文化传信(00343) - 2025 - 年度业绩

Company Information and Disclaimer This section provides the company's registration details and clarifies the disclaimer from Hong Kong Exchanges and Clearing Limited regarding the announcement content - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited are not responsible for the content of this announcement, make no representation, and accept no liability for any loss[1] - The Company is incorporated in Bermuda as a limited liability company with stock code: 00343[2] Financial Performance Overview This section presents a high-level summary of the company's key financial performance indicators for the fiscal years 2025 and 2024 Key Financial Performance Overview for FY2025 | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Annual Loss | (28,400) | (20,929) | 35.7% increase | | Annual Loss Attributable to Owners of the Company | (27,963) | (20,782) | 34.6% increase | | Basic and Diluted Loss Per Share (HK cents) | (1.7) | (1.2) | 41.7% increase | | Revenue | 17,328 | 20,158 | (14.0%) decrease | | Gross Profit | 7,627 | 9,851 | (22.6%) decrease | | Gross Profit Margin | 44.0% | 48.9% | (4.9) percentage points | Consolidated Financial Statements This section presents the audited consolidated statement of profit or loss and other comprehensive income and the consolidated statement of financial position as of March 31, 2025 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended March 31, 2025, the Group reported revenue of 17,328 Thousand HKD, gross profit of 7,627 Thousand HKD, and an expanded annual loss of 28,400 Thousand HKD Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 17,328 | 20,158 | | Cost of Sales | (9,701) | (10,307) | | Gross Profit | 7,627 | 9,851 | | Other Income | 565 | 4,638 | | Other Gains or Losses | (1,743) | 4,039 | | Loss Before Tax | (28,728) | (20,808) | | Annual Loss | (28,400) | (20,929) | | Annual Loss Attributable to Owners of the Company | (27,963) | (20,782) | Consolidated Statement of Financial Position As of March 31, 2025, the Group's non-current assets significantly increased to 36,635 Thousand HKD, while current assets decreased to 61,226 Thousand HKD, leading to a reduction in total equity Summary of Consolidated Statement of Financial Position | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Non-current Assets | 36,635 | 7,268 | | Current Assets | 61,226 | 119,014 | | Current Liabilities | 17,379 | 17,603 | | Net Current Assets | 43,847 | 101,411 | | Net Assets | 80,119 | 108,679 | | Equity Attributable to Owners of the Company | 85,484 | 113,787 | | Cash and Cash Equivalents | 18,429 | 38,228 | Notes to the Consolidated Financial Statements This section provides detailed explanations on the basis of preparation, accounting policies, revenue, segment performance, asset and liability items, and post-reporting period events 1. Basis of Preparation The consolidated financial statements are prepared in accordance with HKFRSs, comply with listing rules, and are presented in HKD for convenience, despite RMB being the functional currency - The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the HKICPA and comply with the disclosure requirements of the Listing Rules and the Hong Kong Companies Ordinance[7] - The statements are prepared on a historical cost basis, with certain financial instruments measured at fair value[7] - The Company's functional currency is RMB, but for the convenience of HKEX users, it is presented in HKD[7] 2. Application of New and Revised HKFRSs The Group adopted several new and revised HKFRSs effective April 1, 2024, which had no material impact on current or prior period financial performance or position - This year, several revised HKFRSs were first applied, including lease liabilities in a sale and leaseback transaction and classification of liabilities as current or non-current[8] - The application of new and revised standards had no material impact on the Group's financial position and performance for the current and prior years[8] 3. Revenue For the year ended March 31, 2025, total Group revenue decreased by 14.0% to 17,328 Thousand HKD, primarily from publishing and IP licensing, with significant declines in digital marketing and retail/wholesale Revenue Source Analysis | Revenue Source | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales of Comic Books | 12,971 | 12,419 | 4.4% increase | | Intellectual Property Licensing Revenue | 3,019 | 2,685 | 12.4% increase | | Sales of Alcoholic Beverages | 1,227 | 2,457 | (50.0%) decrease | | Social Media Marketing | 111 | 113 | (1.8%) decrease | | New Media Advertising Revenue | – | 2,484 | (100.0%) decrease | | Total | 17,328 | 20,158 | (14.0%) decrease | - The Hong Kong market