依波路(01856) - 2024 - 年度业绩

Announcement Overview This announcement provides supplementary information to Ebohr Holdings Limited's annual report for the year ended December 31, 2023, further elaborating on content from previous announcements, circulars, and annual reports Report Background This section outlines the purpose of the announcement as a supplement to the company's annual report for the year ended December 31, 2023 - This announcement supplements Ebohr Holdings Limited's annual report for the year ended December 31, 2023, aiming to provide additional information[1] Profit Compensation Mechanism and Settlement This section details the calculation and settlement of the profit compensation due to Goldenxi Group's failure to meet its guaranteed profit target for 2023 Profit Compensation Calculation Goldenxi Group failed to meet its HKD 30 million guaranteed after-tax net profit for FY2023, resulting in a HKD 30.5 million shortfall and a required compensation of HKD 45.8 million - Goldenxi Group's guaranteed consolidated after-tax net profit for FY2023 was HKD 30 million[2] - Goldenxi Group recorded an annual consolidated net loss of approximately HKD 0.5 million for the year ended December 31, 2023[2] 2023 Profit Guarantee and Compensation | Indicator | Amount (HKD) | | :--- | :--- | | 2023 Profit Guarantee | 30,000,000 | | 2023 Actual Net Loss | (500,000) | | Profit Difference | 30,500,000 | | Profit Compensation Multiple | 1.5 times | | 2023 Profit Compensation Amount | 45,800,000 | Profit Compensation Settlement The HKD 45.8 million profit compensation for 2023 was settled by March 2024 through various offsets, including outstanding cash consideration and intercompany balances - The offsetting sequence for 2023 profit compensation was: first by consideration shares, then by deducting the first installment of outstanding cash consideration of HKD 13.33 million[4] - The acquisition of Goldenxi Group was completed on April 19, 2023, making it an indirect wholly-owned subsidiary of the Company[4] 2023 Profit Compensation Settlement (as of March 2024) | Date | Item | Amount (HKD Million) | | :--- | :--- | :--- | | March 2024 | Offset first installment of cash consideration | 13.3 | | During 2023 | Offset seller's cash advances | 5.3 | | January 2024 | Offset seller's cash advances | 10.0 | | March 2024 | Offset amount due from a fellow subsidiary of the Company | 17.2 | | Total | 2023 Profit Compensation | 45.8 | Board's View and Operational Analysis This section presents the Board's perspective on the profit compensation and the operational factors contributing to Goldenxi Group's performance shortfall Board's View The Board confirmed the company received profit compensation as per the agreement and deemed the terms fair and reasonable, reiterating the acquisition's rationale based on smartwatch market potential and business synergies - The Board believes the Company has received compensation in accordance with the agreement, and the settlement method complies with the agreement terms[5] - The Board considers "no cap on the profit compensation amount" and "1.5 times the difference between after-tax net loss and HKD 30 million" to be fair and reasonable and in the best interests of the Company[5] - Considering the growth potential of the smartwatch market and Goldenxi Group's synergistic effects in watch component manufacturing, the Board deems the acquisition fair and reasonable[5] Reasons for Profit Guarantee Shortfall Goldenxi Group's profit guarantee shortfall was primarily due to delayed orders from its largest customer and other smaller clients, influenced by macroeconomic uncertainty and geopolitical tensions in Greater China - The largest customer (accounting for approximately 60% of full-year total revenue) postponed orders due to macroeconomic uncertainty and geopolitical tensions in the Greater China region[5] - Other customers (accounting for approximately 40% of projected total revenue) delayed sales orders due to macroeconomic pressures and geopolitical tensions[6] - These reasons led to a difference of approximately HKD 30 million in Goldenxi Group's profit compared to the profit projected before the acquisition[6] 2024 Market Outlook Management anticipates a continued sluggish consumer market in 2024, with weak consumer confidence leading to retail sales growth below pre-pandemic levels, thus expecting Goldenxi Group's smartwatch component order volumes to remain low - Management believes consumer spending will remain sluggish in 2024, with retail