东方汇财证券(08001) - 2025 - 年度财报

Corporate Information The report details core company information including board members, committee members, authorized representatives, company secretary, auditor, registered office, and principal place of business - The report details core company information including board members, committee members, authorized representatives, company secretary, auditor, registered office, and principal place of business[9][10][17] Executive Director's Statement Economic Context and Market Performance The report reviews Hong Kong's economic environment in 2024, noting its resilience despite global financial volatility, high interest rates, and geopolitical tensions - Despite challenges from US interest rate policies and geopolitical tensions, Hong Kong's capital market remained vibrant in 2024, with sustained investor confidence[24][25] - Hong Kong solidified its position as a major IPO listing venue in Asia, with total IPO fundraising reaching HK$67 billion, and 80% of the 76 new listings originating from mainland Chinese enterprises, particularly in healthcare, biotech, and technology sectors[25] Company Developments and Outlook In 2024, the company strategically focused on securities distribution (bonds and equities) and asset management, achieving significant revenue growth through China offshore LGFV bond distribution and enhancing market reputation - The company's 2024 strategic focus on securities distribution and asset management led to significant revenue growth through the distribution of China offshore LGFV bonds, strengthening revenue streams and enhancing market reputation[26][30] - The company is optimistic about future opportunities in China's equity and offshore bond markets, planning to create sustained growth and value for shareholders through innovation and diversification strategies[32] Management Discussion and Analysis Business Review In FY2024/25, despite a complex global economic environment, the Hong Kong stock market experienced a significant rebound, with the company's core businesses performing strongly, especially underwriting and placing The Underwriting and Placing Business In FY2024/25, the company's underwriting and placing business became a primary revenue driver, successfully expanding from equity placing to offshore LGFV bond placing, contributing HK$134 million from 58 bond issuances | Business Type | Number of Transactions | Revenue Contribution (HKD) | | :--- | :--- | :--- | | Equity Placing | 3 | Approx. 1.6 million | | LGFV Bond Placing | 58 | 134 million | The Brokerage Business In FY2024/25, the Group's brokerage business maintained stable operations, providing securities trading services for HKEX Main Board and GEM clients, with active accounts increasing to 617 and total transaction volume reaching approximately HK$373 million - As of March 31, 2025, the Group maintained 617 active securities trading accounts with a total transaction volume of approximately HK$373 million[44] The Asset Management Business The Group continued to expand its asset management business, providing investment advisory and custody services for five funds, with revenue primarily from management and performance fees, and total AUM for four active funds reaching approximately HK$544 million as of March 31, 2025 | Fund Name | Registration Place | AUM as of March 31, 2025 (HKD) | | :--- | :--- | :--- | | Orient Global Master SPC | Cayman Islands | Approx. 56.01 million | | Orient Global Master OFC | Hong Kong | Approx. 113.84 million | | Times Capital Global Master Fund SPC | Cayman Islands | 0 (Not yet launched) | | Flourish Growth Fund | Cayman Islands | Approx. 352.1 million | | YH Fund SPC | Cayman Islands | Approx. 21.69 million | The Money Lending Business In FY2024/25, the Group's money lending business underwent significant adjustments, with a full impairment of approximately HK$378 million in loans due to high recovery uncertainty in mainland China, resulting in an additional impairment loss of HK$197 million, and a decision to scale down the business to focus solely on Hong Kong property-backed loans - Due to legal and practical difficulties in liquidating collateral in mainland China, legal advisors and independent valuers engaged by the Group deemed loan recovery risks extremely high[84][85][87] Loan Portfolio Impairment (FY2024/25) | Loan Portfolio Impairment (FY2024/25) | Amount (HKD Million) | | :--- | :--- | | Total Loans and Interest Receivable | 377.8 | | Accumulated Impairment Provision at Beginning of Period | 181.1 | | New Impairment Provision for the Year | 196.7 | | Accumulated Impairment Provision at End of Period | 377.8 | - To proactively manage risk, the Board decided to scale down the money lending business, focusing solely on loans secured by Hong Kong properties, and has ceased approving new loan applications since 2023[97][98][99] Outlook For 2025, management remains cautiously optimistic about the Hong Kong market, driven by strong stock market trading and the Hang Seng