Investor Relations

Management Discussion & Analysis


For the financial year ended 30 June 2018 (“FY2018”), the Group recorded revenue of approximately HK$793.3 million, representing a slight increase of 4.4% over the revenue of approximately HK$760.1 million for the year ended 30 June 2017 (“FY2017”). The increase over the previous year was mainly because more revenues were generated by the leasing and restaurant businesses. Gross profit for the year under review amounted to HK$528.7 million, which approximated that of HK$529.0 million in FY2017. The Group recorded a fair value gain of HK$1,864.5 million from the investment property, Goldin Financial Global Centre, in the year, which was 19.7% less than that of HK$2,321.7 million for FY2017. Profit attributable to owners of the Company was approximately HK$1,202.3 million, which represented a decrease of 15.3% compared with the figure of approximately HK$1,419.6 million for FY2017. The decrease in profit attributable to the owners of the Company was mainly because of the smaller fair value gain from the investment property as compared with that of prior year as aforementioned. The basic and diluted earnings per share for the FY2018 were 17.20 HK cents and 17.09 HK cents respectively (FY2017: 20.31 HK cents and 20.19 HK cents respectively), representing corresponding decreases of 15.3% and 15.4%.


The FY2018 was a year of consolidation of the Group’s businesses. In April 2018, we announced our plan to streamline and consolidate the real estate business by disposing of the equity interests in the two residential property projects which were under construction and acquiring the remaining 40% equity interest in our investment property, Goldin Financial Global Centre. Upon the completion of the transactions, which are expected to take place in the first half of FY2019, Goldin Financial Global Centre will become wholly owned by the Group. The two property development projects represented all the property development projects of the Group, will be disposed to Mr. Pan Sutong (“Mr. Pan”), the controlling shareholder of the Company. The real estate business of the Group will then be focused on the property investment. The streamlining and consolidation of the real estate business are aimed at strengthening the liquidity of the Group for further business development.

Real Estate Business

Property Investment
Kowloon East is an up and coming alternative central business district (“CBD2”) in Hong Kong. The district enjoyed a strong growth of 10.5% in grade-A office price in 2017. Office leasing activities in this area continued to gather pace which drove the vacancy rate down consecutively to a single-digit by the end of June 2018#. The high take-up of office space in Kowloon East showed that 67% of the 3.1 million square feet (“sq. ft.”) of new supply in the area between 2017 and 2019 have been leased out##. The promising take-up rates comprising several major leasing transactions by multi-national tenants further reinforce the bright prospect of this area to become Hong Kong’s CBD2.

The Group’s investment property, Goldin Financial Global Centre, is located in the CBD2 of Kowloon East。 It is a premium grade-A office building providing approximately 800,000 square feet of premium office space and approximately 100,000 square feet of fine dining area。 During the FY2018, increasing office leasing contracts were concluded and tenants of international enterprises had moved into the premises。 We have secured a larger portfolio of more diverse tenants。 In FY2018, rental income and revenue from property management services amounted to HK$84。6 million (FY2017: HK$22。1 million), up by 282。8% compared with FY2017。 In addition, the Group recorded a fair value gain of approximately HK$1,864。5 million from Goldin Financial Global Centre (FY2017: HK$2,321。7 million)。 The fair value gain was 19。7% less compared with that for FY2017 because the commercial properties in CBD2 appreciated to a lesser degree in FY2018。

# Source: Savills Research and Consultancy
## Source: DTZ Cushman & Wakefield

Property Development

Ho Man Tin Sheung Shing Street Project
The Group’s 60%-owned residential development project is situated at Sheung Shing Street, Ho Man Tin, with a total site area of approximately 9,074 square metres. During FY2018, the piling and foundation works at the site had been completed. The superstructure works commenced in August 2018 and are currently progressing well. The construction is expected to be completed by the end of 2020.

Ho Man Tin Station Package One Development Project
The Group’s 50.1%-owned joint venture for residential development of the Ho Man Tin Station Package One Development Project, which is situated at the Ho Man Tin Station of Hong Kong’s Mass Transit Railway, covered the maximum gross floor area of approximately 742,700 square feet. During FY2018, the piling and foundation works were in progress. The construction is expected to be completed by the end of 2022.

