Financial Performance - The Group recorded a significant loss of HK$356.6 million in 2020, compared to a loss of HK$51.0 million in 2019, primarily due to impairment losses on receivables in the financial leasing segment [9]. - The Group's performance was adversely impacted by the overall economic conditions and customer spending not recovering to pre-pandemic levels [9]. - The Group recorded a net loss of HK$356.6 million in 2020, a significant increase from a net loss of HK$51.0 million in 2019, with a loss attributable to owners of HK$242.9 million [31]. - Corporate expenses rose to HK$98.3 million in 2020 from HK$35.8 million in 2019, contributing to the overall net loss [31]. - The Group's total revenue decreased to HK$66.2 million in 2020 from HK$71.2 million in 2019, resulting in a gross loss of HK$16.4 million compared to a gross profit of HK$21.8 million in the previous year [23]. - The financial leasing segment recorded a segment loss of HK$234.0 million in 2020, compared to a loss of HK$45.8 million in 2019, primarily due to impairment losses on receivables of HK$199.4 million [12]. - The food additives business reported a net loss of HK$17.1 million in 2020, an increase from a net loss of HK$12.6 million in 2019, mainly due to a one-off impairment loss of HK$5.1 million [26]. - The trading segment, initiated in 2020, incurred a net loss of HK$5.5 million, attributed to start-up costs and fair value losses related to the acquisition of a new business [30]. - The Group's total assets decreased by HK$361.0 million to HK$1,185.7 million as of December 31, 2020, compared to HK$1,546.7 million in 2019 [51]. - The Group's bank and other borrowings were HK$458.6 million as of December 31, 2020, down from HK$523.7 million in 2019 [55]. Business Strategy and Operations - The Group initiated a trading business in medical and health products and acquired Tripler Holdings Limited to integrate its wholesaling business, aiming to diversify business risks [9]. - The Group's strategic focus includes expanding its distribution network with small to medium-sized pharmaceutical shops in Hong Kong [9]. - The Group's efforts to adapt to market challenges included exploring new business opportunities in response to the pandemic [9]. - The Group plans to explore new growth opportunities and undervalued assets to diversify income sources and achieve long-term growth despite challenging market conditions [13]. - The Group's strategy includes research and development of new products, such as Advantame and EPS, to enhance its offerings in the food additives segment [26]. - The Group's management remains cautiously optimistic about future growth opportunities and plans to seek undervalued assets for long-term diversification of income sources [92]. - The Group's trading segment plans to diversify products and broaden customer bases, having obtained a wholesaler license for proprietary Chinese medicines and applied for exclusive distributorships [91]. Economic Environment - China's GDP grew by 2.3% year-on-year in 2020, recovering notably in the second half after a contraction in the first quarter [9]. - The overall financial outlook remains cautious, with a focus on recovery and potential future growth in the health product sector [9]. - The pandemic significantly impacted the Group's performance, leading to substantial losses primarily from impairment losses on receivables [76]. - The Group anticipates that the global economy will recover steadily with the use of COVID-19 vaccines, although long-term economic prosperity may be affected by geopolitical tensions [77]. - The Group anticipates a gradual economic recovery post-pandemic, supported by government fiscal measures and a stable monetary environment, although geopolitical tensions may pose challenges [81]. Risk Management - The Group's management is actively monitoring credit risks and has implemented measures to mitigate potential losses from defaulted customers [67]. - The Group has implemented robust risk management policies to monitor and manage credit risks associated with existing and new finance projects [84]. Environmental, Social, and Governance (ESG) Initiatives - The Group identified 22 ESG issues covering environmental, social, and operational aspects, prioritizing stakeholder inputs for actions and reporting [141]. - Stakeholder engagement is crucial for formulating environmental and social strategies, with key stakeholders including government, shareholders, customers, and employees [133]. - The Group aims to operate in compliance with laws and fulfill tax obligations, ensuring law-abiding operations and timely payments [135]. - The materiality assessment conducted in 2020 helped the Group identify critical ESG issues that align with stakeholder expectations [141]. - The Group emphasizes the importance of food safety and product quality, implementing ISO 22000:2005 standards [139]. - The Group's governance practices include optimizing internal control and risk management while ensuring timely disclosure of operating data [135]. - The Group's operations primarily focus on finance leasing, consulting services, investment properties, and food additives in the PRC and Hong Kong [129]. Environmental Performance - The Group's key environmental performance indicators for emissions in 2020 are detailed in the report [168]. - There were no significant hazardous waste generated due to the nature of the Group's business [162]. - The Group strictly complied with national and local environmental protection laws, with no material non-compliance reported in 2020 [164]. - The Group implemented various electricity-saving policies, aiming to reduce electricity consumption significantly [152]. - The Group promotes waste reduction practices, including recycling and reducing paper consumption [163]. - In 2020, there were no significant fines or sanctions due to non-compliance with environmental regulations [167]. - The Group encourages the use of teleconferencing to reduce carbon footprints associated with business travel [158]. - The Group's environmental policy promotes proper and environmentally friendly handling of office waste [161]. - Nitrogen oxides (NOX) emissions increased to 10,248 g in 2020 from 7,028 g in 2019, representing a 45.5% rise [169]. - Total GHG emissions rose to 883,091 kg CO2e in 2020, up from 664,437 kg CO2e in 2019, marking a 33% increase [169]. - Indirect emissions (Scope 2) surged to 808,083 kg CO2e in 2020, compared to 578,053 kg CO2e in 2019, reflecting a 39.8% increase [169]. - Total non-hazardous waste produced increased to 1,010 kg in 2020 from 617 kg in 2019, a rise of 63.6% [169]. - GHG emissions intensity increased to 43 kg CO2e per unit produced in 2020, up from 34 kg CO2e in 2019, indicating a 26.5% increase [169]. - The Group implemented measures to control vehicle numbers and business travel frequency to reduce air and GHG emissions [175]. - Non-hazardous waste management strategies included recycling and minimizing landfill disposal, achieving set targets for 2020 [176]. - The Group aims to enhance energy efficiency and increase the use of clean energy in its operations [185]. - Employees are encouraged to adopt water-saving practices, contributing to overall resource efficiency [186]. - The Group's policies focus on reducing energy consumption and monitoring energy efficiency across facilities [185]. - Total energy consumption increased to 1,033,146 kWh in 2020, up from 812,282 kWh in 2019, representing a 27.2% increase [188]. - Energy consumption intensity rose to 50 kWh per unit produced in 2020, compared to 42 kWh in 2019, indicating a 19% increase [188]. - Water consumption decreased significantly to 391 m³ per unit produced in 2020, down from 915 m³ in 2019, a reduction of 57.3% [188]. - Total packaging material (paper) used for finished products decreased to 3,716 kg in 2020 from 4,717 kg in 2019, a decline of 21.2% [188]. - The amount of packaging material (plastic) per unit produced increased to 0.1873 kg in 2020, up from 0.1557 kg in 2019, reflecting an increase of 20.3% [188]. - Natural gas consumption remained stable at 6 m³ per unit produced in both 2020 and 2019 [188]. - The Group implemented energy-saving measures, including variable-frequency drives on machinery, to reduce energy consumption and costs [197]. - An open recirculating water system was installed in the Liaoning factory to enhance water efficiency and reduce electricity consumption for water processing [194]. - The Group's policies for water and energy management were adopted and measures were achieved for the year 2020 [199]. - The Group's operational costs and environmental footprint are directly affected by energy and water consumption, highlighting the importance of efficient resource management [198].
恒嘉融资租赁(00379) - 2020 - 年度财报