万保刚集团(01213) - 2022 - 中期财报

Corporate Information This section outlines key corporate governance and operational information, including board structure, committees, and professional advisors - The report provides key corporate governance and operational information, including details on the board of directors, committee members, registered office, principal place of business, auditors, legal advisors, and principal bankers[4][5] Financial Highlights This section presents a concise overview of the company's key financial performance and position for the period Financial Highlights Summary The group reported 18.3% revenue growth to HKD 260 million and 26.7% gross profit increase, with profit attributable to owners slightly down 0.6% Half-Yearly Performance and Financial Position Summary | Metric | Six Months Ended Sep 30, 2021 (HKD '000) | Six Months Ended Sep 30, 2020 (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Performance | | | | | Revenue | 259,886 | 219,744 | 18.3 | | Gross Profit | 70,469 | 55,605 | 26.7 | | EBITDA | 20,784 | 17,552 | 18.4 | | Profit Attributable to Owners of the Company | 7,299 | 7,344 | (0.6) | | Basic EPS (HK Cents) | 3.6 | 3.7 | (2.7) | | Interim Dividend Per Share (HK Cents) | 0.5 | 0.5 | 0.0 | | Financial Position | As of Sep 30, 2021 (HKD '000) | As of Mar 31, 2021 (HKD '000) | Change (%) | | Total Assets | 326,484 | 334,479 | (2.4) | | Net Assets | 180,625 | 172,875 | 4.5 | Report of the Directors This section details the interim dividend declaration, directors' and substantial shareholders' interests, and the company's corporate governance practices Interim Dividend The Board declared an interim dividend of HKD 0.005 per ordinary share for the six months ended September 30, 2021, consistent with the prior year - The Board resolved on November 25, 2021, to declare an interim dividend of HKD 0.005 per ordinary share, consistent with the same period in 2020[9] Directors' and Substantial Shareholders' Interests This section details the shareholdings of directors and substantial shareholders, including significant stakes held by Dr. Hung Kim Fung and Ms. Yeung Man Yee Directors' and Substantial Shareholders' Shareholdings (As of Sep 30, 2021) | Shareholder Name | Number of Shares Held | Percentage of Shareholding | | :--- | :--- | :--- | | Dr. Hung Kim Fung (via M2B Holding) | 90,000,000 | 45% | | Ms. Yeung Man Yee (via M2B Holding) | 90,000,000 | 45% | | Mr. Hung Ying Fung (Individual) | 26,990,000 | 13.50% | | Mr. Yeung Kwok Leung (via Bestmark Management) | 30,000,000 | 15% | Corporate Governance and Committees The company largely complied with corporate governance codes, with a noted deviation regarding the non-rotation of the Chairman and Managing Director for business continuity - The company deviates from Corporate Governance Code Provision A.4.2, where the Chairman and Managing Director are not subject to retirement by rotation; the Board believes this arrangement contributes to the stable implementation of long-term business plans[26] - The Audit Committee, Remuneration Committee, and Nomination Committee are established and fulfill their respective duties, with their composition complying with regulations and primarily consisting of independent non-executive directors[26][28][29] Management Discussion and Analysis This section provides an in-depth analysis of the group's financial performance, business segment review, future outlook, and liquidity management Financial Results Group revenue increased 18.2% to HKD 260 million, gross profit grew 25%, and operating profit rose to HKD 17.3 million, with profit attributable to owners stable at HKD 7.3 million Half-Yearly Financial Performance Overview | Metric | Six Months Ended Sep 30, 2021 (HKD M) | Six Months Ended Sep 30, 2020 (HKD M) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Revenue | 260 | 220 | 18.2% | | Gross Profit | 70 | 56 | 25.0% | | Operating Profit | 17.3 | 12.2 | 41.8% | | Profit Attributable to Owners of the Company | 7.3 | 7.3 | 0.0% | - Gross profit margin increased from 25.3% in the prior period to 27.1%[40] - Other income in the prior period was higher (approximately HKD 7.3 million), primarily due to approximately HKD 6 million in government grants, whereas current period other income was only approximately HKD 1.1 million[40] Business Review The group's core businesses are electronic