美亨实业(01897) - 2021 - 年度财报

Corporate Information Corporate Information This section outlines the company's fundamental details, including board and committee structures, key personnel changes, and essential corporate contacts - Mr. Wong Sue Toa, Stewart was re-designated from Vice Chairman to Chairman of the Board on November 23, 2020[5] - The company appointed Deloitte Touche Tohmatsu as its auditor[6] Group Structure Group Structure Mei Heung Industrial Holdings Limited, the top-tier holding company, maintains 100% control over its Hong Kong and mainland China operating entities via BVI subsidiaries - Mei Heung Industrial Holdings Limited, through its BVI subsidiaries, 100% owns all operating entities, including Mei Heung Industrial Limited and Mei Hing New Building Materials (Huizhou) Co., Ltd[11] Financial Highlights Financial Highlights This section presents a five-year overview of key financial metrics, highlighting record revenue and significant profit growth in FY2021, alongside steady shareholder equity expansion Financial Highlights (HKD million) | Metric (HKD million) | 2021 | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 536.0 | 299.8 | 376.6 | 421.1 | 501.9 | | Profit Attributable to Owners of the Company | 38.9 | 24.2 | 22.9 | 50.1 | 55.3 | | Shareholders' Equity | 545.9 | 514.9 | 508.8 | 128.7 | 75.4 | Chairman's Statement FY2021 Results The Group achieved substantial revenue growth of 78.8% to HK$536 million and a 60.7% increase in profit attributable to owners, despite a gross margin decline to 14.0% due to competition and rising costs FY2021 Financial Performance (HKD million, unless otherwise stated) | Financial Metric | FY2021 | FY2020 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 536.0 | 299.8 | +78.8% | | Profit Attributable to Owners | 38.9 | 24.2 | +60.7% | | Gross Profit Margin | 14.0% | 16.4% | -2.4pp | | Basic EPS | 0.09 | 0.06 | +50.0% | | Net Asset Value per Share | 1.23 | 1.18 | +4.2% | - Revenue growth was primarily driven by residential projects at Lohas Park Phase 7 and 10, Kai Tak New Kowloon Inland Lot Nos. 6565 and 6564, and the commercial development at 75-85 Lockhart Road[22] - Profit growth also benefited from increased other income due to subsidies received under the Hong Kong SAR Government's "Employment Support Scheme"[23] Dividend The Board declared a total annual dividend of HK$0.042 per share, an increase from the prior year, and plans to distribute two interim dividends annually for more even payments Dividend Per Share (HK cents) | Dividend Item | FY2021 (per share) | FY2020 (per share) | | :--- | :--- | :--- | | First Interim Dividend | 1.6 | 1.2 | | Second Interim/Final Dividend | 2.6 | 2.0 | | Total Annual Dividend | 4.2 | 3.2 | - Starting from FY2021, the company plans to distribute two interim dividends, with the second interim dividend replacing the final dividend, to allow shareholders to receive dividends earlier[33] Business Review Despite initial COVID-19 disruptions, the Group's operations recovered, achieving strong revenue and gross profit growth of 78.8% and 52.0% respectively, as construction progress resumed - In the early stages of the pandemic, semi-finished product manufacturing and transportation processes were delayed or even halted, significantly impacting the Group's operations[37][38] - As the pandemic came under control, the Group's business resumed normal operations, catching up on delayed construction progress, which led to substantial increases in revenue and gross profit[37][38] Prospects Strong Hong Kong property market demand offers positive prospects, but rising raw material costs and RMB appreciation pose margin pressures, while HK$1,284.5 million in uncompleted contracts provide future revenue stability - As of March 31, 2021, the Group's uncompleted contract value amounted to HK$1,284.5 million, expected to provide robust support for revenue in the next 2 to 3 years[47][49] - The Group faces cost pressures from rapidly rising raw material prices and RMB appreciation, which may impact project gross profit margins[43][45] - Despite cost challenges, strong local property market demand and developers' willingness to enhance building value provide a positive outlook for industry development[42][44] Operations Review Principal Business and Projects The Group, a Hong Kong-based subcontractor with over 20 years of experience, specializes in facade and curtain wall systems, completing and securing numerous projects, holding HK$1,284.5 million in uncompleted contracts, and achieving ISO certifications - The Group's principal business is providing one-stop design, supply, and installation services for curtain walls and aluminum windows and doors in Hong Kong, primarily serving main contractors and property developers[52][53] - Key