桦欣控股(01657) - 2025 - 年度财报

Chairman's Statement Despite macroeconomic instability, the Group's sales increased to HKD 153.8 million, with losses narrowing to HKD 6 million, driven by strong growth in apparel supply and explosive expansion in institutional catering Financial Performance Summary | Indicator | FY2025 | Change | | :--- | :--- | :--- | | Sales | HKD 153.8 million | Increase | | Annual Loss | HKD 6 million | Decrease | - Apparel supply business revenue recorded a 17.9% growth, indicating a stable core business[6] - Institutional catering business, as a new growth driver, saw revenue increase by 489.5%, with the Group confident in its future development as a true business model transformation[6] - Future strategy will focus on strengthening customized integrated apparel design and procurement services, optimizing the supplier base, and prudently exploring suitable investment opportunities[7] Management Discussion and Analysis This chapter reviews the Group's business and financial performance, highlighting revenue growth across all segments, improved gross margin, and a significantly narrowed net loss, while discussing liquidity, capital structure, and future outlook Business Review The Group's three business segments—traditional apparel sourcing, new retail, and institutional catering—all achieved significant growth this year, with new retail and institutional catering showing particularly strong expansion Business Segment Revenue | Business Segment | FY2025 Revenue (HKD million) | FY2024 Revenue (HKD million) | YoY Growth | | :--- | :--- | :--- | :--- | | Traditional Segment | 97.2 | 91.8 | +5.9% | | New Retail Segment | 45.4 | 29.2 | +55.5% | | Institutional Catering Segment | 11.2 | 1.9 | +489.5% | - Growth in traditional business primarily stemmed from increased orders from a major UK client and a new US client[10] - New retail business growth was driven by optimized influencer collaboration series and more precise product offerings to clients[10] Financial Review The Group's financial performance significantly improved this fiscal year, with total revenue growing 25.1% to HKD 153.8 million, gross profit increasing 65.6%, and annual loss narrowing substantially to HKD 6 million Key Financial Indicators | Financial Indicator | FY2025 (HKD million) | FY2024 (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 153.8 | 122.9 | +25.1% | | Gross Profit | 30.3 | 18.3 | +65.6% | | Gross Profit Margin | 19.7% | 14.9% | +4.8pp | | Loss for the Year | (6.0) | (17.1) | -64.9% | | Basic Loss Per Share (HKD) | (0.189) | (0.536) | -64.7% | - Gross profit margin improvement primarily resulted from continuous optimization of client and supplier portfolios[17] - Administrative expenses decreased by 2.9% year-on-year, mainly due to optimized back-office teams and reduced rental expenses, reflecting effective cost control measures[20] - Selling and distribution expenses increased by 11.0% year-on-year, primarily due to higher staff costs to support enhanced apparel design, procurement, and institutional catering services[21] Liquidity and Financial Resources The Group maintained a sound financial position at year-end with net current assets of HKD 63.6 million and cash of HKD 30.4 million, despite a decrease in liquidity ratio and an increase in gearing ratio Liquidity and Financial Resources Summary | Indicator | April 30, 2025 | April 30, 2024 | | :--- | :--- | :--- | | Net Current Assets | HKD 63.6 million | HKD 64.3 million | | Bank Balances and Cash | HKD 30.4 million | HKD 32.4 million | | Current Ratio | 2.9 | 5.8 | | Gearing Ratio | 0.1684 | 0.0716 | Capital Structure, Significant Investments and Commitments The Group's capital structure remained stable this fiscal year with issued share capital of HKD 0.32 million, reporting no significant investments, acquisitions, disposals, capital commitments, or contingent liabilities - As of April 30, 2025, the company's issued share capital was HKD 320,000, divided into 32,000,000 shares[29] - During the year, the Group had no significant investments, major acquisitions or disposals, capital commitments, or contingent liabilities[30][31][28][33] Employees and Remuneration Policy At fiscal year-end, the Group employed 49 staff, an increase of 3, with total employee benefit expenses of approximately HKD 14.3 million, and remuneration policy based on market conditions and individual performance Employee and Remuneration Data | Indicator | FY2025 | FY2024 | | :--- | :--- | :--- | | Total Employees | 49 people | 46 people | | Total Employee Benefit Expenses | HKD 14.3 million | HKD 11.2 million | Future Outlook The Group plans to deepen customized apparel design and procurement services while expanding institutional catering to achieve sustainable growth, with the Board prudently seeking investment opportunities - The Group will continue to strengthen customized integrated apparel design and procurement services