contributed the vast majority of revenue (17,217 Thousand HKD), while revenue from the China market significantly decreased to 111 Thousand HKD[11][13] 4. Segment Information The Group's operating segments include publishing and IP licensing, digital marketing, retail and wholesale, and natural language processing, with the latter incurring the largest loss in FY2025 - The Group's operating segments include publishing and intellectual property licensing, digital marketing, retail and wholesale, and natural language processing[15] Segment Revenue and Results | Segment | 2025 Revenue (Thousand HKD) | 2024 Revenue (Thousand HKD) | 2025 Segment Results (Thousand HKD) | 2024 Segment Results (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Publishing and Intellectual Property Licensing | 15,990 | 15,104 | 1,738 | 1,384 | | Digital Marketing | 111 | 2,597 | (916) | 2,236 | | Retail and Wholesale | 1,227 | 2,457 | (767) | (887) | | Natural Language Processing | – | – | (8,605) | (2,873) | | Consolidated Total | 17,328 | 20,158 | (8,550) | (140) | - In 2025, non-current assets were primarily concentrated in China (25,288 Thousand HKD), compared to Hong Kong (6,080 Thousand HKD) in 2024, reflecting a shift in investment focus[22] 5. Other Income For the year ended March 31, 2025, other income significantly decreased to 565 Thousand HKD, primarily due to the absence of impairment loss reversals on trade receivables and prepayments recognized in the prior year Details of Other Income | Other Income Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Bank Interest Income | 120 | 177 | | Imputed Interest Income on Loans Receivable | 268 | 183 | | Reversal of Impairment Loss on Trade Receivables Previously Recognized | – | 1,491 | | Reversal of Impairment Loss on Prepayments Previously Recognized | – | 2,453 | | Total | 565 | 4,638 | - Other income in 2024 included reversals of impairment losses received due to civil claims against digital marketing business customers and suppliers for misconduct[25] 6. Other Gains or Losses For the year ended March 31, 2025, the Group recorded other losses of 1,743 Thousand HKD, a significant shift from the prior year's gains, primarily due to the absence of subsidiary disposal gains and new legal claim provisions Details of Other Gains or Losses | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Gains (Losses) from Fair Value Changes of Financial Assets at FVTPL | 447 | (5,936) | | Gain on Derecognition of a Subsidiary | – | 10,942 | | Gain on Disposal of a Subsidiary | – | 823 | | Net Exchange Loss | (580) | (2,499) | | Provision for Legal Claims | (1,579) | – | | Total | (1,743) | 4,039 | 7. Finance Costs For the year ended March 31, 2025, finance costs increased to 133 Thousand HKD from 69 Thousand HKD in the prior year Finance Costs | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Finance Costs | 133 | 69 | 8. Other Impairment Losses For the year ended March 31, 2025, other impairment losses significantly increased to 2,241 Thousand HKD, primarily due to higher impairment losses on right-of-use assets and intangible assets Details of Other Impairment Losses | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Impairment Loss on Intangible Assets | 552 | – | | Impairment Loss on Right-of-Use Assets | 1,689 | 254 | | Impairment Loss on Prepayments | – | 560 | | Impairment Loss on Associates | –* | 157 | | Total | 2,241 | 971 | 9. Loss Before Tax For the year ended March 31, 2025, loss before tax expanded to 28,728 Thousand HKD, driven by increased staff costs, intangible asset amortization, and legal and consulting fees Loss Before Tax and Key Expenses | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Loss Before Tax | (28,728) | (20,808) | | Staff Costs | 16,436 | 19,777 | | Auditor's Remuneration | 1,230 | 1,600 | | Amortisation of Intangible Assets | 3,322 | 488 | | Legal, Consultancy and Other Professional Fees | 3,919 | 5,437 | 10. Income Tax Credit (Expense) For the year ended March 31, 2025, the Group recorded an income tax credit of 328 Thousand HKD, primarily due to increased deferred tax credits, with Hong Kong profits tax at 16.5% and China subsidiaries at 25% Details of Income Tax Credit (Expense) | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current Tax - Hong Kong Profits Tax | 88 | 154 | | Deferred Tax - Deferred Tax Credit | (416) | (9) | | Income Tax Credit (Expense) | (328) | 121 | - Hong Kong profits tax is calculated at 16.5% (or a two-tiered rate of 8.25%/16.5%), while Chinese subsidiaries are taxed at 25%[30] 11. Dividends No dividends were paid or proposed by the Company for the year ended March 31, 2025, or since the end of the reporting period - No dividends were paid or