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Public company info - Realord Group Holdings Ltd. , 01196.HK
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Realord Group Holdings Ltd., 01196.HK - Company Profile
Chairman Lin Xiaohui
Share Issued (share) 1,438,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Environmental Goods
Corporate Profile Business Summary: The Group is organised into business units based on their products and services and has six operating segments as follows: (i) provision of financial printing, digital printing and other related services (“Commercial Printing Segment”); (ii) sales of hangtags, labels, shirt paper boards and plastic bags principally to manufacturers of consumer products (“Hangtag Segment”); (iii) distribution and sale of motor vehicle parts (“Motor Vehicle Parts Segment”); (iv) provision of corporate finance advisory, asset management, securities brokerage services, margin financing and money lending (“Financial Services Segment”); (v) property investment, development and commercial operation (“Property Segment”); and (vi) environmental protection industry, mainly dismantling and trading of scrap materials (“Environmental Protection Segment”). Performance for the year: During the year under review, the Group recorded a total revenue of approximately HK$869.3 million, representing an increase of approximately 4.9% as compared to that of the last year of approximately HK$828.9 million. The Group recorded a profit of approximately HK$892.3 million for the year as compared to that of a loss of approximately HK$404.7 million for the last year. Business Review The Property Segment The revenue of the Property Segment was mainly generated from the rental income of the Group’s investment properties. In FY2019, the Group generated aggregate rental income of approximately HK$10.6 million, while in FY2020 the revenue from this segment recorded a gentle increase to approximately HK$10.9 million, representing a year-on-year increase of 3.0%. During the year under review, the Group offered a rent reduction period to tenants in the PRC following the outbreak of COVID-19. However, the increase in the number of tenants in, and hence the rental income from Realord Villas outweighed the effect of such rent reduction. The Property Segment recognised a significant growth in segment profit by approximately 28 times on a year-on-year basis, whereby a segment profit of approximately HK$2,050.8 million was generated in FY2020 as compared to that of approximately HK$73.3 million recorded in FY2019. The increase was mainly due to the overall revaluation gain of the Group’s investment properties of approximately HK$2,463.4 million during FY2020 (FY2019: revaluation loss of approximately HK$202.6 million). The net increase in the fair value of investment properties of approximately HK$2,463.4 million for FY2020 was mainly attributable to an appreciation in value of the Qiankeng Property of which the approval in principle in respect of the proposed urban redevelopment plan thereon involving a change in land use from industrial to residential use was granted by the relevant government authority in August 2020. Apart from that, the property market in the PRC was relatively stable following the recovery of economy of the PRC from the COVID-19 pandemic whereas the property market in Hong Kong experienced a slight decline as affected by the prevailing COVID-19 pandemic during FY2020. The gain on re-measurement of previously held interests in an associate of approximately HK$709.4 million as recorded were not recurred in the FY2020. The Financial Services Segment The revenue from the Financial Services Segment reached approximately HK$82.1 million in FY2020, which was doubled from that of approximately HK$40.9 million in FY2019. The significant growth was mainly attributable to (i) the consolidation of full year results of Optima Capital Limited (“Optima Capital”) in FY2020 as compared to that of eight-month results in FY2019 since the completion of the acquisition of 60% issued share capital thereof in April 2019; and (ii) the Group’s provision of more comprehensive services to its customers, such as placing agent, underwriting services as joint bookrunner of certain initial public offering (“IPO”) projects as well as margin financing services and money lending. The segment recorded an operating profit of approximately HK$6.1 million for FY2020 as compared to that of approximately HK$12.6 million in FY2019. The decrease in profit was mainly due to the provision for expected credit loss of approximately HK$22.5 million in FY2020 as compared to that of reversal of provision for expected credit loss of approximately HK$3.4 million in FY2019. The significant increase in the provision was mainly attributable to the commencement in provision of money lending services to individuals in FY2020. The Group, together with 5 other independent third parties, had also applied for the