现恒建筑(01500) - 2022 - 中期财报

Corporate Information This section provides essential company details, including board composition, key management, auditors, and registered office information Corporate Information This chapter details the company's fundamental information, including board members, key management roles, auditors, and principal business locations - The company's Board of Directors comprises executive directors Mr. Lau Pak Man, Mr. Cheng Wing Cheong, Ms. Kwan Kit Sum, and independent non-executive directors Mr. Leung Tsz Kin, Mr. Lam Chi Hung, and Mr. Yau Tsz Man[5] - The company's auditor is KPMG[5] Financial Highlights This section presents key financial performance indicators, showcasing significant growth in revenue and profitability Performance Highlights For the six months ended September 30, 2021, the company achieved robust financial growth, with revenue increasing by 38.9% and gross profit margin significantly improving to 29.5% Key Financial Performance Indicators | Metric | H1 FY2022 | H1 FY2021 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue (HKD million) | 351.1 | 252.7 | +38.9% | | Gross Profit (HKD million) | 103.4 | 37.6 | +175.0% | | Net Profit (HKD million) | 78.6 | 21.4 | +267.3% | | Earnings Per Share (HK cents) | 9.5 | 2.6 | +265.4% | | Gross Profit Margin | 29.5% | 14.9% | +14.6pp | Management Discussion and Analysis This section provides management's insights into the company's operational performance, financial position, and future outlook Business and Financial Review During the period, the company focused on Hong Kong private sector foundation projects, achieving significant revenue growth of 38.9% to HKD 351.1 million and a substantial increase in net profit by 267.3% to HKD 78.6 million - The company's core business is foundation and related works in Hong Kong, focusing on 'design and build' projects to enhance cost-effectiveness and competitiveness through alternative designs[11][12][13] - As of September 30, 2021, the company had 5 ongoing projects with an outstanding contract sum of HKD 296.5 million, with no new projects awarded during the reporting period[16] Key Financial Performance Comparison | Financial Metric | H1 FY2022 (HKD million) | H1 FY2021 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 351.1 | 252.7 | +98.4 | | Gross Profit | 103.4 | 37.6 | +65.8 | | Profit for the Period | 78.6 | 21.4 | +57.2 | | Gross Profit Margin | 29.5% | 14.9% | +14.6pp | - Administrative and other operating expenses decreased from HKD 15.5 million to HKD 10.7 million, primarily due to a HKD 5.4 million reduction in impairment losses on trade and other receivables and contract assets[19] LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE The company maintains a robust financial position with cash and bank balances significantly increasing to HKD 141.7 million as of September 30, 2021, supported by ample unutilized banking facilities Liquidity and Gearing Ratios | Metric | As of Sep 30, 2021 | As of Mar 31, 2021 | | :--- | :--- | :--- | | Current Ratio | 2.9 | 4.7 | | Gearing Ratio | 7.2% | 10.1% | - As of September 30, 2021, cash and bank balances significantly increased to approximately HKD 141.7 million from HKD 56 million as of March 31, 2021, with HKD 45.3 million being restricted bank deposits for project performance guarantees[24] USE OF NET PROCEEDS FROM LISTING The company has largely utilized net proceeds from listing as planned for staff recruitment and equipment acquisition, with a minor delay in funds for performance guarantees Utilization of Net Proceeds from Listing | Intended Use | Intended Amount (HKD million) | Actual Utilization as of Sep 30, 2021 (HKD million) | | :--- | :--- | :--- | | Recruitment of additional staff | 2.9 | 2.9 | | Acquisition of additional machinery and equipment | 29.9 | 29.9 | | Financing for future project performance guarantees | 56.7 | 55.2 | - The utilization of net proceeds for performance guarantees has been delayed, now expected to be fully used by March 31, 2022, instead of the original March 31, 2020[27][30][31] FUTURE PROSPECTS Management is optimistic about the long-term recovery of Hong Kong's foundation industry, driven by government policies, and plans to enhance capacity and project management capabilities while mitigating COVID-19 impacts - Management anticipates a long-term recovery in the Hong Kong foundation industry, supported by government policies on increasing land supply and infrastructure investment[32] - The company will adhere to its business strategy of expanding capacity and strengthening foundation design and project management capabilities to provide quality, flexible solutions and maintain competitive advantage[32] - The company believes the COVID-19 pandemic has had a relatively low impact on the Hong Kong foundation industry but will continue to assess its operational and financial effects and implement precautionary measures[33] Disclosure of Interests This section details the shareholding interests of the company's directors, chief executives, and substantial shareholders DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS IN SECURITIES This chapter discloses the shareholding interests of the company's directors and chief executives as of September 30, 2021, highlighting the significant control held by key executive directors Directors' and Chief Executives' Interests in Securities | Director's Name | Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Lau Pak Man | Controlled corporation and personal interests | 337,520,000 | 40.67% | | Mr. Cheng Wing Cheong | Controlled corporation and personal interests | 275,900,000 | 33.24% | | Ms. Kwan Kit Sum | Controlled corporation and personal interests | 337,520,000 | 40.67% | SUBSTANTIAL SHAREHOLDERS' INTERESTS IN SECURITIES This chapter details the shareholdings of substantial shareholders, including In Play Limited, Wealth Celebration Limited, and Kinetic Kingdom Limited, all wholly owned by the company's executive directors Substantial Shareholders' Interests in Securities | Name of Substantial Shareholder | Capacity | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | In Play Limited | Beneficial Owner | 270,000,000 | 32.53% | | Wealth Celebration Limited | Beneficial Owner | 270,000,000 | 32.53% | | Kinetic Kingdom Limited | Beneficial Owner | 60,000,000 | 7.23% | Corporate Governance and Other Information This section covers the company's corporate governance practices, including interim dividend declaration and compliance with listing rules INTERIM DIVIDEND The Board has resolved to declare an interim dividend of HKD 0.03 per share, a change from no dividend in the prior corresponding period - The Board resolved to declare an interim dividend of HKD 0.03 per share, compared to zero for the same period in 2020[47] CORPORATE GOVERNANCE The company maintains high corporate governance standards, largely complying with listing rules, with the Chairman and CEO roles held by the same individual, Mr. Lau Pak Man - The company complied with the Corporate Governance Code, with one deviation: the roles of Chairman and Chief Executive Officer are held by the same person, Mr. Lau Pak Man[51] - The company's banking facilities include specific performance clauses requiring controlling shareholders (Mr. Lau Pak Man, Mr. Cheng Wing Cheong, and Ms. Kwan Kit Sum) to collectively hold no less than 50% of the equity, with one serving as Chairman[60][63] Financial Statements This section presents the company's consolidated financial statements, including the statement of profit or loss, financial position, cash flows, and accompanying notes Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended September 30, 2021, the company reported HKD 351.1 million in revenue, a 38.9% increase, with net profit surging 267.3% to HKD 78.6 million Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary | Item (HKD thousand) | For the six months ended Sep 30, 2021 | For the six months ended Sep 30, 2020 | | :--- | :--- | :--- | | Revenue | 351,066 | 252,739 | | Gross Profit | 103,361 | 37,578 | | Operating Profit | 94,136 | 25,609 | | Profit before tax | 93,826 | 25,078 | | Profit for the period | 78,589 | 21,351 | | Basic earnings per share (HK cents) | 9.47 | 2.57 | Consolidated Statement of Financial Position As of September 30, 2021, total assets reached HKD 548.5 million, with total equity increasing 28.3% to HKD 356.0 million, driven by higher current assets Consolidated Statement of Financial Position Summary | Item (HKD thousand) | As of Sep 30, 2021 | As of Mar 31, 2021 | | :--- | :--- | :--- | | ASSETS | | | | Non-current assets | 8,545 | 10,704 | | Current assets | 539,906 | 351,812 | | TOTAL ASSETS | 548,451 | 362,516 | | LIABILITIES AND EQUITY | | | | Current liabilities | 184,644 | 74,814 | | Non-current liabilities | 7,846 | 10,330 | | TOTAL LIABILITIES | 192,490 | 85,144 | | TOTAL EQUITY | 355,961 | 277,372 | Condensed Consolidated Cash Flow Statement Net cash from operating activities significantly increased to HKD 86.2 million, resulting in a net increase of HKD 82.2 million in cash and cash equivalents for the period Condensed Consolidated Cash Flow Statement Summary | Item (HKD thousand) | For the six months ended Sep 30, 2021 | For the six months ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash from operating activities | 86,185 | 17,423 | | Net cash used in investing activities | (1,295) | (4,033) | | Net cash used in financing activities | (2,690) | (12,811) | | Net increase in cash and cash equivalents | 82,200 | 579 | | Cash and cash equivalents at beginning of period | 14,155 | 10,534 | | Cash and cash equivalents at end of period | 96,355 | 11,113 | Notes to the Financial Statements These notes provide detailed explanations of the financial statements, covering business segments, accounting policies, receivables and payables aging, cash balances, and contingent liabilities - The company's business is considered a single operating segment, with all operations conducted in Hong Kong[82] - As of September 30, 2021, net trade receivables amounted to HKD 111.3 million, with HKD 98.8 million aged within one month[109][110] - As of September 30, 2021, trade payables significantly increased to HKD 137.5 million from HKD 43.9 million as of March 31, 2021[120] - The company has HKD 80 million in contingent liabilities, primarily for performance guarantees provided for projects in the ordinary course of business[127] Review Report to the Board of Directors This section contains the independent auditor's review report on the interim financial information, providing an unmodified conclusion Auditor's Review Report Independent auditor KPMG has reviewed the interim financial report, concluding that it is prepared in all material respects in accordance with HKAS 34 without modification - Independent auditor KPMG reviewed the interim financial report in accordance with Hong Kong Standard on Review Engagements 2410[136] - The review conclusion is an unmodified opinion, indicating no material issues were found suggesting the financial report was not prepared in accordance with accounting standards[137]