During the year, the Group achieved full-blown business growth with revenue soaring by 183.8% to approximately HK$2,825.3 million (2016: HK$995.6 million). Gross profit improved by a marked 84.1% to approximately HK$871.3 million (2016: HK$473.4 million). Profit attributable to owners of the Company rocketed by 86.3% to approximately HK$869.2 million (2016: HK$466.6 million). The increase was mainly due to the Group's (1) gain on bargain purchase of a newly acquired subsidiary and recognition of sales of its completed properties; (2) an increase in gain from short-term securities investment; (3) an increase in dividend income; which was offset by (a) a decrease in fair value gain of investment properties; (b) an increase in distribution costs and administrative expenses due to enlarged group size; (c) an increase in finance costs and (d) share of losses of associates.
The Board recommends payment of a final dividend of HK$0.51 cents per share (2016: HK$0.32 cents).
Mr. Li Minbin, Executive Director of China Goldjoy, said, "With the launch of the Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and Bond Connect one following the other, the capital markets of the PRC and Hong Kong are effectively interconnected. We have successfully seized business opportunities brought by the PRC market, as well as the economic restructuring and upgrade in progress in the country. With the management team affording forward-looking strategic deployment, the Group recorded satisfactory performances in the annual results of all its business segments."
AutomationThe automation business recorded a stable increase in revenue of 10.7% to HK$613.0 million (2016: HK$553.7 million), accounting for 21.7% of the total revenue of the Group (2016: 55.6%). Capable of constantly providing advanced products and quality services to meet the needs of customers, the Group has seen its advantages in the industry strengthening continuously.
Financial ServicesRevenue from the financial services segment significantly increased by 71.5% to HK$145.8 million, accounting for 5.2% of the Group total. The Group has reached deeper into the innovative financial technology field and expanded its mobile service platform, allowing it to reap better synergies through cross-selling. During the year, the global financial markets made good progress. In particular, the Hong Kong capital market, stimulated by the soaring popularity of new economy shares and stocks, managed a handsome upswing. With the participation of PRC funds and insurance funds, revenue and profit of the business segment increased accordingly.
ManufacturingRevenue from the manufacturing segment doubled to HK$122.9 million (2016: HK$58.1 million), accounting for 4.4% of the Group total (2016: 5.8%). The segmental revenue comprised revenue of HK$120.7 million (2016: HK$37.4 million) from the new energy industry and the Light Emitting Diode ("LED") manufacturing business. Apart from LED light installation work in the private sector, the Group has been actively undertaking LED lighting projects in the public sector in the PRC, including the project of "Landscape Lighting for One River, Two Coasts and Three Belts of Guangzhou", which was widely recognized in the industry.
Property Investment and DevelopmentRevenue from the property investment and development segment amounted to HK$1,412.7million (2016: N/A) for the year, contributing 50% of the Group's total revenue. The Group holds a number of properties in Hong Kong, some of which in Lippo Center in Admiralty, where the headquarters of the Group is also located, otherwise they are held as investment properties. Benefiting from the continuous increase in real estate prices in Hong Kong, rental revenue from the Group's investment properties in Grade A commercial buildings has also risen steadily.
Shenzhen B&K New Energy Co., Limited ("Shenzhen B&K"), 75.5% held by the Group, has not only provided the Group with additional resources and support for the development of new energy and LED lighting business, but has also provided the Group with opportunities to participate in property investment business in the PRC. Shenzhen B&K holds a piece of land with a gross floor area (GFA) of approximately 114,500 square meters (sq. m) and with buildable GFA of approximately 427,000 sq. m. in the core area of Shenzhen Guangming New District. The Group has successfully established the project as a large-scale innovative science park attractive as a base for many science and technology enterprises.
During the year, the Group established its first apartment brand through its subsidiary Shenzhen Bangkai Commercial Property Co., Limited. Applying its edge in sectors such as finance, commerce, culture and science and technology, the Group has been able to use its capital, global resources as well as comprehensive strengths to develop technology industry parks. With innovation and being able to integrate resources, it has opened a new path in the leasing market and provided to the market an example for how to effectively transform and upgrade stock properties in industrial parks.
Furthermore, the Group acquired Laihua Tai Sheng Limited ("Laihua Tai Sheng") in December 2017 which holds a real estate project in Ganzhou City, Jiangxi Province. The project occupies an area of about 128,000 sq. m with total GFA of about 635,000 sq. m. for residential, commercial, hotel and office uses.
Securities InvestmentRevenue from the securities investment segment climbed 77.7% to approximately HK$530.9 million (2016: HK$298.8 million), accounting for 18.8% (2016: 30%) of the total revenue of the Group. In the hope of seizing investment opportunities in economic restructuring and upgrade and technological innovation, as well as establishing cooperative relations with relevant parties, the Group has invested in listed companies focusing on livelihood and high-end consumption and have potential and high growth capacity in the PRC, Hong Kong and overseas . In addition to holding shares of listed companies traded on the Hong Kong Stock Exchange, the Group has invested in a number of leading overseas technology companies, specializing in biometric security, wireless data transmission and communications technologies.
With the business transformation completed, the Group is poised to expand its businesses actively and achieve business diversification. To this end, during the year under review and as at the date of this press release, the Group had successfully raised capital of approximately HK$2,300 million. Apart from repaying bank loans and for use as general working capital, most of the fund raised will be spent on expanding existing businesses including allocation of additional resources to areas such as financial services, property investment and development as well as securities investment with the objective of achieve more significant business growth. The Group has also been actively seeking suitable investment opportunities that can benefit from its business advantages so as to open up more future business possibilities for it.
