知行集团控股(01539) - 2025 - 年度财报

Financial Highlights The Group achieved strong financial growth this year, with total revenue increasing by 70% to HKD 157 million and profit for the year rising over 241% to HKD 39.6 million, primarily driven by energy-saving systems and product leasing services, though adjusted profit slightly declined due to expected credit loss provisions Five-Year Financial Summary and Performance Highlights The Group's financial performance showed robust growth this year, with total revenue increasing by 70% year-on-year to HKD 157 million and profit for the year rising over 241% to HKD 39.6 million, primarily driven by energy-saving systems and product leasing services, though adjusted profit slightly declined due to expected credit loss provisions Five-Year Financial Summary (HKD thousands) | Indicator | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 157,371 | 92,619 | 46,550 | 80,434 | 53,784 | | Gross Profit | 93,385 | 56,744 | 27,713 | 32,563 | 26,376 | | EBITDA | 48,301 | 20,969 | (8,617) | (341,351) | (246,211) | | Profit/(Loss) for the Year | 39,597 | 11,602 | (24,014) | (386,905) | (282,534) | | Basic Earnings/(Loss) Per Share (HK cents) | 1.04 | 0.28 | (1.05) | (22.80) | (20.01) | | Total Assets | 565,908 | 468,382 | 373,638 | 417,811 | 404,890 | | Total Liabilities | 372,184 | 154,272 | 246,986 | 272,170 | 350,341 | | Net Assets | 193,724 | 314,110 | 126,652 | 145,641 | 54,549 | - For the year ended March 31, 2025, the Group recorded significant growth in several key financial indicators - Revenue: increased by 70% year-on-year, reaching approximately HKD 157.4 million[8] - Gross Profit: increased by 64.7% year-on-year, reaching approximately HKD 93.4 million[8] - EBITDA: increased by 130% year-on-year, reaching HKD 48.3 million[8] - Profit for the Year: increased by 241.3% year-on-year, reaching approximately HKD 39.6 million[8] - Despite growth in multiple indicators, adjusted profit (excluding significant non-recurring items) slightly decreased from HKD 36.3 million in the prior year to HKD 35.2 million, primarily due to the impact of expected credit loss provisions for financial assets[8] Chairman's Statement Chairman Mr. Wong Man Fai highlighted the Group's key initiatives in sustainability and innovation, including plans for a secondary listing in Malaysia to expand the investor base, advancing digital ESG vertical farming for sustainable food production, and launching the world's first ESG lighting system certified with artificial carbon credits Chairman's Statement Chairman Mr. Wong Man Fai highlighted the Group's key initiatives in sustainability and innovation, including plans for a secondary listing in Malaysia to expand the investor base, advancing digital ESG vertical farming for sustainable food production, and launching the world's first ESG lighting system certified with artificial carbon credits - The company is actively preparing for a secondary listing in Malaysia, aiming to broaden its investor base and strengthen its commitment to sustainable development in the region[9] - The Group is committed to innovation, continuously advancing its digital ESG vertical farming project to optimize resource utilization efficiency and promote sustainable food production[9] - The company successfully launched the world's first ESG lighting system certified with artificial carbon credits, demonstrating its leadership in carbon footprint reduction and environmental technology[10] Management Discussion and Analysis This section provides an overview of the Group's financial performance, liquidity, capital structure, significant investments, and future strategies Financial Review This year, the Group's total revenue significantly increased by 70.0% to HKD 157.4 million, primarily driven by the substantial expansion of energy-saving leasing projects in Malaysia; gross profit rose by 64.7% to HKD 93.4 million, but the gross profit margin slightly decreased to 59.3% Revenue and Gross Profit Total revenue increased by 70.0% to HKD 157.4 million, primarily driven by the "Energy Saving System and Product Leasing Services" segment, which saw revenue grow from HKD 39.3 million to HKD 85.1 million, mainly from the "Light in the Dark" project in Malaysia Revenue Segment Details (HKD thousands) | Business Segment | 2025 | 2024 | | :--- | :--- | :--- | | Energy Saving System and Product Leasing Services | 85,134 | 39,322 | | - Of which: Malaysia Project | 82,814 | 36,160 | | Energy Saving Product Trading | 65,033 | 40,278 | | Consulting Services Revenue | 7,204 | 12,931 | | Renewable Energy Services Revenue | – | 88 | | Total | 157,371 | 92,619 | - The "Light in the Dark" project in Malaysia was the primary driver of revenue growth, completing the installation of approximately 243,000 LED lights this year and increasing customer numbers from 81 to 170, thereby