20-F: MasterBeef Group Adopts Cybersecurity Policy and Reports Financial Results in Annual Filing

MasterBeef Group files its annual report, highlighting the adoption of a cybersecurity policy and providing financial details for the fiscal year ended December 31, 2024.

Summary

• MasterBeef Group has adopted a Cybersecurity Policy to comply with Regulation S-K Item 16(b)(1) and Item 16(K) of Form 20F.
• The policy aims to ensure cybersecurity risk management is a priority.
• The Board of Directors or a designated committee will administer the policy.
• The policy includes establishing a management strategy for cybersecurity, engaging third parties for evaluation, and determining the materiality of cybersecurity incidents.
• The Chief Financial Officer is required to report any cybersecurity concerns or events to the Board of Directors and legal counsel.
• The policy is effective as of April 11, 2024, and will be filed as an exhibit to the company's annual report on Form 20-F.
• The Group's revenue decreased by 5.3% from HK$532.3 million in 2023 to HK$504.0 million in 2024.
• The company recorded a profit of HK$32.9 million for 2024, compared to a loss of HK$37.4 million in 2023.
• The company completed its IPO of 2,000,000 Ordinary Shares at a public offering price of $4.00 per share on April 11, 2025.
• As of the date of this Annual Report, the Operating Subsidiaries had 363 full-time employees.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While the company returned to profitability and completed its IPO, revenue decreased and material weaknesses in internal control were identified. The adoption of a cybersecurity policy is a positive step, but the overall outlook is cautiously optimistic.

Positives

• Adoption of a formal Cybersecurity Policy demonstrates a commitment to risk management and regulatory compliance.
• The company returned to profitability in 2024 with a profit of HK$32.9 million, a significant improvement from the loss of HK$37.4 million in 2023.
• The company successfully completed its IPO, raising capital for future growth.

Negatives

• Revenue decreased by 5.3% from HK$532.3 million in 2023 to HK$504.0 million in 2024.
• The company identified material weaknesses in its internal control over financial reporting.

Risks

• The company operates in a highly competitive industry.
• Negative publicity or damage to the company's brands could adversely affect its business.
• The company's expansion plans may be unsuccessful, or it may fail to obtain sufficient funding.
• Fluctuations in the supply, quality, or costs of food ingredients could adversely affect profit margins.
• The company's operations are susceptible to unforeseen business interruptions such as health epidemics.
• The company faces risks related to instances of food contamination and food-borne illnesses.
• Macro-economic factors have had and may continue to have a material adverse effect upon the company's business, financial condition and results of operations.
• The PRC government may intervene or influence the company's operations at any time, which could result in a material change in its operations and/or the value of its Ordinary Shares.
• The PCAOB Determinations provides that if the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in mainland China or Hong Kong, it could result in the prohibition of trading in our securities by not being allowed to list on a U.S. exchange, and as a result an exchange may determine to delist our securities, which would materially affect the interest of our investors

Future Outlook

The Group intends to continue to improve the operation efficiency and standardization of its operating procedures across its restaurant network by leveraging its Hong Kong Operating Subsidiaries central kitchen and existing standardized preparation approach, and to seek ways to further optimize costs, streamline processes, and ensure smooth restaurant operations.

Industry Context

The document indicates that the restaurant industry in Hong Kong is highly competitive, with key factors including cuisine, food quality, service, price, location, and ambiance. The company faces competition from other Taiwanese cuisine restaurants, locally-owned restaurants, and regional and international chains.

Comparison to Industry Standards

• The Frost & Sullivan Report states that Master Beef ranked first among specialty hotpot restaurant chains and Taiwanese hotpot restaurant chains in Hong Kong in terms of revenue in 2023.
• The Frost & Sullivan Report states that Master Beef and Anping Grill brands ranked first in the overall Taiwanese cuisine market in Hong Kong with a market share of approximately 9.7% in terms of revenue in 2023.

Corporate Governance

Related Party Transactions

• On May 14, 2024, the Group disposed of its operations in Chubby Bento, Chubby Noodles and Bao Pot to Galaxy Shine Company Limited and Thrivors Holdings Limited, its principal shareholders and related parties.

Stakeholder Impact

• Shareholders may be impacted by the decrease in revenue and the identified material weaknesses in internal control.
• The adoption of a Cybersecurity Policy aims to protect the company and its stakeholders from cybersecurity threats.
• The company's expansion plans and efforts to improve operational efficiency could benefit shareholders, employees, and customers.

Next Steps

• The company intends to further expand its restaurant network in Hong Kong and overseas.
• The company plans to offer overseas franchising opportunities for its restaurant brands.
• The company intends to continue to improve the operation efficiency and standardization of its operating procedures.
• The company intends to fully utilize its central kitchen to maximize its capabilities and drive profitability.

Key Dates

Keywords

cybersecurity, financial results, MasterBeef Group, annual report, risk management, IPO, Hong Kong, Form 20-F