mr. Chan Yan Lam, all possessing extensive experience in real estate and financial investment[37][38][39] - Independent non-executive directors include Mr. Chan Kwok Wai (Chairman of Audit, Remuneration, and Nomination Committees), Mr. Tse Lai Hang, and Ms. Cheung Chung Wai, who possess professional backgrounds in financial accounting, civil engineering, and commercial procurement finance, respectively[42][43][44] Corporate Governance Report This report outlines the company's commitment to high corporate governance standards, noting compliance with most code provisions, with the combined roles of Chairman and Chief Executive Officer being the only deviation, supported by independent non-executive directors for checks and balances - The company complied with all applicable provisions of the Corporate Governance Code, with the only deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. Chan Hoi Sau, a structure the Board believes ensures leadership continuity and efficiency, with three independent non-executive directors providing sufficient checks and balances[45][52] - The Board has established three committees: Audit, Remuneration, and Nomination, all chaired by independent non-executive director Mr. Chan Kwok Wai, with each committee holding meetings during the year to fulfill their responsibilities, including reviewing financial reports, remuneration policies, and director nominations[61][63][68] - The Group has established a risk management framework and outsourced its internal audit function to an external service provider, with the Board deeming the internal control system effective and adequate during the year, subject to at least annual review[87][88][89] Environmental, Social and Governance Report (ESG) This report details the Group's ESG strategies, policies, and performance, including the establishment of an ESG Executive Committee, focus on tenant services, data privacy, anti-corruption, supply chain management, employee welfare, and environmental efforts in emissions, resource efficiency, and climate change adaptation - The Group established an ESG Executive Committee, led by the Managing Director and senior management, responsible for policy formulation, performance monitoring, and integrating ESG initiatives into business operations[126][128] Greenhouse Gas Emissions (Self-occupied Office) | Greenhouse Gas Emissions (Self-occupied Office) | 2023/2024 | 2022/2023 | | :--- | :--- | :--- | | Total Emissions (tonnes of CO2e) | 68.91 | 77.06 | | Intensity (tonnes/person) | 4.30 | 4.81 | Energy Consumption (Self-occupied Office) | Energy Consumption (Self-occupied Office) | 2023/2024 | 2022/2023 | | :--- | :--- | :--- | | Electricity (kWh) | 82,662 | 90,888 | | Gas (MJ) | 31,200 | 42,872 | | Petrol (litres) | 4,778.26 | 4,711.52 | - The Group identified climate-related physical risks (e.g., typhoons, floods) and transition risks (e.g., policy, technology, market changes), and is committed to enhancing asset adaptability and energy efficiency to address these challenges[233][235] Report of the Directors This report summarizes the company's annual business review, performance distribution, share capital changes, and directors' and major shareholders' interests, noting a loss primarily from a HKD 54.4 million net deficit on investment property revaluation and confirming compliance with listing rules on public float - The Group revalued all investment properties at the end of the reporting period, resulting in a net deficit of HKD 54.4 million, which has been directly recognized in the consolidated statement of profit or loss and other comprehensive income[244] - Directors' and Major Shareholders' Interests: Chairman Mr. Chan Hoi Sau, through personal holdings, controlled corporations, and discretionary trusts, collectively holds approximately 73.95% of the company's share interests[251] Major Customers and Suppliers Percentage | Major Customers and Suppliers Percentage | 2024 Fiscal Year | 2023 Fiscal Year | | :--- | :--- | :--- | | Largest Customer as % of Total Sales | 6.4% | 6.8% | | Top Five Customers as % of Total Sales | 22.6% | 23.4% | | Largest Supplier as % of Total Purchases | 13.9% | 12.8% | | Top Five Suppliers as % of Total Purchases | 40.9% | 37.2% | - The company confirms that as of the report date, the public float is not less than 25% of the issued shares, complying with listing rule requirements[275] Financial Statements and Auditor's Opinion Independent Auditor's Report The auditor, Heng Kin CPA Limited, issued an unmodified opinion on the consolidated financial statements, affirming their fair presentation and compliance with HKFRS and the Companies Ordinance, identifying "Valuation of Investment Properties" as a key audit matter due to its significance and judgment involved - Auditor's Opinion: In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of your Group as at 31 March 2024 and of its consolidated financial performance and consolidated cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in compliance with the Hong Kong Companies Ordinance[280] - Key Audit Matter: Valuation of Investment Properties, identified as a key audit matter due to its materiality to the consolidated financial statements as a whole and the significant judgment involved in determining the valuation, with investment properties totaling approximately HKD 2.03 billion as of March 31, 2024[282][283][284] Consolidated Financial Statements This section presents the Group's core financial statements, including the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, and consolidated statement of cash flows, providing a comprehensive view of the Group's financial performance, position, equity changes, and cash flows for the 2024 fiscal year Consolidated Statement of Profit or Loss and Other Comprehensive Income In FY2024, the Group's turnover was HKD 56.032 million, with an annual loss of HKD 9.797 million, significantly narrowed from the previous year's HKD 75.204 million loss, primarily due to a HKD 54.437 million fair value loss on investment properties, resulting in a basic loss per share of HKD 0.04 | Item (HKD