Acquisition and Business Expansion - The acquisition of Xin Yunlian Investment Limited was completed on July 31, 2020, enabling the Group to leverage its expertise in loan financing to support approximately 4.8 million tobacco retailers registered on its e-commerce platform as of December 31, 2022[22]. - New Yunlian Financial Services is targeting over 4,800,000 registered tobacco retailers in China for financial services through its e-commerce platform[24]. - The Group aims to empower emerging e-commerce brands by optimizing its business model and improving risk control strategies to meet their financing needs[13]. - The Group plans to continue broadening its cooperation industries and enhancing its service offerings to better serve emerging customers[13]. Financial Performance - The Group's total segment revenue for FY2022 was HK$201,951,000, down 29.1% from HK$284,867,000 in FY2021[32]. - The Group reported a loss attributable to the owners of the Company of approximately HK$326,213,000 for the year ended 31 December 2022[130]. - The Group's shareholder's deficit attributable to owners amounted to approximately HK$166,349,000 as of 31 December 2022[120]. - The Group's current ratio as of 31 December 2022 was 0.86, down from 1.35 as of December 31, 2021[120]. - The Group's outstanding borrowing was approximately HK$93,622,000, which is repayable within the next twelve months[130]. Loan Financing and Revenue - During FY2022, the loan financing segment in Hong Kong generated revenue of approximately HK$ 109,166,000, down from HK$ 185,524,000 in FY2021, resulting in a segment loss of approximately HK$ 76,454,000[10]. - Loan financing II segment revenue for FY2022 was approximately HK$65,699,000, a decrease of 14.5% from HK$76,861,000 in FY2021[23]. - Revenue from the loan financing services segment for FY2022 was approximately HK$65,699,000, a decrease of 14.5% from approximately HK$76,861,000 in FY2021, resulting in a segment loss of approximately HK$60,715,000[51]. - The interest rates for loan products offered by Xin Yunlian Financial range from 6.5% to 24% per annum, with a referral fee of approximately 3% charged depending on bank terms[6]. Impairment and Risk Management - The Group recognized an impairment loss of HK$239.236 million for the year ended December 31, 2022, compared to HK$176.049 million in 2021, indicating a significant increase in impairment losses[81]. - The increase in impairment losses was primarily due to the impact of the COVID-19 pandemic on certain customers[23]. - The Group is tightening credit policies and improving risk management frameworks to mitigate unexpected impairment losses[25]. - The default payment receivables' loss rate was approximately 80% as of December 31, 2022, indicating a probability of default of 100% and a recovery rate of 20%[111]. Operational Challenges - The Group's liquor trading segment faced challenges, resulting in a loss of approximately HK$ 22,260,000 for FY2022, with no sales revenue generated[10]. - The Group has not recorded any sales revenue from its trade division during the year due to operational difficulties caused by the COVID-19 pandemic[140]. - The Group's operations faced delays in follow-up processes with borrowers due to COVID-19 restrictions, leading to unsatisfactory recovery rates and impairments on other receivables[80]. Strategic Outlook - The Group's management remains optimistic about the long-term business outlook despite the challenging economic environment[25]. - The Group aims to strengthen its position in the financial sector of the tobacco industry through digital empowerment and product technology innovation[70][72]. - The Group's strategic steps include enhancing capabilities and diversifying directions to better serve customers[64]. Employee and Governance - The Group had 122 employees as of December 31, 2022, down from 141 employees on December 31, 2021[182]. - Liu Kequan was appointed as an executive director and CEO on June 30, 2016, and has extensive management experience in investment and real estate development[194]. - Chen Zheng, appointed as an executive director on December 8, 2021, has rich experience in investment business and corporate management[195]. - The Audit Committee supports Management's action plan to address the audit qualification and believes the Group can continue as a going concern[161].
大中华金融(00431) - 2022 - 年度财报