Financial Reporting Standards - The adoption of Hong Kong Financial Reporting Standard No. 12 (Revised) has no significant impact on the basic and diluted earnings per share attributable to equity holders for the years ended December 31, 2023, and 2022[1]. - The group has retrospectively applied the revised standards, but it is not within the scope of the Pillar Two Model Rules, thus having no impact on the group[3]. - The revised Hong Kong Financial Reporting Standard No. 16 (Revised) will take effect for annual periods beginning on or after January 1, 2024, and is not expected to have a significant impact on the group's financial statements[9]. - The group is currently assessing the impact of the revised standards on its financial statements and existing loan agreements, with preliminary assessments indicating no significant impact[10]. - The revised Hong Kong Accounting Standard No. 7 and Hong Kong Financial Reporting Standard No. 7 (Revised) require additional disclosures regarding supplier financing arrangements, which are not expected to significantly impact the group's financial statements[11]. - The group anticipates that the amendments to HKAS 21 will not have a significant impact on its financial statements[12]. - The new and revised Hong Kong Financial Reporting Standards adopted this year do not impact the measurement, recognition, or presentation of any items in the group's financial statements[84]. - The group has adopted the revised Hong Kong Accounting Standards which clarify the distinction between changes in accounting estimates and changes in accounting policies[85]. - The financial statements are prepared in accordance with the Hong Kong Financial Reporting Standards and are presented in Hong Kong dollars[77]. Financial Performance - For the year ending December 31, 2023, total revenue was HKD 54,966,084, a decrease from HKD 77,107,175 in 2022, representing a decline of approximately 29%[28]. - The adjusted pre-tax loss for the year was HKD 29,372,237, compared to a pre-tax loss of HKD 26,309,210 in 2022, indicating a worsening of approximately 8%[28][38]. - The segment revenue from brokerage services was HKD 25,865,466, while financing services generated HKD 19,859,883, showing a significant drop from HKD 42,804,397 and HKD 27,005,131 respectively in 2022[28][31]. - Interest income from clients amounted to HKD 19,859,883, down from HKD 27,005,131 in the previous year, reflecting a decrease of about 26%[49]. - The company reported a net other income of HKD 1,340,462 for 2023, compared to a net loss of HKD 2,550,299 in 2022, indicating a positive turnaround[28][51]. - The company reported a loss from financial instruments measured at fair value of HKD 201,419, a significant improvement from a loss of HKD 2,692,995 in 2022[49]. - The company's revenue for the year ended December 31, 2023, was approximately HKD 54.97 million, a decrease of about 28.7% compared to HKD 77.11 million for the year ended December 31, 2022, reflecting a decline in customer trading volume[59]. - The net loss for the year ended December 31, 2023, was approximately HKD 25.08 million, an increase of about 3.4% from a net loss of HKD 24.24 million for the year ended December 31, 2022, primarily due to reduced revenue and increased one-time expenses[60]. - Total comprehensive loss for the year ended December 31, 2023, was approximately HKD 23.95 million, compared to a total comprehensive loss of HKD 24.57 million for the year ended December 31, 2022[64]. Equity and Dividends - The company proposed a final dividend of HKD 0.50 per share for the year ended December 31, 2023, down from HKD 1.20 per share for the year ended December 31, 2022, pending approval at the upcoming annual general meeting[60]. - The group's total equity attributable to shareholders was approximately HKD 163.01 million as of December 31, 2023, down from approximately HKD 188.91 million as of December 31, 2022[106]. - The total equity decreased from HKD 188,963,827 in 2022 to HKD 163,102,940 in 2023, a decline of about 13.7%[70]. - The company declared an interim dividend of HKD 0.80 per share for the six months ended June 30, 2023, down from HKD 1.00 per share in 2022[179]. Assets and Liabilities - Total non-current assets decreased from HKD 74,793,847 in 2022 to HKD 69,870,643 in 2023, a decline of approximately 6.5%[68]. - Current assets decreased from HKD 290,626,816 in 2022 to HKD 230,883,565 in 2023, representing a reduction of about 20.6%[68]. - Accounts receivable dropped significantly from HKD 238,928,362 in 2022 to HKD 189,743,326 in 2023, a decrease of approximately 20.6%[68]. - Current liabilities decreased from HKD 164,280,031 in 2022 to HKD 135,180,151 in 2023, a decline of about 17.7%[69]. - Net current assets fell from HKD 126,346,785 in 2022 to HKD 95,703,414 in 2023, a decrease of approximately 24.3%[68]. - Total assets less current liabilities decreased from HKD 201,140,632 in 2022 to HKD 165,574,057 in 2023, a decline of about 17.7%[68]. - Non-current liabilities decreased from HKD 12,176,805 in 2022 to HKD 2,471,117 in 2023, a significant reduction of approximately 79.7%[69]. - The company's lease