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Public company info - South China Assets Holdings Limited , 08155.HK

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South China Assets Holdings Limited, 08155.HK - Company Profile
Chairman NG Hung Sang Robert
Share Issued (share) 11,178,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Property Development
Corporate Profile Business Summary: The principal businesses of the Group include property development and financial services. Performance for the year: For the Year, the Group recorded revenue of approximately HK$5.6 million, representing a decrease of approximately 70.5% comparing with that of approximately HK$19.0 million in 2019. There was a profit attributable to the equity holders of the Company for the Year of approximately HK$31.9 million (year ended 31 December 2019: loss of HK$18.9 million) which was mainly due to gains from disposal of certain financial assets. Business Review: The Group’s main businesses are: (i) property development and property project management services in the PRC; (ii) provision of financial services in Hong Kong (subsidiaries of the Company are licensed to carry out types 1, 2, 4, 9 regulated activities under the Securities and Futures Ordinance, Cap. 571 of the Laws of Hong Kong, and to provide money lending services under Money Lenders Ordinance, Cap. 163 of the law of Hong Kong); and (iii) the sale of face masks and related products. The review of the principal business segments of the Group during the Year is as follows: (a) Property development During the Year, revenue attributed to the property development business was approximately HK$1.3 million which was derived from the provision of comprehensive management services of a property project in Tianjin. No revenue from sale of property was recognized. (b) Financial services This segment covers a wide range of financial services including but not limited to investment advisory services, money lending and wealth management. During the Year, the Group had revenue of approximately HK$1.9 million (year ended 31 December 2019: approximately HK$1.7 million) in this segment. The Group’s strategy is to build up a “one-stop financial services center” offering customers a diverse range of financial services. No revenue from rendering investment advisory services was recorded during the Year (year ended 31 December 2019: HK$0.6 million) due to poor market sentiment attributable to COVID-19. The Group also carries out money lending business covering personal loans, tax loans, small business loans, specialised lending loans and debt consolidation loans. During the Year, the Group had revenue of approximately HK$1.9 million (year ended 31 December 2019: approximately HK$1.1 million) in this business and the gross loan portfolio of the money lending business amounted to HK$13.4 million as at 31 December 2020. The Group on the one hand adopted a more prudent approach under the unstable market sentiment attributable to COVID-19 by tightening its credit approval of new loan and loan refinancing applications, but on the other hand it strengthened its debt collection functions for minimizing credit risk. The Board considered that the key risk exposures of the Group’s businesses under this segment are market risk and credit risk. In addition, the Group did not take trade positions to minimize its exposure to price risk and foreign exchange risk. (c) Sales of face masks and related products The Group commenced its business in manufacturing and sales of face masks in the second quarter of 2020. During the Year, revenue from this segment amounted to approximately HK$2.5 million with a segment loss of approximately HK$1.5 million which was mainly due to starting cost including testing and accreditation fees. INVESTMENT PORTFOLIO The Group’s investment portfolio consists of ordinary shares and redeemable convertible preference shares (“RCPSs”) of South China Holdings Company Limited (“SCHC”), which are presented under financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income respectively. SIGNIFICANT INVESTMENTS The Group’s investment portfolio consists of Ordinary Shares and Redeemable Convertible Preference Shares (“RCPSs”) of SCHC, which are presented under financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income in the consolidated statement of financial position respectively. During the year ended 31 December 2020, the audited comprehensive income attributable to owners of the Company from the net fair value change recognized for the Group’s significant investments as listed above amounted to approximately HK$30.6 million. During the year ended 31 December 2019, the audited comprehensive income attributable to owners of the Company from the net fair value change recognized for the Group’s significant investments as listed above amounted to approximately HK$19.4 million. Prospects: The Board believes it is the best interest of the Group to continue consolidating its existing financial services, expanding the scope of property development businesses by providing property project management services and diversifying into new businesses such as face mask production which is expected to produce steady income stream. (a) Property development business Zhongjie Project Planning works of phase 2 of the project, which consists of 2 complexes, were commenced in the first quarter of 2020. The construction works of the first complex started in November 2020 subsequent to issuance of construction works commencement permit by the local authority in October 2020, and the main construction works are expected to be completed at about the end of 2021. Pre-sale of the premises of the first complex has been taken place since December 2020. Huanghua Project Huanghua New City has been more mature recently in terms of erection of a number of residential complexes and other community facilities, e.g. hospital, apart from the operation of a hi-speed train station in about two years. Huanghua Project has 2 phases. Given the satisfactory economic parameters including demographic condition, the planning works of phases 1 have started since October 2020 and the construction works are expected to be commenced in about the second half of 2021 and to be completed by the end of 2023. Xiazhuzhuang Project The project has two development phases which consists of industrial complexes and ancillary offices. The planning work of phase one is expected to be commenced in the second half of 2021. Property Project Management The Group has been engaged in providing management services to 2 property development projects in Tianjin and Nanjing. (b) Financial services business The Group has identified wealth management services e.g. funds, bonds and insurance, as an additional main business apart from brokerage. The Group has focused its investment in engagement of several teams of relevant and experienced personnel for achieving business targets. Due to the force majeure event of outbreak of COVID-19, the Group’s risk management has been tightened aiming at minimizing key risks through clearly defined terms of business with customers, stringent investment and credit control over transactions with customers, and regular monitoring of cash flow. (c) Face mask business In view of the significant surge in demand for face masks due to the pandemic, the Group established a new business line of face mask to meet the demands in Hong Kong and overseas in the second quarter of 2020. The Group is able to produce a maximum of approximately 80,000 units of qualified face masks per day to its clients, which are being sold both online and offline sales points. As the face mask business remains in the initial stage, the Group keeps its product development and diversification for market penetration and development respectively by means of continuous automation upgrade, strengthened R&D capabilities and stringent cost structure in both raw materials and labour. Looking forward to 2021, the global market will continue being shadowed by economic, political and public health risks, including the US-Sino trade war and the pandemic that will cast impact on every business sector of the world, which in turn will affect the global economic growth. Despite the foregoing challenges, the Board believes that business opportunities are always available. The Group will be cautious in capital allocation in its businesses and in any other business sector which is expected to bring positive impact on the Group’s profitability and cash flow, and in turn would be beneficial to its shareholders.

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