Financial Performance - The group's revenue for the year ended December 31, 2024, was approximately HKD 138.70 million, a decrease of about 25.30% compared to approximately HKD 185.67 million for the year ended December 31, 2023[21][24]. - Sales cost decreased by approximately HKD 44.80 million or 31.47% from HKD 142.35 million for the year ended December 31, 2023, to approximately HKD 97.55 million for the year ending December 31, 2024[25]. - Gross profit decreased by approximately HKD 2.17 million or about 5.01% from approximately HKD 43.32 million for the year ended December 31, 2023, to approximately HKD 41.15 million for the year ending December 31, 2024[26]. - Administrative expenses decreased by approximately HKD 11.54 million or about 23.74% from approximately HKD 48.60 million for the year ended December 31, 2023, to approximately HKD 37.06 million for the year ending December 31, 2024[28]. - The company recorded a loss before tax of approximately HKD 19.07 million for the year ending December 31, 2024, an increase of about 1.76% compared to approximately HKD 18.74 million for the year ended December 31, 2023[30]. - Cash and bank balances as of December 31, 2024, were approximately HKD 16.52 million, down from HKD 71.74 million in 2023[36]. - The company's current ratio as of December 31, 2024, was 0.92, compared to 1.02 as of December 31, 2023[36]. - The company's debt-to-equity ratio as of December 31, 2024, was approximately 817.34%, up from 446.54% in 2023[37]. Business Strategy and Operations - The company plans to adopt a prudent approach, strictly control operating costs, and focus on improving operational efficiency and profitability[15][23]. - The company continues to invest in high-tech development and personalized services to maintain stable growth in the watch industry[16]. - The outlook for overseas markets remains uncertain, with risks of economic slowdown or recession, particularly in Europe and the United States[16]. - The company aims to focus on core business development, improve product design, and enhance development capabilities for long-term shareholder returns[17]. - The company will closely monitor market trends to provide designs that meet customer and market needs, especially in the Southeast Asian market[16]. - The company acknowledges the challenges posed by technological innovation, diverse consumer demands, and intense market competition in the watch industry[16]. Shareholder and Capital Management - The company has entered into a non-binding memorandum of understanding regarding the acquisition of a non-ferrous metal mining business[38]. - The company successfully placed all unallocated rights shares at a price of HKD 0.10 per share, raising funds for operational needs[47]. - The total amount raised from the rights issue (including compensation arrangements) is approximately HKD 8.25 million, with a net amount of approximately HKD 7.47 million after expenses[48]. - Approximately HKD 5.98 million of the net proceeds will be used to repay bank loans, and approximately HKD 1.49 million will be allocated for general working capital[50]. - The company has fully utilized the net proceeds from the rights issue and placement, with no remaining unused amounts[50]. - The board does not recommend a final dividend for the year ending December 31, 2024, consistent with the previous year where no dividend was paid[68]. Corporate Governance - The company has confirmed compliance with the non-competition agreement by its controlling shareholders since the listing date, with no violations reported[66]. - The board consists of five members, including two executive directors and three independent non-executive directors[75]. - The company has adopted a board diversity policy, considering various factors such as gender, age, and professional experience to achieve diversity among board members[78]. - The company has maintained compliance with the corporate governance code, except for a reasonable deviation regarding the separation of roles between the chairman and CEO[69]. - The independent non-executive directors have confirmed no knowledge of any breaches of the non-competition agreement by controlling shareholders[66]. - The board is responsible for overseeing the company's business, strategic decisions, and performance[72]. - The board consists of 5 directors, with 3 male and 2 female members, achieving gender diversity[80]. - The company has established an audit committee comprising 3 independent non-executive directors to oversee financial reporting and risk management[86]. - The remuneration committee held one meeting to review the remuneration structure for directors and provide recommendations[87]. - The nomination committee conducted one meeting to assess the board's composition and evaluate the independence of non-executive directors[88]. - The company has a clear division of roles between the chairman and the CEO, with the current arrangement deemed beneficial for effective management[82]. - The board is committed to promoting gender diversity at all levels, including senior management[80]. - The audit committee held four meetings during the reporting period to review accounting standards and financial