都都控股(08250) - 2022 Q3 - 季度财报

Important Notice and Disclaimer GEM Market Characteristics and Investment Risks This report highlights the GEM market's positioning for companies with higher investment risks, urging investors to prudently assess potential market volatility and liquidity limitations - GEM market is positioned for high-investment-risk companies, securities may face significant market volatility, and high liquidity cannot be guaranteed[1] Directors' Responsibility Statement The company's directors jointly and severally assume full responsibility for the report's information, confirming its accuracy, completeness, and absence of misleading content, based on fair and reasonable assumptions - Directors confirm that the information in this report is accurate and complete in all material respects, free from misleading or fraudulent content, and assume full responsibility for its contents[2] Unaudited Condensed Consolidated Financial Results Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the nine months ended March 31, 2022, the Group's revenue increased by 18.69% to HK$131.1 million, but gross profit significantly decreased by 68.86% to HK$8 million, expanding the loss for the period to HK$18.176 million Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the nine months ended March 31) | Indicator | 2022 (HK$ thousand) | 2021 (HK$ thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 131,111 | 110,469 | 18.69% | | Cost of services provided | (123,109) | (84,771) | 45.22% | | Gross profit | 8,002 | 25,698 | -68.86% | | Other income | 7,552 | 6,244 | 20.95% | | Fair value changes of financial assets at fair value through profit or loss | 475 | 2,170 | -78.11% | | Administrative and other operating expenses | (31,372) | (33,018) | -4.98% | | Finance costs | (1,180) | (2,175) | -45.75% | | (Loss) Profit before tax | (16,523) | (1,081) | -1428.58% | | Income tax (expense) credit | (1,653) | (2,610) | -36.74% | | (Loss) Profit for the period | (18,176) | (3,691) | -392.44% | | (Loss) Profit for the period attributable to owners of the Company | (16,091) | (3,423) | -370.09% | | Basic and diluted (loss) per share (HK cents) | (0.21) | (0.05) | -320.00% | Condensed Consolidated Statement of Changes in Equity For the nine months ended March 31, 2022, total equity attributable to owners of the company slightly decreased from HK$365.8 million to HK$364.7 million, primarily due to period loss, partially offset by increased foreign currency translation reserve Condensed Consolidated Statement of Changes in Equity (For the nine months ended March 31) | Indicator | March 31, 2022 (HK$ thousand) | July 1, 2021 (HK$ thousand) | | :--- | :--- | :--- | | Total equity attributable to owners of the Company | 364,711 | 365,765 | | Non-controlling interests | 3,995 | 66 | | Total equity | 368,706 | 365,831 | | Loss for the period (attributable to owners of the Company) | (16,091) | (3,423) | | Exchange differences on translation of overseas operations | 15,037 | 26,120 | | Capital injection from non-controlling interests | 5,983 | - | Notes to the Condensed Consolidated Financial Statements 1. General Information The Company is an investment holding company incorporated in the Cayman Islands, with subsidiaries primarily engaged in coal mining, construction, heating, money lending, and fresh produce trading - The Company is an investment holding company, with subsidiaries primarily engaged in coal mining and construction, heating, money lending, and fresh produce trading[7] 2. Basis of Preparation Financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, Hong Kong Generally Accepted Accounting Principles, and GEM Listing Rules, using the historical cost convention, with some financial instruments measured at fair value - Financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, Hong Kong Generally Accepted Accounting Principles, and GEM Listing Rules, using the historical cost convention, with some financial instruments measured at fair value[8] 3. Revenue For the nine months ended March 31, 2022, the Group's total revenue was HK$131.1 million, with fresh produce trading contributing HK$58.931 million as the largest source, while coal production, excavation, and construction engineering revenue significantly decreased Revenue Analysis (For the nine months ended March 31) | Revenue Source | 2022 (HK$ thousand) | 2021 (HK$ thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Provision of coal production, excavation and construction engineering | 56,283 | 94,494 | -40.43% | | Provision of heating services | 6,440 | 6,518 | -1.20% | | Fresh