龙记集团(00255) - 2022 - 年度业绩

Performance Announcement Overview This announcement presents Luen Thai (Bermuda) Group Limited's audited consolidated results for 2022, with comparative 2021 financial data - This announcement presents the audited consolidated results of Luen Thai (Bermuda) Group Limited for the year ended December 31, 2022, with comparative financial data for the same period in 2021[47][53][79] Consolidated Financial Statements This section presents the Group's consolidated financial performance and position, including profit or loss and financial position statements Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group's 2022 revenue decreased by 29.6% year-on-year to HK$1,601,433 thousand, with annual profit significantly down 93.1% to HK$15,814 thousand, and basic earnings per share falling to 2.50 HK cents Consolidated Statement of Profit or Loss and Other Comprehensive Income (HK$ Thousand) | Metric | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 1,601,433 | 2,273,399 | | Other income, gains and losses | 11,660 | 39,748 | | Increase (decrease) in fair value of investment properties | 6,500 | (13,000) | | Net reversal of impairment losses under expected credit loss model | 5,437 | 179 | | Changes in inventories of finished goods and work-in-progress | 19,116 | (1,874) | | Raw materials and consumables used | (657,603) | (819,753) | | Employee benefit expenses | (436,242) | (571,062) | | Depreciation of property, plant and equipment | (152,796) | (148,189) | | Depreciation of right-of-use assets | (5,909) | (7,919) | | Other expenses | (369,563) | (435,585) | | Interest expense on lease liabilities | (363) | (455) | | Profit before tax | 21,670 | 315,489 | | Income tax expense | (5,856) | (87,648) | | Profit for the year | 15,814 | 227,841 | | Basic earnings per share (HK Cents) | 2.50 | 36.07 | Consolidated Statement of Financial Position As of the end of 2022, the Group's total assets slightly decreased, net current assets reduced, and total equity declined by 12.5% year-on-year Consolidated Statement of Financial Position (HK$ Thousand) | Metric | December 31, 2022 (HK$ Thousand) | December 31, 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Non-current assets | | | | Investment properties | 175,000 | 168,500 | | Property, plant and equipment | 667,715 | 668,494 | | Right-of-use assets | 73,603 | 80,510 | | Deposits paid for acquisition of property, plant and equipment | 78,583 | 95,283 | | Deferred tax assets | 12,508 | 14,576 | | Total non-current assets | 1,007,409 | 1,027,363 | | Current assets | | | | Inventories | 606,924 | 604,275 | | Trade, bills and other receivables | 150,501 | 280,508 | | Bank balances and cash | 536,643 | 833,586 | | Total current assets | 1,294,068 | 1,718,369 | | Current liabilities | | | | Trade, bills and other payables | 135,808 | 249,700 | | Contract liabilities | 21,765 | 32,143 | | Lease liabilities | 3,574 | 3,379 | | Tax payable | 36,264 | 55,486 | | Dividends payable | 295 | 270 | | Total current liabilities | 197,706 | 340,978 | | Net current assets | 1,096,362 | 1,377,391 | | Total assets less current liabilities | 2,103,771 | 2,404,754 | | Non-current liabilities | | | | Deferred tax liabilities | 17,903 | 28,270 | | Lease liabilities | 5,986 | 5,643 | | Other payables | 93,301 | 99,569 | | Total non-current liabilities | 117,190 | 133,482 | | Net assets | 1,986,581 | 2,271,272 | | Capital and reserves | | | | Share capital | 63,168 | 63,168 | | Reserves | 1,923,413 | 2,208,104 | | Total equity | 1,986,581 | 2,271,272 | Notes to the Financial Statements This section details the Group's accounting policies, significant judgments, and estimates, along with specific financial disclosures 1. Application of Revised Hong Kong Financial Reporting Standards The Group first applied several revised HKFRSs this year, with no material impact on current or prior period financial statements; new standards issued but not yet effective are also listed, with no expected material impact - The Group first applied several revised Hong Kong Financial Reporting Standards (HKFRS) this year, including HKFRS 3, HKFRS 16, HKAS 16, and HKAS 37[6][7][57] - These revisions had no material impact on the Group's financial position, performance, and/or disclosures for the current and prior periods[51][52] - New and revised HKFRSs issued but not yet effective (e.g., HKFRS 17, HKAS 1 and HKAS 8 amendments) are not expected to have a material impact on the Group's consolidated financial statements[8][9][11][58][59][86][89] 