Financial Performance - The Group recorded total revenue of HK$101.52 million for the year ended 31 December 2019, a decrease of 18.5% from HK$124.61 million in 2018[29]. - The consolidated net loss for the Group was approximately HK$97.43 million, compared to a loss of HK$60.83 million in 2018, reflecting an increase in losses of 60.4%[29]. - The Group's securities and investment operations generated income of approximately HK$59.14 million, an increase of 29.7% from HK$45.56 million in 2018[30]. - Loss attributed to the securities and investment segment was approximately HK$69.73 million, up from HK$27.28 million in 2018, indicating a significant increase in losses of 156.5%[30]. - The Group incurred a realized loss of HK$4.48 million from the disposal of its entire portfolio of listed securities investments, while earning HK$0.40 million in dividend income[11]. Asset Management - The fund size managed by the Group as of 31 December 2019 was US$736 million, an increase of 11.2% from US$662 million as of 31 December 2018[7]. - Asset management fees recorded were HK$35.20 million, contributing a segment profit of HK$27.04 million for FY 2019[7]. - The Group plans to focus more resources on developing the asset management business and securities investment to provide stable income in 2020[20]. - The Group's asset management services commenced after obtaining regulatory licenses for advising on securities and asset management in May 2018[75]. - The asset management subsidiary managed three funds with sizes ranging from US$20 million to approximately US$642 million, generating asset management fee income of HK$35.20 million, down from HK$51.91 million in the previous year[76]. Investment Strategy - The Group intends to expand its investment strategy by enhancing portfolios in bonds, fixed income products, listed securities, and equity investments[23]. - The Group's strategy includes investing in large state-owned enterprises and companies in real estate, education, renewable energy, consumables, and technology sectors[24]. - The Group's investment strategy includes leveraging fixed income products through financial arrangements such as total return swaps and repurchase agreements[36][39]. - The Group aims to manage interest rate risk by developing a fixed income portfolio, considering various factors such as credit ratings and economic conditions[35][38]. Credit and Liquidity Issues - The Group faced credit and liquidity issues in the private business sector, with defaults on notes leading to impairment losses included in the FY 2019 results[6]. - The Group attempted recovery actions for defaulted notes, including legal proceedings against the issuers[6]. - The Group is negotiating repayment solutions with note issuers and guarantors for the defaulted amounts[6]. - Impairment losses related to fixed income investments amounted to HK$91.39 million and HK$25.84 million for Rundong Fortune Investment Limited and Sanpower (Hong Kong) Company Limited, respectively[29]. Corporate Governance - The Board of Directors is committed to high standards of corporate governance, ensuring accountability and transparency[97]. - The Board composition includes a mix of executive, non-executive, and independent non-executive directors, with a focus on diversity of skills and expertise[99]. - The Group has adopted the Corporate Governance Code, with minor deviations noted during the year[98]. - The Audit Committee is responsible for reviewing the financial reporting process, risk management, and internal control policies[108]. - The Company has developed a code of conduct to guide Directors and employees in handling confidential information and monitoring information disclosure[151]. Environmental, Social, and Governance (ESG) Initiatives - The Group is committed to minimizing environmental impacts through responsible business management and energy-saving initiatives[185]. - The Group's ESG strategy is overseen by the board of directors, ensuring effective risk management and internal control systems[177]. - Total carbon dioxide emissions decreased slightly to 46,063 kg in 2019 from 50,264 kg in 2018, primarily due to reduced emissions from business air travel[191]. - The Group aims to reduce resource usage and carbon footprint through various green initiatives, including energy-efficient equipment and resource-conserving processes[195]. - The Group's existing businesses are not expected to have a significant impact on water or packaging material usage[197]. Employee and Board Composition - The Group employed 3 employees in the PRC and 20 employees in Hong Kong as of December 31, 2019, maintaining good relationships with staff without major disruptions due to labor disputes[92]. - 22% of the Board members are female, while 78% are male, indicating a gender diversity ratio[131]. - 33% of the Board members hold a Bachelor's degree, while 67% have a Master's degree, indicating a high level of educational attainment[131]. - Each Director is subject to retirement by rotation at least once every three years, ensuring fresh perspectives on the Board[129]. Future Outlook - The Group plans to focus on developing its asset management business to provide stable income and support overall business development[82]. - The Group will remain cautious in business development for 2020 due to prevailing uncertainties affecting global economic growth[81]. - The economic situation in Hong Kong shows signs of depression, with negative impacts expected on consumers due to the COVID-19 outbreak[18].
东建国际(00329) - 2019 - 年度财报