approval from the China Securities Regulatory Commission (“CSRC”) of the establishment of a security company in Guangzhou Pilot Free Trade Zone, which is currently under review of CSRC. The Company will update the shareholders with the progress of the application when and as appropriate. The EP Segment Since tightening control policy implemented by the PRC government continued in FY2020 in relation to imports of scrap materials, the Group persisted its strategy to establish its solid scrap material sourcing and processing operations overseas, including Malaysia and Japan. During FY2020, revenue from the EP segment reduced by approximately 8.1% to approximately HK$544.1 million (FY2019: approximately HK$592.2 million). It was mainly attributable to an overall drop in copper price throughout the year and lockdown of cities in the PRC, Malaysia and Japan following the outbreak of COVID-19, which limited the sales activities of the Group in FY2020. The operating profit for the EP Segment for the year also reduced by approximately 70.9% to HK$13.0 million from that of approximately HK$44.7 million recorded in the previous year, which was mainly attributable to the high startup and production cost incurred by Realord Environmental Protection Japan Co. Limited (“Realord EP Japan”) and the decline in copper price during the year under review. The MVP Segment Despite the outbreak of COVID-19 pandemic, the MVP Segment maintained a stable supply to its customers, which was benefited by the Group’s efforts on securing its motor vehicle parts supply since late FY2019. As a result, the revenue of MVP Segment raised by approximately 48.8% in FY2020 to HK$159.3 million (FY2019: HK$107.0 million). Notwithstanding the increase in revenue, the profit was decreased from approximately HK$10.1 million in FY2019 to approximately HK$6.4 million in FY2020. It was mainly due to the reversal of provision of expected credit loss of HK$7.0 million in FY2019 resulting from better credit control exercised on receivables collection in FY2019, of which the effect was not recurred in FY2020. The Commercial Printing Segment The uncertain business environment caused by the outbreak of COVID-19 pandemic in FY2020 has adversely affected the capital market sentiment, and hence reduced the demand for the group’s services, which hindered the business development efforts of the Group to improve its profitability. As such, the revenue from the Commercial Printing Segment decreased by approximately 6.6% to approximately HK$72.7 million in FY2020 (FY2019: HK$77.9 million). The Group maintained a marginal operating profit of approximately HK$0.4 million in FY2020 (FY2019: HK$0.7 million). The Hangtag Segment The revenue contribution of the Hangtag Segment to the Group was relatively minimal at approximately HK$0.2 million in FY2020 (FY2019: HK$0.3 million). The operating loss derived from this segment was relatively minimal during both years of FY2019 and FY2020. Others The Group invests in listed securities in Hong Kong for trading purpose and other club and school debentures in Hong Kong. As at 31 December 2020, the financial assets at fair value through profit or loss amounted to approximately HK$15.3 million. The total net realised gain on the disposal of financial assets at fair value through profit and loss amounted to approximately HK$2.8 million for FY2020. Prospects: The outbreak of COVID-19 started from early 2020 and the prevail of the pandemic throughout the year has proved to cast unprecedented impacts and disruptions on business sentiments and financial markets worldwide. Although there were signs showing that the global economy has been slowly emerging from the collapse triggered by COVID-19 pandemic, the recovery in 2021 is likely to be prolonged and subdued given the arise of variants of the epidemic and pandemic control may pose uncertainties. Moreover, the stance on China-US relations under the new United States administration is yet to be indicated after the completion of the United States presidential election in late 2020. The Group believes that the relatively volatile business environment due to the prolonged pandemic will continue to affect the Group’s businesses to certain extent in 2021. Nonetheless, the Group remains cautiously optimistic towards the post-pandemic rebound as a result of new and stronger initiatives to combat the COVID-19 pandemic, such as the emergence of vaccines and more stringent controlling measures carried out in different countries. Amidst the potential uncertainties due to the global pandemic and China-US tensions, the Group is optimistic that there are still ample development opportunities for its various business segments in 2021. The Group will continue to adopt a prudent approach in achieving steady business development while exploring suitable strategic investment opportunities with an aim to maximise the returns to its Shareholders.

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