佰悦集团(08545) - 2022 Q4 - 年度财报

Financial Summary Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended March 31, 2022, total revenue slightly increased by 2.4% to HK$216.48 million, but operating profit and profit for the year significantly declined by 74.3% and 82.9% respectively, primarily due to increased cost of sales and reduced net other income Consolidated Statement of Profit or Loss Summary | Indicator | 2022 (HK$'000) | 2021 (HK$'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 216,485 | 211,467 | +2.4% | | Gross Profit | 34,873 | 37,964 | -8.1% | | Operating Profit | 3,225 | 12,567 | -74.3% | | Profit Before Tax | 3,117 | 12,371 | -74.8% | | Profit for the Year | 1,481 | 8,677 | -82.9% | | Basic and Diluted Earnings Per Share | 0.15 HK cents | 0.87 HK cents | -82.8% | Consolidated Statement of Financial Position As of March 31, 2022, total assets slightly increased to HK$225 million, with net assets remaining stable at HK$180 million, notably supported by a 74.4% surge in bank balances and cash Consolidated Statement of Financial Position Summary | Indicator | 2022 (HK$'000) | 2021 (HK$'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Assets | | | | | Non-current assets | 17,280 | 56,196 | -69.2% | | Current assets | 207,666 | 165,174 | +25.7% | | Of which: Bank balances and cash | 151,640 | 86,961 | +74.4% | | Total assets | 224,946 | 221,370 | +1.6% | | Liabilities and Equity | | | | | Current liabilities | 44,333 | 41,363 | +7.2% | | Non-current liabilities | 261 | 1,136 | -77.0% | | Total liabilities | 44,594 | 42,499 | +4.9% | | Net assets (Total equity) | 180,352 | 178,871 | +0.8% | Notes to the Financial Statements Company Information and Accounting Policies The company, an investment holding entity incorporated in the Cayman Islands, primarily designs, markets, distributes, and retails toys, with financial statements prepared under HKFRS and no material impact expected from new standards - The Group's principal activities are the design, marketing, distribution, and retail of toys and related products[9] - The financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (HKFRS) and comply with applicable disclosure provisions of the Hong Kong Companies Ordinance and GEM Listing Rules[10] Revenue and Segment Reporting Total revenue for the year was HK$216 million; by business, ODM toys declined while proprietary licensed toy sales grew strongly; by region, Japan was the largest market but saw a decline, while the US market revenue significantly increased, with high dependency on top three customers By Business Segment Sales of ODM toys, the primary revenue source, declined by 19.6% to 49.8% of total revenue, while proprietary licensed toys and related products saw robust 76.6% growth, increasing their share to 27.0%, and distributed imported toys also grew by 13.5% Revenue by Business Segment | Business Segment | 2022 (HK$'000) | 2021 (HK$'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales of ODM toys to licensees | 107,749 | 134,054 | -19.6% | | Distribution of imported toys and related products | 50,264 | 44,297 | +13.5% | | Sales of proprietary licensed toys and related products | 58,472 | 33,116 | +76.6% | | Total | 216,485 | 211,467 | +2.4% | By Geographical Region Japan, the largest market, contributed HK$111 million but declined by 17.8%, while the US market showed strong performance with a 179.1% increase to HK$32.73 million, and other regions recorded single to double-digit growth Revenue from External Customers by Geographical Region | Region | 2022 (HK$'000) | 2021 (HK$'000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Japan | 111,073 | 135,108 | -17.8% | | United States of America | 32,732 | 11,727 | +179.1% | | Hong Kong (Domicile) | 26,992 | 24,313 | +11.0% | | China | 20,217 | 18,006 | +12.3% | | Taiwan | 11,648 | 11,295 | +3.1% | | Others | 13,823 | 11,018 | +25.5% | | Total | 216,485 | 211,467 | +2.4% | Major Customers The top three major customers collectively contributed approximately 66.0% of the Group's total revenue this year, with Customers A and B accounting for 34.4% and 16.9% respectively, indicating customer concentration risk - Revenue from Customers A, B, and C accounted for 34.4%, 16.9%, and 14.5% of total revenue, respectively[24] Analysis of Key Profit or Loss Items Net other income decreased by 39.8% year-on-year due to lower government COVID-19 subsidies, while finance costs decreased by 44.9% and income tax expense significantly dropped by 55.7% in line with reduced taxable profit - Net other income decreased from HK$6.48 million to HK$3.90 million, primarily because HK$1.98 million in COVID-19 related government subsidies were received in the prior year, compared to only HK$0.10 million this year[25][26] - Finance costs decreased from HK$0.196 million to HK$0.108 million, mainly due to reduced interest on bank loans and lease liabilities[27] - Income tax expense decreased from HK$3.69 million to HK$1.64 million, consistent with the decline in profit before tax[29] Analysis of Key Statement of Financial Position Items At the reporting period end, net trade receivables and bills receivable decreased to HK$7.58 million, trade payables remained largely consistent at HK$4.35 million, and the company's equity structure stayed stable - Net trade receivables and bills receivable decreased from HK$10.48 million to HK$7.58 million[34] - Trade payables slightly increased from HK$4.19 million to HK$4.35 million, with most balances aged within 30 days[36][38] Dividends and Earnings Per Share The Board does not recommend any dividend for the current year, and basic earnings per share significantly decreased from 0.87 HK cents to 0.15 HK cents due to a substantial decline in profit for the year, with no potential dilutive shares - The