Index recovery, planning to expand corporate finance advisory services through acquisitions to become a one-stop financial partner - Management maintains a cautiously optimistic outlook for the 2025 market, confident in Hong Kong's robust stock market trading activity (average daily turnover exceeding HK$200 billion) and the strong performance of the Hang Seng Index[101][102] - The Group plans to expand its corporate finance advisory business by acquiring companies holding Type 6 (advising on corporate finance) licenses, aiming to enhance service capabilities and strengthen client relationships[104][106] Financial Review In FY2024/25, the Group's total revenue increased by 46.25% to HK$138.8 million, primarily from LGFV bond placing, but a full impairment of approximately HK$196.7 million on money lending receivables led to a net loss of HK$214.2 million, a reversal from last year's profit of HK$3.4 million, alongside a significant increase in marketing and business development expenses to HK$134.8 million Financial Indicators (HKD Thousand) | Financial Indicator (HKD Thousand) | FY2024/25 | FY2023/24 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 138,761 | 94,878 | +46.25% | | Of which: Underwriting and Placing Income | 136,041 | 70,349 | +93.38% | | Of which: Interest Income from Lending Services | 0 | 21,241 | -100% | | Marketing and Business Development Expenses | (134,779) | (8,467) | +1492% | | Impairment Loss on Loans and Interest Receivable | (196,732) | (38,127) | +416% | | (Loss)/Profit for the Year | (214,206) | 3,392 | Turned from Profit to Loss | - Revenue growth was primarily driven by the new LGFV bond placing business, contributing revenue of approximately HK$134 million[117][120] - The shift from profit to loss was mainly due to the recognition of approximately HK$196.7 million in impairment losses on loans and interest receivable[141][146] Balance Sheet Indicators (HKD Thousand) | Balance Sheet Indicator (HKD Thousand) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Assets | 83,759 | 273,660 | | Total Liabilities | 58,768 | 34,463 | | Total Equity | 24,991 | 239,197 | | Current Ratio | 1.2x | 7.5x | | Debt-to-Asset Ratio | 8.4% | 0% | Corporate Governance Report Corporate Governance Practices The company is committed to high corporate governance standards, complying with GEM Listing Rules' Corporate Governance Code, with two deviations noted during the reporting period: an independent non-executive director's absence from an EGM and the lack of a Chairman or CEO position - The company complied with most provisions of the Corporate Governance Code during the reporting period, but with two deviations: - C.1.6: An independent non-executive director was unable to attend the EGM on September 20, 2024 - C.2.1: The company currently has no Chairman or Chief Executive Officer position[178][179] Board of Directors As of the reporting date, the Board comprises six directors (three executive, three independent non-executive), meeting the one-third independent director requirement, with several changes during the period, responsible for leadership and oversight, and adopting a board diversity policy - The Board consists of 6 directors, including 3 independent non-executive directors, meeting Listing Rule requirements, with frequent changes in board members during the reporting period[185] - The company adopted a board diversity policy, achieving diversity in gender, professional background, and skills, with two female directors currently on the Board[227][228] - During the reporting period, the Board held 11 meetings to discuss the Group's overall strategic direction, financial performance, and other significant matters[203] Board Committees The Board has an Audit Committee, Nomination Committee, and Remuneration Committee, all composed of independent non-executive directors, responsible for overseeing financial reporting, internal controls, director nominations, and executive remuneration policies, respectively, with each committee holding meetings during the period | Committee | Chairman | Composition | Number of Meetings During Reporting Period | | :--- | :--- | :--- | :--- | | Audit Committee | Mr. Chan Chi Fai | 3 Independent Non-executive Directors | 2 | | Nomination Committee | Mr. Chan Chi Fai | 3 Independent Non-executive Directors | 5 | | Remuneration Committee | Mr. Chan Chi Fai | 3 Independent Non-executive Directors | 5 | Risk Management and Internal Control The Board is responsible for establishing and maintaining effective risk management and internal control systems, engaging external professional consultants for annual independent reviews covering financial, operational, compliance, and ESG matters, and deems the existing systems effective and sufficient given the Group's size - The Board holds overall responsibility for the Group's risk management and internal control systems, aiming to safeguard assets, maintain accurate accounting records, and ensure regulatory compliance[265] - The Group engages