圆美光电(08311) - 2022 Q3 - 季度财报

Report Summary The Group successfully turned a loss into a profit for the nine months ended September 30, 2022, with a profit attributable to equity holders of approximately HKD 6.2 million, despite a decrease in revenue Key Performance for the Nine Months Ended September 30, 2022 | Indicator | Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | | :--- | :--- | :--- | | Revenue | Approx. HKD 257.3 million | Approx. HKD 377.5 million | | Profit / (Loss) Attributable to Equity Holders | Profit approx. HKD 6.2 million | Loss approx. HKD 39.7 million | - The Board does not recommend an interim dividend for the nine months ended September 30, 2022[4] Financial Results This section presents the unaudited condensed consolidated financial statements, including the statement of comprehensive income, statement of changes in equity, and detailed notes on revenue composition, other gains/losses, interim dividends, and earnings per share calculations Unaudited Condensed Consolidated Statement of Comprehensive Income During the reporting period, the Group's revenue decreased year-on-year, but it successfully turned a loss into a profit, with a significant improvement in gross profit, resulting in a profit attributable to equity holders of HKD 6.2 million for the nine months ended September 30, 2022, compared to a loss of HKD 39.68 million in the prior year, and basic earnings per share of 0.42 HK cents Key Data from Consolidated Statement of Comprehensive Income (Nine Months Ended September 30, HKD Thousands) | Indicator (HKD Thousands) | 2022 (Unaudited) | 2021 (Unaudited) | | :--- | :--- | :--- | | Revenue | 257,337 | 377,462 | | Gross Profit | 60,762 | 11,420 | | Operating Profit / (Loss) | 9,269 | (39,940) | | Profit / (Loss) for the Period | 5,251 | (40,297) | | Profit / (Loss) Attributable to Equity Holders | 6,198 | (39,676) | | Basic Earnings / (Loss) Per Share (HK cents) | 0.42 | (2.67) | Unaudited Condensed Consolidated Statement of Changes in Equity This statement details the changes in the Group's equity items, including share capital, share premium, various reserves, and retained earnings, for the nine months ended September 30, 2022 - The report includes the unaudited condensed consolidated statement of changes in equity for the nine months ended September 30, 2022, reflecting changes in share capital, reserves, and retained earnings[10] Notes to the Unaudited Condensed Consolidated Financial Results The financial notes provide supplementary information to the financial statements, including revenue breakdown by product category, composition of other gains and losses (primarily fair value changes of financial assets), taxation, and the basis for earnings per share calculation, indicating significant growth in health-related product revenue and a decline in traditional display product revenue Revenue Composition The Group's total revenue is primarily derived from display products and health-related products, with TFT-LCD panel and module revenue decreasing by 55% year-on-year in the first nine months of 2022, while health-related product revenue significantly increased by nearly four times, becoming a crucial revenue source Revenue by Product Category (Nine Months Ended September 30, HKD Thousands) | Product Category | 2022 (Unaudited) | 2021 (Unaudited) | | :--- | :--- | :--- | | TFT-LCD Panels and Modules | 135,210 | 297,644 | | Health-Related Products | 76,318 | 15,628 | | Polarizers | 35,864 | 37,683 | | Electronic Billboards | 5,687 | 11,697 | | Integrated Circuits | 1,829 | 6,291 | | Total | 257,337 | 377,462 | Net Other Gains / (Losses) Net other losses of approximately HKD 12.3 million were recorded during the period, primarily due to a fair value loss of approximately HKD 12.58 million from the equity investment in Mobvoi Inc., which is a narrower loss compared to HKD 19.25 million in the prior year - Fair value loss on financial assets at fair value through profit or loss was HKD 12.581 million during the period, primarily from the investment in private company Mobvoi Inc[19][21] - The fair value of the investment in Mobvoi decreased from approximately HKD 38.46 million at the end of 2021 to approximately HKD 25.88 million as of September 30, 2022[21] Interim Dividend The Board did not declare an interim dividend for the nine months ended September 30, 2022 - The Board did not declare an interim dividend for the nine months ended September 30, 2022, consistent with the prior year period[26] Basic and Diluted Earnings / (Loss) Per Share Based on a profit attributable to equity holders of HKD 6.2 million, basic and diluted earnings per share were calculated at 0.42 HK cents, compared to a loss per share of 2.67 HK cents in the prior year period Earnings Per Share Calculation | Indicator | Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | | :--- | :--- | :--- | | Profit / (Loss) Attributable to Equity Holders (HKD Thousands) | 6,198 | (39,676) | | Weighted Average Number of Ordinary Shares in Issue (Thousands of Shares) | 1,483,687 | 1,483,687 | | Basic and Diluted Earnings / (Loss) Per Share (HK cents) | 0.42 | (2.67) | Management Discussion and Analysis This section provides an overview of the Group's business performance and financial position, highlighting key drivers for the turnaround to profitability, challenges faced in the display market, and the impact of investment fair value changes Business Review and Outlook Despite weakened demand in the display