produce trading | 58,931 | - | New Business | | Interest income from money lending services | 9,457 | 9,457 | 0.00% | | Total Revenue | 131,111 | 110,469 | 18.69% | 4. Other Income For the nine months ended March 31, 2022, other income increased by 20.95% to HK$7.552 million, primarily due to a significant increase in handling fee income and government grants Other Income Analysis (For the nine months ended March 31) | Other Income Source | 2022 (HK$ thousand) | 2021 (HK$ thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Interest income from bank deposits | 222 | 725 | -69.38% | | Handling fee income | 3,425 | 1,895 | 80.74% | | Government grants | 3,826 | 1,302 | 193.86% | | Dividend income from equity securities | 79 | - | New | | Total Other Income | 7,552 | 6,244 | 20.95% | 5. (Loss) Profit for the Period The Group's loss for the period was primarily influenced by factors such as depreciation of property, plant and equipment, and right-of-use assets Major Expense Items (For the nine months ended March 31) | Expense Item | 2022 (HK$ thousand) | 2021 (HK$ thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 2,288 | 1,924 | 18.92% | | Depreciation of right-of-use assets | 388 | 930 | -58.28% | 6. Finance Costs For the nine months ended March 31, 2022, finance costs significantly decreased by 45.75% to HK$1.18 million, mainly due to reduced interest on amounts payable to a former noteholder and the absence of imputed interest on acceptance bills Finance Costs Analysis (For the nine months ended March 31) | Finance Cost Item | 2022 (HK$ thousand) | 2021 (HK$ thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Interest on amounts payable to a former noteholder | 1,015 | 1,594 | -36.32% | | Interest expense on discounted bills | 14 | 175 | -92.00% | | Imputed interest on lease liabilities | 151 | 30 | 403.33% | | Imputed interest on acceptance bills | - | 376 | -100.00% | | Total Finance Costs | 1,180 | 2,175 | -45.75% | 7. Income Tax Expense (Credit) For the nine months ended March 31, 2022, income tax expense decreased by 36.74% to HK$1.653 million, primarily due to reduced tax expenses of PRC subsidiaries, consistent with declining operating profit Income Tax Expense (Credit) Analysis (For the nine months ended March 31) | Tax Source | 2022 (HK$ thousand) | 2021 (HK$ thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong profits tax | 67 | 135 | -50.37% | | PRC enterprise income tax | 1,586 | 2,475 | -35.92% | | Total Income Tax Expense (Credit) | 1,653 | 2,610 | -36.74% | - Hong Kong profits tax adopts a two-tiered system, with the first HK$2 million of assessable profits taxed at 8.25%, and the remainder at 16.5%[14] - PRC subsidiaries are subject to enterprise income tax at a rate of 25%[15] 8. Dividends The Board does not recommend the payment of a dividend for the nine months ended March 31, 2022, consistent with the prior year - The Board does not recommend the payment of a dividend for the nine months ended March 31, 2022[16] 9. (Loss) Earnings Per Share For the nine months ended March 31, 2022, basic and diluted loss per share was HK$0.21 cents, a significant increase from HK$0.05 cents last year, primarily due to increased loss for the period (Loss) Earnings Per Share (For the nine months ended March 31) | Indicator | 2022 (HK cents) | 2021 (HK cents) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Basic and diluted (loss) earnings per share | (0.21) | (0.05) | -320.00% | | (Loss) earnings used in calculation (HK$ thousand) | (16,091) | (3,423) | -370.09% | - Basic and diluted (loss) earnings per share are the same as there are no potential dilutive ordinary shares outstanding during the period[20] Management Discussion and Analysis Business and Financial Review For the nine months ended March 31, 2022, the Group's revenue increased by 18.69% to HK$131.1 million, driven by fresh produce trading, but gross profit and margin significantly decreased, expanding the loss attributable to owners to HK$16.09 million Key Financial Indicators (For the nine months ended March 31) | Indicator | 2022 (HK$) | 2021 (HK$) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 131,110,000 | 110,470,000 | 18.69% | | Gross profit | 8,000,000 | 25,700,000 | -68.87% | | Gross margin | 6.10% | 23.26% | -17.16 percentage points | | Loss attributable to owners of the Company | 16,090,000 | 3,420,000 | -370.47% | - Revenue increase was primarily due to the commencement of the new fresh produce trading business[22] - Decrease in gross profit and gross margin was mainly due to reduced revenue from excavation and construction