位元堂(00897) - 2025 - 年度业绩

Annual Results Announcement Annual Financial Summary The company saw a 4.9% revenue decrease from continuing operations but a 77.5% annual profit increase, with profit attributable to owners of the parent turning profitable, and an improved gearing ratio Key Financial Summary for FY2025 | Indicator | FY2025 (Million HKD) | FY2024 (Million HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue from Continuing Operations | 745.3 | 783.9 | (4.9%) | | Gross Profit from Continuing Operations | 376.5 | 394.8 | (4.6%) | | Annual Profit | 7.1 | 4.0 | 77.5% | | Profit/(Loss) Attributable to Owners of the Parent | 7.1 | (15.4) | 146.1% | | Earnings/(Loss) Per Share (HK cents) - Basic and Diluted | 0.63 | (1.30) | 148.5% | | As of March 31 | | | | | Net Assets | 1,179.6 | 1,385.5 | (14.9%) | | Cash and Cash Equivalents | 132.3 | 155.0 | (14.6%) | | Gearing Ratio | 17.9% | 21.7% | (3.8%) | Consolidated Results The Group's consolidated results for the year ended March 31, 2025, show a slight decrease in revenue from continuing operations but significant growth in annual profit and profit attributable to owners of the parent, driven by cost control and investment property fair value changes Consolidated Statement of Profit or Loss and Other Comprehensive Income The consolidated statement of profit or loss and other comprehensive income shows a year-on-year decrease in revenue from continuing operations, but effective cost management and investment property fair value gains led to a turnaround in profit and significant improvement in profit attributable to owners of the parent Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator (Thousand HKD) | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenue from Continuing Operations | 745,298 | 783,881 | | Cost of Sales | (368,845) | (389,068) | | Gross Profit | 376,453 | 394,813 | | Other Income and Gains, Net | 72,052 | 91,588 | | Selling and Distribution Expenses | (299,030) | (246,123) | | Administrative Expenses | (109,273) | (108,855) | | Reversal of Impairment Loss on Financial Assets/(Impairment Loss), Net | (15,021) | 584 | | Other Expenses, Net | 1,434 | (86,310) | | Finance Costs | (28,158) | (40,792) | | Fair Value Loss on Financial Assets at Fair Value Through Profit or Loss, Net | (6,500) | (3,219) | | Fair Value Gain/(Loss) on Investment Properties, Net | 11,073 | (17,852) | | Share of Profits and Losses of Associates | 1,045 | 2,533 | | Profit/(Loss) Before Tax from Continuing Operations | 4,075 | (13,633) | | Income Tax Credit | 3,017 | 6,359 | | Profit/(Loss) for the Year from Continuing Operations | 7,092 | (7,274) | | Profit for the Year from Discontinued Operations | — | 11,319 | | Profit for the Year | 7,092 | 4,045 | | Profit/(Loss) Attributable to Owners of the Parent | 7,100 | (15,356) | | Non-controlling Interests | (8) | 19,401 | | Total Comprehensive Income/(Loss) for the Year | 5,057 | (109,174) | | Total Comprehensive Income/(Loss) Attributable to Owners of the Parent | 5,065 | (78,228) | | Basic and Diluted Earnings/(Loss) Per Share (HK cents) - Continuing Operations | 0.63 | (0.63) | Consolidated Statement of Financial Position As of March 31, 2025, the Group's consolidated statement of financial position shows decreases in total assets and liabilities, a reduction in net assets, but positive net current assets, reflecting adjustments in asset and liability management Summary of Consolidated Statement of Financial Position (As of March 31) | Indicator (Thousand HKD) | 2025 | 2024 | | :--- | :--- | :--- | | Non-current Assets | | | | Property, Plant and Equipment | 638,547 | 665,458 | | Investment Properties | 129,900 | 152,000 | | Loans and Interest Receivable | 295,000 | 380,000 | | Total Non-current Assets | 1,114,226 | 1,264,882 | | Current Assets | | | | Inventories | 238,098 | 308,098 | | Trade Receivables | 67,346 | 81,356 | | Cash and Cash Equivalents | 132,316 | 154,969 | | Total Current Assets | 621,023 | 830,228 | | Current Liabilities | | | | Trade and Bills Payables | 18,271 | 30,907 | | Interest-bearing Bank Borrowings | 187,345 | 184,749 | | Total Current Liabilities | 358,933 | 380,872 | | Net Current Assets | 262,090 | 449,356 | | Non-current Liabilities | | | | Interest-bearing Bank Borrowings | 155,950 | 276,200 | | Total Non-current Liabilities | 196,746 | 328,782 | | Net Assets | 1,179,570 | 1,385,456 | | Total Equity | 1,179,570 | 1,385,456 | Notes to Financial Information The notes to financial information detail the basis of preparation, accounting policy changes, operating segment information, composition of income and expenses, taxation, dividend policy, earnings per share calculation, and trade receivables and