濠亮环球(08118) - 2021 Q1 - 季度财报

First Quarter Results The Group achieved growth in revenue, gross profit, and profit for the period ended July 31, 2020, driven by increased LED decorative lighting product revenue Financial Highlights The Group's Q1 2020 revenue, gross profit, and profit for the period all increased, primarily from LED decorative lighting sales to US customers Key Financial Indicators for Q1 2020 (Million HKD) | Indicator | 2020 (Million HKD) | 2019 (Million HKD) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Revenue | 49.9 | 44.8 | 11.4% | | Gross Profit | 13.6 | 11.5 | 18.3% | | Profit for the Period | 5.9 | 5.4 | 9.3% | - Revenue growth primarily due to a significant increase in LED decorative lighting product revenue, with increased revenue from US customers (partially offset by decreased revenue from Hong Kong customers)[9] - The Board does not recommend an interim dividend for the three months ended July 31, 2020[9] Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Q1 2020 unaudited consolidated profit or loss shows year-on-year growth in revenue and profit, with exchange differences boosting total comprehensive income Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Thousand HKD) | Indicator | 2020 (Unaudited) | 2019 (Unaudited) | Change (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 49,868 | 44,837 | 5,031 | 11.2% | | Cost of Sales | (36,277) | (33,309) | (2,968) | 8.9% | | Gross Profit | 13,591 | 11,528 | 2,063 | 17.9% | | Other Income and Gains | 160 | 592 | (432) | -73.0% | | Profit Before Tax | 7,491 | 6,469 | 1,022 | 15.8% | | Taxation | (1,556) | (1,039) | (517) | 49.8% | | Profit for the Period | 5,935 | 5,430 | 505 | 9.3% | | Exchange differences on translation of overseas operations | 1,810 | (2,511) | 4,321 | N/A | | Total Comprehensive Income for the Period | 7,745 | 2,919 | 4,826 | 165.3% | | Basic and Diluted EPS (HK cents) | 1.19 | 1.09 | 0.10 | 9.2% | Unaudited Condensed Consolidated Statement of Changes in Equity Total equity increased to HK$144,624 thousand for the three months ended July 31, 2020, driven by profit and favorable exchange differences Condensed Consolidated Statement of Changes in Equity (Thousand HKD) | Indicator | July 31, 2020 (Unaudited) | July 31, 2019 (Unaudited) | Change (Thousand HKD) | | :--- | :--- | :--- | :--- | | Share Capital | 5,000 | 5,000 | 0 | | Share Premium | 41,901 | 41,901 | 0 | | Statutory Reserve | 2,596 | 1,233 | 1,363 | | Exchange Reserve | (3,016) | (2,358) | (658) | | Other Reserves | 1 | 1 | 0 | | Retained Earnings | 98,142 | 80,496 | 17,646 | | Total Equity | 144,624 | 126,273 | 18,351 | - Total comprehensive income for the period increased from HK$2,919 thousand in 2019 to HK$7,745 thousand in 2020[14] Notes to the Condensed Consolidated Financial Statements This section provides essential notes on the Group's financial statements, covering preparation, policies, segments, revenue, profit, tax, and EPS 1. General Information Hao Liang Global Limited, incorporated in the Cayman Islands and listed on HKEX GEM, primarily trades and manufactures LED lighting products - The Company was incorporated in the Cayman Islands on January 30, 2014, and listed on GEM of HKEX on November 16, 2017[16] - The Group is principally engaged in the trading and manufacturing of LED lighting products[17] - Financial information is presented in Hong Kong Dollars, the Company's reporting currency[17] 2. Basis of Preparation Unaudited condensed consolidated financial statements are prepared under HKFRS and GEM Listing Rules, consistent with annual policies - The unaudited condensed consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the GEM Listing Rules[18] - The accounting policies adopted are consistent with those used in the annual consolidated financial statements for the year ended April 30, 2020[18] - The unaudited condensed consolidated financial statements have been reviewed by the Company's Audit Committee[19] 3. Segment Reporting The Group operates as a single segment in LED lighting products, with geographical revenue showing US growth and Hong Kong decline - The Group is solely engaged in the design, manufacturing, and trading of LED lighting products, thus having a single business component/reportable segment[21] Geographical Revenue Distribution (Thousand HKD) | Region | 2020 (Unaudited) | 2019 (Unaudited) | Change (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Canada | 18,476 | 17,969 | 507 | 2.8% | | United States | 7,188 | 1,171 | 6,017 | 513.8% | | China (excluding Hong Kong) | 3,336 | 2,658 | 678 | 25.5% | | Hong Kong | 17,827 | 22,597 | (4,770) | -21.1% | | Others | 3,041 | 442 | 2,599 | 588.0% | | Total | 49,868 | 44,837 | 5,031 | 11.2% | 4. Revenue Revenue primarily from LED decorative and lighting products, recognized