恒达集团控股(03616) - 2025 - 年度业绩

Financial Statements Summary In 2023, revenue grew 24.6% to RMB 3.57 billion, but net profit sharply declined 52.7% to RMB 36.82 million, with significant short-term debt raising going concern uncertainties Consolidated Statement of Profit or Loss In 2023, revenue increased 24.6% to RMB 3.57 billion, but gross profit only grew 3.0%, while profit for the year plummeted 52.7% to RMB 36.82 million due to increased expenses and taxes 2023 Consolidated Statement of Profit or Loss Key Data | Indicator | 2023 (RMB Thousands) | 2022 (RMB Thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 3,565,598 | 2,861,771 | +24.6% | | Gross Profit | 434,203 | 421,376 | +3.0% | | Operating Profit | 133,728 | 154,409 | -13.4% | | Profit for the Year | 36,817 | 77,769 | -52.7% | | Profit Attributable to Owners of the Company | 40,944 | 84,812 | -51.7% | | Basic and Diluted Earnings Per Share (RMB Cents) | 3.41 | 7.07 | -51.8% | Consolidated Statement of Financial Position As of 2023 year-end, total assets decreased 9.4% to RMB 9.09 billion, and total liabilities decreased 11.4% to RMB 7.23 billion, with significant liquidity pressure due to high current liabilities and low cash balances 2023 Year-End Consolidated Statement of Financial Position Key Data | Indicator | 2023 (RMB Thousands) | 2022 (RMB Thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Total Assets | 9,085,205 | 10,029,496 | -9.4% | | Total Liabilities | 7,227,164 | 8,156,029 | -11.4% | | Total Equity | 1,858,041 | 1,873,467 | -0.8% | | Net Current Assets | 1,772,534 | 1,814,111 | -2.3% | | Cash and Cash Equivalents | 274,808 | 221,059 | +24.3% | Summary of Notes to Financial Statements Notes reveal significant going concern uncertainties due to low cash, substantial short-term debt, and high financial guarantees, alongside details on revenue, dividends, EPS, and post-reporting period events Going Concern Ability The report highlights significant going concern uncertainties due to low cash, high short-term debt, and substantial financial guarantees, despite management's mitigating actions and assessment of appropriate financial statement preparation - Significant uncertainties exist that may cast substantial doubt on the Group's ability to continue as a going concern, primarily due to[11] - Cash and cash equivalents of approximately RMB 275 million, while bank and other borrowings due within the next twelve months amount to RMB 679 million[11] - Potential cash outflows of approximately RMB 7.19 billion from financial guarantees provided[11] - Capital commitments for properties under development and land use rights of approximately RMB 1.33 billion[11] - Management's mitigating measures include[13] - Actively adjusting sales and pre-sale activities to monitor cash collection[13] - Negotiating payment arrangements with major contractors and suppliers[13] - Proactively communicating with financial institutions to secure project development loans or better repayment schedules[13] - Obtaining written commitments for financial support from related parties and non-controlling shareholders, who will not demand repayment of approximately RMB 98.84 million[13] Revenue and Segment Information In 2023, total revenue was RMB 3.57 billion, predominantly from property sales (99.7%), with all revenue and non-current assets originating from China, leading to a single reporting segment 2023 Revenue Composition | Revenue Source | 2023 (RMB Thousands) | 2022 (RMB Thousands) | Proportion (2023) | | :--- | :--- | :--- | :--- | | Property Sales | 3,554,210 | 2,850,035 | 99.7% | | Rental Income | 8,720 | 6,832 | 0.2% | | Service Income | 2,668 | 4,904 | 0.1% | | Total | 3,565,598 | 2,861,771 | 100.0% | - The Group primarily engages in a single business in China, property development, thus management reviews operations as one reporting segment, and no segment information is presented[21] - All of the Group's revenue is derived from China, and all non-current assets are located in China[22] Dividends and Earnings Per Share The Board recommends no dividend for 2023, with basic and diluted EPS significantly declining from RMB 7.07 cents to RMB 3.41 cents due to lower profit, and diluted EPS equaling basic EPS - The Board does not recommend the payment of any dividend for the year ended December 31, 2023[30][44] Earnings Per Share | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (RMB Thousands) | 40,944 | 84,812 | | Weighted Average Number of Ordinary Shares in Issue (Thousands of Shares) | 1,200,000 | 1,200,000 | | Basic and Diluted Earnings Per Share (RMB Cents) | 3.41 | 7.07 | Post-Reporting Period Events (Notes) Post-reporting period, the Group sold its 41% equity in Xuchang Hengzhu for zero consideration in April 2024, incurring no gain or loss, and also early repaid RMB 90 million in other long-term borrowings to reduce interest expenses - On April 17, 2024, the Group disposed of its 41% equity interest in associate Xuchang Hengzhu to the controlling shareholder for zero consideration, ceasing to be an associate of the Group[38] - In April 2024, the Group early repaid other long-term borrowings of RMB 90 million to reduce interest expenses[39] Management Discussion and Analysis Management reports 2023 revenue growth of 24.6% despite a weak property market, but profit sharply declined 52.7% due to price drops and cost increases, with heightened financial risk from a significantly increased leverage ratio Chairman's Report The Chairman's report highlights the Group's focus on sales in a challenging 2023 property market, achieving 24.6% revenue growth but a 52.7% net profit decline, with plans for market refinement and financial efficiency in 2024 - In 2023, the Group prioritized sales, increasing marketing incentives and assessments, achieving relatively good results among local property developers[41] 2023 Annual Performance Summary | Indicator | 2023 | 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | Approx. RMB 3,565.6 million | Approx. RMB 2,861.8 million | +24.6% | | Net Profit | Approx. RMB 36.8 million | Approx. RMB 77.8 million | -52.7% | - Looking ahead to 2024, the Group will address challenges by coordinating fund allocation, deepening product R&D, adjusting marketing strategies, and improving risk management systems[46] Industry Review and Business Overview The 2023 property market saw declines in investment and sales, yet the Group achieved 23.5% growth in contracted sales to RMB 2.63 billion, holding 3.5 million sqm of land reserves primarily in Xuchang, despite a drop in average selling price - In 2023, national real estate development investment decreased by 9.6%, new housing starts by 20.4%, and commercial housing sales by 8.5%, indicating a deep market adjustment period[49][50] 2023 Contract Sales Performance | Indicator | 2023 | 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Contract Sales Value (RMB Millions) | 2,634.2 | 2,132.3 | +23.5% | | Contracted Saleable GFA (Square Meters) | 437,621 | 337,623 | +29.6% | | Average Selling Price per Saleable GFA (RMB/Square Meter) | 5,822 | 6,152 | -5.4% | - As of December 31, 2023, the Group's total land bank amounted to approximately 3.5 million square meters of GFA, primarily located in Xuchang City (98.19%)[54] Financial Review Revenue grew 24.6% due to increased confirmed GFA, but gross margin fell from 14.7% to 12.2% due to lower property ASP and negative margins on parking/storage, while sales expenses and income tax rose, and the leverage ratio significantly increased to 51.1% - Revenue increased by 24.6% to RMB 3.57 billion, primarily due to an increase in recognized GFA of residential properties from 439,000 square meters to 605,000 square meters[60] - Gross profit margin decreased from 14.7% to 12.2%, mainly due to lower gross profit margin for residential properties and a negative gross profit margin of -66.8% on sales of parking spaces and storage rooms[57][62][63] - As of 2023 year-end, total borrowings increased to RMB 949 million (2022: RMB 673 million), with RMB 679 million classified as current liabilities due within one year[69][70] Key Financial Ratios | Ratio | 2023 | 2022 | | :--- | :--- | :--- | | Return on Assets (ROA) | 0.4% | 0.8% | | Return on Equity (ROE) | 2.0% | 4.2% | | Leverage Ratio | 51.1% | 35.9% | | Debt-to-Equity Ratio | 36.3% | 24.1% | Key Risk Factors The company faces significant risks including high geographical concentration in Henan Province, intense market competition from other developers, and interest rate risk from floating-rate borrowings without hedging policies - Geographical concentration risk: All projects are located in China's Henan Province, making business performance highly dependent on the property market in Xuchang City and Henan Province[78] - Market competition risk: Facing intense competition from large national and local developers in land acquisition, financial resources, brand recognition, and pricing[79] - Interest rate risk: Borrowings bearing floating interest rates expose the Group to cash flow interest rate risk, and the company has no hedging policy[79] Human Resources As of 2023 year-end, the Group had 616 employees, a decrease from 755 in 2022, with compensation policies reviewed by the Remuneration Committee, and benefits including medical and social insurance, alongside a share option scheme - As of December 31, 2023, the Group had a total of 616 employees, a decrease from 755 in the previous year[86] - The company has a Remuneration Committee to determine directors' remuneration and provides employees with medical insurance, social insurance, and other benefits, along with a share option scheme for incentives[86][87] Corporate Governance and Other Information This section reveals severe governance and operational challenges, including a qualified auditor's opinion on going concern, share trading suspension since April 2024, auditor resignation, and stringent HKEX resumption guidance indicating internal control and management integrity issues Auditor's Opinion on Material Uncertainty Related to Going Concern The auditor's report highlights a material uncertainty regarding the Group's going concern ability due to low cash, significant short-term debt, and potential financial guarantee outflows, though their opinion remains unmodified - The auditor's report draws attention to a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern, but the auditor's opinion is not modified in respect of this matter[95] - Specific factors causing uncertainty include: low cash balance (approx. RMB 275 million), substantial short-term liabilities (borrowings due within 12 months approx. RMB 679 million and capital commitments approx. RMB 1.33 billion), and potential cash outflows from financial guarantees (approx. RMB 7.19 billion)[95] Material Post-Reporting Period Events Significant post-reporting events include share trading suspension since April 2024, the resignation of former auditor PwC and appointment of a new one, and HKEX resumption guidance requiring independent investigations and internal control reviews - The Company's shares have been suspended from trading on the Stock Exchange since 9:00 a.m. on April 2, 2024, and will remain suspended[99] - Former auditor PricewaterhouseCoopers has resigned, and Evergreen (Hong Kong) CPA Limited has been appointed as the new auditor[100][104] - The Stock Exchange has issued resumption guidance requiring the Company to[101][107] - Conduct an independent investigation into prepayment issues[101][107] - Demonstrate management's integrity[101][107] - Conduct an independent internal control review[101][107] - Publish all outstanding financial results[101][107] - Demonstrate compliance with Listing Rule 13.24[101][107] - Inform the market of all material information[101][107] Continued Suspension of Trading The company's shares remain suspended from trading on the Hong Kong Stock Exchange since April 2, 2024, and will continue until further notice, with a caution to shareholders and potential investors - The Company's shares have been suspended from trading since April 2, 2024, and will remain suspended until further notice[109]