Company Operations and Services - The company operates 78 branches and professional laboratories worldwide, employing a total of 3,374 staff[13]. - The company provides services for over 50 types of commodities and natural resources, with 18 categories of professional qualification certifications[13]. - The clean energy sector includes quality inspection and re-inspection services for wind power systems and photovoltaic manufacturing, enhancing power generation stability[14]. - Environmental protection services include monitoring of water, wastewater, air, soil, and noise, supporting industrial enterprises and government-commissioned inspections[17]. - The company focuses on low-carbon emission reduction through Leakage Detection and Repair (LDAR) services, which are essential for accurate carbon emission reduction data[17]. - The company aims to expand its service coverage from the Asia-Pacific region to emerging markets in South America and Africa[13]. - The company emphasizes sustainable development and green low-carbon transition in its service offerings[13]. - The company provides witnessing supervision and joint inspection services to protect clients' interests during customs inspections[13]. - The company conducts environmental impact assessments and soil pollution investigations as part of its consulting services[17]. - The company enhances its environmental protection capabilities through integrated pipeline data platforms and risk assessment systems[17]. - The company provides comprehensive solutions in climate change, including carbon peak and neutrality advisory services, carbon asset development and trading services, ESG technical consulting, and low-carbon information-based integrated solutions[18]. - Key services include carbon emission checks, product carbon footprint assessments, and carbon emission reduction target setting, aimed at various industries such as power generation and petrochemicals[20]. - The company serves both domestic and international clients engaged in sustainable development projects across multiple sectors, including chemicals, iron and steel, and building materials[20]. - The company emphasizes the importance of its LDAR (Leak Detection and Repair) services, which help reduce pipeline accident rates and enhance environmental protection capabilities[19]. Management and Governance - The board consists of eight directors, including four executive directors, one non-executive director, and three independent non-executive directors, ensuring diverse governance[21]. - Mr. Li Xiangli, the chairman and CEO, has approximately 35 years of experience in the energy testing and inspection field, contributing to the company's strategic planning[25]. - Ms. Zhang Aiying, vice president and executive director, is responsible for procurement and human resources management within the group[28]. - The company has a strong management team with extensive experience in energy and inspection sectors, ensuring effective governance and operational efficiency[35]. - The acting-in-concert agreement among Mr. Li, Ms. Zhang, and Mr. Liu ensures unified decision-making in significant operational matters[34]. - The company is focused on maintaining compliance and internal control, which is critical for its long-term sustainability and growth[44]. - The management team includes professionals with advanced degrees and significant industry experience, strengthening the company's leadership[44]. - The substantial shareholding structure indicates a concentrated ownership, which may influence corporate governance and strategic decisions[34]. - The Company has adopted the CG Code to enhance corporate governance and align with shareholder interests[161]. - The Board ensures at least one-third of its members are independent non-executive Directors, with mechanisms in place for independent views and inputs[171]. - The Nomination Committee assesses the independence of independent non-executive Directors annually to ensure unbiased judgment[172]. - No equity-based remuneration with performance-related elements is granted to independent non-executive Directors to maintain their objectivity[173]. - The quality and efficiency of Board discussions are assessed by the chairman of the Board[175]. - Mr. Li Xiangli serves as both Chairman and CEO, which deviates from the CG Code's requirement for separation of these roles[181]. - The Board will review the effectiveness of the arrangement of Mr. Li holding both positions periodically[181]. - Newly appointed Directors receive formal induction to understand the Company's business and their responsibilities under the Listing Rules[188]. - Directors are required to submit details of their training received each financial year for proper training records maintenance[194]. - The Company ensures that each proposed Director obtains legal advice regarding their obligations under the Listing Rules before appointment[189]. - The Nomination Committee is responsible for identifying potential candidates for directorship according to the nomination criteria[182]. - One-third of Directors must retire by rotation at each annual general meeting, ensuring all Directors are subject to retirement at least once every three years[183]. - The Company will disclose in the next annual report the date when each proposed Director obtained legal advice[189]. - Directors participate in continuous professional training to comply with the CG Code[194]. - The Board considers recommendations from the Nomination Committee for the appointment, election, or re-election of Directors[182]. - All executive directors attended 100% of board meetings, with Mr. LI Xiangli, Ms. ZHANG Aiying, Mr. LIU Yi, and Mr. YANG Rongbing each attending 7 out of 7 meetings[198]. - Independent non-executive directors also attended all board meetings, with Mr. WANG Zichen, Mr. ZHAO Hong, and Mr. LIU Hoi Keung each attending 7 out of 7 meetings[198]. - The chairman of the Board held one meeting with independent non-executive directors without the presence of other directors during the year[198]. - The Company has adopted the Model Code for securities transactions to ensure compliance by directors and employees with inside information regulations[199]. - All directors confirmed compliance with the Model Code regarding securities transactions throughout the year ended 31 December 2024[200]. Financial Performance - The company has achieved a compound annual growth rate (CAGR) of 24.7% in revenue, 15.8% in company profit, and 9.9% in net profit attributable to the parent since its listing[70]. - The total return rate for the company's shareholders was 291.2% from 2016 to 2024[71]. - The company suspended cash dividends for the first time in 2024 to maximize shareholder value and initiated a share repurchase program, repurchasing 10,684,000 