Directors do not recommend the payment of a dividend for the years ended March 31, 2022, and 2021[31] - Basic earnings per share was 0.15 HK cents, compared to 0.87 HK cents in the prior year, calculated based on a weighted average of 1,000,000,000 shares[32] Management Discussion and Analysis Business Review The Group's business performance was mixed this year, with core ODM toy revenue and profit margins declining due to supply chain issues and rising costs, while strong growth in distributed imported and proprietary licensed toys, particularly high-end robot collectible figures, partially offset these negative impacts Sales of Original Design Manufacturing (ODM) Toys ODM toy sales revenue decreased by 19.6% to HK$108 million due to COVID-19 related production restrictions, supply chain disruptions, and shipping delays, while the segment's profit margin fell from 14.9% to 11.1% due to increased labor and raw material costs, impacting overall gross margin - Revenue from sales of ODM toys decreased by approximately 19.6% to approximately HK$108 million, primarily due to COVID-19 related supply chain disruptions and production restrictions[40] - The profit margin for ODM toys decreased from 14.9% in the prior year to 11.1% this year, mainly due to increased labor and raw material costs[41] Distribution of Imported Toys and Related Products Revenue from the distribution of imported toys and related products increased by 13.5% to HK$50.26 million, driven by the successful release and delivery of several popular high-end robot collectible figures, indicating robust market demand for high-value collectibles - Revenue from the distribution of imported toys and related products increased by approximately 13.5% to HK$50.26 million, primarily driven by popular high-end robot collectible figures[42] Sales of Proprietary Licensed Toys and Related Products The Group's proprietary brands, including 'SENTINEL/千值練', 'TOPI', and 'FLAME TOYS', performed exceptionally, with revenue from this segment significantly increasing by 76.6% to HK$58.47 million, primarily driven by the successful release of several popular high-end robot collectible figures, making it a key growth engine - Revenue from sales of proprietary licensed toys and related products increased by 76.6% to approximately HK$58.47 million, primarily due to the release and delivery of several popular high-end robot collectible figures[44] Financial Analysis Total revenue slightly increased by 2.4% to HK$216 million, driven by proprietary licensed and distributed toy businesses, but gross margin decreased from 18.0% to 16.1% due to rising ODM costs, while selling expenses increased by 45.2% and administrative expenses by 4.1%, leading to a significant decline in overall profitability - Revenue increased by 2.4% year-on-year, primarily due to rapid growth in sales of proprietary licensed toys and distributed imported toys[45] - Gross margin decreased from 18.0% to 16.1%, mainly due to increased labor and raw material costs for ODM and proprietary licensed toys[47] - Selling expenses increased by 45.2% year-on-year, primarily due to increased social media online marketing expenses and the resumption of the Hong Kong Ani-Com & Games event[50] Liquidity and Capital Resources The Group maintains a robust financial position with a low gearing ratio of 0.02 times and sufficient liquidity from ample bank balances and cash to meet operational needs, while closely monitoring foreign exchange risks without a current hedging policy - As of March 31, 2022, the Group's gearing ratio was approximately 0.02 times, consistent with the prior year, indicating a sound and stable financial position[57] - The Group currently has no foreign currency hedging policy, but management closely monitors and considers hedging significant foreign currency risks when necessary[59] - As of March 31, 2022, the Group had 41 employees, with total staff costs of approximately HK$15.85 million[61] Other Significant Matters Use of Proceeds The company's net proceeds of approximately HK$57.9 million from its May 2018 GEM listing have been fully utilized as disclosed in the prospectus, primarily for expanding its proprietary licensed toy product portfolio, enhancing overseas distribution networks, strengthening human resources, and improving IT systems - As of March 31, 2022, the net proceeds from the listing of approximately HK$57.9 million have been fully utilized[64] Post-Reporting Period Event: Acquisition of DongYiQuan Post-reporting period, the company strategically acquired a 30% equity stake in smart healthcare solution provider DongYiQuan for HK$10 million, paid by issuing 192 million new shares, marking its diversification into the smart healthcare industry in response to China's policy on developing smart eldercare services - The company noted the rise of smart home technology and public awareness of eldercare in China, particularly the emphasis on developing smart eldercare services in the '14th Five-Year Plan'[66] - On May 5, 2022, the company completed the acquisition of a 30% equity interest in DongYiQuan for a consideration of HK$10 million[68][69] - The acquisition consideration was settled by the allotment and issue of a total of 192,307,692 new shares at HK$0.052 per share[69] Corporate Governance The company is committed to high corporate governance standards, complying with all applicable GEM Listing Rules' Corporate Governance Code provisions during the year, and its Audit Committee has reviewed the annual results and oversees internal control systems - During the year, the company consistently complied with all applicable code provisions set out in the Corporate Governance Code[74] - The Audit Committee has reviewed the Group's annual results for the year ended March 31, 2022[78]