payables, providing essential supplementary information for understanding the financial statements Basis of Preparation This section outlines the basis for preparing the financial information, including the accounting standards and measurement methods followed, as well as the reporting currency and rounding conventions - Financial information is prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Hong Kong Companies Ordinance[9] - Financial information is prepared on a historical cost basis, except for investment properties, financial assets at fair value through profit or loss, and financial assets at fair value through other comprehensive income, which are measured at fair value[9] - Financial information is presented in Hong Kong Dollars, with all figures rounded to the nearest thousand[10] Changes in Accounting Policies and Disclosures Two revised Hong Kong Financial Reporting Standards were adopted for the first time this year, but these amendments had no material impact on the Group's financial position or performance due to the absence of relevant transactions or arrangements - This year, the Group first adopted the revised Hong Kong Financial Reporting Standard 16 (Lease Liabilities in a Sale and Leaseback Transaction) and amendments to Hong Kong Accounting Standard 7 and Hong Kong Financial Reporting Standard 7 (Supplier Finance Arrangements)[11][12] - As the Group had no relevant transactions or arrangements, these amendments had no impact on its financial position or performance[12] Operating Segment Information The Group's operations are divided into four segments: Chinese medicine, Western medicine, property investment (continuing operations), and property management and sales of agricultural product trading markets (discontinued operations), with management allocating resources and assessing performance based on segment results - The Group has four reportable operating segments: Chinese Medicine, Western Medicine, Property Investment (continuing operations), and Property Management and Sales of Agricultural Product Trading Markets (discontinued operations)[13][14][17] - For the year ended March 31, 2024, China Agri-Products Exchange Limited's property management and sales business for agricultural product trading markets was classified as a discontinued operation[14] Segment Revenue and Results (For the year ended March 31) | Segment (Thousand HKD) | 2025 Revenue | 2024 Revenue | 2025 Results | 2024 Results | | :--- | :--- | :--- | :--- | :--- | | Chinese Medicine Segment | 651,705 | 690,603 | (31,752) | 37,549 | | Western Medicine Segment | 91,573 | 90,209 | (2,504) | 14,554 | | Property Investment | 9,172 | 18,787 | 36,113 | (39,798) | | Total Continuing Operations | 752,450 | 799,599 | 1,857 | 12,305 | | Property Management and Sales of Agricultural Product Trading Markets (Discontinued) | — | 553,973 | — | 170,947 | Revenue and Other Income and Gains, Net This section details the composition of the Group's revenue from continuing operations, primarily comprising revenue from contracts with customers and investment property rental income, along with a breakdown of other income and gains, reflecting diverse income sources Revenue Analysis (Thousand HKD) | Revenue Source | 2025 Continuing Operations | 2024 Continuing Operations | | :--- | :--- | :--- | | Revenue from Contracts with Customers | 741,974 | 779,398 | | Rental Income from Investment Properties under Operating Leases | 3,324 | 4,483 | | Total Revenue | 745,298 | 783,881 | Other Income and Gains, Net Analysis (Thousand HKD) | Other Income and Gains | 2025 | 2024 | | :--- | :--- | :--- | | Interest Income from Loans to China Agri-Products | 38,758 | 39,100 | | Interest Income from Loans to Wang On | 4,681 | 384 | | Interest Income from Bank Deposits | 1,439 | 2,182 | | Gain on Disposal of Property, Plant and Equipment, Net | 16,368 | 35,395 | | Total | 72,052 | 91,588 | Other Expenses, Net This section presents the net other expenses from continuing operations, primarily including loss on disposal of investment properties, reversal of impairment loss on property, plant and equipment, and exchange losses, reflecting the impact of non-core operations and asset disposals on profit Other Expenses, Net Analysis (Thousand HKD) | Other Expenses | 2025 | 2024 | | :--- | :--- | :--- | | Loss on Disposal of Subsidiaries | — | 5,898 | | Loss on Disposal of Investment Properties | 1,201 | — | | Impairment Loss/(Reversal of Impairment Loss) on Property, Plant and Equipment, Net | (3,130) | 68,630 | | Exchange Losses, Net | 495 | 2,630 | | Total | (1,434) | 86,310 | Profit/(Loss) Before Tax This section details the components of the Group's profit or loss before tax from