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Public company info - Goldin Financial Holdings Ltd. , 00530.HK
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Goldin Financial Holdings Ltd., 00530.HK - Company Profile
Chairman Pan Su Tong
Share Issued (share) 6,991,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Other Financials
Corporate Profile Business Summary: The principal activities of the Group during the year consisted of the provision of factoring services, financial investment, winery and wine related business, property development and investment and operation of restaurants. Performance for the year: For FY2020, the Group recorded revenue of approximately HK$589.1 million, representing a slight decrease of 2.47% from the revenue of approximately HK$604.0 million for the year ended 30 June 2019 (“FY2019”). The Group recorded a substantial loss attributable to owners of the Company of HK$7,461.1 million for FY2020 as compared to a profit of HK$6,255.0 million for the last year. Business Review： Real Estate Business Property Investment In 2020, the COVID-19 pandemic aggravated the economic risks in Hong Kong further from the ongoing sociopolitical unrest since June 2019. Leasing demand for Grade-A offices in the city softened. Corporates were more cost-conscious, with some MNCs, trading firms and co-working operators continued to downsize during the year, pushing up the overall vacancies of the city to 8.8% at end of June 2020. The leasing rentals had declined across the traditional central business district (“CBD”) and office sub-markets where both Hong Kong Island and Kowloon reported a year-on-year drop of 10.1% and 11.4% respectively#. Meanwhile, the trend of office decentralization from the CBD to the lower rents office submarkets, particularly Kowloon East as the prominent alternative central business district (“CBD2”), was steady for the FY2020. The Group’s investment properties, Goldin Financial Global Centre, which is located in the CBD2, Kowloon East, is a premium Grade-A office building. It provides approximately 800,000 square feet (sq.ft.) of premium office space and approximately 100,000 sq.ft. of fine dining area. In FY2020, rental income, revenue from property management services and project management services amounted to HK$228.8 million (FY2019: HK$166.6 million), up by 37.3% compared with FY2019. The general decline in market rents and the weak investor sentiment amid the COVID-19 outbreak affected the valuation of the commercial properties in Hong Kong. As a result, the Group recorded a fair value decrease of approximately HK$3,495.9 million for Goldin Financial Global Centre (as compared with an increase of approximately HK$1,299.7 million for FY2019). The property business segment recorded a loss of HK$6,165.4 million in the current year, against a profit of HK$1,336.8 million for FY2019. In late September 2019, the Company announced the proposed acquisition of the entire issued share capital of Solar Time Developments Limited (“Solar Time”) at the consideration of HK$4,598.0 million (the “Solar Time Acquisition”). Solar Time held the entire equity interests in Goldin Financial Global Square Limited, which holds the land site known as New Kowloon Inland Lot No.5948, 7 Wang Tai Road, Kowloon Bay that will be redeveloped into a Grade-A office building. The Solar Time Acquisition was approved by shareholders of the Company in the Special General Meeting held on 18 December 2019. The Solar Time Acquisition has yet to be completed. Property Development The Group acquired, by way of a government tender, 60% interest in its Kai Tak residential development project (the “Development”) through its indirectly 60% owned subsidiary, Rich Fast International Limited (“Rich Fast”) in December 2018. The Development is located at Kai Tak Area 4B Site 4, Kai Tak, Kowloon with a maximum developable gross floor area of 53,394 sq.m. The formulation of development plan had been underway and the Development was scheduled to be completed on or before 30 September 2024. During the FY2020, the Group completed the acquisition of the remaining 40% equity interest in the Development and become the sole developer of the Development. With the rising challenge of the business environment brought by the weakening of global economy and the decline of economic activities in Hong Kong, showing signs of economic contraction, the property development market in Hong Kong became uncertain in the long run. To take into account the significant capital required for the Development in its preliminary stage, the Group adopted a prudent approach by planning to dispose of the Development so as to retain more cash for the Group’s existing business, and to offset negative impact of the uncertainties in the property market and the overall economic downturn in Hong Kong. On 10 May 2020, the Group entered into a sale and purchase agreement (the “GF SPA”) to dispose of its entire equity interest in Gold Flair Holdings Limited (“Gold Flair”), the holding company of Rich Fast and the related shareholder’s loan at an aggregate consideration of HK$7,040.5 million. The Group intended to apply the proceeds from the disposal of the Development to reduce the Group’s borrowings, thereby enhancing its financial flexibility, further details of which are set out in the Company’s announcement dated 10 May 2020. Based on a valuation performed by an independent valuer, the Group recorded a write-down of properties under development amounted to HK$2,786.4 million as at 30 June 2020 as a result of the decline in prices of residential land in Hong Kong. Subsequent to the FY2020, the GF SPA was terminated and, on 27 July 2020, the Group further entered into a sale and purchase agreement and a profit sharing agreement with an independent third party to dispose of the entire equity interest in Rich Fast at a cash consideration of approximately HK$3,477.3 million. The disposal was completed on 27 July 2020 and the bridging loan associated with the acquisition of the Kai Tak land of approximately HK$3,563.2 million was derecognised upon completion of the disposal of Rich Fast. The profit sharing agreement provides a mechanism for the Group to share the potential upside in the Development if the future sale prices of the units exceed the target agreed with the purchaser. Please refer to the announcements of the Company dated 23 July 2020, 28 July 2020 and 30 July 2020, respectively for further details. Wine and Related Businesses Based on the latest information of OIV (International Organisation of Vine and Wine), the global wine trade in the first half of 2020 was delicate due to the pandemic impacts. This saw the unprecedented halts at the logistics points like ports and airports, and at the points of consumption such as cafes, bars and restaurants. As a result, the world wine trade simultaneously shrank, and the global wine merchants tend to deplete their wine stock in the near term. The China’s wine market became mellow following the nationwide shutdown measures in order to battle with the