思博系统(08319) - 2021 - 年度财报

Company and Financial Highlights Company Information This section provides core information about Expert Systems Holdings Limited, including board members, committee structures, auditors, registered office, principal place of business, bankers, and stock code (8319) - Mr. Wong Chu Kei is the Chairman and Non-executive Director, while Mr. Lau Wai Kwok is the Chief Executive Officer and Executive Director[5] - The company is listed on GEM in Hong Kong under stock code 8319[8] Financial Highlights For the fiscal year ended March 31, 2021, the company achieved significant growth across key financial metrics, with revenue up 14.3%, gross profit up 23.3%, and profit and total comprehensive income surging 103.1%, while adjusted profit (excluding government subsidies) still grew a robust 61.0% Key Financial Performance Indicators for FY2021 | Indicator | FY2021 | Year-on-Year Change | | :--- | :--- | :--- | | Revenue | Approx. 533.9 million HKD | +14.3% | | Gross Profit | Approx. 72.0 million HKD | +23.3% | | Profit and Total Comprehensive Income | Approx. 21.7 million HKD | +103.1% | | Adjusted Profit Attributable to Owners* | 17.2 million HKD | +61.0% | | Earnings Per Share | Approx. 2.72 HK cents | +103.1% | *Adjusted profit excludes HKD 4.5 million in government Employment Support Scheme subsidies Chairman's Statement Chairman Mr. Wong Chu Kei reported excellent FY2021 results despite COVID-19 and economic uncertainties, with revenue up 14.3% and profit up 103.1%, maintaining gross margin and increasing market share, while the board proposed a doubled final dividend of 0.90 HK cents per share, cautiously optimistic about digital transformation opportunities and exploring M&A, including a potential acquisition of an IT infrastructure management services company in Greater China and APAC FY2021 Performance and Dividend | Indicator | Amount | Year-on-Year Change | | :--- | :--- | :--- | | Revenue | 533.9 million HKD | +14.3% | | Profit for the Year | 21.7 million HKD | +103.1% | | Proposed Final Dividend | 0.90 HK cents per share | +100% | - The company believes that increased demand for digital transformation products and services in the new normal presents continuous business opportunities for the Group[19][20] - The Group is exploring M&A opportunities and has announced a potential acquisition of IT infrastructure management service companies to capitalize on business opportunities arising from the Greater Bay Area and Belt and Road initiatives[23] Management Discussion and Analysis Business Review The Group primarily provides IT infrastructure solutions, achieving 14.3% revenue growth and 23.3% gross profit growth in FY2021, driven by increased demand from both private and public sector clients and improved supplier terms that enhanced overall gross margin - The Group's core business involves evaluating, designing, and implementing integrated third-party hardware and software IT infrastructure solutions for clients[26] Private Sector Business Private sector business achieved robust growth in FY2021, with revenue up 12.1% to HKD 240.8 million (45.1% of total), gross profit up 24.6% to HKD 38.7 million, and gross margin improving from 14.4% to 16.1%, driven by increased client demand and more favorable supplier terms Private Sector Business Performance | Indicator | FY2021 | FY2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 240.8 million HKD | 214.8 million HKD | +12.1% | | Gross Profit | 38.7 million HKD | 31.0 million HKD | +24.6% | | Gross Profit Margin | 16.1% | 14.4% | +1.7 percentage points | Public Sector Business Public sector business, a primary revenue source, showed strong performance in FY2021, with revenue up 16.1% to HKD 293.1 million (54.9% of total), gross profit up 21.9% to HKD 33.3 million, and gross margin slightly increasing to 11.4%, also driven by increased client demand and favorable supplier terms Public Sector Business Performance | Indicator | FY2021 | FY2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 293.1 million HKD | 252.5 million HKD | +16.1% | | Gross Profit | 33.3 million HKD | 27.4 million HKD | +21.9% | | Gross Profit Margin | 11.4% | 10.8% | +0.6 percentage points | Outlook and Prospects The Group anticipates a challenging short-to-medium term economic environment but remains optimistic about long-term digital transformation trends, strategically focusing on hybrid/multi-cloud, container/DevOps, cybersecurity, and application management services, while strengthening supplier collaborations and prudently exploring M&A opportunities to enhance shareholder value - Despite global economic uncertainties, the Group believes enterprise digital transformation will continue