万华媒体(00426) - 2025 - 年度财报

Company Information This section provides essential company details, including board members, committee compositions, company secretary, principal bankers, auditor, office address, and share registrar information Company Information This section provides essential company details, including board members, committee compositions, company secretary, principal bankers, auditor, office address, and share registrar information - The company's Chairman is Ms. Cheung Tsung, a Non-Executive Director, and the auditor is PricewaterhouseCoopers[3] - The company is listed on the Hong Kong Stock Exchange with stock code 426[4] Chairman's Statement The Chairman's Statement highlights a challenging FY2024 for the Hong Kong media industry due to macroeconomic pressures impacting group revenue, leading to strategic transformations including core publication redesigns, enhanced digital and video content, expanded content areas, and a shift from traditional print to dynamic multimedia solutions provider Chairman's Statement The Chairman's Statement highlights a challenging FY2024 for the Hong Kong media industry due to macroeconomic pressures impacting group revenue, leading to strategic transformations including core publication redesigns, enhanced digital and video content, expanded content areas, and a shift from traditional print to dynamic multimedia solutions provider - The report acknowledges that US-China tariff tensions and local consumption outflow negatively impacted Hong Kong retail activities, consequently affecting the Group's revenue[7] - The Group comprehensively revamped its flagship publication 'Ming Pao Weekly', merging two magazines into one and enhancing real-time content and video production on digital platforms[7] - The Group is transforming from a print media company into a dynamic multimedia provider, offering customized business solutions including creative concept development, video advertising production, promotional campaign management, and event marketing[8] Management Discussion and Analysis This year, the Group's revenue declined by 18% to HKD 32.31 million, with post-tax loss widening by 23% to HKD 25.83 million, primarily due to reduced Hong Kong consumer spending and a weak advertising market; the Entertainment and Lifestyle segment's loss increased, while the Watches and Automotive segment, despite slight revenue growth, turned to a loss, and financially, the Group's liquidity relies on intercompany loans, with the gearing ratio significantly rising from 222.6% to 299.0%, as the Group anticipates continued challenges and will focus on content creation and technology application to navigate uncertainties Performance Summary Affected by Hong Kong's economic slowdown and declining retail sales, the Group's business faced adverse conditions, with revenue decreasing by 18% year-on-year and post-tax loss widening by 23% for the year ended March 31, 2025 Annual Performance Summary (HKD thousands) | Metric | For the Year Ended March 31, 2025 | For the Year Ended March 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | 32,314 | 39,506 | -18% | | Loss for the Year (after tax) | 25,831 | 21,011 | +23% | Business Review This year, both of the Group's core businesses faced challenges; the Entertainment and Lifestyle segment saw worsening revenue and increased losses due to weak advertising expenditure, while the Watches and Automotive segment, despite slight revenue growth, turned from profit to loss, as the Group responds to market changes through content innovation and service diversification Entertainment and Lifestyle Business This segment's revenue decreased to HKD 20.85 million, with losses expanding by 18% to HKD 19.77 million; to counter the weak advertising market, the Group is broadening its client base beyond retail brands and plans to enhance male-focused content through the new brand 'Ming's Bro' Entertainment and Lifestyle Business Performance (HKD thousands) | Metric | FY2025 (HKD) | FY2024 (HKD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 20,854 | 28,594 | -27.1% | | Segment Loss | 19,769 | 16,752 | +18.0% | Watches and Automotive Business This segment's revenue slightly increased by 5% to HKD 11.46 million, but it shifted from a profit of HKD 0.431 million last year to a loss of HKD 1.251 million; the Group expanded short video production for 'TopGear' and added non-watch lifestyle content like jewelry and fashion to 'Ming Watch' to enhance product appeal Watches and Automotive Business Performance (HKD thousands) | Metric | FY2025 (HKD) | FY2024 (HKD) | | :--- | :--- | :--- | | Revenue | 11,460 | 10,912 | | Segment (Loss)/Profit | (1,251) | 431 | Significant Investments The Group holds a 4.4% equity interest in Most Kwai Chung Limited, listed on the Stock Exchange, which is considered a strategic investment; at year-end, its fair value was HKD 4.38 million, a slight decrease from the prior year Investment Details in Most Kwai Chung (HKD thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Shares Held | 12,000,000 shares | 12,000,000 shares | | Equity Interest | 4.4% | 4.4% | | Fair Value | 4,380 | 4,500 | Outlook The Group anticipates continued challenges in the new fiscal year due to global trade uncertainties; to enhance adaptability, the Group will focus on strengthening content creation, improving technology for increased output and cost reduction, and recruiting talent