Business Operations - The Group is primarily engaged in marketing, selling, and manufacturing healthcare products, particularly targeting children, with the brand "Hin Sang" being well-established[17] - The Group continues to expand its e-commerce business through electronic platforms to align with consumer trends[17] - The Group is trading in skincare, personal care, and slimming products from reputable brands to leverage existing resources for profit increase[17] - The Group is developing its business in Chinese medical healthcare and diagnosis and treatment services projects[17] Financial Performance - The Group's revenue for the Period was approximately HK$42.7 million, a decrease of approximately 33.4% compared to HK$64.1 million for the same period in 2020[18] - The Product Development Segment contributed approximately 95.3% of the Group's revenue, down from 97.5% in 2020, with revenue of approximately HK$40.7 million, a decrease of approximately 34.9% from HK$62.5 million in 2020[18][25] - Revenue from the Brand Development and Management Segment decreased to approximately 1.2% of total revenue, down from 1.9% in 2020, with revenue of approximately HK$0.5 million, a decrease of approximately 58.3% from HK$1.2 million in 2020[18][30] - The Trading of Goods Segment recorded revenue of approximately HK$200,000 for the Period, accounting for approximately 0.5% of total revenue, compared to zero in the same period in 2020[33] - The Healthcare Segment's revenue increased by approximately 210.1% to approximately HK$1.3 million, up from HK$0.4 million in 2020, with a loss of approximately HK$1.8 million for the Period[35] - Revenue from the Hong Kong market was approximately HK$19.3 million, representing 45.2% of total revenue, down from HK$39.7 million and 61.9% in 2020[19][21] - Revenue from the PRC market was approximately HK$23.4 million, accounting for 54.8% of total revenue, compared to HK$24.4 million and 38.1% in 2020[19][21] - The Group's gross profit decreased by approximately 45.0% from approximately HK$36.7 million to approximately HK$20.2 million for the Period[60] - The gross profit margin decreased from approximately 57.2% to 47.3% due to a decline in sales of higher profit margin products[60] - The Group's cost of sales decreased by 17.9% from approximately HK$27.4 million to approximately HK$22.5 million for the Period[59] Product Development and Strategy - The Group launched several new products in 2021 to enhance brand recognition, including "Hin Sang Kids Appetite Support" and "Hin Sang Kids Cough Care"[24] - The Group plans to phase out low-margin products in the Trading of Goods Segment and focus more resources on the Product Development Segment for higher profit margins[32] - The Group plans to focus on developing more products in mother and children health supplements in Hong Kong and the PRC[46] - The Group aims to expand its distribution network in China, particularly in the health supplement market for children, leveraging the "three-child" policy[41] Other Income and Expenses - Revenue from e-commerce platforms accounted for approximately HK$15.5 million, a decrease from HK$17.8 million in the previous year[52] - The Group's other income decreased by approximately 65.5% from approximately HK$2.9 million for the six months ended 30 September 2020 to approximately HK$1.0 million for the Period, mainly due to a decrease in government grants[64] - The Group recorded other gains of approximately HK$9.7 million for the Period, compared to other losses of approximately HK$0.3 million for the six months ended 30 September 2020, attributed to a gain on disposal of property, plant, and equipment of approximately HK$9.8 million[64] - Selling and distribution expenses decreased by approximately 44.5% from approximately HK$6.6 million for the six months ended 30 September 2020 to approximately HK$3.7 million for the Period, due to a shift to more online marketing strategies[67] - Administrative expenses decreased by approximately 4.5% from approximately HK$40.2 million for the six months ended 30 September 2020 to approximately HK$38.4 million for the Period, primarily due to a reduction in staff costs[68] Loss and Financial Position - The Group recorded a net loss of approximately HK$17.9 million for the Period, compared to a net loss of approximately HK$12.2 million for the six months ended 30 September 2020[70] - The Group's inventories decreased by approximately 10.7% from approximately HK$20.1 million as at 31 March 2021 to approximately HK$17.9 million as at 30 September 2021[83] - Trade receivables increased by approximately 8.1% from approximately HK$5.7 million as at 31 March 2021 to approximately HK$6.2 million as at 30 September 2021, mainly due to increased purchases of healthcare products[84] - Trade payables increased by approximately 54.9% from approximately HK$7.5 million as at 31 March 2021 to approximately HK$11.6 million as at 30 September 2021[85] - The Group's bank balances slightly increased from approximately HK$15.1 million as at 31 March 2021 to approximately HK$15.2 million as at 30 September 2021, with a gearing ratio of 1.1 as at 30 September 2021[86] - The fair value of the Group's equity instruments at fair value through other comprehensive income was approximately HK$20.3 million as at the date of the report[80] - As of September 30, 2021, the bank balance and cash slightly increased to approximately HK$15.2 million from HK$15.1 million as of March 31, 2021, while total bank borrowings were approximately HK$336.0 million[90] - The debt-to-equity ratio remained stable at 1.1 as of September 30, 2021, consistent with March 31, 2021[90] - The current ratio decreased from 0.4 as of March 31, 2021, to 0.3 as of September 30, 2021[90] - Total capital commitments for the acquisition of property, plant, and equipment increased to approximately HK$824,000 as of September 30, 2021, from HK$744,000 as of March 31, 2021[99] Shareholding and Corporate Governance - The Board resolved not to pay an interim dividend for the period, consistent with the previous year[108] - As of September 30, 2021, the carrying value of the Group's assets pledged in favor of banks was approximately HK$524.2 million, slightly down from