In April 2018, the Company entered into conditional sale and purchase agreements with Mr. Pan so as to re-structure the real estate business of the Group in the following manner:

(1) the Company proposed to dispose to Mr. Pan (a) the entire 60% equity interest indirectly held by it in Gold Topmont Limited (“Gold Topmont”), the developer of the Ho Man Tin Sheung Shing Street Project; (b) the entire 50.1% equity interest indirectly held by it in Gold Brilliant Investment Limited, the developer of the Ho Man Tin Station Package One Development Project. These transactions mean the disposal of all the property development projects of the Group; and

(2) the Company proposed to acquire from Mr. Pan the 40% equity interests currently held indirectly by him through Goal Eagle Limited so that the Group shall wholly own the investment property, Goldin Financial Global Centre, upon completion of such acquisition.

The real estate business of the Group will immediately be focused on property investment after the above transactions (the “Proposed Transactions”). The net effect of the considerations which is estimated to be approximately HK$6,794.1 million, subject to adjustment and audit after completion, shall provide cash inflows for the Group’s further business development.

Wine and Related Businesses

The wine industry in Hong Kong and China continued to flourish. Hong Kong’s wine imports have expanded rapidly since the elimination of import duties in February 2008. According to the information from the Hong Kong Trade Development Council, in the period of January to June 2018, wine imports amounted to HK$6.2 billion, more than three times the 2007 value of HK$1.6 billion. About 33% of these imported wines are re-exported, and the rest —about 67% —are either taken outside Hong Kong by individuals or retained in Hong Kong for storage or immediate consumption#.

China’s growing wine consumption has been demonstrated by the progressive volume of annual wine imports since 2013. Unlike in the past when imported wines were mainly premium red wines used for business entertaining or gifting, the China wine market is now characterised by young, affluent consumers who opt to drink for personal enjoyment at a competitive price##. The bloom of online sales channel allows such consumers to easily buy wines from different regions and suppliers. Wine imports from such countries as Australia and Chile had become very popular with the young and affluent Chinese consumers, and the two countries had the second and third largest shares (after France) of China’s market for bottled wines import by the e-commerce channels in the past five years.

International wine trading in Hong Kong and China has been pressured by higher wine import costs due to low global wine production in 2017。 Similar to other wine producers in the region, the Group’s vineyards in Bordeaux were hit by frost, reducing the quantity of grapes harvested as well as the number of bottles produced。 In the United States, we had successfully harvested our crop despite the devastating wildfires in California in early October 2017, and production of our 2017 vintage was not affected。

# Source: Hong Kong Trade Development Council
## Source: Wine Intelligence — China Landscapes 2018

The Group continued to promote its premium fine wines overseas through appointed distributors in order to enhance their visibility and branding. In China, the Group pursued its sales strategies, offering full services to customers, from sourcing of prestige wines by renowned producers to portfolio management of premium wines and quality storage services at our well-equipped wine cellar in Guangzhou.

In Hong Kong, the Group’s prestigious SLOAN ESTATE wine are now available for sale in selected local retail stores. The four fine-dining and speciality restaurants at Goldin Financial Global Centre held wine pairing dinners with specially designed menus to introduce the Group’s wines to local food and wine connoisseurs. Besides showcasing the talents of our own award-winning chefs, the Group also invited a well-known international chef for a guest appearance at LE PAN restaurant to offer an extraordinary Michelin-star dining experience. Moreover, our restaurants offered a wider variety of wines and liquors to cater to local consumers’ expanding tastes. We will gear our marketing efforts towards the preferences of more young and affluent middle-class customers.

In FY2018, the wine and related businesses recorded revenues of approximately HK$548.0 million (FY2017: HK$550.8 million). This slight decrease of 0.5% over that of FY2017 was mainly due to the decrease in revenue generated by the wine trading business, and the decrease was partially offset by the increase in revenues from the restaurant and storage businesses. Segment profit from our wine and related businesses was approximately HK$154.3 million (FY2017: HK$168.3 million), which represented a decrease of 8.3% over FY2017. This contraction was mainly because in FY2018 we traded less self-produced wine products as compared with that of FY2017, resulting in a drop in the overall profit margin.


China’s factoring market was characterized by strong competition from an increasing number of registered domestic commercial factors and the persistently low short-term lending rates. The number of registered domestic commercial factors in China continued to grow explosively and increased by 50% in the year ended 31 December 2017. Accordingly, our factoring business continued to face challenges. During the year under review, the Group further reduced the handling fees and charges to the existing customers in view of the increasing competition in China’s factoring market.

