(25 March 2024) Realord Group Holdings Limited (the “Company”, together with its subsidiaries, the “Group”, stock code: 1196) is pleased to announce its annual results for the year ended 31 December 2023. During the period, the Group recorded a total revenue of approximately HK$801 million, representing a year-on-year and gross profit was HK$319 million, representing a year-on-year increase of 11.1%; profit for the Year and the profit attributable to shareholders of the company were HK$41.3 million and HK$76.7million respectively. Earnings per share for the Year was HK 5.32 cent.
Business Review
The principal activities of the Group during the year included the Property Segment, the Financial Services Segment, the Environment Protection (EP) Segment, the Motor Vehicle Parts (MVP) Segment, the Commercial Printing Segment, the Department Store Segment, the Latin American and Caribbean (LAC) Segment, and Others Segment.
Property investment Segment
Properties investment, development and commercial operation have always been one of the main development strategies of the Group’s overall business deployment and development goals. The Group holds three investment property projects, namely Realord Villas and Zhangkengjing Property in Longhua District, and Realord Technology Park in Guangming District in Shenzhen, the PRC. The Group also holds proposed development project and properties under development namely Laiying Garden in Nanshan District and Qiankeng Property in Longhua District respectively in Shenzhen, the PRC. There are five property projects on hand as at 31 December 2023. There are five real estate projects in hand. Revenue from the property segment is mainly derived from rental income from the Group's investment properties. In 2023, the Group generated approximately HK$19.3 million in rental income, representing a year-on-year increase of 33.1%. The number of tenants in the Sincere Mall has increased to 50. During the year, the property segment recorded a segment profit of HK$782.5 million. The segment result was mainly resulted from the net gain on fair value changes in the investment properties of HK$1097.8 million and reversal of provision for properties under development of the Qiankeng Property of HK$62.1 million.
Firstly, for Realord Villas, up to the date of report, the number of tenants of Sincere Mall increased to 50 including children’s amusement park, education training centres, restaurants, fitness studios and billiard room. Secondly, for Realord Technology Park, with total construction scale of approximately 81,000 square meters. [For Phase I, a lease agreement was signed with hotel operator who had international hotel brands operating experience under a lease term starting from Year 2024.] For Phase II, the development plan will be started once government approval is granted. Thirdly, for Qiankeng Property, the construction scale is approximately 112,000 square meters and the redevelopment works are processing since the Group obtained the construction permit from relevant government authorities in October 2023. Fourthly, for Zhangkengjing Property, the application of change of land use from industrial use to residential apartments and commercial use is still under review as at the reporting date. Fifthly, for Laiying Garden, the Group obtained the land use permit from relevant government authorities in July 2023 and the redevelopment work is expected to be commenced once permits from relevant government authorities are granted.
Financial Services Segment
Financial Services Segment generated a revenue of HK$142.5 million in FY2023, which increased 13.3% and segment profit of HK$75.7 million. The financial services segment is committed to providing customers with diversified and high-quality services in the primary and secondary markets. Interest income from money lending business and margin financing continued to rise, driving the financial services category to achieve steady growth despite the sluggish market conditions. In addition, the new mobile trading system brings customers a fast and stable trading experience, helping to enhance brand awareness. The financial services category will continue to develop various investment products to meet market needs and provide customers with diversified high-quality services in the international capital market. At the same time, the financial services category is also actively preparing to launch dark pools and US stock trading systems, and is expanding its sales and business teams to support business development.
EP Segment
EP Segment’s revenue recorded HK$357.8 million in FY2023 due to stricter credit control and the significant decrease in copper demand from customers in FY2023 as the copper price from suppliers still maintained a high level after the first quarter of 2023.
MVP Segment
The revenue of MVP was HK$43.1 million in FY2023 since the market of the Mainland China experienced a slow and uncertain recovery and stricter credit control. Due to the slow and uncertain recovery in market of the Mainland China, the demand for motor vehicle parts was adversely affected in FY2023. The Group has downsized its scale of operations in order to minimize the operating costs. In order to maintain sustainable growth in business, the Group has to further strengthen its relationship with existing suppliers and explore new customer bases.]
