源想集团(08401) - 2020 Q1 - 季度财报

Company Information This report details Source Network Group Limited's core information, including board members, committees, offices, auditors, legal advisors, and principal bankers - The report provides comprehensive details on Source Network Group Limited's core company information, including its board members, committee compositions, principal offices, auditors, legal advisors, and principal bankers[7][8] Financial Highlights The company achieved revenue growth in Q1 2019, with a slight decrease in gross profit, and narrowed net loss due to increased interest income Financial Highlights for the Three Months Ended June 30, 2019 | Metric | Q1 2019 (HKD) | Q1 2018 (HKD) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Unaudited Revenue | Approx. 5,769,000 | Approx. 5,530,000 | +4.3% | | Unaudited Gross Profit | Approx. 3,514,000 | Approx. 3,577,000 | -1.8% | | Unaudited Loss | Approx. 22,000 | Approx. 49,000 | -55.1% | | Proposed Dividend | Not Distributed | N/A | - | - The company achieved revenue growth in Q1 2019, but gross profit slightly decreased, while net loss narrowed year-over-year due to increased interest income[11] Management Discussion and Analysis This section provides an overview of the group's business performance, future strategies, and financial results for the period Business Review The Group's Q1 2019 revenue grew 4.3% to HKD 5.77 million, driven by strong Hong Kong business growth, partially offset by Taiwan's decline and new accounting standards, with gross profit slightly down 1.8% and period loss narrowing to HKD 22 thousand - The company's core business is providing online advertising services, including viral marketing, interactive engagement, and mass blogging services, primarily in Hong Kong, Taiwan, Malaysia, and Singapore[12] Geographical Market Performance Hong Kong market became the primary revenue source, increasing its share from 39.7% to 65.9% with 72.9% year-over-year growth, while Taiwan's share decreased from 50.7% to 24.3% Revenue Contribution by Region | Region | Q1 2019 Revenue Share | Q1 2018 Revenue Share | | :--- | :--- | :--- | | Hong Kong | 65.9% | 39.7% | | Taiwan | 24.3% | 50.7% | | Malaysia and Singapore | 9.8% | 9.5% | - Hong Kong market revenue increased 72.9% year-over-year to HKD 3.8 million, primarily due to a lower base in the prior year period[14] - Taiwan market revenue decreased to HKD 1.403 million due to intensified competition and the impact of new accounting standards[15] - Malaysia's member count grew 47.4% to 129,283, becoming a core driver for other market growth, while Singapore's member base and revenue were below expectations[16] Business Outlook The Group anticipates increased competition in online advertising but is confident in its market position due to its large member base, strong client relationships, and proprietary platform, planning to expand into Southeast Asia and enhance profitability through talent acquisition and new opportunities - Future strategic priorities include replicating Malaysia's success model across Southeast Asia, recruiting business development talent, exploring new opportunities like sponsoring advertising awards to reach potential clients, and diversifying the member base to attract more customers[18] Financial Review This quarter's financial performance shows revenue growth but a slight gross profit decline, with increased service costs and sales/administrative expenses, while income tax significantly decreased, leading to a narrowed net loss due to higher interest income Key Financial Item Changes | Item | Q1 2019 (HKD thousands) | Q1 2018 (HKD thousands) | Y-o-Y Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Revenue | 5,769 | 5,530 | +4.3% | Hong Kong sales growth | | Cost of Services | 2,255 | 1,953 | +15.5% | Increase in system maintenance costs | | Gross Profit | 3,514 | 3,577 | -1.8% | - | | Selling and Distribution Costs | 942 | 877 | +7.4% | Increase in staff headcount and promotional expenses | | Administrative and Other Operating Expenses | 2,905 | 2,613 | +11.2% | Increase in staff salaries, directors' emoluments, and professional fees | | Income Tax | 41 | 233 | -82.4% | Decrease in taxable profits of subsidiaries | | Loss for the Period | 22 | 49 | -55.1% | Increase in interest income | Other Information This section covers directors' and major shareholders' interests, corporate governance practices, and other key disclosures for the period Directors' and Major Shareholders' Interests As of June 30, 2019, Executive Directors Ms. Zhang Li, Mr. Luo Jiajian, and Mr. Li Yongliang collectively held 57.14% of the company's shares through controlled corporations, with Non-Executive Director Mr. Lin Hongyuan holding 17.36% through Create City Financial Group Limited Directors' Shareholding (June 30, 2019) | Director Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Ms. Zhang Li | Interest in controlled corporation; jointly held with others | 114,280,000 | 57.14% | | Mr. Luo Jiajian | Interest in controlled corporation; jointly held with others | 114,280,000 | 57.14% | | Mr. Li Yongliang | Interest in controlled corporation; jointly held with others | 114,280,000 | 57.14% | | Mr. Lin Hongyuan | Interest in controlled corporation | 34,720,000 | 17.36% | Major Shareholders' Shareholding (June 30, 2019) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Source Network Investment Limited | Beneficial interest | 114,280,000 | 57.14% | | Create City Financial Group Limited | Investment