浙江联合投资(08366) - 2019 Q3 - 季度财报

Financial Summary The company's nine-month financial performance shows increased revenue but expanded losses, with no dividend proposed Financial Summary for the Nine Months Ended January 31, 2019 | Metric | Nine Months Ended Jan 31, 2019 | Nine Months Ended Jan 31, 2018 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | Approx. HK$111.0 Million | Approx. HK$86.9 Million | +27.7% | | Loss Attributable to Equity Holders | Approx. HK$7.2 Million | Approx. HK$3.7 Million | Loss expanded | | Basic Loss Per Share | Approx. HK$0.5 Cents | Approx. HK$0.26 Cents | Loss expanded | | Proposed Dividend | None | None | - | Management Discussion and Analysis This section reviews the Group's operational performance, financial position, and future outlook, highlighting key challenges and strategic initiatives Business Review and Outlook The Group's core business in Hong Kong's slope and foundation engineering faces intense competition and rising costs, prompting expansion into mainland China despite a terminated acquisition, with future focus on both markets - The core business involves undertaking slope, foundation, and general building works in Hong Kong, recognized as a specialist contractor for public works by the Hong Kong Government[7] - The Hong Kong construction market faces intense competition and rising operating costs, including subcontracting fees, posing challenges to the Group's operations[7][15] - To expand business and revenue streams, the Group actively pursued opportunities in mainland China: terminated the acquisition of Gain Link Enterprises Limited, established a joint venture with Zhejiang Guangcheng Construction Co., Ltd. for construction projects, and entered a strategic cooperation agreement with Zhejiang Yunbo Technology Co., Ltd. for underground parking projects[9][10][11][12] - The company attempted financing activities to support business development, but subsequently terminated an agreement to place up to 288 million shares, and a letter of intent with Hangzhou Guohan Financial Holdings Group for HK$50 million convertible bonds also lapsed[13][14][15] Financial Review During the reporting period, total revenue increased by 27.7% to HK$111 million, driven by slope and foundation works, but gross profit declined by 41.1% due to rising costs, leading to an expanded loss of HK$7.2 million attributable to equity holders Revenue by Business Segment (Nine Months Ended January 31) | Business Type | 2019 (HK$ Million) | 2018 (HK$ Million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Slope Works | 93.3 | 80.1 | +16.5% | | Foundation Works | 17.5 | 6.8 | +157.4% | | Total Revenue | 111.0 | 86.9 | +27.7% | - Gross profit decreased by approximately 41.1% from HK$5.6 million to HK$3.3 million, with the gross margin falling from 6.5% to 3.0%, primarily due to increased subcontracting fees and overall contract costs from intensified competition in the Hong Kong construction market[18] - Administrative expenses significantly increased by 53.4% year-on-year to HK$13.5 million, mainly due to additional rental and office expenses of approximately HK$4.3 million incurred in Hong Kong and China[20] - Cumulatively, the loss attributable to equity holders for the nine months ended January 31, 2019, expanded to approximately HK$7.2 million, compared to HK$3.7 million in the prior year period[21] Disclosure of Interests This section details the interests of directors, chief executives, and substantial shareholders in the company's shares and related securities Directors' and Chief Executive's Interests As of January 31, 2019, Mr. Zhou Ying, through his wholly-owned controlled corporation, was deemed to hold an interest in 1,080,000,000 shares, representing 75% of the company's issued share capital Directors' Long Positions in the Company's Shares | Name of Director | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Zhou Ying | Interest in Controlled Corporation | 1,080,000,000 | 75% | Major Shareholders' Interests As of January 31, 2019, United Financial Holdings Group Limited and Century Investment Holdings Limited were major shareholders, each holding 75% of the company's equity as beneficial owner and through a controlled corporation, respectively Major Shareholders' Long Positions in the Company's Shares | Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | United Financial Holdings Group Limited | Beneficial Owner | 1,080,000,000 | 75% | | Century Investment Holdings Limited | Interest in Controlled Corporation | 1,080,000,000 | 75% | Other Information This section covers corporate governance practices, dividend policy, share option scheme status, and the audit committee's review Corporate Governance The company generally complied with the Corporate Governance Code, with one deviation where the roles of Chairman and Chief Executive Officer were not separated, both held by Mr. Zhou Ying, which the board believes provides strong leadership - The company complied with the Corporate Governance Code under the GEM Listing Rules, except for a deviation from Code Provision A.2.1, where the roles of Chairman and Chief Executive Officer were not segregated, both held by Mr. Zhou Ying[29] Dividends The Board of Directors does not recommend the payment of any dividend for the nine months ended January 31, 2019 - The Board does not recommend the payment of any dividend for the nine months ended January 31, 2019 (2018: nil)[31] Share Option Scheme The company adopted a share option scheme in 2015 but has not granted any options since its adoption, with no outstanding options at the end of the reporting period - No share options have been granted by the company since the adoption of the share option scheme in 2015[32] Audit Committee The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited condensed consolidated results for the quarter, confirming compliance with applicable accounting standards and listing rules, and adequate disclosure - The Audit Committee comprises three independent non-executive directors, with Mr. Wong Man Hin as Chairman[33] - The Audit Committee has reviewed the quarterly results and deemed them compliant with accounting standards and disclosure requirements[34] Condensed Consolidated Financial Statements and Notes This section presents the unaudited condensed consolidated financial statements and accompanying notes, providing detailed insights into the Group's financial performance and position Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the unaudited financial performance for the three and nine months ended January 31, 2019, showing revenue of HK$111 million, gross profit of HK$3.32 million, and a total loss of HK$7.15 million for the nine-month period Summary of Results for the Nine Months Ended January 31 (HK$ Thousand) | Item | 2019 | 2018 | | :--- | :--- | :--- | | Revenue | 110,881 | 86,900 | | Gross Profit | 3,316 | 5,619 | | Administrative Expenses | (13,513) | (8,775) | | Loss Before Income Tax | (6,953) | (3,009) | | Loss for the Period | (7,153) | (3,699) | | Basic Loss Per Share (HK Cents) | (0.50) | (0.26) | Condensed Consolidated Statement of Changes in Equity This statement shows that the Group's total equity decreased from HK$72.90 million to HK$64.81 million for the nine months ended January 31, 2019, primarily due to a loss of HK$7.15 million and exchange differences of HK$0.93 million Summary of Changes in Equity (HK$ Thousand) | Item | Amount | | :--- | :--- | | As at May 1, 2018 | 72,898 | | Loss for the Period | (7,153) | | Exchange Differences on Translation of Financial Statements of Chinese Subsidiaries | (933) | | As at January 31, 2019 | 64,812 | Notes to the Condensed Consolidated Financial Statements These notes provide supplementary explanations for key financial data, detailing revenue by business type, identifying major clients, listing significant expense items like staff costs and subcontracting expenses, and confirming no dividends were proposed for the period Revenue by Business Type (Nine Months Ended January 31, HK$ Thousand) | Business Type | 2019 | 2018 | | :--- | :--- | :--- | | Slope Works | 93,304 | 80,119 | | Foundation Works | 17,502 | 6,781 | | Others | 75 | – | | Total | 110,881 | 86,900 | - Significant customer concentration exists, with the Lands Department and Civil Engineering and Development Department being major revenue sources[47] Key Expense Items (Nine Months Ended January 31, HK$ Thousand) | Item | 2019 | 2018 | | :--- | :--- | :--- | | Total Staff Costs | 4,472 | 3,324 | | Subcontracting Expenses (Included in Direct Costs) | 106,502 | 79,637 | - The Directors do not recommend the payment of a dividend for the nine months ended January 31, 2019[51]