太兴置业(00277) - 2025 - 年度财报

Company Overview Company Information This section provides fundamental information about Tai Hing Group Holdings Limited, including its board of directors, committee members, principal bankers, registered office, share registrar, company secretary, auditors, and legal advisors - The company's board of directors is co-chaired and co-managed by Ms. Chan Yan Wai and Mr. Chan Yan Lun, with three committees: Audit, Remuneration, and Nomination[4] Chairman's Statement The Chairman's Statement reviews the Group's financial performance for the year ended March 31, 2025, noting reduced revenue due to lower rents and higher vacancy rates, and a loss attributable to shareholders primarily from a decrease in investment property fair value, while proposing dividends and outlining a cautious outlook for the challenging macroeconomic environment and Hong Kong property market Financial Results and Dividends For the year ended March 31, 2025, the Group's revenue decreased by 10% year-on-year to HKD 50.4 million, mainly due to lower rents from renewed leases and a slight increase in vacancy rates, resulting in a loss attributable to shareholders of HKD 54.5 million, primarily due to a decrease in investment property fair value; the Board recommends a final dividend of HKD 1.4 cents per share, bringing the total annual dividend to HKD 1.7 cents per share 2025 Fiscal Year Key Performance Indicators | Indicator | Amount | YoY Change | | :--- | :--- | :--- | | Revenue | HKD 50.4 million | -10% | | Loss Attributable to Shareholders | HKD 54.5 million | - | | Loss Per Share | HKD 19.6 cents | - | | Total Annual Dividend | HKD 1.7 cents per share | - | - The decrease in revenue was primarily due to lower rents from renewed property leases and a slight increase in vacancy rates[6] - The annual loss was mainly attributable to the decrease in the fair value of the Group's investment properties compared to the previous year[6] Business Outlook Looking ahead, the global economic outlook remains uncertain due to trade tensions, inflation, and geopolitical factors, while Hong Kong's economic recovery is slower than expected, with the office and retail leasing markets facing challenges from weak demand and oversupply; despite this, support measures from mainland China and Hong Kong governments offer hope, and the Group remains cautiously optimistic about Hong Kong's long-term market, prioritizing cost control, maintaining ample cash, and extremely low debt levels to navigate economic uncertainties - Hong Kong's office and retail leasing markets face challenges from weak demand and an oversupply of new space, coupled with high borrowing costs, geopolitical instability, and changes in consumer spending patterns, leading to declines in rental income and property values[10] - Mainland China and Hong Kong governments have introduced a series of support measures, such as promoting Hong Kong as a "preferred hub for mega events" and expanding the Individual Visit Scheme, aiming to boost market confidence and support the local economy[10] - The Group adopts a cautious approach, prioritizing cost control and sustainable development, and is well-positioned to mitigate the impact of a potential economic slowdown with ample net cash balance, extremely low debt levels, and stable investment income[11] Management Discussion and Analysis This section provides an in-depth analysis of the Group's financial and business performance, highlighting a decline in revenue and an expanded loss primarily due to a significant decrease in investment property fair value, while maintaining robust liquidity; it also reviews core business segments of property investment and financial investment, noting a decrease in property portfolio value and a significant increase in securities investment, and outlines the Group's business, operational, and financial risks along with corresponding management strategies Financial Review In the current fiscal year, the Group's property investment revenue decreased to HKD 50.4 million, and the loss attributable to shareholders expanded to HKD 54.5 million, primarily due to a significant decrease of HKD 91.1 million in the fair value of investment properties; despite this, the Group's net current assets remained at HKD 276.9 million, with low debt levels and a stable financial position, while finance costs decreased by 11.6% due to a reduction in bank loan principal 2025 Fiscal Year Financial Summary | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | HKD 50.4 million | HKD 56.0 million | | Annual Loss Attributable to Shareholders | HKD 54.5 million | HKD 9.8 million | | Basic Loss Per Share | HKD 19.6 cents | HKD 3.5 cents | | Net Asset Value Per Share | HKD 9.1 | HKD 9.3 | - The expanded loss attributable to shareholders was primarily due to a larger decrease