浙江联合投资(08366) - 2021 Q3 - 季度财报

Financial Highlights Financial Highlights As of January 31, 2021, for the nine months ended, the company's revenue decreased by 10.7% to HKD 85.3 million, successfully turning losses into profits with a HKD 0.9 million profit attributable to owners, compared to a HKD 19.8 million loss in the prior period, with no dividend recommended Financial Summary | Metric | For the nine months ended January 31, 2021 | For the nine months ended January 31, 2020 | | :--- | :--- | :--- | | Revenue | Approx. HKD 85.3 million | Approx. HKD 95.6 million | | Profit/(Loss) attributable to owners of the Company | Profit approx. HKD 0.9 million | Loss approx. HKD 19.8 million | | Basic earnings/(loss) per share | Profit approx. HKD 0.06 HK cents | Loss approx. HKD 1.26 HK cents | | Dividend | Not recommended | Nil | Management Discussion and Analysis Business Review and Outlook The Group's core business is slope and foundation engineering in Hong Kong, facing increased competition and rising costs, leading to diversification into outdoor media advertising and future expansion into mainland China construction and 5G-related services - The Group's principal business is undertaking slope works, foundation works, and other general building works in Hong Kong, currently facing challenges due to slowed public works funding from political and social factors, rising operating costs (especially subcontracting fees), and intensified market competition[7] - Despite challenges, the Board remains cautiously optimistic about the Hong Kong slope engineering industry due to ongoing government infrastructure projects and landslide prevention programs[8] - To diversify its business, the company entered into a cooperation agreement with Beijing Hangdi Media and others in August 2020 to expand into media services including advertising design, production, agency, and internet technology development[9] - The company is optimistic about the outdoor advertising industry's prospects, citing data indicating continuous market growth, projected to reach RMB 71.15 billion by 2021, and believes digitalization and scenario-based approaches will be future trends[11][12][13] - Future strategic objectives include expanding construction business in mainland China, developing 5G network technology-related businesses, and media services to broaden revenue streams and contribute to the Group's future development[16] Financial Review During the reporting period, the Group's total revenue decreased by 10.7% to HKD 85.3 million, mainly due to reduced income from traditional construction businesses; however, new media services contributed HKD 16.8 million, significantly boosting gross profit margin to 16.5%, while administrative expenses sharply declined by 52.5%, coupled with increased other income, ultimately turning a loss of HKD 19.8 million into a profit of HKD 0.9 million Revenue Breakdown | Revenue Item | For the nine months ended January 31, 2021 (HKD million) | For the nine months ended January 31, 2020 (HKD million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Slope Works | 68.1 | 86.8 | -21.5% | | Foundation Works | 0.4 | 8.7 | -95.4% | | Advertising Revenue | 16.8 | 0 | N/A | | Total Revenue | 85.3 | 95.6 | -10.7% | - Gross profit significantly increased from HKD 0.7 million in the same period last year to HKD 14.1 million, with gross profit margin rising from 0.8% to 16.5%, primarily attributed to advertising revenue from the newly launched media services business[19] - Other income increased from HKD 1.0 million to HKD 5.0 million, mainly due to government grants from the "Employment Support Scheme" and increased net foreign exchange gains[20] - Administrative expenses significantly decreased by 52.5% from HKD 21.5 million to HKD 10.2 million, primarily because approximately HKD 8.0 million in share option-related expenses incurred in the previous period did not recur in the current period[21] - As a combined effect, profit attributable to owners of the company was approximately HKD 0.9 million, compared to a loss of approximately HKD 19.8 million in the same period last year, successfully turning losses into profits[22] Disclosure of Interests Directors' and Major Shareholders' Interests As of January 31, 2021, Mr. Zhou Ying, a director, through his wholly-owned controlled corporations, was deemed to hold 950,000,000 shares, representing 60.23% of the issued share capital, with major shareholder United Financial Holdings Group Limited holding the same percentage - Director Mr. Zhou Ying beneficially owns 950,000,000 shares of the Company, representing approximately 60.23% of the total share capital, through his wholly-owned Century