润中国际控股(00202) - 2025 - 年度财报

Management Discussion and Analysis Overall Performance Overview The Group's revenue from continuing operations grew 5.6% to approximately HKD 108.18 million, while annual loss significantly narrowed by 87.5% to approximately HKD 40.24 million, driven by reduced fair value losses and lower basic loss per share FY2025 Performance Summary | Metric | FY2025 (HKD) | FY2024 (HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue from Continuing Operations | 108,181,000 | 102,484,000 | +5.6% | | Annual Loss (including Discontinued Operations) | 40,238,000 | 322,522,000 | -87.5% | | Basic Loss Per Share (HK cents) | 0.551 | 4.385 | -87.4% | Business Review The Group's core businesses, agriculture and property investment, saw the agricultural segment turn profitable with 6.1% revenue growth due to higher soybean prices, while property investment's rental income slightly increased despite fair value losses Agricultural Business The Bolivian agricultural business, including farming and cattle ranching, achieved 6.1% revenue growth to HKD 78.43 million and turned profitable with HKD 47.57 million in segment profit, primarily due to a 25% increase in average soybean selling price Agricultural Business Key Metrics | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Business Revenue (HKD) | 78,434,000 | 73,901,000 | | Segment Profit/(Loss) (HKD) | 47,565,000 | (10,967,000) | | Average Soybean Selling Price (USD/metric ton) | 450 | 360 | | Soybean Production (metric tons) | 20,200 | 25,000 | Property Investment Business The property investment business, with properties in Beijing and Shanghai, saw rental income increase 4.1% to HKD 29.75 million, while fair value losses on investment properties significantly decreased to HKD 66.08 million despite declining commercial property demand, with improved occupancy rates Property Investment Business Key Metrics | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Rental Income (HKD) | 29,747,000 | 28,583,000 | | Fair Value Loss on Investment Properties (HKD) | (66,076,000) | (151,648,000) | | Segment Loss (HKD) | (47,972,000) | (135,549,000) | | Beijing Property Occupancy Rate (%) | 90% | 80% | | Shanghai Property Occupancy Rate (%) | 89% | 54% | Outlook The Group will cautiously manage existing businesses and strengthen risk control amidst an unstable political and economic landscape, while planning to acquire a Shanghai property for elderly serviced apartments, showing optimism for China's elderly care services market - The Group plans to enter the elderly care services market, having signed a provisional agreement to acquire a property in Shanghai, expecting this investment to bring economic benefits to the Group[15] Operating Results Loss from continuing operations significantly decreased by 87.5% to HKD 40.24 million, primarily due to reduced fair value losses on investment properties and the absence of prior-year impairment losses, despite increased tax expenses and profit from discontinued operations - Fair value loss on investment properties decreased by 56.4% to approximately HKD 66.08 million[17] - No loss from early repayment of amounts due to an associate in the current year (last year: HKD 17.44 million)[17] - No impairment loss on mining rights in the current year (last year: HKD 52.95 million)[17] - Discontinued operations recorded a profit of approximately HKD 29.33 million due to tax credits (last year: loss of HKD 46.14 million)[17] Financial Review As of March 31, 2025, the Group's financial position showed increased assets and liabilities, with total borrowings rising to HKD 413 million, a higher debt-to-asset ratio of 0.38, significantly increased cash to HKD 313 million, and a lower current ratio of 0.9, indicating increased short-term repayment pressure Financial Position Summary | Metric | As of March 31, 2025 (HKD) | As of March 31, 2024 (HKD) | | :--- | :--- | :--- | | Total Assets | 1,611,494,000 | 1,564,676,000 | | Total Liabilities | 515,065,000 | 395,899,000 | | Total Bank and Other Borrowings | 413,312,000 | 247,166,000 | | Cash and Bank Balances | 312,618,000 | 24,918,000 | | Debt-to-Asset Ratio | 0.38 | 0.21 | | Current Ratio | 0.9 | 1.4 | - The Group entered into a provisional agreement on March 26, 2025, to acquire a property in Minhang District, Shanghai, for RMB 400 million, which constitutes a major and connected transaction for the Company[23] Directors and Senior Management Biographies Corporate Governance Report Corporate Governance Practices and Code Compliance The Company adheres to the Stock Exchange's Corporate Governance Code, with two minor deviations during the year regarding formal appointment letters for some directors and the Chairman's absence from the 2024 AGM, but believes its practices meet the Code's requirements - Deviation One: Other directors, except for independent non-executive directors, do not have formal appointment letters[48] - Deviation Two: Mr. Jiang Zhaobai, the Chairman of the Board, was