Monday, January 25, 2021
 
Columnist
Martin Hennecke
 
XH NEWS MEDIA
HKEx Stock Code : 00309 
 
Corporate Profile
Principally engaged in the provision of cleaning and related services, the provision of medical waste treatment service, the provision of television screen broadcast business and the provision of management consulting services.

Business Review - For the year ended March 31, 2013

In spite of the fierce competitions in the cleaning and related services field, demand over supply in the labour market and increasing labour costs, the Group was able to maintain steady growth in the past year under review.

In addition to renewing the two warewash and general cleaning contracts with one of the biggest flight kitchens, the Group was able to obtain a third contract from this business partner for providing commissary services (sorting and packing of reading articles, magazines and head phones etc.) in aircrafts.

In the fourth quarter of 2012, the Group entered into a 2-year contract with a prominent property developer to provide initial and day-to-day comprehensive cleaning to their brand new office building next to the West Rail Tsuen Wan Station.

Various major contracts including those in connection with several Grade-A office/commercial buildings and complexes in Central, Admiralty and Quarry Bay were renewed from one year to three years with reasonable adjustments in the contract prices to make provisions for labour cost increases as a result of the ripple effect of the statutory minimum wage rate revision.

The Group has commenced its external wall cleaning services since the early nineties by using ¡§Sparkling¡¨, an effective external wall cleaning agent formulated and uniquely brand named by the Group. Following the satisfactory completion of a project of a multi-storied residential estate in Tin Hau, the Group was able to obtain and complete another external wall cleaning contract of a top-notch residential development up on the Peak. In this project, various unprecedented difficulties, such as high wind blowing in gusts, vast landscaped areas to be taken care of, had to be resolved and overcome. The project was completed to the satisfaction of the property owners well on schedule.

The series of stone maintenance and restoration products, some of which were specially formulated and manufactured by our European business partner for Asian markets, continued to earn recognition. Sales of the products were on the upward trend.

For the medical waste treatment business, the two medical treatment plants of the Group in Siping City and Suihua City in the Mainland continued to be operating smoothly.

As mentioned previously, the Group was engaged in negotiation with an independent stateowned enterprise regarding the Group's investment in a waste treatment plant in Shuyang County, Jiangsu Province. The negotiation is still continuing.

For the television screen broadcast business, specially produced news programs including finance, sports, entertainment and lifestyle run smoothly on through trains operated by the MTR Corporation Limited (¡§MTR¡¨) running from Guangzhou East and Hong Kong and at the MTR Hunghom Departure Hall. In addition, the Group has officially launched the television programs broadcasting on selected television screens at departure gates in Hong Kong International Airport (¡§HK Airport¡¨) since 12 December 2012.

During the year 2012, the Group has also reached several agency agreements with advertising agents in both Mainland China and Hong Kong. It is expected that these arrangements would help to enlarge the client base of the television screen broadcast business and hence, open up an additional source of advertising revenue. In addition, the Group has endeavoured to approach media agents to discuss cooperation in sharing television screen resources to increase broadcasting channels and reducing capital investment costs.

According to the Cooperation Agreement, APRB has undertaken that the audited operating revenue derived from the television screen broadcast business for the year ended 31 December 2011 and the year ending 31 December 2012 will be no less than HK$30,000,000 and HK$100,000,000, respectively and to pay compensation to the Company in the event any part of the undertaking cannot be fulfilled. Negotiations with APRB on remedial actions is on-going. Such negotiation is currently focused on how the compensation shall be calculated on a fair and reasonable basis given that the Cooperation Agreement contains no provision for determining the relevant amount. At this point the Company and APRB are discussing and evaluating the possibility and appropriateness of various options, including, without limitation, engaging a professional valuer for the assessment of the relevant economic damages. Further professional assistance has been sought in this relation including legal advice on the appropriateness of various remedial considerations. Appropriate announcement will be made when an agreement has been reached.

Following the acquisition of the Pan Asia Group in the second half of 2012, the Group has a new business of investment management and consulting services, management solutions for hospitals and sales of medical equipment. For the year ended 31 March 2013, the Group has recorded a gain of approximately HK$652,000 from this business segment.

Business Outlook - For the year ended March 31, 2013

Cleaning and Related Services

The road of the cleaning service sector remains bumpy. Labour shortage is expected to persist in the coming year.

Given the Group's well established and developed employer-and-employee relations with a turnover rate below industry norm and our good track records in reducing accidents and work injuries, we have been able to overcome the hurdles in the past year and are optimistic that the Group would be able to maintain a stable and trust-worthy labour force to fulfill our contractual obligations.

Over the past years, most of the food waste has been mixed with other rubbish for disposal at landfills. Of late, the government has launched a ¡§Food Waste Recycling Scheme in Housing Estates¡¨ and is giving funding support to the participating estates. The food waste-turnedcompost generated is used for landscaping, greening and planting activities. In response to the scheme, more and more estates are taking part.

The Group has matured experience and technology in this field and has been sharing our knowledge with our housing estate customers, other voluntary associations and schools. We shall continue to take an active role and plan to extend our sharing and services in this regard to our customers in shopping malls, food courts, commercial complexes in the coming years.

Television screen broadcast business

In 2012, the Group formulated defined developmental direction and objectives for the television screen broadcast business. A framework for sales network has been established and targeted sales partners identified. The Group has also begun working with several advertising agents based in Mainland China and Hong Kong, enjoying a better connection to customers and a better focus on business with Chinese enterprises.

The Group is contemplating to expand the news programs broadcast coverage to PRC train station departure halls as well as on trains. The Group has identified certain train stations and train service providers and has started negotiations. There are plans to continue seeking out more suitable train stations and train service providers.

After the successful launch of the television screen broadcasting at HK Airport, the Group begins to focus on securing sponsorship on television programs production. The Group is confident that this new development will enhance the Group's profitability and improve our branding image to international customers and consumers.

The Group is in an advanced stage of negotiation with a property owner in Central District for media broadcasting on an outdoor LED video wall. It is anticipated to launch the broadcasting service in the second half of 2013.

In 2013, the Group has considered other opportunities to expand the broadcasting business. In addition to the television screen broadcast business, the Group is diversifying into other media broadcasting medium, such as the internet and advertising billboards, which are expected to broaden the income source of the Group.

The Group is negotiating with certain media companies in Taiwan regarding potential cooperation. The cooperation is expected to begin with the exchange and sharing of resources, followed by exploring the possibility of setting up partnership or other form of enhanced relationship.

The Group is also discussing with companies in the PRC regarding the possible formation of strategic cooperation relationship in the online media advertisement business.

Management consulting services

GoalReal has been deploying resources and efforts to strengthen its performance. The Group intends to further explore different business opportunities in the PRC medical equipment and hospital management service markets, such as exploring the possibility of obtaining the exclusive right to distribute certain medical equipment in the PRC and participating in the management service and operation of PRC hospitals.

Source: Xinhua News Media (00309) Annual Results Announcement
Chairman Lo Kou Hong Issued Capital (shares) 1,302M
Par Value HKD 0.01 Market Capitalisation (HKD) 404M
 
Login
Password
Register  Forget Password
Advanced Search
© 2021 The Standard, The Standard Newspapers Publishing Ltd.
Home | Business | Metro | Focus | Opinion | Markets | World | Sports | Entertainment | Monday Money | Property | Macau | Weekend