HK$527.2 million as of March 31, 2021[98] - The Group continues to adopt prudent financing and treasury policies, with a focus on liquidity risk, financing cost, and exchange rate risk[95] - Ms. Kwan Lai Man holds 5,223,000 shares, representing 0.48% of the total shares[121] - Mr. Pang Siu Hin, as the spouse of Ms. Kwan Lai Man, has an interest in 8,385,000 shares, which is 0.77%[121] - Genwealth, a controlled corporation, holds 554,242,000 shares, accounting for 50.76% of the total shares[137] - The total number of shares issued as of September 30, 2021, is 1,091,796,000[124] - Mr. Pang Siu Hin beneficially owns 8,125,000 shares, which is 0.74%[126] - Ms. Kwan Lai Man has an interest in 5,885,000 shares, representing 0.54%[126] - Viewforth Limited holds 250,000,000 shares, which is 22.90% of the total shares[137] - Magnolia Wealth International Limited also holds 250,000,000 shares, representing 22.90%[137] - Ji Changqun has an interest in 250,000,000 shares, which is 22.90%[137] - The shareholding percentages are based on the total shares issued as of September 30, 2021[138] Share Option Schemes - The Pre-IPO Share Option Scheme allows for the issuance of up to 24,640,000 shares, representing 3.1% of the total shares in issue as of September 30, 2014[144] - The exercise price per option under the Pre-IPO Share Option Scheme is HK$0.826, which is a 30% discount from the offering price during the initial public offering on October 16, 2014[147] - As of September 30, 2021, a total of 8,928,000 share options were outstanding under the Pre-IPO Share Option Scheme, with no options granted, exercised, or forfeited during the period[148] - The Share Option Scheme is valid for ten years starting from October 16, 2014, allowing for the issuance of up to 80,000,000 shares, which is 10% of the shares in issue at the time of listing[151] - The maximum number of shares that can be issued upon exercise of all outstanding options under the Share Option Scheme must not exceed 30% of the total shares in issue at any time[151] - No options may be granted to any eligible participant that would result in the total number of shares issued exceeding 1% of the shares in issue within any 12-month period[151] - The offer of share options is accepted upon signing the offer letter and payment of HK$1 by the grantee[151] - The exercise period for share options is determined by the Directors and cannot exceed ten years from the acceptance date[151] - The total number of share options granted to directors and employees as of September 30, 2021, remains unchanged at 8,928,000[150] - The company aims to motivate eligible participants to enhance their performance and maintain ongoing business relationships through the Share Option Scheme[151] - As of September 30, 2021, the total number of share options under the Share Option Scheme is 6,270,000[157] - During the reporting period, no options were granted, exercised, or forfeited[157] - The exercise price of options shares shall not be less than the highest of the closing price on the date of grant, the average closing price for the five business days preceding the grant, or the nominal value of the share[157] Corporate Governance and Risk Management - The company is committed to maintaining a high standard of corporate governance and improving accountability and transparency in operations[159] - The company has adopted and complied with all code provisions of the Corporate Governance Code as set forth in Appendix 14 to the Listing Rules[160] - The company aims to strengthen the internal control system to meet the expectations of shareholders[159] - The Board consists of six directors, including two executive directors and three independent non-executive directors, with Mr. Pang serving as chairman[164] - The Audit Committee, established in November 2010, reviews financial reporting processes and risk management, consisting of three independent non-executive directors[165] - The Remuneration Committee, also established in November 2010, determines remuneration packages for directors and senior management, consisting of four members[166] - The Nomination Committee, established in November 2010, makes recommendations on the appointment of directors and consists of four members[172] - The Board oversees the Group's risk management and internal control systems, focusing on governance, financial, operational, and compliance risks[176] - The effectiveness of the risk management and internal control system was reviewed by the Audit Committee, including the adequacy of resources and staff qualifications[176] - The company aims to manage risks rather than eliminate them, providing reasonable assurance in compliance and operational effectiveness[176] - The Group's risk management framework is aligned with the COSO Internal Control Integrated Framework, ensuring proactive identification and management of key risks[182] - The Group has adopted the ISO 9001 quality management system to maintain strict control over product quality, ensuring all products pass inspection before release[180] - The internal audit department (IAD) reports directly to the Audit Committee quarterly, assessing the effectiveness of internal controls and risk management processes[186] - The Board has conducted an annual review of the Group's risk management and internal control systems, finding them effective and adequate with no significant irregularities identified[195] - The IAD employs a risk-management based approach for annual internal audit planning, focusing on significant financial, operational, compliance, and fraud risk areas[189] - The Group has established a crisis management team to handle emergency issues related to product safety[181] - All food and Chinese medicine products undergo rigorous testing for pesticides, heavy metals, and microorganisms before being released[180] - The Group regularly monitors suppliers' production and quality inspection procedures to ensure compliance and safety of products[180] Director Information - There have been no changes in the information of the Directors since the last annual report publication[198] - The interim financial information for the period has been reviewed by the Audit Committee[200]
衍生集团(06893) - 2022 - 中期财报