proposed for the years ended March 31, 2025, and 2024[32] 12. Loss Per Share For the year ended March 31, 2025, basic and diluted loss per share attributable to owners of the Company expanded to 1.7 HK cents, with the weighted average number of shares remaining unchanged Loss Per Share Calculation | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Weighted Average Number of Shares for Basic and Diluted Loss Per Share Calculation (Thousand shares) | 1,668,657 | 1,668,657 | | Annual Loss Attributable to Owners of the Company for Basic and Diluted Loss Per Share Calculation (Thousand HKD) | (27,963) | (20,782) | | Basic and Diluted Loss Per Share (HK cents) | (1.7) | (1.2) | - The exercise of share options was not assumed in calculating diluted loss per share as it would result in a reduction in loss per share[33] 13. Goodwill and Impairment Assessment As of March 31, 2025 and 2024, the Group's goodwill carrying amount was zero, as goodwill from Yi Qimen and Hui Chuan Network was fully impaired or derecognized Goodwill Carrying Amount | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Goodwill Carrying Amount | – | – | - Goodwill of Yi Qimen was fully impaired as of March 31, 2021, and derecognized upon its deregistration on March 31, 2024[36][37] - Goodwill of Hui Chuan Network was fully impaired as of March 31, 2022, and derecognized upon its disposal on March 31, 2024[38][39] 14. Intangible Assets As of March 31, 2025, intangible assets significantly increased to 29,761 Thousand HKD, driven by new patent technology additions, with an impairment loss of 552 Thousand HKD recognized for intellectual property Intangible Assets Carrying Amount | Intangible Asset Category | 2025 Carrying Amount (Thousand HKD) | 2024 Carrying Amount (Thousand HKD) | | :--- | :--- | :--- | | Club Memberships | 1,385 | 1,385 | | Intellectual Property | 3,100 | 4,140 | | Patent Technology | 25,276 | – | | Total | 29,761 | 5,525 | - New patent technology additions amounted to 28,341 Thousand HKD in 2025[40] - An impairment loss of 552 Thousand HKD was recognized for intellectual property due to challenging market conditions and failure to meet budgeted financial performance[41] 15. Trade Receivables As of March 31, 2025, net trade receivables were 3,666 Thousand HKD, slightly higher than the prior year, with reduced credit loss provisions and a decrease in receivables overdue by more than 90 days Details of Trade Receivables | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Gross Trade Receivables | 3,889 | 4,408 | | Less: Provision for Credit Losses | (223) | (943) | | Net Trade Receivables | 3,666 | 3,465 | Ageing Analysis of Trade Receivables | Ageing | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | 0 – 60 days | 1,706 | 1,439 | | 61 – 90 days | 701 | 442 | | 91 – 180 days | 1,108 | 1,264 | | Over 180 days | 151 | 320 | 16. Other Receivables, Deposits and Prepayments As of March 31, 2025, total other receivables, deposits, and prepayments significantly decreased to 6,718 Thousand HKD, mainly due to a substantial reduction in intangible asset deposits for the natural language processing business Details of Other Receivables, Deposits and Prepayments | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Net Other Receivables | 50 | 80 | | Net Deposits and Prepayments | 6,668 | 35,733 | | Total | 6,718 | 35,813 | - Intangible asset deposits decreased from 33,269 Thousand HKD (2024) to 4,859 Thousand HKD (2025)[46] 17. Loans Receivable As of March 31, 2025, net loans receivable decreased to 5,029 Thousand HKD, with the Group extending loan maturities for all borrowers and reclassifying some loans as non-current Details of Loans Receivable | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Gross Loans Receivable from Independent Third Parties | 6,736 | 8,068 | | Less: Provision for Credit Losses | (1,707) | (112) | | Net Loans Receivable | 5,029 | 7,956 | - Loan maturity dates have been extended, with some reclassified as non-current items (4,344 Thousand HKD)[47] - As of March 31, 2025, loans receivable with a carrying amount of 5,029 Thousand HKD were considered overdue[47] 18. Trade Payables, Other Payables and Accruals As of March 31, 2025, net trade payables were 899 Thousand HKD, slightly lower than the prior year, while other payables and accruals remained stable at 8,891 Thousand HKD Details of Trade Payables, Other Payables and Accruals | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade Payables | 899 | 946 | | Other Payables and Accruals | 8,891 | 8,331 | - Other payables and accruals primarily include deposits received, accrued operating expenses, accrued salaries, and accrued employee termination costs[51] 19. Disposal/Derecognition