at a point in time with contracts under one year - Revenue refers to income generated from the trading and manufacturing of LED decorative lighting products and LED lighting products[23] - All revenue contracts have a duration of less than one year and are recognized at a point in time[23] Revenue by Product Category (Thousand HKD) | Product Category | 2020 (Unaudited) | 2019 (Unaudited) | Change (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | LED Decorative Lighting | 48,176 | 44,317 | 3,859 | 8.7% | | LED Lighting | 1,692 | 520 | 1,172 | 225.4% | | Total | 49,868 | 44,837 | 5,031 | 11.2% | 5. Profit Before Tax This section details expenses and income deducted in calculating profit before tax, including inventory costs and employee benefits Items Deducted in Profit Before Tax (Thousand HKD) | Item | 2020 (Unaudited) | 2019 (Unaudited) | Change (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Remuneration for non-audit services | 200 | 300 | (100) | -33.3% | | Cost of inventories recognized as cost of sales | 36,277 | 33,309 | 2,968 | 8.9% | | Depreciation of property, plant and equipment | 666 | 728 | (62) | -8.5% | | Employee benefit expenses | 6,416 | 7,238 | (822) | -11.4% | | Listing expenses related to transfer to Main Board | 1,178 | – | 1,178 | N/A | | Net provision for expected credit losses | 362 | 305 | 57 | 18.7% | | Net exchange gains | (153) | (89) | (64) | 71.9% | | Research and development expenses | 24 | 28 | (4) | -14.3% | 6. Dividends No dividends were paid, declared, or proposed for the three months ended July 31, 2020, consistent with the prior year - No dividends were paid, declared, or proposed during the reporting period (three months ended July 31, 2019: nil)[27] 7. Taxation Total taxation for Q1 2020 was HK$1,556 thousand, mainly from Hong Kong and China current tax, with China's tax significantly increasing Tax Expenses (Thousand HKD) | Tax Category | 2020 (Unaudited) | 2019 (Unaudited) | Change (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong current tax expense | 769 | 1,019 | (250) | -24.5% | | China current tax expense | 807 | 33 | 774 | 2345.5% | | Deferred tax | (20) | (13) | (7) | 53.8% | | Total Tax | 1,556 | 1,039 | 517 | 49.8% | - Hong Kong profits tax adopts a two-tiered system, with the first HK$2,000,000 of assessable profits taxed at 8.25% and the remainder at 16.5%[30] - Chinese subsidiaries are subject to a tax rate of 25%[31] 8. Earnings Per Share Attributable to Owners of the Company Basic and diluted EPS for Q1 2020 increased to 1.19 HK cents, up from 1.09 HK cents in the prior year Earnings Per Share Calculation (Thousand HKD/Thousand Shares) | Indicator | 2020 (Unaudited) | 2019 (Unaudited) | | :--- | :--- | :--- | | Profit for the purpose of calculating basic and diluted EPS | 5,935 | 5,430 | | Weighted average number of ordinary shares for basic and diluted EPS | 500,000 | 500,000 | | Basic and Diluted EPS (HK cents) | 1.19 | 1.09 | 9. Capital Commitments As of July 31, 2020, the Group had no contracted but unprovided capital commitments for the acquisition of property, plant, and equipment - As of July 31, 2020, the Group had no contracted but unprovided commitments for the acquisition of property, plant, and equipment[34] Management Discussion and Analysis The Group achieved Q1 2020 revenue growth despite the pandemic, with delayed orders confirmed and a new Cambodian production line expected to bring tax benefits Business Review Despite COVID-19, the Group achieved Q1 2020 revenue growth, with some delayed orders confirmed and a new Cambodian production line expected to aid US market expansion - The global economy was affected by the COVID-19 pandemic, leading to some customer order cancellations or delays[36] - The Group's revenue for the three months ended July 31, 2020, was approximately HK$49.9 million, a slight increase of 11.4% compared to the same period in 2019[36] - The new production line in Phnom Penh, Cambodia, has been delayed until the second half of 2020, but is expected to enjoy tax benefits, facilitating the export of lighting products to the US[36] Prospects The Group will maintain prudent risk management, with the new Cambodian production line enhancing competitiveness and plans for increased marketing efforts - The pandemic has led to strict border controls and mandatory quarantines, posing severe challenges to global business development[38] - The Group will continue to adopt a prudent and balanced risk management approach[38] - The new Cambodian production line is expected to enhance competitiveness, stabilize export sales to North America, and enjoy tax benefits[38] - Plans include arranging sales teams to visit US customers, promoting the new Cambodian production line, and participating in global exhibitions and advertising over