manager | 34,720,000 | 17.36% | | Create City Macro Growth Fund | Beneficial interest | 34,720,000 | 17.36% | Corporate Governance During the reporting period, the company complied with GEM Listing Rules' Corporate Governance Code, with one deviation where the Chairman and Chief Executive roles were jointly performed by three executive directors, deemed effective by the Board - The company deviated from Corporate Governance Code Provision A.2.1, which requires separation of Chairman and Chief Executive roles, explaining that these responsibilities are jointly undertaken by the three founding executive directors for efficient decision-making[38] Other Disclosures During the period, the company and its subsidiaries did not engage in any purchase, sale, or redemption of listed securities, all directors complied with securities trading codes, no share options were granted, and the Audit Committee reviewed the quarterly financial statements - As of June 30, 2019, and the report date, the company had not granted, exercised, lapsed, or cancelled any share options under its share option scheme[41] - The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited condensed consolidated financial statements for the quarter and deemed them compliant with applicable accounting standards and disclosure requirements[44] Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, including the statement of profit or loss and other comprehensive income, and the statement of changes in equity Consolidated Statement of Profit or Loss and Other Comprehensive Income For the three months ended June 30, 2019, the company recorded HKD 5.769 million in revenue and HKD 3.514 million in gross profit, resulting in a loss for the period of HKD 22 thousand and basic/diluted loss per share of HKD 0.01 Results for the Three Months Ended June 30, 2019 (Unaudited) | Item | Amount (HKD thousands) | | :--- | :--- | | Revenue | 5,769 | | Gross Profit | 3,514 | | Profit Before Tax | 19 | | Income Tax | (41) | | Loss for the Period | (22) | | Total Comprehensive Income for the Period | (29) | | Basic and Diluted Loss Per Share (HKD) | (0.01) | Consolidated Statement of Changes in Equity As of April 1, 2019, total equity was HKD 61.803 million, which decreased to HKD 61.774 million by June 30, 2019, due to a HKD 22 thousand loss for the period and exchange differences Summary of Equity Changes (Q1 2019) | Item | Amount (HKD thousands) | | :--- | :--- | | Balance as at April 1, 2019 | 61,803 | | Loss for the Period | (22) | | Other Comprehensive Income (Exchange Differences) | (7) | | Balance as at June 30, 2019 | 61,774 | Notes to the Financial Statements This section provides detailed notes to the unaudited condensed consolidated financial statements, covering company information, accounting policies, revenue segmentation, and specific financial items Notes 1-2: Company Information and Basis of Preparation Source Network Group Limited, an investment holding company registered in the Cayman Islands, primarily provides online advertising services, with its quarterly financial statements prepared under Hong Kong Financial Reporting Standards and reviewed by the Audit Committee - The Group primarily engages in providing online advertising services[49] - The financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards and applicable disclosure provisions of the GEM Listing Rules[50] Note 3: Revenue and Segment Information The Group operates in a single reportable segment of online advertising services, with Hong Kong being the largest revenue source at HKD 3.8 million, accounting for approximately 66% of total revenue, while Taiwan contributed HKD 1.403 million Revenue from External Customers by Region (For the Three Months Ended June 30) | Region | 2019 (HKD thousands) | 2018 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong | 3,800 | 2,198 | | Taiwan | 1,403 | 2,806 | | Other | 566 | 526 | | Total | 5,769 | 5,530 | Notes 4-6: Other Income, Loss Before Tax, and Income Tax This quarter's other income primarily comprised HKD 352 thousand in interest income, with key pre-tax loss components including HKD 2.61 million in staff costs and HKD 50 thousand in auditor's remuneration, and income tax expense totaling HKD 41 thousand mainly from non-Hong Kong jurisdictions - Other income primarily consisted of interest income, increasing from HKD 96 thousand in the prior year period to HKD 352 thousand[55] - Staff costs, including directors' emoluments, were the largest expense item at HKD 2.61 million, a significant increase from HKD 1.435 million in the prior year period[56] - Income tax expense for the quarter was HKD 41 thousand, comprising HKD 18 thousand for Hong Kong profits tax provision, HKD 121 thousand for other jurisdictions, and a HKD 98 thousand deferred tax credit[58] Notes 7-8: Loss Per Share and Dividends For the three months ended June 30, 2019, the company's loss attributable to equity holders was HKD 22 thousand, resulting in basic and diluted loss per share of HKD 0.01 based on 200 million weighted average ordinary shares, with no dividend proposed for the quarter Loss Per Share Calculation | Item | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Loss for the Period Attributable (HKD thousands) | (22) | (49) | | Weighted Average Number of Ordinary Shares in Issue (thousands) | 200,000 | 200,000 | | Basic and Diluted Loss Per Share (HKD) | (0.01) | (0.02) | - The Group does not recommend the payment of any dividend for the three months ended June 30, 2019[61]