Financial Performance - For the year ended December 31, 2023, the Group's revenue decreased to approximately HK$69.1 million, representing a decrease of approximately 9.5% compared to HK$76.3 million for the year ended December 31, 2022[19]. - The Group's net loss increased to approximately HK$46.8 million for the year ended December 31, 2023, up from approximately HK$22.9 million for the year ended December 31, 2022, representing an increase of approximately 104.4%[19]. - The significant loss was primarily attributed to the equine services segment and the manufacturing and trading of threads segment[19]. - Revenue from the manufacturing and trading of threads dropped to approximately HK$21.2 million, a decrease of approximately 58.4% from HK$51.0 million in the previous year, attributed to reduced sales in both overseas and local markets[44]. - The interior design and decoration segment generated revenue of approximately HK$16.5 million, down 6.5% from HK$17.6 million in the previous year, maintaining a stable percentage of total revenue[43]. - The equine services segment saw a significant increase in revenue to approximately HK$31.4 million, up 307.9% from HK$7.7 million in the previous year, indicating strong growth in this area[43]. - The Group recorded a gross loss of HK$3.3 million for the year ended 31 December 2023, compared to a gross profit of HK$13.4 million for the year ended 31 December 2022, representing a decrease of HK$16.7 million in gross profit[60]. - The gross profit margin for the threads segment decreased to 10.3% for the year ended 31 December 2023 from 16.1% for the year ended 31 December 2022, while the decoration segment's gross profit margin decreased to 25.6% from 35.1%[60]. - The Group recorded a loss before income tax of approximately HK$46.6 million for the year ended 31 December 2023, compared to approximately HK$22.9 million in 2022, representing an increase of approximately 103.1%[68]. - Total comprehensive expenses attributable to the owners of the parent increased to approximately HK$48.5 million for the year ended December 31, 2023, up from approximately HK$27.6 million in 2022, representing an increase of approximately 75.7%[70]. - Basic and diluted loss per share for the year ended December 31, 2023 was approximately HK11.44 cents, an increase of approximately 104.3% from HK5.60 cents in 2022[77]. Operational Strategies - The Group's revenue decline reflects challenges in the market and operational segments, necessitating strategic adjustments[19]. - Future strategies may involve enhancing product offerings and exploring new markets to mitigate losses[19]. - The Group's management is focused on improving operational efficiency and addressing the factors contributing to the increased net loss[19]. - The Group plans to focus on the overseas market for sewing threads after slowing down operations in the local PRC market due to intense competition affecting profit margins[44]. - The Group expects the interior design business to diversify its portfolio and increase income sources due to growing demand in Hong Kong and the Greater Bay Area[26]. - The management team is actively consolidating the portfolio by identifying and eliminating underperforming assets to positively impact operational costs[30]. - Management has decided to dispose of certain bloodstock at a loss to manage future operating expenses effectively[60]. - The Group plans to allocate more resources to expand the interior design and decoration segment in 2024[47]. Market Conditions - The Group has faced difficulties in its principal business of manufacturing and selling sewing threads due to ongoing trade conflicts between the PRC and the U.S., as well as a gradual slowdown in the PRC economy[129]. - The Group expects the high interest rate environment and trade conflicts to continue impacting its financial position, cash flows, and operating results in the coming year[129]. - The Group anticipates growth in the interior design, fitting out, and decoration services sector in Hong Kong and the Greater Bay Area, aiming to diversify its business portfolio and increase income sources[130]. Management and Governance - The company has adopted the corporate governance code as set out in Appendix 15 to the GEM Listing Rules, ensuring compliance with standards[182]. - The Board of Directors comprises both executive and independent non-executive directors, with a commitment to regular meetings at least four times a year[188]. - The company emphasizes the importance of strong corporate governance practices to safeguard shareholder interests and ensure accountability[181]. - The financial controller of Guangzhou Xinhua has been with the group since August 1994, indicating stability in financial management[175]. - The production manager of Guangzhou Xinhua has over 24 years of experience in production management and quality control[176]. - The independent non-executive directors have provided written confirmations of their independence, as required by the GEM Listing Rules[192]. - The Board held a total of four regular meetings during the year ended December 31, 2023, with attendance rates ranging from 75% to 100% among directors[195]. - All directors attended the annual general meeting, achieving a 100% attendance rate[198]. - The Company maintained compliance with GEM Listing Rules, ensuring that independent non-executive directors represented at least one third of the Board[200]. Human Resources - As of December 31, 2023, the Group employed a total of 123 employees, a decrease from 141 employees as of December 31, 2022[108]. - The total staff costs for the two years ended December 31, 2023, were approximately HK$14.2 million and HK$18.6 million, respectively[108]. - Administrative expenses decreased to approximately HK$21.5 million for the year ended December 31, 2023, down from approximately HK$29.5 million in 2022, representing a decrease of approximately 27.0%[66]. Financial Position - The Group's cash and bank balances amounted to approximately HK$4.1 million as at 31 December 2023, compared to approximately HK$2.2 million as at 31 December 2022[80]. - The Group has net current liabilities of approximately HK$10.5 million as at 31 December 2023, compared to net current assets of approximately HK$29.9 million as at 31 December 2022[81]. - The gearing ratio increased to approximately 73.5% as at 31 December 2023, up from approximately 48.8% as at 31 December 2022[85]. - There were no significant investments or material acquisitions during the year ended 31 December 2023[88]. - The Group has no significant acquisitions or disposals of subsidiaries or associates as of December 31, 2023[98]. - There are no major investments or capital asset plans as of December 31, 2023[99]. - The Group has no significant contingent liabilities as of December 31, 2023, consistent with the previous year[100]. - The Group does not have a foreign currency hedging policy but closely monitors foreign exchange exposure[103]. - The Group's assets were pledged to lenders to secure certain borrowings as of December 31, 2023[104]. Future Outlook - Overall, the management remains optimistic about future growth, citing strong market demand and a robust pipeline of new products[145]. - The company provided guidance for the next fiscal year, projecting revenue growth of BB% and an expected total revenue of $CC million[145]. - New product launches are anticipated to contribute significantly to revenue, with an estimated impact of DD million in the upcoming quarter[145]. - The company is investing in new technology development, allocating EE million towards R&D initiatives aimed at enhancing product offerings[145]. - Market expansion efforts are underway, with plans to enter the FF market by the end of the fiscal year, targeting a market share of GG%[145]. - The company is exploring potential acquisitions to bolster its market position, with a focus on companies that align with its strategic goals[145]. - A new strategic partnership has been established, expected to enhance distribution channels and increase market reach by HH%[145]. - The company has implemented cost-cutting measures, aiming to reduce operational expenses by II% over the next year[145].
维港育马(08377) - 2023 - 年度财报