泰升集团(00687) - 2023 - 年度业绩

Company Overview and Performance Summary Annual Performance Announcement The company announced its consolidated results for the year ended December 31, 2023, reporting a turn from profit to loss compared to the same period in 2022 - The company announced its consolidated results for the year ended December 31, 2023[3] Consolidated Statement of Profit or Loss The company turned from profit to loss in FY2023, with a net loss of HKD 13.038 million, primarily due to decreased gross profit, significantly increased finance costs, and income tax expense | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | | :---------- | :------------------- | :------------------- | | Revenue | 2,703,266 | 2,473,646 | | Cost of sales | (2,640,126) | (2,391,600) | | Gross profit | 63,140 | 82,046 | | Other income and gains | 31,534 | 30,149 | | Administrative expenses | (73,349) | (73,682) | | Other expenses, net | (11,201) | (10,286) | | Finance costs | (7,744) | (2,338) | | Profit before tax | 2,380 | 25,889 | | Income tax expense | (15,418) | (21,364) | | Profit/(Loss) for the year | (13,038) | 4,525 | | Basic earnings/(loss) per share | (0.39 HK cents) | 0.13 HK cents | - Gross profit decreased by 23% year-on-year to HKD 63,140 thousand in 2023, compared to HKD 82,046 thousand in 2022[22] - Finance costs significantly increased from HKD 2,338 thousand in 2022 to HKD 7,744 thousand in 2023[22] Consolidated Statement of Comprehensive Income Total comprehensive income for 2023 turned from a profit of HKD 2.601 million in 2022 to a loss of HKD 13.664 million, primarily due to loss for the year and exchange differences | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | | :-------------------------- | :------------------- | :------------------- | | Profit/(Loss) for the year | (13,038) | 4,525 | | Exchange differences | (626) | (1,924) | | Other comprehensive expense for the year | (626) | (1,924) | | Total comprehensive income/(expense) for the year | (13,664) | 2,601 | - Exchange differences arising from translation of overseas operations narrowed from (HKD 1,924) thousand in 2022 to (HKD 626) thousand in 2023[4] Financial Position Consolidated Statement of Financial Position As of end-2023, total assets and net assets decreased, total liabilities reduced, but net current assets remained robust | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | | :---------------------- | :------------------- | :------------------- | | Total non-current assets | 272,680 | 281,459 | | Total current assets | 1,642,154 | 1,846,694 | | Total current liabilities | 510,431 | 637,985 | | Net current assets | 1,131,723 | 1,208,709 | | Total assets less current liabilities | 1,404,403 | 1,490,168 | | Total non-current liabilities | 121,071 | 146,979 | | Net assets | 1,283,332 | 1,343,189 | | Total equity | 1,283,332 | 1,343,189 | - Interest-bearing bank borrowings within non-current liabilities decreased from HKD 128,509 thousand in 2022 to HKD 104,528 thousand in 2023[7] - Contract assets decreased from HKD 828,715 thousand in 2022 to HKD 639,893 thousand in 2023[24] Changes in Accounting Policies and Disclosures The Group adopted new and revised HKFRSs, including amendments on accounting estimates, deferred tax, and policy disclosures, with no material impact on financial statements - The Group first adopted amendments to HKAS 8, HKAS 12, and HKAS 1[9][10][26][27] - Amendments to HKAS 1 require disclosure of material accounting policy information instead of significant accounting policies, with no impact on financial statements[11] - Amendments to HKAS 12 regarding deferred tax had no material impact on the overall deferred tax balance, and the Group is not within the scope of Pillar Two legislation[11][29] Operating Analysis and Financial Notes Segment Information Foundation piling remains the main revenue source, but segment profit significantly declined due to unforeseen project conditions, with Hong Kong contributing most revenue | Segment | 2023 (HKD thousands) | 2022 (HKD thousands) | | :----------------- | :------------------- | :------------------- | | Foundation piling revenue | 2,703,266 | 2,458,718 | | Foundation piling segment profit | 25,490 | 93,926 | - Foundation piling segment profit significantly decreased from HKD 93,926 thousand in 2022 to HKD 25,490 thousand in 2023[30][55] - Revenue from Hong Kong was HKD 2,703,266 thousand (2022: HKD 2,473,646 thousand), serving as the primary revenue source[16] Revenue Analysis Revenue in 2023 primarily derived from construction services, with other business lines no longer generating income | Revenue Source | 2023 (HKD thousands) | 2022 (HKD thousands) | | :--------------- | :------------------- | :------------------- | | Construction services | 2,703,266 | 2,446,718 | | Trading of machinery | – | 12 | | Sale of steel structural platforms | – | 