Commercial Printing Segment
The Commercial Printing Segment's revenue recorded HK$54.7 million in FY2023. Due to the slow down of financial markets in Hong Kong, there was decrease in demand of commercial printing services. Though the Group has downsized its scale of operations in order to minimize the operating costs. In order to maintain sustainable growth in business, the Group has to further strengthen its relationship with existing customers and explore new customer bases.
Department Store Segment
During FY2023, the Department Store Segment recorded a segment revenue of HK$145.6 million. The improvement of gross profit margin was increased from 55.9% to 57.4%. During FY2023, due to the gradual recovery of economic activities in Hong Kong and the full resumption of normal travel implemented in February 2023 between the Mainland China and Hong Kong, the Department Store Segment could maintain its revenue even after one of the stores closed in late 2022. The improvement in revenue of the remaining stores covered the loss of revenue from the closed store. However, the increased trend of online behavior of the customers limited limited the effect of recovery and hence hinder the performance of our department store operation. In view of improving the segment performance, the Department Store Segment continued to adopt pro-active measures to reduce operating costs; to negotiate with the landlords for rental concession; to reassess the profitability of stores and the products portfolios. To maintain a healthy inventory level, the clearance of out-of-season inventories continued to be major goal of the Department Store Segment during FY2023.
LAC Segment
The revenue of LAC Segment generated from citizenship application and consultancy services on citizenship by investment programme (“CBI Programme”) was HK$34.8 million in FY2023. The increase in revenue was resulted from the applications of the client’s citizenship had been approved by the Minister as set out in Section 8(1) of the Grenada Citizenship by Investment Act 15 of 2013.
The principal business of LAC Segment are provision of citizenship application and consultancy services on CBI Programme and development of the Grenada Project. The Grenada Project involves the development of a mixed property project consisting educational facilities, apartments for student, residential villas, hotel and resort facilities, commercial development and shopping facilities and in a longer plan university establishment(s) and related amenities. The Government of Grenada granted LAC Segment the “Approval Project Status” such that LAC Segment can develop the Grenada Project on foreign investors’ funding in accordance with the local laws under Section 11 of the Grenada Citizenship by Investment Act 15 of 2013 and a CBI Programme in Grenada. Through the CBI Programme, LAC Segment is authorised to raise capital from investors of the Project for funding the construction and development costs. Qualified investors of the real properties will be granted permanent Grenadian citizenship and a passport offering visa-free travel to over 153 countries including the United Kingdom, EU Schengen countries and the Mainland China. The Project marks a significant flag of our Group into the Caribbean region.
The Group is keen to leverage its experience in the Grenada Project to explore further investment opportunities around the Caribbean economic zone and Latin American region. The Group has further targeted to invest in four other Caribbean countries, namely Antigua and Barbuda, Saint Lucia, Saint Kitts and Nevis, and Dominica. These four countries, together with Grenada (altogether, the “Designated Caribbean Countries”), were ranked top five popular investment destination by CBI Programme by the magazine “Professional Wealth Management” published by “Financial Times” in 2021.
Other than the Grenada Project, the Group is also in negotiation with the authorities of the Republic of Panama on a power generation project to be granted under the foreign investors investment scheme of the Republic of Panama. As seen, it is the corporate strategy of the Group to invest and/or to form joint ventures with local governments in the targeted countries to set up and develop new businesses taking advantage of raising capital from foreign investors through the CBI Programme of different countries. The Group has been identifying suitable investment projects in and develop appropriate business plans for each of the Designated Caribbean Countries and the Republic of Panama. After discussions with and obtaining support from the local governments of each of these Caribbean countries and the Republic of Panama, the Group will determine and proceed with the pertinent investment projects, with an aim to maximizing the return for the Shareholders. To this end, the Group has established a management and marketing team with offices in Beijing, Shanghai, Shenzhen and Hong Kong and engaged consultants in Vietnam, the United States of America to implement the marketing strategies formulated for promoting the citizenship by investment programmes and investment opportunities of each of the aforesaid countries.
Dr. Bryan Lin, Chairman of Realord Group, said: "In the future, the Group will continue to operate its business with a cautious and optimistic attitude. While exploring investment opportunities in the Latin American and Caribbean markets, we will also actively foster the development of Shenzhen urban renewal projects and create the best value and returns to our shareholders and investors."