Financial Performance - For the year ended December 31, 2023, the company reported total revenue of HKD 185,667,000, a decrease of 31.9% compared to HKD 272,555,000 in 2022[6] - The gross profit for the same period was HKD 43,315,000, down 22.9% from HKD 56,218,000 in the previous year[6] - The company recorded a net loss of HKD 19,932,000 for the year, compared to a net loss of HKD 11,118,000 in 2022, representing an increase in loss of 79.5%[6] - Revenue from finished watches was HKD 121,699,000, a decline of 44.9% from HKD 220,579,000 in the previous year[25] - The group reported a pre-tax loss of HKD 21,918,000 for the year ended December 31, 2023, compared to a loss of HKD 24,781,000 in 2022[29] - The company reported a loss attributable to shareholders of HKD 19,764,000 for 2023, compared to a loss of HKD 10,646,000 in 2022, indicating an increase in losses of approximately 85.5%[34] - The group recorded a pre-tax loss of approximately HKD 29.26 million for the year ended December 31, 2023, compared to a pre-tax loss of approximately HKD 10.52 million for the year ended December 31, 2022[59] Assets and Liabilities - Total assets decreased to HKD 202,594,000 in 2023 from HKD 245,659,000 in 2022, reflecting a decline of 17.5%[7] - Current liabilities were reported at HKD 130,875,000, down from HKD 150,878,000 in the previous year, indicating a decrease of 13.3%[7] - Non-current assets decreased to HKD 68,522,000 from HKD 75,945,000, a decline of 9.7%[7] - The company's equity attributable to owners decreased to HKD 18,681,000 from HKD 39,377,000, a drop of 52.6%[8] - Trade receivables decreased to HKD 17,599,000 in 2023 from HKD 22,284,000 in 2022, reflecting a decline of about 21.1%[35] - Trade payables decreased to HKD 23,924,000 in 2023 from HKD 39,258,000 in 2022, representing a reduction of about 39.0%[37] - The total borrowings increased to HKD 120,219,000 in 2023 from HKD 104,874,000 in 2022, marking an increase of approximately 14.6%[40] Revenue Sources - Revenue from major customers included Customer A contributing HKD 70,173,000 (down 55.2% from HKD 156,686,000) and Customer B contributing HKD 48,226,000 (up 39.7% from HKD 34,519,000) for the year ended December 31, 2023[23] - The group’s revenue from Asia was HKD 146,148,000, a significant decrease of 38.1% from HKD 236,014,000 in 2022[22] Cost and Expenses - Cost of sales decreased from approximately HKD 216.34 million to approximately HKD 142.35 million, a reduction of about 34.20%[53] - The group’s total employee costs, excluding directors' remuneration, were HKD 10,565,000, down from HKD 12,346,000 in the previous year, reflecting a decrease of 14.4%[29] - Interest expenses increased to HKD 9,124,000 in 2023 from HKD 6,754,000 in 2022, marking an increase of 35.5%[28] - The income tax expense increased by approximately 98.33%, from about HKD 0.60 million to approximately HKD 1.19 million, primarily due to increased corporate income tax in China[60] Shareholder Information - The basic and diluted loss per share for the year was HKD (11.98), compared to HKD (7.13) in 2022, reflecting a worsening in performance[6] - The company did not declare any dividends for 2023, consistent with the previous year where no dividends were paid[43] - The company’s weighted average number of ordinary shares increased to 165,000,000 in 2023 from 149,307,000 in 2022, reflecting a growth of approximately 10.5%[34] - The board of directors does not recommend the payment of a final dividend for the year ended December 31, 2023, consistent with the previous year[99] Corporate Governance and Compliance - The company has complied with the corporate governance code, except for a deviation regarding the roles of the chairman and CEO being held by the same individual[100] - The company has confirmed that there have been no breaches of the non-competition agreement by the controlling shareholders since the listing date[97] - The independent non-executive directors have reviewed the compliance of controlling shareholders with the non-competition agreement and confirmed no violations[94] - The company has adopted a code of conduct for directors' securities trading, confirming compliance with trading regulations as of December 31, 2023[103] Future Outlook and Strategy - The company continues to focus on ODM manufacturing for global watch brands, indicating ongoing commitment to its core business despite financial challenges[10] - The outlook for overseas markets remains uncertain, with risks of economic slowdown or recession posing challenges for future export performance[48] - The group plans to focus on core business and enhance product design and development capabilities to maximize long-term returns for shareholders[62] Financial Reporting Standards - The new and revised Hong Kong Financial Reporting Standards became effective on January 1, 2023, but did not have a significant impact on the group's financial position or performance for the current and prior years [12] - The group has not yet applied the newly issued but not yet effective revised Hong Kong Financial Reporting Standards, which are expected to have no significant impact on the consolidated financial statements in the foreseeable future [17] - The consolidated financial statements were prepared in accordance with the Hong Kong Financial Reporting Standards and the applicable disclosure requirements of the Hong Kong Stock Exchange [18] - The financial statements are primarily based on historical cost, except for certain industries and financial instruments measured at fair value [19] Audit and Review - The financial data has been reviewed by the audit committee and approved by the board, with external auditor Tianjian International agreeing with the figures presented in the audited financial statements[105] - The consolidated financial statements for the year ending December 31, 2023, have been verified by the group's auditor, Tianjian International, although no assurance opinion has been expressed on the preliminary results announcement[106] - The annual performance announcement for the fiscal year ending December 31, 2023, has been published on the Hong Kong Stock Exchange and the company's website[108] - The company will send the annual report containing all relevant information as per GEM listing rules to shareholders at an appropriate time[108]
恒伟集团控股(08219) - 2023 - 年度业绩