12,000 | | Mechanical engineering services | – | 8,328 | | Rental income from machinery leasing | – | 6,588 | - In 2023, revenue primarily came from construction services, with no revenue from other businesses such as trading of machinery, sale of steel structural platforms, and mechanical engineering services[61] | Major Customer | 2023 (HKD thousands) | 2022 (HKD thousands) | | :------------- | :------------------- | :------------------- | | Customer A1 | 836,022 | 290,048 | | Customer B1 | 364,524 | Not applicable | | Customer C1 | 280,631 | 381,251 | | Customer D1 | Not applicable | 562,574 | | Customer E1 | Not applicable | 386,029 | Other Income and Gains Other income and gains saw a significant increase in interest income but no subsidy income in 2023 | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | | :------------------- | :------------------- | :------------------- | | Interest income | 23,329 | 6,722 | | Insurance claims | 1,512 | 803 | | Subsidy income | – | 18,826 | | Reversal of impairment loss on contract assets | 6,693 | 693 | | Others | – | 3,105 | | Total | 31,534 | 30,149 | - Interest income significantly increased from HKD 6,722 thousand in 2022 to HKD 23,329 thousand in 2023[38] - There was no subsidy income in 2023, compared to HKD 18,826 thousand in 2022[38] Finance Costs Finance costs significantly increased in 2023, mainly driven by interest on bank borrowings and lease liabilities | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | | :----------------------- | :------------------- | :------------------- | | Interest on bank borrowings | 7,302 | 1,422 | | Interest on lease liabilities | 591 | 951 | | Subtotal | 7,893 | 2,373 | | Less: Interest capitalised in cost of sales | (149) | (35) | | Total | 7,744 | 2,338 | - Interest on bank borrowings significantly increased from HKD 1,422 thousand in 2022 to HKD 7,302 thousand in 2023[62] Profit Before Tax Profit before tax significantly decreased in 2023, primarily due to increased depreciation of property, plant and equipment, and higher losses from disposal and write-off of assets | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | | :------------------------------------ | :------------------- | :------------------- | | Depreciation of property, plant and equipment | 56,583 | 49,726 | | Depreciation of right-of-use assets | 13,565 | 13,378 | | Impairment loss on trade receivables | 657 | 1,427 | | Impairment loss/(reversal) on contract assets | 106 | (693) | | Loss on disposal and write-off of property, plant and equipment | 8,182 | 2,826 | | Write-down of inventories to net realisable value | – | 2,989 | - Loss on disposal and write-off of property, plant and equipment increased from HKD 2,826 thousand in 2022 to HKD 8,182 thousand in 2023[40] Income Tax Total income tax expense for 2023 was HKD 15.418 million, mainly from China and Hong Kong tax provisions, with deferred tax as a credit | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | | :-------------------------- | :------------------- | :------------------- | | Tax provision for profit for the year: | | | | China | 15,922 | 9,705 | | Hong Kong | 25 | 6 | | Over-provision in prior years: | | | | China | (6) | (10) | | Deferred tax | (523) | 11,663 | | Total tax expense for the year | 15,418 | 21,364 | - Total income tax expense for 2023 decreased by 27.8% year-on-year to HKD 15,418 thousand[40] Dividends The Board recommended a final dividend of HKD 0.015 per share, consistent with last year, but no interim dividend was declared in 2023. Share transfer registration will be suspended to determine dividend eligibility | Dividend Type | 2023 (HKD thousands) | 2022 (HKD thousands) | | :-------------- | :------------------- | :------------------- | | Final dividend paid | 50,491 | 50,491 | | Interim dividend | – | 33,660 | | Proposed final dividend | 50,491 | 50,491 | - No interim dividend was declared in 2023, compared to HKD 0.01 per share in 2022[48][65] - The company will suspend share transfer registration from June 5 to June 7, 2024, to determine eligibility for the final dividend[49][71][109] Earnings/Loss Per Share The company reported a basic loss per share of HKD 0.39 cents in 2023, compared to a basic profit of HKD 0.13 cents in 2022, reflecting the year's turn from profit to loss | Indicator | 2023 (HK cents) | 2022 (HK cents) | | :-------------------------- | :-------------- | :-------------- | | Basic earnings/(loss) per share | (0.39) | 0.13 | | Diluted earnings/(loss) per share | (0.39) | 0.13 | - No diluted adjustment was made as share options had no dilutive effect on basic earnings/loss per share[43] Trade Receivables As of end-2023, total trade receivables slightly increased, with most due within 90 days, and the company maintains credit policies based on local industry standards | Aging | 2023 (HKD thousands) | 2022 (HKD