projects completed during the year include Lohas Park Phase 6 residential project and the commercial development project at Lockhart Road, Wan Chai[55][58] - Major projects undertaken during the year include Lohas Park Phase 7 and 10, and several residential development projects in Kai Tak[60][63] - New projects awarded during the year include residential and integrated development projects in Kai Tak, Kennedy Town, Tuen Mun, etc. As of March 31, 2021, the total uncompleted contract value on hand was HK$1,284.5 million[67] - The Group obtained ISO 9001:2015 Quality Management System and ISO 14001 Environmental Management System certifications, and was awarded the "Quality Contractor of the Year 2021" certificate for window works in a residential project in Ma On Shan, Sha Tin, New Territories[67] Financial Review Summary of Results The Group reported strong FY2021 financial performance with revenue up 78.8% to HK$536 million and profit attributable to owners up 60.7% to HK$38.9 million, despite a gross margin decline to 14.0% Summary of Financial Results (HKD million, unless otherwise stated) | Financial Metric | FY2021 | FY2020 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 536.0 | 299.8 | +78.8% | | Profit Attributable to Owners | 38.9 | 24.2 | +60.7% | | Gross Profit Margin | 14.0% | 16.4% | -2.4pp | | Basic EPS | 0.09 | 0.06 | +50.0% | | Net Asset Value | 545.9 | 514.9 | +6.0% | Group Liquidity and Financial Resources The Group maintains a robust financial position with HK$236 million in cash, HK$345 million in available bank facilities, no bank loans, and a strong current ratio of 7.22 times Group Liquidity and Financial Resources (HKD million, unless otherwise stated) | Liquidity Metric | As of March 31, 2021 | As of March 31, 2020 | | :--- | :--- | :--- | | Cash and Bank Balances | 236.0 | 297.7 | | Total Bank Facilities | 345.0 | - | | Utilized Bank Facilities (Performance Bonds) | 107.2 | - | | Bank Loans | 0 | 0 | | Net Current Assets | 435.8 | 400.9 | | Current Ratio | 7.22 times | 8.91 times | - During the year, operating activities resulted in a net cash outflow of HK$47.8 million, primarily due to increases in trade and other receivables, deposits and prepayments, and contract assets[82] Capital Structure and Other Financial Information The Group's capital structure is equity-based with no bank loans, shareholders' equity increased to HK$545.9 million, and there were no significant investments, acquisitions, disposals, or asset pledges during the year - The capital structure is entirely composed of equity, with no bank loans[89][94] - As of March 31, 2021, outstanding performance bonds amounted to HK$107.2 million[104] - There were no significant investments, acquisitions, disposals, or asset pledges during the year[90][91] Employees and Remuneration Policy The Group values its 253 employees (116 in mainland China), offering competitive remuneration packages and benefits, with annual reviews based on qualifications, experience, performance, and profitability - As of March 31, 2021, the Group had a total of 253 full-time employees, with 116 in mainland China[110] - Remuneration policy is based on employee qualifications, experience, position, and seniority, with annual reviews incorporating individual performance and Group profitability[112] Corporate Governance Report Compliance with Corporate Governance Code The company generally complied with the Corporate Governance Code for FY2021, with deviations noted for certain non-executive and independent non-executive directors' attendance at the 2020 AGM - The company deviated from code provision A.6.7, as some non-executive and independent non-executive directors were unable to attend the 2020 Annual General Meeting[116] - The company deviated from code provision E.1.2, as the former Chairman of the Board and Chairman of the Nomination Committee were unable to attend the 2020 Annual General Meeting[121] Board of Directors The Board oversees leadership, monitoring, and strategy, delegating daily operations, ensuring diverse composition, adhering to governance policies, and providing continuous professional development for directors - The Board is responsible for strategic leadership and oversight, with daily operations delegated to the Joint Managing Directors and senior management[123][126] - The Board's composition complies with Listing Rules, including at least three independent non-executive directors, comprising at least one-third of the Board members[135] - The company has adopted a Board Diversity Policy and a Director Nomination Policy to ensure directors possess the necessary skills, experience, and diverse perspectives[142][147] - The roles of the Chairman (Mr. Wong Sue Toa, Stewart) and Joint Managing Directors (Mr. Chu Kin Lun and