PICO FAR EAST(00752) - 2024 - 年度财报

Performance Summary The company achieved significant financial growth in FY2024, with revenue increasing by 18.8% and profit attributable to shareholders rising by 56.8% | Indicator | 2024 (HKD) | 2023 (HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 6.327 billion | 5.328 billion | +18.8% | | Core Operating Profit | 499.4 million | 360.0 million | +38.7% | | Profit for the Year | 368.0 million | 243.7 million | +51.0% | | Profit Attributable to Company Shareholders | 357.6 million | 228.1 million | +56.8% | | EBITDA | 564.4 million | 437.4 million | +29.0% | | Dividend Per Share | 16.5 HK cents | 9.0 HK cents | +83.3% | | Earnings Per Share - Basic | 28.84 HK cents | 18.41 HK cents | +56.7% | | Equity Attributable to Company Shareholders | 2.292 billion | 2.261 billion | +1.4% | | Average Return on Equity Attributable to Company Shareholders | 15.7% | 10.4% | +5.3 percentage points | | Current Ratio | 1.37 times | 1.48 times | -7.4% | Group Overview The group operates globally across 36 cities, managing over 4,000 projects with approximately 2,700 full-time employees - The Group's business spans 36 cities globally, employs approximately 2,700 full-time staff, and activated over 4,000 projects during the year[9][11] | Indicator | Data | | :--- | :--- | | Cities Covered | 36 | | Projects Activated | 4,000+ | | Total Exhibition Space | Approx. 3,000,000 square meters | | Full-time Employees | Approx. 2,700 | | Production Facility Area | 70,000+ square meters | | International Awards Received | 90+ | Chairman's Statement The Chairman's Statement provides an overview of the group's strong financial performance, strategic initiatives, and operational highlights for the year Financial Results This fiscal year, the Group achieved strong performance growth, with total revenue increasing by 18.8% year-on-year and profit attributable to shareholders significantly growing by 56.8%, reflecting the Group's success in expanding market share amidst global economic recovery | Financial Indicator | Amount (HKD) | Year-on-Year Growth | | :--- | :--- | :--- | | Total Revenue | 6.327 billion | +18.8% | | EBITDA | 564.4 million | +29.0% | | Core Operating Profit | 499.4 million | +38.7% | | Profit Attributable to Company Shareholders | 357.6 million | +56.8% | Dividends The Board recommends a final dividend of 7.5 HK cents per share and a special dividend of 3.5 HK cents per share, bringing the total annual dividend to 16.5 HK cents per share, an 83.3% increase from last year | Dividend Type | Amount Per Share (HK cents) | | :--- | :--- | | Interim Dividend | 5.5 | | Proposed Final Dividend | 7.5 | | Proposed Special Dividend | 3.5 | | Total Annual Dividend | 16.5 | - The total annual dividend is 16.5 HK cents per share, a significant increase of 83.3% compared to 9.0 HK cents in 2023[19] - The company will offer a scrip dividend scheme, allowing shareholders to elect to convert the special dividend of 3.5 HK cents per share into new shares[19] Business Review Facing a complex geopolitical environment, the Group successfully navigated market changes through its global presence and integrated brand activation strategy, particularly increasing business volume in Southeast Asia and the Middle East, while optimizing resource allocation and enhancing US market capabilities through strategic asset sales and acquisitions during the year - Geopolitical tensions led to a global trade shift towards geopolitical alliances, resulting in increased business volume for the Group in Southeast Asia and the Middle East, and assisting Chinese brands in expanding into overseas markets[23] - Strategic divestment of a 45% equity stake in InfocommAsia Pte Ltd. in Singapore was undertaken to reallocate resources to core businesses[25] - Full acquisition of Infinity Marketing Team, LLC (IMT) in the US was completed to expand global reach and enhance business potential in the US market[25] - To build a data-driven enterprise, the Group continues to focus on utilizing data tools and the AI-powered Pico PowerOne system for digital transformation, aiming to improve sales conversion rates and operational efficiency[28] Operational Review This year's operational performance was strong, with total revenue reaching HKD 6.327 billion, primarily driven by exhibitions, events, and brand activation business, which accounted for 