to generate business opportunities[32] - The company has identified four strategic development directions: (i) hybrid cloud, multi-cloud, and 'as-a-service'; (ii) container technology and DevOps; (iii) cybersecurity; and (iv) application management services[32] - The company will continue to prudently explore suitable M&A opportunities to drive growth and enhance enterprise value[33] Financial Review In FY2021, the Group demonstrated strong financial performance with total revenue up 14.3% to HKD 533.9 million, gross profit up 23.3% to HKD 72.0 million, and gross margin improving to 13.5%, while other income significantly increased due to HKD 4.5 million in government Employment Support Scheme subsidies, and profit attributable to owners surged 103.1% to HKD 21.7 million FY2021 Financial Performance Overview | Financial Indicator | FY2021 | FY2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 533.9 million HKD | 467.3 million HKD | +14.3% | | Gross Profit | 72.0 million HKD | 58.4 million HKD | +23.3% | | Gross Profit Margin | 13.5% | 12.5% | +1.0 percentage point | | Other Income and Gains | 6.0 million HKD | 1.2 million HKD | +406.1% | | Selling Expenses | 40.3 million HKD | 35.0 million HKD | +15.5% | | Administrative Expenses | 12.4 million HKD | 11.2 million HKD | +10.3% | | Profit Attributable to Owners | 21.7 million HKD | 10.7 million HKD | +103.1% | | Earnings Per Share | 2.72 HK cents | 1.34 HK cents | +103.1% | - The significant increase in other income and gains primarily resulted from HKD 4.5 million in government subsidies recognized under the 'Employment Support Scheme' of the 'Anti-epidemic Fund' during the period[38] Liquidity and Financial Resources The Group maintains a robust financial position, primarily funding operations through cash generated from operating activities, with no bank borrowings as of March 31, 2021, and cash and cash equivalents significantly increasing to HKD 152.1 million, reflecting extremely low financial risk with a zero gearing ratio Liquidity and Capital Structure | Indicator | March 31, 2021 | March 31, 2020 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 152.1 million HKD | 95.4 million HKD | | Bank Borrowings | None | None | | Gearing Ratio | Zero | Zero | - As of March 31, 2021, the Group had a bank credit facility of HKD 10.0 million, of which HKD 2.0 million was utilized[49] Biographies of Directors and Senior Management This section details the personal biographies of the company's board members and senior management, including their age, positions, responsibilities, educational backgrounds, and extensive experience in the information technology and related industries Executive Directors The executive director team comprises CEO Mr. Lau Wai Kwok, Ms. Lau Tsz Yan overseeing private sector sales, and Mr. So Cheuk Wah managing public sector sales, all possessing over 20 years of experience in the IT industry - Mr. Lau Wai Kwok serves as Chief Executive Officer, responsible for the Group's overall development and daily operations[66] - Ms. Lau Tsz Yan and Mr. So Cheuk Wah are both General Managers of Sales, responsible for the private and public sector sales teams, respectively[70] Non-executive Directors Non-executive directors include Chairman Mr. Wong Chu Kei, Mr. Chu Siu Sum, and Mr. Chan Kin Mei, who provide professional advice on the Group's business strategy, finance, and corporate governance, leveraging their extensive backgrounds in IT and financial accounting - Mr. Wong Chu Kei serves as Chairman, responsible for leading the Board and advising on business strategies[65] Independent Non-executive Directors The independent non-executive director team comprises Mr. Au Yu Kim, Mr. Chung Fuk Wing, Mr. Ko Man Fu, and Mr. Mak Wai Shing, who provide independent judgment and oversight to the Board with expertise in accounting, engineering, law, and trade - The four independent non-executive directors provide independent professional advice to the company on strategy, investment, policies, and accountability[76][79][80][81] Senior Management Senior management includes Mr. Yan Tsz Yin, Senior Manager of Business Development and Sales Operations, and Ms. Wong Yuk Lam, General Manager of Finance, both possessing nearly 20 years or more of professional experience in IT sales and marketing, and financial accounting, respectively Corporate Governance Report This report outlines the company's corporate governance practices for FY2021, confirming adherence to the GEM Listing Rules' Corporate Governance Code (Appendix 15), with one deviation regarding the company secretary not being an employee, and detailing the Board's structure and responsibilities, the composition and functions of its