sales growth rates below pre-pandemic average levels[6] - Due to continued weak consumer confidence, Goldenxi Group's order volumes for smartwatch components are expected to remain low[6] Goodwill Impairment and Valuation This section details the recognition of goodwill impairment and the valuation methodologies and assumptions used for Goldenxi Group Impairment Recognition Due to Goldenxi Group's failure to meet the 2023 profit guarantee and recording a net loss, an independent valuer confirmed the recoverable amount was below carrying value, leading to a goodwill impairment loss of approximately HKD 13.39 million - Goldenxi Group recorded a net loss of approximately HKD 0.5 million for the year ended December 31, 2023, significantly below the 2023 guaranteed profit[7] - According to accounting standards, goodwill arising from business combinations should be tested for impairment annually[7] - Based on the valuer's assessment, Goldenxi Group's recoverable amount was below its carrying value, resulting in a goodwill impairment of approximately HKD 13.39 million[7] Detailed Valuation Information and Assumptions The valuer used a Discounted Cash Flow (DCF) model based on Value in Use (VIU) to assess Goldenxi Group's recoverable amount, employing a 15.40% WACC and a 5-year free cash flow forecast, ultimately deriving an enterprise value of HKD 127.345 million and a valuation result of approximately HKD 94.7 million - The valuer used a Discounted Cash Flow (DCF) model to assess Goldenxi Group's recoverable cash through Value in Use (VIU)[9] Valuation Parameters | Indicator | Value | | :--- | :--- | | Indicated Risk-Free Rate | 2.561% | | Risk Premium | 10.526% | | Estimated Levered Beta | 0.6368 | | Cost of Equity | 20.09% | | Cost of Debt | 5.040% | | Weighted Average Cost of Capital (WACC) | 15.40% | Goldenxi Group 5-Year Free Cash Flow Forecast (RMB '000) | Indicator | 2024 | 2025 | 2026 | 2027 | 2028 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 182,227 | 164,004 | 155,804 | 148,014 | 140,613 | | Gross Profit | 52,846 | 47,561 | 45,183 | 42,924 | 40,778 | | Profit After Tax | 20,876 | 16,310 | 12,678 | 9,983 | 7,299 | | Discounted Cash Flow | 26,299 | 19,058 | 12,925 | 9,545 | 6,847 | - Goldenxi Group's enterprise value was HKD 127.345 million, with a valuation result of approximately HKD 94.7 million[10] Reasons for Valuation Changes Post-acquisition, Goldenxi Group's failure to meet profit guarantee targets led the valuer to reassess its fair value under IAS 36 "Impairment of Assets," resulting in a recognized impairment loss of HKD 13.39 million, contrasting with the initial market approach valuation - During the acquisition phase of Goldenxi Group, the valuer used a market approach to determine its value[11] - Post-acquisition, as Goldenxi Group failed to meet the annual guaranteed profit target of HKD 30 million, the valuer assessed its fair value according to IAS 36 "Impairment of Assets"[11] - According to IAS 36, if the recoverable amount of a cash-generating unit is less than its carrying amount, an impairment loss is recognized, thus recording an impairment loss of HKD 13.39 million[11] Valuation Methodology and Rationale The valuer primarily used Value in Use (VIU) and Discounted Cash Flow (DCF) methods to reflect the value of Goldenxi Group's future cash flows, considering these methods most accurately estimate future economic benefits and comply with accounting standards; the Board remains cautious and will disclose the performance of the second-period profit guarantee in the next annual report - The valuer used VIU and Discounted Cash Flow (DCF) methods to reflect the value of Goldenxi Group's expected future cash flows[12] - The DCF method provides a more accurate opinion and is the only method to derive Goldenxi Group's future value in compliance with accounting standards[12] - Considering macroeconomic factors and uncertainties in the watch industry market performance, the Board is cautious about Goldenxi Group's expected profit returns[12] Other Information This section provides details regarding the composition of the company's Board of Directors Board Members This section lists the current members of Ebohr Holdings Limited's Board of Directors, including executive directors, non-executive directors, and independent non-executive directors - Executive Directors: Mr. Teguh Halim and Ms. Lin Li[12] - Non-Executive Director: Mr. Xiong Ying[12] - Independent Non-Executive Directors: Mr. Yu Chi Kit, Ms. Chan Lai Wah, and Mr. Zhang Bin[12]