Financial Performance - The company reported a net profit attributable to shareholders of approximately HKD 84 million for the fiscal year ending March 31, 2019, marking a turnaround from previous losses [24]. - The group's revenue for the fiscal year 2019 was approximately HKD 595.5 million, an increase of about HKD 185.5 million or 45% compared to the fiscal year 2018 [41]. - The gross profit increased from approximately HKD 48.7 million in fiscal year 2018 to about HKD 97.4 million in fiscal year 2019, nearly doubling, with the gross margin rising from about 12% to approximately 16% [42]. - The group recorded a profit before tax of approximately HKD 96.9 million in fiscal year 2019, compared to a loss of about HKD 5.6 million in fiscal year 2018 [41]. - The group recorded a net profit of approximately HKD 93.2 million in the fiscal year 2019, a turnaround from a net loss of HKD 7.1 million in the previous fiscal year, driven by a gross profit increase of approximately HKD 48.7 million [47]. Revenue Sources and Growth - Revenue growth was primarily driven by a significant increase in the information technology infrastructure solutions segment and income from long-term maintenance phases of several large projects [25]. - Revenue from the IT infrastructure solutions segment increased by approximately HKD 164.3 million, while revenue from maintenance and support services rose by about HKD 38.1 million [41]. - The IT infrastructure solutions segment accounted for approximately 72% of the total revenue in fiscal year 2019, with revenue rising from about HKD 262.8 million in fiscal year 2018 to approximately HKD 427.0 million, an increase of about 63% [39]. - The maintenance and support services segment generated revenue of approximately HKD 98.4 million, accounting for about 16% of total revenue, a significant increase of about 63% from HKD 60.3 million in fiscal year 2018 [39]. - The group expects stable revenue contributions exceeding HKD 60 million annually from maintenance contracts related to large IT projects, which will continue until 2027 [39]. Acquisitions and Investments - The company completed the acquisition of O2O Limited, which is developing an e-market project combining physical stores and online platforms, expected to enhance revenue sources starting in 2020 [30]. - The acquisition of a 40% stake in Software Technology Limited, which focuses on developing and managing food and beverage sales systems, will provide a stable income stream starting from the fiscal year 2019 [30]. - The acquisition of 15% stake in INAX Technology Limited was completed for HKD 66 million, with a fair value of approximately HKD 37.8 million as of March 31, 2019, representing a 43% decrease from its cost and accounting for about 7% of the group's total assets [54]. - The investment in Software Technology Limited, acquired for HKD 60 million, has a carrying value of approximately HKD 62.5 million as of March 31, 2019, accounting for about 12% of the group's total assets [57]. Cost Management and Efficiency - The workforce was reduced from 283 employees as of March 31, 2018, to 187 employees as of March 31, 2019, indicating improved efficiency and performance [31]. - The restructuring efforts have led to significant cost reductions and efficiency improvements, contributing to the overall profitability [31]. - The group successfully reduced employee costs by HKD 23.9 million in fiscal year 2019, maintaining a sustainable team size and effectively monitoring its cost structure [39]. - Administrative expenses for the fiscal year 2019 were approximately HKD 64.2 million, an increase of about HKD 7.6 million or 13% compared to HKD 56.6 million in 2018, primarily due to increased employee costs [43]. Corporate Governance - The board of directors is committed to maintaining good corporate governance practices and has complied with the corporate governance code as per the Hong Kong Stock Exchange [70]. - The company has adopted a board diversity policy, focusing on measurable goals related to gender, age, race, knowledge, and tenure [81]. - The audit committee held two meetings during the fiscal year ending March 31, 2019, to review quarterly, interim, and annual financial statements, focusing on compliance with accounting standards and listing rules [101]. - The company has established a nomination policy outlining the selection criteria and procedures for nominating director candidates [111]. - The company has implemented internal controls to prevent unauthorized use or misappropriation of assets, maintaining proper accounting records [122]. Environmental and Social Responsibility - The total greenhouse gas emissions for the fiscal year ending March 31, 2019, were 113 tons, a decrease from 148 tons in 2018, representing a reduction of approximately 23.6% [146]. - The company aims to implement energy-saving measures to further reduce greenhouse gas emissions and electricity usage in the future [149]. - The group has engaged in community investment through charitable donations and social responsibility activities in the fiscal year ending March 31, 2019 [167]. - The group has committed to maintaining a diverse and equal opportunity work environment, with no significant legal violations reported in the fiscal year ending March 31, 2019 [152]. Risks and Challenges - The company relies on project-based contracts, which introduces uncertainty in future revenue sources, as clients may not continue to engage the company for new projects after current ones are completed [192]. - The company faces risks related to project overruns and delays, which could lead to significant adverse effects on business, financial condition, and operational performance [186]. - Adverse foreign exchange rate fluctuations could negatively affect the company's financial performance, particularly for projects located in Malaysia [194]. - The company acknowledges the potential for cost overruns in IT application and solution development projects, which may lead to lower project profitability or losses [186].
扬科集团(01460) - 2019 - 年度财报