德林控股(01709) - 2021 - 年度财报

Chairman's Statement Business Review and Future Outlook The Group achieved a significant turnaround, with revenue growing 88.4% to HKD 426.6 million, primarily from financial services Key Performance Indicators for FY2020/2021 | Indicator | Amount (million HKD) | Year-on-Year Change | | :--- | :--- | :--- | | Revenue | 426.6 | +88.4% | | Total Comprehensive Income Attributable to Owners | 200.8 | Turned profitable (loss of 51.4 million HKD in prior period) | - The business structure successfully transformed, with financial services becoming the core revenue source, accounting for 67.6% of total revenue, and its growth fully offsetting the decline in apparel business revenue[7] - The Group will focus on building a friendly and aggressive investment platform, maintaining an optimistic outlook on the sustained growth of its financial services business, planning to further develop asset management services through acquisitions of investment managers in Cayman and Singapore and applying for a Hong Kong Type 9 license, while expanding wealth management services via alternative investment and family office platforms[8] - As of the end of the reporting period, the Group had established 18 limited partnership funds in Hong Kong, primarily investing in private equity[8] Management Discussion and Analysis Business Review The Group successfully shifted its business focus to financial services, driving significant performance growth and diversifying revenue FY2021 Performance Overview | Indicator | Amount (million HKD) | Year-on-Year Growth | | :--- | :--- | :--- | | Revenue | 426.6 | 88.4% | | Gross Profit | 245.5 | 702.5% | | Total Comprehensive Income Attributable to Owners | 200.8 | Turned profitable | Provision of Licensed Financial Services Licensed financial services achieved explosive growth in its first full year, with segment revenue reaching HKD 288.2 million Licensed Financial Services Segment Performance | Indicator | FY2021 (million HKD) | FY2020 (million HKD) | | :--- | :--- | :--- | | Segment Revenue | 288.2 | 12.9 | | Segment Profit | 178.2 | 3.9 | - During the reporting period, service fees of approximately HKD 128.6 million and placement commissions of approximately HKD 72.4 million recognized from the acquisition of a Cayman investment manager were the primary reasons for the significant increase in this segment's revenue[12] Key Operating Data for Licensed Financial Services (as of March 31, 2021) | Indicator | Value | | :--- | :--- | | Number of Securities Brokerage Clients | 197 | | Transaction Volume for Securities Trading and Brokerage Services | Approximately 4.518 billion HKD | | Total Client Assets Under Brokerage Services | Approximately 2.275 billion HKD | | Loans Receivable from Margin Financing Services | Approximately 33.4 million HKD | | Assets Under Management and Advisory Services | Approximately 4.167 billion HKD | Provision of Lending Services Lending services revenue and profit grew steadily, driven by an increase in loans receivable to HKD 92.8 million Lending Services Segment Performance | Indicator | FY2021 (million HKD) | FY2020 (million HKD) | | :--- | :--- | :--- | | Segment Revenue | 4.9 | 0.6 | | Segment Profit | 2.3 | 0.3 | | Loans Receivable (period-end) | 92.8 | 31.9 | Provision of Asset Management Services Asset management, a new segment, recorded a profit of approximately HKD 44.9 million from fair value gains on financial assets - The asset management services segment recorded a profit of approximately HKD 44.9 million during the reporting period, primarily from fair value gains on financial assets measured at fair value through profit or loss[13] Apparel Product Sales and Provision of Supply Chain Management Solutions to Customers The apparel business faced severe challenges from the pandemic and trade conflicts, leading to reduced orders and a segment loss - Apparel business segment revenue decreased from HKD 212.9 million to HKD 133.5 million, a decrease of approximately 37.3%, and recorded a segment loss of approximately HKD 5.5 million[14] Financial Review Strong financial performance this fiscal year saw total