thousands) | | :----------------- | :------------------- | :------------------- | | Within 90 days | 124,456 | 122,816 | | 91 to 180 days | – | 376 | | 181 to 365 days | – | 214 | | Over 365 days | 655 | 657 | | Total | 125,111 | 124,063 | - The company grants an average general credit period of within 30 days to trade customers, subject to regular review[44] - Trade receivables at end-2022 included HKD 104 thousand due from an associate, Top Ascent Construction Engineering Limited[66] Trade Payables, Retention Payables, Accruals and Provisions As of end-2023, total trade payables significantly decreased, while retention payables and accruals remained stable, with a general repayment period of 90 days | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | | :------------------------------------ | :------------------- | :------------------- | | Total trade payables | 220,498 | 329,086 | | Retention payables | 56,050 | 56,373 | | Accruals | 140,579 | 143,026 | | Provisions | 17,938 | 33,297 | | Total | 435,065 | 561,782 | - Total trade payables decreased from HKD 329,086 thousand in 2022 to HKD 220,498 thousand in 2023[108] - Trade payables and retention payables are interest-free, with trade payables generally repayable within 90 days and retention payables typically due within one year after completion of construction works[68] Contingent Liabilities As of end-2023, guarantees for performance bonds related to construction projects significantly decreased, indicating reduced contingent liability risk | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | | :------------------------------------------ | :------------------- | :------------------- | | Guarantees for performance bonds related to construction projects | 332,469 | 461,254 | - Contingent liabilities related to performance bonds decreased from approximately HKD 461 million in 2022 to approximately HKD 332 million in 2023[78] Contractual Commitments As of end-2023, the Group's contractual commitments primarily related to property, plant and equipment, remaining stable in amount | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | | :------------------- | :------------------- | :------------------- | | Property, plant and equipment | 15,791 | 16,463 | Business and Financial Review Business Review The Group's foundation piling segment revenue grew, but segment profit significantly declined due to unforeseen land conditions and site constraints in a project | Indicator | 2023 (HKD) | 2022 (HKD) | | :----------------- | :----------- | :----------- | | Foundation piling revenue | 2.703 billion | 2.459 billion | | Foundation piling profit | 25 million | 94 million | - Foundation piling segment profit significantly decreased from HKD 94 million in 2022 to HKD 25 million in 2023[50] - The profit reduction was primarily due to the need to allocate additional resources to address unforeseen land conditions and site constraints in a project[50] Prospects The company is cautiously optimistic about its core foundation and piling business, expecting strong public sector tenders and new development projects, despite a subdued Hong Kong property market - The Group maintains a cautiously optimistic outlook on its core foundation and piling business[52] - Public sector tender volumes remain strong, with new development area projects, including the Northern Metropolis, set to commence[73][91] - The Hong Kong property market is expected to remain subdued, but may stabilize with the easing of residential property cooling measures and financing ratios[74] Financial Review As of end-2023, the Group's cash on hand, total assets, and net assets decreased, but total liabilities and financial liabilities also reduced, maintaining a zero gearing ratio and net cash position | Indicator | 2023 (HKD) | 2022 (HKD) | | :----------------- | :----------- | :----------- | | Cash on hand | 747 million | 770 million | | Total assets | 1.915 billion | 2.128 billion | | Net assets | 1.283 billion | 1.343 billion | | Total liabilities | 632 million | 785 million | | Financial liabilities | 420 million | 558 million | | Interest-bearing borrowings | 129 million | 153 million | - The Group maintains a zero gearing ratio and is in a net cash position[110] Financing and Financial Policies The Group maintains prudent financing and financial policies, a robust capital structure, and ample cash flow, with borrowings denominated in HKD at floating rates, and closely monitors currency risk - The Group maintains prudent financing and financial policies, a robust capital structure, and ample cash flow[94] - Surplus funds are placed with leading banks, and borrowings are denominated in HKD and bear interest at floating rates[94] - The Group closely monitors currency risk and considers forward contracts when necessary[94] Pledge of Assets As of end-2023, the Group pledged approximately HKD 115 million in