external professional consultants for annual independent internal control reviews, and the Board and Audit Committee have reviewed and deemed the Group's internal control systems (including financial, operational, compliance, and risk management functions) effective and sufficient during the reporting period[270][271] Environmental, Social and Governance Report ESG Strategy and Management The Group views ESG management as crucial for long-term value and operational resilience, integrating it into governance, risk management, and business strategy, with the Board committed to climate action, value chain optimization, and capacity building, and conducting materiality assessments through stakeholder engagement - The Board considers ESG a core strategy, committed to systematically integrating ESG standards into investment decisions, advancing measurable environmental goals, and enhancing enterprise-wide ESG capabilities[338][343] - Through communication with key stakeholders including shareholders, employees, government, customers, and communities, the Group identified their primary concerns such as financial stability, employee development, and compliant operations[352][356] Environmental Performance The Group is committed to environmental protection, with a net-zero emissions roadmap by 2050 and climate change management policies, showing reduced total GHG emissions and electricity consumption in FY2025 through green office initiatives, with no environmental regulatory violations - The Group has set a target to achieve net-zero emissions by 2050 and actively manages climate-related transition risks (e.g., policy changes) and physical risks (e.g., extreme weather)[364][366] Environmental Performance Indicators | Environmental Performance Indicator | Unit | FY2025 | FY2024 | | :--- | :--- | :--- | :--- | | Total Greenhouse Gas Emissions | CO2e (kg) | 12,448.0 | 14,397.8 | | Total Energy Consumption (Electricity) | kWh | 15,189.0 | 18,710.0 | | Paper Consumption | kg | 346.6 | 232.0 | Our People The Group values employees as its most valuable asset, providing a healthy employment environment, equal opportunities, and continuous training, with 20 employees in Hong Kong as of March 31, 2025, reduced turnover, 4.1 average training hours per employee, and strict compliance with labor regulations - As of March 31, 2025, the Group had 20 employees, with 60% male and 40% female, and employee turnover rates by gender were 14.3% for males and 0% for females[417][424][427] - During the reporting period, each employee received an average of 4.1 hours of development and training, with senior and middle management receiving higher training hours at 5.0 hours[439][443] - The Group reported no work-related fatalities or injuries during the period and strictly adhered to labor standards, with no issues concerning child or forced labor[430][433][445] Operating Responsibly The Group emphasizes responsible operations, covering supply chain management, product responsibility, customer privacy protection, and anti-corruption, prioritizing environmentally and socially responsible suppliers, maintaining emergency plans, strictly complying with data privacy regulations, and implementing comprehensive anti-corruption and whistleblowing policies - The Group prioritizes environmentally and socially responsible suppliers in its supply chain management and encourages business partners to adopt sustainable practices[447][453] - The Group strictly complies with data privacy regulations, protecting customer personal data, with no related violations or significant complaints reported during the period[463][464] - The Group is committed to anti-corruption and anti-money laundering, providing 61.5 hours of related training to employees and maintaining a whistleblowing policy, with no concluded corruption or money laundering cases during the reporting period[465][468][469] Biographical Details of Directors and Senior Management This section details the personal biographies of the company's executive directors, independent non-executive directors, and senior management, including their age, academic background, professional qualifications, and extensive experience in finance, accounting, and asset management - This section details the personal biographies of the company's executive directors, independent non-executive directors, and senior management, including their age, academic background, professional qualifications, and extensive experience in finance, accounting, and asset management[503][510][517] Report of Directors Principal Activities and Business Review The Board's report outlines the Group's main businesses, including brokerage, underwriting, securities financing, money lending, and asset management services, noting that detailed reviews are in other sections, with no significant compliance breaches and no final dividend recommended - The Group primarily engages in five core businesses: brokerage services, underwriting and placing services, securities and IPO