2. Revenue and Segment Information The Group primarily manufactures and sells mould bases and related products, recognizing revenue when control of goods transfers to customers, operates in a single segment, and has a diversified customer base with no single customer accounting for over 10% of revenue - The Group primarily engages in the manufacturing and sale of mould bases and related products, with revenue recognized upon delivery of goods to customers[13][63][90] - The Group operates in a single operating segment with a broad customer base across Europe, America, and Asia, and no single customer accounts for more than 10% of the Group's revenue[65][91] Revenue by Delivery Location (HK$ Thousand) | Delivery Location | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | China | 1,390,997 | 1,981,499 | | Others | 210,436 | 291,900 | | Total Revenue | 1,601,433 | 2,273,399 | 3. Other Income, Gains and Losses The Group's total other income, gains, and losses for 2022 amounted to HK$11,660 thousand, a significant decrease from 2021, primarily due to increased net exchange losses, with HK$3,188 thousand in Covid-19 related government grants recognized this year Other Income, Gains and Losses (HK$ Thousand) | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Interest income | 12,300 | 16,193 | | Rental income, net of direct outgoings | 5,524 | 4,602 | | Government grants — Covid-19 related subsidies | 3,188 | — | | Government grants — Others | 352 | 2,670 | | Miscellaneous income | 1,840 | 2,936 | | Subtotal other income | 23,204 | 26,401 | | Gain on disposal of property, plant and equipment | 9,822 | 8,108 | | Net exchange (losses) gains | (21,366) | 5,239 | | Subtotal other gains and losses | (11,544) | 13,347 | | Total | 11,660 | 39,748 | - HK$3,188 thousand in Covid-19 related government grants were recognized in 2022[15][94] 4. Income Tax Expense The Group's 2022 income tax expense was HK$5,856 thousand, a significant 93.3% decrease from 2021, with Chinese subsidiaries subject to a 25% corporate income tax rate, Hong Kong profits tax using a two-tiered system, and a 5% withholding tax rate on dividends distributed by Chinese foreign-invested enterprises Income Tax Expense (HK$ Thousand) | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong profits tax — Current year | 676 | 1,747 | | Hong Kong profits tax — Over-provision in prior years | (16) | (36) | | Taxation in other jurisdictions — Current year | 6,908 | 76,050 | | PRC withholding tax | 5,761 | 12,001 | | Deferred tax — Current year credit | (7,473) | (2,114) | | Total income tax expense | 5,856 | 87,648 | - Chinese subsidiaries are subject to a corporate income tax rate of 25%[17] - Hong Kong profits tax operates under a two-tiered system, with the first HK$2 million of assessable profits taxed at 8.25% and the remainder at 16.5%[68] - A withholding tax rate of 5% applies to dividends distributed from retained profits of Chinese foreign-invested enterprises, based on the tax treaty between Hong Kong and mainland China[96] 5. Dividends / 6. Basic Earnings Per Share The Board recommends a final dividend of 6 HK cents per share for 2022, significantly lower than 20 HK cents in 2021, with basic earnings per share for 2022 at 2.50 HK cents, a substantial decrease from 36.07 HK cents in 2021 - The Board has resolved to pay a final dividend of 6 HK cents per share (2021: 20 HK cents), totaling HK$37,901 thousand (2021: HK$126,335 thousand)[19][70] Basic Earnings Per Share | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Profit for the year attributable to owners of the Company (HK$ Thousand) | 15,814 | 227,841 | | Number of ordinary shares | 631,677,303 | 631,677,303 | | Basic earnings per share (HK Cents) | 2.50 | 36.07 | 7. Inventories As of the end of 2022, the Group's total inventories amounted to HK$606,924 thousand, largely consistent with 2021, with a slight decrease in raw materials and an increase in work-in-progress and finished goods Inventories (HK$ Thousand) | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Raw materials | 514,061 | 530,528 | | Work-in-progress | 81,284 | 67,213 | | Finished goods | 11,579 | 6,534 | | Total inventories | 606,924 | 604,275 | - The cost of inventories recognized as an expense during the year was HK$1,346,819 thousand (2021: HK$1,656,164 thousand)[71] 8. Trade, Bills and Other Receivables As of the end of 2022, the Group's total trade, bills, and other receivables were HK$150,501 thousand, a significant 46.3% decrease from 