office properties and HKD 5 million in bank deposits as security for installment loans - Office properties with a carrying value of approximately HKD 115 million and bank deposits of approximately HKD 5 million were pledged to banks[77] Capital Expenditure and Commitments In 2023, the Group invested approximately HKD 62 million in machinery and equipment, with related capital commitments of about HKD 16 million, primarily funded by internal resources - Approximately HKD 62 million was invested in purchasing machinery and equipment in 2023[95] - As of end-2023, capital commitments related to the purchase of machinery and equipment amounted to approximately HKD 16 million[95] - Capital expenditure was primarily funded by internal resources[95] Remuneration Policy and Employment As of end-2023, the Group employed 791 staff, with remuneration based on market levels and performance, offering benefits like provident funds, medical insurance, training, and share options - As of end-2023, the Group employed 791 staff[78] - Remuneration policy is primarily determined based on prevailing market salary levels and the performance of individual business units and employees[78] - Benefits include provident funds, medical insurance, training, and share options[78] Purchase, Redemption and Sale of Listed Securities During the reporting year, neither the Company nor its subsidiaries purchased, redeemed, or sold any of the Company's listed securities - During the reporting year, neither the Company nor its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[111] Corporate Governance and Audit Compliance with Corporate Governance Code The company generally complied with the Corporate Governance Code during the period, with a temporary deviation due to insufficient independent non-executive directors, which was later rectified - Non-executive Director Ms. Gu Ye did not attend the Annual General Meeting due to other commitments, but the Board had sufficient members present[80] - Board meeting documents were not sent three days in advance due to urgency, but directors had sufficient time for review[81] - The number of independent non-executive directors temporarily fell below the one-third requirement of the Listing Rules, but was rectified by the appointment of Ms. Yang Jing, complying with Listing Rules 3.10A, 3.25, and 3.27A[82][98][99][112] Standard Code for Securities Transactions The Company adopted and confirmed compliance with the Standard Code for Securities Transactions as set out in Appendix C3 of the Listing Rules by all directors during the reporting period - The Company adopted the Standard Code for Securities Transactions as set out in Appendix C3 of the Listing Rules[99] - All directors confirmed compliance with the required standards set out in the Standard Code during the reporting period[99] Audit Committee The Audit Committee, comprising four independent non-executive directors, reviewed the Group's accounting principles, practices, internal controls, risk management, and annual results - The Audit Committee comprises four independent non-executive directors: Mr. Li Kit Chi, Mr. Lung Tsz Ming, Ms. Kwok Man Wai, and Ms. Yang Jing[100] - The Audit Committee reviewed the Group's accounting principles and practices and discussed matters related to audit, internal control, risk management, and financial reporting[100] Review of Preliminary Announcement Ernst & Young, the Group's independent auditor, confirmed the annual results in the preliminary announcement align with the consolidated financial statements but did not perform an assurance engagement - Ernst & Young, the independent auditor, agreed that the annual results in the preliminary announcement are consistent with the consolidated financial statements[85] - Ernst & Young's work does not constitute an assurance engagement conducted in accordance with standards issued by the Hong Kong Institute of Certified Public Accountants, thus no assurance is provided[85] Others Acknowledgement The Board expressed sincere gratitude to all staff for their dedicated service and contributions, and to all shareholders for their support - The Board extends its sincere gratitude to all staff for their dedicated service, hard work, and significant contributions during the year[86] - Appreciation is also extended to all shareholders for their support of the Group[86] Board of Directors As of the announcement date, the Board comprised three executive directors, five non-executive directors, and four independent non-executive directors - Executive Directors: Mr. Fung Chiu Chak, Victor, Mr. Chiu Chin Hung, and Mr. Lau Kin Fai[103] - Non-executive Directors: Mr. Wai Tsang Pang, Mr. Vikram Garg, Mr. Yuen Pak Man, Ms. Gu Ye, and Ms. Hou Xiangjia[103] - Independent Non-executive Directors: Mr. Lung Tsz Ming, George, Mr. Li Kit Chi, Mr. Kwok Man Wai, and Ms. Yang Jing[103]