Financial Performance - For the year ended 31 March 2023, the Group reported a revenue decline of 47.8% to HK$1,209,602,000 compared to HK$2,316,315,000 in FY2022[21] - Gross profit decreased from HK$245,532,000 in FY2022 to HK$126,665,000 in FY2023, with a gross profit margin of 10.5%[21] - The net loss attributable to equity holders for the year was HK$294,169,000, a significant decline from a net profit of HK$56,858,000 in FY2022[21] - Excluding one-off impairment losses, the Group would have recorded a net profit of HK$2,906,000 for FY2023[21] - Revenue decreased by 47.8% year-on-year to HK$1,209,602,000 in FY2022/23, down from HK$2,316,315,000 in FY2021/22[23] - Gross profit before impairment decreased to HK$126,665,000, with a gross margin of 10.5%, compared to 10.6% in the previous fiscal year[23] - The Group recorded a net loss attributable to equity holders of HK$294,169,000, compared to a net profit of HK$56,858,000 in FY2021/22[23] - Overall gross profit (before impairment) decreased by 48.4% YoY to HK$126,665,000, with a gross profit margin of 10.5%[47] - The Group reported a gross loss (after impairment) of HK$164,203,000 for the Year, compared to a gross profit of HK$245,532,000 in FY2022[48] - The total non-recurring and non-cash impairment losses amounted to HK$297,075,000, leading to a loss for the Year of HK$294,169,000, compared to a profit of HK$56,858,000 in FY2022[48] - Basic loss per share for the Year was HK67.01 cents, compared to basic earnings per share of HK12.95 cents in FY2022[48] Economic Environment - The overall economic environment was impacted by inflation, rising interest rates, and the lingering effects of the COVID-19 pandemic[21] - The International Monetary Fund forecasts a global growth of 2.8% in 2023, down from 3.4% in 2022, with inflation expected to decrease from 8.7% in 2022 to 7.0% in 2023[101] - The global economy has been significantly impacted by the COVID-19 pandemic, leading to a reduction in customer purchase orders and an overall decline in product sales[164][168] - The pandemic has left unresolved issues that will require time to address as normalcy resumes[164][168] Market Trends - The real estate market in China saw a 41.3% decrease in sales from the 100 largest property developers, totaling RMB7.6 trillion in 2022[19] - The overall consumer market continues to show hesitation due to global economic slowdown, impacting demand for household appliances, particularly in Europe and the U.S.[71] - In 2022, the Chinese real estate market declined by 5.1% year-on-year, reflecting a lack of recovery confidence and momentum despite supportive policies[88] - Home sales in China's troubled property sector are projected to fall by a median of 8% in 2023, following a decline of approximately 25% in 2022[98] - The average new-home prices in 70 cities in China dropped from 0.44% in March to 0.32% in April 2023, indicating ongoing weakness in the residential property market[98] Strategic Initiatives - The Group's strategy for FY2023 focused on resource consolidation, cost re-engineering, and improving financial position amidst economic challenges[20] - The Group aims to expand its production base outside of China, potentially in Southeast Asia, to enhance customer engagement and order volume[36] - The Group will explore introducing its own original brand manufacturing business to complement existing customer portfolios and improve profit margins[36] - The company is implementing a "China Plus One" strategy, consolidating production facilities in China while expanding capacity in Malaysia to enhance operational efficiency and margin[66] - The Group plans to actively expand its customer reach in China to capitalize on economic recovery opportunities, particularly in the automotive and household appliance sectors[102] Operational Challenges - The Group's production in Shenzhen and Shaoguan faced significant cost pressures and diseconomies of scale due to strict COVID-19 policies in China[14] - The utilization rate of production facilities in the Shixing Production Centre was estimated to be below 20%, leading to a consolidation of orders and restructuring of the supply chain[26] - The Group streamlined operations to maintain efficiency and margins amid a decreasing order book in its manufacturing business segments[47] - The Group's financial pressure has increased due to the combination of high inflation and the need for cash outflow management[165][169] Segment Performance - The Electrical and Electronic Products Business Segment saw increasing sales from the healthcare sector, indicating a positive trend in product demand[31] - The Electrical and Electronic Products Business Segment generated HK$459,846,000, representing 38.0% of the Group's consolidated turnover for the Year, down from 54.7% in FY2022[42] - The Motors Business Segment contributed HK$745,516,000, accounting for 61.6% of the Group's consolidated turnover, an increase from 45.1% in FY2022[52] - The Motors Business Segment reported external turnover of HK$745,516,000 for the Year, a decrease of 28.6% YoY from HK$1,044,052,000 in FY2022[74] - The segment's results for the Year were HK$322,000, significantly down from HK$71,350,000 in FY2022, after accounting for non-recurring impairments of HK$36,714,000[76] Financial Position - The Group's cash and bank balances decreased from HK$256,934,000 as of March 31, 2022, to HK$203,372,000 as of March 31, 2023, reflecting a decline of approximately 20.9%[108] - Net current assets fell significantly from HK$525,724,000 as of March 31, 2022, to HK$257,905,000 as of March 31, 2023, a decrease of about 51%[108] - Shareholders' equity decreased from HK$1,589,910,000 as of March 31, 2022, to HK$1,104,685,000 as of March 31, 2023, representing a decline of approximately 30.5%[108] - Total bank borrowings reduced from HK$529,147,000 as of March 31, 2022, to HK$351,265,000 as of March 31, 2023, a decrease of about 33.6%[108] - The current ratio decreased from 1.46 times as of March 31, 2022, to 1.31 times as of March 31, 2023[110] - The gearing ratio improved slightly from 33.3% as of March 31, 2022, to 31.8% as of March 31, 2023[110] Governance and Compliance - The Group has complied with relevant laws and regulations in Hong Kong and Mainland China throughout the year[153][160] - The Group's risk management and internal control systems are in place to continuously identify, monitor, and manage principal risks[163] - The Group has implemented risk management and internal control systems to identify and manage key operational risks[167][174] Employee and Management - As of March 31, 2023, the Group employed approximately 4,600 full-time employees, with less than 70 based in Hong Kong and the majority working in the PRC and Malaysia[123] - The Group's employee remuneration policies are aligned with prevailing industry standards, providing benefits such as retirement schemes, medical plans, and performance bonuses in Hong Kong[124] - The Group's management regularly reviews and monitors foreign exchange risks, although no foreign currency hedging policies are currently in place[120] Shareholder Information - The Board has resolved not to declare any final dividend for the year, consistent with the previous year[104] - Charitable donations made by the Group during the year amounted to HK$62,000, an increase from HK$30,000 in 2022[158] - The Group's reserves available for cash distribution amounted to HK$448,956,000 as of March 31, 2023[194] - The company can distribute HK$104,750,000 of contributed surplus under certain circumstances according to Bermuda law[200] - The company's share premium account balance is HK$156,015,000, which can be distributed in the form of bonus shares[200]
广和通(00638) - 2023 - 年度财报