shares by February 28, 2025[71]. - The controlling shareholders increased their equity interest from approximately 52.7% at the time of listing to approximately 61.0% as of the current date[77]. - The company maintains a long-term stable dividend policy, delivering substantial cash dividends despite the pandemic's impact on the global economy[71]. - The company emphasizes a corporate strategy focused on sustainable development and long-term value creation for stakeholders[72]. - The Group recorded revenue of HK$1,263.1 million in 2024, representing a year-on-year increase of 12.9%[88]. - Profit for the Year reached HK$126.0 million, reflecting a year-on-year increase of 3.2%[88]. - Profit attributable to owners of the Company amounted to HK$82.7 million, marking a year-on-year increase of 3.4%[88]. - The Group's revenue increased by 12.9% from approximately HK$1,118.5 million in 2023 to approximately HK$1,263.1 million in 2024[121]. - Overseas revenue rose by 21.3% to HK$567.6 million in 2024, accounting for 44.9% of total Group revenue[121]. - The Group's profit attributable to owners increased by 3.4% to HK$82.7 million in 2024[120]. - The Group's ESG+ new businesses have experienced rapid growth, significantly broadening the customer base and exceeding expectations[121]. - Cash and cash equivalents rose from HK$227.3 million in 2023 to HK$267.2 million in 2024, indicating a strong cash position[124][128]. - Net cash inflows from operating activities were approximately HK$203.6 million in 2024, up from HK$175.1 million in 2023[125][129]. - Net cash outflows used in financing activities increased to approximately HK$93.0 million in 2024 from HK$40.1 million in 2023, primarily due to repayment of borrowings and dividend payments[126][130]. - The Group had a total capital commitment of approximately HK$3.4 million for contracted but not performed acquisition of property, plant, and equipment as of December 31, 2024[132][138]. - The Group maintained a healthy liquidity position throughout the year, ensuring sufficient cash and cash equivalents to support operations[133][139]. - The gearing ratio was zero in 2024, as cash and cash equivalents exceeded gross debt[144][145]. - Credit risk is managed by entering transactions only with recognized and creditworthy parties, and ongoing monitoring of receivable balances[146][148]. - The Group's other financial assets include cash and cash equivalents, with maximum exposure to credit risk equal to the carrying amounts of these assets[150]. - The Group was exposed to foreign currency risk primarily from Hong Kong dollar, Renminbi, United States dollar, and Singapore dollar[151]. - As of December 31, 2024, the Group had no investment properties pledged for banking facilities, while certain buildings valued at HK$26.0 million were pledged for facilities amounting to HK$29.8 million[153]. - During the year ended December 31, 2024, the Company repurchased 6,504,000 ordinary shares for approximately HK$12,982,560, which were subsequently cancelled[154]. - Following the reporting period, the Company repurchased an additional 4,180,000 shares for approximately HK$9,699,040, with 2,404,000 shares cancelled up to the report date[155]. Strategic Focus and Growth - The business scope has expanded from traditional energy to clean energy, environmental protection, and climate change sectors[89]. - The Group is actively focusing on mergers and acquisitions to enhance its international service network and leverage global growth opportunities[83]. - The Group's strategic focus includes the development of AI capabilities and integration of AI resources to drive innovation[81]. - The "3+X" development strategy prioritizes ESG-oriented growth, contributing to the green and low-carbon transition of the industry[90]. - The Group is advancing its third development strategy, increasing investment in clean energy and low-carbon transition initiatives[80]. - The Group has successfully expanded its presence in emerging markets, including Africa and the Middle East[89]. - The Group operates 78 service outlets and holds 18 categories of professional qualification certifications globally, covering over 50 types of commodities and natural resources[93]. - On January 22, 2024, the Group was designated as the inspection institution for alumina futures by the Shanghai Futures Exchange, enhancing its brand recognition in non-ferrous metals[94]. - The Group has established inspection qualifications across four major futures exchanges, including copper, aluminum, zinc, and ferroalloys, significantly strengthening its brand credibility[96]. - The Group has become the leading quality inspection institution for lithium carbonate, ferroalloys, and industrial silicon, contributing to the sustainable development of the new energy industry[100]. - The Group plans to complete the global deployment of its AI system by 2025, focusing on technological innovations such as AI-powered carbon emission accounting and quality prediction models for bulk energy commodities[106]. - The Group actively participates in the formulation of industry standards, including the national standard for recycled steel raw materials, which was issued on November 28, 2024[101]. - The Group's ESG+ business focuses on clean energy, environmental protection, and climate change, supporting clients in their transition to green and low-carbon operations[109]. - The Group continues to enhance its R&D investments, driving technological innovation and industry advancement through AI applications and automated systems[105]. - The Group aims to ensure the quality and safety of futures deliveries while supporting the stable operation of commodity futures and options markets[102]. - The Group's strategic focus on ESG development is a core part of its "3+X" strategy, promoting long-term sustainable growth and corporate social responsibility[92]. - The Group is focusing on expanding its clean energy business, particularly in wind and solar power generation[111]. - The climate change business has positioned the Group as a leading carbon asset trader in the Beijing carbon market, enhancing global operational capabilities[112]. - The Group aims to accelerate investment plans aligned with its ESG strategy, targeting mergers and acquisitions in emerging markets[115]. - The integration of AI and cutting-edge technology is expected to enhance service efficiency and customer satisfaction across the entire service process[116]. - The Group's environmental protection services, including LDAR, are crucial for reducing carbon emissions and achieving green low-carbon goals[111]. - The Group is committed to providing comprehensive carbon neutrality solutions to assist clients in meeting their corporate carbon neutrality commitments[112].
力鸿检验(01586) - 2024 - 年度财报