Performance Summary The company reported a significant shift from profit to loss in Q1 FY2021, with revenue declining and a net loss attributable to equity holders First Quarter Performance Highlights (As of June 30, 2021) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | | :--- | :--- | :--- | | Revenue | approx. HKD 126,906,000 | approx. HKD 220,856,000 | | (Loss)/Profit for the Period | Loss of approx. HKD 4,620,000 | Profit of approx. HKD 5,263,000 | | (Loss)/Profit Attributable to Equity Holders | Loss of approx. HKD 4,005,000 | Profit of approx. HKD 5,938,000 | | Basic (Loss)/Earnings Per Share | Loss of approx. HK cents 0.08 | Profit of approx. HK cents 0.14 | | Proposed Dividend | Nil | Nil | Financial Results This section provides a detailed overview of the group's financial performance, including comprehensive income, revenue breakdown, tax expenses, earnings per share, and dividend policy Condensed Consolidated Statement of Comprehensive Income For the three months ended June 30, 2021, the Group shifted from profit to loss, with revenue significantly decreasing by 42.5% year-on-year to HKD 127 million, leading to a 61.2% reduction in gross profit, resulting in a loss attributable to equity holders of HKD 4.005 million compared to a profit of HKD 5.938 million in the prior year Key Items from Consolidated Statement of Comprehensive Income (Three Months Ended June 30) | Item (HKD thousands) | 2021 (Unaudited) | 2020 (Unaudited) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue from contracts with customers | 126,906 | 220,856 | -42.5% | | Gross profit | 7,032 | 18,123 | -61.2% | | Profit from operations | 1,797 | 11,477 | -84.3% | | (Loss)/Profit before tax | (4,048) | 5,263 | Shift from profit to loss | | (Loss)/Profit for the period | (4,620) | 5,263 | Shift from profit to loss | | (Loss)/Profit attributable to equity holders of the Company | (4,005) | 5,938 | Shift from profit to loss | | Basic (loss)/earnings per share (HK cents) | (0.08) | 0.14 | Shift from profit to loss | Notes to Financial Statements The notes detail the company's core businesses, revenue composition, tax situation, earnings per share calculation, and dividend policy, highlighting that current period revenue is solely from supply chain management with no contribution from marine fishing 1. Company Information and Principal Activities The Company is an investment holding company incorporated in Bermuda, with its subsidiaries primarily engaged in supply chain management services and marine fishing - Company's principal activities include investment holding, with subsidiaries engaged in supply chain management services and marine fishing16 3. Revenue and Other Income Total revenue for the period was HKD 127 million, entirely from supply chain management services, a significant decrease from HKD 219 million in the prior year, with no revenue from marine fishing compared to HKD 1.972 million last year Revenue by Segment (Three Months Ended June 30) | Business Segment (HKD thousands) | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Supply chain management services business | 126,906 | 218,884 | | Marine fishing business | – | 1,972 | | Total Revenue | 126,906 | 220,856 | 4. Other Income Other income significantly decreased from HKD 4.603 million in the prior year to HKD 0.384 million, primarily due to the absence of other loan interest income and lower miscellaneous income recorded in the current period Other Income Details (Three Months Ended June 30) | Item (HKD thousands) | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Miscellaneous income | 144 | 2,307 | | Other loan interest income | – | 1,620 | | Government grant income | 240 | 676 | | Total | 384 | 4,603 | 5. Income Tax Expense The period incurred an income tax expense of HKD 0.572 million, mainly from China corporate income tax, compared to no income tax expense in the prior year - The period recorded a tax expense of HKD 0.572 million, entirely current tax, primarily from China operations, compared to zero in the prior year24 6. (Loss)/Earnings Per Share Due to the shift from profit to loss, basic loss per share for the period was HK cents 0.08, compared to earnings per share of HK cents 0.14 in the prior year, calculated based on approximately 4.91 billion weighted average shares (Loss)/Earnings Per Share Calculation | Item | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | (Loss)/Profit attributable to equity holders (HKD thousands) | (4,005) | 5,938 | | Weighted average number of ordinary shares in issue | 4,913,656,179 | 4,225,960,179 | | Basic (loss)/earnings per share (HK cents) | (0.08) | 0.14 | 8. Dividends The Board of Directors did not recommend the payment of any dividend for the three months ended June 30, 2021 - The Board of Directors did not recommend any dividend for the period, consistent with the prior year36 Management Discussion and Analysis This section reviews the group's operational and financial performance, discusses future outlook, and details liquidity, financial resources, capital structure, and employee remuneration policies Operations and Financial Review During the period, the Group's core supply