and electrical component trading, computer, and cosmetics/online retail, with the electronic segment showing strong growth while others declined Revenue Contribution by Business Segment | Business Segment | Revenue (HKD M) | Share of Total Revenue (%) | | :--- | :--- | :--- | | Electronic and Electrical Component Trading Business | 193 | 74% | | Computer Business | 41 | 16% | | Cosmetic and Online Business | 26 | 10% | Electronic and Electrical Trading Business This primary revenue segment grew 46.2% to HKD 193 million, driven by strong global electronic component demand and significant recovery in overseas markets, especially South Africa - Hong Kong market: Benefited from strong global demand for electronic components, with manufacturers actively placing orders to maintain inventory, driving revenue growth of 46.2% to HKD 193 million[50][54] - Overseas markets: Total revenue from overseas subsidiaries increased by 56.9%, with the South African subsidiary's revenue growing by 66.7% to HKD 75 million, primarily due to the recovery of business activities post-pandemic and increased demand for electrical components[51][55] Computer Business Computer business revenue declined, with retail down 28.6% and distribution down 20.5%, as demand normalized following the pandemic-driven surge - Due to the high base from last year's surge in demand for work-from-home and remote learning during the pandemic, current period demand has returned to normal levels, resulting in a 28.6% and 20.5% decline in computer retail and distribution business revenue, respectively[58]62 Cosmetic and Online Business Revenue for this segment decreased 25.7% to HKD 26 million, impacted by reduced foot traffic from mask mandates and intensified online market competition - Revenue decreased by 25.7% to HKD 26 million, primarily impacted by: 1) "mask mandates" and social restrictions reducing demand for color cosmetics and retail foot traffic; and 2) intensified competition in the online e-commerce market[59]63 Outlook The group anticipates continued electronic component supply-demand imbalance, stable computer business demand with potential margin pressure, and ongoing challenges in cosmetics, leading to strategic adjustments - Electronic Business: Supply-demand imbalance is expected to continue until Q3 2022, with particular optimism for the South African business, and the group will seek investment opportunities for expansion[60]66 - Computer Business: Demand is expected to remain stable, but flash memory product margins may face pressure due to intense competition[61]66 - Cosmetic Business: The business faces short-term pressure, with one Mong Kok branch closed, and resources reallocated to online operations and high-margin exclusive distribution products[66] Liquidity, Financial Resources and Capital Structure As of September 30, 2021, the group maintained a robust financial position with HKD 35 million cash, an improved current ratio of 2.0, and a reduced net debt-to-equity ratio of 30.2% Key Liquidity and Capital Structure Indicators | Metric | As of Sep 30, 2021 | As of Mar 31, 2021 | | :--- | :--- | :--- | | Cash and Bank Balances | HKD 35 million | HKD 33.5 million | | Current Ratio | ~2.0 | ~1.9 | | Net Debt-to-Equity Ratio | 30.2% | 35.5% | | Trade Receivables Turnover Days | 42 days | 43 days | | Inventory Turnover Days | 174 days | 185 days | - The group's total bank facilities amount to approximately HKD 104 million, with approximately HKD 43 million remaining unutilized, indicating sufficient financial resources[66] Condensed Consolidated Interim Financial Statements This section presents the condensed consolidated interim financial statements, including the statement of profit or loss, comprehensive income, financial position, changes in equity, and cash flows Condensed Consolidated Interim Statement of Profit or Loss For the six months ended September 30, 2021, revenue increased 18.3% to HKD 260 million, profit for the period rose 33.8% to HKD 12.73 million, and profit attributable to owners remained stable at HKD 7.3 million Statement of Profit or Loss Summary | Item (HKD '000) | 2021 H1 | 2020 H1 | | :--- | :--- | :--- | | Revenue | 259,886 | 219,744 | | Gross Profit | 70,469 | 55,605 | | Operating Profit | 17,256 | 12,155 | | Profit for the Period | 12,733 | 9,516 | | Profit Attributable to Owners of the Company | 7,299 | 7,344 | Condensed Consolidated Interim Statement of Comprehensive Income Total comprehensive income for the period was HKD 10.95 million, with HKD 6.09 million attributable to owners, primarily impacted by HKD 1.79 million in currency translation differences Statement of Comprehensive Income Summary | Item (HKD '000) | 2021 H1 | 2020 H1 | | :--- | :--- | :--- | | Profit for the Period | 12,733 | 9,516 | | Other Comprehensive (Expense)/Income | (1,788) | 5,195 | | Total Comprehensive Income for the Period | 10,945 | 14,711 | | Total Comprehensive Income Attributable to Owners of the Company | 6,090 | 11,004 | Condensed Consolidated Interim Statement of Financial Position As of September 30, 2021, total assets were HKD 326.48 million (down 2.4%), total liabilities HKD 146 million, and total equity increased 4.5% to HKD 180.63 million Statement of Financial Position Summary | Item (HKD '000) | As of Sep 30, 2021 | As of Mar 31, 2021 | | :--- | :--- | :--- | | Non-current Assets | 42,310 | 43,447 | | Current Assets | 284,174 | 291,032 | | Total Assets | 326,484 | 334,479 | | Current Liabilities | 141,925 | 156,833 | | Non-current Liabilities | 3,934 | 4,771 | | Total Equity | 180,625 | 172,875 | Condensed Consolidated Interim Statement of Changes in Equity Equity attributable to owners increased from HKD 125.16 million to HKD 130.29 million, driven by HKD 6.09 million in comprehensive income, partially offset by HKD 1 million in dividends - During the reporting period, equity attributable to owners of the company increased from HKD 125,155 thousand to HKD 130,293 thousand, primarily due to total comprehensive income for the period (HKD 6,090 thousand) and dividends paid (-HKD 1,000 thousand)[83] Condensed Consolidated Interim Statement of Cash Flows Net cash from operating activities significantly improved to HKD 19.54 million, with net cash used in investing at HKD 1.66 million and financing at HKD 9.70 million, resulting in HKD 35.14 million cash at period-end Cash Flow Statement Summary | Item (HKD '000) | 2021 H1 | 2020 H1 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 19,544 | 10,837 | | Net Cash Used in Investing Activities | (1,663) | (174) | | Net Cash Used in Financing Activities | (9,695) | (9,876) | | Cash and Cash Equivalents at End of Period | 35,135 | 33,989 | Notes to the Condensed Consolidated Interim Financial Information This section provides detailed notes to the condensed consolidated interim financial information, including revenue segmentation, trade receivables, related party transactions, and subsidiary disposal Note 6: Revenue and Segment Information Note 6 details revenue composition, with electronic and electrical component trading as the primary source, and Hong Kong, South Africa, and Asia Pacific as key geographical markets Revenue by Geographical Region | Region | 2021 H1 Revenue (HKD '000) | 2020 H1 Revenue (HKD '000) | | :--- | :--- | :--- | | Hong Kong | 114,386 | 129,979 | | Asia Pacific | 64,006 | 39,569 | | South Africa | 73,367 | 45,123 | | Europe | 7,571 | 4,089 | | Other Countries | 556 | 984 | | Total | 259,886 | 219,744 | Note 14: Trade Receivables Note 14 provides an aging analysis of trade receivables, totaling HKD 61.72 million as of September 30, 2021, with approximately 93% within 60 days, indicating efficient collection Aging Analysis of Trade Receivables | Aging | As of Sep 30, 2021 (HKD '000) | As of Mar 31, 2021 (HKD '000) | | :--- | :--- | :--- | | 0 to 60 Days | 57,317 | 55,801 | | 61 to 120 Days | 3,797 | 930 | | Over 121 Days | 606 | 137 | | Total | 61,720 | 56,868 | Note 19: Related Party Transactions Note 19 discloses significant related party transactions, including rental payments and goods procurement/sales, all conducted on normal commercial terms - The group has leasing, procurement, and sales transactions with related parties such as M-Bar Limited and Zidianwang Group, all conducted under normal commercial terms[224]227 Note 20: Disposal of a Subsidiary Note 20 discloses the group's disposal of a 70% equity interest in Milliard Devices Limited for approximately HKD 0.704 million, resulting in a gain of HKD 0.012 million - On August 31, 2021, the group disposed of a 70% equity interest in Milliard Devices Limited for a cash consideration of approximately HKD 704 thousand, recording a gain on disposal of HKD 12 thousand[231]233