to boost its digital content and business solutions capabilities - Facing global trade uncertainties, the Group anticipates continued challenges in the new fiscal year[20] - Future strategic priorities include: strengthening content creation, improving technology for efficiency and cost reduction, and recruiting professional talent[20] Liquidity, Financial Resources and Gearing Ratio At year-end, the Group's net current assets decreased, and the total deficit attributable to owners expanded; the gearing ratio (total liabilities/total assets) sharply rose from 222.6% to 299.0%, indicating significantly increased financial leverage, with the Group's liquidity primarily relying on cash and a HKD 98 million loan from a fellow subsidiary Key Financial Resources Metrics (HKD thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Net Current Assets | 20,429 | 25,607 | | Cash and Cash Equivalents | 28,948 | 29,580 | | Loans from a Fellow Subsidiary | 98,000 | 78,000 | | Gearing Ratio | 299.0% | 222.6% | Directors' Report This report outlines the company's principal activities, performance, dividend policy, and statutory disclosures regarding directors' and shareholders' interests; during the reporting period, the company primarily engaged in investment holding, with subsidiaries operating media businesses, and the Board does not recommend a final dividend, while also detailing directors' and major shareholders' holdings, confirming sufficient public float, and covering related party transactions, environmental policies, and stakeholder relations Results and Appropriations The Group's performance for the year is detailed in the consolidated statement of profit or loss; the Board resolved not to recommend any dividend for the year ended March 31, 2025 - For the years ended March 31, 2025, and March 31, 2024, the directors did not recommend dividend payments[40] Biographies of Directors and Senior Management This section provides detailed biographies of the company's non-executive, executive, independent non-executive directors, and senior management, including their age, position, professional experience, academic background, and appointments in other listed companies - Ms. Cheung Tsung, 55 years old, serves as the company's Chairman and Non-Executive Director, also chairing the controlling company, World Chinese Media Limited[50] - Mr. Tiong Kiu Chiong, 65 years old, is the company's Vice Chairman and Executive Director, with extensive experience in the media and publishing industry[52] - Mr. Lam Pak Cheung, 56 years old, is the company's Chief Executive Officer and Executive Director, responsible for overseeing the Group's overall business operations[53] Major Shareholders' Interests In accordance with the Securities and Futures Ordinance, this section discloses major shareholders holding 5% or more of the company's issued share capital; World Chinese Media Limited, through its indirect wholly-owned subsidiary Comwell Investment Limited, holds 73.01% of the company's shares, making it the company's principal controlling shareholder Major Shareholder Holdings (As of March 31, 2025) | Shareholder Name/Entity | Number of Shares Held | Capacity | Percentage of Issued Ordinary Shares | | :--- | :--- | :--- | :--- | | Tan Sri Datuk Tiong Hiew King | 292,700,000 | Interest in Controlled Corporation | 73.01% | | Dato' Sri Tiong Ik King | 292,700,000 | Interest in Controlled Corporation | 73.01% | | Comwell Investment Limited | 292,700,000 | Beneficial Owner | 73.01% | - The note explains that these shares are held by Comwell Investment Limited, an indirect wholly-owned subsidiary of World Chinese Media, making World Chinese Media the ultimate holding company of the Company[63] Related Party Transactions During the year, the Group conducted transactions with related parties in the ordinary course of business, detailed in Note 31 to the financial statements; these transactions did not constitute discloseable connected transactions or continuing connected transactions under the Listing Rules - The Group has transactions with related parties in the ordinary course of business, detailed in Note 31; these transactions do not constitute discloseable connected transactions under the Listing Rules[68] Corporate Governance Report This report outlines the company's corporate governance framework and practices, confirming compliance with Appendix C1 of the Listing Rules' Corporate Governance Code throughout the reporting period; it details the Board's composition and functions, the responsibilities and operations of various committees (Executive, Remuneration, Nomination, Audit), risk management and internal control systems, and shareholder rights and communication policies, emphasizing the company's commitment to high standards of transparency, accountability, and fairness to protect shareholder interests Board of Directors The Board comprises six directors, including one non-executive director (Chairman), two executive directors, and three independent non-executive directors, ensuring a balanced structure; the Board is responsible for formulating group strategy, monitoring management performance, and fulfilling corporate governance duties, having held four meetings during the reporting period with full attendance - The Board comprises six directors, with independent non-executive directors constituting half (three members), ensuring checks and balances and