2016-07-20-港交所-金利丰金融_年报2016_170页_3mb

2016 Annual Report Summary

Core Information

• Company Name: Kingston Financial Group Limited (金利豐金融集團有限公司)
• Stock Code: 1031
• Website: http://www.kingston.com.hk
• Registered Office: Clarendon House, 2 Church Street, Hamilton HM11, Bermuda
• Principal Place of Business in Hong Kong: Suite 2801, 28th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
• Legal Advisors in Bermuda: Conyers Dill & Pearman, Room 2901, One Exchange Square, 8 Connaught Place, Central, Hong Kong
• Share Registrars:
  • Principal: MUFG Fund Services (Bermuda) Limited, The Belvedere Building, 69 Pitts Bay Road, Pembroke HM08, Bermuda
  • Hong Kong Branch: Tricor Abacus Limited, Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong

Key Financial Highlights

• Total Revenue for the Year: HK$3,115,050,000 (up 26% from HK$2,479,274,000 in the Previous Year)
• Profit Attributable to Owners: HK$1,700,374,000 (up 35% from HK$1,259,636,000 in the Previous Year)
• Basic Earnings Per Share: HK9.79 cents (up from HK7.25 cents in the Previous Year)
• Financial Services Segment Revenue: HK$2,443,448,000 (up 59% from HK$1,541,338,000 in the Previous Year)
• Hotel and Gaming Segment Revenue: HK$671,602,000 (down 29% from HK$937,936,000 in the Previous Year)

Main Business Segments

Financial Services

• Securities Brokerage, Underwriting & Placements: Revenue of HK$710,318,000 (up 66% from HK$427,192,000)
• Margin & IPO Financing: Revenue of HK$1,697,925,000 (up 57% from HK$1,082,742,000)
• Other Financial Services: Revenue of HK$35,205,000 (up 12% from HK$31,404,000)

Hotel Business

• Revenue: HK$190,780,000 (down 27% from HK$259,652,000)
• Average Occupancy Rates:
  • Casa Real: 82% (down from 87%)
  • Grandview: 70% (down from 78%)

Gaming Business

• Revenue: HK$480,822,000 (down 29% from HK$678,284,000)
• Gaming Revenue Percentage: 72% of total hotel and gaming turnover
• Gaming Facilities:
  • 61 tables in mass market
  • 14 tables in VIP rooms
  • 238 slot machines
  • 134 live baccarat machines

Key Financial Ratios and Metrics

• Shareholders' Fund and Net Current Assets: HK$18,615,992,000 (up from HK$17,534,208,000)
• Cash and Bank Balances (General Account): HK$169,339,000 (down from HK$1,772,232,000)
• Current Ratio: 1.4 (up from 1.3)
• Net Gearing Ratio: 75% (up from 64%)
• Bank Borrowings: HK$3,936,000,000 (down from HK$4,364,500,000)
• Amounts Due to Shareholders: HK$2,321,911,000 (down from HK$2,420,911,000)
• Loan from Related Company: HK$7,179,238,000 (up from HK$5,437,965,000)
• Subordinated Loans: HK$700,000,000 (same as previous year)

Major Revenue Streams

• Securities Brokerage, Underwriting & Placements: HK$710,318,000 (23% of total revenue)
• Margin & IPO Financing: HK$1,697,925,000 (54% of total revenue)
• Other Financial Services: HK$35,205,000 (1% of total revenue)
• Hotel Business: HK$190,780,000 (6% of total revenue)
• Gaming Business: HK$480,822,000 (15% of total revenue)

Key Expenses

• Broker Commission: HK$130,801,000 (up 32% from HK$98,784,000)
• Interest Expenses: HK$203,395,000 (up 65% from HK$123,445,000)
• Administrative Expenses: HK$102,326,000 (up 10% from HK$93,128,000)
• Other Operating Expenses: HK$141,077,000 (down 11% from HK$159,059,000)
• Amortisation: HK$14,132,000 (same as previous year)
• Finance Cost: HK$20,200,000 (same as previous year)

Other Income and Expenses

• Other Income: HK$45,490,000 (up 77% from HK$25,721,000)
• Inventory Consumed: HK$23,296,000 (up slightly from HK$23,105,000)
• Staff Costs: HK$253,264,000 (up 19% from HK$212,983,000)
• Gaming Commission: HK$114,479,000 (down 24% from HK$151,032,000)

Future Prospects

• Financial Services:

  • The Group expects continued growth in financial services, especially with the anticipated launch of the "Shenzhen-Hong Kong Stock Connect" in the second half of 2016.
  • The Group will continue to explore cross-border financial cooperation and expand its presence in the capital market of the PRC.
  • A joint venture was formed in April 2016 with two leading companies to target global acquisitions in the healthcare and medical products sector.

• Hotel and Gaming:

  • The Group remains cautious about the Macau market due to the slowdown in tourism and the impact of anti-corruption policies.
  • The Group will focus on marketing and promotion to enhance customer experience and achieve sustainable growth.
  • The hotel and gaming segments are expected to stabilize in the coming year.

Corporate Governance and Committees

• Board of Directors:

  • Executive Directors: Nicholas Yuk-yui Chu (Chairman), Yuet Wah Chu (CEO), Kingston Chun Ho Chu, Ho Chi Ho
  • Independent Non-Executive Directors: Wong Yun Kuen, Lau Man Tak, Yu Peter Pak Yan

• Committees:

  • Audit Committee: Lau Man Tak (Chairman), Wong Yun Kuen, Yu Peter Pak Yan
  • Remuneration Committee: Yu Peter Pak Yan (Chairman), Wong Yun Kuen, Lau Man Tak
  • Nomination Committee: Wong Yun Kuen (Chairman), Lau Man Tak, Yu Peter Pak Yan

Independent Auditors and Legal Advisors

• Independent Auditors: BDO Limited, 25th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong
• Legal Advisors: Conyers Dill & Pearman, Room 2901, One Exchange Square, 8 Connaught Place, Central, Hong Kong

Key Notes

• The Group experienced a significant increase in revenue and profit for the year, driven by growth in financial services.
• The hotel and gaming segments faced challenges due to the slowdown in the Macau tourism and gaming industry.
• The Group is optimistic about the future, especially with the new financial policies and strategic partnerships.
• The Group maintains a strong financial position with sufficient liquidity and a healthy capital structure.
• The Group is committed to corporate governance and has a robust framework for management and oversight.