Financial Performance - The company reported a revenue of HKD 137.7 million for the year ended December 31, 2022, a decrease of 71.3% compared to HKD 478.9 million in the previous year[21]. - The loss attributable to owners of the company was approximately HKD 199.2 million, compared to a profit of HKD 88.5 million for the year ended December 31, 2021[22]. - The gross profit decreased to HKD 24.9 million from HKD 115.1 million in the previous year[22]. - The company recognized a provision related to government subsidies amounting to HKD 151.8 million and a net loss of HKD 63 million from financial assets measured at fair value[22]. - The impairment of property, plant, and equipment was approximately HKD 30 million, compared to HKD 18.2 million in the previous year[22]. - The lithium-ion battery segment reported revenue of approximately HKD 109.1 million for the year ended December 31, 2022, a decrease of about 76.9% from HKD 473.1 million in the previous year[31]. - The lithium-ion battery segment incurred a loss of approximately HKD 174.1 million, compared to a profit of HKD 17.2 million in the previous year, primarily due to reduced revenue and a provision of approximately HKD 151.8 million for government repayments[31]. - The battery-sharing business under the "GETI" brand had revenue of approximately HKD 7.2 million, up from HKD 5.8 million in the previous year, but incurred a loss of approximately HKD 39.1 million, an increase from HKD 15.3 million in the previous year[32]. - The company's cash and cash equivalents were approximately HKD 165.5 million, down from HKD 396.4 million in the previous year, mainly due to loan repayments[94]. - The company's debt-to-equity ratio improved to 3.2% as of December 31, 2022, compared to 6.1% in the previous year, due to the repayment of approximately HKD 123.8 million in loans[94]. Business Operations - The lithium-ion battery factory in Zhejiang contributed approximately 79.3% of the total revenue, while the recently acquired ride-hailing service in France accounted for 15.5%[21]. - The ride-hailing service, Caocao, had approximately 500,000 app downloads and 147,000 registered users as of December 2022, generating revenue of about HKD 21.4 million since the acquisition[21]. - The GETI battery-sharing business in Jiangsu had 448 battery swap stations and 960 subscription users as of December 2022, a significant decrease from 676 stations and 2,242 users in December 2021[22]. - The company plans to reverse the declining trend of GETI by utilizing a franchise model in 2023[22]. - The company completed the acquisition of a controlling stake in Jihang International Technology Co., Ltd. on August 10, 2022, which owns around 300 zero-emission LEVC TX range-extended electric vehicles[25]. - The company aims to expand its ride-hailing services to other countries and major cities in Europe, positioning it as a significant revenue source[25]. - The company is actively pursuing the SAM iron ore project in Brazil, which has received broad support from local communities and businesses despite facing regulatory challenges[26]. - The company is reviewing several independent third-party projects in the lithium battery supply chain, with one currently in the due diligence stage[26]. - The company plans to explore the electric bicycle and commercial vehicle sectors, achieving positive progress in customer acquisition[24]. Market Trends and Projections - The sales volume of new energy vehicles in China reached 6.9 million units for the year ended December 31, 2022, accounting for approximately 25.6% of total new car sales[24]. - The company anticipates that the electric vehicle industry in China will continue to grow, with new energy vehicle sales expected to reach approximately 5 million units by 2025, representing about 20% of total new car sales[101]. - The five-year forecast anticipates revenue growth in 2023 compared to 2022, peaking in 2024, followed by a significant decline in 2025 due to the end of a major product cycle[64]. - The expected revenue growth rate beyond the five-year budget plan is projected at 0%[64]. Strategic Initiatives - The company is actively exploring potential projects in the new energy and mining sectors for mergers, investments, and collaborations to create shareholder value[103]. - The overall business strategy focuses on dual-track development in electric vehicle-related businesses and resource sectors to enhance shareholder value[103]. - The company aims to explore new cooperation opportunities with New Geely and other companies[79]. - The company is implementing a cautious strategy by outsourcing parts of the production process to mitigate risks associated with technological advancements and production line obsolescence[108]. Environmental, Social, and Governance (ESG) - The company emphasizes environmental protection, resource conservation, and sustainable development as core values[198]. - The company integrates Environmental, Social, and Governance (ESG) principles into its risk management system[198]. - The board presented the group's ESG report, reviewing measures, plans, and performance related to environmental, labor practices, and sustainable development[199]. - The ESG governance framework consists of the board and an ESG working group, ensuring alignment with strategic growth[199]. - The working group is composed of representatives from various departments, assisting the board in monitoring ESG issues and ensuring compliance with relevant laws[199]. - The board conducts annual assessments to verify the effectiveness of risk management and internal controls related to ESG[199]. Corporate Governance - The board of directors includes executive directors and independent non-executive directors, with specific roles outlined in the report[126][127]. - The company has established service contracts with executive directors, which will continue unless terminated with a three-month written notice[128]. - The board consists of seven members, with more than one-third being independent non-executive directors, ensuring a balance of power and independence[163]. - The company has established a risk management framework to identify and mitigate significant risks, including ESG risks, with annual reviews conducted[177]. - The company has adopted a whistleblowing policy and an anti-corruption policy, which are disclosed on the company's website[184]. Shareholder Information - The company’s distributable reserves as of December 31, 2022, amounted to approximately HKD 1,177,581,000, a decrease from HKD 1,282,318,000 in 2021[156]. - The top five customers accounted for 71.6% of the total revenue, while the top five suppliers represented 69.7% of total procurement during the fiscal year ending December 31, 2022[160]. - Major shareholder Hongqiao Capital Limited holds 4,065,000,000 shares, representing 41.25% of the total shares[148]. - The company has entered into a conditional sale agreement to transfer 38.09% and 30.77% of its controlling interest to Geely Group Limited and Li Xingxing, respectively[150]. - Following the completion of the sale agreement, the offeror gained statutory control of the company with approximately 62.40% ownership[150].
洪桥集团(08137) - 2022 - 年度财报