panel market due to international conflicts and high inflation, leading to a 32% year-on-year decrease in total revenue to HKD 257 million, the Group successfully turned a loss into a profit of HKD 6.2 million, driven by strong growth and higher gross margins in health-related products, while the investment in Mobvoi recorded a fair value loss due to capital market deterioration, with the Group aiming to continue seizing market opportunities and diversifying products for future value creation - Despite a year-on-year revenue decrease of approximately 32%, the Group successfully turned a loss into a profit during the period, recording a profit attributable to equity holders of approximately HKD 6.2 million, compared to a loss of approximately HKD 39.7 million in the prior year period[30] - Sales of TFT-LCD panels and modules decreased by approximately 55% year-on-year due to reduced demand for remote work and learning post-pandemic[31] - Strong sales in health-related products business, including K-clean and rapid antigen test kits, reached HKD 76.32 million, a significant year-on-year increase, serving as a primary factor for the Group's turnaround to profitability[34] - The investment in AI company Mobvoi recognized a fair value loss of approximately HKD 12.58 million during the period[37] Financial Review The core of this period's financial performance is 'increased profit without increased revenue,' with total revenue decreasing by 32% due to declining display product sales, but gross profit surging to HKD 60.76 million (compared to HKD 11.42 million in the prior year) driven by a significant increase in high-margin health-related product sales, while distribution and selling expenses rose by 46% due to health product business expansion, ultimately leading to a successful turnaround to profitability thanks to substantial gross profit improvement and reduced fair value losses on financial assets - Gross profit significantly increased to approximately HKD 60.76 million, primarily due to revenue growth from high-margin health-related products[41] - Distribution and selling expenses increased by approximately 46%, mainly due to higher sales commissions, staff costs, and promotional expenses generated by health-related products[43] - The turnaround to profitability is primarily attributable to a substantial increase in profit from health-related products and a reduction in fair value losses on financial assets at fair value through profit or loss[46] Other Disclosures This section provides details on directors' and substantial shareholders' interests, the share option scheme, and other compliance matters, including a non-competition undertaking and ongoing legal proceedings initiated by the Hong Kong SFC Directors' and Chief Executive's Interests and Short Positions As of September 30, 2022, Mr. Cheng Wai Tak, a Director, held a combined 62.39% equity interest in the Company through his wholly-owned company, Winful Enterprises Limited, and personal beneficial ownership Directors' Shareholdings | Director Name | Capacity | Number of Shares Held | Equity Percentage | | :--- | :--- | :--- | :--- | | Mr. Cheng Wai Tak | Interest of controlled corporation and beneficial owner | 925,647,151 | 62.39% | | Mr. Kan Man Wai | Beneficial owner | 320,000 | 0.02% | Substantial Shareholders' Interests and Short Positions As of September 30, 2022, Winful Enterprises Limited, as a substantial shareholder, directly and beneficially owned 62.24% of the Company's shares - Substantial shareholder Winful Enterprises Limited directly holds 923,427,151 shares of the Company, representing 62.24% of the issued shares, and is wholly owned by Director Mr. Cheng Wai Tak[53][54] Share Option Scheme The Company adopted a share option scheme in January 2014, but no share options have been granted under the scheme since its adoption - No share options have been granted by the Company since the adoption date of the share option scheme[56] Other Compliance Disclosures This section covers various compliance matters, including a non-competition undertaking by the controlling shareholder, and discloses legal proceedings initiated by the Hong Kong SFC against the Company and certain directors alleging breach of duties, with the relevant directors having suspended their roles pending the outcome of the legal proceedings - Controlling shareholder Mr. Cheng Wai Tak and Winful Enterprises have provided a non-competition undertaking to the Company[61] - The Hong Kong Securities and Futures Commission has filed a petition against the Company and certain directors under Section 214 of the Securities and Futures Ordinance, alleging breach of duties by directors concerning a subsidiary disposal matter[65] - The petitioned directors have suspended their directorships since September 25, 2020, pending the conclusion of the legal proceedings[66] Corporate Governance This section outlines the Company's adherence to corporate governance principles, specifically detailing the composition and responsibilities of the Audit Committee Audit Committee The Company has established an Audit Committee, comprising three independent non-executive directors, in compliance with the Corporate Governance Code, and this committee has reviewed the quarterly report - The Company has complied with all code provisions of the Corporate Governance Code[68] - The Audit Committee is composed of three independent non-executive directors and has reviewed this quarterly report[69]