On behalf of my fellow members of the board of directors (the “Board”) of Goldin Financial Holdings Limited (the “Company” or “Goldin Financial”), I am pleased to present the annual report of the Company for the year ended 30 June 2017(“FY2017” or the “Year” or “financial year under review”).
During the Year, the Group recorded a 21.7% increase in revenue. Gross profit increased by 51.8% mainly on the back of the improved profit margin of our wines traded. Profit attributable to owners of the Company increased by 58.9% to HK$1,419.6 million for the Year from approximately HK$893.2 million for the year ended 30 June 2016 (“FY2016”).
In FY2017, the Group continued to consolidate its core business segments, and achieved steady progress. The expansion of our real estate business gathered momentum as we enhanced the Group’s portfolio of properties by having invested in a grade-A office building and developing high-end residential properties in Hong Kong. All in all, the Company has geared up for long-term growth.
REAL ESTATE BUSINESS
We achieved solid results in our real estate business for FY2017. Our investment property, Goldin Financial Global Centre, began to generate rental income. We also inlaid a second “gemstone” in our property development business by undertaking a major residential development project through a joint venture at the Ho Man Tin Station of the MTR – the Ho Man Tin Station Package One Property Development.
The strong demand for grade-A office spaces continued to drive up rentals in the core business districts in Hong Kong. Investors remained upbeat, and actively bid for sites for commercial property development in public tenders, leading to record-breaking land sales in Hong Kong’s traditional central business district in Central and the city’s second central business district (“CBD2”), which is located in Kowloon East. Corporations became more enthusiastic about relocating to CBD2 for cost-effective office expansion.
Our Goldin Financial Global Centre in CBD2 was officially opened in late October 2016. The building comprises a 27-storey grade-A office building with a three-level basement car park, and a food and dining zone for our specialty and fine dining restaurants offering exquisite Asian and Western cuisines. We aim to attract large enterprises and international corporations as tenants who may share the view that the prominent CBD2 is a good place for growth. We are optimistic that the office leasing in the Kowloon East will be promising and bring long-term success to the Group.
The Ho Man Tin district is a traditional luxury residential area with limited supply of new private housing. Our property development projects at the Sheung Shing Street and the Ho Man Tin MTR Station will become new, remarkable property developments in the area upon their completion. Moreover, the Ho Man Tin Station will be upgraded to function as an interchange station in the MTR network, and this, we believe, can result in an appreciation in the value of the properties in the entire residential neighborhood in the future. We are optimistic for the project’s contribution to the Group’s revenue in the medium term.
We had strategically entrenched our wine and wine-related businesses and made steady strides ahead in FY2017. We restructured the wine business by tying up a few loose ends and developing a new revenue stream. This has enabled us to get off to a good start in the new financial year and will add impetus to the Group’s development.
The Hong Kong Government’s policy of exempting wines from duty and the city’s Closer Economic Partnership Arrangement with the mainland have led to encouraging performance in the wine re-exports in the recent years. In the first half of 2017, China has already accounted for almost 90% of the total volume of wine re-exports in Hong Kong. Undoubtedly, Hong Kong as the gateway to wine-trading in the free trade zones of China has sustained a boom in wine business. The Guangdong province and Shanghai are the two largest entrepôts of bottled wines in China, accounting for over half of the wine imports into the country.#
# Source: China Wines Information Website
Our wine cellar in the Guangzhou Free Trade Zone which is reserved for storing our premium wines will continue to strengthen our wine-trading business and help it to tap the growing wine markets in Hong Kong and China. The Chinese government’s policy of promoting closer economic co-operation in the Guangdong-Hong Kong-Macao Big Bay Area (粵港澳大灣區) is expected to bolster business activities in the region. This development is expected to also benefit the wine-trading business. The Group’s wine business is ready to grasp opportunities for increasing its market penetration in China and Hong Kong.
Meanwhile, we strive to strengthen our global wine operations. As a first step towards the goal, we have made our specialty and fine dining restaurants at Goldin Financial Global Centre as some of our retail outlets for wines in Hong Kong. We will continue to develop our wine retail sales by increasing the proportion of our self-produced premium wines and other carefully selected labels in our offerings.
The factoring market turned out to remain highly competitive in the financial year under review. China’s commercial factoring market has been growing vigorously as the government has adopted policies that favour the development of the domestic factoring industry. Of all the types of commercial factoring for different industries in China, the one for trade finance had notable business performance. We envisage that our factoring arm, Goldin Factoring (China) Development Limited, will continue to face a highly competitive market.
To cope with the situation, we will enhance the risk management system of our factoring business, and continue to sharpen our competitive edge and grasp opportunities in both the local and international markets in the coming years.
THE WAY FORWARD
In financial year under review, we enhanced Goldin Financial’s competitive advantage by consolidating its businesses and developing new growth drivers. To cope with the volatile global economy, we will adhere to our prudent approach to business and strategic moves. As we are entering a new financial year, we will remain dedicated to maximizing returns to shareholders by exploring and grasping opportunities for further business development.
I would like to extend my sincere gratitude to my fellow members of the Board and other colleagues for their unwavering commitment to the Group’s business.
Hong Kong, 20 September 2017