Financial Performance - The company recorded a revenue of approximately HKD 68.9 million for the fiscal year ending December 31, 2024, a decrease from HKD 74.1 million in 2023, primarily due to reduced interest income from lending operations [14]. - The net loss attributable to the company's owners was approximately HKD 143.9 million, significantly higher than the HKD 104.1 million loss in 2023, largely due to fair value losses on financial assets amounting to HKD 87.0 million [15]. - The overall gross profit decreased to approximately HKD 64.3 million from HKD 69.7 million in the previous year, despite enhanced operational cost control measures [14]. - The lending business generated approximately HKD 52.4 million in revenue, a slight decrease from HKD 55.1 million in the previous year [14]. - The financial services segment's revenue decreased to approximately HKD 15.5 million from HKD 18.0 million in 2023 [14]. - Interest income from clients, including margin clients and cash clients, was approximately HKD 12.4 million this year, down from HKD 16.5 million in 2023 [19]. - The group’s lending segment generated revenue of approximately HKD 52.4 million, accounting for about 76.1% of total revenue, with an operating loss of approximately HKD 47.3 million, a decrease of about 426.2% compared to the previous year [31]. - The impairment loss on loans and interest receivable was approximately HKD 74.3 million, an increase from HKD 24.1 million in the previous year, primarily due to increased uncertainty in the recoverability of overdue loans [33]. Economic Environment - The company faced significant challenges, including a 20.1% decline in the Hang Seng Composite Index for healthcare, impacting its equity investments [10]. - The company anticipates a gradual stabilization of the Hong Kong and global economy by 2025, while remaining vigilant about ongoing credit default risks [11]. - The Hang Seng Index recorded a 17.7% increase this year, while the Hang Seng Composite Industry Index showed significant differences, with the information technology sector growing by 43.3% and the healthcare sector declining by 20.1% [16]. - The estimated market value of the Hong Kong capital market is $5.01 trillion, significantly impacted by the US-China trade war and geopolitical instability, with office values plummeting by 40% since 2018 [61]. - The GDP growth forecast for Hong Kong has been revised down from 3.2% to 2.5% for 2024, indicating a fragile future amid a severe economic climate [61]. Risk Management - The company is adopting a more cautious approach to manage rising credit risks and interest rate pressures, preparing for additional impairments to safeguard operations [9]. - The group has implemented strict credit policies and controls to mitigate credit risks, with a focus on maintaining loan quality amid economic uncertainty [23]. - The credit committee is responsible for evaluating and approving loans within predetermined credit limits and regularly monitors the credit quality of the loan portfolio [24]. - The group actively monitors its loan portfolio and conducts targeted negotiations and due diligence to minimize losses from expected credit losses [34]. - The group will conduct regular reviews of its internal control systems, including credit policies and operational manuals, to ensure compliance with applicable regulations [28]. - The company has established a robust risk management and internal control system, which is reviewed annually to ensure effectiveness in safeguarding shareholder interests and assets [188]. - An internal control consultant was appointed to assist in identifying and assessing risks and to conduct independent audits of the internal control system [191]. - The company has established an enterprise risk management framework aligned with the internationally recognized COSO framework [193]. Investment Strategy - The group plans to restructure its securities capital market business to identify and assess profitable transactions, expecting this segment to continue growing as a significant source of revenue [20]. - The group aims to explore potential lending opportunities, including project financing, depending on market conditions and risk-return assessments [21]. - The company has shifted its investment strategy to focus on sectors with better performance, including margin financing and lending activities [46]. - The company is exploring investment opportunities in fintech, healthcare, and biotechnology sectors, viewing current market conditions as potential investment opportunities rather than setbacks [48]. - The group maintains a portfolio of Hong Kong listed stocks to manage and diversify investment risks, regularly reviewing investment strategies based on market conditions [48]. Shareholder and Corporate Governance - The company has approximately HKD 1,061,166,000 available for distribution to shareholders as of December 31, 2024 [107]. - The board does not recommend a dividend for the current year, consistent with the previous year where no dividend was paid [89]. - The company has undergone changes in its board of directors, with several new independent non-executive directors appointed in recent years [81][82]. - The board of directors consists of five members, including two executive directors and three independent non-executive directors [141]. - The board has established committees to delegate certain management and administrative functions, ensuring effective corporate governance [153]. - The company has adopted all code provisions of the Corporate Governance Code as set out in the Listing Rules [138]. - The company has complied with all necessary regulations regarding board composition, including the appointment of independent non-executive directors [178]. Employee and Social Responsibility - The group employs 27 staff members and provides regular training to enhance employee capabilities [70]. - The company has implemented various policies to promote energy and paper conservation among employees, aiming to reduce resource consumption and costs [97]. - The group reported a total charitable donation of HKD 483,000 for the year, a significant increase from HKD 43,000 in the previous year [91]. - The gender ratio of employees as of December 31, 2024, is approximately 58% male and 42% female, indicating a commitment to gender equality in hiring and employee development [182]. Audit and Compliance - The audit committee held two meetings during the year to review the audited consolidated financial statements for the year ending December 31, 2023, and the unaudited consolidated financial information for the six months ending June 30, 2024 [185]. - The total fees paid or payable to the auditor for audit services amounted to HKD 940,000, with no fees for non-audit services [186]. - The audit committee recommended the approval of the audited consolidated financial statements and discussed the effectiveness of the risk management and internal control systems [185]. - The company emphasizes transparency in internal control and compliance matters, with measures in place for handling and disclosing inside information [192].
嬴集团(00397) - 2024 - 年度财报