HK TECH VENTURE(01137)2025-03-27 08:35Financial Performance - The total merchandise trading volume for the year 2024 reached HKD 8,589,800,000, representing a year-on-year growth of 2.0% compared to HKD 8,424,000,000 in 2023[4]. - Adjusted EBITDA for 2024 was HKD 329,200,000, slightly down from HKD 322,700,000 in 2023, indicating a stable performance despite challenges[4]. - The net loss for 2024 was HKD 66,700,000, compared to a profit of HKD 45,300,000 in 2023, primarily due to operational losses in new exploration and technology businesses[4]. - Cash and cash equivalents stood at HKD 712,500,000 as of December 31, 2024, down from HKD 935,400,000 in 2023, mainly due to share buybacks totaling HKD 220,400,000[4]. - The adjusted EBITDA margin for completed orders in 2024 was 4.0%, up from 3.1% in 2023, driven by a 0.9% increase in gross margin and mixed commission rates[4]. - The overall gross margin and mixed commission rate for 1P and 3P businesses reached 23.2% in 2024, compared to 22.3% in 2023[4]. - The total gross merchandise value from new exploration projects reached HKD 328,300,000, a significant increase from HKD 131,100,000 in 2023, primarily driven by the street market and Everuts[6]. - The adjusted EBITDA loss for 2024 was approximately HKD 186,500,000, up from HKD 126,200,000 in 2023, mainly due to increased operational costs associated with business growth and R&D expenses[6]. - The group reported a net loss of HKD 66.7 million in 2024, compared to a profit of HKD 45.3 million in 2023, with adjusted EBITDA of HKD 121 million[80]. - The adjusted EBITDA for the Hong Kong e-commerce business was HKD 329.2 million in 2024, up from HKD 256.4 million in 2023[81]. Customer Metrics - The number of independent customers increased to 1,519,000 in 2024, up from 1,507,000 in 2023, indicating a growing customer base[4]. - Monthly active app users slightly decreased to approximately 1,600,000 in December 2024, down from 1,680,000 in December 2023[4]. - The average shopping frequency per customer remained stable at 4.6 times in Q4 2024, consistent with Q4 2023[29]. - The total product offerings for consumers reached approximately 2,200,000 in December 2024, a significant increase from about 1,600,000 in December 2023[35]. - The number of merchants and suppliers supporting the Hong Kong e-commerce business grew to around 7,000 in December 2024, up from over 6,400 in December 2023[35]. Market and Operational Strategies - The company aims to hire more professionals from mainland China, targeting 15% of office staff to be mainland talent by the end of 2027, to enhance market insights and consumer understanding[12]. - The company faces challenges including a shortage of technology talent, particularly in AI and big data analytics, impacting innovation and competitiveness[9]. - The company emphasizes long-term survival over short-term profits, focusing on sustainable development strategies to ensure competitiveness[8]. - The company has transformed from a telecommunications provider to an online shopping leader within ten years, showcasing its adaptability to market changes[7]. - The company plans to enhance its 1P business gross margin by expanding supplier sources, including direct imports from overseas[34]. - The company is focusing on market expansion strategies, particularly in the pet supplies sector, which has shown a growth trajectory in recent quarters[41]. Innovations and New Services - The "Street Market Instant Delivery" service offers delivery of fresh ingredients within three hours, showing strong growth in 2024, exceeding expectations[14]. - The introduction of a simplified Chinese version of HKTVmall aims to attract more users from mainland China and enhance market influence[13]. - The "Unlimited Add-On" feature allowed over 278,000 unique customers to increase their average order value by enabling additional purchases without extra shipping fees[53]. - The redesigned HKTVLive platform attracted over 50,000 views for a promotional live show, generating over HKD 400,000 in total merchandise transaction value[54]. - The introduction of the eight-hour express delivery service in December 2024 exceeded the initial target of covering 120,000 products, with over 259,000 products available for delivery within eight hours[50]. Financial Position and Investments - The group has a strong cash position with no bank deposits pledged as collateral for bank financing arrangements as of December 31, 2024, ensuring sufficient funds for operational needs[86]. - The group invested HKD 170.8 million in other financial assets as of December 31, 2024, a decrease from HKD 361.8 million in 2023[83]. - The group plans to continue leveraging internal resources and bank financing to meet future capital expenditure needs while maintaining a prudent approach[87]. - The company plans to utilize net proceeds from the subscription to expand its e-commerce and related businesses, with a total allocation of approximately HKD 453.2 million[89]. - The company anticipates significant challenges in the retail environment in Hong Kong and the UK, leading to a cautious financial management approach and a focus on strategic investments[93]. Shareholder Returns and Dividends - The company proposed a special dividend of HKD 0.38 per share to celebrate the 10th anniversary of HKTVmall[5]. - The board does not recommend the payment of an interim dividend for the six months ending June 30, 2024, and no annual dividend for the year ending December 31, 2024[162]. - The company plans to distribute dividends based on approximately 30% to 60% of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA)[159]. - A special dividend of HKD 0.38 per share has been proposed to celebrate HKTVmall's 10th anniversary and acknowledge shareholder support[20]. Challenges and Market Conditions - The local cultural influence is declining, with Hong Kong's entertainment industry facing challenges compared to the thriving cultural industries in mainland China and nearby regions[11]. - Consumer spending power is observed to be weakening, aligning with overall retail market performance[1]. - A major competitor is entering the untapped online market, which may exert additional pressure on local online and offline retailers[1]. - The company anticipates significant impacts on retail business growth due to ongoing economic decline and increased consumer travel outside Hong Kong[101]. Governance and Compliance - The company has adhered to the corporate governance code as per the Hong Kong Stock Exchange regulations throughout the reporting period[156]. - The audit committee has reviewed and discussed the financial performance for the year ending December 31, 2024, with management[158]. - The establishment of the Environment, Social, and Governance (ESG) Committee is effective from March 27, 2025, to oversee the group's ESG matters[166].