86.0% and achieved significant growth, while the Greater China region remained the largest market but with a decreased share, reflecting growth in other regions By Geography Greater China contributed 40.4% of total revenue, remaining the largest market, but its share decreased from 47.8% last year, while Southeast Asia, the Middle East, UK, and US markets remained relatively stable, and other regions' revenue share significantly grew from 4.0% to 14.0% | Region | Revenue Share (2024) | Revenue Share (2023) | | :--- | :--- | :--- | | Greater China | 40.4% | 47.8% | | Southeast Asia | 21.0% | 21.5% | | Middle East | 10.0% | 11.5% | | UK and US | 14.6% | 15.2% | | Other Regions | 14.0% | 4.0% | Exhibitions, Events and Brand Activation As the Group's core business, this segment's revenue increased by 23.2% year-on-year to HKD 5.439 billion, with profit growing by 33.1% to HKD 402.5 million, accounting for 86.0% of total revenue, as the Group successfully delivered multiple global large-scale exhibitions and brand events and was appointed as the main official contractor for COP29, demonstrating its leadership in integrated brand experiences and sustainable solutions | Indicator | 2024 (HKD) | 2023 (HKD) | | :--- | :--- | :--- | | Revenue | 5.439 billion | 4.413 billion | | Profit | 402.5 million | 302.5 million | - The Group was appointed as the main official contractor for the COP29 Blue Zone venue, responsible for designing and constructing 215,000 square meters of temporary facilities, marking the first event to receive ISO20121 (Event Sustainability Management System) certification[40] - A successful advertising campaign activated for State Farm Insurance generated 26 billion impressions and ranked highly in Super Bowl ad ratings[41] - Leveraging data expertise, the Group provided data monitoring and analysis services for the Shenzhen Tencent Global Digital Ecosystem Summit, helping clients build an event data asset library to enhance return on investment[43] Visual Branding Activation Both revenue and profit for this segment decreased, primarily due to reduced store openings by traditional fuel vehicle manufacturers in mainland China; despite challenges, the segment remained profitable and benefited from electric vehicle market growth, establishing partnerships with EV brands like Dongfeng Nano and Xiaomi | Indicator | 2024 (HKD) | 2023 (HKD) | | :--- | :--- | :--- | | Revenue | 293 million | 383 million | | Profit | 9.1 million | 32.0 million | - The decline in revenue was primarily attributed to reduced store openings by traditional fuel vehicle manufacturers in mainland China due to declining sales[52] - The Group solidified its market share in the electric vehicle sector, partnering with brands such as Dongfeng Nano, GAC Trumpchi, AION Hyper, Lotus, Mercedes-Benz, Polestar, Volkswagen, and Xiaomi[52] Museums and Themed Entertainment This segment maintained stable growth, with revenue increasing by 6.3% year-on-year to HKD 422 million and profit growing by 30.2% to HKD 50.4 million, with good progress on the 11 SKIES themed attraction project in Hong Kong in collaboration with K11 Group | Indicator | 2024 (HKD) | 2023 (HKD) | | :--- | :--- | :--- | | Revenue | 422 million | 397 million | | Profit | 50.4 million | 38.7 million | - In Hong Kong, the themed attraction project at 11 SKIES, in collaboration with K11 Group, is progressing well and is expected to become a landmark retail and entertainment destination in the future[60] Conference and Show Management Benefiting from economic recovery and government incentives, this segment's business flourished, with revenue increasing by 28.1% year-on-year to HKD 173 million and profit soaring from HKD 3.2 million to HKD 91.3 million, as the Group leveraged smart technology and AI data analytics to drive community-based strategies, enhancing brand influence | Indicator | 2024 (HKD) | 2023 (HKD) | | :--- | :--- | :--- | | Revenue | 173 million | 135 million | | Profit | 91.3 million | 3.2 million | - The strong performance of this segment was driven by increased demand for large-scale events, coupled with the application of smart technology and AI-driven data analytics[65] Financial Position The Group's financial position is robust, with total net tangible assets growing by 3.6%, net cash balance significantly increasing to HKD 1.512 billion, a current ratio of 1.37 times, and