博富临置业(00225) - 2019 - 年度财报

Company Information Company Overview This section outlines the company's fundamental registration and governance details, including board composition, key advisors, and share information - The Chairman and Managing Director is Mr. Wong Tat Cheung, and the independent auditor is BDO Limited, Hong Kong[6] Share Information | Item | Details | | :--- | :--- | | Listing Venue | Main Board of The Stock Exchange of Hong Kong Limited | | Stock Code | 225 | | Board Lot | 2,000 shares | Chairman's Statement Annual Profit The Group's consolidated net profit for FY2019 was approximately HKD 137 million, a significant decrease from HKD 481 million in the previous year, primarily due to a substantial reduction in investment property revaluation surplus; excluding non-operating items, the adjusted operating net profit was HKD 84.9 million, representing a 2.3% year-on-year increase FY2019 Profit and Non-Operating Items (HKD) | Metric | FY2019 | FY2018 | | :--- | :--- | :--- | | Consolidated Net Profit | Approx. HKD 136.9 million | Approx. HKD 480.8 million | | Investment Property Revaluation Surplus | Approx. HKD 65.9 million | Approx. HKD 420.9 million | | Net Loss on Securities Investment Revaluation | Approx. HKD 4.9 million | Approx. HKD 8.9 million | | Operating Net Profit (Adjusted) | HKD 84.9 million | HKD 83.0 million | | YoY Change in Operating Net Profit | +2.3% | - | Dividends The Board recommends a final dividend of HKD 0.34 per share, bringing the total annual dividend to HKD 0.38 per share, including an interim dividend of HKD 0.04 per share, consistent with the previous year - The total annual dividend for FY2019 is HKD 0.38 per share, consistent with FY2018[8] Business Review The Group's business review covers Hong Kong and Mainland China, highlighting Hong Kong's property leasing as a key profit source with 3.3% revenue growth, stable contributions from Elephant Holdings, and real estate fund investments, alongside efforts to sell the Guangzhou project and declining performance of Beijing residential properties Hong Kong Operations Hong Kong operations primarily focus on property leasing, with rental income growing 3.3% year-on-year, including 2.4% for residential and 5.0% for office and industrial properties; major subsidiary Elephant Holdings (audio-visual solutions) contributes positively, accounting for approximately 22% of total group revenue; the Group also subscribed to the 'TKO Fund' in October 2018 with a capital commitment of HKD 39 million - Rental income from Hong Kong investment properties increased by 3.3% year-on-year, serving as the primary source of the Group's operating profit[10] - Major subsidiary Elephant Holdings Limited's revenue accounts for approximately 22% of the Group's total revenue, providing a positive contribution[12] - The Group subscribed to the 'TKO Fund' in October 2018 with a capital commitment of HKD 39 million to diversify investments[13] Mainland China Property Development Projects The Group is seeking to divest its one-third interest in Guangzhou Dongyin Plaza, with the first public tender having expired and a second tender underway; residential units in Beijing's Chaoyang District experienced declines in both occupancy rates and monthly rents compared to the previous year - The Group is attempting to sell its equity interest in Guangzhou Dongyin Plaza through public tender, with a second tender initiated after the first one failed[17] - Occupancy rates and monthly rents for Beijing residential units have decreased compared to last year[18] Outlook Due to social unrest in Hong Kong and US-China trade friction, the short-term economic outlook for Hong Kong remains uncertain, potentially adversely impacting the Group's rental income in the coming year; nevertheless, the Group will continue to prudently seek new investment opportunities and enhance existing property quality - Management anticipates that social unrest in Hong Kong and US-China trade friction will severely impact sectors like retail and tourism, potentially adversely affecting the Group's rental income in the coming year[20] Financial Summary Five-Year Financial Summary This section presents the Group's key financial indicators over the past five years in a tabular format, showing 2019 revenue at HKD 139 million, shareholders' equity increasing to HKD 5.536 billion, net asset value per share reaching HKD 50.2, dividends per share maintained at HKD 0.38, and the gearing ratio decreasing from 0.8% to 0.7% 2015-2019 Key Financial Indicators | Metric | 2015 | 2016 | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue (HKD million) | 132 | 147 | 142 | 136 | 139 | | Shareholders' Equity (HKD million) | 4,386 | 4,611 | 5,000 | 5,440 | 5,536 | | Net Asset Value Per Share (HKD) | 39.8 | 41.8 | 45.4 | 49.4 | 50.2 | | Operating Profit Per Share* (HKD) | 0.79 | 0.86 | 0.83 | 0.75 | 0.77 | | Dividend Per Share (HKD) | 0.27 | 0.29 | 0.34 | 0.38 | 0.38 | | Gearing Ratio (%) | 1.6% | 1.5% | 1.0% | 0.8% | 0.7% | *Excluding the impact of major non-operating items (after tax) Biographical Details of Directors and Senior Management Directors This section introduces the background information of the Board members, including Executive Directors Mr. Wong