南华集团控股(00413) - 2022 - 年度业绩

Group Performance Consolidated Financial Statements The Group's 2022 total revenue decreased by 19% to HKD 3.814 billion, while annual profit nearly doubled to HKD 65.64 million due to cost control, with net assets slightly declining to HKD 6.489 billion Consolidated Income Statement Summary | Item | 2022 (HKD Thousands) | 2021 (HKD Thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 3,813,722 | 4,724,909 | -19.3% | | Gross Profit | 571,265 | 535,415 | +6.7% | | Operating Profit | 292,347 | 256,239 | +14.1% | | Profit Before Tax | 86,936 | 86,293 | +0.1% | | Profit for the Year | 65,644 | 33,076 | +98.5% | | Profit Attributable to Owners of the Company | 74,734 | 30,852 | +142.2% | Consolidated Statement of Financial Position Summary | Item | As at December 31, 2022 (HKD Thousands) | As at December 31, 2021 (HKD Thousands) | Change | | :--- | :--- | :--- | :--- | | Total Non-Current Assets | 10,343,535 | 11,055,086 | -6.4% | | Total Current Assets | 3,193,691 | 4,559,904 | -30.0% | | Total Current Liabilities | 2,771,488 | 3,957,875 | -29.9% | | Total Non-Current Liabilities | 4,276,533 | 4,759,520 | -10.1% | | Net Assets | 6,489,205 | 6,897,595 | -5.9% | | Total Equity Attributable to Owners | 6,489,205 | 6,897,595 | -5.9% | Earnings Per Share | Item | 2022 (HK Cents) | 2021 (HK Cents) | | :--- | :--- | :--- | | Basic Earnings Per Share | 0.6 | 0.2 | | Diluted Earnings Per Share | 0.6 | 0.2 | Management Discussion and Analysis Financial Summary For 2022, the Group's total revenue decreased by 19% to HKD 3.814 billion, while annual profit nearly doubled to HKD 66 million due to cost control, resulting in basic earnings per share of 0.6 HK Cents 2022 Financial Performance Summary | Indicator | 2022 (HKD) | 2021 (HKD) | | :--- | :--- | :--- | | Total Revenue | 3,814,000,000 | 4,725,000,000 | | Annual Profit | 66,000,000 | 33,000,000 | | Basic Earnings Per Share | 0.6 HK Cents | 0.2 HK Cents | Business Review The Group's core businesses include trading and manufacturing, property investment and development, and forestry, with trading and manufacturing profit significantly increasing this year while property and forestry segments faced challenges - The Group's primary business segments include trading and manufacturing, property investment and development, and forestry operations[2] Trading & Manufacturing Despite an 18% revenue decrease to HKD 3.54 billion, this segment's operating profit surged by 171% to HKD 236 million, driven by cost control in OEM toys and strong footwear trade, while branded ball product sales declined Trading and Manufacturing Segment Performance | Business | Revenue (HKD) | Operating Profit (HKD) | | :--- | :--- | :--- | | Total | 3,540,000,000 (-18%) | 236,000,000 (+171%) | | OEM Toy Production | 3,246,000,000 (-21%) | Not Applicable | | Footwear Product Trading | 274,000,000 (+76%) | 6,600,000 (+154%) | | Branded Ball Product Sales | 15,500,000 (-33%) | Not Applicable | - The decline in OEM toy business revenue was primarily due to reduced customer spending and cautious ordering strategies caused by the pandemic, geopolitical factors, and high interest rates[4] - To address challenges, management implemented measures such as relocating production facilities to lower-cost regions like Guangxi and Vietnam and sourcing new suppliers, effectively controlling production costs and enhancing operating profit[5] Property Investment & Development This segment's revenue decreased by 33% to HKD 274 million, though operating profit (excluding fair value changes) grew 48% to HKD 157 million, as rental income declined 20% due to pandemic restrictions in China and Hong Kong Property Investment and Development Segment Performance | Indicator | 2022 (HKD) | 2021 (HKD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 274,000,000 | 408,000,000 | -33% | | Operating Profit (incl. fair value changes) | 102,600,000 | 234,000,000 | -56% | | Operating Profit (excl. fair value changes) | 156,800,000 | 105,700,000 | +48% | | Rental Income | 187,200,000 | Not Applicable | -20% (vs. prior year) | - The Group's property investment portfolio in China and Hong Kong has a total gross floor area of approximately 630,000 square meters and 26,000 square meters, respectively[9] - China's 'dynamic zero-COVID' policy and Hong Kong's travel restrictions adversely impacted rental income in Nanjing, Shenyang, Tianjin, and Hong Kong[10][45] Forestry Business The forestry business segment's revenue sharply declined by 74% to HKD 0.7 million, with operating loss widening 46% to HKD 17.2 million, and productive plant value decreasing 17% due to RMB depreciation and asset write-offs Forestry Business Segment Performance | Indicator | 2022 (HKD) | Change | | :--- | :--- | :--- | | Revenue | 700,000 | -74% | | Operating Loss | 17,200,000 | +46% | | Balance Value of Productive Plants | 21,400,000 | -17% | Liquidity and Financial Resources At year-end 2022, the Group maintained stable financial health with a current ratio of 1.2 and a gearing ratio of 35%, funding operations via internal resources and bank loans while monitoring RMB and USD exchange risks Financial Ratios | Indicator | December 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Current Ratio | 1.2 | 1.2 | | Gearing Ratio | 35% | 36% | - The Group faces significant foreign currency exchange risks primarily related to RMB and USD, which are