revenue grow 88.4% to HKD 426.6 million, with a return to profitability FY2021 Revenue Segment Composition | Business Segment | Revenue (million HKD) | Year-on-Year Growth Rate | | :--- | :--- | :--- | | Licensed Financial Services | 288.2 | +2,132.7% | | Lending Services | 4.9 | +700.3% | | Apparel Business | 133.5 | -37.3% | | Total | 426.6 | +88.4% | - Cost of sales/services decreased by 7.5% year-on-year to HKD 181.1 million, primarily due to reduced apparel business sales costs aligning with lower revenue, partially offset by a significant increase in financial services costs (e.g., re-referral fees)[15] - Net other income recorded approximately HKD 83.0 million, compared to a net loss of HKD 39.4 million in the prior period, mainly due to sales gains and fair value gains from financial assets measured at fair value through profit or loss[17] - General and administrative expenses increased by 178.8% year-on-year to HKD 100.7 million, primarily due to increased salary expenses from a rise in employees from 42 to 61, and share-based payment expenses of approximately HKD 28.9 million from share option grants[18] Liquidity and Financial Resources The Group's financial position is robust, with net current assets increasing to HKD 287.1 million and cash at HKD 56.2 million Liquidity Indicators (as of March 31) | Indicator | 2021 | 2020 | | :--- | :--- | :--- | | Net Current Assets (million HKD) | 287.1 | 135.8 | | Cash and Cash Equivalents (million HKD) | 56.2 | 50.7 | | Current Ratio | 3.47 | 3.98 | | Bank Borrowings (million HKD) | 0 | 6.4 | | Gearing Ratio | 7.8% | 6.8% | - To strengthen capital, the company issued HKD 6 million in principal amount of 5% coupon unlisted bonds to independent third parties[21] - To pay part of the consideration for the acquisition of Carmel Reserve LLC, the company issued interest-free promissory notes with a principal amount of USD 3.5 million, with an outstanding balance of approximately HKD 22.4 million at period-end[21] Significant Investments The Group made two significant investments, including a Cayman private equity fund and Carmel Reserve LLC, both recording fair value gains Details of Significant Investments (as of March 31, 2021) | Investment Project | Investment Type | Fair Value at Period-End (million HKD) | Percentage of Total Assets | Fair Value Gain During Reporting Period (million HKD) | | :--- | :--- | :--- | :--- | :--- | | Cayman Fund | Private Equity Fund | 119.6 | 19.2% | 3.9 | | Carmel Reserve LLC | Real Estate Project (Equity) | 71.2 | 11.3% | 33.2 | - The investment in Carmel Reserve LLC is the Group's first real estate investment, aimed at expanding its investment portfolio and capturing potential future profit distributions[26] Employees and Remuneration Policy Full-time employees increased from 42 to 61, leading to a significant rise in total employee benefits expenses to HKD 64.2 million Employee and Remuneration Overview | Indicator | 2021 | 2020 | | :--- | :--- | :--- | | Full-time Employees (period-end) | 61 | 42 | | Total Employee Benefits Expenses (million HKD) | 64.2 | 21.1 | Biographical Details of Directors and Senior Management Directors and Senior Management Background This section details the diverse professional backgrounds of the company's directors and senior management, particularly in financial services - Executive Director and Chairwoman Ms. Jiang Xinyong previously worked in private banking at JPMorgan Chase, Standard Chartered, and HSBC, and founded DL Family Office[33] - Executive Director and CEO Mr. Chen Ningdi has over 20 years of global financial industry experience, founded DL Securities and DL Family Office, and previously worked in HSBC's Global Investment Banking division[34] - Board members possess diverse professional backgrounds, including finance, accounting, legal, technology, and media, supporting the Group's strategic decision-making[35][36][37][38] Corporate Governance Report Corporate Governance Practices and the Board The company largely complied with corporate governance codes, maintaining a Board with clear roles and separate Chairman and CEO positions - During the reporting period, the