and explore new business opportunities with clients[41] - The Group plans to gradually expand the scale of its institutional catering business, aiming for sustainable profitable growth[42] - The Board will continue to prudently explore suitable investment opportunities from time to time to enhance the interests of the company and its shareholders[42] Key Risks and Uncertainties Key risks include reliance on major clients without long-term contracts, intense market competition, client credit risk, raw material price fluctuations, and the inability to offset sales losses from UK client order reductions - Reliance on Major Clients: The Group relies on certain major clients without long-term contracts, leading to revenue uncertainty[43] - Market and Operational Risks: These include the ability to adapt to changes in end-customer preferences, risk of reduced orders from the UK market, intense market competition, client credit risk, and raw material price fluctuations[43] - Supplier Compliance Risk: Some clients are sensitive to social responsibility standards, and non-compliance by suppliers could impact the Group's reputation and client relationships[43] Biographies of Directors and Senior Management This section details the backgrounds of the company's executive directors, independent non-executive directors, and senior management, covering their positions, responsibilities, industry experience, and academic qualifications Directors and Senior Management Profiles | Name | Position | Key Responsibilities/Background | | :--- | :--- | :--- | | Mr. Choi King Ting | Executive Director, Chairman and CEO | Responsible for overall Group management, operations, and strategy, with over twenty years of industry experience | | Mr. Choi Ching Sing | Executive Director, Head of Design and Development Team | Responsible for overall Group management and apparel product design and development, with over sixteen years of industry experience | | Ms. Li Lai Mei | Executive Director, Administration and Human Resources Manager | Responsible for Group administration and human resources management, with over twenty years of bookkeeping and administrative experience | | Mr. Lai Kwok Hung | Independent Non-executive Director | Chairman of the Audit and Risk Management Committee, experienced in corporate governance and financial advisory | | Mr. Yeung Chuen Chau | Independent Non-executive Director | Chairman of the Remuneration Committee, with over eighteen years of experience in the garment industry | | Mr. Cüneyt Bülent Bilâloğlu | Independent Non-executive Director | Member of the Audit, Remuneration, and Nomination Committees, with approximately sixteen years of experience in the legal profession | | Ms. Lau Wai Ching | Accounting Manager | Responsible for Group financial management, with approximately thirty years of accounting experience | | Mr. Yu Yuk Ming | Quality Assurance Manager | Responsible for overall quality control procedures, with approximately thirty-six years of experience in the garment industry | | Mr. Chu Pui Ki | Company Secretary | Responsible for overseeing company secretarial matters, a member of the Hong Kong Institute of Certified Public Accountants | Corporate Governance Report This report outlines the company's corporate governance structure and practices, confirming compliance with most code provisions, detailing the Board's composition, committee operations, risk management, and shareholder communication Corporate Governance Practices The company adheres to the HKEX Corporate Governance Code, with the only deviation being the combined Chairman and CEO roles, which the Board believes ensures effective management and balanced power - The company complies with all provisions of the Corporate Governance Code, with the only deviation being Code Provision C.2.1, where the roles of Chairman and Chief Executive Officer are combined and held by Mr. Choi King Ting[56] - The Board believes that combining the roles of Chairman and Chief Executive Officer allows for efficient management and business development, with the Board, including three independent non-executive directors, ensuring a balance of power[56] Board and Committees The Board comprises three executive and three independent non-executive directors, supported by three specialized committees—Audit and Risk Management, Remuneration, and Nomination—all maintaining excellent attendance records Board Committee Responsibilities | Committee Name | Chairman | Key Responsibilities | | :--- | :--- | :--- | | Audit and Risk Management Committee | Mr. Lai Kwok Hung | Oversees relationship with external auditors, reviews financial information, and monitors risk management and internal control systems | | Remuneration Committee | Mr. Yeung Chuen Chau | Advises the Board on remuneration policies and structures for directors and senior management | | Nomination Committee | Mr. Choi King Ting | Reviews Board