managed through close monitoring of exchange rate trends and entering into forward contracts[28] - There were no significant changes in the Group's capital structure during the year[60] Notes to the Announcement Basis of Preparation and Accounting Policies The accounting policies and basis of preparation for this year's financial statements are consistent with the prior year, with the adoption of newly revised Hong Kong Financial Reporting Standards having no material impact on the consolidated financial statements - The Group applied amendments to Hong Kong Accounting Standard 37 (Revised) and Hong Kong Accounting Standard 16 (Revised), among others, issued by the Hong Kong Institute of Certified Public Accountants during this accounting period[43][49] - The adoption of these revised standards had no material impact on the Group's consolidated financial statements[49][43] Revenue and Segment Information The Group is organized into four reportable segments: trading and manufacturing, property investment and development, forestry business, and others, with this report providing detailed revenue and performance information for each business and geographical segment Revenue and Results by Business Segment (HKD Thousands) | Segment | 2022 Revenue | 2021 Revenue | 2022 Results | 2021 Results | | :--- | :--- | :--- | :--- | :--- | | Trading & Manufacturing | 3,539,515 | 4,314,040 | 236,041 | 87,059 | | Property Investment & Development | 273,504 | 408,213 | 102,600 | 233,980 | | Forestry Business | 703 | 2,656 | (17,201) | (11,777) | | Others | – | – | (29,093) | (53,023) | | Total | 3,813,722 | 4,724,909 | 292,347 | 256,239 | External Revenue by Geographical Segment (HKD Thousands) | Region | 2022 | 2021 | | :--- | :--- | :--- | | China (incl. Hong Kong & Macau) | 368,203 | 605,451 | | United States | 2,327,367 | 2,620,073 | | Europe | 749,690 | 1,105,047 | | Japan | 21,048 | 12,070 | | Others | 347,414 | 382,268 | | Total | 3,813,722 | 4,724,909 | Earnings Per Share For 2022, profit attributable to owners was HKD 74.734 million, yielding basic earnings per share based on 12.983 billion weighted average ordinary shares, with diluted EPS reflecting potential dilutive shares Basic and Diluted Earnings Per Share Calculation | Item | 2022 | 2021 | | :--- | :--- | :--- | | Profit (HKD Thousands) | | | | Profit Attributable to Owners of the Company | 74,734 | 30,852 | | Number of Shares (Thousands) | | | | Weighted Average Number of Ordinary Shares (Basic) | 12,982,892 | 12,982,892 | | Weighted Average Number of Ordinary Shares (Diluted) | 13,409,004 | 13,418,999 | - The Company's share options had an anti-dilutive effect as their exercise price was higher than the average market price during the year, thus they were not included in the diluted earnings per share calculation[14] Dividends The Company neither declared nor paid any dividends for the year ended December 31, 2022, and the Board does not recommend a final dividend for the period - The Company neither declared nor paid any dividends for the year 2022, nor did it recommend a final dividend (2021: nil)[1] Trade Receivables and Payables At year-end 2022, total trade receivables significantly decreased to HKD 344 million, and total trade payables also notably declined to HKD 576 million, with aging analyses provided for both Aging Analysis of Trade Receivables (HKD Thousands) | Aging | 2022 | 2021 | | :--- | :--- | :--- | | Within 90 days | 283,186 | 766,076 | | 91 to 180 days | 36,381 | 67,173 | | 181 to 365 days | 11,880 | 5,560 | | Over 365 days | 12,144 | 2,960 | | Total | 343,591 | 841,769 | Aging Analysis of Trade Payables (HKD Thousands) | Aging | 2022 | 2021 | | :--- | :--- | :--- | | Within 90 days | 197,153 | 439,149 | | 91 to 180 days | 175,383 | 422,708 | | 181 to 365 days | 76,541 | 23,329 | | Over 365 days | 127,239 | 146,245 | | Total | 576,316 | 1,031,431 | Share Capital This section details the Company's authorized and issued share capital, including ordinary and redeemable convertible preference shares, with 13.221 billion ordinary shares issued and total issued share capital unchanged at year-end 2022 Issued and Fully Paid Share Capital (HKD Thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | 13,221,302,172 Ordinary Shares | 132,213 | 132,213 | | 109,975,631 Redeemable Convertible Preference Shares | 2,200 | 2,200 | | Total Issued and Fully Paid Share Capital | 134,413 | 134,413 | - There was no change in the number of issued ordinary shares and redeemable convertible preference shares during 2022[23] Significant Corporate Activities Significant Acquisitions and Disposals During the year, the Group completed the sale of Dongguan Naili Enterprise Management Co., Ltd. for RMB 225 million, recognizing a HKD 56.986 million gain, and agreed to sell Genius Year Limited for HKD 89.84 million, completed in early 2023 - The Group completed the disposal of 100% equity in Dongguan Naili Enterprise Management Co., Ltd. for a total consideration of RMB 225 million, recognizing a gain on disposal of approximately HKD 56.986 million[62] - The Group agreed to sell 100% equity in Genius Year Limited to a subsidiary of South China Financial Holdings for a total consideration of HKD 89.84 million, with an expected gain of approximately HKD 78.24 million, and this transaction was completed on January 13, 2023[63] Pledge of Assets and Contingent Liabilities During the