a debt-to-equity ratio decreasing from 6.20% to 4.29%, indicating strong liquidity and solvency | Indicator | 2024 (HKD) | 2023 (HKD) | | :--- | :--- | :--- | | Total Net Tangible Assets | 1.859 billion | 1.795 billion | | Bank and Cash Balances | 1.979 billion | 1.294 billion | | Net Cash Balance | 1.512 billion | 904 million | | Total Borrowings | 467 million | 390 million | | Current Ratio | 1.37 times | 1.48 times | | Debt-to-Equity Ratio | 4.29% | 6.20% | - As of October 31, 2024, the Group's total pledged assets amounted to HKD 208 million, primarily comprising freehold and leasehold land and buildings, as well as bank deposits[76] Outlook Looking ahead to 2025, the Group anticipates a challenging global business environment but remains cautiously optimistic about growth opportunities from China's 'Belt and Road' initiative, continuing to invest in content, community, creativity, and data strategies to deepen integrated brand experience services, and has secured multiple large-scale exhibition and event projects, expecting continued growth across all business segments - The new US administration is expected to introduce trade uncertainties, but China's "Belt and Road" initiative is anticipated to bring growth opportunities to Southeast Asian and Middle Eastern markets[80] - The Group will continue to invest in its existing content, community, creativity, and data strategies, transforming from a supplier to a trusted advisor[80] - Multiple large-scale projects have been secured, including the China International Machine Tool Show in Beijing, the Guangzhou International Automobile Exhibition, and events for renowned brands such as BYD, Jaguar Land Rover, and Meta[81] - The Visual Branding Activation segment will continue to deliver digital showroom solutions for clients like Bentley and Lexus, and expand its business to themed entertainment projects such as LEGOLAND Shenzhen[82] - The Museums and Themed Entertainment segment is involved in significant contracts including the Hong Kong Museum of History, Hong Kong Wetland Park, and a Hollywood movie theme park in Japan[84] Directors and Senior Management Profile This section provides detailed profiles of the company's executive directors, independent non-executive directors, and senior management, highlighting their experience and responsibilities - This section provides detailed information on the background, experience, and responsibilities of the company's Executive Directors, Independent Non-Executive Directors, and Senior Management members, showcasing the management team's professional capabilities in areas such as exhibitions, events, finance, and legal affairs[93][95][100] Five-Year Financial Summary This section presents a five-year overview of key financial indicators, including revenue, profit attributable to shareholders, total assets, and equity | Indicator (HKD thousands) | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 6,327,002 | 5,327,931 | 4,541,018 | 4,051,864 | 3,438,111 | | Profit Attributable to Company Shareholders | 357,568 | 228,083 | 162,642 | 136,909 | 50,536 | | Total Assets | 5,707,137 | 5,060,507 | 5,011,624 | 5,385,841 | 4,764,940 | | Equity Attributable to Company Shareholders | 2,291,917 | 2,261,271 | 2,105,432 | 2,187,658 | 1,957,974 | Corporate Governance Report This report details the company's corporate governance framework, including board structure, committee functions, and risk management practices Board of Directors The Board of Directors is responsible for overseeing the company's business and affairs, comprising experienced executive and non-executive directors, and held four meetings during the reporting period, with all directors participating in continuous professional development training - The Board of Directors is responsible for fulfilling the functions outlined in Corporate Governance Code A.2.1, including formulating, reviewing, and monitoring corporate governance policies, director training, and compliance[133] - For the fiscal year ended October 31, 2024, the Board held four meetings, with all directors maintaining high attendance rates[134] Committees The company has established Remuneration, Audit, and Nomination Committees to ensure transparent and effective corporate governance, with each committee predominantly composed of independent non-executive directors, fulfilling their respective duties