华盛国际控股(01323) - 2025 - 年度财报

Company Information This section provides fundamental company information, including board members, committee structures, and key operational details - The report provides fundamental company information, including board members, committee structures, registered office, principal place of business, share registrar, principal bankers, and auditors[4][5] Chairman's Statement Performance and Outlook The Group's core concrete business faced weak demand and increased competition, leading to reduced revenue, yet remains a strong income source, with cautious optimism for future diversification - The business environment was challenging, with cautious investor sentiment in the Chinese real estate market and sluggish overall concrete demand due to uneven infrastructure development, compounded by global inflationary pressures, high interest rates, and geopolitical tensions[6] Concrete Business Revenue Changes | Item | Current Year (million HKD) | Prior Year (million HKD) | Change (million HKD) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Concrete Business Revenue | Approx. 372.6 | Approx. 547.8 | -175.2 | -32.0% | - The Group maintains cautious optimism for its concrete business, anticipating new opportunities from Hainan Free Trade Port development, and will continue to seek investment opportunities for business diversification and financial risk mitigation[7] Management Discussion and Analysis Annual Performance Overview | Indicator | Current Year (thousand HKD) | Prior Year (thousand HKD) | Change | | :--- | :--- | :--- | :--- | | Net Loss Attributable to Owners of the Company | 92,400 | 31,400 | Loss widened | | Revenue from Continuing Operations | 372,566 | 547,762 | -32.0% | | Gross Profit from Continuing Operations | 65,199 | 136,300 | -52.2% | - The Group disposed of its money lending business during the year, classified as a discontinued operation, recording a net loss of approximately 13.7 million HKD[10][22] Business and Financial Review The Group's net loss widened to 92.4 million HKD due to a 32.0% decline in concrete business revenue from weak real estate and intense competition, while maintaining a stable financial position with a 2.1 current ratio Analysis of Continuing Operations Continuing concrete operations saw revenue drop 32.0% to 373 million HKD and gross profit by 52.2% due to weak demand and competition, resulting in a widened pre-tax loss of 84.7 million HKD Key Indicators of Continuing Operations | Indicator | Current Year (million HKD) | Prior Year (million HKD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 372.6 | 547.8 | -32.0% | | Gross Profit | 65.2 | 136.3 | -52.2% | | Gross Profit Margin | 17.5% | 24.9% | -7.4pp | | Loss Before Income Tax | 84.7 | 3.2 | Loss widened | - Revenue decline is primarily attributed to fewer new projects due to China's real estate market policy adjustments and intense market competition, resulting in an approximate 9% decrease in average concrete product selling prices[11] - Other net losses expanded to approximately 42.8 million HKD, primarily due to increased impairment losses on trade receivables, property and inventory write-offs from typhoons, and no bond discount income recognized this year[16] Analysis of Discontinued Operations The Group disposed of its money lending business, classified as discontinued operations, which recorded a net loss of approximately 13.7 million HKD, a reduction from the prior year Loss from Discontinued Operations | Item | Current Year (thousand HKD) | Prior Year (thousand HKD) | | :--- | :--- | :--- | | Net Loss from Discontinued Operations | 13,700 | 24,900 | Liquidity and Financial Resources As of March 31, 2025, the Group's cash and equivalents decreased, but liquidity remained healthy with a 2.1 current ratio and 29.6% gearing ratio, reflecting sufficient financial resources Financial Position Indicators (as of March 31, 2025) | Indicator | Current Year-End | Prior Year-End | | :--- | :--- | :--- | | Cash and Cash Equivalents | Approx. 76 million HKD | Approx. 163 million HKD | | Total Debt | Approx. 226 million HKD | Approx. 329 million HKD | | Current Ratio | 2.1 | 2.5 | | Gearing Ratio | 29.6% | 34.2% | Capital Structure The Group's share capital structure remained unchanged with 756 million issued ordinary shares, while it holds several outstanding bonds, including a USD 20 million and two HKD bonds - As of March 31, 2025, the company's issued share capital comprised 755,654,743 ordinary shares, with no changes to the capital structure during the year[30] - The Group has three main outstanding bonds: a USD 20 million seven-year bond issued in March 2021 at 4.2% p.a.; a HKD 25 million bond issued in November 2021 at 8% p.a. (extended); and a HKD 63 million six-year bond issued in March 2024 at 3.5% to 10.5% p.a.