In view of the strong growth potential of the financial services market in the Greater China region and also the increase in interest to invest in the Hong Kong financial market through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect in the PRC, Goldjoy Holding Limited ("Goldjoy Holding"), a subsidiary of the Group which holds major securities business licenses, will promote its corporate finance services in Hong Kong. Moreover, to capture the immense opportunities arising from the "One Belt, One Road" initiative, Goldjoy Holding plans to establish footholds in Beijing and Nanning, Guangxi in 2018 with the aim of opening markets in Eastern, Northern and Western China.
Also, the Group will continue its efforts in enriching and optimizing its business portfolio as well as enhancing its sales and trading capacity to provide customers with more comprehensive and diversified financial services. As for bond related services, the Group is committed to providing better services to its corporate and government clients in the PRC and Hong Kong. Benefitting from the intense attention of mainland investors on the Hong Kong financial market, the trading volume and number of new customers of the financing services business of institutional clients increased significantly. The Group will strive to expand its debt financing and merger & acquisition transaction businesses in the future.
As for the automation segment, the demand for new automated production lines from the electric vehicle manufacturing industry, 5G wireless communication technology business and consumer electronic products is expected to keep increasing. Therefore, the Group is cautiously optimistic about the growth of the automation business. Furthermore, the Group will continue to actively develop its automation businesses in the direction of linking it with financial leasing industry and financial market, and the provision of financial leasing services for high-end manufacturing and large-scale equipment, which can in turn boost the scale and competitiveness of the business. Moreover, the Group will seize the opportunities presented by the manufacturing industry in the PRC embracing intelligent and high-end development to enlarge its market share and turn the business into a steady revenue source for the Group.
The prospects of the LED lighting business are optimistic, and performance of the business is expected to keep improving. And, with leading R&D and manufacturing capabilities and on the back of intensive promotion by the Group, the business expects orders from both the domestic and oversea markets to increase in foreseeable future.
As the real estate market in the PRC remains favorable, the Group will continue to capture investment and development opportunities in the property market there and in Hong Kong, and position the property development and investment business as one of its major focuses. The Group's B&K Town in Guangming, Shenzhen will be built in three phases. Phase I, which covers a GFA of approximately 100,000 sq. m., comprises rental housing leased during the year. The Group's first rental apartment brand "All Inn" launched 1,000 units of "Joyful Talent Apartments" which are smart community style of apartments centrally managed and offers comprehensive life services and interaction platforms for tenants. The office buildings in Phase II, covering a GFA of approximately 87,000 sq. m, are expected to start operation in mid-2018. Phase III, covering a GFA of about 240,000 sq. m, which development plans consist of offices and apartments for high-end talent as well as commercial auxiliaries and provisions for international conferences, is still being developed at good pace. As for Laihua Tai Sheng, which holds the property development project "Century Plaza", it is expected to bring benefit to the Group from value growth and the sale and leasing of the properties, and also present the business with strong growth momentum.
Moreover, the Group has been actively striving to align its strategy with China's "One Belt, One Road" strategy, by such as expanding markets in South Asia and Southeast Asia to take its business international. In February 2018, the Group established a joint venture with companies including Yunnan Energy Investment (HK) Co. Limited ("Yunnan Energy"). The joint venture will invest in projects in relation to clean energy, finance and health, investment management, development of new energy and financial services. Yunnan Energy Investment Group is a major state-owned enterprise in Yunnan and owns 100% of Yunnan Energy. Leveraging Yunnan Energy Investment Group's state-owned background and industrial background, the Group shall be able to enter the electricity and new energy sectors. It will also help broaden the Group's industrial chain and establish a foundation of cooperation for the Group with other major state-owned capitals in the future.
Mr. Li added, "Going forward, we will pay close attention to market conditions, but we remain optimistic about the capital market, and will continue to look for investment opportunities in financial services, properties investment and development, the high-end manufacturing industry, as well as new energy and new technologies to the aim of generating outstanding returns for shareholders."
About China Goldjoy Group Limited (HKEX: 1282)China Goldjoy Group Limited, established in 2009, was listed on the Main Board of The Stock Exchange of Hong Kong Limited on 15 December 2010 (Stock code: 1282). The Group has been successful in transforming its business achieving high value enhancement and diversification in the past few years, with main emphasis on integrated financial services, asset management, emerging industries and investment in and development of properties.
Through its subsidiaries, the Group offers securities, futures, precious metals trading, asset management, wealth management, corporate finance and credit financing services in Hong Kong, and asset management, investment management and financial leasing services in Mainland China. Property investment and development is also one of its major businesses, so it can make better use of existing resources to expand income source and improve its financial status. At the same time, to grasp business opportunities in emerging industries, the Group is actively developing new energy and energy-saving lighting, automation and smart manufacturing businesses.
China Goldjoy made it into the MSCI China Small Cap Index in 2017 and is also a constituent of several Hang Seng indexes, including the Hang Seng Internet & Information Technology Index, Hang Seng Global Composite Index, Hang Seng Composite Index Series - Hang Seng Composite Index, Hang Seng Composite Industry Index - Information Technology, Hang Seng LargeCap & MidCap Index, Hang Seng MidCap & SmallCap Index and Hang Seng MidCap Index. The Group is also one of the eligible equities in the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect schemes.
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