unable to attend the 2024 Annual General Meeting due to other commitments[48] Board of Directors The Board of Directors, comprising eight members including a non-executive chairman, four executive directors, and three independent non-executive directors, maintains a balanced power structure with clear role separation, and all independent non-executive directors are confirmed independent, even those with long tenures - The Board of Directors comprises eight directors, including Mr. Jiang Zhaobai (Non-executive Chairman) and Mr. Chen Yi (Chief Executive Officer), with clearly separated roles and responsibilities[50][60] - The Board confirms that all three independent non-executive directors, including Mr. Ho Yiu Yu and Mr. Gao Mingdong who have served for over nine years, meet the independence guidelines[62][63] Board Committees The Board has Audit, Remuneration, and Nomination Committees with written terms of reference; the Audit Committee oversees financial reporting and internal controls, the Remuneration Committee sets remuneration policies, and the Nomination Committee reviews board structure and nominates directors, having achieved board diversity goals including appointing a female director - The Audit Committee, composed of three independent non-executive directors, is responsible for overseeing the relationship with the independent auditor, reviewing financial statements, and supervising the effectiveness of the internal control system[83] - The Nomination Committee is responsible for reviewing the Board's structure, size, and composition, and making recommendations for director appointments in accordance with the Board Diversity Policy[71] - The Company has achieved several measurable objectives under its Board Diversity Policy, including the successful appointment of a female director in December 2024, meeting the Stock Exchange's requirements[79][80] Accountability, Audit and Risk Management The Board ensures true and fair financial statements, with HKD 2.05 million and HKD 0.2 million paid for audit and non-audit services respectively; it maintains adequate risk management and internal control systems, utilizing external consultants for internal audit, and reviews confirmed the system's effective operation with no significant control failures Auditor's Remuneration | Service Type | FY2025 Remuneration (HKD) | FY2024 Remuneration (HKD) | | :--- | :--- | :--- | | Audit Services | 2,050,000 | 2,000,000 | | Non-Audit Services | 200,000 | 400,000 | - The Group has not established an in-house internal audit function but has engaged external professional consultants to perform this function, reporting to the Audit Committee, and the Board believes the Group's risk management and internal control systems operated effectively during the year[89] Shareholder Rights and Communication The Company communicates with shareholders through various channels, outlining rights and procedures for convening general meetings, allowing shareholders with at least 5% voting rights to request a meeting, and has a dividend policy without a predetermined payout ratio - Shareholders holding at least 5% of the Company's total voting rights may submit a written request to the Board to convene a general meeting[94] - The Company has adopted a dividend policy, but there is no predetermined payout ratio, and dividend declarations are subject to the Group's financial position[97] Environmental, Social and Governance Report Report Overview and Governance This ESG report covers the Group's agricultural and property investment businesses for FY2025, with the Board overseeing sustainability and an ESG working group managing six material issues identified through stakeholder engagement, including climate change and anti-corruption - The report covers the agricultural business in Bolivia (soybean and rice cultivation, and cattle ranching) and the property investment business in Beijing, China[102][103] - The Board is fully responsible for ESG matters and has established an ESG working group to evaluate and manage related issues[112] - The six material ESG issues identified are[123] - 1. Climate Change[123] - 2. Cultivation/Ranching Activities[123] - 3. Anti-corruption[123] - 4. Customer Service[123] - 5. Environmental Measures[123] - 6. Food Safety[123] A. Environment The Group's environmental performance shows a significant increase in total greenhouse gas emissions due to expanded Scope 3 reporting, while it has set and made progress on targets for emission reduction, energy saving, and water conservation, with climate-related governance and risk management detailed under the TCFD framework Greenhouse Gas Emissions Summary (tonnes of CO2 equivalent) | Emission Scope | 2024/25 (tonnes of CO2e) | 2023/24 (tonnes of CO2e) | | :--- | :--- | :--- | | Scope 1 (Direct) | 7,648.43 | 6,962.62 | | Scope 2 (Indirect) | 49.39 | 50.58 | | Scope 3 (Other Indirect) | 122,395.72 | 7.62 | | Total | 130,093.55 | 7,020.81 | - Total greenhouse gas emissions significantly