迪臣发展国际(00262) - 2020 - 中期财报

Financial Statements Condensed Consolidated Statement of Profit or Loss The Group's revenue grew by 14.1% to HKD 224.1 million, but gross profit and profit for the period significantly declined by 40% and 59.4% respectively Summary of Consolidated Statement of Profit or Loss | Indicator | Six Months Ended Sep 30, 2019 (HKD thousands) | Six Months Ended Sep 30, 2018 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 224,108 | 196,491 | +14.1% | | Gross Profit | 41,971 | 69,971 | -40.0% | | Profit Before Tax | 10,220 | 28,477 | -64.1% | | Profit for the Period | 4,919 | 12,123 | -59.4% | | Profit Attributable to Owners of the Company | 5,202 | 12,538 | -58.5% | | Basic and Diluted EPS | 0.53 HK cents | 1.28 HK cents | -58.6% | Condensed Consolidated Statement of Comprehensive Income The Group recorded a total comprehensive loss of HKD 76.68 million for the period, primarily driven by HKD 81.6 million in other comprehensive loss from overseas currency translation Summary of Consolidated Statement of Comprehensive Income | Indicator | Six Months Ended Sep 30, 2019 (HKD thousands) | Six Months Ended Sep 30, 2018 (HKD thousands) | | :--- | :--- | :--- | | Profit for the Period | 4,919 | 12,123 | | Other Comprehensive Loss for the Period, Net of Tax | (81,602) | (117,811) | | Total Comprehensive Loss for the Period | (76,683) | (105,688) | | Total Comprehensive Loss Attributable to Owners of the Company | (76,403) | (105,282) | Condensed Consolidated Statement of Financial Position Total assets decreased to HKD 2.283 billion, with net assets slightly declining to HKD 1.562 billion, while total interest-bearing borrowings stood at HKD 363 million Summary of Statement of Financial Position | Indicator | Sep 30, 2019 (HKD thousands) | Mar 31, 2019 (HKD thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 1,343,072 | 1,402,040 | | Total Current Assets | 940,358 | 1,189,924 | | Total Assets | 2,283,430 | 2,591,964 | | Total Current Liabilities | 369,328 | 560,443 | | Total Non-current Liabilities | 352,497 | 384,180 | | Total Liabilities | 721,825 | 944,623 | | Net Assets | 1,561,605 | 1,647,341 | | Total Equity | 1,561,605 | 1,647,341 | Condensed Consolidated Statement of Changes in Equity Equity attributable to owners of the Company decreased from HKD 1.651 billion to HKD 1.565 billion, mainly due to other comprehensive loss of HKD 81.6 million from foreign exchange fluctuations - Equity attributable to owners of the Company decreased from HKD 1,651,273 thousand at the beginning of the period to HKD 1,565,090 thousand at the end of the period[17] - The change in equity was primarily influenced by the combined effect of profit for the period (+HKD 5,202 thousand) and other comprehensive loss (-HKD 81,605 thousand), with the latter mainly from exchange differences on translation of overseas operations (-HKD 76,994 thousand)[17] Condensed Consolidated Statement of Cash Flows Operating activities resulted in a net cash outflow of HKD 31.76 million, while investing activities generated a net inflow of HKD 53.98 million, leading to a net decrease in cash and cash equivalents of HKD 27.13 million Summary of Cash Flow Statement | Indicator | Six Months Ended Sep 30, 2019 (HKD thousands) | Six Months Ended Sep 30, 2018 (HKD thousands) | | :--- | :--- | :--- | | Net Cash Flows from/(used in) Operating Activities | (31,759) | 75,600 | | Net Cash Flows from Investing Activities | 53,980 | 64,654 | | Net Cash Flows used in Financing Activities | (49,353) | (130,139) | | Net Increase/(Decrease) in Cash and Cash Equivalents | (27,132) | 10,115 | | Cash and Cash Equivalents at Beginning of Period | 28,130 | 68,259 | | Cash and Cash Equivalents at End of Period | 512 | 75,379 | Notes to the Condensed Consolidated Financial Statements Note 1 Basis of Preparation The interim financial statements are prepared under HKAS 34, with the adoption of HKFRS 16 Leases having no significant impact on the Group's financial position - The financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[26] - The Group first adopted Hong Kong Financial Reporting Standard 16 Leases on April 