Finance

2023 Financial Highlights

Overall Net Income Margin came in at -23% (HKD -1.4M) in 2023 compared to -30% (HKD-1.9M) in 2022. Clinic operations continued to be impacted by lower number of patient visitations, which were mainly driven by changes in practicing Chiropractors and fluctuating recovery trend from Covid19. Operations ranging from fundraising to clinic activity remained relatively consistent year over year, with improved margin overall due to explicit actions taken to manage overall expense levels in 2023.

Gross Revenue of HKD6.3M came in for 2023, up 2% compared to 2022. This is a positive trend given there was no Government subsidy in 2023, compared to HKD0.2M contribution from prior year.
Key Revenue drivers include:

1. Revenue from clinic operations at HKD5.9M, up HKD0.3M (+5%) from 2022 despite discontinued Government subsidy. The lower clinic visitations caused by turnover of more experienced chiropractors, which will require a longer recovery time as newer chiropractors build out their clientele and experience.
2. Donation revenue came in at HKD0.2M, +16% to prior year, which is result of more focused fund raising activities conducted throughout the year.
3. HKD0.1M from interest & dividends came in +75% higher than prior year, primarily driven by higher bank interest income in investing free cash into time deposits to leverage higher prevailing interest rates effectively in 2023.

Expenses delivered as per expected on the whole, with continued expense management measures underway.

• The most significant contributor are the salaries and cost of medical supplies at HKD4.2m in 2023 comprised 61% of total expenses, compared to HKD4.5m in 2022 comprising of 57% of total expenses, which demonstrated consistently managed variable expenses as proportion of gross revenues.
• Rent expense consistent with prior year at HKD1.7M, with longer term execution of expense management in place for 2024 clinic space reduction, through reduction of one clinic floor.
• Scholarship expenditure of HKD0.3M, -64% compared to prior year was due to reduction of student sponsorships in the year, contributing to the Foundation’s expense saving.

From a balance sheet perspective, Equity Position at HKD7.6M remains healthy as at Dec 31, 2023, with healthy liquidity contributed by a cash balance of HKD5.6M. Despite healthy balance sheet capital position, the foundation will continue to review revenue and expense drivers to optimize financials to ensure continued sustainable business model to support the continued delivery on the foundation objectives. The foundation’s team continues to reinvigorate clinic operations to continue to attract patients and raise awareness in the community. Also, new channels of fundraising activities underway. On the expense side, reducing clinic rent and sponsorship in the upcoming year will have a significant benefit in the interim whilst newer chiropractors focus on building out proposition for clinic operations.

2022 Financial Highlights

Overall Net Income Margin came in at -30% (HKD -1.9M) compared to +3% (HKD +0.4M) in 2021. Throughout 2022, there were increase of Covid-19 surge cases across Hong Kong as well as imposed restrictions across the city. Resultantly, the Foundation’s operations were significantly impacted across the board- with lower number of patient visitations in the Clinic, substantially reduced fund raising and limited seminar educational activities.

Gross Revenue of HKD6.2M, was approximately half of levels in prior year, despite a HKD264k Government subsidy in the year of 2022.
Key Revenue drivers mainly from clinic and donations which comprise of 94% of total revenues in the year.

1. Revenue from clinic operations at HKD5.6M, (down 55% from prior year) mainly due to continued impact from departure of experienced chiropractors on top of the Covid-19 waves which hit Q1 2022 and Q4 2022 particularly significantly.
2. Donation revenue came in at HKD0.2M (50% lower than prior year), also impacted by Covid-19 limiting social and business activities across Hong Kong.

On the expense side, controllable expenses were being effectively managed in light of the prolonged challenging times, as evidenced by better expense ratios- with better margins generated by lower variable expenses as a percentage of sales and with fixed expense level maintained flat year over year.

Total salaries and cost of medical supplies at HKD4.5M in 2022 comprised 57% of total expenses, compared to HKD8.8M in 2021 comprising of 69% of total expenses in that year. Scholarship expenditure of HKD0.7M in 2022 was reduced byHKD0.2M compared to previous year due to the prevailing number of students in the program. These were all evidential of explicit expense management to propel the foundation forward. In addition, major categories of fixed expenses including rent, building & office expenses, depreciation- were consistent at HKD2.5M both in 2022 and 2021. and only fixed expense reduction was scholarship expenditure reduced by HKD0.2M in 2022.

