Financial Performance - The group recorded a loss of approximately HKD 40.8 million for the year ended December 31, 2023, compared to a profit of HKD 12.2 million in 2022, primarily due to a decrease in rental income and increased financing costs [8]. - Revenue for the year ended December 31, 2023, was HKD 23,437,000, a decrease of 4.8% compared to HKD 24,612,000 in 2022 [39]. - Gross profit for the same period was HKD 18,241,000, down 8.6% from HKD 19,960,000 in 2022 [39]. - The loss from continuing operations before tax was HKD 38,068,000, compared to a profit of HKD 14,709,000 in the previous year [39]. - The net loss for the year was HKD 40,816,000, compared to a profit of HKD 12,184,000 in 2022 [39]. - Basic and diluted loss per share for 2023 was HKD (10.51), compared to earnings of HKD 3.14 per share in 2022 [150]. - The company’s total comprehensive loss for the year was HKD (40,753,000), compared to a total comprehensive income of HKD 12,621,000 in 2022 [153]. Rental Income and Financing Costs - Rental income for the year was approximately HKD 23.4 million, a decrease of about HKD 1.2 million or 5% from HKD 24.6 million in 2022, attributed to weakened tenant demand and affordability [7]. - Financing costs increased over twofold to approximately HKD 7.6 million, up from HKD 3.4 million in 2022 [8]. - Financing costs increased to HKD 7,627,000 in 2023, up from HKD 3,400,000 in the previous year, reflecting higher borrowing costs [150]. Assets and Liabilities - The total borrowings of the group as of December 31, 2023, were approximately HKD 294.7 million, a decrease from HKD 307.9 million in 2022 [12]. - Total assets as of December 31, 2023, amounted to HKD 1,815,307,000, a decrease of 3.2% from HKD 1,875,848,000 in 2022 [40]. - Total liabilities were HKD 343,596,000, down from HKD 355,621,000 in 2022, reflecting a decrease of 3.1% [40]. - The company's equity decreased from HKD 1,520,227 thousand in 2022 to HKD 1,471,711 thousand in 2023, a decline of approximately 3.2% [158]. - As of December 31, 2023, the group had a net current liability of approximately HKD 155,942,000, slightly up from HKD 152,662,000 in 2022, indicating significant uncertainty regarding the group's ability to continue as a going concern [172]. Dividends - The board recommends a final dividend of HKD 0.012 per share, bringing the total dividend for the year to HKD 0.02 per share [37]. - The interim dividend of HKD 0.008 per share was already distributed on October 19, 2023 [37]. - The company paid dividends totaling HKD 7,405 thousand in 2023, compared to HKD 10,368 thousand in 2022 [164]. Corporate Governance - The company emphasizes its commitment to good corporate governance practices, focusing on a quality board and robust internal controls [83]. - The board consists of two executive directors and three independent non-executive directors, ensuring a majority of independent members [86]. - Independent non-executive directors account for over one-third of the board, with at least one possessing appropriate professional qualifications in accounting or related financial management [90]. - The board has adopted a diversity policy to enhance its composition, aiming to appoint at least one director of a different gender by December 31, 2024 [94]. - The company provides necessary training for newly appointed directors to ensure understanding of operations and responsibilities under relevant regulations [99]. Market Environment - The global business environment in 2023 is challenging due to geopolitical conflicts, global inflation, and high interest rates, particularly affecting economic growth in Hong Kong and mainland China [22]. - The company anticipates continued economic and real estate market slowdown in Hong Kong during the first half of 2024 due to geopolitical tensions and prolonged high interest rates [22]. - Malaysia's relaxation of visa policies for Chinese tourists and broader investment incentives are expected to boost the tourism and business investment sectors, benefiting the real estate industry [22]. - The Hong Kong government plans to relax property stamp duty requirements in Q1 2024, which has improved the atmosphere in the local real estate market [22]. Investment and Development - A joint venture agreement was established for land acquisition and development with a total capital commitment of approximately HKD 106 million [18]. - The company is actively seeking opportunities to acquire quality real estate and land reserves in Malaysia to diversify its real estate investment and development portfolio [22]. Employee and Operational Expenses - Employee expenses for the year were approximately HKD 2.6 million, an increase from HKD 2.4 million in 2022, with about 6 employees as of December 31, 2023 [20]. - Operating and administrative expenses were HKD 5,305,000 in 2023, slightly up from HKD 5,143,000 in the previous year [150]. Audit and Compliance - The financial statements for the year ending December 31, 2023, were audited by Kaiyuan Xinde Accounting Firm Limited [80]. - The audit committee has reviewed and recommended the approval of the audited consolidated financial statements for the year ending December 31, 2023 [103]. - The external auditor, KPMG, will be proposed for reappointment at the upcoming annual general meeting [104]. Risk Management - The group aims to adopt a flexible business model and prudent risk management framework to sustain long-term profitability and asset growth [117]. - The board has identified the major risks faced by the group and established a risk appetite aligned with strategic objectives [113]. - The company faces foreign exchange risks primarily related to the Renminbi, which may impact performance [10].
东方兴业控股(00430) - 2023 - 年度财报