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Public company info - Bison Finance Group Limited , 00888.HK

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Bison Finance Group Limited, 00888.HK - Company Profile
Chairman MA Weihua
Share Issued (share) 1,422,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Advertising
Corporate Profile Business Summary: The Group is principally engaged in (a) the provision of financial services of licensed businesses including provision of investment advisory services business, securities brokerage business, securities underwriting and placing business, fund management business and loan financing business; as well as the provision of insurance brokerage services business in the People’s Republic of China (the “PRC”) (the “Financial Services Business”) and (b) the provision of media sales, design services and production of advertisements for transit vehicle exteriors (“BUS-BODY Advertising”) and interiors (“BUS-INTERIOR Advertising”), shelters (“BUS-SHELTER Advertising”), outdoor signage advertising business and the provision of integrated marketing services covering these advertising platforms in Hong Kong (the “Media Business”). Performance for the year: For the year ended 31 December 2020, the Group reported a revenue of approximately HK$298.2 million (2019: approximately HK$513.6 million (restated)). For the year ended 31 December 2020, the Group reported a loss attributable to owners of the Company of approximately HK$344.0 million (2019: profit attributable to owners of the Company of approximately HK$20.8 million). Business Review (1) Financial Services Business The Group has been engaging in the Financial Services Business with the licences to carry out Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities under the Securities Futures Ordinance (“SFO”) since December 2018 and throughout the reporting period. During the year ended 31 December 2020, the Financial Services Business contributed approximately HK$79.0 million (2019: approximately HK$129.5 million (restated)) of revenue which represents a decrease of approximately 39.0% as compared to that of the previous year. The Financial Services Business has been unfavourably affected by various factors including the down-turning macroeconomic trends (which correlated with the COVID-19 pandemic), trade wars and global political conflicts that decreased the frequency of transactions by the investors, reduced the risk appetite of the investors leading to withdrawal of investments and downsizing of assets under management (“AUM”). The decrease in transactions and/or service fees charged amid such unfavourable market situation resulted in the decrease in revenue of the Financial Services Business. The Group expected that the growth of AUM and revenue will be limited in coming years due to the adverse impact and the uncertainties brought about by the COVID-19 pandemic together with the economic and political factors. The management took a conservative approach to adjust the financial budgets and its key assumptions and assessed that part of the carrying amount of the goodwill in relation to the Financial Services Business may not be recoverable through the future cash flow to be generated from operations or from their disposal. As such, an impairment loss on goodwill in respect of the Financial Services Business of approximately HK$99.9 million was recognised in 2020 (2019: nil) due to adjustment to financial budgets. During the year of 2020, the disposal of China Sports Insurance Broker Co., Ltd.* (中體保險經紀有限公司) (“CSIB”) was completed with a gain on disposal of approximately HK$2.2 million, whilst an impairment loss on goodwill of approximately HK$9.2 million was recognised in 2019 with reference to the price quote obtained from the potential buyers at the end of the reporting period. The Group considers the disposal of CSIB as a good opportunity to streamline the Group’s business segments for better utilisation of the Company’s financial resources in its Financial Services Business and strengthening of the cash position of the Group. Meanwhile, on 16 December 2020, Bison Corporate Finance Limited, being a wholly-owned subsidiary of the Company, was granted a licence to carry out Type 6 (advising on corporate finance) regulated activity under the SFO by the Securities and Futures Commission (“SFC”). This enables the Group to further broaden its Financial Services Business and to create synergies with other existing financial services of the Group by strengthening its ability to provide integrated financial products and services to The Group’s customers. In the long term, the Group’s Financial Services Business will continue to diversify the existing Financial Services Business and to utilise the Group’s resources and network as well as the extensive investment experience of The Group’s senior management, which are considered as major contributing factors to maintain an ongoing business development in the Financial Services Business carried out by the Group. (2) Media Business The Group continued to engage in the provision of media sales, design services and production of advertisements for transit vehicle exteriors (“BUS-BODY Advertising”) and interiors (“BUS-INTERIOR Advertising”), shelters (“BUS-SHELTER Advertising”), outdoor signage (“BILLBOARDS Advertising”) advertising business and the provision of integrated marketing services covering these advertising platforms in Hong Kong. For the year ended 31 December 2020, the Media Business recorded revenue of approximately HK$219.3 million (2019: approximately HK$384.2 million) which represent a decrease of approximately 42.9%. Facing the unfavourable advertising business environment mainly due to the outbreak of COVID-19 pandemic and unstable political and social condition, the occupancy rate of various advertising platforms provided by the Group has been adversely affected and thus resulting in a decline in advertising revenue of the Media Business throughout the year of 2020. Having considered the adverse impact and the uncertainties brought about by the COVID-19 pandemic affecting the Media Business, the management adjusted the financial budgets and assessed that the carrying amounts of certain assets in relation to the Media Business may not be recoverable through the future cash flow to be generated from operations or from their disposal upon expiry of the advertising licences. As such, an impairment loss on assets in respect of the Media Business of approximately HK$27.0 million (2019: approximately HK$0.5 million), of which impairment loss on assets (including property, plant