Revenue and Financial Performance - The revenue from the provision of wet trades works and related ancillary works amounted to approximately HK$110.0 million, representing an increase of approximately HK$23.2 million or 26.8% compared to HK$86.7 million for the year ended December 31, 2023[17]. - The Group's revenue increased by approximately HK$23.3 million or approximately 26.8%, from approximately HK$86.7 million for the year ended 31 December 2023 to approximately HK$110.0 million for the Year[39]. - The gross loss reported for the year was approximately HK$12.9 million, primarily due to competitive project pricing, delays in certification of works, and increased direct costs[17]. - The gross loss for the Year was approximately HK$12.9 million, a decrease of approximately 40.0% from approximately HK$21.5 million for the year ended 31 December 2023, with a gross loss margin of approximately 11.7% compared to 24.8% in the previous year[43]. - Other gains for the Year amounted to a net gain of approximately HK$0.1 million, representing a decrease of approximately 97.3% from a net gain of approximately HK$3.4 million for the year ended 31 December 2023[41]. - Impairment losses under the expected credit loss model for the Year were approximately HK$21.5 million, a decrease of approximately 11.6% from HK$24.3 million for the year ended 31 December 2023[45]. - The net loss attributable to owners of the Company decreased by approximately HK$8.3 million or 16.0% to approximately HK$43.3 million for the Year, mainly due to improvements in gross loss margin and impairment loss allowances[48]. - Administrative expenses for the Year were approximately HK$8.9 million, a decrease of approximately 2.0% from approximately HK$9.1 million for the year ended 31 December 2023, maintaining a stable level[46]. - Finance costs for the Year were approximately HK$214,000, a decrease of approximately 36.3% from approximately HK$336,000 for the year ended 31 December 2023, primarily due to repayment of borrowings[47]. Business Strategy and Expansion - The Group intends to commence a new beauty business, providing high-quality beauty services and nutritional healthcare products, to diversify its income sources[20]. - The Group's strategic focus includes capitalizing on emerging opportunities in the beauty industry due to changing consumer lifestyles and health awareness[20]. - The Group aims to provide better returns to shareholders through diversification of its business operations[21]. - The Group is exploring business opportunities and expanding geographical coverage beyond the Hong Kong market to enhance future development and strengthen revenue bases[21]. - The Group's proactive approach in expanding its service offerings and exploring new business opportunities is aimed at strengthening its revenue base and ensuring long-term growth[32]. - The Group intends to commence a new beauty business focused on comprehensive consumer services, including cosmetics, beauty and skin care products, and health management, with plans to establish joint ventures and physical stores in first- and second-tier cities in China[36]. Market Conditions and Challenges - The Group is facing challenges in the Hong Kong construction market due to a decrease in new construction projects, intense market competition, and increased direct costs impacting gross margin[31]. - The ongoing economic slowdown and slower-than-expected recovery have increased credit risk in the construction industry, leading to potential financial constraints for construction companies[31]. - The Group will continue to monitor market conditions and seek opportunities to expand its customer base and market share in the wet trades works industry[32]. - The Group plans to increase involvement in private sector projects to mitigate reliance on government infrastructure projects[199]. - Demand for residential and commercial buildings is expected to sustain growth in the construction industry, prompting the Group to acquire new machinery[200]. Operational Efficiency and Management - The gross loss margin decreased compared to the previous year, indicating potential improvements in operational efficiency despite the loss[17]. - The Group's management is confident in its competitive position due to its reputation and experienced management team in the wet trades works industry[32]. - The establishment of an online platform to provide information on wet trade services aims to assist customers in reviewing contractor payment requests, leveraging the Group's expertise in construction information technology[35]. - The Group has implemented safety measures, including recruiting safety officers and conducting semi-annual safety audits, to minimize industrial accidents[197]. - The Group conducts regular aging analysis of receivables to manage financial liquidity and understand customer solvency[198]. Shareholder and Corporate Governance - The Board has resolved not to recommend the declaration of a final dividend to shareholders for the year[77]. - The Company has adopted a Dividend Policy to allow shareholders