Economic Environment - In the second half of 2018, despite strong performance in premium office rents and hotels, the market faced volatility due to liquidity shortages in China and rising US interest rates, leading to a short-term decline in Hong Kong property prices[7]. - The strategic competition between the US and China is expected to have profound impacts on the global economy, particularly disrupting the established global technology supply chain over the past two decades[7]. - The company is adjusting its policy direction in response to the trade war and economic slowdown threats, indicating a shift towards a more balanced medium to long-term economic development strategy[7]. - The company is closely monitoring the potential for a trade agreement between China and the US, which could influence global economic conditions[7]. Tourism Industry - The number of tourists from China to Thailand reached a historical high of 38.27 million, representing a 7.5% increase compared to the previous year[7]. - Following a strong first quarter in 2018, the tourism industry in Thailand faced challenges in the second half, particularly after the tragic boat accident in Phuket, which significantly reduced the number of Chinese tourists[7]. - The company has noted that the market in Bangkok remains stable in terms of occupancy rates due to new hotel openings, despite facing short-term political uncertainties from the upcoming elections[7]. Financial Performance - Total revenue for the fiscal year ending March 31, 2019, was HKD 743,100,000, an increase of 10.0% from HKD 675,800,000 in 2018[9]. - Operating profit rose to HKD 220,500,000, compared to HKD 191,900,000 in 2018[9]. - Share of profit from joint ventures increased to HKD 167,300,000, up from HKD 133,500,000 in 2018[9]. - Fair value of investment properties increased by HKD 366,500,000, lower than the HKD 475,500,000 increase in 2018[9]. - The company experienced a strong performance in the first quarter of 2018, but the second half of the year presented challenges due to external market conditions[7]. Investment and Assets - The acquisition of two buildings in Taikoo Shing for HKD 15,000,000,000, with a total area of 792,780 square feet, is expected to enhance rental growth in the area[16]. - The group’s investment properties had a book value of HKD 7,450,000,000, up from HKD 7,090,000,000 in the previous year[22]. - The fair value of the group's investment properties as of March 31, 2019, was approximately HKD 7,525,000,000, with unrealized gains of about HKD 366,503,000 recognized in profit or loss[155]. - The carrying value of the group's interest in associates was approximately HKD 2,337,377,000, with significant associate Supreme Key Limited accounting for HKD 1,606,174,000 of this amount[155]. Shareholder Information - The proposed final dividend is HKD 0.031 per share, consistent with the previous year's dividend, totaling HKD 17,311,000 for the interim dividend paid on January 23, 2019[28]. - The group's available reserves for distribution to shareholders amounted to HKD 965,748,000 as of March 31, 2019, an increase from HKD 930,552,000 in 2018[32]. - The top five customers accounted for approximately 31% of the total revenue, with the largest customer contributing about 11%[39]. - The company emphasizes a sustainable dividend policy to balance shareholder interests and prudent capital management, considering financial conditions and future operational needs[146]. Governance and Compliance - The company has a policy in place for compliance with legal and regulatory requirements, employing external legal advisors[59]. - The company has adopted the corporate governance code as per the listing rules, ensuring compliance with good governance principles[99]. - The board consists of eight directors, including five executive directors and three independent non-executive directors, meeting the requirement of having more than one-third independent directors[102]. - The independent non-executive directors have confirmed that the related party transactions are conducted in the ordinary course of business and on normal commercial terms[83]. - The company has established a risk management and internal control system, which includes five components: control environment, risk assessment, control activities, information and communication, and monitoring[117]. Cash Flow and Financial Position - The company reported a comprehensive financial position as of March 31, 2019, reflecting its financial performance and cash flow for the fiscal year[150]. - The total cash and cash equivalents at the end of the year increased to HKD 275,183 thousand from HKD 198,109 thousand in the previous year, reflecting a significant increase[191]. - Operating cash flow for the year was HKD 195,025,000, an increase from HKD 172,722,000 in the previous year, reflecting a positive trend in cash generation[189]. - The company reported a decrease in financial expenses to HKD 69,087,000 from HKD 50,411,000, indicating improved cost management[170]. Environmental and Social Responsibility - The company emphasizes environmental sustainability through energy management and waste reduction initiatives[57]. - The company encourages the use of electronic billing and receipts among tenants to promote environmental responsibility[57].
建生国际(00224) - 2019 - 年度财报