Tat Cheung (Chairman and Managing Director), Mr. Wong Tat Ki, and Mr. Wong Tat Sum, who are brothers, and Independent Non-Executive Directors Ms. Lam Tse Lai Kuen, Mr. Li Kwok Sing, Mr. Sit Hoi Wah, and Mr. Szeto Chun Chung, who possess extensive experience in finance, law, and other fields - Executive Directors Mr. Wong Tat Cheung, Mr. Wong Tat Ki, and Mr. Wong Tat Sum are brothers[28][29][30] - Independent Non-Executive Directors possess extensive professional experience and backgrounds in banking, law, securities, and asset management[31][33][34][35] Senior Management This section introduces the background information of senior management, including General Manager Mr. Wong Chin Yee and Company Secretary and Financial Controller Mr. Hui Shui Yuen - General Manager Mr. Wong Chin Yee is the son of the Chairman and Managing Director, Mr. Wong Tat Cheung[37] - Company Secretary and Financial Controller Mr. Hui Shui Yuen is a fellow member of the Hong Kong Institute of Certified Public Accountants with over eighteen years of experience in accounting and finance[38] Environmental, Social and Governance Report Environment The Group is committed to environmental protection, primarily through energy saving, water conservation, and waste management to mitigate operational environmental impact; in FY2019, total greenhouse gas emissions decreased from 21.82 tonnes of CO2e to 16.70 tonnes, and the Group implemented various environmental measures, such as prioritizing energy-efficient appliances, encouraging waste segregation, and successfully promoting electronic billing to 80% of tenants to reduce paper consumption Greenhouse Gas Emissions (tonnes of CO2e) | Emission Scope | FY2019 | FY2018 | | :--- | :--- | :--- | | Scope 1 (Direct Emissions) | 5.75 | 6.27 | | Scope 2 (Indirect Emissions) | 10.55 | 15.54 | | Scope 3 (Other Indirect Emissions) | 0.40 | Not Applicable | | Total | 16.70 | 21.81 | - Since promoting electronic billing to tenants in April 2019, 80% of tenants have adopted it, effectively reducing paper consumption[60] - During the reporting period, the Group found no instances of non-compliance with relevant environmental regulations[62] Society The Group's social responsibility covers employment, health and safety, supply chain management, product responsibility, anti-corruption, and community investment; the Group is committed to providing a fair employment environment and a safe workplace, with a 0% staff turnover rate at the head office in FY2019, and also emphasizes supplier management, customer service quality, anti-corruption policy implementation, and active participation in community welfare activities Employment and Labor Practices As of September 30, 2019, the Group's head office employed 17 staff members, consistent with the previous year; the staff turnover rate for FY2019 was 0%, a significant improvement from 6.1% last year, and the Group enforces equal remuneration and anti-discrimination policies to ensure equal opportunities for all employees Employee Turnover Rate | Fiscal Year | Total Turnover Rate | | :--- | :--- | | 2019 | 0% | | 2018 | 6.1% | - At the end of the reporting period, the Group was involved in one legal proceeding concerning employee compensation[80] Health and Safety The Group is committed to fostering a safe working environment and regularly provides occupational health and safety training to employees; during the reporting period, there were no work-related fatalities, and lost workdays due to injuries remained at 0, consistent with the previous year - During the reporting period, the number of work-related fatalities and lost workdays due to injuries were both 0[84] Product/Service Responsibility The Group focuses on providing high-quality services to tenants and clients, establishing stringent quality control processes and customer complaint handling mechanisms; during the reporting period, no complaints related to engineering and services were received, nor were there any completed projects requiring recall due to safety or health reasons - During the reporting period, the number of complaints related to engineering and services received at the corporate level was 0[104] - The Group utilizes a complaint management tool named "Upkeep" to handle inquiries and complaints in real-time[108] Anti-Corruption The Group maintains a zero-tolerance stance on bribery, extortion, fraud, and money laundering, having established employee codes of conduct and whistleblowing policies; during the reporting period, the Group complied with all relevant anti-corruption regulations, with no concluded legal cases concerning bribery against the Group or its employees - During the reporting period, there were no concluded legal cases concerning bribery against the Group or its employees[119] Community Investment The Group actively fulfills its social responsibilities and encourages employee participation in volunteer activities; during the reporting period, it donated HKD 50,000 to the World Wide Fund for Nature and raised HKD 10,000 for "World Heart Day" activities - During the reporting period, a donation of HKD 50,000 was made to the World Wide Fund for Nature, and HKD 10,000 was raised for "World Heart Day"[121][122] Corporate Governance