直通电讯(08337) - 2020 - 年度财报

Chairman's Statement Annual Results and Review In 2020, the Group's total revenue decreased by 12.7% year-on-year, while loss attributable to equity holders significantly narrowed by 98.9%, primarily due to a sharp decline in telecommunications services revenue 2020 Key Performance Indicators | Indicator | 2020 | 2019 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 213.8 million | HKD 244.8 million | -12.7% | | Loss attributable to equity holders | HKD 0.668 million | HKD 59.076 million | -98.9% | | Basic and diluted loss per share | HKD 0.36 cents | HKD 34.00 cents (restated) | -98.9% | - Telecommunications services revenue significantly decreased by 41.2% from HKD 61.723 million to HKD 36.292 million, a primary factor in the Group's overall weak performance[11] - Distribution business (mobile phones, electronic products, and top-up vouchers) revenue was approximately HKD 177.5 million, a slight decrease of 3.1% year-on-year, expected to remain the Group's main revenue source in the future[11] Outlook The Group maintains cautious optimism for the future, anticipating a recovery in tourism and demand for roaming products with widespread vaccine adoption - The Group expects its roaming products and services to regain market demand with the recovery of global tourism[12] - The future strategic core is "Mobile as a Service" (MaaS), aiming to establish partnerships with the tourism, hotel, airline, and insurance industries to provide mobile communication services for travelers in the Greater Bay Area and Southeast Asia[12] Management Discussion and Analysis Business Review and Outlook This year, the Group's operations faced challenges across all markets, leading to significant revenue shifts and strategic adjustments towards "Mobile as a Service" (MaaS) with strict cost control Hong Kong Operations Hong Kong operations were severely impacted by the COVID-19 pandemic, leading to an 80.7% year-on-year reduction in telecommunications services revenue, while mobile phone and electronic product distribution business grew by 7.4% - Due to the sharp decline in tourists caused by COVID-19, the Group's prepaid roaming product sales were severely hit, with telecommunications services revenue significantly decreasing by 80.7% from HKD 22.668 million in the prior year to HKD 4.374 million[18] - Mobile phone and electronic product distribution business became the main revenue source in Hong Kong, with annual revenue of approximately HKD 103.8 million, a year-on-year increase of approximately 7.4%[19] China Operations China operations faced intense competition and pandemic-related impacts, resulting in a 16.8% decline in mobile and data top-up services revenue and a 71.2% drop in mobile phone and electronic product distribution revenue - Mobile and data top-up services revenue was approximately HKD 31.855 million, a year-on-year decrease of approximately 16.8%, primarily due to intense industry competition and operator tariff adjustments[22] - Mobile phone and electronic product distribution business revenue was approximately HKD 4.63 million, a significant year-on-year decrease of approximately 71.2%, mainly due to customer order cancellations and increased credit risk from some distributors due to the pandemic[23] Singapore Operations Singapore's mobile and data top-up distribution business remained stable with a slight 1.8% year-on-year decrease, but the goodwill from acquisition was fully impaired due to underperformance - Mobile and data top-up distribution business revenue was approximately HKD 69.045 million, a slight year-on-year decrease of 1.8%[27] - Goodwill of approximately HKD 5.942 million arising from the acquisition of South Data, the Singapore business, was fully impaired during the year due to its actual performance falling short of expectations[28] Financial Review For FY2020, total revenue decreased by 12.7% to HKD 213.8 million, but gross profit increased by 52.9%, and a significant net other income of HKD 36.405 million from the elimination of contingent consideration led to a 98.9% reduction in loss attributable to equity holders 2020 Financial Performance Summary (HKD thousand) | Item | 2020 | 2019 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 213,786 | 244,823 | -12.7% | | Cost of sales | (211,892) | (243,584) | -13.0% | | Gross profit | 1,894 | 1,239 | +52.9% | | Net other income/(loss) | 36,405 | (2,626) | N/A | | Administrative and other operating expenses | (38,799) | (57,784) | -32.9% | | Loss attributable to equity holders | (668) | (59,076) | -98.9% | - Net other income significantly increased, primarily due to a gain of approximately HKD 35.21 million from the elimination of contingent consideration payable for the acquisition of Sun Tai Investment[40] - Administrative expenses decreased mainly because impairment losses on goodwill and intangible assets significantly reduced from approximately HKD 30.5 million last year to approximately HKD 5.94 million, though partly offset by an increase in impairment losses on trade receivables[41] Other Information As of the end of 2020, approximately HKD 61.2 million of the total HKD 69.2 million IPO proceeds had been utilized, with about HKD 8 million allocated for RF-SIM business in Hong Kong and Macau remaining unutilized due to slower progress Use of IPO Proceeds (As of December 31, 2020) (HKD million) | Use | Original Allocation | Revised Allocation | Actual Use | | :--- | :--- | :--- | :--- | | Expand Asia Pacific business | 22.7 | 22.7 | 22.7 | | Upgrade telecommunications facilities | 20.8 | 12.8 | 12.8 | | Develop