company complied with all Code Provisions of the Corporate Governance Code, with the only deviation being Chairwoman Ms. Jiang Xinyong's absence from the Annual General Meeting on September 29, 2020, due to other commitments[40] - The roles of Chairman and Chief Executive Officer are held separately by Ms. Jiang Xinyong and Mr. Chen Ningdi, ensuring a balance of power and authority[48] Board Meeting Attendance Record (for the year ended March 31, 2021) | Director Name | Board Meeting Attendance | General Meeting Attendance | | :--- | :--- | :--- | | Ms. Jiang Xinyong | 13/14 | 0/2 | | Mr. Chen Ningdi | 14/14 | 1/2 | | Mr. Chen Guanhua | 12/14 | 0/2 | | Mr. Li Ren | 11/14 | 0/2 | | Mr. Zhang Shize | 11/14 | 2/2 | | Mr. Chen Zhengliang | 12/14 | 1/2 | | Mr. Liu Chun | 9/13 | 0/2 | | Ms. Lu Xuanling (resigned) | 9/10 | 1/1 | Board Committees The company established Audit, Remuneration, and Nomination Committees, predominantly composed of independent non-executive directors Audit Committee The Audit Committee, comprising independent non-executive directors, oversees financial reporting, risk management, and internal controls Audit Committee Meeting Attendance Record | Audit Committee Member Name | Attended/Entitled to Attend Meetings | | :--- | :--- | | Mr. Zhang Shize (Chairman) | 1/2 | | Mr. Chen Zhengliang | 2/2 | | Mr. Liu Chun | 2/2 | | Ms. Lu Xuanling (resigned) | 1/1 | - The Audit Committee believes that for the year ended March 31, 2021, the Group's risk management and internal control systems were effective and complied with the Corporate Governance Code[51] Remuneration Committee The Remuneration Committee advises the Board on remuneration policies and structures for directors and senior management Remuneration Committee Meeting Attendance Record | Remuneration Committee Member Name | Attended/Entitled to Attend Meetings | | :--- | :--- | | Mr. Zhang Shize (Chairman) | 2/3 | | Ms. Jiang Xinyong | 3/3 | | Mr. Chen Zhengliang | 3/3 | Nomination Committee The Nomination Committee reviews Board structure and diversity, advising on director appointments and re-appointments Nomination Committee Meeting Attendance Record | Nomination Committee Member Name | Attended/Entitled to Attend Meetings | | :--- | :--- | | Ms. Jiang Xinyong (Chairman) | 2/2 | | Mr. Zhang Shize | 1/2 | | Mr. Chen Zhengliang | 2/2 | Accountability and Audit The Board confirms its responsibility for true and fair financial statements, deeming the Group's risk management and internal control systems effective - The Board, with the assistance of the Audit Committee, conducted an annual review of the risk management and internal control systems for the year ended March 31, 2021, deeming them effective and adequate[62] Auditor's Remuneration (for the year ended March 31, 2021) | Services Provided | Fees Paid/Payable (thousand HKD) | | :--- | :--- | | Audit Services | 1,100 | Shareholders' Rights This report clarifies shareholder rights, including procedures for convening meetings, making inquiries, and proposing directors - Shareholders holding not less than one-tenth of the company's paid-up share capital have the right to request the Board to convene an extraordinary general meeting[66] - Shareholders may nominate director candidates in writing, subject to specific notice periods and procedural requirements[67] Directors' Report Principal Activities and Performance Distribution The Group's principal activities include financial services and apparel business, with the Board approving interim and recommending final dividends - The Group's principal activities include: (i) Licensed Financial Services, (ii) Lending Services, (iii) Apparel Product Sales and Supply Chain Management, and (iv) Asset Management Services[71] FY2021 Dividend Distribution | Dividend Type | Amount Per Share (HKD) | Total Amount (million HKD) | Status | | :--- | :--- | :--- | :--- | | Interim Dividend | 0.0068 | ~9.5 | Distributed | | Proposed Final Dividend | 0.0358 | ~50.0 | Proposed, subject to Shareholders' Approval | Major Customers and Suppliers The Group exhibits high customer and supplier concentration, with top five customers accounting