in the fair value of investment properties (HKD 91.1 million), reduced rental income, and a shift from a net reversal of impairment losses on debt instruments in the prior year to an impairment loss in the current year[23] - As of March 31, 2025, the Group's net current assets amounted to HKD 276.9 million, bank borrowings were HKD 41.7 million, and it maintained a significant net cash balance[22][24] Business Review The Group's core businesses are property investment and financial investment; in property, the investment property portfolio, primarily located in Hong Kong, decreased in fair value by HKD 91.5 million to HKD 1,937.9 million during the year, with no acquisitions or disposals; in financial investment, the securities and treasury products portfolio increased to HKD 127.9 million, with a significant increase in listed equity investments; the number of employees slightly increased to 18, while total costs decreased - The investment property portfolio value decreased to HKD 1,937.9 million, primarily due to a reduction in the fair value of properties in Tsim Sha Tsui and Sheung Wan, with no property transactions during the year[34] - The securities investment and treasury products portfolio increased to HKD 127.9 million, with listed equity investments significantly rising from HKD 9.3 million to HKD 94.9 million, while debt securities decreased from HKD 63.7 million to HKD 33.0 million[34] Employee Information | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Total Employees | 18 persons | 16 persons | | Total Employee Costs | HKD 25.9 million | HKD 27.7 million | Our Risk Profile The Group categorizes risks into business, operational, and financial risks; business risks are managed by maintaining property competitiveness; operational risks are controlled through sound internal controls; and details of financial risk management (including market, credit, and liquidity risks) are elaborated in the notes to the financial statements - Business risk management: Closely monitor market trends and ensure properties remain competitive, safe, and of high quality through regular maintenance and renovation[35] - Operational risk management: Reduce and control losses arising from internal procedures, human error, systems, or external events by establishing sound internal controls, clearly defined authorities, proper segregation of duties, and effective reporting systems[36] - Financial risk management: Includes market risks (equity, interest rate, foreign exchange), credit risk, and liquidity risk, with detailed discussions in Note 32(b) to the consolidated financial statements[37] Profile of Directors and Senior Management This section provides detailed background information on the company's executive and independent non-executive directors, including their age, education, professional experience, tenure within the Group, and relationships with other directors, highlighting the board members' extensive experience across real estate, finance, engineering, and management Executive Directors Executive directors include Co-Chairperson and Co-Managing Director Ms. Chan Yan Wai and Mr. Chan Yan Lun, as well as Mr. Chan Yan Tin; they are all children of the Group's founder, Mr. Chan Hoi Sau, hold key management positions within the Group, and possess extensive experience in real estate, corporate finance, and investment management - Ms. Chan Yan Wai, 60 years old, has served the Group since 2002 and currently holds the positions of Co-Chairperson and Co-Managing Director, responsible for operations and corporate functions[39] - Mr. Chan Yan Lun, 55 years old, possesses over 30 years of experience in corporate finance, investment management, and engineering, and currently serves as Co-Chairperson and Co-Managing Director[40] - Mr. Chan Yan Tin, 61 years old, has served as an Executive Director since 2004 and has extensive experience in construction, property investment, and development[41] Independent Non-Executive Directors Independent non-executive directors include Mr. Chan Kwok Wai, Mr. Tse Lai Hang, and Ms. Cheung Chung Wai; they possess deep professional backgrounds in financial accounting, civil engineering, and procurement finance, respectively, providing independent professional advice to the board and serving as chairpersons or members of the Audit, Remuneration, and Nomination Committees - Mr. Chan Kwok Wai, 66 years old, is a member of CPA Australia with extensive experience in the finance and accounting industry, serving as Chairman of the Audit, Remuneration, and Nomination Committees[42] - Mr. Tse Lai Hang, 60 years old, holds a Master's degree in Civil Engineering and has extensive experience in construction and property development[43] - Ms. Cheung Chung Wai, 58 years old, holds an MBA and possesses over 30 years of experience in leading complex