Market Expansion and Project Diversification - SEM Holdings Limited reported a diversification of market risks by engaging in new E&M engineering projects in Hong Kong through its wholly owned subsidiary, SEM Resources Limited[8]. - The scope of E&M engineering works includes supply, installation, and maintenance of electrical systems for commercial and residential developments, hotel developments, and casino renovations in Macau and Hong Kong[8]. - The company aims to enhance its market presence and mitigate uncertainties by expanding its project portfolio in the new Hong Kong segment[8]. - The Group was awarded 15 E&M engineering services projects with an aggregate contract sum of approximately MOP564.4 million during 2021[33]. - Additional project revenue generated in Hong Kong amounted to MOP78.3 million in 2021 compared to 2020[42]. - The Group continues to focus on providing electrical-related E&M engineering services, leveraging strong cooperation with customers, suppliers, and subcontractors[28]. - The Group is focused on expanding its E&M engineering services in Macau and Hong Kong markets[75]. Financial Performance and Revenue Growth - The Group recorded an annual revenue of approximately MOP200.0 million for the first time in 2017[10]. - The Group recorded total revenue of approximately MOP182.2 million in 2021, an increase of approximately MOP111.9 million or 159.4% from MOP70.2 million in 2020[34]. - The Group experienced a sharp increase in revenue in 2021 due to eased COVID-19 quarantine measures, leading to improved construction progress[21]. - The increase in revenue was mainly due to the easing of quarantine measures for COVID-19, which improved construction progress for ongoing projects[34]. - The Group's revenue increased by 159.4% from approximately MOP70.2 million in 2020 to approximately MOP182.2 million in 2021[45]. - The Group's profit margins were affected by higher labor and material costs in the Hong Kong market and intense competition in the construction sector[21]. Economic Context and Challenges - The Macau SAR economy saw a GDP increase of 68.6% and 32.9% in the second and third quarters of 2021, respectively, compared to the previous periods[23]. - The economic growth in Macau SAR for the second and third quarters of 2021 was 68.6% and 32.9% respectively, but still only reached 56.8% and 51.3% of the pre-pandemic level of 2019[25]. - The Group faced increased labor costs in the Macau market due to limited import labor quotas during the COVID-19 pandemic[21]. - The Group's net loss for the year was attributed to various factors, including increased labor costs and lower profit margins on awarded projects[21]. - The Group's performance in 2021 reflects a recovery trajectory despite ongoing challenges posed by the COVID-19 pandemic[25]. Management and Strategic Initiatives - The Group plans to strengthen its financial position to undertake larger E&M engineering projects and establish a maintenance department[15]. - The Group has developed its E&M maintenance department, including the acquisition of a workshop and equipment in 2021, to enlarge its revenue base[42]. - The management successfully implemented market strategies to diversify risks associated with COVID-19, leading to additional revenue from new projects in the Hong Kong segment[34]. - The Group's management is committed to long-term growth and stability in revenue, particularly through the development of the E&M maintenance department[28]. - The Group anticipates a better business environment post-COVID-19, despite facing increasing challenges in Macau since 2021[42]. Governance and Board Structure - The company emphasizes the importance of internal control and corporate governance, as highlighted by Mrs. Kan's role in providing strategic advice[114]. - The company has a diverse board with members holding various professional qualifications and extensive experience in their respective fields[116]. - The Board consists of eight Directors, including three executive Directors and five non-executive Directors, ensuring a balance of skills and experience[140]. - The company has complied with the Corporate Governance Code during the Year 2021 and will periodically review its governance policies[138]. - The Board has established three committees: Audit Committee, Nomination Committee, and Remuneration Committee to oversee specific aspects of the Company's affairs[155]. Financial Management and Performance - The Group reported a net loss of approximately MOP5.0 million for the Year 2021, a significant improvement from a net loss of approximately MOP20.2 million in 2020[62]. - The Group's administrative expenses rose from approximately MOP18.2 million in 2020 to approximately MOP19.3 million in 2021, mainly due to increased staff costs and depreciation charges from the acquisition of a workshop[60]. - The Group's cost of sales rose by 169.2% to approximately MOP160.7 million in 2021 from approximately MOP59.7 million in 2020[47]. - The Group's income tax expense decreased from approximately MOP0.8 million in 2020 to MOP14,000 in 2021, primarily due to the recognition of deferred tax assets for tax losses[60]. - The Group's cash and cash equivalents were approximately MOP40.3 million, down from approximately MOP105.4 million as of December 31, 2020[62]. Risk Management and Operational Challenges - The Group has implemented a risk management system to mitigate operational risks, led by Directors who consider macro and microeconomic conditions in decision-making[68]. - Liquidity may be adversely affected if progress payments or retention money are not received on time, necessitating regular aging analysis to monitor financial pressure[66]. - The Group's operations are project-based and non-recurring, requiring competitive bidding for each new project, which poses a risk to revenue generation[65]. - The economic recession in the Macau casino market has contributed to increased credit risks for the Group[60]. Human Resources and Staff Management - Total staff costs for the Year 2021 were approximately MOP17.6 million, an increase from approximately MOP11.7 million in 2020[85]. - The Group had 63 full-time employees as of December 31, 2021, up from 39 in 2020[85]. - The Group's remuneration policy includes salary increments and discretionary bonuses based on performance assessments[85]. - The company emphasizes the importance of experienced leadership in its financial and operational management[126]. Future Outlook and Strategic Goals - The Group is optimistic about the prospects of the electrical-related E&M engineering industry in the coming years[28]. - The Group aims to bid for potential projects with higher gross profit margins to maintain a healthier gross margin[52]. - The Group aims to fully utilise the unutilised net proceeds within one year after 2021, impacted by the COVID-19 epidemic[93].
澳达控股(09929) - 2021 - 年度财报