reporting[86]. - The company has complied with GEM listing rules by appointing at least three independent non-executive directors[84]. - The board will continue to review its composition and diversity regularly to ensure effectiveness[80]. Environmental, Social, and Governance (ESG) Practices - The company emphasizes a sustainable dividend policy, balancing shareholder interests with prudent capital management[103]. - The board will consider various factors, including financial performance and economic conditions, when recommending any dividend payments[104]. - The company has established effective communication channels with shareholders, including an annual general meeting to discuss important resolutions[106]. - The company has a whistleblowing and anti-corruption policy in place, detailed in the 2023 Environmental, Social, and Governance report[109]. - The board consists of experienced members, including the chairman with over 36 years in the watch industry, focusing on strategy and product development[111]. - The company aims to become a leading manufacturer of high-quality watches in China and globally, focusing on sustainable practices and providing reasonable returns to shareholders[183]. - The board emphasizes the importance of resource management, occupational safety, and compliance with environmental, social, and governance (ESG) regulations to enhance corporate image and competitiveness[185]. - The company maintains the same ESG governance structure as the previous reporting period, with the board responsible for setting goals and monitoring performance related to ESG issues[186]. - The company actively engages with stakeholders to identify and address relevant ESG matters, utilizing various communication channels[189]. - An annual materiality assessment is conducted to understand stakeholder expectations regarding the company's ESG performance[191]. - The company is committed to minimizing its carbon footprint, energy consumption, and the impact of climate change as part of its sustainable development strategy[195]. - The Shenzhen factory operates under multiple environmental protection laws and regulations to ensure compliance and sustainability[195]. - The board regularly reviews and discusses the establishment and progress of annual environmental goals[185]. - The company aims to create long-term value for stakeholders through a strict corporate governance framework[185]. - The company has established a comprehensive stakeholder list and engages in continuous communication to ensure effective stakeholder participation[190]. - The company has not experienced any significant violations of China's environmental protection laws and regulations during the 2024 reporting period[196]. - Management conducts an annual review of environmental issues and regularly monitors for any new laws and regulations[197]. - The company emphasizes environmental management and corporate social responsibility, focusing on compliance with local environmental laws and regulations[198]. - During the reporting period, there were no significant issues related to emissions of harmful and non-harmful waste or water pollution violations[198]. - Air pollutants generated by the company during the 2024 reporting period include sulfur oxides, nitrogen oxides, and particulate matter, primarily from vehicle usage[199]. - The company aims to minimize adverse environmental impacts by using unleaded gasoline and electricity for all vehicles and machinery[200]. - Air pollutants and greenhouse gas emissions are sourced from direct emissions from mobile combustion sources (Scope 1) and indirect emissions from purchased electricity (Scope 2)[200]. Market and Competitive Environment - The Hong Kong Trade Development Council's export confidence index rose from 35.0 in Q4 2023 to 50.3 in Q4 2024, indicating improved business performance among exporters[14][22]. - The watch industry's confidence index increased from 47.5 in Q4 2023 to 49.1 in Q4 2024, reflecting a slight improvement in market sentiment[14][22]. - The company reported an increase in sales, new orders, and procurement activities, contributing to the rise in exporter confidence[14][22]. - The competitive environment in the watch manufacturing industry in China is intense, with over 1,000 market participants, impacting pricing and demand significantly[143]. - The company faces potential increases in operational costs due to changes in laws and regulations in the jurisdictions where it operates, which may affect its growth and expansion capabilities[144]. - The company's operations in China are heavily influenced by the economic, political, and legal developments in the region, which could impact its financial performance[145]. - The Chinese government's economic policies and interventions may affect the company's ability to maintain growth and expansion strategies[146]. - The company acknowledges the risks associated with the implementation of new laws and regulations that could impose additional costs and limit its operational capabilities[148]. - Financial risks are detailed in the consolidated financial statements, indicating potential vulnerabilities in the company's financial health[149].
恒伟集团控股(08219) - 2024 - 年度财报