the next few years[38] Financial Review Q1 2020 saw robust financial performance with growth in total revenue and gross profit, despite increased administrative and finance costs Revenue Total revenue increased by 11.4% year-on-year, driven by sales growth in LED decorative and lighting products Revenue from LED Decorative Lighting Products Q1 2020 LED decorative lighting product revenue increased by 8.8%, driven by sales to US and other customers - Revenue from LED decorative lighting products was approximately HK$48.2 million, an increase of 8.8% compared to the same period in 2019[39] - The increase was primarily due to increased sales to US and other customers, partially offset by decreased sales to Hong Kong customers[39] Revenue from LED Lighting Products Q1 2020 LED lighting product revenue significantly increased by 240.0%, primarily due to higher sales to Chinese customers - Revenue from LED lighting products was approximately HK$1.7 million, a significant increase of 240.0% compared to the same period in 2019[41] - The significant increase was primarily due to increased sales of LED lighting products to Chinese customers[41] Cost of Sales Cost of sales increased by 9.0% year-on-year, consistent with the Group's overall revenue growth trend - Cost of sales was approximately HK$36.3 million, an increase of 9.0% compared to the same period in 2019[42] - The increase in cost of sales was generally consistent with the increase in the Group's total revenue[42] Gross Profit and Gross Margin Gross profit increased by 18.3%, with overall gross margin rising to 27.3%, mainly due to higher margins on LED decorative lighting products - Gross profit was approximately HK$13.6 million, an increase of 18.3% compared to the same period in 2019[43] - The overall gross margin was approximately 27.3%, a slight increase of 6.2% compared to the same period in 2019[43] - The increase in gross margin was primarily due to a higher gross margin for LED decorative lighting products[43] Selling and Distribution Expenses Selling and distribution expenses decreased by 14.3% year-on-year, primarily due to reduced sales staff remuneration during the pandemic - Selling and distribution expenses were approximately HK$0.6 million, a slight decrease of 14.3% compared to the same period in 2019[44] - The decrease was primarily due to reduced sales staff remuneration during the pandemic[44] Other Income and Gains Other income and gains significantly decreased by 66.7%, mainly due to the fair value of financial assets remaining within a range - Other income and gains were approximately HK$0.2 million, a significant decrease of 66.7% compared to the same period in 2019[46] - The significant decrease was primarily due to the fair value of financial assets recognized in profit or loss remaining within a certain range[46] Administrative Expenses Administrative expenses slightly increased by 6.7%, primarily due to higher legal and professional fees and Main Board listing expenses - Administrative expenses were approximately HK$4.8 million, a slight increase of 6.7% compared to the same period in 2019[47] - The increase was primarily due to higher legal and professional fees and expenses related to the Group's application for transfer to the Main Board[47] Finance Costs Finance costs significantly increased by 300.0%, mainly due to higher interest expenses on bank borrowings and lease liabilities - Finance costs were approximately HK$0.4 million, a significant increase of 300.0% compared to the same period in 2019[48] - The significant increase was primarily due to higher interest expenses on bank borrowings and lease liabilities[48] Profit for the Period Profit for the period slightly increased by 9.3%, primarily driven by increased revenue from LED decorative lighting products - Profit for the period was approximately HK$5.9 million, a slight increase of 9.3% compared to the same period in 2019[49] - The slight increase was primarily due to increased revenue from LED decorative lighting products[49] Dividends The Board does not recommend an interim dividend for Q1 2020, consistent with the prior year - The Board does not recommend an interim dividend for the three months ended July 31, 2020 (three months ended July 31, 2019: nil)[50] Corporate Governance and Other Information This section covers the Group's corporate governance, including directors' and major shareholders' interests, and compliance with the Corporate Governance Code Disclosure of Interests This section details the interests and short positions of directors, chief executives, and substantial shareholders in the Company's shares Directors' and Chief Executives' Interests and Short Positions in the Company's Shares, Underlying Shares, or Debentures As of July 31, 2020, Mr. Shao Guoliang held 