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2024 Annual Report Summary

Core Content

This is the 2024 Annual Report of China Demeter Financial Investments Limited ("Company"), which is listed on the GEM (The Stock Exchange of Hong Kong Limited). The report provides an overview of the company's financial performance, business operations, and future outlook.

Main Points

1. Company Overview

• Listing: The Company is listed on GEM, a market designed for small and mid-sized companies with higher investment risks.
• Investor Notice: Prospective investors are warned about the potential for high market volatility and the lack of guaranteed liquidity in GEM-traded securities.
• Responsibility: The Directors of the Company accept full responsibility for the content of the annual report.
• Corporate Structure:
  • Executive Directors: Mr. Ng Man Chun Paul (Chairman), Mr. Ng Ting Ho (CEO), Mr. Chan Chi Fung
  • Independent Non-Executive Directors: Mr. Chan Hin Hang, Mr. Hung Kenneth, Ms. Ng Ching
  • Authorised Representatives: Mr. Ng Ting Ho, Ms. Chan Lai Ping
  • Committees:
    • Audit Committee: Mr. Chan Hin Hang (Chairman), Mr. Hung Kenneth, Ms. Ng Ching
    • Remuneration Committee: Mr. Chan Hin Hang (Chairman), Mr. Hung Kenneth, Ms. Ng Ching
    • Nomination Committee: Ms. Ng Ching (Chairman), Mr. Chan Hin Hang, Mr. Hung Kenneth

2. Financial Performance

• Revenue: For the year ended 31 December 2024, the Group recorded revenue of approximately HK$134,342,000, representing a 14.4% decrease compared to the previous year.
• Net Loss: The Group recorded a net loss of approximately HK$38,397,000 for the year, compared to HK$45,308,000 in 2023.
• Main Loss Drivers:
  • Impairment loss on property, plant, and equipment: HK$8,579,000
  • Impairment loss on loans and interest receivables: HK$2,135,000
  • General and administrative expenses: HK$122,132,000
• Offsetting Gains:
  • Loan interest income: HK$1,137,000
  • Financial services business income: HK$9,615,000
  • Fair value gain on financial assets: HK$175,000
  • Alcoholic beverage distribution and miscellaneous business: HK$673,000
  • Food and beverage business: HK$117,425,000
  • Children education business: HK$5,354,000
  • Reversal of impairment loss on trade receivables: HK$1,250,000

3. Business Performance

• Food and Beverage Business:
  • Revenue: HK$117,425,000 (down by 11.3% from 2023).
  • 11 restaurants in Hong Kong.
  • The Group focuses on residential areas and operates in major shopping malls.
  • Impairment Loss: HK$8,579,000 (up from HK$2,370,000 in 2023), mainly due to right-of-use assets related to restaurant leases.
  • The Group has conducted impairment assessments using independent valuation experts.
• Securities Investment Business:
  • The Group invests in both listed and non-listed companies.
  • Financial assets at fair value through profit or loss include shares of Hong Kong listed companies.
  • For the year, there was a fair value gain of HK$175,000, compared to a loss of HK$13,232,000 in 2023.
  • Loss from equity instruments through other comprehensive income: HK$1,489,000.
• Money Lending Business:
  • Launched in December 2013 through a wholly-owned subsidiary with a money lenders licence under the Money Lenders Ordinance (Chapter 163).
  • The business offers both secured and unsecured loans to individuals and corporations.
  • Interest rates range from 10% to 18% annually.
  • Loan Portfolio:
    • Total outstanding loans and interest receivables: HK$3.9 million
    • Personal loans: 52.4% of total loan value
    • Corporate loans: 47.6% of total loan value
    • Secured loans: 33.6% of total loan value
    • Unsecured loans: 50% of total loan count, with an effective interest rate of 15% to 18%.
    • Secured by personal/corporate guarantees: 16.7% of total loan count, with an effective interest rate of 12%.
  • The Group does not usually grant loans to connected persons.

4. Business Prospects

• The Group is aware of external challenges, including trade protectionism and slow interest rate reductions.
• These factors have contributed to market volatility and weakened consumer demand in Hong Kong.
• The Group is committed to strategic initiatives to enhance brand value and secure favorable locations for new restaurants.
• The Group plans to monitor business performance and adjust strategies to respond to market pressures.
• The Group is also seeking new opportunities in the children education sector and other diversified areas.

Key Information

• Stock Code: 8120
• Website: www.chinademeter.com
• Registered Office: Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda
• Principal Place of Business in Hong Kong: Office A01, 35/F, United Centre, No. 95 Queensway, Admiralty, Hong Kong
• Principal Bankers:
  • Bank of Communications Co., Ltd.
  • The Hongkong and Shanghai Banking Corporation Limited
  • Hang Seng Bank
• Audit Firm: Baker Tilly Hong Kong Limited, Certified Public Accountants, Level 8, K11 ATELIER, King's Road, Quarry Bay, Hong Kong

Conclusion

The report highlights the financial challenges faced by the Group in 2024, particularly in the food and beverage sector and the impact of external economic conditions. Despite these challenges, the Group remains committed to diversifying its operations, enhancing brand value, and managing risks through improvements in cost control and strategic investment decisions. The Group continues to monitor and adapt to ensure long-term sustainability and profitability.