Financial Performance - The company's revenue increased by approximately 20.9% from HKD 94,213,000 in the fiscal year ending December 31, 2023, to HKD 113,869,000 in the fiscal year ending December 31, 2024, primarily due to increased export sales to Japan [11]. - Gross profit decreased to approximately HKD 15,697,000 with a gross margin of 13.8% for the fiscal year ending December 31, 2024, compared to HKD 22,405,000 and 23.8% for the previous year [12]. - The company reported a profit attributable to equity holders of approximately HKD 15,300,000 for the year ended December 31, 2024, compared to a loss of HKD 11,500,000 in the same period last year [16]. - Operating profit for the year was HKD 17,494,000, a significant recovery from an operating loss of HKD 7,066,000 in the previous year [174]. - Profit before tax was HKD 15,324,000, compared to a loss before tax of HKD 11,456,000 in 2023 [174]. - Basic and diluted earnings per share improved to HKD 1.90 from a loss of HKD 1.42 per share in the prior year [174]. - Total comprehensive income for the year was HKD 5,514,000, recovering from a total comprehensive loss of HKD 11,558,000 in 2023 [176]. - Cash generated from operating activities was HKD 6,701,000, down from HKD 15,870,000 in the previous year [186]. - The company experienced a net cash inflow of HKD 51,215,000 from investing activities, primarily due to the sale of subsidiaries [186]. - The company paid dividends amounting to HKD 60,688,000 during the year [186]. Asset and Liability Management - Non-current assets decreased to HKD 3,029,000 as of December 31, 2024, from HKD 97,575,000 in the previous year, indicating a significant reduction in asset value [7]. - The net asset value of the company was HKD 51,999,000 as of December 31, 2024, down from HKD 107,173,000 in the previous year [7]. - Current assets decreased to HKD 63,288,000 from HKD 84,695,000, a decline of 25.4% [179]. - Current liabilities significantly reduced to HKD 14,150,000 from HKD 72,620,000, a decrease of 80.6% [179]. - Total equity as of December 31, 2024, was HKD 51,999,000, a decrease from HKD 107,173,000 at the beginning of the year [182]. - The company reported a cash and cash equivalents balance of HKD 26,948,000, down from HKD 33,510,000 in the previous year [179]. - The company’s total liabilities decreased significantly, reflecting improved financial management strategies [189]. Operational Changes - The company successfully sold its wholly-owned subsidiary, Success Profit International Limited, for HKD 62,000,000, eliminating all bank borrowings and distributing a special dividend of HKD 0.0751 per share to shareholders [8]. - Selling and distribution expenses decreased to approximately HKD 4,682,000 for the fiscal year ending December 31, 2024, down from HKD 7,665,000 in the previous year, due to lower marketing activity levels [13]. - Administrative expenses were approximately HKD 8,776,000 for the fiscal year ending December 31, 2024, significantly reduced from HKD 22,354,000 in the previous year, attributed to the absence of impairment provisions and favorable foreign exchange gains [15]. - The company has ceased its marketing business as of March 2024, which had provided higher gross margins, indicating a strategic shift in operations [10]. - The company plans to streamline its business strategies to enhance overall performance and outlook amid challenging business and political environments [8]. Market and Strategic Focus - The company is focusing on expanding its overseas market presence, particularly in the Middle East and Japan, to counteract the decline in demand in the Chinese furniture market [10]. - The geopolitical situation, rising interest rates, and trade conflicts, particularly between the US and China, may severely impact the company's export business in 2025 [36]. - The company maintains a cautious but optimistic outlook, confident in its team and corporate value to seize anticipated recovery opportunities [36]. - The company plans to enhance research and development and promote new products through exhibitions, while maintaining close communication with customers to share market trends [36]. Governance and Compliance - The board held four meetings during the fiscal year ending December 31, 2024, with full attendance from all directors [53]. - The audit committee conducted two meetings in the review year, with all members present, and confirmed no significant uncertainties regarding the company's ability to continue as a going concern [60]. - The remuneration committee held one meeting to review the compensation and incentive policies for directors and senior management, with full attendance [62]. - The company has established specific committees, including the audit committee, remuneration committee, and nomination committee, to assist in effective governance [59]. - Continuous professional development training was completed by all directors during the fiscal year, ensuring they remain informed and skilled [57]. - The company has established a whistleblowing policy to allow employees and relevant third parties to report any actions that may harm the company's interests [88]. - The company has adopted an anti-corruption policy to promote compliance with anti-corruption laws and provide guidelines for ethical conduct [91]. - The board and audit committee will regularly review the effectiveness of the anti-corruption policy and mechanisms [92]. Shareholder Relations - The company is committed to transparent communication with shareholders, providing updates through financial reports and its website [79]. - The company allows shareholders holding at least 10% of the voting rights to request a special general meeting within two months of submission [81]. - Shareholders with at least 5% of the paid-up capital can submit written requests for notices regarding proposed resolutions at the next general meeting [84]. - The company held two shareholder meetings in 2024, with full attendance from executive and independent directors [79]. Employee and Diversity Initiatives - As of December 31, 2024, the group employed approximately 125 employees, with employee costs amounting to HKD 17,000,000, an increase from HKD 15,800,000 in 2023 [17]. - The gender ratio of employees as of December 31, 2024, is 76:24, reflecting the company's commitment to diversity in hiring practices [52]. - The company recognizes the importance of attracting and retaining skilled personnel and offers competitive compensation packages, including stock options, to achieve its business objectives [31]. Audit and Financial Reporting - The independent auditor's report confirmed that the financial statements present a true and fair view of the group's financial position as of December 31, 2024 [154]. - The group prepares consolidated financial statements based on historical cost accounting principles [193]. - The adoption of new Hong Kong Financial Reporting Standards did not have a significant impact on the group's financial performance or position for the current or prior periods [194]. - The audit identified trade receivables impairment as a key audit matter due to the subjective nature of management's estimates [158].
兴利(香港)控股(00396) - 2024 - 年度财报