宏强控股(08262) - 2020 Q3 - 季度财报

Financial Performance The Group experienced significant declines in revenue and profit for the nine months ended March 31, 2020, with total equity decreasing due to dividend payments Consolidated Statement of Profit or Loss The Group's revenue and profit significantly declined for the nine months ended March 31, 2020, reflecting substantial year-on-year decreases in key financial metrics Consolidated Statement of Profit or Loss Summary (For the nine months ended March 31) | Metric | 2020 (HKD thousands) | 2019 (HKD thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 197,911 | 377,828 | -47.6% | | Gross Profit | 25,056 | 35,322 | -28.9% | | Profit Before Tax | 5,454 | 7,756 | -29.7% | | Profit for the Period | 4,555 | 5,955 | -23.5% | | Profit Attributable to Owners of the Company | 4,785 | 5,955 | -19.5% | | Basic Earnings Per Share (HK cents) | 0.60 | 0.74 | -18.9% | Consolidated Statement of Changes in Equity The Group's total equity decreased from HKD 164 million to HKD 150 million as of March 31, 2020, primarily due to significant dividend payments - Total equity decreased from HKD 164 million as of July 1, 2019, to HKD 150 million as of March 31, 2020[4] - HKD 20 million in dividends paid during the period was the primary factor contributing to the decrease in equity[4] Notes to the Financial Statements This section details the company's core business, financial statement preparation, revenue segmentation, tax, dividends, EPS, and share-based payment transactions General Information and Basis of Preparation The company, a Cayman Islands investment holding firm, primarily offers Hong Kong property construction services, with financial statements prepared under HKFRS and reviewed by the Audit Committee - The Group's principal business is providing property construction services in Hong Kong[7] - The unaudited condensed consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (HKFRS)[9] Revenue and Segment Information The Group's revenue is almost entirely from general building construction, with this segment's revenue significantly decreasing year-on-year Segment Revenue (For the nine months ended March 31) | Business Segment | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | General Building Construction | 197,911 | 318,401 | | Specialized Building Construction | – | 348 | | Total | 197,911 | 318,749 | - The Group's operating segments are categorized into "General Building Construction" for residential, commercial, and industrial building projects, and "Specialized Building Construction" for demolition, site formation, and foundation works[15] Income Tax, Dividends, and Earnings Per Share Income tax expense halved due to decreased profit before tax, with no interim dividend recommended, and basic earnings per share declined - The Board does not recommend the payment of an interim dividend for the nine months ended March 31, 2020[19] - Basic earnings per share was 0.60 HK cents, down from 0.74 HK cents in the prior period[3][20] - Hong Kong profits tax is provided at a rate of 16.5% on estimated assessable profits, with current period tax expense at HKD 0.899 million compared to HKD 1.801 million in the prior period[18] Share-based Payment Transactions The company's share option scheme saw 16.1 million options granted and 3 million forfeited, resulting in 49.2 million outstanding options and an expense recognized Share Option Movement | Item | Number of Share Options | | :--- | :--- | | As at July 1, 2019 | 36,100,000 | | Granted during the period | 16,100,000 | | Forfeited during the period | (3,000,000) | | As at March 31, 2020 | 49,200,000 | - As of March 31, 2020, outstanding share options represented 6.2% of the company's issued shares[24] - The Group recognized an expense of approximately HKD 0.8 million for share options granted during the period[27] Management Discussion and Analysis This section provides an overview of the Group's financial performance, business operations, and future outlook, including challenges and strategic initiatives Financial Review Revenue significantly decreased due to fewer orders and a subsidiary disposal, while gross profit margin improved and administrative expenses decreased due to cost control - Revenue decreased by 47.6% to HKD 197.9 million, primarily due to fewer construction orders and the disposal of a subsidiary in February 2019[29] - Gross profit margin improved from 9.3% in the prior period to 12.7%, mainly due to higher gross margins on certain projects during the period[31] - Administrative expenses decreased by 27.5% to HKD 20.3 million, primarily due to reduced staff costs (including lower share-based payments and staff streamlining due to decreased revenue) and the disposal of a subsidiary[33] Business Review and Outlook The Group faces intense market competition and revenue decline, but is confident in its construction business and exploring new investment opportunities, with a joint venture project expected to contribute revenue - The construction market is extremely competitive, making it difficult to secure new projects even with reduced profit margins[37] - The Group maintains its policy of bidding at reasonable profit margins, avoiding operational loss risks to secure projects, and has taken the opportunity to streamline its management team[37] - The Board is considering other investment opportunities to broaden the Group's return base and enhance shareholder returns[37] - The Group has commenced landscaping works for a Sai Kung joint venture project, with revenue expected to be recognized in the fourth quarter[37] Disclosure of Interests and Corporate Governance This section outlines director and major shareholder interests, details the share option scheme, and confirms adherence to corporate governance standards Directors' and Major Shareholders' Interests As of March 31, 2020, directors Mr. Kwok Tung Keung and Mr. Ko Chun Hei held significant interests, alongside major shareholders Best Brain and Chuang Gao Directors' Shareholdings (As at March 31, 2020) | Director Name | Nature of Interest | Number of Shares Held | Number of Share Options | Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Mr. Kwok Tung Keung | Interest in Controlled Corporation | 250,000,000 | - | 31.25% | | | Beneficial Owner | - | 15,800,000 | 1.98% | | Mr. Ko Chun Hei | Beneficial Owner | 189,500,000 | - | 23.69% | | | Beneficial Owner | - | 15,800,000 | 1.98% | Major Shareholders' Interests (As at March 31, 2020) | Shareholder Name | Nature of Interest | Number of Shares Held | Percentage | | :--- | :--- | :--- | :--- | | Best Brain | Beneficial Owner | 250,000,000 | 31.25% | | Chuang Gao | Beneficial Owner | 160,000,000 | 20.00% | Share Option Scheme The company's 2016 share option scheme had 49.2 million outstanding options as of March 31, 2020, representing 6.2% of issued capital, with some options lapsing during the period - As of March 31, 2020, the total number of share options granted and outstanding under the share option scheme was 49,200,000, representing approximately 6.2% of the issued share capital[52] Summary of Share Option Movements During the Period | Item | As at July 1, 2019 | Granted during the period | Cancelled/Forfeited during the period | As at March 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | Total | 36,100,000 | 16,100,000 | 3,000,000 | 49,200,000 | Corporate Governance The company complied with the GEM Listing Rules' Corporate Governance Code, and the Audit Committee, composed of independent non-executive directors, reviewed the quarterly report and financial statements - During the relevant period, the company consistently complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix 15 to the GEM Listing Rules[48] - The Audit Committee, comprising three independent non-executive directors with Ms. Wong Suk Fong as chairperson, has reviewed this report and the financial statements[54]