Financial Performance - Revenue increased by 30.9% year-on-year to HK$3,717.6 million in 2018, compared to HK$2,840.3 million in 2017[9] - Gross profit surged by 26.0% year-on-year to HK$178.1 million, up from HK$141.4 million in 2017[9] - Profit attributable to owners of the Company decreased by 35.4% year-on-year to HK$22.6 million, down from HK$35.0 million in 2017[9] - Basic earnings per share were 2.38 HK cents, compared to 4.66 HK cents in 2017[9] - The Group's total revenue for the year increased by 30.9% to HK$3,717.6 million, up from HK$2,840.3 million in the previous year[24] - Revenue from Memory products surged by 30.3% year-on-year to HK$2,344.0 million, accounting for approximately 63.1% of the Group's total revenue[20] - Data & Cloud products revenue increased by 42.7% year-on-year to HK$935.1 million, representing 25.1% of total revenue[22] - Revenue from General components rose by approximately 13.6% year-on-year to HK$438.5 million, contributing about 11.8% to total revenue[23] - Net profit for the Year amounted to HK$33.3 million, representing a drop of 26.6% compared to HK$45.4 million in 2017[39] - Net profit attributable to the owners of the Company was HK$22.6 million, a decrease of 35.4% from the previous year, primarily due to significant increases in administrative, distribution, and selling expenses despite growth in sales revenue[39] Expenses and Costs - Selling and distribution expenses increased by approximately HK$31.0 million, primarily due to additional marketing efforts and increased commission expenses[30] - Administrative expenses increased by approximately HK$16.0 million, driven by a HK$10.4 million rise in salaries and staff benefits due to business expansion[36] - Finance costs rose to approximately HK$18.3 million from HK$11.4 million in 2017, attributed to increased interest rates and higher use of factoring loans[33] - Distribution and selling expenses increased by approximately HK$31.0 million, mainly due to enhanced marketing efforts and increased commissions[35] Market Outlook and Strategy - The Company remains cautious about market outlook due to global economic slowdown and trade tensions, adopting a prudent approach to market trends[11] - Emerging technologies are expected to drive growth in digital storage and electronic component markets, particularly with the rise of 5G technology[10] - The Company aims to expand its business scale from upstream suppliers to downstream market and sales volume[11] - The Group's proactive exploration of new products and suppliers helped sustain growth despite market challenges from US-China trade tensions[20] - The Group aims to maintain a "high volume — low margin" business strategy to uphold and expand market share while ensuring sustainability in business expansion[49] - The focus will be on sales of electronic components for automotive, medical electronic equipment, and industrial applications to capture more business opportunities[49] Corporate Governance - The company adopted the Corporate Governance Code and complied with all applicable code provisions from the Listing Date to December 31, 2018[64] - The roles of Chairman and CEO are held by Mr. Lee Bing Kwong, ensuring consistent leadership and effective strategic planning[64] - The Board consists of three executive Directors and three independent non-executive Directors, ensuring a balanced governance structure[66] - The Company has received written confirmations of independence from all INEDs, affirming their status throughout the Period[66] - The Board is responsible for major policy matters, strategies, budgets, and internal controls, while management handles daily operations[77] Risk Management - The Board is responsible for maintaining effective risk management and internal control systems to protect the interests of the Company and its shareholders[139] - The Audit Committee conducted a review of the risk management and internal control systems, which the Board considers adequate and effective[141] - The procedures established for risk management include identifying, analyzing, and mitigating significant risks while ensuring compliance with relevant legislation[140] - The Company does not currently have an internal audit department, but this will be reviewed periodically[141] Dividend Policy - The Company adopted a Dividend Policy on December 31, 2018, considering factors such as actual and expected financial performance, shareholder interests, and retained earnings[146] - The declaration and payment of dividends are subject to applicable laws, including the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)[148] - The Company reported a final dividend of 0.6 HK cents per share for the year ended December 31, 2018, subject to shareholder approval at the upcoming AGM[172] Employee and Management Information - As of 31 December 2018, the Group employed 104 staff, an increase from 102 staff in 2017[43] - The remuneration policy for employees is based on merit, qualifications, and competence, with recommendations from the Remuneration Committee[199] - The Company has adopted a share option scheme as an incentive for eligible participants[199] Shareholder Communication - The Company aims to maintain ongoing dialogue with shareholders through annual general meetings and other meetings[159] - The Group has established procedures for responding to external inquiries, ensuring only authorized personnel communicate with outside parties[144] - The Company has a communication platform available at www.apexace.com for public access to financial and relevant information[160]
光丽科技(06036) - 2018 - 年度财报