Report Corporate Governance Practices During the reporting period, the company complied with all code provisions of the Corporate Governance Code, with two deviations: Code Provision A.2.1 (non-separation of Chairman and Chief Executive Officer roles) and A.4.1 (Independent Non-Executive Directors without specific terms); the Board believes the current arrangements are in the company's best interests - The company deviates from Code Provision A.2.1, where the Chairman and Managing Director (equivalent to Chief Executive Officer) roles are combined and held by Mr. Wong Tat Cheung, which the Board believes provides strong and consistent leadership[127][149] - The company deviates from Code Provision A.4.1, as Independent Non-Executive Directors do not have specific terms but are subject to retirement by rotation and re-election in accordance with the company's articles of association[127][141] Board of Directors The Board of Directors, comprising three Executive Directors and four Independent Non-Executive Directors, is responsible for the company's leadership and oversight; the report details the Board's responsibilities, composition, diversity policy, director appointment and re-election mechanisms, and continuous professional development - The Board currently consists of seven members, including three Executive Directors and four Independent Non-Executive Directors, with Independent Non-Executive Directors constituting more than half of the Board[132] - The company has adopted a Board diversity policy, considering factors such as gender, age, cultural background, and professional experience when appointing directors[136] Board Committees The Board has established a Remuneration Committee, Audit Committee, and Nomination Committee; the report details each committee's composition, primary responsibilities, and annual meeting attendance, with most members being Independent Non-Executive Directors to ensure independence FY2019 Board and Committee Meeting Attendance Record | Director Name | Board Meetings | Remuneration Committee | Audit Committee | Nomination Committee | | :--- | :--- | :--- | :--- | :--- | | Wong Tat Cheung | 4/4 | 1/1 | Not Applicable | 3/3 | | Wong Tat Ki | 4/4 | Not Applicable | Not Applicable | Not Applicable | | Wong Tat Sum | 4/4 | Not Applicable | Not Applicable | Not Applicable | | Ms. Lam | 3/4 | Not Applicable | 1/2 | Not Applicable | | Mr. Li | 4/4 | 1/1 | 2/2 | 3/3 | | Mr. Sit | 4/4 | 1/1 | 2/2 | 3/3 | | Mr. Szeto | 1/1 | Not Applicable | Not Applicable | Not Applicable | Risk Management and Internal Control The Board bears overall responsibility for the Group's risk management and internal control systems; the Group has engaged an independent internal audit consultant to annually review the effectiveness of these systems, which are deemed effective and appropriate - The Group has engaged an independent internal audit consultant to conduct an annual year-end review of the effectiveness of its risk management and internal control systems[185] Directors' Report Management Discussion and Analysis This section reviews the Group's financial position; as of September 30, 2019, shareholders' equity was HKD 5.536 billion, total bank balances and cash were HKD 186 million, total debt was HKD 55 million, and the debt-to-equity ratio was 1.0%, indicating a low level; the Group maintains a conservative treasury policy and has HKD 436 million in unutilized bank credit facilities Financial Position Summary (September 30, 2019) | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Shareholders' Equity | HKD 5.536 billion | HKD 5.441 billion | | Bank Balances and Cash | HKD 186 million | HKD 248 million | | Total Debt | HKD 55 million | HKD 40 million | | Debt-to-Equity Ratio | 1.0% | 0.7% | - As of September 30, 2019, the Group had HKD 436 million in unutilized bank credit facilities, indicating ample liquidity[230] Major Customers and Suppliers During the reporting period, the Group's customer base was relatively diversified, with the top five customers collectively accounting for less than 18% of turnover; regarding suppliers, the top five suppliers accounted for approximately 71% of total purchases, with the largest supplier accounting for approximately 47% - The top five customers collectively accounted for less than 18% of turnover[246] - The top five suppliers accounted for approximately 71% of total purchases, with the largest supplier accounting for approximately 47%[246] Directors' and Major Shareholders' Interests in Shares This section discloses the interests of directors in the company's shares; Executive Directors Mr. Wong Tat Cheung, Mr. Wong Tat Ki, and Mr. Wong Tat Sum, who are brothers, hold substantial shares in the company through personal and discretionary trusts, with their combined interests exceeding 73% Executive Directors' Shareholdings (September 30, 2019) | Director Name | Total Shares Held | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | | Mr. Wong Tat Cheung | 81,084,666 | 73.6% | | Mr. Wong Tat Ki | 80,633,866 | 73.2% | | Mr. Wong Tat Sum | 81,218,666 | 73.7% | - The shareholding interests of the three Executive Directors are largely beneficially owned through discretionary trusts, resulting in overlapping