of Subsidiaries In FY2024, the Group disposed of Hui Chuan Network and derecognized Yi Qimen, recognizing gains of 823 Thousand HKD and 10,942 Thousand HKD, respectively, leading to goodwill derecognition - On April 13, 2023, the Group disposed of its entire equity interest in Hui Chuan Network for 57 Thousand HKD, recognizing a gain of 823 Thousand HKD[52][53] - On March 20, 2024, the Group derecognized Yi Qimen (55% owned), recognizing a gain on derecognition of 10,942 Thousand HKD[54] 20. Provisions As of March 31, 2025, the Group made a provision of 1,565 Thousand HKD for legal claims related to a supplier dispute, resulting in the freezing of a Chinese subsidiary's bank account Details of Provisions | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Provision for Legal Claims | 1,565 | – | - The provision was made for legal proceedings in China with a supplier, resulting in the freezing of a bank account of approximately RMB1,052,000[55] 21. Comparative Figures Certain comparative figures have been reclassified to conform with the current year's presentation, providing a more appropriate view of the Group's affairs - Certain comparative figures have been reclassified to conform with the current year's presentation, providing a more appropriate view of the Group's affairs[56] 22. Events After the Reporting Period Post-reporting period, the Company entered a warrant placing agreement to raise working capital and secured a 2 million HKD unsecured fixed loan at 24% annual interest - On April 16, 2025, the Company entered into a warrant placing agreement with a placing agent to place up to 200 million warrants at an initial subscription price of 0.3 HKD per share[57] - On May 16, 2025, the Company obtained a 2 million HKD unsecured fixed loan from a third party at an annual interest rate of 24%, repayable by June 16, 2025, for partial working capital[57] Management Discussion and Analysis This section reviews the Group's FY2025 financial performance, liquidity, human resources, significant transactions, and operations, outlining future strategies focused on resource conservation and cost control Dividends No dividends were paid or proposed by the Company for the years ended 2025 and 2024 - No dividends were paid or proposed for the years ended 2025 and 2024[58] Financial Results For the year ended March 31, 2025, the Group's consolidated net loss increased by 34.6% to 27,963 Thousand HKD, driven by a 14.0% revenue decline, reduced gross margin, and increased impairment losses 1. Revenue For the year ended March 31, 2025, overall Group revenue decreased by 14.0% to 17,328 Thousand HKD, with publishing and IP licensing showing slight growth, while digital marketing and retail/wholesale significantly declined Revenue Changes by Business Segment | Business Segment | 2025 Revenue (Thousand HKD) | 2024 Revenue (Thousand HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Publishing and Intellectual Property Licensing | 15,990 | 15,104 | 5.9% increase | | Digital Marketing | 111 | 2,597 | (95.7%) decrease | | Retail and Wholesale | 1,227 | 2,457 | (50.0%) decrease | | Total Revenue | 17,328 | 20,158 | (14.0%) decrease | - The significant decrease in digital marketing revenue was due to reduced operating scale, as the Group prioritized cash and working capital preservation[60] 2. Gross Profit and Gross Profit Margin For the year ended March 31, 2025, gross profit decreased to 7,627 Thousand HKD, and gross profit margin fell to 44.0%, primarily due to the recognition of production costs in the digital marketing segment Changes in Gross Profit and Gross Profit Margin | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Gross Profit | 7,627 | 9,851 | | Gross Profit Margin | 44.0% | 48.9% | - The decrease in gross profit margin was due to the recognition of production costs in the digital marketing business segment during the year[62] 3. Selling Expenses For the year ended March 31, 2025, selling expenses significantly decreased to zero from 1,949 Thousand HKD, primarily due to reduced revenue and operating scale in the digital marketing segment Changes in Selling Expenses | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Selling Expenses | – | 1,949 | - The decrease in selling expenses was mainly due to reduced revenue and operating scale from the consolidation of the digital marketing business segment since 2024[63] 4. Administrative Expenses For the year ended March 31, 2025, total administrative expenses decreased to 26,391 Thousand HKD, primarily due to reduced digital marketing activities and ongoing cost control measures Administrative Expenses and Key Components | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Administrative