万保刚集团(01213) - 2021 - 中期财报

Corporate Information Presents fundamental corporate details and contact information Financial Highlights The Group's revenue decreased by 6.1% while gross profit increased by 5.9%, leading to a turnaround in profit attributable to equity holders to HKD 7.344 million 2020/2021 Interim Performance Summary (For the Six Months Ended September 30) | Metric | 2020 H1 (thousand HKD) | 2019 H1 (thousand HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 219,744 | 233,975 | -6.1% | | Gross Profit | 55,605 | 52,504 | +5.9% | | EBITDA | 17,552 | 5,932 | +195.9% | | Profit/(Loss) Attributable to Equity Holders | 7,344 | (3,981) | +284.5% | | Basic Earnings/(Loss) Per Share (HK cents) | 3.7 | (2.0) | +285% | | Interim Dividend Per Share (HK cents) | 0.5 | 0.5 | - | Financial Position Summary | Metric | September 30, 2020 (thousand HKD) | March 31, 2020 (thousand HKD) | Period Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 312,823 | 306,355 | +2.1% | | Net Assets | 154,995 | 141,484 | +9.5% | | Total Equity Attributable to Equity Holders | 116,288 | 106,284 | +9.4% | Report of the Directors The report outlines corporate governance, dividend policy, and shareholdings, highlighting an unchanged interim dividend and a governance deviation regarding the Chairman's tenure - The Board resolved to declare an interim dividend of HKD 0.005 per ordinary share for the six months ended September 30, 2020, consistent with the same period in 2019[13] - Chairman Dr. Hung Kim Fung and Vice Chairman Ms. Yeung Man Yee jointly hold 45% of the company's shares through M2B Holding Limited; Director Mr. Yeung Kwok Leung holds 15% of the shares through Bestmark Management Limited[17][19] - A deviation in corporate governance exists: the Chairman and Managing Director are not subject to rotation retirement as per company articles, which does not comply with code provision A.4.2, though the Board believes this arrangement supports long-term business stability[32][35] - The Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the period[33][36] Management Discussion and Analysis Provides an in-depth review of the Group's financial performance, business operations, and future outlook Financial Results Group revenue declined by 6% to HKD 220 million, but gross profit increased by 5.7% to HKD 56 million, leading to a turnaround in profit attributable to equity holders to HKD 7.3 million Key Financial Metric Changes | Metric | 2020 H1 | 2019 H1 | Change | | :--- | :--- | :--- | :--- | | Revenue | approx. HKD 220 million | approx. HKD 234 million | -6% | | Gross Profit | approx. HKD 56 million | approx. HKD 53 million | +5.7% | | Gross Profit Margin | 25.3% | 22.4% | +2.9pp | | Operating Profit | approx. HKD 12.2 million | approx. HKD 2.2 million | Significant Increase | | Profit Attributable to Equity Holders | approx. HKD 7.3 million | Loss approx. HKD 4 million | Turned Profitable | - Other income significantly increased, primarily due to the recognition of approximately HKD 6 million in government grants during the period[48][49] Business Review The Group's core businesses showed mixed performance, with electronic trading declining, computer business growing significantly, and cosmetics and online retail seeing slight revenue decrease, while Hong Kong remained the largest market Revenue Contribution by Business Segment (2020 H1) | Business Segment | Revenue Contribution Ratio | Revenue (approx.) | YoY Change | | :--- | :--- | :--- | :--- | | Electronic Trading Business | 60.1% | HKD 132 million | -13.2% | | Computer Business | 23.9% | HKD 52 million | +13.8% | | Cosmetic and Online Retail Business | 16.0% | HKD 35 million | -2.8% | Revenue Contribution by Region (2020 H1) | Region | Revenue Contribution Ratio | | :--- | :--- | | Hong Kong | 59.2% | | Asia Pacific (excluding Hong Kong) | 18.0% | | South Africa | 20.5% | | Other Regions | 2.3% | Electronic Trading Business Electronic trading, the largest revenue source, saw a decline to HKD 132 million due to the pandemic, with overseas subsidiaries also experiencing a 14.7% revenue decrease - Electronic trading business revenue was approximately HKD 132 million, serving as the Group's primary revenue source, but demand decreased due to the pandemic, particularly with a significant decline in orders from the toy industry[56] - South African subsidiary revenue decreased by 11.8% to approximately HKD 45 million, primarily due to approximately 50 days of strict lockdown measures implemented locally[56] Computer Business The computer business achieved strong growth, with retail revenue up 40% to HKD 14 million and distribution up 5.6% to HKD 38 million, driven by pandemic-related demand - Computer retail business revenue increased by 40% year-on-year to approximately HKD 14 million[59][62] - Computer distribution business revenue increased by 5.6% year-on-year to approximately HKD 38 million[59][62] Cosmetic and Online Retail Business Cosmetic and online retail revenue slightly decreased by 2.8% to HKD 35 million, as online growth partially offset physical store losses due to a strategic shift to e-commerce - This business segment's revenue slightly decreased by 2.8% to approximately HKD 35 million[60][63] - The business focus has shifted to online retail, with significant growth in online revenue, but physical store revenue was severely impacted by the pandemic[60][63] Outlook The Group holds cautious optimism for the second half, anticipating improved electronic business, normalized computer demand, and continued online sales growth for cosmetics and retail - Optimistic about the recovery of the