Performance Summary Financial Highlights The Group's total revenue for the fiscal year decreased by 13.0% to 205 million HKD, shifting from profit to a loss attributable to owners of the Company of 36.24 million HKD, compared to a profit of 0.57 million HKD in the prior year, with adjusted net loss of 5.84 million HKD significantly down from prior year's adjusted net profit of 15.57 million HKD, primarily due to weak performance in the health and beauty business and fair value loss on investment properties Key Financial Data for FY2025 | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 205,048 | 235,586 | -13.0% | | Gross Profit | 157,953 | 184,212 | -14.2% | | Loss / (Profit) Attributable to Owners of the Company | (36,243) | 571 | Shifted from profit to loss | | Adjusted Net Loss / (Profit)* | (5,843) | 15,571 | Shifted from profit to loss | - Adjusted net loss / (profit) is a non-GAAP measure excluding fair value changes of investment properties (30.40 million HKD), which management believes better reflects core operating performance3 Core Financial Statements The consolidated statement of profit or loss for the year shows that decreased revenue and significant fair value loss on investment properties were the main drivers of the loss before tax, while the consolidated statement of financial position reflects a reduction in total assets due to diminished investment property values and the Company's net current liabilities position Consolidated Statement of Profit or Loss and Other Comprehensive Income This fiscal year's revenue decreased to 205 million HKD, with gross profit consequently falling to 158 million HKD. Due to a 30.40 million HKD fair value loss on investment properties, the Company recorded a loss before tax of 33.37 million HKD, a stark contrast to the 4.57 million HKD profit before tax in the prior year, resulting in a final loss for the year of 36.24 million HKD and basic loss per share of 1.17 HK cents Key Items from Consolidated Statement of Profit or Loss | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 205,048 | 235,586 | | Gross Profit | 157,953 | 184,212 | | Selling and Distribution Expenses | (53,131) | (54,499) | | Administrative Expenses | (102,002) | (103,802) | | Fair Value Change of Investment Properties | (30,400) | (15,000) | | Loss / (Profit) Before Tax | (33,368) | 4,574 | | Loss / (Profit) for the Year | (36,243) | 518 | | Basic Loss / (Earnings) Per Share (HK cents) | (1.17) | 0.02 | Consolidated Statement of Financial Position As of March 31, 2025, the Group's total assets decreased to 289 million HKD, primarily due to the fair value of investment properties falling from 207 million HKD to 177 million HKD. The Company recorded net current liabilities of 75.44 million HKD, indicating short-term repayment pressure, and total equity decreased from 172 million HKD to 135 million HKD Key Items from Consolidated Statement of Financial Position | Item | March 31, 2025 (HKD thousands) | March 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Non-current Assets | 218,788 | 258,379 | | Of which: Investment Properties | 176,700 | 207,100 | | Current Assets | 70,116 | 85,955 | | Current Liabilities | 145,557 | 165,500 | | Net Current Liabilities | (75,441) | (79,545) | | Net Assets | 135,345 | 171,608 | | Total Equity | 135,345 | 171,608 | - Despite net current liabilities, the Directors believe the Group can continue as a going concern, considering operating cash flows, ongoing financing capabilities, and undrawn shareholder loans14 Management Discussion and Analysis Business and Market Review The Group's business was impacted by a weak retail market and a sluggish property sector in Hong Kong, where a resurgence in inbound tourist numbers was offset by a shift in tourist spending patterns, reduced purchasing power, and the trend of local residents spending in mainland China, all pressuring the Group's health supplement retail business, while high interest rates and a weak economic environment also hindered property market recovery - During the reporting period, Hong Kong's overall retail sales value decreased by 8.7%, with traditional Chinese medicine and herbal categories, relevant to the Group's business, declining by 12.2%49 - Inbound tourist spending shifted from shopping to experiences, and the strong HKD led to cautious tourist spending48 - Despite the government's withdrawal of property cooling measures, the residential and commercial property markets' recovery remains slow due to unfavorable economic conditions and high interest rates50 Segment Business Performance The core health and beauty supplements business actively responded to market challenges by launching new products, engaging new spokespersons, and expanding online channels, while the property investment business adopted a cautious strategy in a sluggish market to maintain stable rental returns Health and Beauty Supplements and Products Business This business segment owns proprietary brands like "Yu Yao Tang" and sells through retail chains, counters, and e-commerce platforms. During the reporting period, the Company launched several new products and engaged new spokespersons to rebrand. To expand its market, the Company entered mainland China's e-commerce platforms (Tmall, Douyin) and launched the "Yu Shang Hui" CRM mobile application to enhance customer loyalty - Successfully launched several new products, such as "Immunoglobulin Potent Formula" and "Melatonin Sleep 3-in-1 Formula", and upgraded best-selling products like NMN52 - Invited renowned artist Mr. Johnny as spokesperson for multiple products and sponsored a TV drama to enhance brand image53 - Expanded sales channels into mainland China by opening flagship stores on Tmall and Douyin54 - Launched the "Yu Shang Hui" CRM mobile application to gain deeper insights into customer spending habits and formulate more precise marketing strategies55 Property Investment Business The Group continues to hold commercial, residential, and industrial properties in Sham Shui Po, Mid-Levels, and Kwai Chung, Hong Kong. Facing a persistently sluggish Hong Kong property market, the Group adopted a cautious investment strategy, focusing on managing its existing property portfolio to ensure returns - The property portfolio includes tenement buildings in Sham Shui Po, residential properties in Mid-Levels, and industrial properties in Kwai Chung56 Financial Performance Analysis The Group's financial performance significantly declined, with