Expenses | 26,391 | 28,909 | | Staff Costs | 11,915 | 14,498 | | Depreciation of Right-of-Use Assets | 1,924 | 342 | | Directors' Remuneration | 3,282 | 4,204 | - The decrease in administrative expenses was mainly due to reduced business activities in the digital marketing segment and streamlined operations through continuous cost control[64] 5. Other Impairment Losses For the year ended March 31, 2025, other impairment losses increased to 2,241 Thousand HKD, primarily comprising impairment losses on right-of-use assets and intangible assets Details of Other Impairment Losses | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Impairment Loss on Right-of-Use Assets | 1,689 | 254 | | Impairment Loss on Intangible Assets | 552 | – | | Impairment Loss on Prepayments | – | 560 | | Impairment Loss on Associates | – | 157 | 6. Other Expenses For the year ended March 31, 2025, other operating expenses decreased, primarily due to lower R&D costs and legal/consulting fees, reflecting ongoing cost control measures Details of Other Expenses | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Research and Development Costs | 1,481 | 2,423 | | Legal, Consultancy and Other Professional Fees | 3,919 | 5,437 | - The decrease in other operating expenses was mainly due to streamlined operations through continuous cost control measures[67] 7. Annual Loss For the year ended March 31, 2025, the Group's operating loss expanded to 28,400 Thousand HKD, with net assets and net assets per share both decreasing Annual Loss and Net Assets | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Annual Loss | 28,400 | 20,929 | | Net Assets | 80,119 | 108,679 | | Net Assets Per Share (HKD) | 0.05 | 0.07 | Liquidity and Financial Resources As of March 31, 2025, the Group's cash and bank balances were 18,429 Thousand HKD, with net current assets significantly decreasing to 43,847 Thousand HKD and a liquidity ratio of 3.5 Overview of Liquidity and Financial Resources | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Cash and Bank Balances | 18,429 | 38,228 | | Net Current Assets | 43,847 | 101,411 | | Current Ratio | 3.5 | 6.8 | | Total Liabilities | 17,742 | 17,603 | | Gearing Ratio (Equity Attributable to Owners of the Company) | 20.8% | 15.5% | - The Group faces foreign exchange risk related to RMB but no significant foreign exchange rate fluctuation risk[69] - Post-reporting period, an unsecured fixed loan of 2 million HKD was obtained at an annual interest rate of 24% for partial working capital[69] Deposits Paid for Intangible Assets As of March 31, 2025, the Group paid approximately 4,859 Thousand HKD in intangible asset deposits for NLP technology development and production of software and chipsets, primarily for Chinese speech recognition Intangible Asset Deposits | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Intangible Asset Deposits (Natural Language Processing Business) | 4,859 | 33,269 | - The deposits are for the development and production of software and chipsets with natural language processing technology, primarily for Chinese speech recognition chips[71] Employment and Remuneration Policies As of March 31, 2025, the Group had 45 employees with total staff costs of 17,769 Thousand HKD, and management regularly reviews remuneration and offers discretionary bonuses and share options Employment and Remuneration Overview | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Number of Employees | 45 | 47 | | Total Staff Costs (Thousand HKD) | 17,769 | 21,061 | - Management regularly reviews remuneration packages to ensure competitiveness and offers discretionary bonuses and share options[72] Acquisition of Entire Equity Interest in a Company (Involving Issue of Consideration Shares Under General Mandate) The Group's proposed acquisition of Brain-like Technology for 63,000 Thousand HKD, to be settled by issuing new shares, was terminated as of November 29, 2024 - The Group had planned to acquire the entire equity interest in Brain-like Technology for 63,000 Thousand HKD, to be settled by issuing 191,000,000 new shares[73] - As of November 29, 2024, the proposed transaction was terminated[74] Proposed Placing of Unlisted Warrants Under General Mandate The Company proposes to place up to 200 million unlisted warrants to raise approximately 6,200 Thousand HKD (net 5,450 Thousand HKD) for general working capital, with potential additional funds for IP activation and general working capital upon full exercise - The Company proposes to place up to 200 million warrants at 0.031 HKD each, raising approximately 6,200 Thousand HKD in gross proceeds and 5,450 Thousand HKD in net proceeds[75][76] - The net proceeds will be used as general working capital for the