RF-SIM business | 18.9 | 12.3 | 4.3 | | Overseas mobile phone distribution | – | 12.1 | 12.1 | | Working capital | 6.8 | 9.3 | 9.3 | | Total | 69.2 | 69.2 | 61.2 | - The unutilized balance of approximately HKD 8 million allocated for the RF-SIM business plan is currently held as interest-bearing deposits in banks due to slower-than-expected business development progress[48][50] Capital Structure, Liquidity and Financial Resources The Group maintained a robust capital structure with no outstanding loans or borrowings at year-end, holding net current assets of approximately HKD 62.25 million and a current ratio of 13.6 times - As of December 31, 2020, the Group had no outstanding loans or borrowings, and the gearing ratio was not applicable[51] Liquidity Indicators (At Year-End) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Net current assets | HKD 62.248 million | HKD 89.314 million | | Cash and cash equivalents | HKD 37.154 million | HKD 56.625 million | | Current ratio | 13.6 times | 12.1 times | Employees and Remuneration Policy As of the end of 2020, the Group had 23 employees, an increase of one from the previous year, with total employee remuneration decreasing to approximately HKD 4.632 million Employee Distribution and Remuneration | Item | 2020 | 2019 | | :--- | :--- | :--- | | Total number of employees | 23 | 22 | | Total employee remuneration | HKD 4.632 million | HKD 5.125 million | Directors' Report Principal Businesses and Risks The Group, primarily an investment holding company with subsidiaries providing mobile telecommunications and distribution services, faces key risks including intense market competition, reliance on third-party service providers, and cybersecurity threats - Key risks include: - Intense Competition: The market is characterized by price pressure, potentially leading to market share loss - Reliance on Service Providers: As a mobile virtual network operator, business relies on third-party network infrastructure - Information Systems/Technology: Business stability depends on the protection and stable operation of information technology systems - Development Strategy: Expanding into overseas markets poses risks related to unfamiliar regulatory environments - Cybersecurity: Handling large volumes of customer data makes the Group vulnerable to cyber threats - Financial Risks: Exposure to credit, interest rate, foreign exchange, and liquidity risks[70][72][74][75][76][78] Financial Information and Dividends The Board does not recommend a final dividend for the year, consistent with the previous year, with approximately HKD 53.5 million in distributable reserves available as of December 31, 2020 - The Board does not recommend the payment of a final dividend for the year ended December 31, 2020[85] - As of December 31, 2020, the Company had approximately HKD 53.496 million in reserves available for distribution to equity holders[90] Major Customers and Suppliers The Group exhibits high concentration in both its customer and supplier bases, with the top five customers accounting for 74.3% of total revenue and the top five suppliers for 76.1% of total purchases in 2020 Customer and Supplier Concentration (2020) | Item | Percentage | | :--- | :--- | | Revenue from largest customer | 32.3% | | Revenue from top five customers | 74.3% | | Purchases from largest supplier | 32.6% | | Purchases from top five suppliers | 76.1% | Events After Reporting Period In January 2021, the Company completed a share consolidation, merging every twenty HKD 0.01 par value ordinary shares into one HKD 0.20 par value consolidated share, resulting in 184,875,000 issued shares - The Company completed a share consolidation on January 20, 2021, on a "20-for-1" basis[96] Share Capital and Interests As of the end of 2020, Chairman Mr. Li Kin Shing beneficially owned approximately 59.23% of the Company's shares, and a non-competition undertaking was in place to address potential conflicts of interest related to the RF-SIM business - Chairman Mr. Li Kin Shing is deemed to hold approximately 59.23% of the Company's shares (56.49% through controlled corporations and 2.74% beneficially owned)[114] - Controlling shareholder Mr. Li Kin Shing and his associated companies have potential competition with the Group in the RF-SIM business in China (excluding Hong Kong and Macau), but a non-competition undertaking deed has been signed[121][125] Share Option Scheme The Company adopted a 10-year share option scheme in 2016, with no share options granted or cancelled during 2020, and no outstanding share options at year-end - No share options were granted or cancelled during the year, and as of December 31, 2020, there were no outstanding share options under the share option scheme[130] Corporate Governance Report Board and Committees The Company adheres strictly to corporate governance codes, with an eight-member Board ensuring power balance and three independent non-executive director-chaired committees assisting in fulfilling responsibilities - The Board comprises 8 directors, including 3 independent non-executive directors, meeting the GEM Listing Rules requirements[140][141] - The roles of Chairman (Mr. Li Kin Shing) and Chief Executive Officer (Mr. Pang Kwok Chau) are separated, ensuring a balance of power[150] - The Company has established an Audit Committee, a Nomination Committee, and a Remuneration Committee, all chaired by Independent Non-executive Director Ms. Li Man Yee[159][164][181] Shareholders' Rights and Investor Relations The Company prioritizes shareholder communication through various channels and outlines procedures