Company Overview - The company operates as a leading provider of casino management services and electronic gaming equipment, focusing on the Macau gaming market since 2007[9]. - As of December 31, 2019, the company was the exclusive casino management service provider for two independent satellite casinos in Macau[9]. - The company’s major business involves providing casino management services and developing, selling, and leasing electronic gaming equipment and systems[94]. Product Development and Innovation - The company has developed a patented live mixed gaming machine system, dominating the ETG market in Macau[10]. - The company is investing in high-tech electronic gaming equipment and systems, including 5G and artificial intelligence technologies, to enhance customer experience[10]. - The company aims to simplify gaming processes and reduce labor costs through innovative product development[10]. - The company is committed to creating innovative products that optimize gaming productivity and enhance player experiences[10]. - The flagship product, the live hybrid gaming machine, saw increased sales due to strong demand for upgrades and new technical standards issued by the gaming authority[20]. - The company believes there is ample room for expansion in the live hybrid gaming machine business as the trend towards mass market gaming continues[20]. - The company has increased investments in R&D for high-tech products, including 5G and artificial intelligence, which are expected to generate new revenue streams in the coming years[20]. Financial Performance - The total revenue for the year ended December 31, 2019, was HKD 1,181.8 million, an increase of 1.5% compared to HKD 1,164.2 million for the year ended December 31, 2018[28]. - Adjusted EBITDA for the year ended December 31, 2019, was HKD 87 million, a decrease of 27.9% from HKD 120.7 million for the year ended December 31, 2018[31]. - The adjusted EBITDA from the group's managed casinos was HKD 114 million, a decrease of 42.3% compared to HKD 197.6 million for the previous year[34]. - The group recorded a profit of HKD 10.6 million, down 80.1% from HKD 53.2 million in the previous year[35]. - Sales of electronic gaming equipment and systems generated an adjusted EBITDA of HKD 88.1 million, compared to HKD 10.5 million in the previous year[35]. - The group reported a consolidated asset value of HKD 608.5 million as of December 31, 2019, a decrease of HKD 20.2 million or 3.2% from HKD 628.7 million on December 31, 2018[61]. - The group aims to invest in high-tech and pioneering entertainment products to explore more opportunities in the entertainment technology sector and expand its market share globally[60]. Market Trends - The mass gaming segment accounted for 53.8% of Macau's total gaming revenue in 2019, up from 45.2% in 2018, indicating a shift from VIP to mass market gaming[28]. - The total gaming revenue in Macau decreased by 3.4% to HKD 292,500,000,000, while the number of visitors increased by 10.1% to 39,400,000[53]. Customer and Supplier Relationships - The group reported that the top five customers accounted for approximately 98.4% of total revenue, with the largest customer contributing about 58.6%[145]. - The top five suppliers represented around 70.2% of total sales and service costs, with the largest supplier accounting for approximately 29.9%[145]. Employee and Compensation - As of December 31, 2019, the group had approximately 1,210 employees, including about 730 gaming business employees hired by 澳博 or 銀娛[73]. - Total employee costs for the year ended December 31, 2019, amounted to HKD 452.6 million, an increase from HKD 412.7 million in 2018[73]. - Compensation paid or payable to gaming business employees hired by 澳博 or 銀娛 was HKD 265.9 million for the year, compared to HKD 241.1 million in 2018[73]. - The company's compensation policy is based on qualifications, performance, industry experience, and market trends[74]. Corporate Governance and Compliance - The company believes that corporate governance is key to its success and has adopted various measures to ensure high levels of governance[200]. - The independent auditor has issued an unqualified opinion regarding the group's disclosed continuing connected transactions[158]. - The company has complied with the corporate governance code during the year ended December 31, 2019, with some deviations noted[200]. COVID-19 Impact - The group is cautious about the impact of the COVID-19 pandemic on operations, particularly in the casinos it manages, and is committed to taking protective measures for customers and employees[59]. - The company suspended operations at its gaming venues due to the COVID-19 outbreak, with the Golden Sands Casino reopening on February 20, 2020, and the Grand Lisboa Casino on February 24, 2020[188]. - The ongoing global health crisis may significantly impact the company's operations, cash flow, and financial condition, although the extent of the impact remains uncertain[188]. Strategic Agreements and Contracts - A strategic agreement with IGT was established in April 2016, allowing the company to receive non-refundable advance payments for patent rights and related technologies[10]. - The group will not renew or extend the service contract for the management of the Huadu Casino, which expired on February 29, 2020, and will focus on maximizing returns from the Golden Sands Casino operations[58]. - The management service contract for the Grand Lisboa Casino expired on February 29, 2020, and the company will no longer provide management services from March 1, 2020[189].
汇彩控股(01180) - 2019 - 年度财报