ALCO HOLDINGS(00328) - 2025 - 年度财报

Company Information The report details core company information including board members, company secretary, principal bankers, auditors, legal advisors, and registered office - The report provides detailed core company information, including board members, company secretary, principal bankers, auditors, legal advisors, and registered office[5] Chairman's Statement Group Performance and Dividends The Group's FY2025 performance significantly declined with a 33% year-on-year decrease in turnover, turning from profit to loss, with a loss of HKD 64 million from continuing operations, while prior year's profit was primarily from one-off gains from discontinued operations, and the Board does not recommend a final dividend FY2025 Performance Overview (Continuing Operations) | Indicator | Year Ended March 31, 2025 | Year Ended March 31, 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Turnover | HKD 99 million | HKD 148 million | -33% | | Gross Profit | HKD 5 million | HKD 9 million | -44% | | Annual (Loss)/Profit | (HKD 64 million) | HKD 592 million | From Profit to Loss | - The high profit in FY2024 was primarily due to a one-off gain of HKD 596 million from deconsolidation of discontinued operations and HKD 78 million from deconsolidation of a subsidiary, not from core business operations[6] - The Board does not recommend a final dividend for the financial year ended March 31, 2025[7] Business Review The Group's core business is proprietary brand notebooks and tablets, transitioning from in-house manufacturing to outsourced ODM/OEM, which, despite generating gross profit, faces a challenging business environment and financial difficulties, necessitating new product and market development and reliance on capital market financing for operations - The core business involves developing and selling proprietary brand notebooks and tablets[8] - The company is transitioning from in-house manufacturing to outsourced ODM and OEM models, which has generated gross profit, but the overall financial condition remains challenging[8] - The company will continue to rely on capital markets for fundraising to address financial challenges and seek a stable and profitable operating model[8] Outlook The Group maintains cautious optimism for the future, focusing on strategic objectives including optimizing operational efficiency, exploring business collaborations to enhance competitiveness, and planning capital market financing through rights issues to support strategic investments and future growth - Operational Optimization: Continued implementation of headcount reductions, process improvements, and cost control measures to enhance efficiency[11] - Business Collaboration: Actively exploring strategic partnerships, technological innovation, and product diversification to seize new market opportunities[11] - Capital Market Financing: Plans to explore financing options such as rights issues to raise funds for strategic investments and growth initiatives[11] Biographical Details of Directors Directors' Biographies This section provides detailed personal backgrounds, professional experience, and industry qualifications of the company's executive, non-executive, and independent non-executive directors, who collectively possess extensive experience across banking, investment, finance, accounting, corporate management, and information technology - Executive Director Ms. Liu Li Ping possesses over 27 years of experience in banking, investment, and education[12] - Non-Executive Director Mr. Bian Wenbin has over 15 years of financial experience and has led intelligent transformation in financial and legal services[14][15] - The independent non-executive director team possesses diverse professional backgrounds in accounting, corporate finance, business administration, and engineering, with several members holding directorships in other listed companies[16][17][22][24] Corporate Governance Report Corporate Governance Practices and the Board The company is committed to high standards of corporate governance and has complied with the Corporate Governance Code; the Board, comprising eight members (two executive, two non-executive, and four independent non-executive directors), is responsible for the Group's business and strategic decisions, holding 20 meetings during the reporting period with disclosed attendance - The company has complied with all applicable code provisions of the Corporate Governance Code during the year[25] - The Board currently comprises 8 members: 2 executive directors, 2 non-executive directors, and 4 independent non-executive