金慧科技(08295) - 2025 - 年度财报

Company Profile Company Profile Jinhui Technology Group Co, Ltd is a Hong Kong-based investment holding company founded in 2010 and listed on the GEM of the Hong Kong Stock Exchange, expanding its main business to provide back-office, comprehensive marketing, agency, and data center services in China after acquiring the KingNine Group in October 2020 - The Group is an investment holding company headquartered in Hong Kong and listed on the GEM of the Hong Kong Stock Exchange (stock code: 08295)[12][15] - The Group completed the acquisition of the KingNine Group on October 15, 2020, which constituted a very substantial acquisition and a connected transaction[13] - The Group's principal businesses include back-office services (mainly providing customer service solutions and establishing contact service systems and centers), comprehensive marketing and agency services, and data center services[15] Corporate Information Corporate Information This chapter provides key corporate information, including core management, committee members, registered office, principal place of business, share registrar, auditor, and principal bankers - The Chairman of the Board is Mr Qiu Xiaojian, and the Chief Executive Officer is Mr Hu Shilong[17][18] - The company's auditor is Ernst & Young[20] - The company has an Audit Committee, a Nomination Committee, and a Remuneration Committee, chaired by Ms Li Guiying, Mr Qiu Xiaojian, and Mr Zeng Liang, respectively[17] Management Discussion and Analysis Business Review The Group actively responded to a complex global economy and technological changes, maintaining a focus on customer satisfaction and sustainable business development, with total revenue remaining stable at approximately RMB 1.2407 billion | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Total Revenue | Approx. RMB 1,240.7 million | Approx. RMB 1,240.9 million | | Back-office Service Revenue | Approx. RMB 1,190.5 million | - | | Back-office Service Revenue as % of Total | 96.0% | - | - The Group continued to strengthen business relationships with leading clients in sectors like internet, financial securities, manufacturing, retail, and logistics, while expanding into new areas such as data annotation, review, and commercialization services[32][35] - During the reporting period, the Group obtained 2 new invention patents and multiple software copyrights, accumulating a total of 5 invention patents and 350 software copyrights[33][35] - The Group built and renovated several self-operated contact service centers in multiple locations, bringing the total number of completed workstations in its 52 self-operated centers to 19,013[34][36] Financial Review The Group's total revenue slightly decreased to RMB 1.2407 billion, while increased service costs and a significant goodwill impairment led to a wider loss attributable to owners of RMB 207.7 million | Financial Metric (RMB'000) | FY2025 | FY2024 | | :--- | :--- | :--- | | Total Revenue | 1,240,654 | 1,240,904 | | Cost of Services | 1,199,889 | 1,113,027 | | Gross Profit | 40,765 | 127,877 | | Goodwill Impairment Loss | 56,742 | 224,838 | | Loss Attributable to Owners of the Company | 207,729 | 197,382 | | Basic Loss Per Share (RMB cents) | 4.35 | 4.13 | | Total Assets (End of Period) | 1,029,100 | 1,278,300 | | Net Assets (End of Period) | 617,600 | 820,700 | - The increase in service costs, leading to a decline in gross margin, was primarily due to proactive expansion and upgrades in personnel, equipment, and work environments to adapt to new technologies like AI, without a corresponding growth in revenue[40][41] - A goodwill impairment loss of approximately RMB 56.7 million was recognized during the year based on conservative future sales growth forecasts for the KingNine Group, resulting in the full impairment of goodwill as of March 31, 2025[44][46][52] | Key Assumptions for Goodwill Impairment Test | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Revenue Growth Rate | 2.5%–6.4% | 3%–11.4% | | Perpetual Growth Rate | 2% | 2.5% | | Discount Rate | 19.2% | 21.6% | Capital Structure, Liquidity and Financial Resources The Group's operations and investments are mainly funded by internal resources and interest-bearing borrowings, with an improved current ratio but a higher gearing ratio as of March 31, 2025 | Financial Metric (RMB) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Cash and Bank Balances | Approx. 110.9 million | Approx. 86.4 million | | Interest-bearing Bank and Other Borrowings | Approx. 234.6 million | Approx. 198.0 million | | Current Ratio | 4.8 | 2.2 | | Gearing Ratio | 38.0% | 24.1% | - The Group's operational and investment capital is primarily sourced from internal resources and interest-bearing bank and other borrowings[67] Employees and Remuneration Policies As of March 31, 2025, the Group's employee count increased to 14,377, with total staff costs for the year amounting to approximately RMB 852.8 million | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Number of Employees | 14,377 | 13,446 | | Total Annual Staff Costs | Approx. RMB 852.8 million | - | Future Plans for Material Investments or Capital Assets The Group plans to focus on high-quality corporate clients in the internet and financial industries, considering synergistic acquisitions or investments to enhance its service offerings and core competitiveness - Future focus will be on high-quality corporate clients in the internet and financial sectors, enriching service types to increase