more than doubling the segment's revenue[14] - The Group's gross profit margin decreased from 61.3% in the previous year to 59.3% this year, primarily due to reduced profit margins from trade customers[18] Other Income, Expenses and Profit Analysis This year, the Group recorded net other expenses of approximately HKD 16.9 million, a significant shift from last year's net other income of HKD 10.9 million, mainly due to expected credit loss provisions for financial assets of approximately HKD 14.4 million - A gain on modification of financial assets of approximately HKD 39.2 million was recognized this year due to the restructuring of trade receivables with several debtors[19] - Selling and distribution expenses increased from HKD 5.6 million to HKD 10.1 million, primarily due to increased advertising and promotion expenses[20] - Administrative expenses increased from HKD 46.6 million to HKD 56.6 million, mainly driven by an increase of approximately HKD 12.7 million in equity-settled share option expenses[21] Reconciliation of Profit for the Year to Adjusted Profit (HKD thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Year | 39,597 | 11,602 | | Add/(Less) Significant Non-recurring/Non-operating Items: | | | | Gain on modification of financial assets | (39,253) | – | | Share-based payment expenses relating to share options | 21,117 | 8,462 | | Fair value loss on equity investments at fair value through profit or loss | 3,738 | 15,078 | | Fair value changes and amortization related to convertible bonds | 844 | (5,754) | | Others | 9,176 | 6,923 | | Adjusted Profit for the Year | 35,222 | 36,311 | Liquidity, Financial Resources and Capital Structure The Group's financial position faced challenges this year, with the current ratio significantly decreasing from 2.5 times to 0.9 times, indicating increased short-term solvency pressure, while total liabilities substantially increased and total equity decreased by approximately 38.3% - The Group's current ratio significantly decreased from approximately 2.5 times as at March 31, 2024, to approximately 0.9 times as at March 31, 2025, primarily due to a substantial increase in current liabilities[35] Aging Analysis of Trade Receivables (HKD millions) | Aging | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Not overdue | 233.4 | 47.1 | | Overdue 1-365 days | 4.9 | 39.2 | | Overdue over 365 days | 48.8 | 117.6 | | Total | 287.1 | 203.9 | - The Group reached settlement agreements with several customers to restructure long-outstanding trade receivables, with the restructured outstanding amount being approximately HKD 226.9 million, which improved the credit risk profile of trade receivables[43] - The gearing ratio (total liabilities/total equity) significantly increased from 32.0% in the prior year to 66.8% this year, reflecting a higher level of financial leverage[57] Significant Investments and Corporate Activities This year, the Group made a significant acquisition, increasing its equity interest in SCML, its Malaysian business operating holding company, to 88.04% for HKD 200 million, which constituted a discloseable and connected transaction - The Group acquired a 25% equity interest in its non-wholly owned subsidiary SCML (Malaysian business holding company) for HKD 200 million, increasing its interest in SCML from approximately 63.04% to 88.04%, which constituted a discloseable connected transaction[46] - The Group's investment in associate KSL Group is its only significant investment (exceeding 5% of total assets), accounting for approximately 7.5% of total assets[48] - The share of loss from KSL Group this year was approximately HKD 4 million, primarily due to a one-off loss from KSL's early settlement of trade receivables[50] Use of Proceeds from Convertible Bonds (HKD millions) | Intended Use | Intended Amount | Actual Use for the Year Ended March 31, 2025 | Unutilized Proceeds | | :--- | :--- | :--- | :--- | | Capital expenditures for energy-saving projects | 59.6 | 19.8 | – | | General working capital | 14.9 | – | – | | Total | 74.5 | 19.8 | – | Future Outlook The Group's future strategic focus is clear, with plans for a secondary listing in Malaysia to enhance company value and business development, while accelerating the "Light in the Dark" project and deepening cooperation with Nestlé in vertical farming - The Group is preparing for a potential secondary listing on the Malaysian stock exchange to broaden investor access, enhance corporate reputation, and support business development in Malaysia[64] - In Malaysia, the Group will accelerate the deployment of the "Light in the Dark" project and continue its collaboration with Nestlé on vertical farming projects, with promising results already achieved in chilli cultivation tests[65] - The Group is actively expanding into new markets, including: - Singapore: Establishing