万成环球控股(08309) - 2023 Q1 - 季度财报

Report Overview and Disclaimer This section outlines GEM market characteristics and risks, clarifying directors' responsibilities for report accuracy Characteristics of GEM Market and Risk Warnings The GEM market offers a listing platform for small companies, but investors face higher risks, greater volatility, and uncertain liquidity - GEM market provides listing for small and medium-sized companies, with higher investment risks[1] - GEM securities may experience greater market volatility and cannot guarantee high liquidity[1] Report Statement and Directors' Responsibilities Directors are jointly and severally responsible for this report, confirming its accuracy, completeness, and absence of misleading content - This report is the joint and several responsibility of the company's directors, aiming to provide company information[2] - Directors confirm the report's information is accurate, complete, and free from misleading or fraudulent content in all material aspects[2] Unaudited Condensed Consolidated Results This section presents the unaudited condensed consolidated financial performance, including profit or loss and equity changes Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Revenue increased significantly, but profit decreased due to higher staff costs and lower gross margin Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the three months ended June 30) | Indicator | 2022 (HKD thousand) | 2021 (HKD thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 223,331 | 151,108 | 47.8% | | Cost of sales | (204,092) | (135,777) | 50.3% | | Gross profit | 19,239 | 15,331 | 25.5% | | Other income | 1,188 | 208 | 471.2% | | Administrative expenses | (13,911) | (10,434) | 33.3% | | Finance costs | (1,164) | (465) | 150.3% | | Profit before tax | 5,352 | 4,640 | 15.3% | | Income tax expense | (1,473) | (574) | 156.6% | | Profit and total comprehensive income attributable to owners of the Company for the year | 3,879 | 4,066 | -4.6% | | Earnings per share (HK cents) | 0.65 | 0.68 | -4.4% | - Revenue increased by 47.8% year-on-year, primarily driven by newly awarded street cleaning contracts[5] - Profit for the period decreased by 4.6% year-on-year, mainly due to a decline in gross margin caused by increased staff costs and higher finance costs[5] Unaudited Condensed Consolidated Statement of Changes in Equity Total equity decreased to HKD 98,639 thousand as of June 30, 2022, mainly due to reduced profit contribution Unaudited Condensed Consolidated Statement of Changes in Equity (As of June 30) | Indicator | 2022 (HKD thousand) | 2021 (HKD thousand) | | :--- | :--- | :--- | | Share capital | 6,000 | 6,000 | | Share premium | 33,463 | 42,463 | | Other reserves | 110 | 110 | | Retained earnings | 59,066 | 57,000 | | Total equity | 98,639 | 105,573 | - Total equity as of June 30, 2022, was HKD 98,639 thousand, a decrease from HKD 105,573 thousand in the same period of 2021[7] - Profit contribution for the period was HKD 3,879 thousand, recognized in retained earnings[7] Notes to the Unaudited Condensed Consolidated Financial Statements This section details general information, presentation basis, and analyses of key financial statement items General Information Incorporated in Cayman Islands in 2016, listed on GEM in 2017, the company provides environmental cleaning and property management services - The company was incorporated in the Cayman Islands on March 18, 2016, and listed on GEM of the Stock Exchange from April 13, 2017[9] - Principal business is investment holding, with subsidiaries providing environmental cleaning solutions (including street, building, bus, and ferry cleaning, waste disposal, pest control, etc.) and property management services[9] - Controlling shareholders are Mr. Wong Man Shing, Mr. Wong Chong Shing, and Mr. Wong Chi Ho[9] Basis of Presentation Quarterly results are presented in HKD, prepared under HKFRS and GEM Listing Rules, reviewed by Audit Committee, but unaudited - Financial statements are presented in HKD, prepared in accordance with Hong Kong Financial Reporting Standards, the Companies Ordinance, and the GEM Listing Rules[10][11] - Prepared using the historical cost convention, unaudited by external auditors, but reviewed by the Audit Committee[12][13] Revenue Analysis Total revenue grew 47.8% to HKD 223,331 thousand, primarily from street cleaning solutions Revenue by Source (For the three months ended June 30) | Revenue Source | 2022 (HKD thousand) | 2021 (HKD thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Street cleaning solutions | 171,913 | 100,583 | 70.9% | | Building cleaning solutions | 24,160 | 20,835 | 15.9% | | Bus and ferry cleaning solutions | 11,250 | 17,753 | -36.6% | | Other cleaning solutions | 13,522 | 9,941 | 36.0% | | Property management services | 2,486 | 1,996 | 24.5% | | Total Revenue | 223,331 | 151,108 | 47.8% | - Street cleaning solutions revenue was the primary growth driver, increasing by 70.9% year-on-year[15] - Bus and ferry cleaning solutions revenue decreased by 36.6% year-on-year[15] Other Income Analysis Other income significantly increased to HKD 1,188 thousand, primarily due to government subsidies Other Income by Source (For the three months ended June 30) | Other Income Source | 2022 (HKD thousand) | 2021 (HKD thousand) | | :--- | :--- | :--- | | Government Anti-epidemic Fund subsidy | 920 | – | | Government Employment Support Scheme subsidy | 176 | – | | Disposal of property, plant and equipment | – | 203 | | Bank interest income | 6 | – | | Miscellaneous income | 86 | 5 | | Total Other Income | 1,188 | 208 | - Other income increased by 471.2% from HKD 208 thousand in 2021 to HKD 1,188 thousand in 2022[16] - The main growth came from Government Anti-epidemic Fund subsidy (HKD 920 thousand) and Government Employment Support Scheme subsidy (HKD 176 thousand)[16] Finance Costs Analysis Finance costs significantly increased by 150.1% to HKD 1,164 thousand, mainly due to higher interest on bank borrowings Finance Costs by Source (For the three months ended June 30) | Finance Cost Source | 2022 (HKD thousand) | 2021 (HKD thousand) | | :--- | :--- | :--- | | Interest on bank overdrafts and borrowings | 665 | 212 | | Interest on lease liabilities | 499 | 253 | | Total Finance Costs | 1,164 | 465 | - Finance costs increased by 150.1% year-on-year, from HKD 465 thousand to HKD 1,164 thousand[18] - The primary reason was an increase in interest expenses on bank overdrafts and borrowings[18] Income Tax Expense Analysis Income tax expense increased 156.6% to HKD 1,473 thousand, mainly due to higher Hong Kong profits tax Income Tax Expense by Type (For the three months ended June 30) | Tax Type | 2022 (HKD thousand) | 2021 (HKD thousand) | | :--- | :--- | :--- | | Hong Kong profits tax | 1,521 | 625 | | Deferred tax | (48) | (51) | | Total Income Tax Expense | 1,473 | 574 | - Income tax expense increased by 156.6% year-on-year, from HKD 574 thousand to HKD 1,473 thousand[19] - Hong Kong profits tax applies a two-tiered tax rate system, with the first HKD 2 million of assessable profits taxed at 8.25% and the remainder at 16.5%[21] Composition of Profit/(Loss) for the Period Total staff costs significantly increased by 54.4% to HKD 182,695 thousand, impacting profit, with depreciation also rising Cost Items (For the three months ended June 30) | Cost Item | 2022 (HKD thousand) | 2021 (HKD thousand) | | :--- | :--- | :--- | | Salaries, wages and other benefits | 170,607 | 116,653 | | Contributions to retirement benefit schemes | 5,061 | 3,002 | | Reversal of long service payment | (33) | (1,324) | | Provision for gratuity liabilities | 7,060 | – | | Total Staff Costs | 182,695 | 118,331 | | Auditor's remuneration | 180 | 125 | | Depreciation of property, plant and equipment | 220 | 293 | | Depreciation of right-of-use assets | 3,261 | 1,831 | - Total staff costs increased by 54.4% year-on-year, from HKD 118,331 thousand to HKD 182,695 thousand[22] - Depreciation of right-of-use assets increased by 78.1% year-on-year, from HKD 1,831 thousand to HKD 3,261 thousand[22] Earnings Per Share Basic and diluted EPS decreased slightly to 0.65 HK cents from 0.68 HK cents, due to reduced profit Earnings Per Share (For the three months ended June 30) | Indicator | 2022 (HK cents) | 2021 (HK cents) | | :--- | :--- | :--- | | Basic and diluted earnings per share | 0.65 | 0.68 | - Profit attributable to ordinary equity holders used for basic earnings per share calculation was HKD 3,879 thousand (2021: HKD 4,066 thousand)[23] - The weighted average number of ordinary shares outstanding was 600,000 thousand shares, with no potential dilutive ordinary shares[23] Management Discussion and Analysis This section reviews business performance, future outlook, and key financial metrics Business Review Group revenue significantly increased due to new street cleaning contracts, enhancing competitiveness through operational efficiency and technology - Revenue significantly increased during the reporting period, mainly due to multiple street cleaning contracts awarded in late 2021 and May 2022[25] - The company strategically enhances operational efficiency, improves asset utilization, and leverages new technologies to strengthen operations and optimize work performance[25] Cleaning Solution Services Cleaning solution services remain the primary business, with revenue growing 48.1% to HKD 220,800 thousand, driven by new government contracts - Cleaning solution services are the Group's primary business, with over 30 years of experience[26] - Revenue from cleaning solution services was approximately HKD 220,800 