Group[76] - Upon full exercise of the warrants, an additional 60,000 Thousand HKD is expected to be raised, with approximately 67% for IP activation and promotion, and 33% for general working capital[77] Voluntary Liquidation of Two Non-wholly Owned Subsidiaries The Group initiated voluntary liquidation for Beijing Yi Qimen Technology Co., Ltd. and Beijing Xinghe Engine Information Technology Co., Ltd. to mitigate losses and reallocate resources, with Yi Qimen's liquidation completed in March 2024 - The Group is undergoing voluntary liquidation for Yi Qimen and Beijing Xinghe Engine to reduce losses and reallocate resources[80] - The voluntary liquidation of Yi Qimen was completed in March 2024, while the liquidation of Beijing Xinghe Engine is still ongoing[80] Derecognition of a Wholly-owned Subsidiary This year, the Group derecognized Guangzhou Honghao Technology Co., Ltd., a wholly-owned subsidiary engaged in digital marketing, with completion on July 4, 2024 - The Group derecognized Guangzhou Honghao Technology Co., Ltd., a wholly-owned subsidiary engaged in digital marketing, with completion on July 4, 2024[81] Capital Commitments and Contingent Liabilities As of March 31, 2025, the Group had no significant capital commitments or contingent liabilities - As of March 31, 2025, the Group had no significant capital commitments or contingent liabilities[82] Business Review Amidst a challenging economic environment, the Group's total revenue decreased by 14.0%, with ongoing efforts in resource conservation, business restructuring, and cost control across its diverse segments Publishing and Intellectual Property Licensing Business This business segment showed stable performance with 2025 revenue of 15,990 Thousand HKD, and the Company plans to expand its comic publishing and distribution Publishing and Intellectual Property Licensing Business Revenue | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 15,990 | 15,104 | - The Company is focusing more on sales of published books with owned or licensed copyrights and plans to expand its comic publishing and distribution business in the last quarter of the fiscal year[84] Digital Marketing Following voluntary liquidation and restructuring, digital marketing business significantly contracted, with revenue decreasing by 95.7% to 111 Thousand HKD and employee count reduced Digital Marketing Business Revenue | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 111 | 2,597 | - The business significantly scaled down, with the total number of employees reduced from 3 to 1[85] - The voluntary liquidation process for Beijing Xinghe Engine is still ongoing[85] Retail and Wholesale Business The Group's premium alcoholic beverage retail and wholesale business maintains stable sales but faces revenue instability due to market demand, focusing on inventory turnover and positive cash flow - Premium alcoholic beverages are primarily for high-end consumers or restaurants, with wholesale sales being the main focus[86] - Sales are stable but revenue is unstable due to market demand[86] - The Group is focused on selling large quantities of alcoholic beverages to generate positive cash flow and turn over inventory[86] Natural Language Processing Business The Group continues to invest in NLP technology development, focusing on Chinese speech recognition with several patents, incurring 2,581 Thousand HKD in net operating expenses for FY2025, and plans a cautious market entry via partnerships - The Group invests in developing and producing software and chipsets with natural language processing technology, focusing on Chinese speech recognition, and has obtained several invention patents[87] Natural Language Processing Business Overview | Metric | 2025 (Thousand HKD) | | :--- | :--- | | Net Operating Expenses (excluding amortization, impairment, legal provisions) | 2,581 | | Number of Employees | 14 | - The Group adopts a cautious strategy to enter the market through cooperation or licensing, which may not generate significant revenue in the short term[87] Outlook The Group aims for sustainable growth in existing businesses and seeks to commercialize its NLP business through technology licensing, while also planning to expand IP and comic ventures with AI-generated content - Committed to maintaining the sustainable development of existing businesses and hopes the natural language processing business will enter the market and generate profits as soon as possible[88] - The natural language processing business will operate through technology licensing partnerships, applied in smart homes, intelligent cockpits, and smartphones[88] - Plans to revitalize and expand the scope of intellectual property and comic businesses, launching