Financial Performance - The company reported a revenue of HKD 914,709,000 for the year ending December 31, 2025, representing an increase of 1.3% from HKD 897,521,000 in 2024[3]. - The gross profit for the year was HKD 513,637,000, slightly down from HKD 516,157,000 in the previous year, indicating a gross margin of approximately 56.2%[3]. - The company incurred a total loss of HKD 482,557,000 for the year, a significant increase from a loss of HKD 99,021,000 in 2024[4]. - The basic loss per share was HKD 7.67, compared to HKD 1.35 in the previous year, reflecting a substantial decline in profitability[4]. - The company reported a pre-tax loss of HKD 454.730 million for the year 2025, compared to a loss of HKD 97.979 million in 2024, indicating a significant increase in losses[17]. - The net loss for the fiscal year was approximately HKD 482.6 million, a significant increase from a net loss of HKD 99.0 million in the previous year, with a basic loss per share of HKD 0.0767[38]. - The company recorded a net loss attributable to shareholders of HKD 427,848,000 in 2025, compared to a loss of HKD 75,537,000 in 2024, representing a significant increase in losses[25]. Revenue Breakdown - Revenue from the pharmaceutical business was HKD 716.970 million in 2025, up from HKD 682.086 million in 2024, indicating a growth of about 5.1%[17]. - The fitness business generated revenue of HKD 197.739 million in 2025, a decrease from HKD 215.435 million in 2024, reflecting a decline of approximately 8.2%[17]. - The pharmaceutical business recorded revenue and gross profit of approximately HKD 717.0 million and HKD 500.8 million for the year ended December 31, 2025, representing a year-on-year increase of about 5.1% and a slight decrease of 0.1% respectively[40]. - Tongfang Pharmaceutical achieved revenue and gross profit of approximately RMB 563.9 million and RMB 461.8 million, reflecting a year-on-year increase of about 3.8% and 0.2% respectively[41]. - Chongqing Kangle reported revenue and gross profit of approximately RMB 100.1 million and RMB 12.7 million, with year-on-year increases of approximately 19.2% and 49.2% respectively[42]. Asset and Liability Changes - The company’s total assets decreased to HKD 602,379,000 from HKD 1,145,120,000 in 2024, indicating a reduction in asset base[6]. - The net current liabilities amounted to HKD 90,788,000, a significant change from a net current asset position of HKD 114,697,000 in 2024[5]. - The total liabilities to total assets ratio increased to 7.2% in 2025 from 5.5% in 2024, with total liabilities of HKD 76.5 million and total assets of HKD 1,065.2 million[46]. Impairment and Losses - The impairment losses related to goodwill and intangible assets accounted for HKD 406,417,000 of the total loss, primarily affecting the fitness business segment[10]. - The impairment loss on goodwill for 2025 amounted to HKD 111.541 million, with no such loss reported in 2024[21]. - The increase in net loss was primarily due to the termination of the franchise business in Taiwan and a slower-than-expected recovery in the fitness business, leading to impairment losses of approximately HKD 169.3 million related to a joint venture's receivables, HKD 123.9 million related to intangible assets, and HKD 111.5 million related to goodwill[38]. Operational Developments - The company is focusing on optimizing its pharmaceutical products and fitness services to enhance customer competitiveness and brand recognition[10]. - The company has secured bank financing totaling HKD 185,000,000, with HKD 110,000,000 available for withdrawal as of December 31, 2025[8]. - The company is actively negotiating with banks to secure financing for its operations and financial obligations[10]. - The company has restructured its internal reporting framework, leading to changes in the composition of reportable segments[13]. - The company has been actively pursuing legal actions against Active Gains and PJW for breaches of the sale agreement and shareholder agreement, with ongoing litigation expected to have minimal economic outflow implications[34]. - The company has denied allegations in the Cayman Islands petition filed by Active Gains, asserting that the continuation of operations is in the best interest of True Cayman and its shareholders[35]. - The company’s fitness franchise operations in Taiwan ceased on October 1, 2025, impacting overall business performance[37]. Employee and Operational Costs - Total employee costs increased to HKD 182,509,000 in 2025 from HKD 157,529,000 in 2024, reflecting a rise of 15.8%[24]. - The total depreciation and amortization expenses decreased to HKD 91,075,000 in 2025 from HKD 99,129,000 in 2024, a decline of 8.1%[25]. - The company incurred research and development expenses of HKD 8,366,000 in 2025, a decrease from HKD 34,630,000 in 2024, indicating a reduction of 75.8%[25]. Governance and Compliance - The company has applied all applicable principles of the Corporate Governance Code as per the Hong Kong Stock Exchange, with a deviation regarding the separation of roles between the Chairman and CEO[57]. - The audit committee has reviewed the accounting principles and practices adopted by the group for the year ending December 31, 2025[58]. - The group's auditor, BDO Limited, confirmed that the financial statements for the year ending December 31, 2025, are consistent with the audited consolidated financial statements[59]. - The board consists of three executive directors, one non-executive director, and three independent non-executive directors[62]. Dividend and Shareholder Information - The company did not recommend the payment of a final dividend for the year ended December 31, 2025, consistent with no dividends declared in 2024[27]. - The board has decided not to recommend any final dividend for the year ending December 31, 2025[55]. - No shares were purchased, sold, or redeemed by the company or any of its subsidiaries for the year ending December 31, 2025[60]. Future Outlook - The group plans to focus on existing advantageous businesses and explore development potential to create long-term value in a challenging market environment[52]. - The pharmaceutical business aims to leverage the "Healthy China" strategy, enhancing product development and expanding sales channels, including online marketing and overseas markets[53]. - The fitness business in Singapore is expected to face multiple challenges, including a gradually saturated industry environment and rising customer acquisition costs[54].
华控康泰(01312) - 2025 - 年度业绩