continuing operations, including cost of inventories, employee benefit expenses, depreciation, and impairment loss on financial assets, providing a breakdown for understanding profit sources and cost structure Components of Profit/(Loss) Before Tax (Thousand HKD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Cost of Inventories Recognized as Expense | 340,265 | 358,473 | | Cost of Services Provided | 28,580 | 30,595 | | Research and Development Costs | 1,124 | 1,786 | | Lease Payments Not Included in Lease Liabilities Measurement | 7,553 | 13,573 | | Auditor's Remuneration | 3,800 | 4,580 | | Depreciation of Owned Assets | 33,349 | 36,105 | | Depreciation of Right-of-Use Assets | 57,134 | 53,067 | | Employee Benefit Expenses (Excluding Directors' Emoluments) | 242,567 | 231,393 | | Exchange Differences, Net | 495 | 2,630 | | Impairment Loss/(Reversal of Impairment Loss) on Financial Assets, Net | 15,021 | (584) | | Net Rental Income | (8,086) | (9,096) | Finance Costs This section analyzes finance costs from continuing operations, primarily comprising interest on bank borrowings and lease liabilities, reflecting the company's debt financing costs Finance Costs Analysis (Thousand HKD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest on Bank Borrowings | 22,624 | 36,721 | | Interest on Lease Liabilities | 5,534 | 4,071 | | Total | 28,158 | 40,792 | Income Tax This section details the Group's income tax credit from continuing operations and tax expense from discontinued operations, reflecting the tax impact across different business segments Income Tax Credit/(Expense) Analysis (Thousand HKD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Total Tax Credit for the Year from Continuing Operations | (3,017) | (6,359) | | Total Tax Expense for the Year from Discontinued Operations | — | 52,001 | | Total Tax Expense/(Credit) | (3,017) | 45,642 | Dividends This section discloses no dividends are recommended for the current year and reviews the previous year's final cash dividend, special cash dividend, and special dividend paid by way of distribution in specie - The Board does not recommend the payment of any dividend for the year ended March 31, 2025 (2024: final cash dividend of 3.0 HK cents per share and special cash dividend of 14.7 HK cents per share)[28] - On March 7, 2024, shareholders approved a special dividend paid by way of distribution in specie, involving shares of Wang On and China Agri-Products, totaling HKD 869,289,000[28] Earnings/(Loss) Per Share Attributable to Ordinary Equity Holders of the Parent This section provides the basis for calculating basic and diluted earnings or loss per share attributable to ordinary equity holders of the parent, including the profit/loss amount and weighted average number of ordinary shares used in the calculation Calculation of Basic and Diluted Earnings/(Loss) Per Share | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Ordinary Equity Holders of the Parent | 7,100 | (15,356) | | - Continuing Operations | 7,100 | (7,426) | | - Discontinued Operations | — | (7,930) | | Weighted Average Number of Ordinary Shares (Shares) | 1,125,837,135 | 1,181,345,893 | Trade Receivables This section provides the net carrying amount and aging analysis of trade receivables, along with the Group's credit policy and risk management measures Aging Analysis of Trade Receivables (Thousand HKD) | Aging | 2025 | 2024 | | :--- | :--- | :--- | | Within 1 month | 51,515 | 37,767 | | 1 to 3 months | 14,500 | 13,313 | | Over 3 months but within 6 months | 716 | 15,391 | | Over 6 months | 615 | 14,885 | | Total | 67,346 | 81,356 | - Trade terms are primarily credit-based, with credit periods ranging from 7 to 120 days, and close monitoring is maintained over outstanding receivables to mitigate credit risk[31] Trade and Bills Payables This section provides an aging analysis of trade and bills payables, detailing their interest-bearing status and the Group's financial risk management policies Aging Analysis of Trade and Bills Payables (Thousand HKD) | Aging | 2025 | 2024 | | :--- | :--- | :--- | | Within 1 month | 10,982 | 13,817 | | 1 to 3 months | 2,102 | 4,234 | | Over 3 months but within 6 months | 334 | 1,364 | | Over 6 months | 4,853 | 11,492 | | Total | 18,271 | 30,907 | - Trade payables are non-interest-bearing, while bills payable are secured by bank balances and property, plant and equipment, bearing interest at an annual rate of 2.45%[33] Management Discussion and Analysis This section provides a detailed review of the year's consolidated results, dividend policy, business segment performance, financial position changes, treasury policy, capital commitments, asset pledges, financial guarantees, investment