procurement and financing projects[44] Corporate Governance Report This report outlines the company's corporate governance practices during the reporting period, confirming compliance with all applicable code provisions of the Corporate Governance Code, except for the deviation where the roles of Chairman and Chief Executive Officer are held by the same individuals; it details the board's structure and operations, the responsibilities and work of specialized committees (Audit, Remuneration, Nomination), the risk management and internal control systems, and communication policies with shareholders, demonstrating the company's commitment to maintaining high standards of corporate governance for enhanced transparency and accountability Board and Committees The Board of Directors, comprising three executive and three independent non-executive directors, is responsible for formulating the Group's strategy; during the reporting period, the roles of Chairman and Chief Executive Officer were held by the Co-Chairpersons and Co-Managing Directors, constituting a deviation from the Code, though the Board believes this structure facilitates efficient leadership; the company has established Audit, Remuneration, and Nomination Committees, all chaired by independent non-executive directors, to fulfill oversight functions, and the report also discloses the board diversity policy and directors' attendance at meetings - The company deviates from Code Provision C.2.1 of the Corporate Governance Code, as the roles of Chairman and Chief Executive Officer are jointly held by Co-Chairpersons and Co-Managing Directors Ms. Chan Yan Wai and Mr. Chan Yan Lun, a structure the Board believes ensures consistent leadership and optimal efficiency[52] - The Audit Committee, composed of three independent non-executive directors, is responsible for overseeing financial reporting, internal controls, and external auditors[63] - The Remuneration Committee and Nomination Committee, both with a majority of independent non-executive directors, are responsible for remuneration policies and director nominations, respectively[68][71] Directors' Meeting Attendance (During the Year) | Director | Board | Audit Committee | Remuneration Committee | Nomination Committee | | :--- | :--- | :--- | :--- | :--- | | Chan Yan Wai | 4/4 | – | – | 1/1 | | Chan Yan Lun | 4/4 | – | – | – | | Chan Yan Tin | 4/4 | – | 2/2 | – | | Chan Kwok Wai | 4/4 | 2/2 | 2/2 | 1/1 | | Tse Lai Hang | 4/4 | 2/2 | 2/2 | 1/1 | | Cheung Chung Wai | 4/4 | 2/2 | – | – | Risk Management and Internal Control The Board of Directors bears overall responsibility for the Group's risk management and internal control systems, with management responsible for their design and implementation; the Audit Committee assists the Board in monitoring, and the internal audit function has been outsourced to an external service provider; the Group established a risk management framework in 2017 and reviews it annually, with the Board deeming the internal control system effective and adequate during the reporting period - The Board of Directors bears overall responsibility for maintaining sound and effective risk management and internal controls, while management is responsible for their design and implementation[84] - The Group has outsourced its internal audit function to an external service provider, which regularly reports review findings to the Audit Committee[85] - After reviewing during the year, the Board considers the internal control system effective and adequate, with no significant issues identified[86] Communication with Shareholders and Other Policies The company communicates with shareholders through various channels, including general meetings, financial reports, announcements, and its website, and has adopted a shareholder communication policy; the report details shareholders' rights and procedures for convening general meetings and proposing resolutions; additionally, the company has established a dividend policy aimed at balancing shareholder returns with future growth needs and has adopted an anti-corruption and whistleblowing policy - The company has adopted a shareholder communication policy to ensure effective and timely communication with shareholders, and its effectiveness is reviewed annually[94][95] - In accordance with the Companies Ordinance, shareholders holding at least 5% of the total voting rights may request to convene a general meeting; shareholders holding at least 2.5% of the total voting rights or at least 50 shareholders may request to circulate a resolution at an annual general meeting[97][100] - The dividend policy aims for semi-annual dividend payments, with specific amounts determined by the Board's sole discretion based on factors such as profitability, liquidity, and future capital needs[106][107] Environmental, Social