a strategic partnership with Primech Group to jointly explore energy efficiency solutions and commercial applications of robotics technology[69] - Middle East: Discussing cooperation opportunities with local partners on energy management contracts, solar equipment procurement, and green data centers[70] Directors' Report This report details the Board of Directors' composition, their interests in the company's shares, and the company's share option scheme, along with information on major customers and suppliers Directors' and Shareholders' Interests The report details the list of Board members and their shareholdings in the company, with Chairman Mr. Wong Man Fai, through his controlled corporations and personal beneficial ownership, collectively holding approximately 56.09% of the company's shares as the controlling shareholder Interests of Directors and Chief Executive in the Company's Shares (As at March 31, 2025) | Name of Director | Nature of Interest | Number of Shares (Long Position) | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Wong Man Fai | Interest in controlled corporation / Beneficial owner | 1,931,807,481 | 56.090% | | Choi Yan Yan | Spouse's interest | 1,931,807,481 | 56.090% | | Tsang Sze Wai | Beneficial owner | 68,000,000 | 1.974% | Interests of Substantial Shareholders in the Company's Shares (As at March 31, 2025) | Name of Substantial Shareholder | Nature of Interest | Number of Shares (Long Position) | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Rich Gain Development Limited | Beneficial owner | 1,825,245,360 | 52.996% | | Ancient Wisdom Limited | Interest in securities of shares | 1,240,547,360 | 36.019% | | Ng Sheung Tun | Interest in controlled corporation | 1,240,547,360 | 36.019% | Share Option Scheme The company terminated its "2015 Share Option Scheme" on November 1, 2024, and adopted a new "2024 Share Option Scheme" with a ten-year validity, aimed at incentivizing and retaining talent - The company terminated its 2015 Share Option Scheme and adopted a new "2024 Share Option Scheme" on November 1, 2024, with a ten-year validity, aiming to attract, retain talent, and provide additional incentives[102][103] Summary of Share Option Movements During the Year (As at March 31, 2025) | Status | Number of Share Options | | :--- | :--- | | Outstanding at beginning of year | 124,224,680 | | Granted during the year | 166,724,000 | | Exercised during the year | (35,606,680) | | Lapsed/forfeited during the year | (26,406,000) | | Outstanding at end of year | 207,367,320 | Major Customers and Suppliers The Group's procurement and sales demonstrate high concentration, with the top five suppliers accounting for 99.1% of total purchases and the top five customers accounting for 51.3% of total sales for the year ended March 31, 2025 - Supplier concentration is high: the top five suppliers accounted for 99.1% of total purchases, with the largest supplier accounting for 94.6%[127] - Customer concentration is relatively high: the top five customers accounted for 51.3% of total sales, with the largest customer accounting for 20.7%[127] Corporate Governance Report This report outlines the company's commitment to maintaining high corporate governance standards, detailing its practices, board composition, committee functions, risk management, internal controls, and shareholder communication Corporate Governance Practices and the Board The company is committed to maintaining a high level of corporate governance and has complied with most provisions of the Corporate Governance Code, with one deviation where the roles of Chairman and Chief Executive Officer are combined and held by Mr. Wong Man Fai - The company deviated from the Corporate Governance Code's provision requiring separation of the roles of Chairman and Chief Executive Officer, with Mr. Wong Man Fai holding both positions, which the Board believes contributes to more effective leadership and focus on business strategy implementation[162] - The Board currently comprises seven directors, including one executive director, two non-executive directors, and four independent non-executive directors, meeting the Listing Rules' requirements for the number and proportion of independent non-executive directors[155] Board Meeting Attendance Record (For the Year Ended March 31, 2025) | Name of Director | Board Meetings | Audit Committee | Remuneration Committee | Nomination Committee | Annual General Meeting | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Wong Man Fai | 4/4 | – | – | – | 1/1 | | Mr. Tsang Sze Wai | 4/4 | – | – | – | 1/1 | | Ms. Choi Yan Yan | 3/3 | – | – | – | 1/1 | | Mr. Chung Koon Yan | 4/4 | 3/3 | 1/1 | 1/1 | 1/1 | | Mr. Cheung Yik Hung | 4/4 | 3/3 | 1/1 | 1/1 | 1/1 | | Dr. Wong Tze King | 4/4 | 3/3 | 1/1 | 1/1 | 0/1 | | Mr. Tong Wai Lun | 4/4 | – | – | 1/1 | 1/1 | Board Committees