plans, post-reporting events, stakeholder relations, key risks, uncertainties, future prospects, and ESG practices Consolidated Results Total revenue decreased this year due to reduced sales of Chinese medicine and health food products, but the company achieved a turnaround in profit attributable to owners of the parent through cost control, investment property fair value gains, and reduced finance costs - Total revenue for the year decreased by approximately 4.9% to approximately HKD 745.3 million, primarily due to reduced sales of Chinese medicine and health food products[34][43] - Profit attributable to owners of the parent was approximately HKD 7.1 million, turning profitable (2024: loss of approximately HKD 15.4 million), primarily benefiting from reduced impairment loss on property, plant and equipment, a shift from investment property fair value loss to gain, and decreased finance costs, partially offset by increased marketing expenses[34][49] Dividends The Board does not recommend any dividend payment for the current year, contrasting with the previous year's cash dividends and special dividend paid by way of distribution in specie - The Board does not recommend the payment of any dividend for the year ended March 31, 2025[35] - For the year ended March 31, 2024, a final cash dividend, a special cash dividend, and a special dividend paid by way of distribution in specie were distributed[35] Business Review The business review details the company's adaptation to challenging retail conditions through strategic retail expansion, e-commerce collaboration, cross-border live streaming, and product innovation, with new product launches and brand promotion in Chinese medicine, sales growth in Western medicine and personal care, and fair value gains and disposals in property investment Chinese Medicine and Health Food Products In Chinese medicine and health food products, the company successfully navigated market challenges by expanding its retail footprint, enhancing e-commerce partnerships, leveraging live streaming platforms, and launching innovative products, boosting brand awareness and sales - Strategically expanded retail footprint by opening new stores in key tourist areas and optimizing operating hours[37] - Strengthened cooperation with leading health and beauty retailers and e-commerce platforms in Hong Kong and mainland China, utilizing platforms like Douyin for live streaming activities to drive cross-border e-commerce sales growth[37] - Successfully launched 3 key products in 2024: Bai Cao Ling Zhi Huang, Qu Shi Qing, and Xue Ji Wan Formula, with existing products like Wild Cordyceps King and Gu Ying Su more than doubling their sales contribution[38] Western Medicine and Personal Care Products The Western medicine and personal care products business strengthened its market position and achieved sales growth through brand anniversary promotions, distribution network expansion, and cross-border e-commerce investments - Madame Pearl's brand celebrated its 70th anniversary with new marketing campaigns, solidifying its position as the market leader in cough syrup for 15 consecutive years, and achieving positive sales growth in the Hong Kong market[39] - Madame Pearl's Cough Syrup expanded its distribution in the Chinese market to over 10,000 stores, including top pharmacy chains and leading hospitals[39] - Pedia-Care personal care products were promoted through MTR advertisements, Pokémon collaborations, and cross-border e-commerce flagship stores, resulting in a 10-fold increase in cross-border e-commerce sales[40] Property Investment The property investment business benefited from a recovering property market, with investment property fair value turning into gains, and completed multiple retail property disposals, optimizing the asset portfolio - Net fair value gain on investment properties was approximately HKD 11.1 million (2024: net loss of approximately HKD 17.9 million), primarily due to a recovering property market[41] - This year, the disposal of multiple retail properties in Hong Kong was completed, with total consideration exceeding HKD 130 million[42] Financial Review The financial review details changes in key financial metrics, including decreased total revenue due to lower Chinese medicine sales, stable gross margin, reduced other income from property disposals, increased selling expenses from staff costs and e-commerce promotion, a significant decrease in net other expenses due to reduced impairment losses, and lower finance costs from interest rate declines and loan repayments, ultimately leading to a turnaround in profit attributable to owners of the parent, with stable liquidity and retranslation