2021, with most trade receivables due within 60 days according to the aging analysis Trade, Bills and Other Receivables (HK$ Thousand) | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Trade receivables | 91,702 | 152,642 | | Less: Provision for credit losses | (8,921) | (15,407) | | Bills receivable | 13,241 | 22,421 | | Other receivables | 3,110 | 2,931 | | Prepayments for materials | 46,858 | 110,780 | | Deposits and prepayments | 4,511 | 7,141 | | Total | 150,501 | 280,508 | Aging of Trade Receivables (HK$ Thousand) | Aging of trade receivables | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 60 days | 86,508 | 136,833 | | 61 to 90 days | 12,187 | 26,443 | | Over 90 days | 6,248 | 11,787 | | Total | 104,943 | 175,063 | - The Group grants credit periods ranging from 30 to 90 days to its trade customers[13][100] 9. Trade, Bills and Other Payables As of the end of 2022, the Group's total trade, bills, and other payables amounted to HK$229,109 thousand, a 34.4% decrease from 2021, with significant reductions in both trade payables and bills payable Trade, Bills and Other Payables (HK$ Thousand) | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Trade payables | 30,535 | 43,792 | | Bills payable | 847 | 13,757 | | VAT payables | 11,035 | 28,862 | | Employee benefit provisions | 102,847 | 129,194 | | Salaries and bonuses payable | 36,031 | 78,886 | | Deposits and accrued charges | 24,742 | 27,028 | | Other payables | 23,072 | 27,750 | | Total | 229,109 | 349,269 | | Less: Amount due within one year shown under current liabilities | (135,808) | (249,700) | | Amount due after one year | 93,301 | 99,569 | Aging of Trade Payables (HK$ Thousand) | Aging of trade payables | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 60 days | 23,494 | 46,009 | | 61 to 90 days | 4,334 | 7,166 | | Over 90 days | 3,554 | 4,374 | | Total | 31,382 | 57,549 | - The credit period for purchases of goods ranges from 30 to 150 days[102] Management Discussion and Analysis This section offers management's insights into the Group's operational and financial performance, liquidity, and future outlook Business Review In 2022, the Group's revenue decreased by 29.6% year-on-year, and profit significantly dropped by 93.1%, primarily due to recurring COVID-19 outbreaks in China, stringent measures, adverse global economic factors, and rising raw material costs, leading to a substantial decline in total market orders - In 2022, the Group's revenue decreased by 29.6%, profit decreased by 93.1%, and basic earnings per share were 2.50 HK cents[119] - The revenue decrease was primarily due to recurring COVID-19 outbreaks in China, stringent epidemic prevention measures, and adverse global economic factors leading to a substantial decline in total market orders[76][77][104] - Increased raw material costs and relatively fixed operating costs, which could not be offset by product price adjustments, resulted in a significant reduction in gross profit and net profit[104][105] - Global economic slowdown, geopolitical tensions, disruptions in international shipping, and escalating global inflationary pressures further hampered global economic recovery, impacting the Group's export orders[120] Financial Review and Liquidity The Group's 2022 profit significantly decreased by 93.1% to HK$15,814 thousand; raw materials and consumables costs decreased by 22.3% but increased as a percentage of revenue; total equity declined by 12.5% year-on-year, and bank balances and cash decreased by 35.7%, yet the Group remains debt-free with ample cash - Profit for 2022 decreased by 93.1% to HK$15,814 thousand[30] - Raw materials and consumables costs decreased by 22.3%, but their proportion of revenue increased to 39.9% (2021: 36.1%)[21] - Fair value of investment properties increased by HK$19,500 thousand, net reversal of expected credit loss provisions increased by HK$5,258 thousand, while other income decreased by HK$28,088 thousand (primarily due to increased net exchange losses)[106] - Income tax expense decreased by 93.3%, with the effective tax rate falling to 27.0% (2021: 27.8%)[106] - As of the end of 2022, the Group's total equity was HK$1,986,581 thousand (2021: HK$2,271,272 thousand), bank balances and cash were HK$536,643 thousand (2021: HK$833,586 thousand), with no borrowings[122] - The Group possesses ample cash to meet its operating and capital commitments, and the COVID-19 pandemic has not affected its financial position[123] Employees and Remuneration Policy As of the end of 2022, the