a series of products under its own IP brands, and AI-created film and television works[88] Corporate Governance and Other Information This section details the Group's corporate governance practices, including share transfer arrangements, listed securities transactions, audit committee operations, code compliance, and adjustments to board composition Closure of Register of Members To determine eligibility for the 2025 AGM, the register of members will be closed from August 21 to August 26, 2025, with all transfer documents due by 4:30 p.m. on August 20, 2025 - The register of members will be closed from August 21 to August 26, 2025[89] - All transfer documents must be lodged by 4:30 p.m. on August 20, 2025[89] Purchase, Sale or Redemption of Listed Securities For the year ended March 31, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the year ended March 31, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[90] Audit Committee The Company's Audit Committee, comprising three independent non-executive directors, reviewed the Group's accounting principles, internal controls, risk management, and financial reporting, including the audited financial statements for the year ended March 31, 2025 - The Audit Committee comprises three independent non-executive directors[91] - The Committee has reviewed the Group's accounting principles, internal controls, risk management, and financial reporting matters, including the audited financial statements[91] Compliance with Corporate Governance Code The Company complied with all Code on Corporate Governance provisions during the reporting period, with the exception of directors' rotation, which is addressed by its articles of association - The Company has complied with all code provisions of the Corporate Governance Code during the reporting period[92] - There was a deviation from Code Provision B.2.2 (rotation of directors), but the Company's articles of association require all directors to retire by rotation at the AGM, which is considered sufficient[92] Minimum Number of Independent Non-executive Directors Following Mr. Fan Chun Wah's resignation, the Company temporarily had fewer than the minimum required independent non-executive directors, but compliance was restored with Mr. Fung Ting Ho's appointment on July 31, 2024 - After Mr. Fan Chun Wah's resignation, the number of independent non-executive directors was temporarily below the minimum required by Listing Rule 3.10(1)[93] - Following Mr. Fung Ting Ho's appointment, the Company now meets the requirement of at least three independent non-executive directors[93] Minimum Number of Members of Corporate Governance Committee The Corporate Governance Committee currently has three members, which is below the four members stipulated in its terms of reference, and the Board is seeking to fill the vacancy - The Corporate Governance Committee currently consists of three members, which is fewer than the four members stipulated in its written terms of reference[94] - The Board is in the process of identifying suitable candidates to fill the vacancy to meet the requirement[94] Chairman of Nomination Committee Following Mr. Kwan Kin Chung's resignation, independent non-executive director Mr. Fung Ting Ho was appointed as the new Chairman of the Nomination Committee, ensuring compliance with Listing Rule 3.27A - Following Mr. Kwan Kin Chung's resignation as Chairman of the Nomination Committee, independent non-executive director Mr. Fung Ting Ho was appointed as the new Chairman[95] - The Company has complied with Listing Rule 3.27A regarding the Chairman of the Nomination Committee[95] Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the reporting period - The Company has adopted the Model Code as set out in Appendix C3 of the Listing Rules as its code for directors' dealings in the Company's securities[96] - Following enquiry, all directors confirmed compliance with the Model Code during the reporting period[96] Other Information This announcement is published on the HKEX and Company websites, with the annual report to follow, and the Board comprises one executive, two non-executive, and three independent non-executive directors as of the announcement date - The results announcement is published on the HKEX and the Company's website, and the annual report will be dispatched to shareholders and published on the website in due course[97] - As of the date of this announcement, the Board comprises Mr. Kwan Kin Chung (Executive Director), Mr. Wong Kon Man (Chairman and Non-executive Director), Dr. Liu Ka Ying (Vice Chairman and Non-executive Director), Mr. Wong Kwun Kit, Mr. Mong Yat Lik, and Mr. Fung Ting Ho (Independent Non-executive Directors)[99]