Financial Performance - Revenue for the nine months ended December 31, 2023, was HK$4,826.3 million, a decrease of 16.3% compared to HK$5,764.8 million in the previous period[10]. - Gross profit for the same period was HK$679.9 million, representing an increase of 8.8% from HK$624.7 million[10]. - Profit for the period was HK$277.6 million, up 28.6% from HK$215.9 million year-on-year[10]. - Basic earnings per share increased to 14.2 Hong Kong cents, a rise of 27.9% from 11.1 Hong Kong cents[10]. - Cash generated from operations was HK$1,055.7 million, a significant improvement of 175.8% compared to a cash outflow of HK$1,393.4 million in the previous period[10]. - Bank balances and cash increased to HK$338.0 million, up 17.4% from HK$288.0 million[10]. - Shareholders' funds rose to HK$1,361.2 million, reflecting a growth of 20.2% from HK$1,132.4 million[10]. - Capital expenditure decreased to HK$80.5 million, down 64.6% from HK$227.3 million[10]. - Gross profit margin improved to 14.1%, up 3.3 percentage points from 10.8%[10]. - Return on shareholders' funds was 20.4%, an increase of 1.3 percentage points from 19.1%[10]. Business Expansion and Strategy - The Group expanded its business into the server sector, which significantly contributed to revenue and profit growth[14]. - A new wholly-owned subsidiary, Linkz Cables Mexico, was established to increase market share outside China and Asia, with a new plant expected to start production in 2024[14]. - Two wholly-owned subsidiaries were established to enhance production capacity and R&D capabilities for medical equipment cables, with production starting in September 2023[14]. - The Group underwent multi-dimensional operating integrations following the acquisition by Luxshare Precision Limited, enhancing operational efficiency[15]. - The financial year end date was changed from 31 March to 31 December to align with Luxshare Group, facilitating better preparation of consolidated financial statements[15]. - The Group's proactive approach includes seeking investment opportunities to diversify its business portfolio and enhance shareholder value[14]. - The Group aims to leverage the growth in 5G technology and increased demand for network communication products to drive business growth[21]. - The strategic alliance with Luxshare Precision is expected to enhance the Group's core competitiveness and facilitate growth opportunities in various sectors, including consumer electronics and healthcare[24]. Revenue Breakdown by Sector - The data center sector's revenue increased slightly by HK$0.1 million to HK$791.0 million, maintaining the highest revenue in the cable assembly business[40]. - The telecommunications sector experienced a revenue decline of HK$88.6 million or 13.8%, down to HK$555.4 million, despite stable order volume and improved profit margins from new models[41]. - The medical equipment sector's revenue rose by HK$12.4 million or 5.0% to HK$258.0 million, driven by sustained high demand for medical equipment cables[41]. - The industrial equipment sector's revenue decreased by HK$23.0 million or 48.5% to HK$24.4 million, attributed to slower-than-expected economic recovery and high inflation[43]. - The revenue of the automotive sector was HK$100.4 million, a decrease of HK$61.6 million or 38.0% compared to HK$162.0 million in the previous year, impacted by geopolitical issues and trade wars[44]. - The networking cable sector reported revenue of HK$788.7 million, down HK$466.0 million or 37.1% from HK$1,254.7 million in the previous year, due to suppressed overseas orders caused by war, high interest rates, and inflation[45]. - The server sector generated revenue of HK$2,231.4 million, a decline of HK$296.4 million or 11.7% from HK$2,527.8 million in the previous year, with a focus on developing new products related to AIGC[46]. Operational Efficiency and Cost Management - Total operating expenses as a percentage of revenue remained stable at 5.6% during the review period[37]. - Distribution and selling expenses decreased from HK$61.4 million to HK$48.1 million, a decrease of HK$13.3 million or 21.7% compared to the Previous Year, with the percentage of these expenses to revenue decreasing from 1.1% to 1.0%[48]. - Administrative expenses decreased from HK$143.6 million to HK$124.5 million, a decrease of HK$19.1 million or 13.3% compared to the Previous Year, with administrative expenses as a percentage of revenue increasing from 2.5% to 2.6%[49]. - Research and development expenses were HK$95.7 million, a decrease of HK$14.2 million or 12.9% compared to HK$109.9 million in the Previous Year, with R&D expenses as a percentage of revenue increasing from 1.9% to 2.0%[50]. - The Group focused on the development and delivery of new products with AIGC (Artificial Intelligence Generated Content) during the Review Period, improving profitability[48]. Dividend and Shareholder Returns - The Board proposed a final dividend of HK$0.7 cents per share, totaling approximately HK$13.6 million, compared to HK$0.5 cents per share for the previous year[19]. - The proposed final dividend is subject to approval at the upcoming annual general meeting scheduled for 29 May 2024[118]. - The dividend payout for the previous year was HK$0.5 cents per share, indicating a 40% increase in the proposed dividend for the current year[117]. - The Group's expected working capital requirements and future expansion plans are considered in the dividend declaration process[116]. Risk Management and Compliance - The Directors identified several principal risks, including potential labor shortages, credit risk from customers, and fluctuations in raw material prices, which could adversely affect the Group's business and financial conditions[94]. - The Group's ability to maintain strong relationships with customers and suppliers may be compromised if it fails to attract or retain key managerial and technical personnel[94]. - The Company has maintained high standards of compliance with relevant laws and regulations, with no identified breaches during the reporting period[160]. - The Group's policies and practices on compliance with legal and regulatory requirements are regularly reviewed and monitored[182]. Corporate Governance and Board Structure - The Board currently comprises two executive Directors, one non-executive Director, and three independent non-executive Directors, ensuring a diverse governance structure[188]. - The three independent non-executive Directors represent more than one-third of the Board, exceeding the requirement of the Listing Rules[188]. - The Company has adopted a Board Diversity Policy since December 28, 2018, to enhance the quality of its performance through diversity[188]. - The Nomination Committee will evaluate and recommend retiring Directors for re-appointment based on their overall contribution, attendance, and performance on the Board[190]. - The Company ensures that independent non-executive Directors do not participate in daily management, maintaining their independent judgment[194]. Sustainability and Corporate Social Responsibility - The Group is committed to sustainability, implementing initiatives to reduce carbon emissions and energy consumption, such as using LED lighting and heat recovery systems in its factories[164]. - The Group has received various recognitions for its corporate social responsibility efforts, including the 15 Years+ Caring Company logo and the Industry Cares Award during FY2023[164]. - The Company actively participates in non-profit social development projects in its operational cities and encourages employee involvement in community activities[166].
汇聚科技(01729) - 2024 - 年度财报