Group employed approximately 2,900 staff, implementing a competitive remuneration system where promotions and salary increments are performance-based, and share options may be granted - As of the end of 2022, the Group employed approximately 2,900 staff[31] - The Group implements a competitive remuneration system, with promotions and salary increments based on performance, and share options may be granted[31] Outlook The Group anticipates a challenging short-term global economic recovery, with continued weak overseas demand and pressure on China's export business; while China's domestic market is expected to grow, a weak property sector will impact home appliance and furniture demand, medical product demand will decline, but new energy vehicle mould demand is projected to increase; the Group will adapt to market trends, optimize management, and enhance automated production to address challenges and achieve sustainable development - The Group anticipates a challenging short-term global economic recovery, with European geopolitical conflicts, energy shortages, Sino-US trade frictions, high inflation, and interest rate hikes leading to continued weak overseas market demand and pressure on China's export business[33] - As the pandemic subsides, Chinese consumer spending is expected to gradually increase, potentially driving economic growth in the domestic market, but a weak property sector will lead to continued reduced demand for home appliances and furniture products[24] - Demand for medical products will decline as the pandemic recedes, while demand for new technology electronic consumer products is improving, and new energy vehicle consumption is expected to drive the development of automotive moulds[24] - The Group will closely follow market trends to explore business opportunities, enhance market competitiveness, optimize management models, and improve automated production processes to mitigate rising cost risks and achieve sustainable development[24][109] - The business environment in 2023 remains challenging, and the Group will adopt a cautious and rigorous approach to market changes[34] Other Important Information This section covers corporate governance, auditor's review, dividend proposals, and share transaction details Audit Committee and Auditor's Scope The Audit Committee has reviewed the Group's accounting principles, internal control measures, and financial reporting matters, including the consolidated financial statements; the Group's auditor, Deloitte Touche Tohmatsu, has agreed that the financial figures in this preliminary announcement are consistent with the audited consolidated financial statements - The Audit Committee, in conjunction with management, has reviewed the Group's adopted accounting principles and practices, and discussed internal control measures and financial reporting matters, including the consolidated financial statements[26][35] - The financial figures contained in this preliminary announcement of results have been agreed by the Group's auditor, Deloitte Touche Tohmatsu, to the amounts set out in the audited consolidated financial statements approved by the Board[36][111] Final Dividend and Closure of Register of Members The Board recommends a final dividend of 6 HK cents per share and has announced specific dates for the closure of the register of members to determine eligibility for attending the Annual General Meeting and receiving the dividend - The Board recommends a final dividend of 6 HK cents per share for the year ended December 31, 2022[27][112] - To qualify for attending and voting at the Annual General Meeting, the register of members will be closed from May 23, 2023, to May 29, 2023[37][38][112] - To qualify for the proposed final dividend, the register of members will be closed from June 6, 2023, to June 7, 2023[39][113] Securities Transactions and Corporate Governance For the year ended December 31, 2022, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's shares or other securities; the Company has consistently complied with all code provisions of the Corporate Governance Code during the reporting period - For the year ended December 31, 2022, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares or other securities[40][114] - The Company has consistently complied with all code provisions of the Corporate Governance Code as set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[44][115] - The announcement lists the executive and independent non-executive directors of the Company[41][116]