losses from RMB exchange rate fluctuations Revenue Total revenue for the year decreased by 4.9% to HKD 745.3 million, primarily due to lower sales of Chinese medicine and health food products - Total revenue decreased by approximately 4.9% to approximately HKD 745.3 million, primarily due to a decline in sales performance of Chinese medicine and health food products[43] Gross Profit Gross profit decreased by 4.6% year-on-year to HKD 376.5 million, consistent with the decline in sales revenue, while the gross profit margin remained stable at approximately 50.5% - Gross profit decreased by approximately 4.6% to approximately HKD 376.5 million, consistent with the reduction in sales revenue, but the gross profit margin remained stable at approximately 50.5%[44] Other Income and Gains, Net Net other income and gains decreased by 21.3% to HKD 72.1 million, primarily due to reduced gains from the disposal of owner-occupied properties - Other income and gains decreased by approximately 21.3% to approximately HKD 72.1 million, mainly due to reduced gains from the disposal of owner-occupied properties[45] Selling and Distribution Expenses Selling and distribution expenses increased by 21.5% to HKD 299.0 million, primarily due to higher staff costs and increased advertising and promotion expenses for cross-border e-commerce - Selling and distribution expenses increased by approximately 21.5% to approximately HKD 299.0 million, primarily due to higher staff costs and increased advertising and promotion expenses for cross-border e-commerce business[46] Other Expenses, Net Other expenses shifted from a net expense of HKD 86.3 million to a net income of HKD 1.4 million, primarily benefiting from reduced and reversed impairment losses on property, plant and equipment - Other expenses decreased from a net expense of approximately HKD 86.3 million to a net income of approximately HKD 1.4 million, primarily attributable to reduced and reversed impairment losses on property, plant and equipment[47] Finance Costs Finance costs decreased by 30.9% to HKD 28.2 million, primarily due to lower interest rates and loan repayments following property disposals - Finance costs decreased by approximately 30.9% to approximately HKD 28.2 million, primarily due to lower interest rates and a reduction in outstanding loan amounts resulting from property disposals during the year[48] Profit/(Loss) for the Year Attributable to Owners of the Parent Profit attributable to owners of the parent turned profitable this year, recording HKD 7.1 million, primarily influenced by reduced impairment losses, investment property fair value gains, and decreased finance costs - Profit attributable to owners of the parent for the year was approximately HKD 7.1 million (2024: loss of approximately HKD 15.4 million), achieving a turnaround to profitability[49] Liquidity, Gearing Ratio and Financial Resources As of March 31, 2025, the Group's total assets and interest-bearing debts decreased, while the current ratio and gearing ratio remained at prudent levels, reflecting sound financial management - As of March 31, 2025, total assets were approximately HKD 1,735.2 million, and total interest-bearing debts were approximately HKD 343.3 million[50] - The current ratio was approximately 1.7 (2024: 2.2), and the gearing ratio was approximately 17.9% (2024: 21.7%), indicating prudent financial management[51] Foreign Exchange The Group faces RMB foreign exchange risk, primarily from the retranslation of net assets of its mainland China subsidiaries, resulting in a retranslation loss of approximately HKD 1.1 million this year - The Group faces significant RMB foreign exchange risk, primarily arising from currency translation risk of net assets of its subsidiaries in mainland China[52] - Exchange rate translation as of the reporting date resulted in a retranslation loss of approximately HKD 1.1 million (2024: loss of approximately HKD 87.9 million), recognized in other comprehensive income/exchange reserve[52] Treasury Policy The Group manages exchange rate, interest rate, and price risks to ensure sufficient financial resources for business growth, maintains a prudent capital structure, and invests surplus funds in equity and debt securities to maximize asset efficiency - The Group manages financial risks, including exchange rate risk, interest rate risk, and price risk, to ensure sufficient financial resources for business growth while maintaining a prudent capital structure[53] - Surplus funds are invested in equity and debt securities to maximize asset efficiency[53] Capital Commitments As of March 31, 2025, the Group had contracted but unprovided capital commitments of approximately HKD 8.5 