directors[27] Board Meeting Attendance (Year Ended March 31, 2025) | Director Name | Position | Attended/Eligible to Attend | | :--- | :--- | :--- | | Ms. Liu Li Ping | Executive Director | 19/19 | | Mr. He Ze Yu | Executive Director | 20/20 | | Mr. Tian Yi | Non-Executive Director | 5/5 | | Mr. Zhu Kai Qin | Independent Non-Executive Director | 20/20 | | Mr. Lin Zhi Ying | Independent Non-Executive Director | 20/20 | | Mr. Deng She Jian | Independent Non-Executive Director | 20/20 | | Mr. Deng Chao Wen | Independent Non-Executive Director | 20/20 | Board Committees The company has established Remuneration, Audit, and Nomination Committees, all chaired by independent non-executive directors; the report details each committee's responsibilities, composition, and annual meeting attendance, ensuring independent and professional corporate governance - The Remuneration Committee, composed of four independent non-executive directors, held four meetings this year, responsible for reviewing remuneration policies for directors and senior management[36] - The Audit Committee, composed of four independent non-executive directors, held three meetings this year, responsible for overseeing the financial reporting process, internal controls, and risk management systems[38][40] - The Nomination Committee, composed of four independent non-executive directors, held four meetings this year, responsible for reviewing the Board structure, identifying, and nominating director candidates[43][44] Auditor's Disclaimer of Opinion The auditor, Highlink CPA Limited, issued a "Disclaimer of Opinion" on the Group's consolidated financial statements primarily due to multiple material uncertainties related to the Group's ability to continue as a going concern, including significant annual losses, substantial net current liabilities, bank loan defaults, and severe cash flow deficiencies, as the auditor could not obtain sufficient audit evidence regarding the effectiveness of management's plans to mitigate liquidity pressure - The auditor issued a 'Disclaimer of Opinion' on the Group's consolidated financial statements for FY2025[49][126] - The core reason for the disclaimer of opinion is the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern[50][127] Key Financial Issues Leading to Going Concern Uncertainty (As at March 31, 2025) | Indicator | Amount | | :--- | :--- | | Annual Loss from Continuing Operations | Approximately HKD 64.27 million | | Net Current Liabilities | Approximately HKD 142.65 million | | Defaulted Outstanding Bank Borrowings | Approximately HKD 47.53 million | | Bank Balances and Cash | Only Approximately HKD 10.06 million | | Financial Guarantees Provided for Former Subsidiary | Approximately HKD 108.47 million | - Management proposed a series of plans to address the crisis, including bank loan restructuring, shareholder loan extension, accounts payable restructuring, and improving operating cash flow, but the auditor found insufficient evidence to support the success of these plans[51][52][59] Risk Management and Internal Control The Board holds ultimate responsibility for the Group's risk management and internal control systems, aiming to manage rather than eliminate risks, with the Audit Committee overseeing the system and outsourcing this year's internal control review to a third-party consulting firm, while the Group maintains strict procedures for insider information confidentiality and disclosure - The Board bears ultimate responsibility for the risk management and internal control systems and reviews their effectiveness[67] - This year's internal control review was outsourced to a third-party consulting firm[67] Directors' Report Business and Financial Review During the reporting period, the Group primarily engaged in investment holding, with subsidiaries involved in designing and selling consumer electronic products; the Group recorded a total deficit of HKD 65 million, with cash and bank balances of only HKD 10 million and net borrowings as high as HKD 184 million, indicating extreme liquidity strain, though the company raised approximately HKD 95.25 million net proceeds from two placings, mainly used for debt repayment and working capital Financial Position Summary (As at March 31, 2025) | Indicator | 2025 (HKD) | 2024 (HKD) | | :--- | :--- | :--- | | Total Deficit | 65 million | 88 million | | Bank Balances and Cash | 10 million | 24 million | | Bank and Other Borrowings | 48 million | 48 million | | Financial Guarantees | 108 million | 124 million | | Shareholder Loans | 38 million | 38 million | | Net Borrowings | 184 million | 186 million | - The company completed two placings in March 2024 and November 2024, raising net proceeds of approximately HKD 30.05 million and HKD 65.20 million respectively, primarily used for loan repayment and settlement of external debts[88][90] Major Suppliers and Customers The Group exhibits high concentration in its suppliers and customers; during the year, the largest supplier accounted for 25% of total purchases, with the top five suppliers collectively accounting for 82%, while the largest customer accounted for 28% of total sales, and the top five customers collectively accounting for 71% Supplier and Customer Concentration | Category | Percentage | | :--- | :--- | | Largest Supplier | 25% | | Top Five Suppliers Total | 82% | | Largest Customer | 28% | | Top Five Customers Total | 71% | Independent Auditor's Report Disclaimer of Opinion The auditor explicitly stated a disclaimer of opinion on the Group's consolidated financial statements due to the materiality of multiple uncertainties related to going concern, indicating an inability to obtain sufficient appropriate audit evidence to form an opinion on the true and fair view of the financial statements - We do not express an opinion on your Group's consolidated financial statements; due to the significance of the matters described in the Basis for Disclaimer of Opinion section of our report, we were unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these consolidated financial statements[126] - The basis for the disclaimer of opinion stems from multiple uncertainties related to going concern, including significant losses, high net current liabilities, defaulted bank borrowings, and severe cash shortages[127] - The auditor could not be satisfied with the success of management's plans to improve liquidity, such as debt restructuring and extension of repayment periods, thus unable to confirm the appropriateness of using the going concern basis of accounting[128] Consolidated Financial Statements Consolidated Statement of Profit or Loss The financial statements show the Group's FY2025 turnover from continuing operations was HKD 99.31 million, a 33% year-on-year decrease, resulting in a pre-tax loss of HKD 64.27 million due to ineffective cost control and high expenses, a significant deterioration from the prior year's profit primarily driven by one-off gains from discontinued operations Consolidated Statement of Profit or Loss Summary (Continuing Operations) | Item (HKD thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Turnover | 99,313 | 148,422 | | Gross Profit | 5,121 | 8,864 | | Administrative Expenses | (46,787) | (50,295) | | Finance Costs | (9,961) | (9,458) | | Loss Before Income Tax | (64,270) | (3,070) | | Loss for the Year from Continuing Operations | (64,270) | (3,070) | - The HKD 595 million profit from discontinued operations recorded in FY2024 was a one-off event, masking the core business's loss-making status[141] - Basic loss per share was HKD 0.63, compared to earnings per share of HKD 9.79 in the prior year (primarily impacted by discontinued operations)[143] Consolidated Statement of Financial Position As of March 31, 2025, the Group's financial position is extremely severe, with net current liabilities reaching HKD 143 million and a total deficit (total liabilities exceeding total assets) of HKD 64.69 million, indicating severe solvency pressure as current assets cannot cover current liabilities Consolidated Statement of Financial Position Summary (As at March 31, 2025) | Item (HKD thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 91,069 | 95,337 | | Current Assets | 88,425 | 87,073 | | Of which: Bank Balances and Cash | 10,056 | 23,855 | | Liabilities and Equity | | | | Current Liabilities | 231,076 | 256,444 | | Of which: Bank and Other Borrowings | 47,528 | 47,528 | | Of which: Financial Guarantees Provided | 108,468 | 123,532 | | Non-current Liabilities | 13,111 | 13,493 | | Net Current Liabilities | (142,651) | (169,371) | | Total Deficit | (64,693) | (87,527) | Consolidated Statement of Cash Flows The Group's FY2025 operating activities resulted in a net cash outflow of HKD 96.56 million, indicating the core business's inability to generate positive cash flow; despite raising HKD 78.63 million from share issuance, cash and cash equivalents at year-end decreased from HKD 23.86 million to HKD 10.06 million, reflecting a continuous deterioration in cash position Consolidated Statement of Cash Flows Summary (Year Ended March 31, 2025) | Item (HKD thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (96,557) | (69,473) | | Net Cash (Used in)/Generated from Investing