customer stickiness[82][87] - The Group will consider timely acquisitions or investments in assets with synergistic effects to expand service categories and customer base, and to enhance R&D capabilities and core competitiveness[83][87] Outlook Despite economic uncertainties, the Group sees opportunities in AI and the digital economy, planning to expand back-office services and develop digital marketing and local life services - Despite macroeconomic challenges, the wave of artificial intelligence and data elements presents development opportunities for the corporate services industry[89][90][92] - Back-office services: The Group will continue to secure new orders from telecom operators, traditional financial institutions, and new leading internet companies, while systematically developing digital services like data annotation and review[96][98] - Internet marketing: The Group will continue to expand its digital marketing services and actively develop its local life and digital marketing businesses to achieve brand-performance integration[97][98] Biographical Details of Directors Executive Directors This section details the personal biographies, professional backgrounds, and positions held by the company's executive directors within and outside the Group - Executive Directors include: - Mr Qiu Xiaojian (Chairman) - Mr Hu Shilong (Chief Executive Officer) - Mr Li Xiang - Ms Zhou Fang - Ms Liu Xiaochen - Mr Xu Gang - Mr Wang Rui[105][110][116][118][123][125][127] Independent Non-Executive Directors This section details the personal biographies, professional backgrounds, and positions held by the company's independent non-executive directors within and outside the Group - Independent Non-Executive Directors include: - Mr Zeng Liang - Mr Wang Li - Mr Yang Hongjun - Ms Li Guiying[132][134][138][140] Directors' Report Principal Activities The company's principal activity is investment holding, with its subsidiaries primarily engaged in back-office, comprehensive marketing, agency, and data center services - The principal activity of the Company is investment holding, while its subsidiaries are mainly engaged in investment holding, providing back-office services (primarily customer service solutions and establishing contact service systems and centers), comprehensive marketing and agency services, and data center services[147][151] Principal Risks and Uncertainties The Group's main risks include compliance risks related to the confidentiality of personal information and risks associated with its contractual arrangements (VIE structure) due to foreign investment restrictions in China - Compliance risk: As a customer service outsourcer, the Group handles a large amount of personal information, posing a risk of data leakage; it mitigates this through strict internal controls, confidentiality agreements, and ISO 27001 certification[149][153][156][168] - Contractual arrangement risk: Due to Chinese legal restrictions on foreign investment in value-added telecommunications services (such as call centers), the Group controls its PRC operating entities through contractual arrangements (VIE structure), which entails related legal and operational risks[164][169][232] Directors' and Chief Executive's Interests This section discloses the interests of directors and the chief executive in the company's shares as of March 31, 2025, with Mr Hu Shilong holding approximately 64.45% of the voting rights | Director/Chief Executive | Capacity | Number of Shares Held | Approx. % of Company's Shareholding | | :--- | :--- | :--- | :--- | | Mr Hu Shilong | Interest in a controlled corporation | 212,640,219 | 4.45% | | | Interest of a party to a voting rights entrustment deed | 2,865,644,243 | 60.00% | | Ms Zhou Fang | Interest in a controlled corporation | 113,560,919 | 2.38% | Substantial Shareholders' Interests This section discloses the interests of substantial shareholders holding 5% or more of the company's shares as of March 31, 2025, with Zhong Zhi Xin Zhuo Capital Limited being the largest single shareholder | Shareholder Name | Capacity | Number of Shares Held | Approx. % of Company's Shareholding | | :--- | :--- | :--- | :--- | | Zhong Zhi Xin Zhuo Capital Company Limited | Beneficial owner | 2,409,823,718 | 50.46% | | Kang Bang Qi Hui (HK) Company Limited | Beneficial owner | 455,820,525 | 9.54% | | Tian Xi Capital Company Limited | Interest in a controlled corporation | 2,865,644,243 | 60.00% | | Gfly Ltd | Beneficial owner | 437,500,000 | 9.16% | Contractual Arrangements (VIE Structure) The Group controls its main PRC operating entity, Dalian Jinhui Group, through a VIE structure to comply with foreign investment restrictions, with these arrangements contributing 99.5% of total revenue this year - Due to PRC legal restrictions on foreign investment in value-added telecommunications services (such as call centers), the Group uses contractual arrangements (VIE structure) to control its operating entities in mainland China (Consolidated Affiliated Entities)[227][232][238] - The contractual arrangements, including Exclusive Business Cooperation, Exclusive Option, Share Pledge, and Power of Attorney agreements, are designed to transfer economic benefits and control of the operating entities to the Group[263][273][279][284] - For the fiscal year, the Consolidated Affiliated Entities controlled via the VIE structure generated revenue of approximately RMB 1.2344 billion, accounting for 99.5% of the Group's total revenue, with net assets of approximately RMB 