Stock Code: 8060
http://www.glink.hk
年報2023/24ANNUAL REPORT
Global Link Communications Holdings Limited
(Incorporated in the Cayman Islands with Limited Liability)
CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE")
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This report, for which the directors (the "Directors") of Global Link Communications Holdings Limited (the "Company") collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on GEM (the "GEM Listing Rules") of the Stock Exchange for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief the information contained in this report is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this report misleading.
CONTENTS
Corporate Information | 3 |
Chairman's Statement | 4 |
CORPORATE INFORMATION
EXECUTIVE DIRECTORS
Mr. Li Kin Shing (Chairman)
Mr. Ma Yuanguang
Mr. Wong Kin Wa (Chief Executive Officer)
INDEPENDENT NON-EXECUTIVE DIRECTORS
Mr. Leung Kwok Keung
Mr. Cheung Sai Ming
Mr. Liu Chun Bao
AUTHORIZED REPRESENTATIVES
Mr. Li Kin Shing
Mr. Wong Kin Wa
COMPLIANCE OFFICER
Mr. Wong Kin Wa
COMPANY SECRETARY
Ms. Chan Wai Ching
AUDIT COMMITTEE
Mr. Cheung Sai Ming (Chairman)
Mr. Leung Kwok Keung
Mr. Liu Chun Bao
REMUNERATION COMMITTEE
Mr. Cheung Sai Ming (Chairman)
Mr. Wong Kin Wa
Mr. Liu Chun Bao
NOMINATION COMMITTEE
Mr. Cheung Sai Ming (Chairman)
Mr. Li Kin Shing
Mr. Liu Chun Bao
REGISTERED OFFICE
Cricket Square
Hutchins Drive, P.O. Box 2681
Grand Cayman KY1-1111
Cayman Islands
HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN HONG KONG
Room 3815, Hong Kong Plaza,
188 Connaught Road West,
Hong Kong
PRINCIPAL BANKERS
China Citic Bank Corporation Limited
Guangzhou Economic and
Technological Development Zone Branch
China Merchants Bank Guangzhou Long Kou Branch
Chiyu Banking Corporation Limited
PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE IN THE CAYMAN ISLANDS
Suntera (Cayman) Limited
Suite 3204, Unit 2A, Block 3
Building D, P.O. Box 1586
Gardenia Court, Camana Bay
Grand Cayman, KY1-1100
Cayman Islands
BRANCH SHARE REGISTRAR AND TRANSFER OFFICE IN HONG KONG
Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
AUDITOR
Crowe (HK) CPA Limited 9/F, Leighton Centre 77 Leighton Road Causeway Bay
Hong Kong
STOCK CODE
8060
ANNUAL REPORT 2023/24 | 3 |
CHAIRMAN'S STATEMENT
On behalf of the board of directors (the "Board") of Global Link Communications Holdings Limited (the "Company"), I would like to present the audited annual results of the Company and its subsidiaries (the "Group") for the year ended 31 March 2024 for shareholders' review.
In March 2024, the People's Republic of China ("PRC") convened the Second Session of the 14th National People's Congress and the Second Session of the 14th National Committee of the Chinese People's Political Consultative Conference. During these sessions, there was a strong emphasis on constructing a modernised industrial system, accelerating the development of new quality productivity, implementing a comprehensive strategy for national development through science and education, strengthening the foundational support for high-quality development, expanding domestic demand, facilitating a positive economic cycle, and expanding high-level international openness to foster a mutually beneficial and cooperative environment. China's gross domestic production (GDP) was RMB126 trillion in 2023 and the GDP growth reached 5.2% in 2023. The two sessions proposed main projected targets for economic and social development in 2024, including a GDP growth target of 5%.
Throughout the year, the PRC government remained committed to enhancing macroeconomic regulation and control, resulting in a steady improvement in economic performance. Emphasis was placed on driving industrial upgrading through innovation, bolstering new sources of growth for urban and rural regional development. Reforms were deepened, and efforts to expand opening up were intensified. Significant strides were made in improving the business environment, while comprehensive development of the government was reinforced, leading to a notable enhancement in governance effectiveness.
During the year, with the epidemic control measures generally lifted, socio-economic activities began to recover gradually. However, HIBOR showed an upward trend due to the impact of the significant interest rate hike in the United States, which increased the operational burden on enterprises. Also, Hong Kong people flocking to Mainland China for consumer spending, further contributed to Hong Kong's continuous economic downturn, and the slowdown in business activities in various sectors has resulted in a downward trend in demand for customer relationship management ("CRM") business in Hong Kong.