The Board has established Audit, Nomination, and Remuneration Committees, all primarily led by independent non-executive directors to ensure independence and professionalism - Audit Committee: Composed of three independent non-executive directors, its primary responsibilities include reviewing financial statements, overseeing the financial reporting system, and risk management and internal control systems[187] - Nomination Committee: Composed of four independent non-executive directors and one non-executive director, it is responsible for reviewing the Board's structure, composition, and diversity, and this year recommended the appointment of a female non-executive director to avoid a single-gender board[192] - Remuneration Committee: Composed of three independent non-executive directors, it is responsible for determining the remuneration of executive directors and senior management, and this year reviewed remuneration packages and recommended the grant of share options to several directors and eligible participants[210][211] Risk Management, Internal Control and Shareholder Communication The Board assumes full responsibility for risk management and internal control systems, conducting annual effectiveness reviews, and has established written procedures for handling and disseminating inside information, while actively engaging with shareholders through various channels - The Board confirmed its full responsibility for risk management and internal control systems and, with the assistance of the Audit Committee, reviewed the effectiveness of the systems for the year ended March 31, 2025, deeming them effective and adequate[220][223] - The company has established and implemented written procedures for handling and disseminating inside information, ensuring compliance and confidentiality of information disclosure[226] - The company values communication with shareholders, has adopted a shareholder communication policy, and facilitates information exchange through various channels such as general meetings and the company website to protect shareholder rights[230] Biographies of Directors and Senior Management This section details the backgrounds, qualifications, and experience of the company's directors and senior management, highlighting the core leadership's expertise in electronic engineering, capital markets, private equity, investment banking, accounting, and business operations Biographies of Directors and Senior Management This section details the backgrounds, qualifications, and experience of the company's directors and senior management, highlighting the core leadership's expertise in electronic engineering, capital markets, private equity, investment banking, accounting, and business operations - Mr. Wong Man Fai (Chairman and Chief Executive Officer): 51 years old, holds a Master's degree in Electronic Engineering from Cornell University, with over 18 years of management experience, primarily responsible for the Group's overall corporate strategy, development management, and operations[256] - Mr. Tsang Sze Wai (Non-executive Director): 48 years old, with over 20 years of experience in capital markets, specializing in SPACs, private equity, and M&A transactions, having previously worked at Templeton Asset Management and Lehman Brothers[257] - Senior Management: The team includes Mr. Cheng Chi Kuen (Chief Operating Officer), Mr. Lo Kwok Shing (Chief Investment Officer), Mr. Wong Ho Kwan (Chief Financial Officer), and Mr. Ng Sai Wing (Chief Strategy Officer), all possessing extensive industry experience in their respective fields[266][267][269][270] Independent Auditor's Report The auditor, Beijing Xinghua Dingfeng Certified Public Accountants Co., Ltd., issued an unmodified opinion on the company's consolidated financial statements for the year ended March 31, 2025, affirming that the financial statements truly and fairly reflect the Group's financial position and performance Independent Auditor's Report The auditor, Beijing Xinghua Dingfeng Certified Public Accountants Co., Ltd., issued an unmodified opinion on the company's consolidated financial statements for the year ended March 31, 2025, affirming that the financial statements truly and fairly reflect the Group's financial position and performance - The auditor issued an unmodified opinion on the consolidated financial statements, deeming them to truly and fairly reflect the Group's financial position and performance in accordance with Hong Kong Financial Reporting Standards[272] - The "impairment assessment of trade receivables and finance lease receivables" was identified as a key audit matter, primarily because these amounts represent approximately 71% of total assets, and their impairment assessment involves significant management judgment and estimation uncertainty[276] - The auditor performed procedures including