chain management services, particularly for aquatic products, experienced a revenue decline due to COVID-19 impacting overseas fishing license renewals, halting upstream fishing operations; despite revenue and gross profit decreases, administrative expenses were reduced by approximately 50% year-on-year through enhanced cost control, resulting in a loss attributable to shareholders of approximately HKD 4 million - The Group's business focus remains on supply chain management services, with continued development in aquatic product supply chains, while seeking alternative overseas fishing grounds due to COVID-19 related license renewal difficulties38 Financial Performance Review (Three Months Ended June 30) | Item | 2021 | 2020 | Reason for Change | | :--- | :--- | :--- | :--- | | Revenue | approx. HKD 127 million | approx. HKD 221 million | No contribution from fishing business | | Gross Profit Margin | 5.5% | 8.2% | Absence of fishing business (higher gross margin) | | Administrative Expenses | approx. HKD 5.6 million | approx. HKD 11.2 million | Enhanced cost control and reduced travel expenses | | (Loss)/Profit Attributable to Shareholders | Loss of approx. HKD 4 million | Profit of approx. HKD 5.94 million | Decreased revenue and gross profit | Outlook The company will continue to monitor and develop existing supply chain management businesses while actively seeking other promising investment and business opportunities to diversify revenue streams, particularly leveraging the new management team's experience in ocean fishing to enhance shareholder value - Management will continue to seek promising investment and business opportunities to expand revenue sources41 - The Group will leverage the new management team's experience to further explore ocean fishing business opportunities41 Liquidity, Financial Resources and Capital Structure As of June 30, 2021, the Group maintained a sound financial position with total assets of approximately HKD 1.57 billion and a low gearing ratio (total bank borrowings/total assets) of 4.16%, with bank balances and cash of approximately HKD 4.7 million, a decrease from the beginning of the period, primarily relying on self-generated working capital for operations Capital Structure (As of June 30, 2021) | Metric | June 30, 2021 | March 31, 2021 | | :--- | :--- | :--- | | Total Assets | approx. HKD 1,569,672,000 | approx. HKD 1,544,594,000 | | Bank Balances and Cash | approx. HKD 4,696,000 | approx. HKD 9,656,000 | | Bank Borrowings | approx. HKD 65,289,000 | approx. HKD 64,822,000 | | Gearing Ratio | 4.16% | 4.28% | Employees and Remuneration Policy As of June 30, 2021, the Group's employee count decreased from 75 to 61, and total staff costs (excluding directors' emoluments) significantly dropped from HKD 4.1 million to HKD 2.2 million, reflecting the company's control over human resource expenses Employee and Cost Changes | Metric | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Number of Employees | 61 | 75 | | Total Staff Costs for the Period | approx. HKD 2,200,000 | approx. HKD 4,100,000 | Disclosures This section covers the interests of directors and major shareholders in the company's shares, details of the share option scheme, and adherence to corporate governance practices Directors' and Chief Executives' Interests in Shares, Underlying Shares and Debentures The report discloses the shareholdings of directors and major shareholders as of June 30, 2021, including Ms. Wei Qing, Mr. Fan Guocheng, and Mr. Cai Haiming, with Mr. Liu Yi holding 14.74% as a major shareholder Directors' Shareholdings (As of June 30, 2021) | Director's Name | Capacity | Number of Ordinary Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Ms. Wei Qing | Beneficial Owner | 79,608,000 | 1.62% | | Mr. Fan Guocheng | Beneficial Owner | 800,000 | 0.02% | | Mr. Cai Haiming | Beneficial Owner | 151,404,857 | 3.08% | - Major shareholder Mr. Liu Yi beneficially owns 724,292,000 shares, representing approximately 14.74% of the issued share capital55 Share Option Scheme The company adopted a share option scheme in 2011 to incentivize and retain eligible employees; however, no share options have been granted under the scheme since its adoption - The company adopted a share option scheme in 2011, but no options have been granted since its adoption5758 Corporate Governance Practices The company has adopted the Corporate Governance Code, but deviates in the separation of Chairman and Chief Executive roles, currently held by Mr. Liu Rongsheng, which the Board believes provides strong and consistent leadership; the Audit Committee, comprising three independent non-executive directors, has reviewed the unaudited financial statements for the period - The company deviates from corporate governance best practices as the roles of Chairman and Chief Executive are not separated, both held by Mr. Liu Rongsheng, though the Board believes this structure provides strong and consistent leadership64 - The Audit Committee, composed of three independent non-executive directors with Mr. Jin Xiaoxian as Chairman, has reviewed the unaudited financial statements for the period66
中国海洋发展(08047) - 2022 Q1 - 季度财报