46.8% equity, and Mr. Yuan Liqian held 6.0% through his spouse's interest Directors' and Chief Executives' Long Positions in the Company's Ordinary Shares | Name of Director | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Company's Shareholding | | :--- | :--- | :--- | :--- | | Mr. Shao Guoliang | Interest in controlled corporation | 234,000,000 | 46.8% | | Mr. Yuan Liqian | Spouse's interest | 30,000,000 | 6.0% | - Mr. Shao Guoliang's interest is held by Real Charm Corp, which is wholly and beneficially owned by him[53] - Mr. Yuan Liqian's interest is held through his spouse, Ms. Jiang Fengwen[54] Substantial Shareholders' Interests and Short Positions in the Company's Shares, Underlying Shares, or Debentures Real Charm Corp, Ms. Zhong Ruchun, Wanko Creation Limited, and Ms. Jiang Fengwen are substantial shareholders with significant equity interests Substantial Shareholders' Long Positions in the Company's Ordinary Shares | Name of Shareholder | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Company's Shareholding | | :--- | :--- | :--- | :--- | | Real Charm Corp | Beneficial owner | 234,000,000 | 46.8% | | Ms. Zhong Ruchun | Spouse's interest | 234,000,000 | 46.8% | | Wanko Creation Limited | Beneficial owner | 30,000,000 | 6.0% | | Ms. Jiang Fengwen | Interest in controlled corporation | 30,000,000 | 6.0% | - Real Charm Corp's interest is the same as Mr. Shao Guoliang's interest[59] - Ms. Zhong Ruchun's interest is held through her spouse, Mr. Shao Guoliang[60] - Wanko Creation Limited is wholly and beneficially owned by Ms. Jiang Fengwen, and its interest is the same as Mr. Yuan Liqian's interest[60] Competition and Conflicts of Interest No competition or conflicts of interest were identified between the Company's business and any directors, controlling shareholders, or their close associates - The Directors are not aware of any business or interest that competes or may compete with the Company's business[62] - No Director, controlling shareholder, or substantial shareholder of the Company, or any of their respective close associates, is engaged in or has any interest in any business that directly or indirectly competes with the Group's business[62] Compliance Adviser's Interests As of July 29, 2020, Frontpage Capital Limited and its associates held no disclosable interests in the Group - The Company appointed Frontpage Capital Limited as its compliance adviser until July 29, 2020[64] - As of July 29, 2020, the compliance adviser and its directors, employees, and close associates had no notifiable interests in the Group[64] Purchase, Sale, or Redemption of the Company's Listed Securities Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during the three months ended July 31, 2020 - During the three months ended July 31, 2020, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[65] Corporate Governance Practices The Company maintains high corporate governance standards and complied with the Corporate Governance Code for the three months ended July 31, 2020 - The Company is committed to achieving and maintaining high standards of corporate governance[66] - The Company has complied with the Corporate Governance Code for the three months ended July 31, 2020[66] Directors' Securities Transactions All directors confirmed compliance with the required standard of dealings for securities transactions during the reporting period - The Company has adopted the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct for directors' securities transactions in the Company[67] - Following specific inquiries with all directors, all directors confirmed compliance with the required standard of dealings throughout the reporting period and that no non-compliance incidents occurred[67] Share Option Scheme A share option scheme was adopted in 2017 to grant options to contributors, but no options have been granted since its adoption - The Share Option Scheme was conditionally adopted on October 24, 2017, to grant share options to any directors, employees, consultants, etc., who have contributed or may contribute to the Group[69] - The scheme became effective on November 16, 2017, for a period of 10 years[69] - No share options have been granted by the Company under the Share Option Scheme since its adoption[70] Audit Committee The Audit Committee, comprising three independent non-executive directors, reviewed the Q1 2020 unaudited condensed consolidated financial statements - The Audit Committee was established on October 24, 2017, and comprises three independent non-executive directors[71] - Its primary responsibilities include reviewing the Company's financial information and reporting processes, risk management, and internal control systems[71] - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the three months ended July 31, 2020[72]