interests[262] Connected Transactions On November 18, 2019, the company entered into an agreement with Elephant Holdings Limited, owned by the three Executive Directors, to acquire a 47.84% stake in its subsidiary Elephant Holdings for HKD 15.424 million; this transaction constitutes a discloseable connected transaction - Subsequent to the reporting period, the company agreed to acquire a 47.84% stake in its subsidiary Elephant Holdings from a connected person (owned by Executive Directors) for HKD 15.424 million to consolidate control[267] Independent Auditor's Report Audit Opinion Independent auditor BDO Limited, Hong Kong, issued an unmodified opinion on the Group's consolidated financial statements, deeming them to present a true and fair view of the Group's financial position as of September 30, 2019, and its financial performance and cash flows for the year then ended; the key audit matter identified by the auditor was the valuation of investment properties - The auditor issued an unmodified opinion, stating that the consolidated financial statements present a true and fair view of the Group's financial position and performance in accordance with Hong Kong Financial Reporting Standards[297] - The key audit matter identified was the valuation of investment properties; as of September 30, 2019, the fair value of investment properties was approximately HKD 5.214 billion[300][301] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended September 30, 2019, the Group recorded revenue of HKD 139 million, a slight year-on-year increase; however, due to a significant reduction in the fair value gain on investment properties, annual profit decreased from HKD 480 million last year to HKD 136 million, with basic earnings per share at HKD 1.24 Consolidated Statement of Profit or Loss Key Data (HKD thousand) | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Revenue | 139,223 | 135,535 | | Fair Value Gain on Investment Properties | 65,885 | 420,936 | | Profit Before Income Tax | 144,778 | 488,950 | | Profit for the Year | 136,151 | 480,008 | | Profit Attributable to Owners of the Company | 136,847 | 480,770 | | Basic Earnings Per Share (HKD) | 1.24 | 4.36 | Consolidated Statement of Financial Position As of September 30, 2019, the Group's total assets were HKD 5.706 billion, with investment properties accounting for HKD 5.214 billion as the primary asset; total equity was HKD 5.542 billion, indicating a robust financial position, and current liabilities were HKD 121 million, mainly comprising secured bank loans and trade payables Consolidated Statement of Financial Position Key Data (HKD thousand) | Metric | September 30, 2019 | September 30, 2018 | | :--- | :--- | :--- | | Investment Properties | 5,213,818 | 5,087,890 | | Total Assets | 5,705,536 | 5,588,661 | | Bank Loans (Current) | 55,000 | 40,000 | | Total Equity | 5,542,326 | 5,447,261 | Consolidated Statement of Cash Flows In FY2019, net cash generated from operating activities was HKD 65.1 million; net cash used in investing activities was HKD 97.28 million, primarily for additions to investment properties; net cash used in financing activities was HKD 28.78 million, mainly for dividend payments; net decrease in cash and cash equivalents during the year was HKD 60.96 million Consolidated Statement of Cash Flows Summary (HKD thousand) | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 65,099 | 52,341 | | Net Cash Used in Investing Activities | (97,279) | (10,738) | | Net Cash Used in Financing Activities | (28,780) | (38,800) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (60,960) | 2,803 | | Cash and Cash Equivalents at Year End | 185,992 | 247,630 | Five-Year Financial Summary Five-Year Financial Summary This section provides a summary of the Group's consolidated results and net assets from FY2015 to FY2019, showing relatively stable revenue, significant fluctuations in annual profit due to changes in investment property fair value, and a steady increase in total assets and net assets Consolidated Results (2015-2019) | Year (HKD thousand) | 2015 | 2016 | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 132,473 | 146,515 | 141,962 | 135,535 | 139,223 | | Profit for the Year | 172,529 | 259,690 | 420,421 | 480,008 | 136,151 | Consolidated Net Assets (2015-2019) | Year (HKD thousand) | 2015 | 2016 | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 4,547,930 | 4,781,392 | 5,147,246 | 5,588,661 | 5,705,536 | | Net Assets | 4,393,601 | 4,619,478 | 5,007,804 | 5,447,261 | 5,542,326 | Investment Property Information Investment Property Portfolio This section details the Group's wholly-owned investment property portfolio, including commercial, residential, and industrial properties in Hong Kong, and residential properties in Beijing, China; key Hong Kong properties include Lee Lim Building on Lockhart Road, Scenic Terrace on Scenic Villa Drive, residential properties on Harland Road, and Welland Centre II in Kwai Chung - The Group holds multiple core investment properties in Hong Kong, covering commercial, residential, and industrial uses, mostly under long-term leases[736][740] - The Group holds residential units in Jingda Garden, Chaoyang District, Beijing, Mainland China, as investment properties[740]