structure, size, and composition, assesses independence of independent non-executive directors, and recommends director appointments | - The Board has adopted a "Board Diversity Policy," currently includes one female director, and will continue to seek opportunities to increase the proportion of female members[68][69] - During the reporting year, all directors maintained a 100% attendance rate at Board meetings, general meetings, and relevant committee meetings (where applicable)[88] Risk Management and Internal Control The Board annually reviews the Group's risk management and internal control systems, engaging external independent professionals for internal control review and adopting a "three lines of defense" governance framework based on COSO - The Board annually reviews the effectiveness of the risk management and internal control systems, covering financial, operational, and compliance controls[95] - The Group does not have an internal audit department but has appointed external independent professional APEC RISK MANAGEMENT LIMITED (ARML) to assist in identifying and assessing risks and independently reviewing internal control systems[95][96][97] - The Group has established a "three lines of defense" corporate governance framework for risk monitoring: (i) operational management monitoring, (ii) financial team risk management monitoring, and (iii) outsourced independent internal audit[101] Communication with Shareholders and Investors The company prioritizes effective shareholder communication via its website, hotline, and email, encouraging general meeting attendance, and outlining procedures for shareholders to convene extraordinary general meetings and propose resolutions - The company communicates with shareholders and investors through various channels, including its website (www.jcfash.com), telephone hotline, and email address[111] - Pursuant to Article 64 of the Articles of Association, shareholders holding not less than 10% of the paid-up share capital have the right to request an extraordinary general meeting[112] Environmental, Social and Governance (ESG) Report This ESG report details the Group's environmental, social, and governance policies, measures, and performance, covering emissions, resource use, climate strategies, employee welfare, and supply chain management, demonstrating commitment to sustainable development Environmental The Group is committed to reducing its environmental impact, with total greenhouse gas emissions of 220.155 tonnes of CO2e, re-integrating 36.4 tonnes of fabric waste, and adopting the TCFD framework for climate-related disclosures Greenhouse Gas Emissions | Greenhouse Gas Emissions (tonnes of CO2e) | FY2025 | | :--- | :--- | | Scope 1 (Direct Emissions) | 0.310 | | Scope 2 (Indirect Emissions - Energy) | 142.925 | | Scope 3 (Indirect Emissions - Value Chain) | 76.920 | | Total Emissions | 220.155 | - The Group utilizes the innovative blockchain platform TT Green for greenhouse gas inventory management and carbon emission calculation to ensure data accuracy and completeness[140] - In fabric waste management, 36.4 tonnes of non-hazardous fabric waste were re-integrated into the production process during the reporting period, demonstrating circular economy practices[155] - The report incorporates recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) for the first time, comprehensively outlining climate-related risks and opportunities, governance structure, strategies, and scenario analysis[178][199] Social The Group focuses on employee welfare, supply chain ethics, and product safety, reporting 49 employees, 100% training coverage, zero fatalities, zero lost workdays, zero product recalls, zero customer complaints, and zero corruption cases, while rigorously managing 13 key suppliers - In employment, the Group has 49 employees, with 69% female; the highest turnover rate was in Hong Kong (20%) and among the 20-29 age group (27%)[255][257][258] - In health and safety, the reporting period saw zero work-related fatalities and zero lost workdays due to work-related injuries[265][268] - In development and training, 100% of employees received training, with middle management having the highest average training hours (3.75 hours)[278][280] - In product responsibility, there were zero product recalls due to safety and health reasons and zero related complaints during the reporting period[305][306] - In anti-corruption, there were no concluded corruption-related cases during the reporting period, and anti-corruption training was provided to all directors and employees[312][314] - In supply chain management, the Group conducts rigorous environmental and social risk assessments for suppliers located in Hong Kong (8 suppliers) and Mainland China (5 suppliers)[289][290] Directors' Report This report outlines the Board's work for the fiscal year, covering principal business, performance, and share capital, confirming