Mr. Lee Cheuk Hung) are clearly separated with distinct responsibilities[171] Board and Committee Operations The Board held four meetings and is supported by Audit, Nomination, Remuneration, and Investment Committees, each with specific oversight responsibilities, and director attendance records are detailed - The Audit Committee comprises four independent non-executive directors, chaired by Mr. Yip Kai Wing, responsible for reviewing financial statements, recommending external auditors, and reviewing risk management and internal control systems[203] - The Nomination Committee, chaired by Professor Ho Yan Ki, is responsible for reviewing the Board structure, identifying and recommending director candidates, and assessing the independence of independent non-executive directors[212] - The Remuneration Committee, chaired by Mr. Poon Kan Kwong, is responsible for formulating remuneration policies and making recommendations on the remuneration and share option grants for directors and senior management[221] - The Investment Committee, chaired by Mr. Wong Sue Toa, Stewart, is responsible for handling the Group's investment decisions[227] Board and Committee Meeting Attendance | Meeting Type | Number of Meetings | | :--- | :--- | | Board Meetings | 4 | | Audit Committee Meetings | 3 | | Nomination Committee Meetings | 3 | | Remuneration Committee Meetings | 4 | | Investment Committee Meetings | 2 | Risk Management and Internal Control The Board oversees the Group's risk management and internal control systems, which are reviewed annually by external consultants and deemed effective and adequate - The Board confirms its oversight responsibility for risk management and internal control systems, conducting effectiveness reviews at least annually[236] - The Group established a Risk Management Committee and engaged external consultants to assist in reviewing system effectiveness, which the Board considers effective and adequate[237][244] Shareholder Rights and Investor Relations The company ensures shareholder rights and communication through general meetings, detailing procedures for convening meetings, proposing resolutions, and nominating directors, with additional inquiry channels available - Shareholders holding not less than one-tenth of the company's paid-up share capital may request in writing to convene an extraordinary general meeting[265] - The report clarifies the procedures for shareholders to nominate director candidates, including required documents and submission deadlines[269][273] Environmental, Social and Governance Report ESG Governance and Strategy The Group is committed to sustainable development, with a Board-supervised ESG governance structure, identifying occupational health and safety, corporate governance, and customer satisfaction as key material issues - The Group has established an ESG governance structure overseen by the Board, with a dedicated working group responsible for implementation and reporting[291] - Through materiality assessment, occupational health and safety, corporate governance, customer satisfaction, training and development, and equal opportunities were identified as highly material ESG issues[316] A. Environmental Aspect The Group implements ISO 14001, monitors emissions (424.8 tCO2e GHG), reduced energy consumption intensity by 3% through efficiency measures, and decreased non-hazardous waste disposal intensity by promoting "3R" principles Environmental Performance Data | Environmental Performance Indicator | FY2021 | FY2020 | | :--- | :--- | :--- | | Total GHG Emissions (tCO2e) | 424.8 | 395.9 | | GHG Emissions Intensity (tCO2e/employee) | 1.7 | 1.7 | | Total Energy Consumption (MWh) | 916.7 | 876.5 | | Energy Consumption Intensity (MWh/employee) | 3.6 | 3.7 | | Total Water Consumption (m³) | 7,755 | - | | Total Non-Hazardous Waste Disposed (tonnes) | 13.1 | 43.4 | | Non-Hazardous Waste Disposal Intensity (tonnes/employee) | 0.1 | 0.2 | - The Group complies with the ISO 14001 environmental management system and implements internal environmental management policies to ensure compliance[323][330] - The Group installed a photovoltaic panel system on the rooftop of its dormitory building in China to utilize renewable energy[377] B. Social Aspect The Group prioritizes employees and social responsibility, offering competitive benefits, ensuring health and safety, providing training, adhering to labor standards, managing supply chains responsibly, and upholding anti-corruption policies Employee Statistics | Employee Data (as of March 31) | 2021 | 2020 | | :--- | :--- | :--- | | Total Employees | 253 | 235 | | By Region | Hong Kong: 137, Mainland China: 116 | - | | Overall Turnover Rate (Mainland China) | 33.6% | 41.4% | | Overall Turnover Rate (Hong Kong) | 9.5% | 8.4% | - Health and