The Group is confident that through the intensified in-depth economic cooperation between the Hong Kong SAR Government and the Guangdong Provincial Government, coupled with the economic and development potential brought about by the enhanced interconnectivity among cities in the Greater Bay Area, the consolidation and integration of various industries will create more business opportunities and bring new business opportunities for the Group's CRM business.
For the urban rail transit business, the Group implemented the additional purchase of Guangzhou Metro Line 2 and the delivery of a train information system for projects such as Guangzhou Metro Line 11, Wuhan Metro Line 16, Qianchuan Metro Line, Harbin Metro Lines 1, 2 and 3, as well as the Istanbul Airport Line in Turkey. Meanwhile, by focusing on smart metro, smart operation and maintenance and unmanned driving, which are the development trends of urban rail transit, the Group continuously increased its investment in research and development and innovation in products and solutions to further enhance its competitive advantages.
I hereby would like to take this opportunity to express my sincere gratitude to all members of the Board, the management and all of our staff of our subsidiary companies. I am also thankful for the vigorous support and close collaboration of the Company's valued business partners.
Li Kin Shing
Chairman
Hong Kong, 26 June 2024
4 Global Link Communications Holdings Limited
MANAGEMENT DISCUSSION AND ANALYSIS
During the year under review, the international political landscape has remained acute. With the Russia- Ukraine war continuing unabated and armed conflict in the Middle East rekindled, the global economy suffered a severe impact due to complicated geopolitical influences. The Sino-US relations have gradually resumed high-level diplomatic interactions after the meeting of the two national leaders, but the trend of Western efforts to impede China's development has not diminished. Under the impact of the high Federal Reserve interest rate, price indicators of many countries have risen, and new investments in the capital market have dropped to a new low. Under the impact of high inflation, the prices of various industrial chains are extremely unstable. Facing the volatile global economic situation, the Chinese government has consistently adhered to the economic development strategy of "pursuing progress while ensuring stability, consolidating stability through advancement, and prioritising development before addressing problems". During the year, the Mainland China economy showed a relatively high growth rate, stable employment, low prices and basically balanced international payments. In 2023, its GDP was RMB126 trillion, representing a year-on-year growth of 5.2%.
MARKET OVERVIEW
According to the research report issued by a professional organization in China's urban rail transit industry, China's urban rail transit market remained the largest market in the world during the year under review, in which the urban rail transit with large traffic volumes remained dominant. In the recent three years, under the impact of policies and related factors, the construction of urban rail transit with low and medium traffic volumes, especially modern trams, light monorail transportation and medium- and low-speed magnetic levitation, declined sharply. Hence, the market for urban rail transit with low and medium traffic volumes was also greatly affected.
The current complicated international political and economic environment has an inevitable impact on enterprises. In terms of external environment, due to the close economic ties between Hong Kong and Mainland China, the slowdown in structural growth of the Mainland's economy and reduced business investments by domestic enterprises which have changed from a bullish to a cautious outlook have also exerted a significant impact on the Hong Kong economy. As business activities in various sectors had slowed down, the demand for CRM in economic activities of the Greater Bay Area experienced a downward trend.
BUSINESS REVIEW
Guangzhou Global Link Communications Inc. ("Guangzhou Global Link"), a subsidiary of the Group, implemented the enterprise's operating activities relating to vehicle information systems for urban rail transit under the guidance of the Chinese government's economic development policies and in accordance with the investment and project progress of rail transit in various major cities. During the year, under the signed contracts, Guangzhou Global Link implemented the additional purchase for Guangzhou Metro Line 2 and the delivery of a train information system for projects such as Guangzhou Metro Line 11, Wuhan Metro Line 16, Qianchuan Metro Line, Harbin Metro Lines 1, 2 and 3, as well as the Istanbul Airport Line in Turkey. At the same time, the delivery of spare parts was also implemented in metros of relevant cities and subsidiaries under the CRRC in various places. Smart metro, smart operation and maintenance and unmanned driving are the development trends of urban rail transit. Although enterprises' business performance has been unsatisfactory in recent years, we have continuously strengthened our investment in research and development and innovation in products and solutions to further enhance our competitive advantages. At the same time, Guangzhou Global Link continued to review and optimize its system development and uninterrupted operation and maintenance services for its product deliveries to complement the after-sales services offered by vehicle manufacturers to various railway owners.