financing services, money lending services, and asset management services[525] - The directors do not recommend the payment of a final dividend for the year ended March 31, 2025[528] Directors' and Shareholders' Interests The report discloses directors' and major shareholders' interests in the company's shares as of March 31, 2025, with Executive Director Mr. Shiu Shu Ming holding or deemed to hold 11,316,800 shares, representing 9.10% of the total share capital, and confirms the status of the share option scheme | Director/Shareholder | Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Shiu Shu Ming | Interest in controlled corporation and beneficial owner | 11,316,800 | 9.10% | | Wealthbase Global Limited | Beneficial owner | 10,280,000 | 8.26% | - The company's share option scheme expired on December 19, 2023, with no new options granted, but previously granted options remain valid, with 3,192,000 unexercised share options as of March 31, 2025[602][607] Independent Auditor's Report Auditor's Opinion and Key Audit Matters RSM Hong Kong Certified Public Accountants Limited issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2025, affirming their true and fair view, with "Impairment Assessment of Loans and Interest Receivable" identified as a key audit matter - The auditor issued an unmodified opinion on the consolidated financial statements, deeming them to present a true and fair view of the company's financial position[640] - The key audit matter is the impairment assessment of loans and interest receivable, which involves significant judgment and estimation, leading the auditor to conduct detailed reviews including testing credit risk classification, reviewing repayment history, and evaluating the Expected Credit Loss (ECL) model[645][646][654] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For the fiscal year ended March 31, 2025, the Group reported a net loss of HK$214.2 million, a significant reversal from the previous year's profit of HK$3.39 million, primarily due to a substantial impairment loss of HK$196.7 million on loans and interest receivable, despite total revenue growth to HK$138.8 million Consolidated Statement of Profit or Loss and Other Comprehensive Income (HKD Thousand) | Item (HKD Thousand) | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenue | 138,761 | 94,878 | | Impairment Loss on Loans and Interest Receivable | (196,732) | (38,127) | | Marketing and Business Development Expenses | (134,779) | (8,467) | | (Loss)/Profit Before Income Tax | (214,220) | 7,577 | | (Loss)/Profit for the Year | (214,206) | 3,392 | | (Loss)/Earnings Per Share (HK Cents) | (172.17) | 2.73 | Consolidated Statement of Financial Position As of March 31, 2025, the Group's total assets significantly decreased to HK$83.76 million (2024: HK$273.7 million), total liabilities increased to HK$58.77 million (2024: HK$34.46 million), and total equity plummeted from HK$239.2 million to HK$24.99 million, mainly due to the full impairment of loans and interest receivable Consolidated Statement of Financial Position (HKD Thousand) | Balance Sheet Item (HKD Thousand) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Assets | 83,759 | 273,660 | | Non-current Assets | 11,029 | 15,121 | | Current Assets | 72,730 | 258,539 | | Of which: Loans and Interest Receivable | 0 | 196,732 | | Total Liabilities | 58,768 | 34,463 | | Net Assets (Total Equity) | 24,991 | 239,197 | Consolidated Statement of Cash Flows In FY2024/25, the Group experienced a net cash outflow from operating activities of HK$4.03 million (compared to a net inflow of HK$36.64 million last year), a net cash outflow from investing activities of HK$9.76 million, and a net cash inflow from financing activities of HK$1.94 million, resulting in a year-end cash and cash equivalents balance of HK$29.8 million Consolidated Statement of Cash Flows (HKD Thousand) | Cash Flow Item (HKD Thousand) | FY2025 | FY2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | (4,031) | 36,640 | | Net Cash from Investing Activities | (9,762) | 0 | | Net Cash from Financing Activities | 1,939 | (755) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (11,854) | 35,885 | | Cash and Cash Equivalents at End of Year | 29,800 | 41,654 | Financial Summary This section provides a five-year financial summary, highlighting key metrics such as revenue, profit/loss, total assets, total liabilities, and net assets, offering a concise overview of the Group's financial performance and position over time Financial Summary (HKD Thousand) | Financial Summary (HKD Thousand) | FY2025 | FY2024 | FY2023 (15 months) | FY2021 | FY2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 138,761 | 94,878 | 49,125 | 46,704 | 59,292 | | (Loss)/Profit for the Year/Period | (214,206) | 3,392 | (125,702) | 17,975 | 16,860 | | Total Assets | 83,759 | 273,660 | 259,257 | 381,906 | 354,023 | | Total Liabilities | (58,768) | (34,463) | (23,452) | (33,250) | (23,342) | | Net Assets | 24,991 | 239,197 | 235,805 | 348,656 | 330,681 |