Safety: There were no work-related fatalities during the reporting period, and 2 lost workdays due to work-related injuries[421] - Development and Training: By gender, 60% of female employees and 46% of male employees received training[436] - Supply Chain Management: The Group has a total of 458 suppliers or subcontractors, with approximately half located in Hong Kong and half in mainland China[451] - Anti-corruption: There were no concluded corruption litigation cases during the reporting period. The Group invited the Independent Commission Against Corruption (ICAC) to provide training for new employees[472][473] Report of the Directors Principal Activities and Review The company is an investment holding entity whose subsidiaries primarily design, supply, and install facade and curtain wall systems, with detailed business reviews and risks covered in other sections - The company's principal business involves the design, supply, and installation of facade and curtain wall systems[512] Share Capital and Reserves This section details the company's profit distribution, investment properties, and changes in share capital and reserves, including the declaration of a second interim dividend and HK$295.8 million in distributable reserves - The Board declared a second interim dividend of HK$0.026 per share (replacing the final dividend)[521] - As of March 31, 2021, the company's distributable reserves to shareholders amounted to HK$295.8 million[531] Share Option Scheme The company adopted a new share option scheme on August 25, 2020, granting 22,907,000 options at HK$0.59 per share, with 13,336,000 remaining unexercised by year-end - The company adopted a new share option scheme on August 25, 2020, valid until August 24, 2030[550][573] Share Option Activity | Share Option Movements (as of March 31, 2021) | Number of Shares | | :--- | :--- | | Unexercised at Beginning of Year | 0 | | Granted During Year | 22,907,000 | | Exercised During Year | (9,309,000) | | Lapsed During Year | (262,000) | | Unexercised at End of Year | 13,336,000 | - Share options granted during the year had an exercise price of HK$0.59 per share, matching the closing price on the day prior to the grant date[556][579] [Purchase, Sale or Redemption of Listed Securities of the Company](index=109&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20LISTED%20SECU RITIES%20OF%20THE%20COMPANY) The company repurchased 8,812,000 shares for approximately HK$7.336 million during the year, which were subsequently cancelled Share Repurchase Summary | Share Repurchase Details (March 2021) | | | :--- | :--- | | Number of Shares Repurchased | 8,812,000 shares | | Highest Price Paid per Share | 0.86 HKD | | Lowest Price Paid per Share | 0.67 HKD | | Total Consideration Paid (excluding transaction costs) | Approximately 7,336,000 HKD | Directors' and Major Shareholders' Interests This section details directors' and major shareholders' interests in the company's shares as of March 31, 2021, including significant holdings by Mr. Cha Mou Daid, CCM Trust (Cayman) Limited, and Mr. David Michael Webb - Non-executive Director Mr. Cha Mou Daid, Johnson is deemed to have an interest in 219,409,017 shares, representing approximately 49.56% of the issued share capital, primarily through his capacity as a beneficiary of a discretionary trust[649][652] - Major shareholder CCM Trust (Cayman) Limited is deemed to have an interest in 195,104,050 shares, representing approximately 44.07% of the issued share capital[664][668] - Mr. David Michael Webb is deemed to have an interest in 26,350,399 shares, representing approximately 5.95% of the issued share capital[664][674] Major Customers and Suppliers The Group's customer and supplier base shows concentration, with the top five customers contributing 94.2% of total revenue and the top five suppliers accounting for 42.1% of total purchases in FY2021 - The top five customers accounted for 94.2% of the Group's total revenue, with the largest customer (an independent third party) contributing 45.9%[696] - The top five suppliers accounted for 42.1% of the Group's total purchases[696] Independent Auditor's Report Independent Auditor's Report Deloitte issued an unqualified opinion on the FY2020/2021 consolidated financial statements, with "Provisions for Rectification Works and Warranty Provisions" identified as a key audit matter due to significant management estimates - Auditor Deloitte issued an unqualified opinion on the financial statements, deeming them to present a true and fair view of the Group's financial position[712] - A key audit matter was "Provisions for Rectification Works and Warranty Provisions," primarily due to the significant amounts and substantial management estimates and judgments involved[720][722] - Auditors addressed