and Governance Report This report outlines the Group's Environmental, Social, and Governance (ESG) performance and strategy for the 2024/2025 fiscal year; facing a challenging market environment, the Group focuses on enhancing property sustainability, tenant satisfaction, and risk management; the report details the ESG governance structure, stakeholder engagement, materiality assessment results, and specific measures and performance data related to operational practices, employment and labor, environmental protection, and climate change response ESG Approach and Governance In a challenging economic environment, the Group adheres to a prudent asset management strategy, integrating sustainable development principles into daily operations; the Board of Directors holds overall responsibility for ESG initiatives and has established an ESG Executive Committee, led by the Managing Directors, to formulate policies, monitor performance, and focus on tenant retention, risk management, and sustainable asset enhancement - The Board of Directors is fully responsible for corporate governance and incorporates climate-related risks, business ethics, and other ESG risks into regular risk assessments[118] - The Group has established an ESG Executive Committee, led by the Managing Directors and senior management, responsible for promoting and monitoring the implementation of ESG practices[122][123] - For the 2024/2025 fiscal year, the ESG Executive Committee focused on three key areas: tenant retention and operational resilience, risk management and regulatory preparedness, and sustainable asset enhancement[129] Stakeholder Engagement and Materiality Assessment The Group identified six key stakeholder groups and maintains communication with them; based on the annual materiality assessment, service quality and responsibility, financial resilience, talent retention, anti-corruption, waste management, and energy efficiency were deemed the most material issues for the Group's business and stakeholders - The Group identified six key stakeholder groups: tenants, employees, suppliers/contractors, investors/shareholders, local communities, and regulatory bodies, and communicates with them through diverse channels[128] - Based on the materiality matrix analysis, service quality and responsibility, financial resilience, and talent retention were rated as the most important issues[136][137] Social Performance On the social front, the Group is committed to providing high-quality property services, prioritizing property safety, hygiene, and tenant satisfaction, and protecting customer privacy; the Group upholds high standards of business ethics and implements strict anti-corruption policies; in terms of employment, the Group promotes equal opportunities and focuses on employee health, safety, and career development, with zero employee turnover during the reporting period Tenant Satisfaction Survey Results | Rating | Sunbase Commercial Centre | The Wave | Tai Hing Building 2 | | :--- | :--- | :--- | :--- | | Excellent | 50% | – | 50% | | Satisfactory | 50% | 100% | 25% | - The Group strictly adheres to anti-corruption regulations, with no confirmed corruption incidents or related legal cases during the reporting period[158] - As of March 31, 2025, the Group employed 18 local employees, with zero employee turnover during the reporting period[166][169] - During the reporting period, the Group achieved zero work-related fatalities and zero lost workdays due to work-related injuries[172] Environmental Performance The Group is committed to green development, managing emissions, resource use, and climate change through environmental management plans; during the reporting period, greenhouse gas emissions and energy consumption from self-occupied offices showed a downward trend; the Group has identified physical and transition risks from climate change and implemented measures to enhance asset energy efficiency and resilience; the company has set targets to reduce greenhouse gas emissions, electricity, and water consumption over the next five years Self-Occupied Office Greenhouse Gas Emission Trends (tonnes of CO2e) | Year | Total Emissions | Intensity (tonnes/person) | | :--- | :--- | :--- | | 2024/2025 | 57.60 | 3.20 | | 2023/2024 | 68.91 | 4.30 | | 2022/2023 | 77.06 | 4.81 | Self-Occupied Office Energy Consumption Trends | Energy Type | 2024/2025 | 2023/2024 | 2022/2023 | | :--- | :--- | :--- | :--- | | Electricity (kWh) | 70,887 | 82,662 | 90,888 | | Gas (MJ) | 33,312 | 31,200 | 42,872 | | Gasoline (liters) | 3,902.85 | 4,778.26 | 4,711.52 | - The Group has set targets to reduce greenhouse gas emissions, electricity, water, and waste emissions over the next five years based on current business levels[220] - The Group has identified climate change-related physical risks (e.g., typhoons, floods) and