SUN HUNG KAI CO(HK:00086)2023-04-06 09:21Financial Performance - In 2022, the company reported a loss attributable to shareholders of HKD 1,534.8 million, compared to a profit of HKD 2,813.7 million in 2021, resulting in a basic loss per share of HKD 78.2, down from a profit of HKD 142.7[17]. - Revenue declined by 6.2% to HKD 4,054.1 million[27]. - The company's asset management scale increased from USD 809 million at the end of 2021 to USD 975 million at the end of 2022, driven by the performance of the ActusRayPartners European Alpha Fund[19]. - The company recorded a pre-tax profit of HKD 1,197.1 million from consumer finance, despite a 28.1% decrease compared to the record performance in 2021[17]. - The company reported a loss attributable to shareholders of HKD 1,534.8 million in 2022, compared to a profit of HKD 2,813.7 million in 2021[32]. - Basic loss per share for 2022 was HKD 78.2 cents, down from earnings of HKD 142.7 cents per share in 2021[32]. - The pre-tax loss for the year was HKD 892.3 million, significantly down from a profit of HKD 3,773.2 million in 2021[33]. - The group's pre-tax contribution for 2022 was HKD 1,197.1 million, a decrease of 28.1% from the record HKD 1,665.4 million in 2021[36]. - The company's revenue for 2022 was HKD 4,054.1 million, a decrease of 6.2% from HKD 4,324.0 million in 2021[31]. Asset Management and Investment - The company established its fund management platform, SHK Capital Partners, in 2021, holding licenses from the Hong Kong Securities and Futures Commission[6]. - The investment management division was launched in 2015, focusing on public markets, alternative investments, and real estate[11]. - The fund management business is expected to become a new growth driver, promoting revenue and asset management scale[14]. - The company has initiated eight partnerships/funds since 2021, covering various strategies[14]. - The alternative investments and real estate generated an unrealized loss of HKD 1,865.9 million in 2022, partially offset by realized gains of HKD 400.8 million[51]. - The investment management segment recorded a pre-tax loss of HKD 2,403.8 million, compared to a profit of HKD 1,917.8 million in 2021[34]. - The public market investment portfolio had a year-end value of HKD 2,310.3 million, with an average value of HKD 2,860.0 million and a loss of HKD 174.9 million[55]. - The company aims to enhance risk management systems and improve infrastructure to achieve its vision of becoming a leading alternative investment platform[51]. Consumer Finance - The consumer finance segment, through Asia United Finance, is a leader in the personal loan market in Hong Kong and mainland China[9]. - The mortgage loan business contributed a pre-tax profit of HKD 122.3 million, marking a historical high since its establishment in 2015[43]. - The group's consumer finance business, operated through Asia United Finance, ranked first among all lenders in Hong Kong for unsecured loan outstanding balances for five consecutive years[36]. - The total loan balance decreased by 8.3% to HKD 11,630.3 million, while the net loan balance fell by 8.5% to HKD 11,025.9 million[35]. - New loans issued during the year amounted to HKD 11,968.2 million, down 1.7% from HKD 12,177.3 million in 2021[41]. Corporate Governance - The company is committed to maintaining high standards of corporate governance, emphasizing integrity, transparency, accountability, and fairness[120]. - The board has established various committees, including a nomination committee, to ensure effective governance and oversight of company operations[121]. - The company has adopted a remuneration policy that aligns with the corporate governance code, with deviations explained in the report[125]. - The board's governance responsibilities include reviewing compliance with legal and regulatory requirements, as well as monitoring the training and development of directors and senior management[120]. - The company has implemented a governance structure that separates the roles of the chairman and CEO, enhancing internal communication and decision-making processes[115]. Risk Management - The risk management framework is based on a "three lines of defense" model, involving the board, risk committee, and management team[95]. - The company has established a strong credit management policy to mitigate credit risk, particularly in the consumer finance and mortgage sectors[100]. - The risk management committee held seven meetings in 2022 to review and recommend approval of various policies, including ESG principles and climate change policies[132]. - The group has mechanisms in place to continuously monitor risks, including environmental, social, and governance risks[130]. - The company is actively addressing climate-related risks and plans to establish metrics for measuring these risks by 2023[174]. Sustainability and ESG Initiatives - The company emphasizes its commitment to sustainable development, aligning its policies with the United Nations Sustainable Development Goals (UNSDGs)[154]. - The report includes key performance indicators (KPIs) related to environmental and social aspects, ensuring consistency with previous years' calculations[147]. - The company has set a target to ensure that 30% of its investment portfolio considers ESG factors by 2024, which has already been achieved[160]. - The company plans to reduce absolute paper usage by 15% compared to the fiscal year 2019 baseline by 2025, currently in practice[160]. - The company has engaged stakeholders to understand their satisfaction and expectations, which is crucial for continuous improvement[164]. Shareholder Returns and Dividends - The board declared a second interim dividend of HKD 0.14 per share, maintaining the same level as the previous year, with a total dividend of HKD 0.26 per share for 2022[16]. - The company has returned a total of HKD 13.4 billion to shareholders through dividends and share buybacks since 2007[25]. - The company maintained a dividend per share of HKD 26.0, down 13.3%[27]. - The company will continue to maintain diverse financing channels and strong liquidity to support future business growth[83]. Employee and Workplace Initiatives - The group offers comprehensive benefits to employees in Hong Kong, including unlimited paid leave, insurance, and healthcare benefits[190]. - The company has a dedicated team monitoring occupational health and safety risks in the office environment[194]. - The company has enhanced communication with employees to understand their needs and improve workplace conditions[197]. - The group emphasizes a flexible work policy to enhance employee well-being and productivity[191]. - The company conducted over 5 major health promotion activities, including high-intensity interval training and monthly social events, to enhance employee well-being[197].