Financial Performance - Total revenue for the three months ended June 30, 2022, was HKD 182,873,000, a decrease of 47.5% compared to HKD 349,239,000 in the same period of 2021[4] - Revenue from the distribution of cosmetics and skincare products was HKD 164,129,000, down 48.0% from HKD 316,110,000 year-on-year[10] - The company reported a net loss of HKD 5,016,000 for the quarter, compared to a profit of HKD 17,195,000 in the same quarter of the previous year[6] - Basic and diluted loss per share was HKD 6.02, compared to earnings of HKD 21.05 and HKD 19.67 respectively in the prior year[6] - Gross profit for the quarter was HKD 24,349,000, representing a gross margin of 13.3%, down from HKD 44,523,000 and a margin of 12.8% in the previous year[4] - The company incurred operating losses of HKD 4,941,000, a significant decline from an operating profit of HKD 18,969,000 in the same quarter last year[4] - The total comprehensive loss for the period was HKD 5,270,000, compared to a comprehensive income of HKD 18,224,000 in the same quarter of the previous year[8] - The net income from investment securities dropped to approximately HKD 2.91 million, compared to HKD 14.72 million in the previous year, reflecting a significant decline[19] - The securities investment business generated a net revenue of HKD 2,913,000, a decrease of approximately 80% from the previous year's net revenue of HKD 14,718,000[29] Revenue Sources - Revenue from beauty and body services was approximately HKD 12.47 million, down about 20% from HKD 15.63 million year-on-year[22] - The distribution sales from Shanghai Dongfang Daily Chemical Co., Ltd. decreased to approximately HKD 164.13 million, down from HKD 316.11 million year-on-year[19] - The distribution sales of cosmetics and skincare products in China recorded revenue of approximately HKD 164,129,000, a decrease of about 48% compared to approximately HKD 316,110,000, primarily due to strict lockdown measures from the COVID-19 pandemic[25] Tax and Financial Management - The company did not incur any Hong Kong profits tax for the quarter, while it recorded a tax expense of HKD 1,649,000 in the previous year[13] - The company raised approximately HKD 352,000,000 from a rights issue, with HKD 208.3 million already utilized and HKD 143.7 million remaining unutilized[32] - The company plans to control the pace and scale of property acquisitions due to market uncertainties caused by the COVID-19 pandemic and global economic conditions[32] Strategic Plans and Market Position - The company aims to strengthen its market position by continuously introducing advanced beauty and body services and products[22] - The company plans to leverage its brand strength and professional services to capture a larger share of the high-end market and achieve sustainable growth[23] - The health and beauty product distribution segment is expected to continue contributing steadily to the company's performance in the future, despite not being a major revenue driver currently[26] - The company aims to enhance its product offerings by investing in the development and introduction of advanced technology and safe ingredients in health and beauty products[26] - The company has established a strong brand presence in the Chinese beauty and slimming industry through its successful franchise operations since 2004[28] - The company is focused on expanding its lending business and developing its securities investment business to diversify revenue sources and reduce overall risk[29][30] Shareholder Information - The company has a total of 750,494 shares held by each of its directors and key executives, representing approximately 1% of the company's issued share capital[35] - Major shareholder Qiu Zhongzong holds 10,979,000 shares, representing 13.93% of the company's issued share capital as of June 30, 2022[40] - The weighted average exercise price for the stock options granted is HKD 0.87, with a total of 5,253,458 options granted[38] - The average remaining contractual life of the stock options is 3.87 years[38] Governance and Compliance - The company has established a formal and transparent procedure to protect shareholders' rights, adhering to the GEM Listing Rules[44] - The audit committee consists of three independent non-executive directors who reviewed the unaudited financial performance for the three months ending June 30, 2022[45] - The company has adopted the trading standards as per GEM Listing Rules for directors' securities transactions[46] - There are no competitive interests held by directors or major shareholders that could conflict with the company's business[42] - The company has not authorized any rights for directors or their family members to benefit from acquiring the company's shares or bonds during the review period[41] - The company has provided quarterly updates and regular information to the board, rather than monthly updates, to ensure effective governance[44] Other Financial Activities - Interest income from lending was HKD 3,040,000, an increase of 27.2% from HKD 2,394,000 year-on-year[10] - Other comprehensive loss for the period included a foreign exchange loss of HKD 254,000, compared to a gain of HKD 1,029,000 in the previous year[8] - The company recorded a loss attributable to shareholders of approximately HKD 4.52 million, compared to a loss of HKD 15.80 million in the same period last year[20] - The company did not recommend an interim dividend for the three months ended June 30, 2022, compared to no dividend in the previous year[18] - No purchases, redemptions, or sales of the company's listed securities occurred during the three months ending June 30, 2022[48]
修身堂(08200) - 2023 Q1 - 季度财报