during the year, including reviewing remuneration policies, financial statements, internal controls, and board structure Remuneration Committee The Remuneration Committee, composed of one executive director and two independent non-executive directors, is responsible for formulating and monitoring the remuneration policies for directors and senior management, holding one meeting during the year to review performance-based remuneration, share option grants, and director's fee proposals - The Remuneration Committee is responsible for ensuring the company has formal and transparent procedures for formulating and monitoring the remuneration policies for directors and senior management[147] - Its work during the year included recommending remuneration packages for executive directors and senior management, approving share option grants, and reviewing proposals for directors' fees[150] Audit Committee The Audit Committee, comprising five independent non-executive directors, is responsible for reviewing financial statements, risk management, and internal control systems, holding three meetings during the year to review the annual audit plan, financial reports, internal audit progress, and risk management review reports - The Audit Committee's primary responsibilities include considering the appointment of external auditors, reviewing interim and annual financial statements, and reviewing the company's internal control and risk management systems[155] - Its work during the year included reviewing the 2023 Annual Report, 2024 Interim Report, internal audit progress reports, and the 2025 internal audit plan[155] Nomination Committee The Nomination Committee, composed of one executive director and three independent non-executive directors, is responsible for reviewing the board's structure, size, and composition, and making recommendations on director appointments and re-election, holding one meeting during the year to review board composition and the independence of independent non-executive directors, and making recommendations for director re-election - The Nomination Committee reviews the Board's structure, size, and composition at least annually and identifies qualified individuals to serve as directors[158] - Its work during the year included reviewing the Board's structure, assessing the independence of independent non-executive directors, and making recommendations for the re-election of directors at the 2025 Annual General Meeting[163] Risk Management and Internal Control The Group has established a 'three lines of defense' risk management framework, with the Board bearing overall responsibility for system effectiveness, and during the year, the Board conducted an annual review of the risk management and internal control systems, covering financial, operational, and compliance controls, deeming them effective and adequate - The risk governance framework is based on a "three lines of defense" model: the first line is operational management, the second is the Group Risk Management Committee, and the third is the Internal Audit Department[168] - Key risks identified, managed, and monitored during the year included changes in customer preferences and technology, exchange rate fluctuations, crisis management, work safety, and legal compliance, with international tax compliance identified as an emerging risk[169] - The Board conducted an annual review of the adequacy and effectiveness of the risk management and internal control systems for the year ended October 31, 2024, and found no significant concerns[171] Report of the Directors This report provides an overview of the company's share option schemes and details of its major shareholders Share Options The company has 2012 and 2022 share option schemes to incentivize eligible persons, with the 2012 scheme having expired but unexercised options remaining valid; as of the fiscal year-end, the total number of unexercised share options under both schemes was 22,430,000, and 6,798,000 share options were granted under the 2022 scheme during the year - The 2012 Share Option Scheme expired on March 22, 2022, and no new share options will be granted under it; the company adopted a new 2022 Share Option Scheme on March 25, 2022[209] | Scheme | Unexercised at Beginning of Year | Granted During Year | Exercised During Year | Lapsed/Cancelled During Year | Unexercised at End of Year | | :--- | :--- | :--- | :--- | :--- | :--- | | 2012 Scheme | 6,444,000 | 0 | (302,000) | (660,000) | 5,482,000 | | 2022 Scheme | 11,670,000 | 6,798,000 | (1,474,000) | (46,000) | 16,948,000 | | Total | 18,114,000 | 6,798,000 | (1,776,000) | (706,000) | 22,430,000 | - The 6,798,000 share options granted on May 27, 2024, have an exercise price of HKD 1.700 and an estimated total fair value of HKD 2,133,000[234][237] Major Shareholders According to the register of major shareholders, as of October 31, 2024, Pine Asset Management Limited, FMR LLC, and Brandes Investment Partners, L.P. were the company's major shareholders, holding 37.24%, 9.98%, and 8.53% of the equity, respectively | Shareholder Name | Capacity | Number of Shares Held (Long Position) | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Pine Asset Management Limited | Beneficial Owner | 462,167,186 | 37.24% | | FMR LLC | Interest of Controlled Corporation | 123,789,010 | 9.98% | | Brandes Investment Partners, L.P. | Investment Manager | 105,897,175 | 8.53% | | FIL Limited | Interest of Controlled Corporation | 85,984,539 | 6.93% | Independent Auditor's Report This report presents the auditor's opinion on the consolidated financial statements and highlights key audit matters Opinion Auditor RSM Hong Kong Certified Public Accountants believes that the consolidated financial statements truly and fairly reflect the Group's consolidated financial position as of October 31, 2024, and its financial performance and cash flows for the year then ended, and have been properly prepared in accordance with the disclosure requirements of the Companies Ordinance - The auditor issued an unqualified opinion on the Group's consolidated financial statements[275] Key Audit Matters The auditor identified three key audit matters: impairment of trade receivables and contract assets, recognition of revenue from construction contracts, and impairment assessment of goodwill and other intangible assets, which are considered most significant due to substantial management judgment and estimation involved - Impairment of trade receivables and contract assets: Involves significant management judgment regarding expected credit losses[278] - Revenue from construction contracts and contract assets/liabilities: Revenue from construction contracts is recognized over time using the input method, requiring significant estimates of total contract costs and progress towards completion[280] - Impairment assessment of goodwill and other intangible assets: Based on value-in-use calculations, requiring significant management assumptions on future sales, gross margins, growth rates, and discount rates[284] Consolidated Financial Statements This section presents the consolidated income statement, statement of financial position, and cash flow statement for the Group Consolidated Income Statement The consolidated income statement shows the Group's revenue for the 2024 fiscal year was HKD 6.327 billion, an 18.8% year-on-year increase, with gross profit growing to HKD 1.942 billion and profit for the year reaching HKD 368 million, a significant 51.0% year-on-year increase | Item (HKD thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | 6,327,002 | 5,327,931 | | Gross Profit | 1,942,100 | 1,590,594 | | Operating Profit | 474,563 | 328,990 | | Profit Before Tax | 454,243 | 301,132 | | Profit for the Year | 368,023 | 243,731 | | Profit Attributable to Company Shareholders | 357,568 | 228,083 | Consolidated Statement of Financial Position As of October 31, 2024, the Group's total assets increased to HKD 5.707 billion, total liabilities were HKD 3.389 billion, and net assets were HKD 2.318 billion, with net current assets remaining stable at HKD 1.122 billion, indicating a robust financial structure | Item (HKD thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Non-current Assets | 1,527,722 | 1,594,742 | | Current Assets | 4,179,415 | 3,465,765 | | Total Assets | 5,707,137 | 5,060,507 | | Current Liabilities | 3,057,024 | 2,336,406 | | Non-current Liabilities | 331,940 | 394,163 | | Total Liabilities | 3,388,964 | 2,730,569 | | Net Assets | 2,318,173 | 2,329,938 | | Equity Attributable to Company Shareholders | 2,291,917 | 2,261,271 | Consolidated Statement of Cash Flows Net cash generated from operating activities significantly increased to HKD 949 million in this fiscal year, with net cash used