Financial Performance - Daohe Global recorded a revenue of approximately US$107.5 million for the year ended 31 December 2018, representing a year-on-year growth of around 195.2% from the online social platforms business, which contributed approximately US$43.5 million[12]. - The gross profit for the year was approximately US$27.7 million, with about US$9.4 million coming from the online social platforms operation[26]. - Operating expenses increased to approximately US$33.0 million, primarily due to the growth in the online social platforms business[27]. - The loss for the year amounted to approximately US$84.2 million, which included non-cash impairment losses on goodwill of approximately US$66.5 million[28]. - Excluding non-cash impairment losses, the Group's profit for the year would have been approximately US$8.6 million[28]. - Gross profit for the year ended December 31, 2018, was approximately US$27.7 million, compared to US$18.2 million for the eight months ended December 31, 2017[30]. - Operating expenses for the year ended December 31, 2018, were approximately US$33.0 million, an increase from US$23.6 million for the eight months ended December 31, 2017, primarily due to increased expenses in the online social platform segment[30]. - The Group reported a loss of approximately US$84.2 million for the year ended December 31, 2018, compared to a loss of US$76.2 million for the eight months ended December 31, 2017[31]. - Revenue from trading and supply chain management services was approximately US$64.0 million, representing about 59.5% of the Group's total revenue, down from approximately 81.1% for the eight months ended December 31, 2017[44]. - Revenue from the operation of online social platforms surged by 195.2% to approximately US$43.5 million, contributing around 40.5% of the Group's total revenue[45]. Market and Business Strategy - The number of Internet users in China reached 829 million as of December 2018, with 817 million using mobile phones, indicating a significant market opportunity[16]. - Daohe Global plans to terminate its money lending business in 2019 to focus resources on trading, supply chain management services, and online social platforms, which have greater development potential[17]. - The company aims to develop more mobile games to meet the demand for innovative online social and entertainment experiences[16]. - Daohe Global will explore other areas suitable for procurement to satisfy the needs of US-based business partners[13]. - The company has established long-term relationships with brand partners and retail customers, which will help navigate challenges posed by the ongoing China-US trade dispute[13]. - The management expects challenges in trading and supply chain management services due to the ongoing China-US trade dispute, particularly affecting exports in the first half of 2019[81]. - The Group plans to expand procurement beyond China to meet customer requirements, especially from US clients, while continuing to enhance product offerings and competitive pricing[82]. Impairment and Losses - The Group recognized non-cash impairment losses on goodwill and other intangible assets of approximately US$66.5 million and US$21.7 million, respectively, due to a challenging business environment[51]. - The Group recognized an impairment loss of US$75.5 million for goodwill and other intangible assets for the year ended December 31, 2018, due to anticipated declines in future earnings from two business segments[56]. - The trading and supply chain management services segment recognized an impairment loss of US$12.7 million, with US$9.7 million provided in the interim results due to a challenging business environment and reduced customer orders[59]. - A further impairment loss of US$3 million was recognized for the trading and supply chain management segment for the year ended December 31, 2018, primarily due to fewer orders from U.S. customers affected by the China-US trade war[60]. Cash and Assets - As of December 31, 2018, the Group's cash and cash equivalents amounted to approximately US$17.2 million, an increase from US$13.3 million in 2017[72]. - The Group's current ratio was approximately 1.6, with a gearing ratio of zero, indicating no interest-bearing borrowings[73]. - Trade receivables as of December 31, 2018, were approximately US$8.8 million, with US$1.2 million aged over 90 days being closely monitored[74]. - The Group's net asset value decreased to approximately US$24.6 million as of December 31, 2018, down from approximately US$111.5 million in 2017[74]. Corporate Governance - The Company has adopted the Corporate Governance Code as stated in the Listing Rules on The Stock Exchange of Hong Kong Limited[126]. - During the year ended 31 December 2018, the Company complied with all applicable Code Provisions of the CG Code, except for certain deviations[127]. - The Board of Directors consisted of seven Directors, including three Executive Directors, one Non-executive Director, and three Independent Non-executive Directors during the year ended 31 December 2018[135]. - The Board had six Directors after the resignation of Mr. YU Lei as an Executive Director effective from 1 January 2019[135]. - The Company established written guidelines for securities transactions by employees likely to possess unpublished inside information, with no incidents of non-compliance noted during the year[129]. - The Directors have given sufficient time and attention to the Company's affairs during the year ended 31 December 2018[136]. - Independent Non-executive Directors provide diversified skills and expertise, ensuring the interests of all Shareholders are considered[137]. - The Company maintains an updated list of Directors identifying their roles and functions on its website and the