and equipment and right-of-use assets, prepayments, deposits and other receivables and intangible assets) of approximately HK$26.8 million was recognised in 2020 (2019: approximately HK$0.3 million). In addition, the Group reassessed its strategies so that it would be in line with the adjustment of the financial budgets. In particular, having experienced continued losses in its existing BUS-SHELTER Advertising business and upon expiry of the advertising licence of its BILLBOARDS Advertising business, the Group since late 2020 implemented measures to reduce loss for operation of its BUS-SHELTER Advertising and BILLBOARDS Advertising businesses to alleviate its financial pressure while the Group continuously adjusts its strategy to face the challenging situation caused by the on-going COVID-19 pandemic and the changes in trend in advertising industry such as change in clients’ and audiences’ preference on advertising platforms. The aforementioned measures allow the Group to now focus its resources on other segments of its Media Business, including the BUS-BODY Advertising and BUSINTERIOR Advertising businesses. Following the expiration of the exclusive licence in relation to BUS-BODY Advertising and BUS-INTERIOR Advertising with The Kowloon Motor Bus Company (1933) Limited and Long Win Bus Company Limited on 30 June 2020, the Group successfully obtained an exclusive licence from New World First Bus Services Limited and Citybus Limited pertaining to BUS-BODY Advertising and BUS-INTERIOR Advertising businesses for the term commencing from 1 July 2020. Whilst it is expected that Hong Kong’s economic contraction is likely to continue during first half of 2021 due to the outbreak of COVID-19 pandemic, Hong Kong’s retail sector, growth of which would benefit the overall advertising market, is expected to gradually recover starting from second half of 2021 following the launch of vaccination programme for the general public. While the Group anticipates that the customers will remain conservative on advertising spending, especially on out-ofhome (OOH) media, in the first half of 2021, The Group will strive hard to stretch the creativity on BUS-BODY as well as BUS-INTERIOR platforms in order to drive the growth of these business units. The cessation of BUS-SHELTER and BILLBOARDS advertising businesses enable the Group to focus on its existing BUS-BODY and BUS-INTERIOR advertising businesses and to seize opportunities in the future. In view of the challenges amid the COVID-19 pandemic and competitive business environment, the Group will continue to review its strategies to effectively allocate its resources and engage in active negotiations with licensors of certain licensing agreements for better terms that enable The Group’s Group’s business to remain sustainable during such unfavourable market situation. (3) Other Investments On 22 February 2019, the Group entered into the subscription agreements with BeiTai Investment Limited (an independent third party to the Company and its connected persons), being the general partner of BeiTai Investment LP (the “Investment Fund”) to subscribe for limited partner interests in the Investment Fund. The objective of the Investment Fund is to invest in debt securities or equity securities of both private and listed companies in Hong Kong or elsewhere or by investing in such other financial instruments as its general partner may determine. Such investment is a passive investment and the Group, as a limited partner, is entitled to receive distributions of the Investment Fund in accordance with the Group’s capital commitment therein, but has no right to participate in the day-today operations of the Investment Fund, nor does it have control over the management of the Investment Fund. The Group’s investment strategy in the Investment Fund would be to capture investment opportunities and increase the efficiency of its financial resources, and to generate a reasonable return for the duration of the Group’s investments in the Investment Fund. For details, please refer to the Company’s announcement dated 22 February 2019. As at 31 December 2020, the Group has made investment of HK$103.0 million (2019: HK$93.0 million) in the Investment Fund as a limited partner, which represent approximately 71.0% (2019: approximately 75.0%) of the total capital commitment of the Investment Fund. As at 31 December 2020, the underlying investments of the Investment Fund represent equity securities listed in Hong Kong and bonds issued by a corporation listed in Hong Kong (2019: equity securities listed in Hong Kong). The investment in the Investment Fund is stated at fair value and is recorded as “financial assets at fair value through profit or loss” in the consolidated statement of financial position. As at 31 December 2020, due to the overall decline in fair value of the underlying assets of the Investment Fund near the end of 2020, the fair value of Investment Fund dropped to approximately HK$95.0 million (2019: approximately HK$167.5 million), which represents approximately 15.3% (2019: approximately 15.3%) of the total assets of the Group as at 31 December 2020. During the year ended 31 December 2020, as a result of such decrease in fair value of the Investment Fund, the Group recorded an unrealised loss on financial assets at fair value through profit or loss of approximately HK$82.4 million (2019: unrealised gain of approximately HK$74.5 million) from the Investment Fund. No dividend was received from the Investment Fund for the years ended 31 December 2020 and 2019. Prospects: The impact from the COVID-19 pandemic, weak economic condition and market instability on The Group’s Group’s businesses are expected to persist for a certain period. It is expected that such business environment will weaken revenue generating activities, affect investors’ willingness to launch new asset management portfolios, and eventually affecting the profitability and financial resources of the Group. The business operations of the Group will remain challenging. The Group will cautiously monitor the development to ensure timely response to changes in market condition and development of the COVID-19 pandemic. Yet, despite these unfavourable factors, the Board is of the view that the business performance of the Group will recover gradually in 2021. The Group will strategically streamline and alter allocation of resources among business segments where appropriate and will continue to seize investment opportunities with a view to maximise returns for the shareholders of the Company (the “Shareholders”).

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