From a balance sheet perspective, Equity Position at HKD9M remains healthy as at Dec 31, 2022, noting due to weaker financial performance in the year, this level comes in 17% lower than prior year. Despite healthy balance sheet capital position, the foundation continues to focus on activities to increase revenue across the various streams and engage a more active discretionary expense management approach. These activities are under constant review in order to continue to drive to deliver on the foundation’s objectives.

2021 Financial Highlights

Overall Net Income Margin came in at +3% (HKD 0.4M) compared to -3% (HKD -0.3M) in 2020. Operations ranging from fundraising to clinic activity recovered slightly compared to 2020 despite continued headwinds impacted by Covid-19.

Gross revenue of HKD13.3M, trending higher than prior year despite no Government Covid-19 subsidy in 2021. Revenue sources performed well across the board, with more sources of revenue compared to the previous two years from deliberate efforts across clinic, fund raising and education activities new book sales. Key revenue drivers

• HKD12.4M revenue from clinic operations, 35% higher than 2020, showing positive trend of recovery
• HKD0.4M of donation revenue, more than doubling from prior year
• HKD0.3M from Seminars & Courses slightly down, at HKD0.08M below prior year

On key drivers of Expenses as follows, which were in line with anticipated needs where necessitated as the Foundation underwent expense management activities in light of more challenging macroeconomic conditions.

• Over 60% of Expenses comprised of Salaries and Benefits. Salaries increase in 2021 compared to 2020 in line with increased clinic consultation activity.
• Rent of HKD1.6M consistent with 2020 under current clinic 3-year lease obligation.
• Scholarship expenses at HKD0.9M significantly higher to compared to HKD0.5M in prior year with a larger number of sponsored students with schooling underway in 2021.
• Unrealized loss on investment holdings observed as equity markets remain volatile on the backdrop of China real estate and macro Covid-19 headwinds.

Overall 2021, was a resilient year, in a net profit position, with controlled expenses to revenue growth.

Overall Foundation equity position remains healthy as at Dec 31, 2021, at HKD10.9M with a healthy net asset position and continued strong liquidity from the foundation operations.

2020 Financial Highlights

The overall Foundation and Clinic Operations were impacted by the unprecedented Covid-19 virus. Covid-19 resulted in widespread disruption throughout the year with social distancing rules, limiting in-Clinic patient visits and fund raising activities. Resultantly, the foundation sustained a HKD0.3M net loss in 2020, which was driven by higher salaries and benefit expense run rate in 2020 compared to prior year, even with higher revenues in the year.

Despite the headwinds, revenues came in HKD10.3M for the year, up overall 12% in 2020 compared to 2019, which was also a challenging year for the Foundation.

• Income generated by the clinic was up HKD0.6M, up 7% from prior year.
• Income from seminars and courses up HKD0.3M, up 234% from prior year with increased educational activities throughout 2020.
• Additional Government Covid-19 subsidy of HKD0.5M was granted in 2020, making up 5% of gross revenue for 2020.
• Lower donations of HKD0.1M in 2020 compared to prior year due to limitations of in person fund raising from regular donation channels.

Expenses were HKD10.7M in 2020, up 20% (HKD1.8M) compared to 2019.

• Most significant expense approximately half of total expenses is salary & benefits. Salary expense increase, which was proportionately in line with consultation activities.
• Rent was favorable in 2020 to prior year due to reduction of rental space from discontinuation of Central clinic lease.

Loss in the year driven by several key factors, which is not expected to be recurring drivers overall:

• HKD0.1M from a one time loss incurred for leasehold write-off of leasehold improvements upon termination of Central clinic lease.
• Cost of medical dispensary items higher in 2020 due to selling of packages which have higher material costs, HKD0.7M higher than previous year which is a lower margin item.
• Investment holdings impacted by significant volatility in the equity market, driving an unrealized fair value of asset decrease of HKD0.5M, which is subject to continued revaluation.

Overall Foundation equity position remains healthy as at Dec 31, 2020, coming in just 3% lower than prior year, with continued good liquidity with increased cash and receivables from the clinic revenue & seminars in charity operations.

2019 Financial Highlights

The year 2019 was a turbulent year, with significant impact on the financial status of the Foundation. No fund raising activity was organized, and the income from the activity was nil, compared to HKD684 thousand last year. Also, the income from seminars and courses reduced, from HKD320 thousand the previous year to HKD110 thousand in 2019. Fortunately, the consultation income increased from HKD7,252 thousand in 2018 to HKD8,571 thousand.