evaluating management's estimation process, the appropriateness of data used, the competence of management's experts, and checking the accuracy of valuation models, concluding that the Group's impairment assessment for these amounts was supported by available evidence[278][282][285] Consolidated Financial Statements This section presents the Group's comprehensive financial performance and position, including the statement of comprehensive income, statement of financial position, and cash flow statement, along with detailed notes explaining accounting policies and key financial items Key Financial Statements The financial statements show strong profit growth for the Group in FY2025, with profit for the year reaching HKD 39.6 million, significantly exceeding last year's HKD 11.6 million, though the balance sheet indicates a weakened financial structure with net current liabilities of HKD 29.46 million Summary of Consolidated Statement of Comprehensive Income (HKD thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 157,371 | 92,619 | | Gross Profit | 93,385 | 56,744 | | Profit before income tax | 38,841 | 15,217 | | Profit for the year | 39,597 | 11,602 | | Profit attributable to owners of the Company | 35,532 | 8,387 | | Basic earnings per share (HK cents) | 1.04 | 0.28 | Summary of Consolidated Statement of Financial Position (HKD thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Non-current assets | 225,903 | 183,791 | | Current assets | 340,005 | 284,591 | | Total assets | 565,908 | 468,382 | | Current liabilities | 369,465 | 111,984 | | Non-current liabilities | 2,719 | 42,288 | | Total liabilities | 372,184 | 154,272 | | Net assets | 193,724 | 314,110 | Notes to the Consolidated Financial Statements The notes to the financial statements provide detailed explanations of the company's accounting policies, key accounting estimates, and various financial statement items, including segment information, trade receivables, borrowings, and convertible bonds Note 5: Segment Information This year, the Group's revenue primarily originated from two major segments: "Provision of Energy Saving Systems" and "Energy Saving Product Trading," with the Malaysian market contributing the most significant portion of revenue at HKD 85.06 million, accounting for 54% of total revenue Revenue from External Customers by Segment (HKD thousands) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Provision of Energy Saving Systems | 85,134 | 39,322 | | Energy Saving Product Trading | 65,033 | 40,278 | | Energy Saving Product Licensing Fees (Consulting) | 7,204 | 12,931 | | Solar PV System EPCC | – | 88 | | Total | 157,371 | 92,619 | Revenue from External Customers by Geographical Region (HKD thousands) | Region | 2025 | 2024 | | :--- | :--- | :--- | | Malaysia | 85,062 | 39,182 | | Japan | 32,526 | 17,179 | | Australia | 32,229 | 17,415 | | Macau | 7,204 | 8,102 | | Hong Kong | 65 | 10,127 | | Others | 285 | 614 | | Total | 157,371 | 92,619 | Note 19: Trade Receivables As of March 31, 2025, net trade receivables amounted to HKD 287 million, with the Group restructuring approximately HKD 369 million in receivables into a HKD 246 million repayment plan this year, resulting in a HKD 39.25 million gain on modification of financial assets and an improved aging structure - This year, the Group reached debt restructuring agreements with several trade debtors, restructuring approximately HKD 369 million in receivables into a HKD 246 million repayment plan, and consequently recognized a HKD 39.25 million gain on modification of financial assets in profit or loss[501] Note 26: Borrowings The Group's total borrowings significantly increased from HKD 17.42 million in the previous year to HKD 88.96 million, primarily due to a new MYR 50 million secured bank financing to support Malaysian operations, with most borrowings secured by finance lease receivables, trade receivables, and bank deposits - The Group's total borrowings significantly increased from HKD 17.42 million to HKD 88.96 million[526] - A new financing agreement of MYR 50 million (approximately HKD 88.5 million) was secured to support Malaysian business expansion, with the loan collateralized by finance lease receivables, trade receivables, and other assets[527] Note 30: Convertible Bonds The convertible bonds with a total principal amount of USD 10 million, issued by the company in 2023, were fully converted into company shares during this fiscal year, with the remaining USD 2.5 million converted into approximately 59.09 million new shares on May 31, 2024 - On May 31, 2024, the remaining principal amount of USD 2.5 million of convertible bonds was converted into approximately 59.09 million newly issued shares of the company[550] - As of March 31, 2025, all convertible bonds issued in 2023 have been converted, with a carrying value of zero[551]