[31][32] Significant Acquisitions and Disposals The Group increased its stake in Wisdom Moon to 17.92% for 45 million HKD and disposed of 65% of its money lending business, Honest Finance, for 32.5 million HKD - In November 2024, the Group increased its holding of Wisdom Moon's Class A shares for 45 million HKD, resulting in an indirect 17.92% interest, recognized as an equity investment at fair value[42] - As of March 31, 2025, the Group disposed of 65% of Honest Finance's equity for 32.5 million HKD (12 million HKD cash, 20.5 million HKD promissory notes), after which Honest Finance ceased to be a subsidiary[43] Events After Reporting Period Subsequent to the reporting period, the Group acquired four Hong Kong industrial properties for 16.5 million HKD in April 2025, completed in June, aiming for stable rental income and capital appreciation - In April 2025, the Group agreed to acquire four Hong Kong industrial properties for 16.5 million HKD, aiming for stable rental income and capital appreciation, with the acquisition completed in June 2025[45][417] Prospects The Group anticipates continued challenges from slow real estate recovery, sluggish concrete demand, and rising costs, focusing on strict cost control, efficiency, and strategic diversification for long-term development - Significant challenges are anticipated, with the real estate and construction markets remaining sluggish, and ready-mixed concrete demand expected to continue to be weak[46] - The Group's strategy will focus on strict cost control, enhancing efficiency, and actively seeking investment opportunities for business diversification to improve overall performance[46] Profiles of Directors and Senior Management Directors and Senior Management Background This section details the personal profiles of executive, non-executive, and independent non-executive directors, and senior management, including their qualifications and experience - Executive Directors Mr. Wong Ming Hei and Mr. Kong Chi Keung were promoted internally, possessing extensive project management and business operations experience[47] - Non-Executive Director and Chairman Mr. Li Renjie has extensive experience in the information technology industry, having served as CTO and CEO for several technology companies[48] - Independent Non-Executive Directors Mr. Kwok Kam Tim, Mr. Cho Ping Cheong, and Ms. Chu Hiu Ka possess professional backgrounds and experience in accounting, financial management, corporate governance, and project management[49][50][53] Corporate Governance Report Corporate Governance Practices and the Board The Company maintained high corporate governance standards, complying with the HKEX Code, with a balanced Board comprising executive, non-executive, and independent non-executive directors, all adhering to securities trading standards and engaging in training - Throughout the current year and up to the report date, the Company has consistently complied with all code provisions of the Corporate Governance Code[56] - The Board comprises 6 directors: 2 executive, 1 non-executive (Chairman), and 3 independent non-executive directors, meeting Listing Rules requirements[62] Directors' Meeting Attendance | Director | Board Meetings | Audit Committee | Nomination Committee | Remuneration Committee | General Meetings | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Wong Ming Hei | 6/6 | N/A | N/A | N/A | 1/1 | | Mr. Kong Chi Keung | 6/6 | N/A | N/A | N/A | 1/1 | | Mr. Li Renjie | 6/6 | N/A | N/A | N/A | 1/1 | | Mr. Kwok Kam Tim | 6/6 | 2/2 | 1/1 | 1/1 | 1/1 | | Mr. Cho Ping Cheong | 6/6 | 2/2 | 1/1 | 1/1 | 1/1 | | Ms. Chu Hiu Ka | 6/6 | 2/2 | 1/1 | 1/1 | 1/1 | Board Committees The Board has independent Audit, Remuneration, and Nomination Committees, each with clear mandates to oversee financial reporting, risk, internal controls, compensation, and board structure, ensuring robust corporate governance - The Audit, Remuneration, and Nomination Committees are all composed entirely of independent non-executive directors, ensuring their independent operation[73][81][83] - The Audit Committee held 2 meetings, reviewing annual and interim reports, and meeting with external auditors and internal audit consultants, concluding the Group's risk management and internal control systems are effective[74][75] - The Group engaged an external consultant for internal audit, reviewing the ready-mixed concrete business's financial reporting, taxation, cash, and treasury management