million for the acquisition of property, plant and equipment - As of March 31, 2025, the Group had contracted but unprovided capital commitments for the acquisition of property, plant and equipment of approximately HKD 8.5 million (2024: approximately HKD 2.6 million)[54] Pledge of Assets As of March 31, 2025, certain bank loans of the Group were secured by property, plant and equipment, owner-occupied investment properties, related rental income, and equity interests in certain subsidiaries, with a total carrying value of approximately HKD 274.8 million - As of March 31, 2025, certain bank loans of the Group were secured by property, plant and equipment, owner-occupied investment properties, certain rental income derived from these properties, and equity interests in certain subsidiaries of the Company, with a total carrying value of approximately HKD 274.8 million[55] Financial Guarantees As of March 31, 2025, the Group had provided guarantees of up to HKD 370 million to banks for financing extended to China Agri-Products - As of March 31, 2025, the Group had provided guarantees of up to HKD 370,000,000 to banks for financing extended to China Agri-Products[56] Other Material Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures and Future Plans for Material Investments or Capital Assets The Group made no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures this year, and had no specific future plans for material investments or capital assets as of the reporting period end - There were no material investments held, nor any material acquisitions or disposals of subsidiaries, associates, and joint ventures during the year[57] - As of March 31, 2025, the Group had no specific plans for any material investments or capital assets, or acquisitions or disposals of subsidiaries, associates, and joint ventures[57] Events After Reporting Period Subsequent to the reporting period, on April 10, 2025, the Group entered into an agreement to dispose of a Hong Kong property for HKD 19.5 million, with the transaction completed on June 5, 2025 - On April 10, 2025, the Group entered into a provisional sale and purchase agreement with an independent third party to dispose of a property located at G/F with Cockloft, 60A Kinchuen Street, Kowloon, Hong Kong, for HKD 19.5 million, with the transaction completed on June 5, 2025[58] Relationship with Employees, Suppliers and Customers The Group views employees as key to success, offering competitive compensation, benefits, and a safe work environment, while also fostering strong relationships with business partners, suppliers, and customers to provide high-quality products and promote long-term growth - As of March 31, 2025, the Group employed 759 employees (2024: 810 employees), with approximately 84.5% located in Hong Kong and Macau[59] - The Group provides competitive remuneration, discretionary bonuses, share options, medical and retirement benefits, along with systematic training and a safe working environment[59] - The Group is committed to providing customers with reliable, diverse, and high-quality products, and establishing long-term, reliable cooperative relationships with suppliers[60] Key Risks and Uncertainties The Group faces several key risks and uncertainties, including industry and environmental policies, cost control, inventory provisions, supply chain disruptions, emerging market penetration, changing customer behavior, retail rent fluctuations, and exchange rate risks, which the company is actively addressing through enhanced policy analysis, strategic adjustments, inventory control, and improved management - Industry policy risks: Policies such as healthcare system reform, cost control, pharmaceutical regulation, and Chinese medicine certification may have profound impacts[61] - Environmental policies: The environmental impact of waste and wastewater generated from pharmaceutical production and agricultural product trading market operations[61] - Cost control: Failure to effectively offset rising product costs and/or declining revenue[61] - Provision for obsolete inventory: Inventory provisions due to weather, product expiry dates, and other damages[61] - Supply chain disruptions: Shortages or price increases of raw materials due to industry events, supplier control, and flexibility risks[61] - Inability to capture emerging markets: The Group may not be able to rapidly capture emerging markets with traditional industries and products[65] - Responding to customer behavior: The Group may not be able to effectively respond to economic downturns, reduced consumer spending, and changes in impulse buying behavior[65] - Retail rent fluctuations: Rising rents may reduce profitability[65] - Exchange