no final dividend recommendation, disclosing major client and supplier concentrations, and affirming compliance with non-competition undertakings and public float requirements - The Board does not recommend the payment of a final dividend for the current year[324] Customer and Supplier Concentration | Concentration Analysis | Percentage of Total | | :--- | :--- | | Sales to Largest Customer | 29.3% | | Sales to Top Five Customers | 82.2% | | Purchases from Largest Supplier | 34.0% | | Purchases from Top Five Suppliers | 85.6% | - Chairman Mr. Choi King Ting, through his wholly-owned JC Fashion International Group Limited, collectively holds a 74.91% equity interest in the company[349][351] - During the reporting period and up to the date of this report, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[358] - The company confirms that it maintained a public float of at least 25% during the current year and up to the date of this report, in compliance with Listing Rules requirements[364] Independent Auditor's Report This report by Debo CPA Limited provides an unmodified opinion on the consolidated financial statements, affirming they present a true and fair view, and highlights key audit matters including revenue recognition, trade receivables impairment, and asset impairment - The auditor issued an unmodified opinion on the Group's consolidated financial statements (true and fair view)[370] - Key audit matters include: - Revenue Recognition for Apparel Products Supply: Due to its significant contribution to total revenue and management's judgment on recognition timing - Impairment Assessment of Trade Receivables: Due to its significance to the consolidated financial position and subjective judgment and estimation of expected credit losses - Impairment of Property, Plant and Equipment, Intangible Assets and Right-of-Use Assets: Due to its significance to the consolidated financial statements and high level of management judgment in determining recoverable amounts[372][373][375][377] Consolidated Financial Statements This section presents the Group's audited consolidated financial statements for the year ended April 30, 2025, including key statements and notes, showing annual revenue of HKD 153.8 million, a loss of HKD 6.041 million, total assets of HKD 116.5 million, and net assets of HKD 83.11 million Consolidated Statement of Profit or Loss and Other Comprehensive Income This fiscal year, the Group recorded revenue of HKD 153.8 million, a 25.1% increase, and gross profit of HKD 30.35 million, up 65.6%, leading to a significant reduction in loss for the year to HKD 6.04 million Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item (HKD thousand) | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenue | 153,766 | 122,905 | | Gross Profit | 30,347 | 18,319 | | Loss Before Tax | (6,255) | (17,359) | | Loss for the Year | (6,041) | (17,147) | | Total Comprehensive Expense for the Year | (6,234) | (17,631) | | Basic Loss Per Share (HKD) | (0.189) | (0.536) | Consolidated Statement of Financial Position As of April 30, 2025, the Group's total assets increased to HKD 116.5 million, total liabilities rose to HKD 33.38 million due to new borrowings, and total equity decreased to HKD 83.11 million Consolidated Statement of Financial Position | Item (HKD thousand) | April 30, 2025 | April 30, 2024 | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 20,032 | 26,662 | | Current Assets | 96,460 | 77,635 | | Total Assets | 116,492 | 104,297 | | Liabilities and Equity | | | | Current Liabilities | 32,872 | 13,349 | | Non-current Liabilities | 510 | 1,604 | | Total Liabilities | 33,382 | 14,953 | | Total Equity | 83,110 | 89,344 | Consolidated Statement of Cash Flows This fiscal year, the Group experienced a net cash outflow from operating activities of HKD 12.74 million, net cash inflow from investing activities of HKD 3.82 million, and net cash inflow from financing activities of HKD 7.12 million, resulting in a year-end cash balance of HKD 30.44 million Consolidated Statement of Cash Flows | Item (HKD thousand) | FY2025 | FY2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | (12,738) | 1,479 | | Net Cash from Investing Activities | 3,820 | 237 | | Net Cash from Financing Activities | 7,117 | (3,008) | | Net Decrease in Cash and Cash Equivalents | (1,801) | (1,292) | | Cash and Cash Equivalents at Year-End | 30,439 | 32,430 | Financial Summary This summary provides key performance and financial position data for the Group over the past five fiscal years, showing fluctuating revenue, three consecutive years of pre-tax losses, and a declining net asset value Five-Year Financial Summary | Item (HKD thousand) | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 153,766 | 122,905 | 149,362 | 168,888 | 120,932 | | (Loss) Profit Before Tax | (6,255) | (17,359) | (16,517) | 1,230 | 1,051 | | Net Assets | 83,110 | 89,344 | 106,975 | 126,194 | 125,960 |