Financial Performance - For the three months ended September 30, 2022, the company reported revenue of HKD 20,875,000, a decrease of 67.4% compared to HKD 64,085,000 in the same period last year[6]. - The gross profit for the same period was HKD 14,099,000, down 65.7% from HKD 41,123,000 year-on-year[6]. - The company incurred a loss before tax of HKD 4,935,000 for the three months ended September 30, 2022, compared to a loss of HKD 10,533,000 in the previous year, representing a 53.2% improvement[6]. - For the nine months ended September 30, 2022, total revenue was HKD 56,770,000, a decline of 67.6% from HKD 175,038,000 in the same period last year[6]. - The net loss attributable to owners of the company for the nine months was HKD 8,046,000, compared to HKD 19,316,000 in the previous year, indicating a 58.3% reduction in losses[6]. - The basic and diluted loss per share for the three months was HKD (2.86), compared to HKD 7.21 in the same period last year[6]. - Basic loss per share for the nine months ended September 30, 2022, was HKD (4.66), an improvement from HKD (13.35) for the same period in 2021[31]. Revenue Breakdown - Revenue from Chinese restaurants for the nine months ended September 30, 2022, was HKD 56,770,000, a decrease of 67.6% compared to HKD 175,038,000 for the same period in 2021[18]. - Revenue from Hong Kong and Macau for the three months ended September 30, 2022, was HKD 20,875,000, compared to HKD 58,213,000 for the same period in 2021, representing a decline of 64.1%[18]. - Revenue from the "Dragon Emperor" brand decreased by approximately HKD 67.4 million or about 62.0% to approximately HKD 41.3 million for the nine months ended September 30, 2022, primarily due to stricter pandemic measures[43]. - Revenue from the "Dragon Seal" brand dropped by approximately HKD 25.1 million or about 95.7% to approximately HKD 1.1 million, mainly due to the closure of the Global Trade Square branch[44]. - Revenue from the "Dragon Robe" brand decreased by approximately HKD 3.9 million or about 21.2% to approximately HKD 14.6 million, attributed to stricter pandemic measures affecting the dining industry[45]. Cost Management - Employee costs for the three months were HKD 10,545,000, down 59.0% from HKD 25,764,000 year-on-year[6]. - The group’s employee benefits expenses (excluding directors and CEO remuneration) for the nine months ended September 30, 2022, were HKD 27,314,000, down 57.3% from HKD 63,594,000 for the same period in 2021[25]. - Employee costs for the nine months ended September 30, 2022, were approximately HKD 29.7 million, a significant decrease of about HKD 41.9 million or approximately 59.5% compared to HKD 71.6 million for the same period in 2021[51]. - Rental and related expenses decreased by approximately HKD 9.3 million or about 50.3% to approximately HKD 9.2 million for the nine months ended September 30, 2022, due to a reduction in the number of restaurants operated[54]. - Other operating expenses decreased by approximately HKD 16.2 million or about 52% to approximately HKD 14.9 million for the nine months ended September 30, 2022, also due to a reduction in the number of restaurants operated[55]. Government Support - The group recognized government subsidies related to COVID-19 amounting to HKD 6,353,000 for the nine months ended September 30, 2022, compared to HKD 4,200,000 for the same period in 2021, an increase of 51.2%[23]. Operational Challenges - The group closed the New Peking branch in July 2022, further impacting its operational capacity[38]. - The group is adopting a conservative approach to operations due to the economic downturn in Hong Kong and ongoing COVID-19 challenges[57]. - Employee costs and food costs remain relatively high, putting pressure on the group to balance cost control with food and service quality[59]. - The group is negotiating rent reductions with landlords due to restrictions on restaurant operations, but landlords are unwilling to offer substantial rent discounts[59]. - The group is implementing a series of cost-saving measures and emergency plans to cope with the adverse operating environment caused by COVID-19[59]. Compliance and Governance - The company failed to comply with GEM Listing Rules regarding the number of independent non-executive directors after the resignation of two directors on October 31, 2022[95]. - The company is actively seeking suitable candidates to fill the vacancies to comply with GEM Listing Rules[95]. - All directors confirmed compliance with the trading standards as per GEM Listing Rules during the nine months ending September 30, 2022[98]. - The company has complied with the corporate governance code as of September 30, 2022, except for the combined roles of Chairman and CEO held by Mr. Chan since July 13, 2021[99]. - The audit committee, established on December 15, 2017, is chaired by independent non-executive director Mr. Wong, ensuring compliance with GEM Listing Rules[101]. - The unaudited consolidated financial statements for the nine months ended September 30, 2022, have been reviewed and deemed compliant with applicable accounting standards and GEM Listing Rules[103]. Legal Matters - The company is required to repay a total of HKD 366,000 along with interest and legal fees as per the final judgment on February 8, 2022[80]. - Long Wong Restaurant Group Limited must repay HKD 334,000 plus interest and legal fees as per the final judgment on May 11, 2022[81]. - The company’s subsidiary, Dongfang E-commerce Limited, is ordered to repay HKD 2,000,000 along with interest and legal fees as per the final judgment on May 11, 2022[83]. - The company and its subsidiary, Qigang Limited, are facing a claim for HKD 2,117,469.59 for unpaid principal and default interest as per the summons received on May 11, 2022[84]. - Qigang is facing a claim for HKD 177,996 plus interest and legal fees as per the summons received on July 26, 2022[86]. - The company has filed a defense in response to the summons related to the claims mentioned above[85][89]. Investment Activity - The company has not made any significant investments, acquisitions, or disposals of subsidiaries or associated companies as of September 30, 2022[62]. - The company has not purchased, sold, or redeemed any of its listed securities in the nine months ending September 30, 2022[94]. Future Outlook - The group is preparing to leverage future growth opportunities while maintaining a strong and stable liquidity position[65].
龙皇集团(08493) - 2022 Q3 - 季度财报