549.3 million[296][297] - The independent non-executive directors and the company's auditor have reviewed the contractual arrangements for the year and confirmed their approval, compliance with agreements, and that no dividends were distributed to equity holders without being transferred to the Group[313][317] Major Customers and Suppliers The Group exhibits a high concentration of customers and suppliers, with the top five customers and suppliers accounting for 77.5% of revenue and 21.2% of service costs, respectively | Concentration | Percentage of Total Revenue/Cost | | :--- | :--- | | Top Five Customers | 77.5% | | Largest Customer | 34.9% | | Top Five Suppliers | 21.2% | | Largest Supplier | 13.9% | Corporate Governance Report Corporate Governance Practices The company complied with all code provisions of the Corporate Governance Code during the year, with separate individuals serving as Chairman and Chief Executive Officer - Throughout the reporting year, the company has applied and complied with all code provisions of the Corporate Governance Code[371][375] - The Board is responsible for formulating the Group's overall strategy and supervising its development, with Audit, Remuneration, and Nomination Committees established with written terms of reference[373][386] - The Board has conducted an annual review of the Group's risk management and internal control systems and considers them effective and adequate for the year[425][441] - The company has adopted a shareholder communication policy to maintain effective communication through various channels such as the company website, financial reports, and general meetings[466][468] Independent Auditor's Report Opinion The auditor, Ernst & Young, concluded that the consolidated financial statements give a true and fair view of the Group's financial position, performance, and cash flows in accordance with HKFRSs - The auditor issued an unqualified opinion on the consolidated financial statements for the year, stating they give a 'true and fair view' of the Group's financial position and performance[474][475] Key Audit Matters The key audit matters for the year were the impairment of goodwill and intangible assets and the impairment of trade receivables, both involving significant management judgment - Key Audit Matter 1: Impairment of goodwill and intangible assets with indefinite useful lives, which involved complex management judgments on cash flow forecasts and discount rates, was addressed by the auditor through procedures including assessing independent valuers and reviewing valuation methodologies[483][487] - Key Audit Matter 2: Impairment of trade receivables, which involved significant management judgment based on the Expected Credit Loss (ECL) model, was addressed by the auditor through procedures including assessing the ECL model and examining forward-looking factors[488][492] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group's revenue remained stable at RMB 1.2407 billion, but the loss attributable to owners widened to RMB 207.7 million due to higher service costs and goodwill impairment | Item (RMB'000) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 1,240,654 | 1,240,904 | | Gross Profit | 40,765 | 127,877 | | Loss before tax | (207,063) | (199,917) | | Loss for the year | (203,383) | (204,947) | | Loss attributable to owners of the Company | (207,729) | (197,382) | | Basic and diluted loss per share (RMB cents) | (4.35) | (4.13) | Consolidated Statement of Financial Position As of March 31, 2025, the Group's total assets decreased to RMB 1.029 billion, primarily due to the full impairment of goodwill and a reduction in trade receivables | Item (RMB'000) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total non-current assets | 323,458 | 440,522 | | Total current assets | 705,623 | 837,763 | | Total assets | 1,029,081 | 1,278,285 | | Total current liabilities | 147,843 | 387,978 | | Total non-current liabilities | 263,589 | 69,616 | | Total liabilities | 411,432 | 457,594 | | Net assets | 617,649 | 820,691 | | Equity attributable to owners of the Company | 609,213 | 816,601 | Consolidated Statement of Cash Flows The Group's net cash from operating activities increased to RMB 74.13 million, and the year-end cash and cash equivalents balance grew to RMB 104.8 million | Item (RMB'000) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash flows from operating activities | 74,128 | 60,267 | | Net cash flows used in investing activities | (15,453) | (18,916) | | Net cash flows used in financing activities | (36,675) | (124,305) | | Net increase/(decrease) in cash and cash equivalents | 22,000 | (82,954) | | Cash and cash equivalents at end of year | 104,758 | 82,673 | Five Years' Financial Summary Five Years' Financial Summary This section summarizes key performance, asset, and liability data for the past five fiscal years, showing continuous revenue growth since FY2021 but consecutive losses from FY2023 to FY2025 | Results (RMB'000) | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,240,654 | 1,240,904 | 888,622 | 734,021 | 264,368 | | Profit/(loss) for the year | (203,383) | (204,947) | (236,217) | 76,955 | 26,876 | | Assets and Liabilities (RMB'000) | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total assets | 1,029,081 | 1,278,285 | 1,498,220 | 1,579,053 | 1,415,441 | | Total liabilities | (411,432) | (457,594) | (472,943) | (488,177) | (399,810) | | Equity attributable to owners of the Company | 609,213 | 816,601 | 1,013,610 | 1,070,742 | 999,904 |