engineering, gross loss from fresh produce trading, and increased gas costs[22] Segment Performance Overview The Group's business segments showed mixed performance, with coal mining and construction services revenue significantly decreasing, money lending revenue flat, heating services revenue slightly down but losses mitigated by government grants, fresh produce trading contributing significant revenue but incurring a gross loss, and investment in listed securities seeing reduced gains Provision of Coal Mining and Construction Services For the nine months ended March 31, 2022, this segment's revenue significantly decreased by 40.43% to HK$56.28 million, accounting for 42.93% of total revenue, resulting in a HK$9.17 million loss due to project completion Coal Mining and Construction Services Segment Performance (For the nine months ended March 31) | Indicator | 2022 (HK$) | 2021 (HK$) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 56,280,000 | 94,490,000 | -40.43% | | Percentage of total revenue | 42.93% | - | - | | Segment loss | 9,170,000 | - | - | - Revenue decrease was mainly due to a coal mining and construction service project completion, with no revenue recorded during the period[24] Money Lending Business For the nine months ended March 31, 2022, money lending business revenue remained at HK$9.46 million, accounting for 7.21% of total revenue, and recorded a profit of HK$3.61 million Money Lending Business Segment Performance (For the nine months ended March 31) | Indicator | 2022 (HK$) | 2021 (HK$) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue (Interest income) | 9,460,000 | 9,460,000 | 0.00% | | Percentage of total revenue | 7.21% | - | - | | Segment profit | 3,610,000 | - | - | - All loans provided by the Group are unsecured, except for one loan of HK$3 million secured by a second mortgage on property[26] Provision of Heating Services For the nine months ended March 31, 2022, heating services revenue slightly decreased to HK$6.44 million, accounting for 4.91% of total revenue, resulting in a HK$2.20 million loss despite government grants, due to high gas prices Heating Services Segment Performance (For the nine months ended March 31) | Indicator | 2022 (HK$) | 2021 (HK$) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 6,440,000 | 6,520,000 | -1.23% | | Percentage of total revenue | 4.91% | - | - | | Gross loss | 2,920,000 | 120,000 | 2333.33% | | Government grants | 3,830,000 | - | - | | Segment loss | 2,200,000 | - | - | - Increase in gross loss was mainly due to high gas prices[27] Fresh Produce Trading The Group's new fresh produce trading business generated HK$58.93 million in revenue but recorded a gross loss of HK$1.92 million and a loss of HK$3.55 million due to COVID-19's impact on the supply chain and fruit spoilage Fresh Produce Trading Segment Performance (For the nine months ended March 31) | Indicator | 2022 (HK$) | | :--- | :--- | | Revenue | 58,930,000 | | Gross loss | 1,920,000 | | Segment loss | 3,550,000 | - Gross loss was due to the impact of the novel coronavirus pandemic on the fruit supply chain, leading to fruit spoilage[29] Investment in Listed Securities As of March 31, 2022, the Group's investment in listed securities was approximately HK$30.31 million, with a significant decrease in fair value changes of financial assets at fair value through profit or loss to HK$0.48 million Listed Securities Investment (For the nine months ended March 31) | Indicator | 2022 (HK$) | 2021 (HK$) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss | 30,310,000 | 27,330,000 (June 30, 2021) | 10.90% | | Gain from fair value changes | 480,000 | 2,170,000 | -77.88% | Future Prospects The company anticipates coal mining and construction services will remain a primary revenue source, while actively seeking new clients and exploring opportunities in environmental heating, strictly controlling credit risks in money lending, and investing more in the promising fresh produce trading business for diversification and profit growth - Coal mining and construction services remain a primary revenue source, but the company will actively seek new clients to maintain project continuity[31] - Environmental heating business will align with China's urbanization process and environmental regulatory trends, seeking further development in Tianjin and Beijing[31] - Money lending business will continue to strictly control credit risks and monitor outstanding loans[31] - Fresh produce trading business has optimistic prospects, with growing Chinese purchasing power expected to drive demand for imported fruits and high-quality