ANNUAL REPORT 2023/24 | 5 |
MANAGEMENT DISCUSSION AND ANALYSIS
During the year, HIBOR showed an upward trend due to the impact of the significant interest rate hike in the United States, which increased the operational burden of enterprises and affected their economic development. Hong Kong people flocking to Mainland China for consumer spending during holidays, and their consumption patterns changed from confining spending in Hong Kong during the epidemic to flocking to Mainland China for consumer spending, further highlighting the predicament faced by the Hong Kong economy. The Group's CRM business was also affected by the slowdown of the Mainland economy and the downturn of Hong Kong's economy, which hindered our business development and resulted in a slight decrease in CRM revenue during the year as compared with the last corresponding period.
FINANCIAL REVIEW
Turnover
During the year under review, Guangzhou Global Link implemented the additional purchase for Guangzhou Metro Line 2 and the delivery of equipments relating to train information system for projects such as Guangzhou Metro Line 11, Wuhan Metro Line 16, Qianchuan Metro Line, Harbin Metro Lines 1, 2 and 3, as well as the Istanbul Airport Line in Turkey in accordance with signed contracts. At the same time, the delivery of spare parts was also implemented in metros of relevant cities and subsidiaries under the CRRC in various places. The sales relating to the rail transit information system for the period amounted to approximately HK $ 70,476,000, representing an increase of approximately 19% as compared with approximately HK$59,046,000 in the last corresponding period. The results of the Group's CRM business in the Greater Bay Area declined during the period. Sales of the CRM business amounted to approximately HK$63,804,000, representing a decrease of approximately 21% as compared with approximately HK$80,932,000 in the last corresponding period. During the period, the sales of the Group amounted to approximately HK $ 134,280,000, representing a decrease of approximately 4% as compared with approximately HK$139,978,000 in the last corresponding period.
Gross profit and loss attributable to equity shareholders
For the year ended 31 March 2024, the Group recorded gross profit of approximately HK$12,719,000, representing an increase of approximately 98% as compared with approximately HK$6,432,000 in the last corresponding period, and the loss attributable to equity shareholders during the year amounted to approximately HK$1,999,000, representing a decrease of approximately 83% as compared with approximately HK$11,815,000 in the last corresponding period.
Selling expenses
During the year under review, selling expenses were approximately HK$10,350,000, representing an increase of approximately 4% as compared to the last corresponding period.
Administrative expenses
During the year under review, administrative expenses were approximately HK$10,111,000, representing an increase of approximately 12% as compared to the last corresponding period.
Other revenue and other net gain
During the year under review, other revenue and other net gain were approximately HK$4,735,000, representing a decrease of approximately 18% as compared with approximately HK$5,782,000 in the last corresponding period.
6 Global Link Communications Holdings Limited
MANAGEMENT DISCUSSION AND ANALYSIS
TURNOVER BY REGION
During the year under review, train manufacturers under CRRC, railway transportation contractors and integrated project enterprises, as well as metro operators in places where projects had commenced operation, were the major customers of Guangzhou Global Link. The PRC market was the main market for train information system products and services, supplemented by overseas markets. The CRM business providing quality services for customers in telecommunications, catering and market questionnaire surveys. The CRM business of the Group is focused on customers in Guangdong Province, Hong Kong and Macau in China (the "Greater Bay Area").
The Group realized a turnover of approximately HK$128,391,000 in the PRC, representing approximately 96% of the Group's turnover for the year.
CUSTOMER ANALYSIS
The customers of the Group are mainly train manufacturers under CRRC, which are supplied with our certified and licensed train information system products. The Group also supplies technical support and operation guarantee for train operating services for various urban rail transit operators in the PRC, carries out corresponding technical cooperation and innovation at rail transit operators' requests and provides system software and hardware upgrades, spare parts and accessories at the same time. The Group also supplies system solutions, product support and operating after-sale services for rail transit operators in, among others, Hong Kong, Malaysia and Turkey.
The customers of the CRM business mainly include telecommunication, catering, market research companies and instant messaging service platforms with demands for the CRM business.
BUSINESS PARTNERS
The business partners of the Group are mainly train manufacturers under CRRC, which are supplied with our certified and licensed system products, innovation system components, modules, hardware and software research and development and technical support and cooperation for the trial production of new trains. We have established and maintained long-term good partnership with systems integrators, as well as renowned train manufacturers and local enterprises, project construction companies and rail transit operators in Hong Kong and abroad.