rates: Unfavorable fluctuations in exchange rates may adversely affect the Group's cash flow and profitability[65] - The company will enhance marketing investment, strictly control inventory, formulate sales policies and product development, improve safety management and environmental protection standards, and advance the construction of streamlined management and risk control systems to address risks[62] Prospects The company plans to integrate traditional Chinese medicine with modern technology, launching an AI-powered diagnostic system, expanding telemedicine, and enhancing services with AI-driven CRM, while investing heavily in e-commerce, particularly live commerce in the Greater Bay Area, and actively exploring Southeast Asian markets for future growth Chinese and Western Medicine and Health Food Products The company is committed to Chinese medicine innovation, having launched an AI-powered diagnostic system and planning to enhance accessibility to professional Chinese medicine services and foster customer loyalty through telemedicine platforms and AI-driven CRM systems - Launched a groundbreaking artificial intelligence Chinese medicine diagnostic system, utilizing imaging and data processing technologies to assess facial and voice characteristics, providing highly accurate health evaluations[63] - Plans to enhance the accessibility of professional Chinese medicine services and cultivate customer loyalty by expanding its telemedicine consultation platform and integrating an AI-driven customer relationship management system[64] Digital Transformation and Expansion Strategy Digital transformation is a key driver of the company's growth strategy, involving significant investment in e-commerce capabilities, with a focus on live commerce platforms in the Greater Bay Area, and active pursuit of expansion into Southeast Asian markets - Significantly increased investment to enhance e-commerce capabilities, with a focus on live commerce platforms tailored for consumers in the Greater Bay Area[66] - Strengthened strategic relationships with leading cross-border e-commerce platforms and service providers to expand influence among consumers in mainland China[66] - Actively seeking expansion into Southeast Asian markets, leveraging the growing local interest in Chinese medicine and e-commerce penetration rates[66] Brand Valuation As of March 31, 2025, the total valuation of the Group's renowned brands, Watsons, Madame Pearl's, and Pedia-Care, reached HKD 2.05 billion - As of March 31, 2025, the total valuation of the Watsons, Madame Pearl's, and Pedia-Care brands was HKD 2.05 billion[68] Environmental, Social and Governance The Group is committed to enhancing environmental protection through product restructuring, energy conservation, emission reduction, and pollution prevention strategies to promote industry transformation, while fulfilling corporate social responsibility by improving quality management, strengthening audit quality, and actively participating in community donations and volunteer activities Environmental Policies and Performance The Group has intensified environmental protection efforts by adjusting product structure, implementing energy conservation, using recycled paper, emission reduction, and pollution prevention strategies, and upgrading industrial facilities for greater environmental friendliness, including solar energy utilization - Increased environmental protection efforts, implementing energy conservation, using recycled paper, emission reduction, and pollution prevention strategies, and upgrading industrial facilities to be more environmentally friendly, including the use of solar energy[69] Corporate Social Responsibility The Group is committed to improving quality management systems, strengthening audit quality to ensure the safety of Chinese and Western medicines, and actively fulfilling corporate social responsibility by giving back to the community through donations and volunteer activities - Improved quality management systems and strengthened audit quality to ensure the safety and quality of Chinese and Western medicines[70] - Actively donated to and supported the community, established volunteer teams, and encouraged employees to participate in charitable activities[70] Other Information This section covers the company's corporate governance practices, including compliance with the Corporate Governance Code (deviation regarding the Chairman and CEO roles), directors' securities dealing code, listed securities transactions, audit committee composition and duties, independent auditor's scope of work, and upcoming AGM and annual report publication details Compliance with Corporate Governance Code