agricultural products; the company will allocate more resources to achieve business diversification and profit improvement[32] Use of Proceeds from 2016 Placing The 2016 placing raised HK$201.2 million net, with HK$121 million utilized as of March 31, 2022, and the remaining HK$80 million held in banks, under consideration for natural gas heating service investments Use of Proceeds from 2016 Placing (As of March 31, 2022) | Use | Actual Net Proceeds (HK$ million) | Cumulative Usage (HK$ million) | Usage During Period (HK$ million) | Unutilized (HK$ million) | | :--- | :--- | :--- | :--- | :--- | | Provision of clean energy heating services | 160 | 80 | 0 | 80 | | General working capital | 41 | 41 | 0 | 0 | | Total | 201 | 121 | 0 | 80 | - Unutilized proceeds of approximately HK$80 million are held in banks, and the company is considering using them for potential investments in natural gas heating services, consistent with the intended use[35] Financial Position, Liquidity and Others The Group maintains a robust financial position with ample cash, healthy liquidity and gearing ratios, no bank borrowings or significant contingent liabilities, and completed a material acquisition and disposal during the period Foreign Exchange Risk The Group primarily transacts in HKD, RMB, or USD, mitigating currency risk by allowing operating entities to function in their respective local currencies - The Group's primary transaction currencies are HKD, RMB, or USD, and it mitigates currency risk by allowing operating entities to operate in their respective local currencies[36] Material Acquisitions and Disposals During the period, the Group acquired a 51% equity interest in Zhongtai Hongzhi Technology (Shenzhen) Co., Ltd. and disposed of a 30% equity interest in Asset Management International Limited, expecting a book gain of approximately HK$1 million - On November 23, 2021, Dahui City, an indirect wholly-owned subsidiary of the Company, acquired a 51% equity interest in Zhongtai Hongzhi Technology (Shenzhen) Co., Ltd[37] - On April 12, 2022, the Group disposed of a 30% equity interest in Asset Management International Limited and its subsidiaries for a cash consideration of HK$1 million, expecting to record a book gain of approximately HK$1 million[39] Liquidity and Financial Resources As of March 31, 2022, the Group demonstrated strong liquidity with cash and cash equivalents of approximately HK$155.14 million, net current assets of HK$351.33 million, a current ratio of 4.82 times, and no bank borrowings Liquidity and Financial Resources (As of March 31) | Indicator | March 31, 2022 (HK$) | June 30, 2021 (HK$) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 155,140,000 | 167,150,000 | -7.21% | | Net current assets | 351,330,000 | 348,890,000 | 0.70% | | Current ratio | 4.82 times | 3.67 times | 31.34% | | Gearing ratio | 0.20 | 0.27 | -25.93% | | Bank borrowings | None | None | - | Pledges of Assets As of March 31, 2022, the Group had no assets pledged as collateral for any bank credit - As of March 31, 2022, the Group had no assets pledged as collateral for any bank credit[41] Employees Information As of March 31, 2022, the Group employed 349 staff, with remuneration based on industry practice, educational background, experience, and performance, supplemented by various benefits - As of March 31, 2022, the Group employed a total of 349 staff[42] - Employee remuneration is determined based on industry practice, educational background, experience, and performance, with share options, Mandatory Provident Fund, medical allowances, and other benefits provided[42] Contingent Liabilities As of March 31, 2022, the Group had no significant contingent liabilities - As of March 31, 2022, the Group had no significant contingent liabilities[43] Litigation There was no significant litigation during the reporting period - There was no significant litigation during the reporting period[44] Other Information Directors' and Chief Executive's Interests As of March 31, 2022, no directors or chief executives held disclosable interests or short positions in the Company's shares, underlying shares, or debentures, nor were there any arrangements for them to benefit from purchasing such securities Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures As of March 31, 2022, no directors or chief executives held disclosable interests or short positions in the Company's shares, underlying shares, or debentures - As of March 31, 2022, no directors or chief executives had interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations that were required to be notified