transition risks (e.g., policy, technology, market changes) and has developed corresponding response strategies[229] Directors' Report This report is a statutory document presented in accordance with the Companies Ordinance, covering the Group's principal activities, results and profit appropriation, major risks, property movements, directors' and major shareholders' interests in shares, connected transactions, and other compliance disclosures; the Group's business review and future developments for the reporting period are detailed in the Chairman's Statement and Management Discussion and Analysis; the Board recommends a final dividend and confirms that the company maintained sufficient public float Results, Dividends and Reserves The results for the current year are detailed in the consolidated statement of profit or loss; the Board recommends a final dividend of HKD 1.4 cents per share, bringing the total annual dividend, including the interim dividend, to HKD 1.7 cents; as of March 31, 2025, the company's distributable reserves amounted to approximately HKD 493.6 million - An interim dividend of HKD 0.3 cents per share has been paid, and a final dividend of HKD 1.4 cents per share is recommended[234] - As of March 31, 2025, the company's distributable reserves to shareholders amounted to approximately HKD 493,625,000[235] Directors' and Shareholders' Interests The report discloses changes in the Board of Directors during the year, including Mr. Chan Hoi Sau's resignation due to retirement, and details the interests of directors and major shareholders in the company's shares, indicating that the Chan family holds the majority of the company's equity through individuals, trusts, and controlled corporations Directors' Interests in Company Shares (Long Position) | Director Name | Capacity | Total Long Position | Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Chan Yan Tin | Beneficial Owner/Trust Beneficiary | 173,232,896 shares | 62.49% | | Chan Yan Wai | Trust Beneficiary | 172,440,896 shares | 62.20% | | Chan Yan Lun | Trust Beneficiary | 172,440,896 shares | 62.20% | - Major shareholder Mr. Chan Hoi Sau and his spouse Ms. Chan Lo Kwok Ping are deemed to collectively hold interests in 205,008,534 shares, representing approximately 73.95% of the total share capital[258] Major Customers, Suppliers and Compliance During the reporting period, the largest customer accounted for 6.4% of the Group's total sales, and the top five customers accounted for 23.5%; the largest supplier accounted for 9.3% of total purchases, and the top five suppliers accounted for 32.5%; none of the company's directors, their associates, or major shareholders held any interests in these customers and suppliers; the company complied with relevant laws and regulations and maintained a public float of not less than 25% Major Customer and Supplier Proportions | Category | Percentage of Total (2025) | | :--- | :--- | | Largest Customer | 6.4% | | Total Top Five Customers | 23.5% | | Largest Supplier | 9.3% | | Total Top Five Suppliers | 32.5% | - Based on publicly available information and to the best knowledge of the directors, the company maintained a sufficient public float (not less than 25%) as of the date of this report[266] Financial Statements and Notes This section comprises the independent auditor's report, the Group's consolidated financial statements (including the statement of profit or loss, statement of financial position, statement of changes in equity, and statement of cash flows), and detailed notes to the financial statements; the auditor issued an unmodified opinion on the financial statements, identifying investment property valuation as a key audit matter; the financial statements show that the Group recorded a loss in the reporting year, primarily due to a decrease in investment property fair value; the notes elaborate on accounting policies, account details, financial instrument risk management, and other relevant information Independent Auditor's Report The auditor, Heng Kin CPA Limited, issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2025, deeming them to present a true and fair view of the Group's financial position and performance; the report identified "Valuation of Investment Properties" as a key audit matter due to its significance to the overall financial statements and the substantial management judgment and estimation involved in its valuation - The auditor believes that 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 and have been properly prepared in compliance with the Hong Kong Companies Ordinance[271] - A key audit matter is "Valuation of Investment Properties" due to its material balance to the overall financial statements and the significant judgments involved in its valuation, such as market selling prices, rents, and