煜荣集团(01536) - 2025 - 年度财报

Corporate Information Letter from the Board Review and Prospects The Group's annual revenue grew significantly to HK$217.1 million, with net loss narrowing to HK$12.2 million Financial Highlights | Metric | FY2025 | FY2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | HK$217.1 million | HK$148.2 million | +46.5% | | Net Loss | HK$12.2 million | HK$22.6 million | -46.0% | - The increase in revenue was primarily attributable to a higher-than-expected demand for the company's products from an increase in construction works and projects in Hong Kong[13] - The company maintains a cautious outlook on the local Hong Kong market and will continue to pursue business opportunities in overseas markets[16][19] Management Discussion and Analysis Business Review The Group's core business of manufacturing and trading DTH rockdrilling tools constituted 98.1% of total revenue Revenue by Business Segment | Business Segment | Revenue Share (FY2025) | Revenue Share (FY2024) | | :--- | :--- | :--- | | Manufacturing and trading of DTH rockdrilling tools | 98.1% | 92.1% | | Trading of piling and drilling machines and rockdrilling equipment | 1.9% | 7.9% | Revenue by Geographical Market | Region | Revenue (FY2025) | Revenue (FY2024) | Revenue Share (FY2025) | | :--- | :--- | :--- | :--- | | Hong Kong | HK$196.3 million | HK$142.6 million | 90.4% | | China | HK$15.1 million | HK$0.6 million | 7.0% | | Macau | HK$1.7 million | HK$0.5 million | 0.8% | | Germany | HK$1.1 million | HK$1.5 million | 0.5% | | Scandinavia | HK$1.0 million | HK$1.5 million | 0.5% | Financial Review Revenue grew 46.5% to HK$217.1 million, while net loss narrowed significantly due to gains on financial assets Key Financial Metrics | Financial Metric | FY2025 | FY2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | HK$217.1 million | HK$148.2 million | +46.5% | | Gross Profit | HK$43.8 million | HK$34.1 million | +28.4% | | Gross Profit Margin | 20.2% | 23.0% | -2.8pp | | Net Loss | HK$12.2 million | HK$22.6 million | -46.0% | - Other income and losses shifted from a loss of HK$5.0 million last year to a gain of HK$5.3 million, mainly due to a HK$7.0 million gain from changes in the fair value of financial assets (compared to a HK$3.1 million loss last year)[34] - Selling and distribution expenses increased by 32.6% to HK$11.4 million, primarily due to higher freight and storage costs associated with increased revenue[37] - Administrative expenses rose by 12.7% to HK$45.3 million, mainly due to increased operating costs[38] Strategy and Prospects The Group remains cautious about the local business environment and will continue to focus on expanding its international presence - The business environment in Hong Kong remains stagnant due to an uncertain economic outlook, leading the Group to adopt a cautious stance on local business prospects[44][45] - The Group will continue to explore international markets, expecting increased revenue contributions from international customers and actively seeking overseas business opportunities[44][45] Liquidity and Financial Resources The Group's gearing ratio improved significantly to 9.6%, supported by reduced borrowings and a new share placement Liquidity Position | Metric | As of Mar 31, 2025 | As of Mar 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | HK$42.2 million | HK$46.6 million | | Bank and other borrowings | HK$13.0 million | HK$23.0 million | | Gearing ratio | 9.6% | 21.9% | - In October 2024, the company raised net proceeds of approximately HK$6.2 million by placing 76,000,000 new shares at HK$0.085 per share to strengthen its financial position and for general working capital[65] Employees and Remuneration Policies The Group's total number of employees increased to approximately 101 as of March 31, 2025 - The number of employees increased from approximately 88 as of March 31, 2024, to approximately 101 as of March 31, 2025[70] Corporate Governance Report Board of Directors and Committees The company deviated from the corporate governance code by not separating the roles of Chairman and Chief Executive Officer - The company did not comply with code provision C.2.1 of the Corporate Governance Code regarding the separation of the chairman and chief executive roles, with the chairman's functions being performed collectively by the executive directors[73][74] Attendance of Directors | Director's Name | Board | Audit & Compliance Committee | Remuneration Committee | Nomination Committee | General Meeting | | :--- | :--- | :--- | :--- | :--- | :--- | | Executive Directors | | | | | | | Ms. Li Ka Lai | 10/10 | N/A | N/A | N/A | 1/1 | | Ms. Wu Lan Ying | 5/6 | N/A | N/A | N/A | 1/1 | | Independent Non-executive Directors | | | | | | | Mr. Cheung Sze Man | 7/10 | 3/3 | 1/1 | 2/2 | 1/1 | | Mr. Wong Siu Keung | 7/10 | 3/3 | 1/1 | 2/2 | 1/1 | | Mr. Yiu To Wa | 8/10 | 3/3 | 1/1 | 2/2 | 1/1 | Risk Management and Internal Controls The Group's risk management and internal control systems were deemed effective, with internal audit functions outsourced - The Group has appointed an external independent professional, BT Corporate Governance Limited (BTCGL), to perform the internal audit function and conduct an independent review of its risk management and internal control systems[149][152] - Risk monitoring is conducted through a "three-lines-of-defense" corporate governance structure, executed by operational management, the finance team, and the external independent internal auditor[158] Biographies of Directors and Senior Management Directors' Report Business and Financial Summary The Board does not recommend a final dividend for the year ended March 31, 2025, citing key business risks - The Board does not recommend the payment of a final dividend for the year ended March 31, 2025[210] - Key risks and uncertainties faced by the Group include: - Over-concentration of customers and suppliers - Rising raw material prices and labor costs - Decrease in market demand - Failure to appoint a Chairman and a Chief Executive Officer[211] Major Customers, Suppliers, and Connected Transactions The Group exhibits significant concentration risk with its top five customers and suppliers Concentration Ratios | Concentration Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenue share from top five customers | 56.4% | 55.2% | | Purchase share from top five suppliers | 80.9% | 89.2% | - The Group has ongoing property leasing agreements with a connected person, Top Champion Industries Limited, with related rental expenses of approximately HK$0.828 million for the year, which is exempt from full reporting requirements under Chapter 14A of the Listing Rules[271][278][279][281] Independent Auditor's Report Audit Opinion and Key Audit Matters The auditor issued an unqualified opinion, highlighting the impairment assessment of trade receivables as a key audit matter - The auditor issued an unqualified opinion, concluding that the consolidated financial statements give a true and fair view of the Group's financial position[305] - The impairment assessment of trade receivables was identified as a key audit matter due to its material impact on the consolidated financial position and the subjective judgment and management estimates involved in the assessment[311] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group reported a loss for the year of HK$12.2 million on revenue of HK$217.1 million Financial Performance | Item | FY2025 (HK$'000) | FY2024 (HK$'000) | | :--- | :--- | :--- | | Revenue | 217,074 | 148,231 | | Gross Profit | 43,826 | 34,146 | | Loss before tax | (11,949) | (21,328) | | Loss for the year | (12,204) | (22,561) | | Loss attributable to owners of the Company | (12,524) | (18,674) | | Basic loss per share (HK cents) | (3.04) | (4.91) | Consolidated Statement of Financial Position The Group's total assets stood at HK$200.4 million, with net assets of HK$144.6 million as of March 31, 2025 Financial Position | Item | Mar 31, 2025 (HK$'000) | Mar 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Non-current assets | 14,733 | 15,662 | | Current assets | 185,678 | 186,074 | | Total assets | 200,411 | 201,736 | | Current liabilities | 55,606 | 41,719 | | Non-current liabilities | 238 | 7,204 | | Total liabilities | 55,844 | 48,923 | | Net assets | 144,567 | 152,813 | | Equity attributable to owners of the Company | 115,233 | 122,707 | Consolidated Statement of Cash Flows The Group generated a net cash inflow of HK$11.5 million from operating activities, a significant turnaround from the prior year Cash Flow Summary | Item | FY2025 (HK$'000) | FY2024 (HK$'000) | | :--- | :--- | :--- | | Net cash from operating activities | 11,454 | (7,981) | | Net cash (used in)/from investing activities | (6,254) | 297 | | Net cash used in financing activities | (7,487) | (9,004) | | Net decrease in cash and cash equivalents | (2,287) | (16,688) | | Cash and cash equivalents at end of year | 42,174 | 46,616 | Financial Summary Five-Year Financial Summary | Metric (HK$'000) | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 217,074 | 148,231 | 157,048 | 141,748 | 106,693 | | Loss for the year | (12,204) | (22,561) | (3,576) | (1,475) | (6,537) | | Total assets | 200,411 | 201,736 | 231,105 | 232,796 | 239,093 | | Net assets | 144,567 | 152,813 | 177,869 | 186,305 | 185,986 | Definitions