increased by 1,753% year-on-year, primarily due to increased disclosure of Scope 3 emissions in the current reporting period, particularly from downstream transportation and distribution[127][129] - The Group has identified climate change-related physical risks (e.g., extreme weather) and transition risks (e.g., policy and regulatory changes, market shifts), and has developed short, medium, and long-term response strategies[167][171] B. Society The report details the Group's social performance, including employment practices, health and safety, supply chain management, product responsibility, and anti-corruption, noting 96 employees, a 5.2% turnover rate, no work-related injuries or fatalities, strict labor standard compliance, and a zero-tolerance anti-corruption policy with no litigation cases Employee Profile (As of March 31, 2025) | Category | Total Number | Percentage (%) | | :--- | :--- | :--- | | Total Employees | 96 | 100% | | By Gender (Male/Female) | 67 / 29 | 70% / 30% | | By Business (Agricultural/Property) | 79 / 17 | 82% / 18% | | By Employment Type (Full-time/Part-time) | 86 / 10 | 90% / 10% | - During the reporting period, the Group's overall employee turnover rate was 5.2%, a significant decrease from 10.6% in the previous year[191][193] - The Group recorded no work-related fatalities during the reporting period or in the past three years, and no work injury cases in the current reporting period[197][198] - The Group is committed to maintaining high ethical standards, strictly prohibiting bribery and corruption, and provides anti-corruption training materials to directors and employees, with no concluded corruption litigation cases during the reporting period[229][230][231] Directors' Report Principal Activities and Performance This report outlines the Group's business for FY2025, primarily investment holding with agricultural and property investment subsidiaries, noting no significant business changes and no recommended annual dividend - The Directors do not recommend the payment of a dividend for the year ended March 31, 2025[238] Directors, Shareholder Interests and Share Option Scheme The report details director changes and independent director confirmations, noting Executive Director Mr. Jiang Xiaohang's interest in approximately 28% of shares, identifies major shareholders, and states no share options were granted under the 2021 scheme as of the reporting period end - Executive Director Mr. Jiang Xiaohang is deemed to have an interest in 2,042,210,000 shares of the Company, representing approximately 28% of the total share capital, through his wholly-owned companies Rich Monitor Limited and Pengxin Holdings Co., Ltd[253][267] - The Company adopted a new share option scheme on September 3, 2021, valid until September 2, 2031, and as of March 31, 2025, no share options had been granted under this scheme[256][264] Connected Transactions and Major Customers The Group completed a significant connected transaction, acquiring a property for RMB 400 million; customer concentration is high, with the largest customer contributing 36% of total revenue and the top five 70%, while supplier concentration is lower, with the top five accounting for 30% of total purchases - On March 26, 2025, the Group entered into an agreement with connected party Shanghai Pengxin Zhihuiyuan to acquire a property in Shanghai for RMB 400 million, constituting a major and connected transaction for the Company[270] Major Customer and Supplier Concentration | Category | Percentage (%) | | :--- | :--- | | Largest Customer | 佔總收益 36% | | Top Five Customers | 佔總收益 70% | | Largest Supplier | 佔總採購額 9% | | Top Five Suppliers | 佔總採購額 30% | Risk Management and Compliance The Group faces principal risks including regulatory compliance, market investment, environmental and social, business operations, and financial risks, which are identified and monitored by its risk management system, and it maintained compliance with relevant laws and regulations and sufficient public float during the period - Regulatory and Compliance Risk: Business is subject to regulations in multiple jurisdictions including Mainland China, Hong Kong, Indonesia, and Bolivia[279][280][281][282][284][285] - Market and Investment Risk: Property, hotel, and agricultural businesses are susceptible to factors such as government policies and economic conditions[279][280][281][282][284][285] - Environmental and Social Risk: Agricultural business faces the risk of adverse weather impacting harvests[279][280][281][282][284][285] - Business and Operational Risk: Risks include tenant defaults and internal process failures[279][280][281][282][284][285] - Financial Risk: Faces interest rate, credit, liquidity, and currency risks[279][280][281][282][284][285] Independent Auditor's Report Audit Opinion The auditor, Crowe HK, issued an unmodified opinion, confirming the consolidated financial statements truly and fairly reflect the Group's financial position, performance, and cash flows