Investment Holdings Limited and United Financial Holdings Group Limited[24][25] - Major shareholder United Financial Holdings Group Limited (ultimately controlled by Mr. Zhou Ying) beneficially holds 950,000,000 shares of the Company, representing approximately 60.23% of the total share capital[26] Other Information Corporate Governance and Compliance During the reporting period, the company experienced changes and deviations in corporate governance, including two independent non-executive directors resigning, temporarily failing to meet GEM Listing Rules, and the Chairman and CEO roles being held by the same person, while the Board did not recommend dividends and the Audit Committee reviewed the quarterly results - During the reporting period and up to the date of this report, the company and its subsidiaries did not purchase, sell, or redeem any of the company's securities[28] - The resignation of two independent non-executive directors resulted in the number of independent non-executive directors and Audit Committee members falling below the minimum requirements of the GEM Listing Rules; the company is committed to filling the vacancies as soon as possible within three months to comply with regulations[29][30] - The company deviated from the Corporate Governance Code's provision regarding the separation of Chairman and Chief Executive roles, with Mr. Zhou Ying simultaneously holding both positions; the Board believes this arrangement provides strong and consistent leadership[31] - The Board does not recommend the payment of any dividend for the nine months ended January 31, 2021[33] - The Audit Committee has reviewed the unaudited condensed consolidated results of the Group for the nine months ended January 31, 2021[35] Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the nine months ended January 31, 2021, the company reported revenue of HKD 85.3 million and gross profit of HKD 14.1 million; despite a decline in traditional construction business revenue, contributions from new media business and effective cost control led to a turnaround, with a profit for the period of HKD 5.6 million, of which HKD 0.9 million was attributable to owners of the company, and basic earnings per share were HKD 0.06 cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item (For the nine months ended January 31) | 2021 (HKD thousand) | 2020 (HKD thousand) | | :--- | :--- | :--- | | Revenue | 85,310 | 95,557 | | Gross Profit | 14,082 | 745 | | Profit/(Loss) before income tax | 8,877 | (20,053) | | Profit/(Loss) for the period | 5,648 | (20,053) | | Profit/(Loss) attributable to owners of the Company | 911 | (19,836) | | Basic earnings/(loss) per share (HK cents) | 0.06 | (1.26) | Condensed Consolidated Statement of Changes in Equity As of January 31, 2021, the Group's total equity increased to HKD 85.6 million from HKD 77.3 million on May 1, 2020, primarily due to the HKD 8.2 million total comprehensive income recorded during the period - As of January 31, 2021, total equity attributable to owners of the Company was HKD 82.7 million, non-controlling interests were HKD 2.9 million, and total equity was HKD 85.6 million[39] Notes to the Condensed Consolidated Financial Statements The notes disclose detailed information on the company's business segments, revenue sources, major customers, and taxation, showing two segments (construction and media services, with media being new and all revenue from mainland China), and a significant decrease in staff costs due to the absence of prior period share option expenses - The Group is principally engaged in slope works, foundation works, other general building works, telecommunications business, and media services[41] Business Segment Performance | Business Segment (For the nine months ended January 31, 2021) | Segment Revenue (HKD thousand) | Segment Results (HKD thousand) | | :--- | :--- | :--- | | Media Services Business | 16,803 | 12,917 | | Construction Services Business | 68,507 | (2,656) | Revenue by Geographical Region | Geographical Region (For the nine months ended January 31, 2021) | Revenue from External Customers (HKD thousand) | | :--- | :--- | | Hong Kong | 68,507 | | People's Republic of China | 16,803 | - Total staff costs for the reporting period were HKD 5.6 million, a significant decrease from HKD 12.7 million in the same period last year, mainly due to the absence of HKD 7.96 million in equity-settled share-based payment expenses incurred in the prior period[54] - Income tax expense for the reporting period was HKD 3.2 million, entirely attributable to PRC enterprise income tax; no Hong Kong profits tax was incurred as Hong Kong operations had no assessable profits[55][56][57]