independence[81] Board Meeting Attendance | Director Name | Board Meeting Attendance | | :--- | :--- | | Ms. Cheung Tsung | 4/4 | | Mr. Tiong Kiu Chiong | 4/4 | | Mr. Lam Pak Cheung | 4/4 | | Mr. Yu Hon To | 4/4 | | Mr. Lau Chi Wah | 4/4 | | Ms. Wong Hung Yuen Yee | 4/4 | Governance Structure (Committees) The company has established four committees—Executive, Remuneration, Nomination, and Audit—to assist the Board in its duties; the Remuneration, Nomination, and Audit Committees are majority-led by independent non-executive directors and chaired by them, ensuring independent operation, with the report detailing each committee's members, responsibilities, and annual work summary - The Audit Committee, composed of three independent non-executive directors, oversees financial reporting, external auditor relations, and reviews risk management and internal control systems[99][100] - The Remuneration Committee is responsible for recommending remuneration policies and structures for directors and senior management to the Board[91][94] - The Nomination Committee reviews the Board's structure, size, and composition, and identifies suitable director candidates[93][95] Risk Management and Internal Control The Board is responsible for ensuring the Group establishes and maintains robust and effective risk management and internal control systems; the Group has implemented systematic procedures to identify, assess, and manage significant risks, overseen by the Audit Committee and the Executive Committee (acting as the Risk Management Committee), and has also adopted whistleblowing and anti-bribery and corruption policies; the Board reviewed the adequacy and effectiveness of these systems during the year and deemed them effective - The Group has a systematic risk management framework, with the Executive Committee acting as the Risk Management Committee, responsible for overseeing the framework's implementation[118][120] - World Chinese Media's internal audit department, the holding company, is responsible for assessing the adequacy and effectiveness of the Group's risk management and internal control systems[122] - The Group has adopted whistleblowing and anti-bribery and corruption policies to ensure high levels of transparency, integrity, and accountability[123][125] Shareholders' Rights This section clarifies the company's measures to protect shareholder rights, including communication policies and procedures for convening extraordinary general meetings; the company communicates with shareholders through various channels such as general meetings, financial reports, and announcements, and shareholders holding at least 10% of the voting share capital may request an extraordinary general meeting - Shareholders holding not less than one-tenth of the company's paid-up share capital may submit a written request to the Board to convene an extraordinary general meeting[132] Independent Auditor's Report PricewaterhouseCoopers, the auditor, issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2025, affirming that the statements present a true and fair view of the Group's financial position and operating results; 'Revenue Recognition' was specifically highlighted as a key audit matter due to its significant amount and the extensive audit effort involved Independent Auditor's Report PricewaterhouseCoopers, the auditor, issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2025, affirming that the statements present a true and fair view of the Group's financial position and operating results; 'Revenue Recognition' was specifically highlighted as a key audit matter due to its significant amount and the extensive audit effort involved - The auditor believes the consolidated financial statements truly and fairly reflect the Group's financial position and performance in accordance with International Financial Reporting Standards, issuing an unmodified opinion[136] - Revenue recognition was identified as a key audit matter; the auditor, through procedures such as policy evaluation, internal control testing, and sample testing of revenue transactions, concluded that the Group's revenue recognition was adequately supported by evidence[142][144][145] Consolidated Financial Statements This section contains the Group's core financial statements, comprehensively reflecting its financial performance, position, and cash flows during the reporting period; overall, the Group faced operational pressure in FY2025, with declining revenue, widening losses, deteriorating balance sheet, negative operating cash flow, and primary reliance on financing activities to sustain operations Consolidated Statement of Profit or Loss For the year ended March 31, 2025, the Group's revenue was HKD 32.31 million, an 18% decrease from HKD 39.51 million last year; gross profit significantly narrowed to HKD 0.49 million, and due to relatively stable administrative and selling expenses, operating loss expanded to HKD 21.73 million, resulting in a net loss for the year of HKD 25.83 million and a basic loss per share of HKD 0.064 Consolidated Statement of Profit or Loss Key Data (HKD thousands) | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenue | 32,314 | 39,506 | | Gross Profit | 486 | 5,081 | | Operating Loss | (21,725) | (17,733) | | Loss for the Year | (25,831) | (21,011) | | Basic Loss Per Share (HK cents) | (6.4) | (5.2) | Consolidated Statement of Financial Position As of March 31, 