1, 2019, with management assessing no significant right-of-use assets or lease liabilities recognized upon adoption[27][37] Note 2 Operating Segment Information The Group's two segments are property development and investment, and other businesses, with property contributing most revenue and profit, and Mainland China being the main revenue source Results by Business Segment (Six Months Ended Sep 30, 2019) | Segment | Revenue (HKD thousands) | Operating Profit (HKD thousands) | | :--- | :--- | :--- | | Property Development and Investment Business | 200,195 | 16,420 | | Others | 23,913 | 3,933 | | Total | 224,108 | 20,353 | Revenue from External Customers by Geographical Area (Six Months Ended Sep 30, 2019) | Region | Revenue (HKD thousands) | | :--- | :--- | | Hong Kong | 15,057 | | Mainland China | 209,051 | | Total | 224,108 | - During the period, approximately HKD 180.8 million in revenue was derived from sales to a single customer within the property development and investment business segment[51] Note 3 Revenue, Other Income and Gains Total revenue reached HKD 224 million, primarily from property development and investment (HKD 188 million) and medical equipment sales (HKD 23.91 million), supplemented by HKD 6.63 million in other income and gains Revenue Source Analysis | Revenue Source | 2019 (HKD thousands) | 2018 (HKD thousands) | | :--- | :--- | :--- | | Property Development and Investment Business | 188,191 | 164,375 | | Trading of Medical Equipment and Home Security Products | 23,913 | 20,274 | | Gross Rental Income | 12,004 | 11,842 | | Total | 224,108 | 196,491 | Note 6 Income Tax Total income tax expense significantly decreased to HKD 5.3 million, primarily from current tax in other regions and land appreciation tax in Mainland China Composition of Tax Expense | Item | 2019 (HKD thousands) | 2018 (HKD thousands) | | :--- | :--- | :--- | | Current Period Expense - Other Jurisdictions | 3,390 | 8,330 | | Deferred Tax | 734 | 884 | | Land Appreciation Tax in Mainland China | 1,177 | 7,140 | | Total Tax Expense for the Period | 5,301 | 16,354 | Note 7 Dividends No interim dividend is recommended, but a special dividend of HKD 0.5 cents per share, totaling HKD 4.89 million, was paid due to the disposal of Deson Construction - The Board does not recommend the payment of an interim dividend (2018: nil)[79] - A special interim dividend of HKD 0.5 cents per share, totaling HKD 4,890 thousand, was paid due to proceeds from the disposal of Deson Construction[78] Note 13 Non-current Assets Held for Sale The Group completed the disposal of its interest in Deson Construction for HKD 68.59 million, incurring a HKD 0.493 million loss, leading to its classification as a non-current asset held for sale - The Group agreed to dispose of its entire interest in Deson Construction for approximately HKD 68,589,000[96] - The disposal was completed on June 18, 2019, with the Group recording a disposal loss of HKD 493,000[97] - Consequently, as of March 31, 2019, the HKD 68,589,000 interest in Deson Construction Group was classified as a non-current asset held for sale[97][98] Management Discussion and Analysis Business Review Total turnover increased by 14.1% to HKD 224 million, but overall profit attributable to owners of the Company significantly decreased due to lower gross profit margins in the property business despite revenue growth - Property development and investment business revenue grew by 13.6% to HKD 200 million, primarily due to the sale of the entire Zhujiang Lane project to a single customer for RMB 160 million[119][120] - Despite increased property sales revenue, the Zhujiang Lane project's gross profit margin of approximately 12% was significantly lower than the prior period's Expo Plaza project's 30%, causing segment operating profit to fall from HKD 36.54 million to HKD 16.42 million[122] - Revenue from trading medical equipment and home security products increased by 17.9% to HKD 23.91 million, with operating profit growing to HKD 3.93 million, mainly driven by increased medical equipment sales for the Tseung Kwan O Hospital project[124] Financial Review Overall gross