The company is committed to high standards of corporate governance, but there is a deviation where the Chairman and Managing Director roles are held by the same person, an arrangement the Board deems valuable for efficiency and will continuously review - The company is committed to maintaining high standards of corporate governance, placing great emphasis on transparency, accountability, integrity, and independence[71] - There is a deviation from Code Provision C.2.1 of the Corporate Governance Code, where the roles of Chairman and Managing Director are held by the same person (Mr. Tang Ching Ho)[71] - The Board believes this arrangement is valuable for enhancing the company's efficiency in responding to a rapidly changing business environment and will continue to review this deviation[71] Standard Code for Securities Transactions by Directors The company has adopted a stringent code of conduct for directors' securities transactions and confirms that all directors complied with this code during the review year - The company has adopted a code of conduct no less exacting than the Model Code set out in Appendix C3 of the Listing Rules[73] - Following specific enquiries, it is confirmed that all Directors have complied with the required standards set out in the Model Code throughout the review year and up to the date of this announcement[73] Purchase, Sale or Redemption of the Company's Listed Securities This year, the company repurchased and cancelled 46,000,000 shares on the Stock Exchange, aiming to enhance net asset value per share and earnings per share for the overall benefit of shareholders - During the year, the company repurchased a total of 46,000,000 shares on the Stock Exchange, which were cancelled on May 3, 2024[74] - The share repurchases aimed to benefit shareholders as a whole by increasing the company's net asset value per share and earnings per share[75] Share Repurchase Details for April 2024 | Month of Repurchase | Number of Shares Repurchased (Million Shares) | Highest Price Paid Per Share (HKD) | Lowest Price Paid Per Share (HKD) | Total Amount (Million HKD) | | :--- | :--- | :--- | :--- | :--- | | April 2024 | 46.00 | 0.260 | 0.250 | 11.80 | Audit Committee The Audit Committee, composed of all independent non-executive directors, is responsible for reviewing and approving the Group's accounting principles, financial reporting matters, audit plan, internal controls, and risk management, and has reviewed and approved this year's consolidated financial statements - The Audit Committee comprises all independent non-executive directors, with Mr. Li Ka Fai, David as Chairman[77] - The Audit Committee reviewed and approved the Group's consolidated financial statements for the fiscal year ended March 31, 2025[78] Scope of Work of Ernst & Young Independent auditor Ernst & Young has confirmed the consistency of financial figures in this announcement with the draft consolidated financial statements, but their work does not constitute an assurance engagement, thus no opinion or assurance conclusion is expressed - Ernst & Young has acknowledged the figures in the Group's consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, and related notes for the year ended March 31, 2025, as presented in this announcement[79] - The work performed by Ernst & Young in this regard does not constitute an assurance engagement, and therefore no opinion or assurance conclusion has been expressed on this announcement[79] Annual General Meeting The company will hold its Annual General Meeting on August 19, 2025, with the relevant notice to be published and dispatched to shareholders as required - The company will hold its 2025 Annual General Meeting on August 19, 2025, at 11:30 a.m[80] Closure of Register of Members To determine eligibility for attending and voting at the Annual General Meeting, the register of members will be closed from August 14 to August 19, 2025, inclusive - The register of members will be closed from August 14, 2025, to August 19, 2025 (both dates inclusive), to determine eligibility for attending and voting at the Annual General Meeting[81] Publication of Annual Results and Despatch of Annual Report This annual results announcement has been published on the Stock Exchange and company websites, and the 2025 annual report, containing all required information, will be dispatched to shareholders and published on the aforementioned websites in due course - The annual results announcement has been published on the Stock Exchange website (www.hkexnews.hk) and the company's website (www.wyth.net)[82](index=82&type=chunk) - The 2025 annual report, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned websites in due course[82]