Major business partners on the CRM business include companies with demands for the CRM business in Mainland China and Hong Kong, such as a telecommunication service provider in Guangdong Province, a well-known catering company in Hong Kong and a telecommunication operator in Hong Kong.
ANNUAL REPORT 2023/24 | 7 |
MANAGEMENT DISCUSSION AND ANALYSIS
CAPITAL STRUCTURE
There has been no material change in the capital structure of the Group since the last accounting year.
The Group carried out prudent financial policy with surplus cash deposited in bank to finance operation and investments. Management will review financial forecast on a regular basis. As at 31 March 2024, the Group had total time deposit, cash and cash equivalents, amounting to approximately HK$86,061,000 (2023: approximately HK$87,062,000).
BUSINESS OUTLOOK
The rail transit in the Chinese market has witnessed nearly 20 years of tremendous investment and high- speed development. China has correspondingly promulgated a number of policy guidelines and norms according to the financial, transport capacity and construction benefits of various regions, and the planning and construction policies are increasingly tightened, and the approval of cities applying for the construction of urban rail transit has been gradually slowed down. In the last two years of the "Fourteenth Five-Year" plan, the approval of new investment projects still shows an inevitable continuous tightening trend. During this period, trains that have been in operation for over 10 years in various central cities will gradually enter the stage of interim maintenance and general overhaul, which will bring certain market opportunities to enterprises in the industry.
The Company is confident that the economic and development potential brought about by the increased city interconnectivity in the Greater Bay Area, and the consolidation and integration of various industries will create more business opportunities and we expect to select the most effective solution among the numerous business opportunities, bringing new development opportunities for the Group's CRM business. The Company actively participates in the integration activities of various industries, and designs and provides all-round quality services to its customers with a customer-centric approach, which enables the Group's CRM business to embrace more diversified development.
LIQUIDITY AND FINANCIAL RESOURCES
As at 31 March 2024, the Group had net current assets of approximately HK $ 82,072,000 (2023: a p p r o x i m a t e l y H K $ 8 3 , 8 0 4 , 0 0 0 ) , o f w h i c h a p p r o x i m a t e l y H K $ 8 6 , 0 6 1 , 0 0 0 ( 2 0 2 3 : a p p r o x i m a t e l y HK$87,062,000) were time deposit, cash and cash equivalents. The Directors are confident that the Group's existing financial resources will be sufficient to satisfy its commitments and working capital requirements.
TREASURY POLICIES
The Group adopts a conservative approach towards its treasury policies. The Group strives to reduce its exposure to credit risk by performing ongoing credit evaluations of the financial conditions of its customers. To manage liquidity risk, the Board closely monitors the Group's liquidity position to ensure that the liquidity structure of the Group's assets, liabilities and commitments can meet its funding requirements.
8 Global Link Communications Holdings Limited
MANAGEMENT DISCUSSION AND ANALYSIS
CHARGE ON THE GROUP'S ASSETS
The Group had no charge on its assets for the year under review.
MATERIAL ACQUISITIONS, DISPOSALS AND SIGNIFICANT INVESTMENTS
The Group did not have any material acquisitions, disposals and significant investments during the year under review.
GEARING RATIO
Gearing ratio is calculated as the net debt (being total borrowings less bank and cash balances) divided by the total capital. As at 31 March 2024, the Group had time deposit, cash and cash equivalents of approximately HK$86,061,000. As at 31 March 2024, the Group had total borrowings of approximately HK$5,922,000, and the total equity attributable to equity shareholders of the Company was approximately HK$80,355,000, therefore, the gearing ratio of the Group was negative, hence the Group' the gearing ratio was not applicable (2023: Not applicable).
FOREIGN EXCHANGE EXPOSURE
The Group exposes to certain foreign currency risk primarily with respect to Renminbi and Hong Kong dollars. No hedging or other alternatives have been implemented. The Group will continue to monitor its exposure closely and take measures to lower the foreign currency risk when necessary.
PUBLIC FLOAT
Based on information that is publicly available to the Company and within the knowledge of our Directors as at the latest practicable date prior to the issue of the annual report, the Group had maintained sufficient public float in accordance with the GEM Listing Rules throughout the year.
SEGMENT INFORMATION
Segment information of the Group is set out in note 8 to the consolidated financial statements.
ANNUAL REPORT 2023/24 | 9 |