liabilities decreased to HKD 2,317,754 as of December 31, 2023, from HKD 2,929,576 in 2022, a reduction of approximately 21%[184]. Credit Loss Provisions - The expected credit loss provision for margin clients and cash clients was HKD 40,805,372 as of December 31, 2023, compared to HKD 31,999,493 in 2022, indicating an increase of approximately 27.7%[21]. - The expected credit loss provisions increased significantly, with stage 3 margin and cash customer receivables totaling HKD 61,334,423, including HKD 9,594,281 from customers holding suspended securities[139]. - The expected credit loss provisions for cash customer receivables amounted to HKD 1,436,481 as of December 31, 2023, compared to HKD 703,617 in 2022, indicating a substantial increase[144]. - The total expected credit loss provisions as of December 31, 2023, were HKD 40,805,372, a decrease from HKD 31,999,493 in 2022[138]. - The expected credit loss rate for cash customer receivables was 0.10% in stage 2 and 0.01% in stage 1 as of December 31, 2023, compared to 0.31% and 0.07% respectively in 2022[138]. - The expected credit loss provision increased by HKD 86,904 due to the transfer of HKD 10,476,211 from Stage 1 to Stage 3 and HKD 562,782 from Stage 2 to Stage 3[166]. - The company reported a net expected credit loss provision expense of HKD 8,805,879 for the fiscal year ending December 31, 2023, compared to HKD 23,699,287 in the previous year[170]. Operational Highlights - The group has organized its business units into five reportable segments: Securities/Derivatives Brokerage Services, Financing Services, Asset Management Services, Insurance Advisory Services, and Financial Advisory Services[24]. - The group expects positive revenue impact from expanding asset management services in China, Singapore, and Japan, enhancing research capabilities, and increasing experienced personnel[92]. - The group aims to explore potential opportunities in the financial advisory services segment, largely dependent on the economic recovery and investment climate in China[95]. - The performance of the business segment has been adversely affected by market sentiment, particularly since Q4 2021[92]. - The group has established a multi-tiered authorization mechanism for capital management and allocation, ensuring compliance with applicable laws and regulations[118]. - The group has implemented strict cash flow management measures to meet capital requirements and mitigate potential cash flow risks[118]. - The company has received approval to provide virtual asset trading services and manage investment portfolios in virtual assets[72]. - The company’s subsidiary has been authorized to offer financial advisory services without holding client assets, targeting professional investors only[73]. Employee and Operational Costs - Employee costs decreased to HKD 31,227,932 in 2023 from HKD 32,722,967 in 2022, a reduction of approximately 5%[53]. - The company's total employee costs, including director remuneration and retirement benefit plan contributions, were approximately HKD 31.23 million for the year ended December 31, 2023, compared to approximately HKD 32.72 million for the year ended December 31, 2022[133]. - The company incurred a commission expense of HKD 4,687,531, which includes HKD 3,440,461 from brokerage services and HKD 1,247,070 from advisory services[28]. - Other operating expenses increased by 50.7% to HKD 28.14 million for the year ended December 31, 2023, from HKD 18.67 million in the previous year[59]. - The company incurred information service expenses of HKD 2,263,958 for the fiscal year ending December 31, 2023, down from HKD 2,416,388 in the previous year[170]. Market Conditions and Future Outlook - The group anticipates that the economic outlook for Hong Kong in 2024 may continue to be affected by various global and domestic factors, including the recovery of the economy post-COVID-19 and fluctuations in commodity prices[109]. - The group does not currently have a foreign currency hedging policy but is monitoring foreign exchange risks and may consider hedging significant foreign exchange exposures as needed[121]. - The group encourages employee development through internal training programs and supports employees in pursuing further education and professional development[134]. - The group will reassess its control over an investment if there are changes in the elements related to control[80]. Compliance and Governance - The company established an audit committee in compliance with GEM Listing Rules, consisting of one non-executive director and two independent non-executive directors[161]. - The company confirmed compliance with the GEM Listing Rules regarding trading standards for directors during the fiscal year ending December 31, 2023[152]. - There were no purchases, sales, or redemptions of the company's listed securities by the company or its subsidiaries during the fiscal year ending December 31, 2023[153]. - The preliminary financial figures for the fiscal year ending December 31, 2023, have been audited by Ernst & Young, ensuring consistency with the consolidated financial statements[154].
胜利证券(08540) - 2023 - 年度业绩