revenue decreasing by 13.0% and shifting from profit to loss. The 13.3% revenue decrease in the core health supplement business was the primary drag. Despite the Company's cost control measures on selling and administrative expenses, these were insufficient to offset the impact of revenue decline and the 30.40 million HKD fair value loss on investment properties Revenue Analysis Total revenue decreased by 13.0% year-on-year to 205 million HKD. Specifically, revenue from the health and beauty supplements business decreased by 13.3% to 200 million HKD, primarily due to the weak local retail market and changing tourist spending patterns, while property investment revenue slightly increased by 2.5% to 5.13 million HKD Segment Revenue Breakdown | Business Segment | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Health and Beauty Supplements and Products | 199,918 | 230,580 | -13.3% | | Property Investment | 5,130 | 5,006 | +2.5% | | Total Revenue | 205,048 | 235,586 | -13.0% | Cost and Gross Profit Analysis Cost of sales decreased by 8.4% year-on-year to 47.10 million HKD, a smaller reduction than the revenue decline, leading to a slight 1.2 percentage point decrease in the overall gross profit margin from 78.2% in the prior year to 77.0% - Overall gross profit margin remained relatively stable, slightly decreasing to 77.0%58 Operating Expense Analysis The Company successfully controlled operating expenses, with selling and distribution expenses decreasing by 2.6% to 53.10 million HKD and administrative expenses decreasing by 1.7% to 102 million HKD, reflecting reduced sales-linked commissions and rentals, as well as prudent cost control measures - The decrease in selling and distribution expenses was primarily due to reduced sales commission expenses59 - The reduction in administrative expenses was mainly due to lower counter rental and cost control measures on back-office expenses60 Profitability Analysis Due to the continued deterioration of the Hong Kong property market, the Group recorded a fair value loss on investment properties of 30.40 million HKD, which was a key factor in the full-year shift from profit to loss. Excluding this non-operating item, the adjusted net loss was 5.80 million HKD - Due to the continued deterioration of the Hong Kong property market, fair value loss on investment properties expanded to 30.40 million HKD (compared to 15.00 million HKD in the prior year)61 Profitability Metrics | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Loss / (Profit) for the Year | (36,243) | 518 | | Adjusted Net Loss / (Profit) | (5,843) | 15,571 | Liquidity and Capital Resources The Group's financial position tightened, with the gearing ratio increasing to 87.9%, cash and bank balances decreasing to 5.50 million HKD, and the current ratio remaining at a low level of 0.5x. Despite this, management believes the Group has sufficient resources to meet its financial needs, supported by internal funds generated from operations and undrawn banking and shareholder facilities totaling approximately 28.00 million HKD Liquidity and Capital Structure Metrics | Indicator | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Cash and Bank Balances | Approx. 5.50 million HKD | Approx. 12.70 million HKD | | Current Ratio | Approx. 0.5x | Approx. 0.5x | | Gearing Ratio | Approx. 87.9% | Approx. 79.8% | - The increase in gearing ratio was primarily due to a decrease in total equity at the end of the reporting period67 - The Group holds undrawn general banking facilities of approximately 10.00 million HKD and loan facilities of 18.00 million HKD provided by a shareholder67 Outlook Looking ahead, the Company anticipates continued challenges in Hong Kong's retail sector. To address this, the Group plans to actively explore new revenue streams, including launching a new high-end health supplement brand in FY2025/26, while implementing stringent cost control measures to navigate the uncertain macroeconomic environment and consolidate its industry position for long-term shareholder value creation - Hong Kong's retail sector is expected to continue facing challenges due to evolving consumer patterns71 - Plans to establish a new brand focusing on premium health and beauty supplements in FY2025/26 to attract new customers73 - Prudent cost control measures will be implemented for procurement, advertising, and back-office expenses starting from FY2025/2674 Principal Risks and Uncertainties The Group faces principal risks including regulatory and business risks. Regulatory changes concerning traditional Chinese medicine health products may impact operations. Business risks include the health supplement segment's close ties to Hong Kong's economic environment, where slowdowns affect consumption, and the property investment segment's vulnerability to a sluggish Hong Kong property market, potentially leading to fair value losses - Regulatory Risk: Changes in regulatory policies and laws concerning traditional Chinese medicine ingredient health products may impact industry development83 - Business Risk (Health Supplements): A slowdown or recession in Hong Kong's economy may adversely affect consumer preferences and spending, impacting the business84 - Business Risk (Property): Any downturn in Hong Kong's property market could significantly and adversely affect the Group's financial position and investment property values85 Other Significant Matters Dividends and Annual General Meeting The Board does not recommend a final dividend for the reporting period. To determine eligibility for attending the Annual General Meeting, the Company will suspend share transfer registration from August 29 to September 3, 2025, with the AGM scheduled for September 3, 2025 - The Board does not recommend a final dividend for the year ended March 31, 202587 - The Annual General Meeting (AGM) is scheduled for September 3, 202588 Corporate Governance The Company emphasizes its commitment to good corporate governance and confirms compliance with the Corporate Governance Code's provisions during the reporting period. An Audit Committee, comprising three independent non-executive directors, has been established and reviewed the annual consolidated financial statements - The Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during the reporting period89 - The Audit Committee, composed of three independent non-executive directors, has reviewed the Group's consolidated financial statements and final results91
顺腾国际控股(00932) - 2025 - 年度业绩