thousand) | 2024 | 2023 | | :--- | :--- | :--- | | Turnover | 56,032 | 51,876 | | Gross Profit | 51,109 | 49,618 | | Operating Loss | (7,940) | (60,951) | | Loss Before Tax | (5,629) | (70,922) | | Loss for the Year Attributable to Owners of the Company | (9,797) | (75,204) | | Other Comprehensive Expense for the Year | (55,232) | (1,766) | | Total Comprehensive Expense for the Year Attributable to Owners of the Company | (65,029) | (76,970) | | Basic and Diluted Loss Per Share (HKD) | (0.04) | (0.27) | Consolidated Statement of Financial Position As of March 31, 2024, the Group's total assets were HKD 2.683 billion, with net assets of HKD 2.575 billion, where investment properties constituted the largest portion of non-current assets at HKD 2.029 billion, and bank balances and cash significantly increased to HKD 288.4 million | Item (HKD thousand) | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Non-current Assets | 2,335,833 | 2,501,791 | | Of which: Investment Properties | 2,029,390 | 2,083,782 | | Current Assets | 347,365 | 251,814 | | Of which: Bank Balances and Cash | 288,425 | 171,040 | | Total Assets | 2,683,198 | 2,753,605 | | Current Liabilities | 20,057 | 20,534 | | Non-current Liabilities | 88,034 | 88,776 | | Total Liabilities | 108,091 | 109,310 | | Net Assets | 2,575,107 | 2,644,295 | | Total Equity | 2,575,107 | 2,644,295 | Consolidated Statement of Changes in Equity As of March 31, 2024, the Group's total shareholders' equity decreased from HKD 2.644 billion to HKD 2.575 billion, primarily due to a total comprehensive expense of HKD 65.03 million (including annual loss and other comprehensive expenses) and dividends paid of HKD 4.16 million | Item (HKD thousand) | 2024 Fiscal Year | 2023 Fiscal Year | | :--- | :--- | :--- | | Total Equity at Beginning of Year | 2,644,295 | 2,726,809 | | Loss for the Year | (9,797) | (75,204) | | Other Comprehensive Expense | (55,232) | (1,766) | | Dividends Paid | (4,159) | (5,544) | | Total Equity at End of Year | 2,575,107 | 2,644,295 | Consolidated Statement of Cash Flows In FY2024, the Group generated HKD 15.63 million net cash from operating activities and HKD 20.80 million net cash from investing activities, while financing activities resulted in a net outflow of HKD 8.93 million, leading to a net increase in cash and cash equivalents of HKD 27.50 million, with an ending balance of HKD 236.25 million | Item (HKD thousand) | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash From Operating Activities | 15,628 | 21,202 | | Net Cash From Investing Activities | 20,802 | 42,972 | | Net Cash Used in Financing Activities | (8,933) | (10,179) | | Net Increase in Cash and Cash Equivalents | 27,497 | 53,995 | | Cash and Cash Equivalents at Beginning of Year | 208,725 | 155,130 | | Cash and Cash Equivalents at End of Year | 236,252 | 208,725 | Notes to the Consolidated Financial Statements This section provides detailed notes to the consolidated financial statements, explaining significant accounting policies, key judgments, and estimates, and offering detailed classifications and explanations for various financial statement items, including revenue recognition, investment property valuation, financial instruments, taxation, dividends, related party transactions, and capital risk management - Note 16: Investment properties fair value is approximately HKD 2.03 billion, valued by independent professional surveyors using the direct comparison and/or income capitalization approaches, classified as Level 3 fair value measurements involving unobservable inputs such as market rents and capitalization rates[405][436][438] - Note 25: As of the reporting period end, total secured bank borrowings were HKD 44.59 million, with approximately HKD 2.81 million due within one year, and bank facilities are secured by investment properties, financial assets, and bank deposits[463][464] - Note 31: Related party transactions primarily include management fee income of HKD 3.95 million and dividend income of HKD 1.80 million from an associate[477][478] Appendix Five Year Financial Summary of the Group This section provides a summary of the Group's key financial data for the past five fiscal years (2020-2024), covering performance metrics like revenue, annual loss, and loss per share, as well as balance sheet items such as total assets, total liabilities, and shareholders' equity, facilitating comparative analysis of long-term financial trends | Item (HKD thousand) | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Results | | | | | | | Revenue | 56,032 | 51,876 | 57,128 | 64,490 | 73,120 | | Loss Attributable to Shareholders | (9,797) | (75,204) | (55,083) | (134,229) | (531,208) | | Assets and Liabilities | | | | | | | Total Assets | 2,683,198 | 2,753,605 | 2,836,393 | 3,190,308 | 3,330,089 | | Total Liabilities | 108,091 | 109,310 | 109,584 | 307,954 | 366,589 | | Total Equity Attributable to Shareholders | 2,575,107 | 2,644,295 | 2,726,809 | 2,882,354 | 2,963,500 | Particulars of Major Properties This section details the Group's major property portfolio as of March 31, 2024, primarily comprising commercial properties and some residential units in prime Hong Kong locations like Tsim Sha Tsui, Causeway Bay, and Central, along with one residential property in Vancouver, Canada, with most Hong Kong properties held under long or medium-term leases - The Group holds a significant portfolio of commercial properties in prime Hong Kong locations, including: - Retail shops at Park Lane Shopper's Boulevard, Nathan Road, Tsim Sha Tsui, Kowloon - The entire building of Sunbeam Commercial Centre, Granville Road, Tsim Sha Tsui, Kowloon - Portions and entire buildings of Tai Hing Building Block 1 and Block 2, Queen's Road Central, Hong Kong[512][513] - The Group holds a 50% interest in portions of commercial floors in Tai Hing Plaza and Pottinger House, Cameron Road, Tsim Sha Tsui, Kowloon, through an associate[515] - In addition to commercial properties, the Group also holds residential properties in Tai Tam, Hong Kong, and Vancouver, Canada, used as directors' quarters or for investment purposes[512][515]