Financial Performance - The company's total revenue for 2020 was approximately $134 million, a decrease of about 25.4% compared to approximately $180 million in 2019[24]. - Gross profit for 2020 was approximately $27 million[24]. - Revenue from North America decreased by approximately 37.4% to about $45.4 million[25]. - Sales in Europe increased by approximately 9.2% to about $38.4 million[26]. - Revenue from Asia decreased by approximately 34.7% to about $36.5 million, partly due to the strategy of discontinuing low-margin products[27]. - Revenue from Latin America decreased by approximately 15.1% to about $13.9 million[28]. - The company's net revenue increased from approximately $2.7 million for the year ended December 31, 2019, to approximately $3.7 million for the year ended December 31, 2020, reflecting a significant improvement in profitability[35]. - Gross margin improved from approximately 19.5% for the year ended December 31, 2019, to approximately 20.3% for the year ended December 31, 2020[35]. - Total revenue for the year ended December 31, 2020, decreased by approximately 25.4% (about $45.8 million) compared to the year ended December 31, 2019[37]. - The company's sales cost for the year ended December 31, 2020, was approximately $107.0 million, accounting for about 79.7% of total revenue[41]. - The company recorded a pre-tax profit of approximately $4.7 million for the year ended December 31, 2020, compared to approximately $4.6 million for the year ended December 31, 2019[51]. - The net profit after tax for the year ended December 31, 2020, was approximately $3.7 million, an increase of about $1.0 million from approximately $2.7 million for the year ended December 31, 2019[53]. Strategic Plans - The company plans to continue a dual strategy in 2021, focusing on both core pay-TV business recovery and expansion into new markets[29]. - The company will invest in opportunities in HVAC and electric vehicle sectors[29]. - The next generation of the Simple Setup Hybrid solution is expected to launch in early 2021 in collaboration with a major operator[32]. - The company has initiated a vertical market plan and successfully launched a new COVID-19 contact tracing system in India and the United States[36]. - The company plans to continue investing in research and development, expanding the sales team, and improving the existing supply chain[36]. Financial Position - As of December 31, 2020, the company's cash and cash equivalents were approximately $22.6 million, indicating a strong financial position[55]. - The net cash flow from operating activities for the year ended December 31, 2020, was approximately $10.74 million, a decrease from $13.51 million in 2019[57]. - The net cash used in investing activities was approximately $1.45 million, primarily due to the purchase of property, plant, and equipment[60]. - The net cash used in financing activities amounted to approximately $15.61 million, mainly due to repayment of interest-bearing bank loans of about $18.0 million[61]. - The cash and cash equivalents decreased by approximately $6.33 million, ending the year at $22.61 million compared to $28.77 million in 2019[57]. - The current asset net value decreased from approximately $20.9 million as of December 31, 2019, to approximately $16.9 million as of December 31, 2020[62]. - The debt ratio decreased from approximately 39.7% as of December 31, 2019, to approximately 38.7% as of December 31, 2020[75]. - The company has available bank financing of $45 million, of which $24 million has been drawn down[72]. - The company does not have any off-balance sheet transactions as of the report date[79]. Governance and Management - The company believes the current composition of the board is balanced and suitable for its business[155]. - The board consists of executive, non-executive, and independent non-executive directors, ensuring a diverse governance structure[153]. - The company has a global finance director responsible for overseeing compliance with financial practices and monitoring cash flow[98]. - The company has a dedicated sales team for Europe and Latin America, led by a sales department head with 26 years of experience[96]. - The company has a strong focus on research and development, particularly in Singapore, to drive innovation and product marketing[96]. Risks and Challenges - The company has faced significant business risks due to the global impact of COVID-19, which may adversely affect supply, sales, and profitability[115]. - The company is at risk of significant adverse effects if it fails to successfully develop and market new products in a timely manner[115]. - The company has experienced a substantial increase in component prices, which could negatively impact its business and financial condition[116]. - Goodwill impairment may adversely affect the company's financial condition and operating performance[117]. Shareholder Information - The company proposed a final dividend of USD 0.0037 per ordinary share, equivalent to approximately HKD 0.0288 per share, subject to shareholder approval[126]. - The company has a distributable reserve of approximately USD 9,552,430 as of December 31, 2020, unchanged from the previous year[132]. - The company adopted a share option plan on May 1, 2015, granting options to employees and directors to enhance retention and incentivize performance, with a total of 40,841,584 shares available for purchase[142]. - As of December 31, 2020, 16,336,632 shares of the granted options have vested, representing approximately 8.14% of the total shares issued as of that date[142]. - The exercise price for the options granted under the plan is approximately $0.0877 per share, equivalent to about HKD 0.689 per share[142]. - In the fiscal year, a total of 14,702,969 options were exercised by management, with no cancellations or modifications to the plan[145]. - The company adopted a share award plan on August 20, 2020, with a maximum of 5,016,337 shares to be awarded, representing about 1.00% of the total shares issued at the time[148]. - On October 5, 2020, the board resolved to grant 5,016,337 award shares, with 2,382,760 shares allocated to connected participants and 2,633,577 shares to non-connected participants[148]. - As of December 31, 2020, all 5,016,337 awarded shares under the share award plan remain unvested[152]. Compliance and Legal Matters - The consolidated financial statements for the year ended December 31, 2020, were audited by Ernst & Young[196]. - There were no related party transactions that required disclosure under the listing rules, as they were fully exempted[177]. - The company did not engage in any significant litigation or arbitration during the year[184]. - The company did not know of any significant non-compliance with environmental laws and regulations during the year[192]. - The company has maintained directors and officers liability insurance to provide appropriate protection against legal claims[166].
HOME CONTROL(01747) - 2020 - 年度财报