for 58.92% of revenue Customer and Supplier Concentration (for the year ended March 31, 2021) | Category | Percentage | | :--- | :--- | | Largest Customer as % of Total Revenue | 29.15% | | Top Five Customers as % of Total Revenue | 58.92% | | Largest Supplier as % of Total Cost of Sales | 27.09% | | Top Five Suppliers as % of Total Cost of Sales | 64.94% | Directors' and Chief Executive's Interests in Shares, Underlying Shares, and Debentures This section discloses the significant shareholdings of directors, chief executive, and substantial shareholders as of March 31, 2021 Directors' and Chief Executive's Interests in Shares (as of March 31, 2021) | Director Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage | | :--- | :--- | :--- | :--- | | Ms. Jiang Xinyong | Interest of Spouse / Interest of Controlled Corporation | 530,424,395 / 222,418,000 | 37.98% / 15.93% | | Mr. Chen Ningdi | Interest of Controlled Corporation / Interest of Spouse | 530,424,395 / 222,418,000 | 37.98% / 15.93% | | Mr. Li Ren | Beneficial Owner | 118,892,000 | 8.51% | | Mr. Liu Chun | Beneficial Owner (Share Options) | 3,000,000 | 0.21% | Share Option Scheme The company's share option scheme granted 107.5 million options and saw 107 million exercised, with 63 million unexercised - During the reporting period, the company granted 107,500,000 share options and 106,976,000 share options were exercised under the share option scheme[92] - As of March 31, 2021, 63,000,000 share options remained unexercised under the share option scheme, representing approximately 4.5% of the issued shares[92][273] Share Award Scheme The company adopted a share award scheme on September 8, 2020, purchasing 12.26 million shares for HKD 17.255 million - The company adopted a share award scheme on September 8, 2020. As of the fiscal year-end, 12,260,000 shares had been purchased for the scheme at a total cost of HKD 17.255 million, with no awards yet granted[95] Issuance of Securities and Use of Proceeds The company raised net proceeds of approximately HKD 60.15 million from a placement of 75.5 million new shares, used for financial services expansion Share Subscription and Use of Proceeds | Item | Details | | :--- | :--- | | Subscriber | CMF Global Quantitative Multi-Asset SPC | | Number of Shares Issued | 75,500,000 | | Subscription Price | HKD 0.80 per share | | Net Proceeds | Approximately 60.15 million HKD | | Use of Proceeds | | | Expand Financial Services Business (Subscription of Private Equity Fund) | 50.0 million HKD (Utilized) | | Strengthen Sales and Distribution Network | 10.15 million HKD (Utilized) | Connected Transactions The Group engaged in several discloseable connected transactions, including an investment in Carmel Reserve LLC and a met profit guarantee - The Group subscribed for a 27.06% Class B membership interest in Carmel Reserve LLC, an associate of the Chairwoman and CEO, for USD 5 million (approximately HKD 39 million), which constituted a discloseable and connected transaction, with all compliance procedures completed[104] - Upon the 2019 acquisition of DL Securities and DL Finance, the vendor (Mr. Chen Ningdi) guaranteed that the target companies' audited after-tax profit for the guarantee period (fiscal year ended December 31, 2020) would be no less than HKD 6 million. The report confirms that actual profit exceeded the guaranteed profit, and the vendor fulfilled his obligations[105] Independent Auditor's Report Audit Opinion and Key Audit Matters The auditor issued an unqualified opinion on the financial statements, highlighting key audit matters including receivables impairment and financial instrument fair value - The auditor issued a standard unqualified audit opinion[108] - Key audit matters include: - Impairment assessment of receivables: Involves evaluating expected credit losses (ECL) for trade receivables, bills receivable, other receivables, and loans and interest receivable, due to significant management judgment - Valuation of share options: Valuing 107.5 million granted share options using a binomial option pricing model, involving subjective assumptions - Assessment of control over