capitalization rates[273][274][275] Consolidated Financial Statements This section presents the Group's four primary consolidated financial statements; the consolidated statement of profit or loss shows an annual loss of HKD 54.5 million; the consolidated statement of financial position indicates net assets of HKD 2.52 billion; the consolidated statement of changes in equity reflects the impact of the loss and dividend distribution on equity; and the consolidated statement of cash flows shows net cash generated from operating activities, but net cash outflow from investing activities led to an overall decrease in cash and cash equivalents Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the year ended March 31, 2025) | Item | Amount (HKD thousands) | | :--- | :--- | | Turnover | 50,397 | | Operating Loss | (45,376) | | Loss Before Tax | (49,158) | | Loss for the Year Attributable to Owners of the Company | (54,459) | Summary of Consolidated Statement of Financial Position (As at March 31, 2025) | Item | Amount (HKD thousands) | | :--- | :--- | | Non-current Assets | 2,238,900 | | Current Assets | 389,120 | | Total Assets | 2,628,020 | | Current Liabilities | 23,041 | | Non-current Liabilities | 82,007 | | Total Liabilities | 105,048 | | Net Assets | 2,522,972 | Notes to the Consolidated Financial Statements The notes section provides detailed explanations of the basis of preparation and significant accounting policies for the financial statements, along with in-depth analysis of various accounting items; key contents include segment information (property investment and financial investment), fair value changes of investment properties, classification and risk management of financial instruments, directors' emoluments, related party transactions, and capital risk management - The Group's operating activities are divided into two main segments: property investment and financial investment; the property investment segment recorded a loss before tax of HKD 70.3 million, while the financial investment segment recorded a profit before tax of HKD 21.1 million[398][399] - The fair value of investment properties decreased by HKD 91.1 million during the year, with a year-end carrying amount of HKD 1.938 billion; valuations were determined by independent professional valuers using the direct comparison approach and/or income capitalization approach[421][424] - The Group faces major financial risks including foreign exchange risk, liquidity risk, credit risk, interest rate risk, and market price risk; Note 32 elaborates on the related risk management objectives and policies[464] - The Group's capital management objective is to safeguard its ability to continue as a going concern and maintain an optimal capital structure; as at the end of the reporting period, the Group was in a net cash position (bank balances and cash exceeded borrowings), thus the gearing ratio was not applicable[483][484] Five Year Financial Summary This section provides a summary of the Group's key financial data for the past five fiscal years, illustrating trends in revenue, profit, assets, liabilities, and shareholders' equity; the data indicates a recent downward trend in the Group's revenue and a loss attributable to shareholders for five consecutive years, with total assets and total shareholders' equity also decreasing year by year Five-Year Performance Summary (HKD thousands) | Year | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 50,397 | 56,032 | 51,876 | 57,128 | 64,490 | | Loss Attributable to Shareholders | (54,459) | (9,797) | (75,204) | (55,083) | (134,229) | Five-Year Assets and Liabilities Summary (HKD thousands) | Year | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 2,628,020 | 2,683,198 | 2,753,605 | 2,836,393 | 3,190,308 | | Total Liabilities | 105,048 | 108,091 | 109,310 | 109,584 | 307,954 | | Equity Attributable to Shareholders | 2,522,972 | 2,575,107 | 2,644,295 | 2,726,809 | 2,882,354 | Major Property Information This section provides a detailed list of the Group's major properties held as of March 31, 2025, including their location, use, type of tenure, and the Group's interest; the property portfolio is primarily concentrated in commercial and office properties in Hong Kong, with a small number of residential properties in Canada; some properties are wholly owned by the Group, while others are held with a 50% interest - The Group holds several core commercial and office properties in Hong Kong, such as Tai Hing Building 1 & 2, Sunbase Commercial Centre, and Ying Lung Commercial Building, most of which are 100% owned[497][499] - The Group also holds a 50% interest in some properties, primarily located on Cameron Road, Tsim Sha Tsui[502] - In addition to Hong Kong properties, the Group holds a residential property in Vancouver, Canada, with 100% freehold interest[502]