in investing activities at HKD 218 million and net cash used in financing activities at HKD 366 million, primarily for dividend payments and acquisition of non-controlling interests, resulting in a net increase of HKD 365 million in cash and cash equivalents at year-end | Item (HKD thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 949,339 | 460,366 | | Net Cash Used in Investing Activities | (217,993) | (135,961) | | Net Cash Used in Financing Activities | (365,855) | (561,075) | | Net Increase (Decrease) in Cash and Cash Equivalents | 365,491 | (236,670) | | Cash and Cash Equivalents at Beginning of Year | 1,173,464 | 1,372,347 | | Cash and Cash Equivalents at End of Year | 1,576,085 | 1,173,464 | Notes to the Consolidated Financial Statements This section provides detailed notes supporting the consolidated financial statements, including segment information, intangible assets, and receivables Note 8 Revenue and Segment Information This note details revenue by business segment and geography, with Exhibitions, Events and Brand Activation being the largest segment contributing HKD 5.438 billion in revenue, and Greater China being the largest regional market contributing HKD 2.556 billion in revenue 按業務分部劃分之收益 (千港元) | Segment | 2024 Revenue (HKD thousands) | 2023 Revenue (HKD thousands) | | :--- | :--- | :--- | | Exhibitions, Events and Brand Activation | 5,438,411 | 4,413,088 | | Visual Branding Activation | 292,981 | 383,403 | | Museums and Themed Entertainment | 422,290 | 396,939 | | Conference and Show Management | 173,320 | 134,501 | | Total | 6,327,002 | 5,327,931 | 按地區劃分之收益 (千港元) | Region | 2024 Revenue (HKD thousands) | 2023 Revenue (HKD thousands) | | :--- | :--- | :--- | | Greater China | 2,556,357 | 2,545,368 | | Malaysia, Singapore, Philippines and Vietnam | 1,331,793 | 1,146,762 | | Middle East | 630,663 | 615,114 | | UK and US | 926,085 | 808,127 | | Other | 882,104 | 212,560 | | Total | 6,327,002 | 5,327,931 | Note 19 Intangible Assets As of the fiscal year-end, the Group's intangible assets had a carrying amount of HKD 433 million, with goodwill accounting for HKD 290 million, primarily allocated to the Exhibitions, Events and Brand Activation segment (HKD 189 million) and the Museums and Themed Entertainment segment (HKD 97 million), and management performed impairment tests on goodwill, finding no significant impairment | Intangible Asset Category | Carrying Amount (2024, HKD thousands) | Carrying Amount (2023, HKD thousands) | | :--- | :--- | :--- | | Goodwill | 290,196 | 290,327 | | Software | 44,988 | 48,878 | | Customer Relationships | 68,174 | 92,900 | | Trade Names | 22,533 | 22,687 | | Other | 6,659 | 10,291 | | Total | 432,550 | 466,017 | - Goodwill impairment tests were based on value-in-use calculations, utilizing discount rates ranging from 15.00% to 20.00% and terminal growth rates from 0.00% to 3.00%[594] Note 27 Accounts Receivable, Deposits and Prepayments As of the fiscal year-end, trade receivables net of provisions were HKD 901 million, an increase from HKD 773 million last year, with the majority of receivables aged 91 days or less, indicating generally normal collection, and the Group has made a provision of HKD 120 million for doubtful debts | Item (HKD thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Trade Receivables (Gross) | 1,020,530 | 861,070 | | Less: Provision for Doubtful Debts | (119,758) | (88,018) | | Trade Receivables (Net) | 900,772 | 773,052 | Particulars of Major Investment Properties This section lists the Group's major investment properties as of October 31, 2024, located in Hong Kong and mainland China, including commercial, residential, and industrial properties - This section lists the Group's major investment properties held as of October 31, 2024, with locations spanning Hong Kong and mainland China (Shanghai, Beijing, Shenzhen, Guangzhou), and property types including commercial, residential, and industrial uses[739][742] Corporate Information This section provides essential corporate details, including board members, company secretary, auditor, principal bankers, registered office, share registrar, and key company events - This section provides essential company information, including Board of Directors members, Company Secretary, Auditor, Principal Bankers, Registered Office, Share Registrar, and important company event schedules[745][746]