structured entities: Determining if the Group has control over managed structured entities (e.g., funds), involving complex judgments - Fair value measurement of Level 3 financial instruments: Valuing financial assets lacking observable market data (e.g., unlisted equity investments), involving subjectivity[110][112][113][114] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group achieved a strong turnaround with revenue of HKD 426.6 million and profit attributable to owners of HKD 200.8 million Consolidated Statement of Profit or Loss Summary (for the year ended March 31) | Indicator (thousand HKD) | 2021 | 2020 | | :--- | :--- | :--- | | Revenue | 426,551 | 226,391 | | Gross Profit | 245,473 | 30,587 | | Operating Profit / (Loss) | 219,854 | (51,618) | | Profit / (Loss) Before Income Tax | 217,792 | (51,861) | | Profit / (Loss) for the Year | 200,798 | (51,409) | | Basic Earnings / (Loss) Per Share (HK cents) | 15.06 | (4.57) | Consolidated Statement of Financial Position As of March 31, 2021, total assets grew to HKD 627.9 million, total liabilities were HKD 127.4 million, and total equity increased to HKD 500.6 million Consolidated Statement of Financial Position Summary (as of March 31) | Indicator (thousand HKD) | 2021 | 2020 | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 224,566 | 29,739 | | Current Assets | 403,375 | 181,375 | | Total Assets | 627,941 | 211,114 | | Liabilities | | | | Current Liabilities | 116,313 | 45,562 | | Non-current Liabilities | 11,071 | 538 | | Total Liabilities | 127,384 | 46,100 | | Net Assets | 500,557 | 165,014 | | Equity | | | | Share Capital | 13,966 | 12,142 | | Total Equity | 500,557 | 165,014 | Consolidated Statement of Cash Flows Operating activities generated HKD 49.13 million net cash inflow, while investing activities used HKD 114.3 million, resulting in a HKD 33.8 million net increase in cash Consolidated Statement of Cash Flows Summary (for the year ended March 31) | Indicator (thousand HKD) | 2021 | 2020 | | :--- | :--- | :--- | | Net Cash From / (Used in) Operating Activities | 49,125 | (6,270) | | Net Cash (Used in) / From Investing Activities | (114,301) | 19,081 | | Net Cash From Financing Activities | 98,980 | 356 | | Net Increase in Cash and Cash Equivalents | 33,804 | 13,167 | | Cash and Cash Equivalents at Beginning of Year | 65,451 | 52,284 | | Cash and Cash Equivalents at End of Year | 99,255 | 65,451 | Notes to the Consolidated Financial Statements The notes detail significant accounting policies, estimates, and breakdowns of financial statement items, providing essential context - Note 5 provides detailed disclosure of the performance, assets, and liabilities of each business segment, indicating that financial services are the absolute performance pillar[211][213][219] - Notes 11 and 26 detail the share option scheme and share award scheme, respectively, including grants, exercises, and valuation assumptions[251][317] - Notes 36 and 37 disclose details of significant related party transactions and business combinations during the year, including the investment in Carmel Reserve LLC and acquisitions of DL Family and Four Seasons[347][353] - Note 39 provides a detailed analysis of various financial risks faced by the Group (market risk, credit risk, liquidity risk) and their management strategies, along with fair value hierarchy classifications for financial instruments[382][416] Financial Summary Five-Year Financial Summary This summary presents key five-year financial data, highlighting the Group's historic performance breakthrough in FY2021 with record high revenue and profit Five-Year Financial Summary (for the year ended March 31) | Indicator (thousand HKD) | 2021 | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Performance | | | | | | | Revenue | 426,551 | 226,391 | 186,519 | 279,382 | 206,219 | | Profit / (Loss) for the Year | 200,798 | (51,409) | 18,682 | 15,688 | 25,143 | | Assets and Liabilities | | | | | | | Total Assets | 627,941 | 211,114 | 180,456 | 115,695 | 90,909 | | Total Liabilities | 127,384 | 46,100 | 9,634 | 33,292 | 29,537 | | Net Assets | 500,557 | 165,014 | 170,822 | 82,403 | 61,372 |