four committees (Audit, Remuneration, Nomination, Corporate Governance), and the implementation of internal control systems to ensure effective management and accountability Board of Directors The Board of Directors is responsible for the Group's overall management and strategy, comprising 10 members as of the reporting date (3 executive, 3 non-executive, 4 independent non-executive), meeting listing rule requirements, with separate roles for Chairman and CEO to ensure checks and balances - The Board comprises 10 directors, with 4 independent non-executive directors, exceeding the one-third requirement[92] - The roles of Chairman (Mr. Wong Chu Kei) and Chief Executive Officer (Mr. Lau Wai Kwok) are separate to prevent concentration of power[97] Board Committees The Board has four specialized committees: Audit, Remuneration, Nomination, and Corporate Governance, each with clear written terms of reference and composed of directors with relevant expertise (mostly independent non-executive directors) to oversee specific areas - The Audit Committee is chaired by Independent Non-executive Director Mr. Au Yu Kim, responsible for overseeing financial reporting, external auditors, and internal controls[104][105] - The Remuneration Committee is chaired by Independent Non-executive Director Mr. Ko Man Fu, responsible for reviewing the remuneration policies of directors and senior management[108] - The Nomination Committee is chaired by Independent Non-executive Director Mr. Chung Fuk Wing, responsible for the nomination, appointment, and evaluation of directors[110] - The Corporate Governance Committee is chaired by Non-executive Director Mr. Chan Kin Mei, responsible for formulating and reviewing the company's corporate governance policies[116] Internal Control and Risk Management The Board ensures the Group maintains sound and effective internal control systems, having appointed an independent internal control consultant in FY2021 whose recommendations were fully implemented, and has established risk management policies and measures for risk identification, analysis, and mitigation by the Board and senior management, with ultimate oversight by the Audit Committee and the Board - The company engaged an independent consultant to review its internal control system and has fully implemented the recommended enhancement measures[130] - The Group has established risk management policies, with management responsible for risk identification and the Audit Committee and Board providing oversight[131] Report of the Directors This report outlines the Group's business, financial results, and corporate affairs for the year ended March 31, 2021, confirming its primary business as IT infrastructure solutions with no significant changes, and the Board's recommendation of a 0.90 HK cents per share final dividend, while also disclosing key customer and supplier concentration, directors' interests in shares and share options, and compliance with non-competition undertakings by controlling shareholders, with no major acquisitions or disposals during the year Results and Dividends The Board recommends a final dividend of 0.90 HK cents per ordinary share for FY2021, double the 0.45 HK cents from FY2020, subject to shareholder approval at the upcoming Annual General Meeting - A final dividend of 0.90 HK cents per share is proposed, doubling last year's 0.45 HK cents[148] Major Customers and Suppliers During the fiscal year, the Group experienced high customer and supplier concentration, with the top five customers contributing 30.5% of total revenue (largest customer 14.9%), and the top five suppliers accounting for 68.7% of total purchases (largest supplier 35.7%) Customer and Supplier Concentration | Category | Percentage | | :--- | :--- | | Top Five Customers of Total Revenue | Approx. 30.5% | | Largest Customer of Total Revenue | Approx. 14.9% | | Top Five Suppliers of Total Purchases | Approx. 68.7% | | Largest Supplier of Total Purchases | Approx. 35.7% | Directors' and Chief Executive's Interests in Shares The report discloses the company's ordinary shares and share options held by directors and chief executives as of March 31, 2021, with key shareholders including Mr. Chu Siu Sum, Mr. Lau Wai Kwok, and Mr. Wong Chu Kei Directors' Long Positions in Company's Ordinary Shares | Director/Chief Executive Name | Total Shares | Nature of Interest | | :--- | :--- | :--- | | Mr. Chu Siu Sum | 226,890,000 | Beneficial Owner | | Mr. Lau Wai Kwok | 100,000,000 | Beneficial Owner | | Mr. Wong Chu Kei | 53,300,000 | Beneficial Owner | | Mr. Chan Kin Mei | 6,720,000 | Beneficial Owner | - Several directors and independent non-executive directors hold share options granted under