thousand during the reporting period, an increase of 48.1% compared to the same period in 2021[27] - Revenue growth was mainly due to securing street cleaning service contracts for Fanling, Sheung Shui, Southern, Tuen Mun, and Yau Tsim Mong (North) districts[27] Property Management Services Property management services provide stable but limited revenue, with management seeing synergies and future growth potential - Property management services provide a stable but limited revenue source for the Group[28] - Management believes property management services have synergistic effects with cleaning solutions and are expected to become a major revenue source in the future[28] Outlook The company is confident in Hong Kong's economic recovery and environmental cleaning sector, pursuing new opportunities for sustainable growth - The company anticipates Hong Kong's economy is recovering and is confident in the prospects of the environmental cleaning services industry in Hong Kong[29] - Future efforts will focus on securing more new tenders from other Hong Kong government departments and expanding to private clients to broaden the customer base[31] - Will utilize financial resources, keep pace with business and technological trends, and formulate new business strategies to improve performance and service quality, aiming to maximize shareholder returns[31] Financial Review Revenue increased 47.8%, but net profit decreased 4.6% due to lower gross margin and higher operating costs Revenue Revenue grew 47.8% to HKD 223,331 thousand, primarily from new street cleaning contracts Revenue (For the three months ended June 30) | Indicator | 2022 (HKD thousand) | 2021 (HKD thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 223,331 | 151,108 | 47.8% | - Revenue increase was mainly due to street cleaning contracts awarded in late 2021 and May 2022, contributing additional revenue of approximately HKD 64,614 thousand[32] Gross Profit and Gross Margin Gross profit increased 25.5% to HKD 19,239 thousand, but gross margin decreased 1.6 percentage points due to higher staff costs Gross Profit and Gross Margin (For the three months ended June 30) | Indicator | 2022 (HKD thousand) | 2021 (HKD thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 19,239 | 15,331 | 25.5% | | Gross margin | 8.6% | 10.2% | -1.6 percentage points | - Gross margin decline was mainly due to an increase in staff costs of approximately HKD 64,364 thousand during the reporting period[33] Other Income Other income significantly increased to HKD 1,188 thousand, primarily due to government subsidies Other Income (For the three months ended June 30) | Indicator | 2022 (HKD thousand) | 2021 (HKD thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Other income | 1,188 | 208 | 471.2% | - The main growth came from Government Anti-epidemic Fund subsidy and Government Employment Support Scheme subsidy[34] Administrative Expenses Administrative expenses increased 33.3% to HKD 13,911 thousand, mainly due to higher depreciation and bank charges Administrative Expenses (For the three months ended June 30) | Indicator | 2022 (HKD thousand) | 2021 (HKD thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 13,911 | 10,434 | 33.3% | - The increase in administrative expenses was mainly due to increased depreciation, insurance expenses, and bank charges[35] Finance Costs Finance costs significantly increased by 150.1% to HKD 1,164 thousand, due to higher interest on bank borrowings Finance Costs (For the three months ended June 30) | Indicator | 2022 (HKD thousand) | 2021 (HKD thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 1,164 | 465 | 150.1% | - The increase in finance costs was mainly due to higher interest expenses paid on bank borrowings[37] Net Profit Net profit attributable to owners decreased 4.6% to HKD 3,879 thousand, affected by lower gross margin and higher expenses Net Profit (For the three months ended June 30) | Indicator | 2022 (HKD thousand) | 2021 (HKD thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net profit | 3,879 | 4,066 | -4.6% | Dividends The Board does not recommend a dividend for the three months ended June 30, 2022, consistent with prior periods - The Board of Directors does not recommend the payment of a dividend for the three months ended June 30, 2022[39] Disclosure of Interests This section details interests and short positions of directors, chief executives, and substantial shareholders in company securities Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company Directors Wong Chong Shing, Wong Man Shing, and Wong Chi Ho each held 61.50% of shares through controlled corporations and acting-in-concert interests Directors' Interests (As of June 30, 2022) | Director | Capacity/Nature | Number of Ordinary Shares | Percentage of Interest | | :--- | :--- | :--- | :--- | | Mr. Wong