this key audit matter by understanding management processes, evaluating methodologies, referencing historical data, and comparing actual expenditures[720][722] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For FY2021, the Group reported HK$536 million in revenue, HK$74.81 million in gross profit, HK$38.94 million in profit for the year, and basic and diluted EPS of HK$0.09 Consolidated Statement of Profit or Loss and Other Comprehensive Income | Profit or Loss Item (HKD thousand) | 2021 | 2020 | | :--- | :--- | :--- | | Revenue | 536,009 | 299,794 | | Gross Profit | 74,805 | 49,151 | | Profit Before Tax | 46,150 | 28,181 | | Profit for the Year | 38,940 | 24,240 | | Total Comprehensive Income for the Year | 44,674 | 20,027 | | Basic Earnings Per Share (HKD) | 0.09 | 0.06 | Consolidated Statement of Financial Position As of March 31, 2021, the Group reported total assets of HK$672.6 million, total liabilities of HK$126.8 million, and shareholders' equity of HK$545.9 million, demonstrating strong short-term solvency Consolidated Statement of Financial Position | Balance Sheet Item (HKD thousand) | As of March 31, 2021 | As of March 31, 2020 | | :--- | :--- | :--- | | Non-current Assets | 166,724 | 170,109 | | Current Assets | 505,921 | 451,578 | | Total Assets | 672,645 | 621,687 | | Current Liabilities | 70,114 | 50,703 | | Non-current Liabilities | 56,665 | 56,102 | | Total Liabilities | 126,779 | 106,805 | | Total Equity | 545,866 | 514,882 | Consolidated Statement of Cash Flows For FY2021, the Group experienced a net cash outflow of HK$47.83 million from operations, a net inflow of HK$2.19 million from investing, and a net outflow of HK$17.79 million from financing, resulting in a HK$63.43 million net decrease in cash Consolidated Statement of Cash Flows | Cash Flow Statement Item (HKD thousand) | 2021 | 2020 | | :--- | :--- | :--- | | Net Cash from Operating Activities | (47,828) | 15,149 | | Net Cash from Investing Activities | 2,190 | 5,681 | | Net Cash from Financing Activities | (17,794) | (27,211) | | Net Decrease in Cash and Cash Equivalents | (63,432) | (6,381) | | Cash and Cash Equivalents at Beginning of Year | 297,691 | 304,648 | | Cash and Cash Equivalents at End of Year | 236,019 | 297,691 | Notes to the Consolidated Financial Statements (Summary) The notes detail accounting policies, judgments, and financial statement items, including revenue disaggregation by contract type, geographical concentration in Hong Kong, and disclosures on related party transactions, share capital, and performance bonds Revenue Disaggregation by Contract Type (HKD thousand) | Contract Type | 2021 | 2020 | | :--- | :--- | :--- | | Design, supply and installation of curtain walls, aluminum windows and doors for new buildings | 493,290 | 205,678 | | Design, supply and installation of aluminum windows and doors for new buildings | 37,022 | 80,139 | | Renovation works for existing buildings | 1,262 | 8,061 | | Repair and maintenance, etc | 4,435 | 5,916 | | Total | 536,009 | 299,794 | - The vast majority of the Group's revenue is derived from Hong Kong, amounting to HK$531 million in FY2021[1048] - In FY2021, revenue from customers A, B, and C each accounted for over 10% of total revenue, with customer A contributing HK$246 million and customer B contributing HK$159 million[1053] - As of March 31, 2021, the Group held outstanding performance bonds for construction contracts amounting to HK$107.2 million[1219] Financial Summary Five-Year Financial Summary This section summarizes the Group's five-year financial performance, highlighting significant revenue and profit growth in FY2021, alongside continuous expansion of total assets and equity Five-Year Financial Summary (HKD thousand) | Item (HKD thousand) | 2021 | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 536,009 | 299,794 | 376,621 | 421,146 | 501,938 | | Profit for the Year | 38,940 | 24,240 | 22,882 | 50,112 | 55,337 | | Total Assets | 672,645 | 621,687 | 672,059 | 383,118 | 410,785 | | Total Liabilities | 126,779 | 106,805 | 163,241 | 254,426 | 335,361 | | Total Equity | 545,866 | 514,882 | 508,818 | 128,692 | 75,424 | Summary of Major Properties Summary of Major Properties This section lists the Group's major properties, distinguishing between investment properties for rental in Hong Kong and self-use properties in Hong Kong and Huizhou, mainland China - Investment properties held for rental income include portions of offices in Phase 1, Kings Wing Plaza, Sha Tin, New Territories, Hong Kong[1385] - Properties for own use in Hong Kong include multiple offices and parking spaces in Phase 1, Kings Wing Plaza[1387] - Properties for own use in mainland China include an industrial complex building located in Shuikou Town, Huizhou City, Guangdong Province[1389]