the share option scheme[179] Share Option Scheme The company adopted a share option scheme on March 15, 2016, to incentivize contributors, granting 16 million options to directors and employees in April 2019, with 15.9 million options unexercised as of March 31, 2021 (approximately 2.0% of issued shares), of which 3.18 million have vested - In April 2019, the company granted 16 million share options with an exercise price of 0.111 HKD per share[187] - As of March 31, 2021, the company had 15.9 million unexercised share options, representing approximately 2.0% of issued shares[187] Financial Statements and Notes Summary of Financial Information This section provides a summary of the Group's key financial data for the past five fiscal years (2017-2021), illustrating a continuous growth trend in revenue, gross profit, profit, earnings per share, and asset and liability scales Five-Year Financial Performance Summary (Unit: HKD Thousand) | Year Ended March 31 | 2021 | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 533,944 | 467,293 | 432,529 | 337,223 | 306,453 | | Gross Profit | 72,008 | 58,383 | 53,950 | 43,249 | 42,621 | | Profit for the Year | 21,720 | 10,695 | 10,753 | 6,889 | 6,987 | | Earnings Per Share (HK cents) | 2.72 | 1.34 | 1.34 | 0.86 | 0.88 | Five-Year Financial Position Summary (Unit: HKD Thousand) | As of March 31 | 2021 | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 257,975 | 220,382 | 212,702 | 183,894 | 160,049 | | Total Liabilities | 135,980 | 116,870 | 116,995 | 98,940 | 81,984 | | Total Equity | 121,995 | 103,512 | 95,707 | 84,954 | 78,065 | Independent Auditor's Report Auditor BDO Limited issued an unmodified opinion on the company's consolidated financial statements for the year ended March 31, 2021, deeming them to present a true and fair view of the Group's financial position and performance, with 'Impairment assessment of trade receivables' identified as a key audit matter due to significant management judgment involved - The auditor issued an unmodified opinion on the consolidated financial statements for FY2021[217] - The 'Impairment assessment of trade receivables' was identified as a key audit matter due to its material carrying amount and the significant management judgment involved in its assessment[219][224] Consolidated Financial Statements This section presents the Group's core financial statements, including the consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, and consolidated statement of cash flows, comprehensively reflecting the Group's operating results, financial position, and cash flow for FY2021 Consolidated Statement of Comprehensive Income Summary (Unit: HKD Thousand) | Item | 2021 | 2020 | | :--- | :--- | :--- | | Revenue | 533,944 | 467,293 | | Gross Profit | 72,008 | 58,383 | | Profit Before Income Tax Expense | 25,051 | 12,781 | | Profit and Total Comprehensive Income for the Year | 21,720 | 10,695 | Consolidated Statement of Financial Position Summary (Unit: HKD Thousand) | Item | March 31, 2021 | March 31, 2020 | | :--- | :--- | :--- | | Total Assets | 257,975 | 220,382 | | Total Liabilities | 135,980 | 116,870 | | Total Equity | 121,995 | 103,512 | Consolidated Statement of Cash Flows Summary (Unit: HKD Thousand) | Item | 2021 | 2020 | | :--- | :--- | :--- | | Net Cash From Operating Activities | 63,592 | 1,182 | | Net Cash (Used in) Investing Activities | (1,724) | 747 | | Net Cash Used in Financing Activities | (5,162) | (4,857) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 56,706 | (3,675) | | Cash and Cash Equivalents at End of Year | 152,105 | 95,399 | Notes to the Consolidated Financial Statements The notes to the financial statements detail the significant accounting policies adopted and provide breakdowns and explanations for key items, including segment information, revenue recognition, directors' emoluments, trade receivables, related party transactions, and the share option scheme, offering essential context and details for understanding the financial statements - The Group's operating segments are solely the provision of information technology infrastructure solutions and finance lease income, with primary revenue derived from Hong Kong[370][373] - Government grants of HKD 4.503 million included in other income originated from the Hong Kong Government's 'Employment Support Scheme'[378] - As of March 31, 2021, total trade receivables amounted to HKD 83.892 million, with an impairment allowance of HKD 0.15 million recognized[428][431] - Post-reporting period events disclose that the company is in discussions regarding a potential acquisition of companies providing IT infrastructure management services in Greater China and the Asia Pacific region[520]