Intelligent Group(INTJ) - 2023 Q4 - Annual Report

Company Performance - For the year ended November 30, 2023, total revenue was HK$20,539,218 (US$2,630,030), a significant increase from HK$14,331,576 in 2022 [222]. - Net income for the year ended November 30, 2023, was HK$4,068,979 (US$521,029), compared to HK$3,479,011 in 2022 [222]. - Financial PR services revenue constituted 85% of total revenues for the year ended November 30, 2023, amounting to HK$15,427,899 (US$1,975,530), up 16% from HK$13,248,243 in 2022 [223]. - Project-based financial PR services revenue increased by 140$2,607,555 (US$333,895) for the year ended November 30, 2023, following the lifting of COVID-19 restrictions [226]. Expenses and Costs - Staff costs for the year ended November 30, 2023, amounted to HK$3,160,163 (US$404,656), up from HK$2,096,145 in 2022 [215]. - Direct cost of revenues increased by HK$2,013,179, or 80.78$2,492,304 for the year ended November 30, 2022 to HK$4,505,483 (US$576,923) for the year ended November 30, 2023, mainly due to the increase in staff costs and employee compensation [230]. - Total selling expenses increased to HK$3,276,562 (US$419,561) for the year ended November 30, 2023, up from HK$957,546 in 2022, representing a significant increase of 242.5$2,325,708, from HK$354,652 in 2022 to HK$2,680,360 (US$343,218) in 2023, driven by increased capital market activities [235]. - Administrative expenses rose by HK$1,550,077, or 21.9%, to HK$8,623,437 (US$1,104,224) for the year ended November 30, 2023, primarily due to an increase in provision for doubtful accounts [239]. - Professional and consultancy fees decreased by HK$813,555, or 23$2,628,447 (US$336,571) for the year ended November 30, 2023, following a prior increase due to audit fees related to the proposed listing [249]. Assets and Liabilities - Current assets increased by HK$12,397,384, or 67.4%, from HK$18,399,967 as of November 30, 2022 to HK$30,797,351 (US$3,943,576) as of November 30, 2023 [263]. - Total current liabilities increased by HK$9,242,934, or 184.5%, from HK$5,006,133 to HK$14,249,067 (US$1,824,581) primarily due to an increase in due to related parties [263]. - Contract liabilities increased by HK$352,747, or 30.2%, from HK$1,166,837 to HK$1,519,584 (US$194,581) as a result of serving more customers and new corporate clients paying fees in advance [270]. - Operating lease liabilities surged by HK$607,540, or 237%, from HK$255,968 to HK$863,508 (US$110,572) due to a new lease for office premises [272]. Cash Flow - Net cash provided by operating activities decreased to HK$2,728,981 from HK$7,066,941, reflecting a decline in net income adjustments and changes in operating assets and liabilities [274]. - Net cash provided by financing activities increased significantly to HK$7,082,765, primarily from funds received from a director and related parties [283]. - The company had net cash used in financing activities of HK$4,547,805 for the year ended November 30, 2022, mainly due to dividend payments of HK$2,300,186 [295]. - The company had net cash provided by investing activities of HK$6,560 for the year ended November 30, 2023, primarily from equipment purchases and director repayment [293]. Risk Factors - The company faces significant competition in the financial services industry in Hong Kong, which may pressure profitability and market share [216]. - The ongoing geopolitical tensions and economic conditions may adversely affect the Hong Kong capital markets and the company's operations [213]. - The company will continue to monitor economic conditions and market trends closely throughout 2024 and beyond [220]. Credit Management - The company made an allowance for doubtful debts of HK$2,154,945 during the year ended November 30, 2023, indicating a focus on managing credit risk [266]. - The company believes its working capital will be sufficient to meet anticipated cash needs for at least the next twelve months [296].