Financial Performance - For the year ended December 31, 2023, the group recorded a revenue decrease of approximately 25.3% to about HKD 691.1 million, down from approximately HKD 925.7 million in 2022[1]. - Gross profit declined by approximately 9.7% to about HKD 179.7 million, while gross margin improved by approximately 4.5 percentage points to about 26.0%[2]. - The group reported a loss attributable to owners of approximately HKD 14.8 million, a decrease of approximately 163.8% from a profit of HKD 23.2 million in 2022[19]. - The company reported a loss before tax of HKD 9,210,000 for 2023, compared to a profit of HKD 35,783,000 in the previous year[93]. - The net loss attributable to the company’s owners for 2023 was HKD 14,829,000, a significant decline from a profit of HKD 23,248,000 in 2022[99]. - The company’s financial performance has shown a downward trend over the past five years, with revenue decreasing from HKD 1,540,412,000 in 2019 to HKD 691,143,000 in 2023[93]. - The total revenue for the fiscal year 2023 decreased by approximately 25.3% to around HKD 691.1 million, compared to HKD 925.7 million in 2022[114]. Expenses and Costs - Other income and losses decreased by approximately 277.6%, resulting in a loss of about HKD 11.9 million, primarily due to significant fair value losses on investment properties[3]. - Distribution expenses decreased by approximately 4.4% to about HKD 43.0 million, attributed to reduced marketing and transportation costs[4]. - Administrative expenses increased by approximately 3.1% to about HKD 127.9 million, mainly due to provisions for impairment of trade receivables[5]. - Financing costs rose by approximately 196.2% to about HKD 7.7 million, driven by increased bank borrowing rates related to lease liabilities[6]. - Total employee costs, including director remuneration, amounted to approximately HKD 57.8 million for the year ending December 31, 2023, compared to HKD 63.1 million for the previous year[148]. Cash Flow and Assets - As of December 31, 2023, the company's cash and bank balances were approximately HKD 155.8 million, down from HKD 229.6 million in 2022[32]. - The company's bank borrowings increased to approximately HKD 89.8 million as of December 31, 2023, compared to approximately HKD 45.5 million in 2022[32]. - The asset-liability ratio increased from approximately 20.6% in 2022 to approximately 21.0% in 2023, representing an increase of 0.4 percentage points[38]. - Non-current assets amounted to HKD 290,291 million, while current assets were HKD 514,021 million[100]. - Current liabilities stood at HKD 174,180 million, resulting in a net current asset value of HKD 339,841 million[100]. - Non-current liabilities were reported at HKD 25,536 million, contributing to a total asset value of HKD 604,596 million[100]. Market and Economic Conditions - The outlook for 2024 remains challenging, with expectations of continued economic pressure due to high inflation and tightening monetary policies[20]. - The global market and operational environment remain unstable due to rising inflation rates, tightening monetary policies, and geopolitical tensions, impacting consumer behavior in North America[66]. - The North American retail market for mid-to-high priced household and drinking utensils continues to shrink, leading to reduced orders from key customers[66]. - The company faced challenges due to high inflation and interest rates, impacting consumer confidence in North America and Europe[114]. - The local market downturn significantly affected the value of the group's asset portfolio[114]. - The company noted that weak consumer sentiment led to high distributor inventory levels, tightening stock and reducing orders[114]. Corporate Governance - The board consists of two executive directors and three independent non-executive directors, ensuring a balanced governance structure[48]. - The company has adopted the corporate governance code and has complied with it, except for the separation of the roles of chairman and CEO, which are held by the same individual[46]. - The company has established four board committees: audit committee, remuneration committee, nomination committee, and risk management committee to oversee various aspects of the business[48]. - The board of directors emphasized the importance of corporate governance and diversity within the board[111]. - Independent non-executive directors provide independent and objective opinions to ensure adequate checks and balances for the benefit of shareholders and the group[79]. Strategic Initiatives - The company plans to diversify its product portfolio, with new product launches expected in 2024 and 2025, focusing on household items beyond existing kitchenware[20]. - The company aims to expand its customer reach and revenue sources by targeting new segments such as baby and children's products, pet accessories, and coffee accessories[20]. - The company is expanding its sales and distribution network in mainland China and other Asia-Pacific regions, including Taiwan, Thailand, and Japan, to increase market penetration[118]. - The company has established a specialized center for nanotechnology applications in collaboration with Hong Kong Science Park, expected to open in mid-2024[127]. - The company is deepening R&D collaborations with universities and research institutions, including the establishment of a joint laboratory with Hong Kong University of Science and Technology in 2023[127]. Risk Management - The company faces various risks including foreign currency risk, credit risk, interest rate risk, and liquidity risk, which may negatively impact its profitability[27]. - The company has established a risk management and internal control system, which was reviewed and deemed effective by the board for the year ending December 31, 2023[135]. - The board is tasked with overseeing the financial reporting process of the group, with the audit committee assisting in this responsibility[195]. - The management's assessment of expected credit losses is based on historical default rates and forward-looking information, which are subject to significant estimation uncertainty[184]. - The valuation of investment properties is identified as a key audit matter due to its significance and inherent subjectivity, requiring significant judgment[197]. Shareholder Engagement - The company aims to provide equal opportunities for all shareholders to exercise their rights and participate actively in the business[56]. - The company encourages shareholders to engage directly with the board during annual general meetings and other shareholder meetings[56]. - The company will suspend shareholder registration from May 28, 2024, to May 31, 2024, to determine the rights of shareholders to attend and vote at the annual general meeting[145]. - The proposed final dividend for the year ending December 31, 2023, is HKD 0.02 per share, down from HKD 0.03 per share in 2022, pending shareholder approval at the annual general meeting[151].
科劲国际(06822) - 2023 - 年度财报