systems, finding no material deficiencies[79][80] - The Nomination Committee reviewed and confirmed the Board Diversity Policy, concluding that the current Board achieved measurable objectives in gender, age, and professional experience[88][89] Shareholder Rights and Communication The report outlines shareholder rights, including the right to requisition extraordinary general meetings, and the company's communication policy, which includes a dividend policy balancing growth needs with shareholder returns - Shareholders holding not less than one-tenth of the company's paid-up share capital have the right to requisition the Board to convene an extraordinary general meeting[95] - The Company has adopted a dividend policy, where dividend declarations consider the Group's operating results, financial position, funding needs, and future prospects[103] Directors' Report Business, Risks and Compliance The Group primarily produces ready-mixed concrete, with the Board not recommending a final dividend, while emphasizing stakeholder relations, regulatory compliance, and managing risks like raw material costs, credit, and operations - The Group's principal business for the current year was the production and sale of ready-mixed concrete[107] - The Directors do not recommend the payment of a final dividend for the current year[109] - The Group faces key risks including raw material supply disruption or price fluctuations, customer bad debt, loss of major customers or economic downturn, and inadequate internal procedures, people, or systems[117][118][119][120] Share Capital, Share Options and Shareholder Interests The company's share capital remained unchanged, its 2015 share option scheme expired, and no new options were granted or exercised, with Capital Wealth Global Limited holding 21.18% as the largest shareholder - The company's 2015 share option scheme expired on February 26, 2025, with no share options granted, exercised, or cancelled during the year, and no outstanding options[129] Major Shareholders' Interests (as of March 31, 2025) | Name / Company | Nature of Interest | Total Shares Held | Approximate Percentage of Company's Interest | | :--- | :--- | :--- | :--- | | Capital Wealth Global Limited | Beneficial owner | 160,058,100 | 21.18% | | Chang Chia-Hsiang | Interest in controlled corporation | 160,058,100 | 21.18% | | Lam Kwok Hung Raymond | Beneficial owner | 55,000,000 | 7.28% | | Tang Hon Kwong | Beneficial owner | 50,693,800 | 6.71% | - During the current year, the Company did not engage in any connected transactions or continuing connected transactions[146] Major Suppliers and Customers The Group exhibited high supplier and customer concentration, with the largest supplier accounting for 46.2% of purchases and the top five customers representing 22.0% of sales, with no related party interests Supplier and Customer Concentration | Item | Percentage (Current Year) | Percentage (Prior Year) | | :--- | :--- | :--- | | Largest Supplier as % of Total Purchases | 46.2% | 45.1% | | Top Five Suppliers as % of Total Purchases | 83.4% | 86.0% | | Largest Customer as % of Total Sales | 6.0% | 6.7% | | Top Five Customers as % of Total Sales | 22.0% | 22.9% | Independent Auditor's Report Audit Opinion and Key Audit Matters The auditor issued an unmodified opinion on the consolidated financial statements, highlighting key audit matters including impairment of intangible assets and goodwill, impairment testing of receivables, and valuation of equity investments - The auditor believes the consolidated financial statements present a true and fair view of the Group's financial position and performance in accordance with Hong Kong Financial Reporting Standards, issuing an unmodified opinion[163] - Key audit matters include: impairment of other intangible assets and goodwill due to significant balances and management judgments; impairment testing of trade receivables, retention receivables, other receivables, and prepayments due to significant balances and estimates; and valuation of equity investments at fair value through other comprehensive income due to significant balances and fair value measurement judgments[165][167][169][174] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group's total loss significantly widened to 92.38 million HKD, with continuing operations (concrete) losing 78.66 million HKD and discontinued operations (money lending) losing 13.72 million HKD, resulting in a basic loss per share of 12.22 HK cents Consolidated Statement of Profit or Loss Summary | Indicator (thousand HKD) | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Continuing Operations | | | | Revenue | 372,566 | 547,762 | | Gross Profit | 65,199 | 136,313 | | Loss for the Year | (78,664) | (6,567) | | Discontinued Operations | | | | Loss for the Year | (13,716) | (24,874) | | Total | | | | Loss for the Year Attributable to Owners of the Company | (92,380) | (31,441) | | Total Comprehensive Loss for the Year Attributable to Owners of the Company | (62,545) | (44,531) | | Basic Loss Per Share (HK cents) | (12.22) | (6.21) | Consolidated Statement of Financial Position As of March 31, 2025, total assets decreased to 1.465 billion HKD, total liabilities to 568 million HKD, and net assets to 898 million HKD, with key assets including receivables, equity investments, and goodwill Consolidated Statement of Financial Position Summary (as of March 31) | Indicator (thousand HKD) | 2025 | 2024 | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 565,505 | 464,724 | | Current Assets | 899,904 | 1,171,255 | | Total Assets | 1,465,409 | 1,635,979 | | Liabilities and Equity | | | | Current Liabilities | 421,160 | 460,804 | | Non-current Liabilities | 146,397 | 214,778 | | Total Liabilities | 567,557 | 675,582 | | Equity Attributable to Owners of the Company | 897,852 | 960,397 | Consolidated Statement of Changes in Equity Total equity attributable to owners decreased by 62.55 million HKD to 898 million HKD, primarily due to a 92.38 million HKD loss, partially offset by 38.55 million HKD in other comprehensive income from equity investments Summary of Changes in Equity (thousand HKD) | Item | Amount | | :--- | :--- | | Total Equity as at March 31, 2024 | 960,397 | | Loss for the Year | (92,380) | | Total Other Comprehensive Income (Loss) | 29,835 | | Total Equity as at March 31, 2025 | 897,852 | Consolidated Statement of Cash Flows The Group's cash and cash equivalents decreased by 90.17 million HKD, with 129 million HKD net cash from operations offset by significant outflows from investing (89.57 million HKD) and financing (129 million HKD) activities, ending with 20.18 million HKD Cash Flow Summary (thousand HKD) | Item | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 128,703 | 96,748 | | Net Cash (Used in)/from Investing Activities | (89,572) | 9,901 | | Net Cash Used in Financing Activities | (129,302) | (11,615) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (90,171) | 95,034 | | Cash and Cash Equivalents at Beginning of Year | 110,827 | 15,092 | | Cash and Cash Equivalents at End of Year | 20,181 | 110,827 | Notes to the Consolidated Financial Statements Summary of Notes The notes detail the Group's accounting policies, key estimates, and judgments, covering segment information, discontinued operations, asset impairment tests, financial instrument fair value, related party transactions, and post-reporting events - Note 3 discloses the Group's principal accounting policies, including basis of consolidation, revenue recognition, leases, financial instruments, and impairment testing[202] - Note 4 explains management's significant judgments and estimates in financial statement preparation, particularly regarding goodwill and intangible asset impairment, receivables impairment, and fair value of financial instruments[275][276] - Notes 12 and 40 detail the disposal of Honest Finance (money lending business), classified as discontinued operations, which recorded a loss of approximately 14.82 million HKD on disposal[305][411][413] - Note 19 details the impairment testing of goodwill and intangible assets for the concrete business cash-generating unit, resulting in no impairment, while the money lending business's goodwill was fully impaired last year[317][320] - Note 42 discloses a significant post-reporting event: in April 2025, the Group agreed to acquire four industrial properties for 16.5 million HKD, with completion in June[417] Financial Summary Five-Year Financial Summary The five-year financial summary shows continuous revenue decline since 2021, losses in the last three years (widening in 2025), and a downward trend in total and net assets over the past two years Five-Year Performance Summary (thousand HKD) | For the Year Ended March 31 | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 383,284 | 565,906 | 690,082 | 864,508 | 928,691 | | (Loss)/Profit for the Year | (92,380) | (31,441) | (54,774) | 31,293 | 43,887 | Five-Year Assets and Liabilities Summary (thousand HKD) | For the Year Ended March 31 | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 1,465,409 | 1,635,979 | 1,798,802 | 2,025,253 | 1,734,467 | | Total Liabilities | (567,557) | (675,582) | (834,500) | (1,069,778) | (815,298) | | Net Assets | 897,852 | 960,397 | 964,302 | 955,475 | 919,169 |