to the Company and the Stock Exchange[46] Directors' Rights to Acquire Shares or Debentures During the period, neither the Company nor any of its subsidiaries entered into any arrangements enabling directors to benefit from purchasing shares or debentures of the Company or any other corporation - During the period, neither the Company nor any of its subsidiaries entered into any arrangements enabling directors to benefit from purchasing shares or debentures of the Company or any other corporation[47] Substantial Shareholders' Interests As of March 31, 2022, Mr. Xu Gongming and Redwood Bay Investment Group International Company Limited collectively held 21.05% of shares, and Mr. Wei Kai and Starlink Technology Co., Limited collectively held 11.81% of shares, making them the Company's substantial shareholders Substantial Shareholders' Long Positions in Ordinary Shares of the Company (As of March 31, 2022) | Shareholder Name | Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Xu Gongming | Beneficial owner | 12,000,000 | 0.16% | | Xu Gongming | Held by controlled entity (Redwood Bay Investment Group International Company Limited) | 1,577,380,000 | 21.05% | | Redwood Bay Investment Group International Company Limited | Beneficial owner | 1,577,380,000 | 21.05% | | Wei Kai | Beneficial owner | 232,900,000 | 3.11% | | Wei Kai | Held by controlled entity (Starlink Technology Co., Limited) | 884,820,000 | 11.81% | | Starlink Technology Co., Limited | Beneficial owner | 884,820,000 | 11.81% | Share Option Scheme The Company adopted a share option scheme in 2014 to reward contributors, allowing for the grant of options for up to 533,250,233 shares, with no options granted since its adoption - The Company adopted a share option scheme in 2014, allowing for the grant of share options for up to 533,250,233 shares[52] - No share options have been granted under the share option scheme since its adoption date[52] Competing Interests During the period, no directors, substantial shareholders, or their associates had any interests in competing businesses or conflicts of interest with the Group - During the period, no directors, substantial shareholders, or their respective associates had any interests in businesses that competed or might compete with the Group's business[53] Company's Listed Securities Transactions During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[54] Corporate Governance The Company is committed to high corporate governance standards, adhering to the directors' securities transaction code and Corporate Governance Code, with co-chairmen in place and an Audit Committee overseeing financial reporting and internal controls Compliance with the Model Code for Securities Transactions by Directors The Company has adopted the GEM Listing Rules' required standard of dealings as the code of conduct for directors' securities transactions, confirming full compliance by all directors during the period - The Company has adopted the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct for directors' securities transactions[56] - Directors have complied with the required standard of dealings and the Company's code of conduct for directors' securities transactions during the period[56] Corporate Governance Code The Company maintains high corporate governance standards, applying the Corporate Governance Code principles and complying with applicable provisions, despite the CEO position being vacant and temporarily filled by an executive director since January 1, 2021 - The Company has co-chairmen, Mr. Cai Da responsible for leading and overseeing Board management, and Mr. Li Xianghong responsible for the Group's business strategic development[57] - The CEO's duties have been performed by an executive director since January 1, 2021, and the Board has not yet appointed a new CEO[57] - Except for the vacant CEO position, the Company has complied with all applicable Corporate Governance Code provisions during the period[57] Audit Committee The Audit Committee, comprising four independent non-executive directors, reviews financial statements and advises the Board on financial reporting, internal controls, and risk management systems - The Audit Committee is composed of four independent non-executive directors, responsible for reviewing financial statements, internal control procedures, and risk management systems[59] - The Audit Committee has reviewed the unaudited condensed consolidated financial statements for the period and considers them to have been prepared in compliance with applicable accounting standards and the GEM Listing Rules[59]