profit margin declined to 19% due to lower property sales margins, while the Group maintained a stable financial position with a current ratio of 2.55 and gearing ratio of 18% - The Group's gross profit margin decreased from 36% to 19%, primarily because the Zhujiang Lane project sold this period had a gross profit margin of approximately 12%, significantly lower than the Expo Plaza project's approximately 30% in the prior period[127] - As of September 30, 2019, the Group's current ratio was 2.55 (March 31, 2019: 2.12) and gearing ratio was 18% (March 31, 2019: 19%), indicating a stable financial structure[129] - The Group's bank credit facilities are secured by leasehold land and buildings, investment properties, properties held for sale, and deposits located in Hong Kong and China[134] Outlook The Group maintains an optimistic outlook on the Mainland China property market, pursuing diversified development through property projects in Kaifeng, Hong Kong, and Shanghai, while expanding medical equipment and e-commerce services - Mainland China Property Projects: Kaifeng "Century Grand Garden" Zone G is expected to be completed in Q4 2020 with pre-sales commencing in Q2; Kaifeng "Expo Plaza" Hotel is expected to commence operations in December 2019[139][142] - Hong Kong and Shanghai Investments: Participation in the redevelopment of an old commercial building in Tsim Sha Tsui, Hong Kong, through Topford International (6% equity interest); investment in Embassy Project, Stone Project, and Tian Ran Ju Project in Shanghai, seeking potential buyers or focusing on asset management[145][148][150][152] - Real Estate Fund Participation: Involvement as both general and limited partner in Pamfleet Shanghai Real Estate Fund II (PSREFII), investing in value-add real estate projects in Shanghai and other tier-one cities[154][155] - New Business Expansion: Establishment of an e-solutions company for customs clearance logistics services in Indonesia and China, and engagement in general trade and e-commerce services via platforms like Haipaiker and Pinduoduo[161][162] Other Disclosures Human Resources As of September 30, 2019, the Group employed 125 staff, with total employee benefit expenses increasing to HKD 12.1 million due to salary adjustments - As of September 30, 2019, the Group had 125 employees[172] - Total employee benefit expenses (including directors' emoluments) for the period were approximately HKD 12.1 million, representing a year-on-year increase of approximately 23.5%[172] Share Option Scheme The Company's share option scheme, adopted in 2012 to incentivize participants, had no outstanding options at the end of the reporting period - As of the end of the reporting period, the Company had no outstanding share options under the share option scheme[179] Directors' and Substantial Shareholders' Interests As of September 30, 2019, Director Mr. Tse Man Shing held 42.81% of the Company's shares, while Granda Overseas Holding Co. Ltd. held 17.76% Major Shareholders' Shareholding (Sep 30, 2019) | Shareholder Name | Capacity | Number of Shares Held | Percentage of Share Capital | | :--- | :--- | :--- | :--- | | Sparta Assets Limited (wholly owned by Mr. Tse) | Beneficial Owner | 349,935,000 | 35.79% | | Mr. Tse | Interest in Controlled Corporation and Direct Interest | 418,596,600 | 42.81% | | Granda Overseas Holding Co. Ltd. (wholly owned by Mr. Chan For Fat) | Beneficial Owner | 173,698,740 | 17.76% | Corporate Governance The Company largely complied with the Corporate Governance Code, with a deviation regarding non-executive directors' term appointments, and has established key board committees - The Company complied with most provisions of the Corporate Governance Code during the reporting period, with a deviation from Code Provision A.4.1[198] - The deviation relates to independent non-executive directors not having a specific term of appointment but being subject to retirement by rotation every three years[199] - The Audit Committee has reviewed these interim results and believes the financial statements comply with applicable accounting standards and provide appropriate disclosures[203]