Activities | (2,054) | 3,645 | | Net Cash Generated from Financing Activities | 78,625 | 96,068 | | Net Decrease in Cash and Cash Equivalents | (19,986) | 30,240 | | Cash and Cash Equivalents at Beginning of Year | 23,855 | 2,392 | | Cash and Cash Equivalents at End of Year | 10,056 | 23,855 | Notes to the Consolidated Financial Statements Note 1: General Information and Basis of Preparation This note reiterates the severe going concern issues faced by the Group, including annual losses, net current liabilities, and bank loan defaults; the Board believes that preparing financial statements on a going concern basis is appropriate given a series of plans (e.g., debt restructuring, shareholder loan extension, improving operating cash flow), but also acknowledges that the Group may not be able to continue as a going concern if these plans fail - The Board has carefully considered the Group's future liquidity, acknowledging an approximate HKD 64.27 million loss from continuing operations and approximate HKD 143 million net current liabilities[161] - Measures taken by management to maintain going concern include negotiating debt restructuring with banks, discussing loan extensions with the estate administrator of the deceased former chairman, negotiating extended repayment periods with creditors, and implementing measures to achieve positive operating cash inflows[162][163][164][166] Note 6: Turnover and Segment Information All of the Group's continuing operations turnover, totaling HKD 99.31 million, is derived from notebook products; geographically, Asia is the primary market, accounting for all turnover, with high customer concentration where Customer A and Customer B collectively contribute nearly half of the revenue - All HKD 99.31 million of turnover from continuing operations is derived from the sale of notebook products[285] - Geographically, the Asian market contributed all turnover, while sales in the European market decreased from HKD 38 million last year to zero[289] Major Customer Turnover (HKD thousands) | Customer | 2025 | 2024 | | :--- | :--- | :--- | | Customer A | 21,053 | 42,700 | | Customer B | 27,437 | 33,134 | Note 11: Discontinued Operations This note details the discontinued Dongguan production line business (disposal group); due to a winding-up petition, the Group lost control of its wholly-owned subsidiary, Alco Electronics Ltd., on June 28, 2023, and deconsolidated it, resulting in a one-off gain of approximately HKD 596 million recognized in FY2024 - In August 2022, the Board decided to cease operations of the Dongguan production line[298] - Due to a winding-up petition, the Group lost control of its subsidiary, Alco Electronics Group, on June 28, 2023, and deconsolidated it[299] - The deconsolidation of Alco Electronics Group generated a gain of HKD 596 million in FY2024, which was the primary reason for the Group's high profit that year[300][301] Note 27: Bank and Other Borrowings As of March 31, 2025, the Group had secured bank borrowings of HKD 47.53 million and issued HKD 12 million in 10-year bonds; notably, all HKD 47.53 million of bank borrowings are in default and can be immediately called for repayment by the bank, posing a severe liquidity risk - The Group has HKD 47.53 million in secured bank borrowings and has issued an additional HKD 12 million in 10-year bonds[358] - Significant Risk: The Group has defaulted on HKD 47.53 million in bank loan repayments, and if lenders exercise their rights, this borrowing will become immediately due and payable[360] Five Year Financial Summary Five Year Financial Data The five-year financial summary shows the Group's turnover sharply contracted from HKD 1.279 billion in FY2021 to less than HKD 100 million in FY2025; except for FY2024, which recorded a profit due to one-off gains, the other four fiscal years incurred significant losses, with total assets continuously shrinking and total equity turning negative (total deficit), reflecting an increasingly severe insolvent position Five-Year Performance and Balance Sheet Summary (HKD thousands) | Financial Year | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Performance | | | | | | | Turnover | 99,313 | 148,422 | 89,321 | 542,408 | 1,278,686 | | (Loss)/Profit Attributable to Owners of the Company | (64,043) | 600,692 | (510,242) | (594,575) | (360,463) | | Assets and Liabilities | | | | | | | Total Assets | 179,494 | 182,410 | 283,288 | 833,777 | 1,363,113 | | Total Liabilities | (244,187) | (269,937) | (1,077,958) | (1,106,700) | (1,032,927) | | Total (Deficit)/Equity | (64,693) | (87,527) | (794,670) | (272,923) | 330,186 |