Against this backdrop, the Group’s factoring business recorded revenue of approximately HK$160。7 million (FY2017: HK$187。2 million), down by 14。2%。 To cope with the reduced prices of its factoring service, the Group reduced the commission fees paid to the import factors for the existing clients with good credit standing in FY2018。 Profit from this business segment increased by 79。8% to approximately HK$140。1 million, compared with the HK$77。9 million for FY2017。


Liquidity, Financial Resources and Gearing

As at 30 June 2018, the Group’s working capital stood at approximately HK$3,175.1 million, which is a significant decrease of 73.5% over the HK$11,998.3 million recorded at the end of FY2017. The working capital decreased mainly because the Group had refinanced its long term mortgage loan of approximately HK$8,367.2 million with a short term borrowing in June 2018. Cash and cash equivalents totaled approximately HK$277.5 million, down by 43.2% compared with the HK$488.7 million at the end of FY2017.

As at 30 June 2018, the Group’s interest-bearing bank and other borrowings amounted to approximately HK$16,899.6 million (30 June 2017: HK$14,338.7 million). Besides, the Group had an outstanding non-interesting bearing loan of approximately HK$518.3 million (30 June 2017: HK$518.3 million) from a non-controlling interest which represented the funding contribution from the joint venture partner for financing the acquisition of the Group’s properties under development in FY2017.

The Group maintained a borrowing facility of US$500 million (equivalent to HK$3,922。7 million) (30 June 2017: US$500 million (equivalent to HK$3,875 million)) from a related company in which Mr。 Pan, the controlling shareholder of the Company, has a beneficial interest。 During the year, the Group repaid approximately HK$479。7 million which had been drawn down in the prior year for financing the acquisition of the Group’s properties under development。 As a result, the amount of the facilities utilized as at 30 June 2018 was lowered to approximately US$4。8 million (equivalent to HK$37。9 million) (30 June 2017: US$66。8 million (equivalent to HK$517。6 million))。 The undrawn borrowing facility as at 30 June 2018 was approximately US$495。2 million (equivalent to HK$3,884。8 million) (30 June 2017: US$433。2 million (equivalent to HK$3,356。7 million))。

As at 30 June 2018, the debt-to-total assets ratio, which is calculated as total bank and other borrowings, loan from a non-controlling shareholder and loan from a related party (“Total Debts”) divided by total assets of the Group, was maintained at a healthy level of 46。2%, compared with 42。9% as at 30 June 2017。 The ratio of net debts (Total Debts net of cash and bank balances) divided by total assets was approximately 45。5% (30 June 2017: 41。5%)。

Foreign Exchange

As the Group’s key operations are located in Hong Kong, China, the US and France, its major assets and liabilities are primarily denominated in Hong Kong dollar, Renminbi, the US dollar and euro. While the Group has yet to formulate a formal policy on foreign currency hedging, it will, as always, continue to monitor its exposure to foreign exchange fluctuations carefully and may introduce appropriate hedging measures should the need arises.


The Group’s businesses, results of operations, financial conditions and prospect are subject to risks and uncertainties. The Group has established policies and procedures for managing its business risks arising from its core business segments, including factoring, wine, and property investment and development.

Management of key customers

The Group traded with certain major customers from the factoring and wine businesses. For the year ended 30 June 2018, the aggregate amount of revenue attributable to the Group’s five largest customers who are customers from the factoring and wine businesses, represented approximately 58% (FY2017: 70%) of the Group’s revenue for the year. The major customers of the factoring business are PRC-based enterprises manufacture and export high-end digital electronic products to reputable end-buyers in the United States. The major customers of our wine business are premium wine collectors and investors in Hong Kong and China. These customers have had business relationships with the Group for periods ranging from two to nine years.

The Group strived to diversify its businesses and broaden its customer base through the launching of the restaurant business and the continuing development of its wine business。

With the growth of the Group’s restaurant business and the increasing rental income generated from the leasing activities of the Goldin Financial Global Centre, the Group has strengthened its revenue sources and reduced the reliance on the key customers in FY2018. On the other hand, given our well-established business relationships, the present customers of the factoring business may continue to account for a relatively large percentage of the Group’s sales in the coming year.

Credit risk management

The Group is selective about its customers and will only deal with creditworthy parties. In order to minimize the credit risk and risks of money laundering, the Group has formulated policies on credit and anti-money laundering, and delegated a team to determine credit limits, approve credit, monitor progress in recovering overdue debts and implement anti-money laundering measures. The Group only accepts the factoring of quality trade receivables from customers/buyers with good credit standing, good repayment records and no history of default, or with credit insurance or covered by other import factors who are international financial institutions. In addition, the Group regularly reviews the aging and recoverable amount of each individual trade debt and takes appropriate follow-up actions to recover any long overdue debts.

As at 30 June 2018, approximately 84% of the Group’s trade receivables, which were factored to the Group by our factoring customers, are due from three debtors who are international corporations with exceptionally low risk of default. As of 18 September 2018, over 99% of the trade receivables arose from the provision of factoring services that were past due as at 30 June 2018 have been subsequently settled.