for shareholders to convene extraordinary general meetings, make inquiries, and propose resolutions, safeguarding their participation rights - Shareholders holding not less than one-tenth of the paid-up share capital carrying the right to vote at general meetings may request to convene an extraordinary general meeting[190] Biographies of Directors and Senior Management This section provides detailed background, industry experience, and responsibilities within the Group for the Company's Board members and senior management Independent Auditor's Report Audit Opinion KPMG issued an unmodified opinion on the Company's consolidated financial statements for the year ended December 31, 2020, affirming their fair presentation in accordance with International Financial Reporting Standards and Hong Kong Companies Ordinance - The auditor believes that the consolidated financial statements fairly and truly reflect the Group's financial position and performance in accordance with International Financial Reporting Standards[207] Key Audit Matters The auditor identified goodwill impairment testing and revenue recognition as key audit matters, focusing on significant management estimates for goodwill and accounting treatment for telecommunications and distribution business revenues - Goodwill Impairment Testing: Focus on the impairment assessment of goodwill arising from the acquisition of the Singapore business, as it involves significant estimates and judgments regarding future cash flow forecasts[211] - Revenue Recognition: - Telecommunications Services: Revenue derived from a large volume of low-value transactions and involves estimates of customers' "unused rights," posing subjectivity and risk of error - Distribution Business: Revenue is a key performance indicator, with a risk of revenue being recorded in incorrect periods to meet financial targets[215][220] Audited Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income The statement shows 2020 revenue at HKD 213.8 million, a 12.7% year-on-year decrease, but the annual loss significantly narrowed to HKD 0.668 million from HKD 59.076 million in 2019 due to a substantial increase in net other income Consolidated Statement of Profit or Loss Summary (HKD thousand) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 213,786 | 244,823 | | Gross profit | 1,894 | 1,239 | | Net other income/(loss) | 36,405 | (2,626) | | Profit/(loss) before tax | 220 | (58,816) | | Loss for the year attributable to equity holders | (668) | (59,076) | Consolidated Statement of Financial Position As of the end of 2020, total assets decreased significantly to HKD 76.344 million from HKD 115.8 million, primarily due to full goodwill impairment and lower cash balances, while total liabilities decreased to HKD 6.484 million mainly due to the elimination of contingent consideration Consolidated Statement of Financial Position Summary (HKD thousand) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Non-current assets | 9,163 | 18,479 | | Current assets | 67,181 | 97,335 | | Total assets | 76,344 | 115,814 | | Current liabilities | 4,933 | 8,021 | | Non-current liabilities | 1,551 | 38,191 | | Total liabilities | 6,484 | 46,212 | | Total equity | 69,860 | 69,602 | Consolidated Statement of Cash Flows In 2020, the Group experienced a net cash outflow from operating activities of HKD 19.04 million, compared to a net inflow of HKD 9.623 million in the prior year, primarily due to changes in working capital, resulting in a year-end cash balance of HKD 37.154 million Consolidated Statement of Cash Flows Summary (HKD thousand) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Net cash from operating activities | (19,040) | 9,623 | | Net cash from investing activities | 202 | 249 | | Net cash from financing activities | (1,055) | 31,561 | | Net (decrease)/increase in cash and cash equivalents | (19,893) | 41,433 | | Cash and cash equivalents at beginning of year | 56,625 | 15,711 | | Cash and cash equivalents at end of year | 37,154 | 56,625 | Notes to the Financial Statements This section provides detailed supplementary information to the financial statements, covering key accounting policies, segment information, asset and liability breakdowns, related party transactions, financial risk management, and significant accounting estimates and judgments - Segment information indicates that the distribution business contributed the vast majority of revenue (HKD 177.5 million), while telecommunications services revenue was HKD 36.29 million[319] - Goodwill impairment loss of HKD 5.942 million due to underperformance of Singapore operations; goodwill of HKD 28.061 million was impaired in 2019 due to underperformance of China operations[357][364] - Loss allowance for trade receivables significantly increased from HKD 3.765 million to HKD 18.362 million, reflecting increased credit risk[407] Five-Year Financial Summary This section provides a summary of the Group's key financial data for five consecutive fiscal years from 2016 to 2020, illustrating trends in performance and financial position, showing revenue peaking in 2018 before two consecutive years of decline, and a significant narrowing of loss in 2020 after a substantial loss in 2019 Five-Year Financial Summary (HKD thousand) | Item | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 213,786 | 244,823 | 256,279 | 59,096 | 6,415 | | (Loss)/Profit attributable to equity holders | (668) | (59,076) | (1,778) | (6,222) | 3,243 | | Total assets | 76,344 | 115,814 | 144,233 | 142,577 | 114,140 | | Total equity | 69,860 | 69,602 | 98,059 | 100,622 | 106,620 |