South African electronic business, with improved performance expected in the second half[65] - Anticipates computer product demand to normalize and plans to enhance market share through social media networks[65] - Positive on the cosmetic and online retail business, continuing to invest in social media marketing to drive sales[65] Liquidity and Financial Resources As of September 30, 2020, the Group's financial position is robust with HKD 34 million in cash, a current ratio of 1.8, and HKD 40 million in unused bank facilities Key Liquidity Ratios | Metric | September 30, 2020 | March 31, 2020 | | :--- | :--- | :--- | | Cash and Cash Equivalents | approx. HKD 34 million | approx. HKD 28.8 million | | Current Ratio | 1.8 | 1.6 | | Unused Bank Facilities | approx. HKD 40 million | approx. HKD 36 million | Working Capital Turnover Days | Metric | 2020 H1 | 2020 FY End | | :--- | :--- | :--- | | Accounts Receivable Turnover Days | 42 Days | 39 Days | | Accounts Payable Turnover Days | 33 Days | 30 Days | | Inventory Turnover Days | 188 Days | 169 Days | Capital Structure As of September 30, 2020, the Group's capital structure improved, with net borrowings decreasing and the net debt-to-equity ratio significantly declining to 40.6% - The net debt-to-equity ratio (net borrowings/total equity) decreased from 50.4% to 40.6%[69][71] Key Capital Structure Data | Metric | September 30, 2020 (thousand HKD) | March 31, 2020 (thousand HKD) | | :--- | :--- | :--- | | Net Borrowings | approx. 63,000 | approx. 71,000 | | Total Equity | approx. 155,000 | approx. 141,000 | Condensed Consolidated Interim Financial Statements Presents the Group's unaudited interim financial performance and position for the period Condensed Consolidated Interim Statement of Profit or Loss The statement shows Group revenue of HKD 219.7 million, gross profit of HKD 55.6 million, and profit attributable to equity holders of HKD 7.344 million Condensed Consolidated Interim Statement of Profit or Loss (For the Six Months Ended September 30) | Item (thousand HKD) | 2020 (Unaudited) | 2019 (Unaudited) | | :--- | :--- | :--- | | Revenue | 219,744 | 233,975 | | Gross Profit | 55,605 | 52,504 | | Operating Profit | 12,155 | 2,235 | | Profit Before Income Tax | 10,786 | 560 | | Profit/(Loss) for the Period | 9,516 | (1,784) | | Profit/(Loss) Attributable to Equity Holders of the Company | 7,344 | (3,981) | Condensed Consolidated Interim Statement of Comprehensive Income The statement shows total comprehensive income of HKD 14.711 million for the period, with HKD 11.004 million attributable to equity holders, including currency translation differences Condensed Consolidated Interim Statement of Financial Position The statement shows total assets of HKD 312.8 million, net assets of HKD 155 million, and net current assets of HKD 116.8 million as of September 30, 2020 Key Financial Position Data | Item (thousand HKD) | September 30, 2020 (Unaudited) | March 31, 2020 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 45,383 | 47,181 | | Current Assets | 267,440 | 259,174 | | Total Assets | 312,823 | 306,355 | | Current Liabilities | 150,671 | 158,383 | | Non-current Liabilities | 7,157 | 6,488 | | Net Assets | 154,995 | 141,484 | | Total Equity | 154,995 | 141,484 | Condensed Consolidated Interim Statement of Changes in Equity The statement shows total equity attributable to equity holders increased from HKD 106.3 million to HKD 116.3 million, driven by comprehensive income partially offset by dividends Condensed Consolidated Interim Statement of Cash Flows The statement shows net cash generated from operating activities of HKD 10.837 million, with net cash outflows from investing and financing, and a period-end cash balance of HKD 33.989 million Condensed Cash Flow Statement (For the Six Months Ended September 30) | Item (thousand HKD) | 2020 (Unaudited) | 2019 (Unaudited) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 10,837 | 3,195 | | Net Cash Used in Investing Activities | (174) | (7,557) | | Net Cash Used in Financing Activities | (9,876) | (2,672) | | Cash and Cash Equivalents at End of Period | 33,989 | 22,741 | Notes to the Condensed Consolidated Interim Financial Information Provides detailed explanations and breakdowns for various line items within the condensed consolidated interim financial statements 6. REVENUE AND SEGMENT INFORMATION This note details revenue and performance by segment and region, highlighting increased segment results for electronic trading and computer businesses, and a turnaround to profit for cosmetic and online retail Segment Results by Business Segment (Before Finance Costs) | Business Segment (thousand HKD) | 2020 H1 | 2019 H1 | | :--- | :--- | :--- | | Electronic Trading Business | 5,880 | 3,580 | | Computer Business | 3,733 | 270 | | Cosmetic and Online Retail Business | 2,543 | (1,612) | Revenue by Geographical Region | Region (thousand HKD) | 2020 H1 | 2019 H1 | | :--- | :--- | :--- | | Hong Kong | 129,979 | 131,274 | | Asia Pacific | 39,569 | 46,415 | | South Africa | 45,123 | 51,384 | | Europe | 4,089 | 3,709 | | Other Countries | 984 | 1,193 | 19. RELATED PARTY TRANSACTIONS This note discloses related party transactions, including a HKD 1.392 million rental payment to M-Bar Limited and various transactions with PC Supply Group - Rental payment of HKD 1.392 million to related company M-Bar Limited, which is beneficially owned by several of the company's directors and major shareholders[188][190] - Procurement transactions of HKD 0.561 million and sales transactions of HKD 0.132 million occurred with related company PC Supply Group[188][190]