pandemic outbreaks. The volume and value of the total wine imports for the first six months of 2020 fell 31.7% and 34.8% respectively (source from 華經情報網). Meanwhile, the persistent uncertainties in the China-US trade tensions and the economic contraction brought by the global pandemic had dampened the investment sentiment for the Chinese investors and wine collectors in premium wines, especially the American wines on which the retaliatory tariff increased to 93% in 2019 due to the trade war between the two countries. Facing these headwinds, the Group recorded a significant drop in revenue from its wine trading business during the FY2020. In FY2020, the wine and related businesses recorded revenues (including income in the form of storage fees and income from the restaurant operations) of approximately HK$157.0 million (FY2019: HK$298.6 million), which represented a decrease of 47.4%. The drop was mainly due to the loss in revenue generated by the wine trading business during FY2020. The Group traded its premium wines at a much lower profit margin in the year and thus brought the overall gross profit margin for the wine and related businesses dropped to 53.0% as at the end of FY2020 against the figure of 75.5% for the last year. Given the significant drop in the business performance of the wine and related businesses during the year, impairment assessments were performed for each cash-generating unit within this segment. The Group recognized an impairment loss on certain property, plant and equipment in respect of the Group’s wine cellar and the restaurant operation in an aggregate amount of approximately HK$167.0 million as a result of the review of their business performance. Coupled with this, the wine and related businesses reported a loss for this segment of approximately HK$283.1 million for FY2020, in contrast to the profit of approximately HK$47.3 million for FY2019. Factoring The global trade has been disrupted by the pandemic outbreaks as many countries imposed border closure measures. According to the World Bank forecasts, it is expected that the global economy will contract sharply by 5.2% for the year, and shall experience the largest declines in per capita output in over a century. The escalating China-US trade tensions as well as the exchange rate fluctuation significantly increased the credit risk for the small and medium-sized enterprises (“SMEs”) in China. Traditional banks tightened their credit policy toward the SMEs, driving them to turn to other avenues for financing, such as shadow banks to obtain necessary funds for their business at a higher borrowing cost. Amid the credit crunch, the Group had increased the handling fees and interests charged to its factoring clients. The factoring business of the Group recorded a 46.4% increase in revenue to approximately HK$203.3 million for FY2020 (FY2019: HK$138.9 million). The increase was mainly due to the increased fees and interests charged to the factoring clients in the current year. Profit from this business segment increased by 39.1% to approximately HK$157.6 million, compared with the HK$113.3 million for FY2019, which was mainly due to the increase in factoring revenues. On the other hand, as factoring business is highly capital intensive, the Group took out a working capital loan in late May 2019 to finance its factoring operations. As a result, the funding costs for the Group’s factoring business in FY2020 had increased significantly to HK$177.0 million (FY2019: HK$15.2 million), rendering the factoring business to report a net loss of HK$68.2 million against a net profit of HK$55.5 million for FY2019. Prospects: The overall business environment in Hong Kong and China is expected to remain challenging in the short term. The adverse impacts to economies brought by the outbreak of COVID-19 pandemic and the uncertainties arising from the escalating trade tensions between China and the United States of America is expected to continually cause pressure on the Group’s businesses. In such turbulent time, the Group will adhere to a prudent approach to manage its business and strategies. In July 2020, the Company disposed of the Kai Tak residential development project. This disposal immediately brought in fresh capital to the Group and relieved the Group from the future business and financial risks associated with the development of project. In view of the rising of capital cost and risks exposure in relation to the factoring operation, the Group decided to dispose of the factoring business and re-allocate the management and financial resources of the Group to strengthen its remaining business. On 2 September 2020, the Group entered into a term sheet with an independent third party to dispose of the factoring operation at a cash consideration of approximately HK$2,050.0 million. The disposal is expected to be completed in February 2021. The disposal would result in derecognition of bank borrowing from the factoring subsidiary which, together with the proceeds arising therefrom, would help to strengthen the financial flexibility of the Group as a whole. On 29 September 2020, the Company entered into the Provisional SPA with the Purchaser to conditionally sell and assign the entire issued share capital of Cheng Mei and Goal Eagle and the debts owing by them to the Group at an aggregate consideration of HK$14.3 billion. Cheng Mei and Goal Eagle altogether hold 100% of the issued share capital of Smart Edge, which in turns holds the Group’s investment properties, namely Goldin Financial Global Centre. On 23 December 2020, it was confirmed to the Group by the receivers of Smart Edge that the receivers and the Purchaser had entered into a sale and purchase agreement in respect of all the ordinary shares of Smart Edge. The receivers have informed the Company that (i) the funds to be received by the receivers pursuant to the SE Disposal Agreement will be sufficient to settle all outstanding indebtedness in relation to the Senior Notes and the Mezzanine Loan in full; and (ii) the Purchaser has paid very substantial non-refundable deposits pursuant to the terms of the SE Disposal Agreement. The Purchaser informed the Group of the termination of the Provisional SPA on 28 December 2020. The Board is confident that once the SE Disposal Agreement has been duly completed, all legal proceedings relating to the Senior Notes and the Mezzanine Loan, as well as the Winding-Up Petition will be resolved amicably. While the Group continues to dedicate its efforts to maximise returns to shareholders, it will closely monitor the market sentiment, evaluate its business and opportunities on hand and make appropriate adjustments accordingly. The Group may also consider to pursuit opportunities for further business developments or realise its assets if thought fit with a view to enhancing its financial flexibility. Besides, the Group will consider engaging in fund raising activities such as share placing with a view to improving the Group’s liquidity and financial position.

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