year, the Group released pledges on certain investment properties and assets held for sale, while a Chinese subsidiary provided guarantees of approximately RMB 195 million for property buyers, to be released upon property certificate issuance - During the year, pledges on certain of the Group's investment properties and assets held for sale were released and discharged[66] - The Group has a contingent liability in the form of guarantees totaling approximately RMB 195 million (approximately HKD 219 million) provided to independent buyers of Central Plaza properties[66] Prospects and Risks Prospects For 2023, the Group foresees challenges from global interest rate hikes and geopolitical tensions, balanced by opportunities from China's relaxed pandemic measures, adopting cautious strategies across segments including cost control, customer expansion, and leveraging China's property market recovery - The trading and manufacturing segment will continue to control costs through production relocation, process streamlining, and increased automation, while planning to expand its customer base and strengthen green manufacturing R&D[69] - In property investment, the lifting of China's pandemic measures is expected to benefit retail business, with the Group focusing on increasing occupancy rates at Shenyang Xinghui Plaza and Central Plaza shopping malls, and planning to reintroduce night market events to enhance commercial vibrancy[77] - In property development, the Group maintains cautious optimism regarding sales of Shenyang Central Plaza residential units and will continue to explore the feasibility of converting other land reserves from industrial to commercial use[78] - The forestry business will continue to explore opportunities for planting high-margin varieties and improve harvesting, sales channels, and cost control[79] Principal Risks and Uncertainties The Group's principal risks stem from its core business areas: trading and manufacturing is affected by macroeconomic conditions and rising costs; property investment and development faces policy and market volatility risks in mainland China and Hong Kong real estate markets; and forestry business is susceptible to natural disasters and adverse weather - Trading and Manufacturing Risks: - Macroeconomic downturns leading to reduced consumer disposable income and impacting customer orders[81] - Increased costs for raw materials, transportation, and labor potentially affecting product profit margins[83] - Property Investment and Development Risks: - Mainland China's real estate market is influenced by policy changes, exchange rates, interest rates, and supply-demand imbalances[84] - Hong Kong's real estate market is affected by economic conditions, government policies, and the political environment[85] - Forestry Business Risks: Operations are susceptible to natural disasters like droughts and floods, and adverse weather, which may lead to reduced output or production delays[86] Litigation Progress Litigation Progress This section updates the Group's significant litigation, including copyright infringement and corporate interest disputes with Nanjing Qingtian Technology, both awaiting judgment, and land-related cases in Tianjin and Guangzhou Nansha, also under trial or awaiting decisions - Copyright Infringement Case: South China Qingtian sued Nanjing Qingtian and others for infringing 31 computer software copyrights; after being remanded for retrial by the Supreme People's Court, the case is now awaiting judgment from the Jiangsu Provincial High People's Court[91][94][95] - Dispute over Damages for Company Interests: Involves Nanjing Qingtian and its executives violating non-compete obligations; after the Supreme People's Court ordered a retrial, the case is currently awaiting judgment from the Jiangsu Provincial High People's Court[100][97] - Tianjin Land Infringement Case: Huanwei, an indirect wholly-owned subsidiary of the Group, filed a lawsuit concerning development rights for a piece of land in Tianjin Binhai New Area; the case has been heard and is now awaiting judgment[103][104][105] - Nansha Land Arbitration Case: Huihan, an indirect wholly-owned subsidiary of the Group, initiated arbitration regarding breach of land transfer agreements; the case was heard in February 2023[106][108] Corporate Governance and Other Information Corporate Governance and Other Information The Company largely complied with the Corporate Governance Code, with some directors missing the AGM due to other commitments; the Audit Committee reviewed annual results, and no listed securities were purchased, sold, or redeemed by the Company or its subsidiaries during the year, with the AGM set for June 20, 2023 - The Company complied with applicable code provisions of the Corporate Governance Code in effect during the year, except for certain directors' inability to attend the 2022 Annual General Meeting due to other important commitments, deviating from code provisions F.2.2 and C.1.6[110] - The Audit Committee, comprising four independent non-executive directors, reviewed the Group's annual results and deemed them prepared in compliance with applicable accounting standards and adequately disclosed[112] - For the year ended December 31, 2022, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[111] - The Board does not recommend the payment of a final dividend for the year ended December 31, 2022[109]