Real estate business risk management

The Group has well established measures to ensure that (i) the costs of the property development projects are within budgets; (ii) the progress of the property development projects is on schedule; and (iii) the quality of the properties under construction meets the industrial standards.

The risk arising from property investment business is relatively low due to the business nature, and most of the leasing contracts are long-term ones lasting for two to four years。 The Group will maintain a portfolio of tenants who are reputable and creditworthy。 In addition, the leasing team keeps monitoring the market conditions with a view to maintain the competitive position of Goldin Financial Global Centre。


As at 30 June 2018, the facilities granted to certain property development subsidiaries and a property investment subsidiary, which are subject to guarantees given to the banks and financial institution by the Company for up to 50.1% and 60% of the funds drawn down, had been utilized to the extent of HK$9,881.3 million (30 June 2017: HK$8,402.6 million).


As at 30 June 2018, the Group’s secured bank and other borrowings were secured by (i) the investment property with an aggregate carrying value of HK$17,200 million (30 June 2017: HK$15,300 million); (ii) the properties under development with an aggregate carrying value of HK$7,249.6 million (30 June 2017: HK$6,775.7 million); (iii) the entire share capital of Smart Edge Limited (“Smart Edge”), the Company’s 60%-owned subsidiary which holds the investment property; (iv) all assets of Smart Edge and (v) the entire share capital of Gold Topmont, a 60%-owned subsidiary of the Company which holds the properties under development.

In addition, the Group pledged its prepaid land lease payments with a net carrying amount of HK$48.5 million (30 June 2017: HK$48.4 million) and buildings with a net carrying amount of HK$1,616.5 million (30 June 2017: HK$1,608.2 million) for a bank facility granted but not yet utilized as at 30 June 2018 and 30 June 2017.


Real Estate Business

The uncertainties in global economic outlook are looming as a result of the heightened trade tensions in the recent months. Corporations are generally becoming more cost-conscious. In Hong Kong, office decentralization is an easy, fast and cost-efficient way to trade up to high-grade office space and to curb the capital expenditure at the same time. The growing trend towards office decentralization has been reflected by the high take-up of office space in the submarket for office.

The Group has been delighted to see the vigorous growth in demand for office space in Kowloon East, which supplies lots of new grade-A office space at rents that are more competitive than those in the traditional business districts on Hong Kong Island。 The Group is currently in negotiations with potential tenants who are internationally well-known enterprises。 It expects the occupancy rate of offices at Goldin Financial Global Centre to rise steadily in the years ahead。

The Proposed Transactions in the Group’s real estate business segment will improve the Group’s gearing ratio and thus enhance its financial strength when they are completed. We will also explore other possibilities of real estate investment and will study them carefully should the opportunities arise.

Wine and Related Businesses

The 2018 wine harvest in France was set to rebound from the low in 2017 when one of the smallest grape crops since 1945 was recorded, according to the country’s Ministry of Agriculture. The country’s wine production in 2018 is estimated to rise by 20% compared with the historical low in 2017#. Thanks to the good weather in 2018, the production levels for the Group’s French vineyards is also expected to normalise for the 2018 vintage. Our vineyard in Napa, California is also expecting a bountiful harvest this year.

China has recently imposed a retaliatory tariff on US wine imports in response to increased trade tariffs levied by US. Meanwhile, the continued development of online sale platforms in China will increase price transparency and, at the same time, intensify the competition in the market for the mid-range wines. Nevertheless, the Group will continue with its strategy in its wine-trading business —it will secure a stable supply of wines under its own brands from the US and France and continue to promote its wines locally in Hong Kong and China. It will build a stronger sales team to cater for the growing demand in the Hong Kong wine market. The Group’s restaurants at Goldin Financial Global Centre offer delectable cuisines with foods and wines meticulously prepared and selected by the chefs and sommelier team. The Group will enrich its wine list by introducing new and competitive fine wines of more brands to the local market. Moreover, a new café is underway, offering additional choices of light refreshments to customers.

Meanwhile, the Group will continue to build up its market position in China, aiming for a wider market coverage in the key cities。 The Group will continue to explore other possibilities, including acquisitions in wine and related businesses in order to increase its market penetration in Hong Kong and China, as well as internationally。

# Source:


With the increasing competition and reduced factoring fees, revenue from the Group’s factoring business is expected to decrease in the coming year。 The Group will strive to maintain the competitive edge of its factoring business and continue its prudent approach to managing risks and selecting clients。 It will also explore possibilities of forming new ventures and cooperating with other commercial factors and financial institutions in developing new products and services in China’s financial sector。