2025, the Group's total assets were HKD 37.86 million, and total liabilities were HKD 113 million, leading to a total deficit (negative equity) of HKD 75.33 million, further worsening from HKD 49.16 million last year; the increase in liabilities primarily stemmed from loans from a fellow subsidiary rising from HKD 78 million to HKD 98 million Consolidated Statement of Financial Position Key Data (HKD thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Assets | 37,857 | 40,091 | | Total Liabilities | 113,189 | 89,251 | | Total Deficit | (75,332) | (49,160) | | Cash and Cash Equivalents | 28,948 | 29,580 | | Loans from a Fellow Subsidiary | 98,000 | 78,000 | Consolidated Statement of Cash Flows This year, the Group's net cash outflow from operating activities was HKD 20.75 million, largely consistent with last year; financing activities generated a net cash inflow of HKD 19.93 million, primarily from new loans from a fellow subsidiary, which was crucial for offsetting operating losses, resulting in a net decrease in cash and cash equivalents of HKD 0.63 million Consolidated Statement of Cash Flows Key Data (HKD thousands) | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (20,745) | (19,654) | | Net Cash From/(Used in) Investing Activities | 187 | (161) | | Net Cash From Financing Activities | 19,931 | 12,935 | | Net Decrease in Cash and Cash Equivalents | (627) | (6,880) | Notes to the Consolidated Financial Statements This section provides detailed supplementary information to the financial statements, explaining accounting policies, key estimates, risk management, and the specific composition of various statement items; key notes include segment information (Note 5), revealing business line performance; related party transactions (Note 31), highlighting the Group's reliance on funding and services within its controlling shareholder's system; and loans from a fellow subsidiary (Note 26), which are crucial for the Group's liquidity Note 5 Revenue and Segment Information This note details the Group's revenue composition and the performance of each operating segment; the Entertainment and Lifestyle business is the primary revenue source but also the largest source of loss, while the Watches and Automotive business, smaller in revenue, turned from profit to loss this year, with most revenue (approximately 84%) recognized over time as advertising income FY2025 Segment Performance (HKD thousands) | Operating Segment | Revenue | Segment Loss | | :--- | :--- | :--- | | Entertainment and Lifestyle Business | 20,854 | (19,769) | | Watches and Automotive Business and Others | 11,460 | (1,251) | | Total | 32,314 | (21,020) | Note 26 Loans from a Fellow Subsidiary This note discloses the Group's key financing source; at year-end, the Group had a loan balance of HKD 98 million from a fellow subsidiary, with a total facility of HKD 150 million; this HKD-denominated loan carries an interest rate of HIBOR plus 1.4% and matures on March 31, 2028 Fellow Subsidiary Loan Details (HKD thousands) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Facility Limit | 150,000 | 100,000 | | Utilized Facility | 98,000 | 78,000 | | Unutilized Facility | 52,000 | 22,000 | Note 31 Related Party Transactions This note details transactions between the Group and its ultimate parent, World Chinese Media, and its subsidiaries; these transactions cover administrative support, information system services, office and parking space rentals, and crucial loan financing; this year, the Group paid HKD 3.91 million in loan interest and HKD 2.80 million for administrative support and other services to related parties, indicating the Group's close operational and financial ties to its controlling shareholder's system Key Related Party Transaction Expenses (FY2025, HKD thousands) | Transaction Type | Amount | | :--- | :--- | | Loan Interest Expense | 3,911 | | Administrative Support and IT Services Fees | 2,804 | | Office, Warehouse and Car Park Rental and License Fees | 1,117 | Five-Year Financial Summary This section presents key performance and financial position data for the Group's past five fiscal years; the data indicates a continuous decline in the Group's revenue since 2021 and an expanding trend in loss attributable to owners of the company, while the Group's financial position has deteriorated year-on-year, shifting from net assets in 2021 to a continuously expanding net liability (total deficit) Five-Year Financial Summary This section presents key performance and financial position data for the Group's past five fiscal years; the data indicates a continuous decline in the Group's revenue since 2021 and an expanding trend in loss attributable to owners of the company, while the Group's financial position has deteriorated year-on-year, shifting from net assets in 2021 to a continuously expanding net liability (total deficit) Five-Year Performance Trend (HKD thousands) | Fiscal Year | 2021 | 2022 | 2023 | 2024 | 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 45,943 | 45,039 | 41,166 | 39,506 | 32,314 | | Loss Attributable to Owners of the Company | (17,255) | (12,332) | (18,507) | (21,011) | (25,831) | Five-Year Assets and Liabilities Trend (HKD thousands) | Fiscal Year End | 2021 | 2022 | 2023 | 2024 | 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Capital and Reserves Attributable to Owners of the Company | 5,513 | (9,037) | (22,731) | (49,160) | (75,332) |