Chong Shing | Interest in controlled corporation; Acting-in-concert interest | 369,000,000 | 61.50% | | Mr. Wong Man Shing | Interest in controlled corporation; Acting-in-concert interest | 369,000,000 | 61.50% | | Mr. Wong Chi Ho | Interest in controlled corporation; Acting-in-concert interest | 369,000,000 | 61.50% | - Mr. Wong Chong Shing, Mr. Wong Man Shing, and Mr. Wong Chi Ho entered into an acting-in-concert agreement on March 30, 2016[43] - Mr. Wong Chong Shing holds 175,500,000 shares through his wholly-owned company, Man Shing Global Limited, and is deemed to own 193,500,000 shares due to acting-in-concert[43] Substantial Shareholders' Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company Man Shing Global Limited and Li Hang Investment Limited each held 29.25% of shares; spouses were deemed to own 61.50% Substantial Shareholders' Interests (As of June 30, 2022) | Shareholder Name/Name | Capacity/Nature | Number of Ordinary Shares | Percentage of Interest | | :--- | :--- | :--- | :--- | | Man Shing Global Limited | Beneficial owner | 175,500,000 | 29.25% | | Li Hang Investment Limited | Beneficial owner | 175,500,000 | 29.25% | | Ms. Wong Lai Man | Interest of spouse | 369,000,000 | 61.50% | | Chun Shing Investment Limited | Beneficial owner | 18,000,000 | 3.00% | | Ms. Wan Wing Ting | Interest of spouse | 369,000,000 | 61.50% | - Man Shing Global Limited is wholly-owned by Executive Director Mr. Wong Chong Shing[47] - Ms. Wong Lai Man is the spouse of Mr. Wong Man Shing, and Ms. Wan Wing Ting is the spouse of Mr. Wong Chi Ho, both are deemed to have interests in the shares held by their respective spouses[47] Corporate Governance and Other Information This section covers corporate governance practices, including competing interests, securities transactions, code compliance, share options, and board composition Competing Interests and Conflicts of Interest Directors confirm no controlling shareholders, directors, or associates have competing businesses or conflicts of interest - None of the controlling shareholders, directors, or their respective close associates have any business that directly or indirectly competes with or creates a conflict of interest with the Group's business[48] Purchase, Sale or Redemption of the Company's Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period - Neither the company nor its any subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[49] Compliance with the Corporate Governance Code The company complied with all applicable Corporate Governance Code provisions, ensuring transparency and protecting shareholder interests - The company has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix 15 to the GEM Listing Rules during the reporting period[50] - The company is committed to maintaining high standards of corporate governance practices to ensure transparency and safeguard shareholders' interests[51] Code of Conduct for Securities Transactions by Directors The company adopted GEM Listing Rules standards for directors' securities transactions, with all directors confirming full compliance - The company has adopted the standards set out in Rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct for directors' securities transactions[52] - All directors have confirmed full compliance with the dealing standards set out in the Code of Conduct during the reporting period and up to the reporting date[52] Share Option Scheme The Share Option Scheme, adopted on March 20, 2017, aims to attract and motivate talent, but no options have been granted - The Share Option Scheme was adopted on March 20, 2017, to attract, retain, and motivate talented participants[53] - No share options have been granted under the Share Option Scheme since its adoption and up to June 30, 2022[54] Audit Committee The Audit Committee, comprising three independent non-executive directors, reviews financial reporting and internal controls - The Audit Committee comprises three independent non-executive directors, with Mr. Au Yeung Tin Wah as chairman[56] - The committee assists the Board in fulfilling its responsibilities, providing independent review of financial reporting and monitoring the effectiveness of internal controls[56] - These unaudited quarterly financial statements have been reviewed by the Audit Committee and are considered to comply with the applicable accounting principles and requirements of the GEM Listing Rules[56] Board Composition The Board comprises three executive directors and three independent non-executive directors - The Board of Directors includes three executive directors: Mr. Wong Chong Shing, Mr. Wong Man Shing, and Mr. Wong Chi Ho[57] - The Board of Directors includes three independent non-executive directors: Mr. Li Pak Chung, Mr. Au Yeung Tin Wah, and Mr. Chiu Ka Wai[57]