as of March 31, 2025, in compliance with the Hong Kong Companies Ordinance - The auditor issued an unmodified opinion on the consolidated financial statements[292] Material Uncertainty Related to Going Concern The auditor highlighted a material uncertainty regarding the Group's going concern, citing an annual loss of HKD 40.24 million, net current liabilities of HKD 53.97 million, and insufficient cash of HKD 313 million to cover HKD 413 million in short-term borrowings, though the audit opinion remains unmodified - As of March 31, 2025, the Group recorded an annual loss of approximately HKD 40,238,000[294] - As of the same date, the Group had net current liabilities of approximately HKD 53,970,000[294] - Short-term bank and other borrowings amounted to approximately HKD 413,312,000, while cash and cash equivalents were HKD 312,618,000, insufficient to cover short-term debts[294] Key Audit Matters The auditor identified "Valuation of Investment Properties" as a key audit matter, given its fair value of approximately HKD 635 million and the significant management judgment involved in key assumptions like reversionary yield and future rental income - A key audit matter is the valuation of investment properties, with a fair value of approximately HKD 634,690,000, where the valuation involves significant management judgment[297] Consolidated Financial Statements Consolidated Statement of Profit or Loss For FY2025, the Group's revenue from continuing operations was HKD 108.18 million, with gross profit of HKD 48.26 million; loss from continuing operations narrowed to HKD 69.57 million, and after including profit from discontinued operations, the total loss for the year was HKD 40.24 million Consolidated Statement of Profit or Loss Summary (HKD thousands) | Item | FY2205 (HKD thousands) | FY2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 108,181 | 102,484 | | Gross Profit | 48,259 | 45,477 | | Operating Loss | (22,169) | (245,624) | | Loss for the Year from Continuing Operations | (69,567) | (276,378) | | Profit/(Loss) for the Year from Discontinued Operations | 29,329 | (46,144) | | Loss for the Year | (40,238) | (322,522) | | Loss Attributable to Owners of the Company | (40,211) | (319,846) | | Basic Loss Per Share (HK cents) | (0.551) | (4.385) | Consolidated Statement of Financial Position As of March 31, 2025, the Group's total assets were HKD 1.611 billion, total liabilities HKD 515 million, and total equity HKD 1.096 billion, with a notable shift from net current assets to net current liabilities of HKD 53.97 million, indicating tightening short-term liquidity Consolidated Statement of Financial Position Summary (HKD thousands) | Item | As of March 31, 2025 (HKD thousands) | As of March 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 1,180,005 | 1,087,140 | | Current Assets | 431,489 | 477,536 | | Total Assets | 1,611,494 | 1,564,676 | | Equity and Liabilities | | | | Total Equity | 1,096,429 | 1,168,777 | | Non-current Liabilities | 29,606 | 59,617 | | Current Liabilities | 485,459 | 336,282 | | Total Liabilities | 515,065 | 395,899 | | Net Current (Liabilities)/Assets | (53,970) | 141,254 | Consolidated Statement of Cash Flows For FY2025, the Group experienced a net cash outflow of HKD 38.95 million from operating activities, a net cash inflow of HKD 193 million from investing activities, and a net cash inflow of HKD 136 million from financing activities, resulting in a year-end cash and cash equivalents balance of HKD 313 million Consolidated Statement of Cash Flows Summary (HKD thousands) | Item | FY2025 (HKD thousands) | FY2024 (HKD thousands) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (38,945) | (31,314) | | Net Cash From Investing Activities | 192,566 | 64,002 | | Net Cash From/(Used in) Financing Activities | 135,923 | (65,070) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 289,544 | (32,382) | | Cash and Cash Equivalents at Beginning of Year | 24,918 | 60,746 | | Cash and Cash Equivalents at End of Year | 312,618 | 24,918 | Five-Year Financial Summary Performance and Balance Sheet Trends Over the past five years, the Group's revenue fluctuated between HKD 102 million and HKD 149 million, consistently recording annual losses, with FY2025 being the lowest, while total assets and shareholders' equity continuously declined from HKD 3.136 billion and HKD 1.977 billion in 2021 to HKD 1.611 billion and HKD 1.067 billion in 2025, respectively Five-Year Financial Data Summary (HKD thousands) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | 2023 (HKD thousands) | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 108,181 | 102,484 | 117,777 | 149,347 | 127,093 | | Loss for the Year | (40,238) | (322,522) | (197,419) | (238,636) | (135,091) | | Total Assets | 1,611,494 | 1,564,676 | 2,558,371 | 2,902,087 | 3,135,705 | | Total Liabilities | (515,065) | (395,899) | (1,036,655) | (1,055,347) | (1,121,242) | | Shareholders' Equity | 1,067,355 | 1,139,676 | 1,489,939 | 1,814,088 | 1,976,561 |