Stock Exchange[138]. - The Company has adopted a Board Diversity Policy to ensure a diverse mix of skills, knowledge, and experience among Board members, which is essential for effective governance[143][144]. - The Nomination Committee is responsible for assessing Board diversity and ensuring an appropriate balance of perspectives, skills, and experience[145]. - The Company has implemented a Director Nomination Policy to maintain a suitable mix of skills and experience on the Board[148]. - The Board meets regularly to review and approve financial and operational performance, ensuring compliance with corporate governance standards[159]. - The Company has arranged appropriate insurance coverage for directors' and officers' liabilities to protect against legal actions arising from corporate activities[150]. - The management provides monthly updates and financial accounts to the Board to ensure informed decision-making[152]. - The Board is collectively responsible for promoting the success of the Group and making decisions in the best interests of the Company[151]. - The Company emphasizes the importance of training and continuous professional development for Directors and senior management[157]. - The Board is tasked with developing and reviewing the Company's corporate governance policies and practices[158]. - The Company has four Board committees, including Executive, Audit, Remuneration, and Nomination[164]. Management and Directors - Mr. Ho Chi Kin has over 20 years of experience in wealth management services across the USA, Hong Kong, and mainland China, focusing on corporate restructuring and mergers and acquisitions[99]. - The company has appointed Mr. Ho as Chief Financial Officer since January 1, 2018, and he is also a member of the Executive Committee of the Board[100]. - Mr. Wang Arthur Minshiang has been an Independent Non-executive Director since April 22, 2002, and is currently the Chairman of the Remuneration Committee[102]. - Mr. Lau Shu Yan, appointed as an Independent Non-executive Director on January 11, 2017, is the Chairman of the Audit Committee[108]. - Mr. Zhang Huijun has been an Independent Non-executive Director since January 11, 2017, and is a member of the Audit, Remuneration, and Nomination Committees[113]. - The company has a diverse board with members holding extensive experience in finance, accounting, and corporate governance[99][100][102][108][113]. - The management team includes professionals with qualifications from prestigious institutions, enhancing the company's strategic decision-making capabilities[99][100]. - The company is focused on expanding its corporate restructuring and financial consulting services in mainland China[99]. - The board's composition reflects a strong commitment to governance and oversight, with independent directors actively participating in key committees[102][108]. - The company aims to leverage its management's extensive experience to enhance shareholder value through strategic initiatives[99][100]. Director Remuneration - Mr. WONG Hing Lin, Dennis was appointed as the Chief Executive Officer and Chairman of the Executive Committee effective from January 1, 2019[165]. - Mr. HO Chi Kin was appointed as Chief Financial Officer effective from January 1, 2018[165]. - The attendance of Mr. WONG Hing Lin at Board meetings was 4 out of 4, and at Executive Committee meetings was 6 out of 6[168]. - The Company held a total of 4 Board meetings and 2 Audit Committee meetings during the year ended December 31, 2018[168]. - The roles of Chairman and CEO are segregated, with responsibilities clearly defined[174]. - The Company ensures that all Directors are subject to retirement by rotation and eligible for re-election at least once every three years[176]. - Key issues and decisions made during meetings were communicated to Directors in a timely manner[173]. - The Board is satisfied that each Director spends sufficient time performing their responsibilities[173]. - The Company circulates written resolutions for approval by Board members, except in cases of conflict of interest[172]. - Mr. WONG Hing Lin, Dennis's director salary increased to HK$450,000 per month effective from January 1, 2019[190]. - Mr. HO Chi Kin's director salary increased to HK$120,000 per month effective from January 1, 2019[190]. - Mr. HO Chi Kin appointed as company secretary effective from August 24, 2018[191]. - Mr. HO Chi Kin acted as chairman of the 2018 AGM due to Mr. ZHOU Xijian's absence[180]. - All Independent Non-executive Directors confirmed their independence as per Rule 3.13 of the Listing Rules[182]. - Mr. WANG Arthur Minshiang has served as Independent Non-executive Director for over nine years and was re-elected at AGMs held on August 27, 2012, and August 27, 2015[182]. - The Company provides ongoing professional development and updates to Directors regarding business and regulatory changes[186][187]. - The Company has a clear separation of roles between the Chairman and the Chief Executive Officer[179]. - The Company ensures all Directors receive tailored induction upon appointment to understand their responsibilities[183]. - The Company has formal letters of appointment for all Independent Non-executive Directors outlining key terms[181]. - Mr. Huang's director salary increased to HKD 450,000 per month starting January 1, 2019[193]. - Mr. Ho's director salary increased to HKD 120,000 per month starting January 1, 2019[194]. - Mr. Ho has been serving as the Company Secretary since August 24, 2018, and is also the Executive Director and Chief Financial Officer[195]. - The Company has four committees: Executive Committee, Audit Committee, Remuneration Committee, and Nomination Committee, overseeing specific aspects of the Company's affairs[200].
道和环球(00915) - 2018 - 年度财报