2022-10-27-港交所-德泰新能源集团_年报2022_230页_3mb

2022 Annual Report Summary

Core Content

This summary provides an overview of the DeTai New Energy Group Limited (the "Company") for the year ended 30 June 2022, highlighting the core business segments, financial performance, management discussion and analysis, and key assumptions used in financial reporting.

Main Business Segments

The Group operates in four core business segments:

1. Hotel Hospitality Business
2. Money Lending Services
3. Trading and Distribution of Liquor and Wine
4. Investments in Listed Securities and Funds

Financial Overview

Revenue and Loss

• Total Revenue: Approximately HK$41.1 million (2021: HK$24.1 million)
• Net Loss: Approximately HK$135.8 million (2021: HK$36.9 million)
• Loss attributable to owners: Approximately HK$135.8 million (2021: HK$35.4 million)
• Basic loss per share: Approximately 0.87 HK cents (2021: 0.23 HK cents)

Key Loss Drivers

1. Liquor and Wine Business:
   • Gross loss and inventory write-down: HK$27 million
   • Bulk sales to distributors for cash inflow and working capital
2. Financial Assets at Fair Value through Profit or Loss:
   • Fair value loss: HK$70 million
3. Loans Receivable:
   • Impairment loss: HK$13 million

Business Review

Hotel Hospitality Business

• Revenue: Approximately HK$15.9 million (2021: HK$18.8 million)
• Segment Loss: Approximately HK$9.1 million (2021: HK$22.6 million)
• Key Factors:
  • Strict cost control reduced segment loss
  • One Niseko Resort Towers is the core asset, located in Niseko, Japan, a famous ski destination
  • The resort has 110 high-end units and an onsen (hot spring)
  • 2022 Revenue: HK$15.9 million (down from 2021 due to pandemic impact)
  • Contribution to Group Revenue: 39%

Money Lending Services

• Segment Loss: Approximately HK$10.9 million (2021: Profit of HK$13.3 million)
• Key Factors:
  • Impairment loss on loans receivable
  • Loan portfolio includes loans to independent third-party borrowers
  • Loan terms: 8–40 months, interest rates: 5.5%–20% per annum
  • Credit risk assessment includes financial review, collateral evaluation, and legal actions for overdue loans

Investment Activities

Investments in Listed Securities and Funds

• Total Investment Value: Approximately HK$75.8 million (2021: HK$59.8 million)
• Key Investments:
  • TAR High Value Fund SP:
    • Value: HK$75.8 million
    • Represents 10.5% of Group's total assets
    • Average return: 26.73% (2022) and 0.95% (2021)
  • Other Listed Securities:
    • CLP Holdings Limited (2%): Investment cost HK$17,023k, market value HK$14,192k
    • Shenzhen International Holdings Limited (0.027%): Investment cost HK$5,020k, market value HK$5,003k
    • Hong Kong Exchanges and Clearing Limited (0.007%): Investment cost HK$30,386k, market value HK$33,968k
    • Shenzhen Expressway Corporation Limited (0.086%): Investment cost HK$5,037k, market value HK$5,216k
    • Techtronic Industries Company Limited (0.001%): Investment cost HK$927k, market value HK$818k
    • Tencent Holdings Limited (0.000%): Investment cost HK$1,653k, market value HK$1,701k
    • China Construction Bank Corporation (0.001%): Investment cost HK$16,946k, market value HK$15,810k
    • China Mobile Limited (0.002%): Investment cost HK$16,898k, market value HK$16,170k
    • AIA Group Limited (0.000%): Investment cost HK$2,517k, market value HK$2,722k
    • Hong Kong Aerospace Technology Group Limited (1.226%): Investment cost HK$113,881k, market value HK$67,491k
    • B & D Strategic Holdings Limited (0.454%): Investment cost HK$6,957k, market value HK$3,125k
    • Diwang Industrial Holdings Limited (0.768%): Investment cost HK$2,073k, market value HK$1,677k
    • BOC Hong Kong (Holdings) Limited (0.009%): Investment cost HK$25,291k, market value HK$29,450k
    • Tracker Fund of Hong Kong (0.005%): Investment cost HK$4,859k, market value HK$5,303k
    • Meituan (0.000%): Investment cost HK$782k, market value HK$971k
    • JD.com, Inc. (0.000%): Investment cost HK$2,073k, market value HK$1,677k

Key Financial Assumptions

• Discount Rate: Pre-tax discount rate of 17% (2021: 18%) used for value-in-use calculation
• Growth Rate:
  • 5-year revenue growth rate: 16.0% (2021: 4.23%)
  • Post-pandemic growth expectations:
    • 2023: Increase by 28%
    • 2024: Increase by 40%
• Long-term Growth Rate: 2% for cash flow projections beyond 5 years
• Impairment Assumptions:
  • Fair Value Less Cost of Disposal: 3.5% of market value
  • Includes average market brokerage fees and other administrative/legal costs
  • The recoverable amount of the hotel CGU was lower than its carrying amount, leading to impairment recognition

Governance and Regulatory Information

• Independent Valuers: Engaged for impairment assessments
• Audit and Legal Advisors:
  • Audit: BDO Limited (Hong Kong)
  • Legal: Michael Li & Co. (Hong Kong)
• Share Registrars:
  • Bermuda: MUFG Fund Services (Bermuda) Limited
  • Hong Kong: Tricor Tengis Limited
• Principal Banks:
  • Bank of Communications Co., Ltd.
  • China CITIC Bank International Limited
  • Sumitomo Mitsui Banking Corporation

Key Contacts

• Chairman: Cheng Chi Kin (鄭子堅)
• Company Secretary: Wong Siu Keung Joe (黄兆強)
• Directors:
  • Executive Directors: Cheng Chi Kin, Wong Siu Keung Joe
  • Independent Non-executive Directors: Chiu Wai On, Man Kwok Leung, Sheung Kwong Cho
• Committees:
  • Audit Committee: Chiu Wai On (Chairman), Man Kwok Leung, Sheung Kwong Cho
  • Remuneration Committee: Chiu Wai On (Chairman), Man Kwok Leung, Sheung Kwong Cho
  • Nomination Committee: Chiu Wai On (Chairman), Man Kwok Leung, Sheung Kwong Cho
  • Investment Committee: Cheng Chi Kin (Chairman), Wong Siu Keung Joe

Conclusion

The Group faced significant financial challenges in 2022, primarily due to the impact of the pandemic, leading to revenue declines and impairment losses in multiple segments. However, management has implemented prudent financial policies and cost control measures to mitigate these effects. The Group also continues to diversify its investment portfolio across various sectors, including financial services, real estate, and listed securities, with a focus on capital appreciation and long-term growth. The outlook for 2023 and 2024 is positive, with expectations of revenue recovery and growth driven by vaccination programs and economic normalization.