to participate in profits while retaining adequate reserves for future growth[139]. - The Board will consider various factors, including the Group's financial condition and market conditions, when deciding on dividend proposals[147]. - The Company considers all independent non-executive Directors to be independent under the Listing Rules, with annual confirmations of independence received[131]. - Each controlling shareholder has complied with non-competition undertakings during the year[151]. - The Company has arranged for appropriate insurance coverage for Directors' and officers' liabilities arising from corporate activities[156]. Employee and Management Contracts - The total staff costs for the year were approximately HK$5.0 million, down from approximately HK$5.6 million for the year ended December 31, 2023[74]. - The Group employed a total of 13 employees as of December 31, 2024, compared to 14 employees as of December 31, 2023[74]. - The service contracts for executive Directors are typically for a term of three years, with a notice period of not less than three months for termination[132]. - Ms. Zhang Lingke has entered into a service contract for an initial term of 2 years starting from October 21, 2024, with automatic renewal for 1 year[133]. - Mr. Zhu Qi has a service contract for an initial term of 2 years starting from November 29, 2024, also with automatic renewal for 1 year[133]. - Ms. Ding Xin has a letter of appointment for a term of 1 year, subject to termination with one month's notice[133]. Share Option Scheme - The Company adopted a share option scheme on July 22, 2019, to incentivize directors and employees[107]. - The total number of shares available for issue under the Share Option Scheme is 26,000,000 Shares, representing approximately 8.33% of the Shares in issue after the ten-to-one Share Consolidation effective on August 15, 2023[113]. - No options have been granted under the Share Option Scheme since its adoption, resulting in no options being exercised, cancelled, or lapsed during the year, and no options outstanding as of December 31, 2024[118]. - The maximum entitlement of each participant under the Share Option Scheme is limited to 1% of the Shares in issue as at the date of grant, requiring shareholder approval for any further grants exceeding this limit[114]. - The remaining life of the Share Option Scheme is approximately 4 years and 4 months as of the date of the annual report[123]. - Each eligible participant must accept the offer of the grant of a share option within 21 days, with a consideration of HK$1.00 for each option[116]. - The subscription price for any share option granted must not be less than the highest of the closing price on the date of grant, the average closing price for the five trading days preceding the grant, or the nominal value of a Share[117]. Shareholding Structure - As of December 31, 2024, Mr. Adam Cheung holds a long position of 195,000,000 shares, representing 62.5% of the company's shareholding[163]. - Wonderful Renown Limited, a corporation beneficially owned by Mr. Adam Cheung (84%) and Ms. LC Cheung (16%), holds 195,000,000 shares, equating to 62.5% of the total issued share capital[171]. - Ms. LC Cheung and Ms. Chan Shui King also have interests in the same 195,000,000 shares, each representing 62.5% of the company's shareholding[171]. - No other directors or chief executives reported interests or short positions in the shares or underlying shares of the company as of the report date[166]. - The company did not purchase, sell, or redeem any of its listed securities during the year[173]. - There were no arrangements for directors to acquire benefits through the acquisition of shares or debentures of the company during the year[174]. - No substantial shareholders other than those disclosed hold interests or short positions in the shares or underlying shares of the company as of December 31, 2024[172]. - The company has not been notified of any additional interests or short positions in its shares that would require disclosure under the SFO provisions[172]. Customer and Revenue Concentration - The largest customer accounted for 24.1% of total revenue for the year ended December 31, 2024, down from 80.8% in the previous year[179]. - The five largest customers collectively represented 59.8% of total revenue for the year ended December 31, 2024, compared to 97.7% in 2023[179]. - The largest cost of services incurred accounted for 53.4% of total service costs for the year ended December 31, 2024, a decrease from 85.9% in 2023[179]. - The five largest costs of services collectively represented 90.8% of total service costs for the year ended December 31, 2024, compared to 81.8% in 2023[179]. Compliance and Regulatory Matters - The Group has maintained a sufficient amount of public float for its shares as required under the Listing Rules during the year[188]. - The Group's operational results may vary significantly due to factors such as political and economic environment, competitiveness, and subcontractor performance[192].
恒新丰控股(01920) - 2024 - 年度财报