Yet, the increase in consultation income did not arise without costs. There was a significant increase in remuneration and MPF of the attending chiropractors and assistants. The salaries were HKD4,723 thousand, while that in 2018 was HKD3,67 thousand, representing an increase of 28.7%. The reasons were that the clinic hired new chiropractors who needed time to build their practices. Another significant increase in expenses was the rent, as we leased an extra floor in late 2018. For the year 2019, the related costs were HKD2,089 thousand, which represented an increase of 15.3%.

Overall, the reserve of the Foundation increased by HKD300 thousand. At the end of 2019, the accumulated funds of the Foundation were HKD10,785 thousand.

2018 Financial Highlights

Sources of income include outpatient services, donations, fundraising activities, seminars, courses and other activities. All the surplus after deducting operating costs is transferred to the fund. If there are qualified scholarship applicants, the scholarship expenditure will be deducted from the surplus. The remaining funds will be reserved for the establishment of a local chiropractic college.

Total income amounted to HK$8,427 thousand. That was a considerable increase of 39% compared to last year. The primary income of clinical service amounted to HK$7,253 thousand, an increase of 41% as compared to the previous year, which was driven by the expansion of clinical services. The foundation has established another clinic with an increased number of chiropractors and supporting nurses in the same building during the year. The income from seminar and courses and donations decreased compared to last year, dropping to HKD320 thousand and HKD169 thousand respectively. However, fundraising activity income increased to HK $ 684 thousand, compared to the previous year's HK $ 255 thousand. This fundraising income increase was mainly driven by the deferred 2017 World Spine Day activities to early 2018 due to typhoons. Other activities income continuously maintained healthy growth from last year. Other activities income amounted to HK$676 thousand, an increase of 60% compared to the previous year. This growth was mainly due to dividend income of HK$231 thousand from holding common stocks in the market and temporary gain of HK$150 thousand on changes in the fair value of financial assets.

Total expenses increased by 63% to HK$7,807 thousand. The increase was mainly due to an increased number of clinical staff. Clinical service costs increased 62% from HK$4,053 thousands to HK$6,584 thousand. As newly joined chiropractors required time to build their practice, a lower profit margin of clinical service was expected in the initial year of clinic expansion. Scholarship expenditure increased 57% from HK$318 thousand to HK$500 thousand as the foundation awarded two scholarships instead of one in prior years. Administration costs increased considerably by 61% from HK$168 thousand to HK$270 thousand. Fundraising cost amounted to HK$155 thousand as compared to HK$28 thousand last year. Lastly, seminars & courses cost amounted to HK$102 thousand compared to HK$218 thousand last year. The surplus in 2018 was HK$1,296 thousand, which was about a 25% drop from last year.

The year-to-date cumulative reserved fund has reached HK$10,485 thousand since the foundation was set up. Establishing a chiropractic college would need hundreds of millions of dollars; the accumulated fund pool is far from sufficient to complete this mission. Thus, the foundation continues to focus on income-generating activities.

2018 Income, Costs & Surplus Chart

Categories of income, cost, and surplus are listed in the below graph to provide fund allocation transparency. Information on additional income and expenses breakdown details can be found in the website's posted annual audit report.

2017 Financial Highlights

Total income amounted to HK$6,501 thousands, a slight increase of 2% as compared to last year. Major income of clinical service amounted to HK$5,153 thousands which were very close to last year level of HK$5,213 thousands. This slight drop was because more chiropractic resources were allocated to promote chiropractic continuous learning and public education. Seminars and courses income amounted to HK$349 thousands, an increase of 55% above last year. Donation amounted to HK$322 thousands, a slight decline of 4% as compared to last year. Fund raising activity income amounted to HK$255 thousands, a reduction of 41% as compared to last year. This reduction was because only one walkathon event was held in the year. The sizable event of 2017 World Spine Day was deferred until early 2018 due to typhoon. Other activities contributed to a decent growth of income. Total amount of other activities amounted to HK$422 thousands, more than double of that of last year. This growth was mainly due to dividend income of HK$146 thousands from holding common stocks in the market and temporary gain of HK$104 thousands on changes in fair value of financial assets.

Total expenses amounted to HK$4,784 thousands, a reduction of 7% from last year. This cost improvement mainly came from cost reduction from fund raising activities. Fund raising cost amounted to HK$28 thousands as compared to HK$158 thousands last year. Clinical service cost amounted to HK$4,053 thousands, a decrease of 2% compared to last year. Expenditures on scholarship and seminars & courses amounted to HK$318 thousands and HK$218 thousands and these costs were 12% and 9% above that of last year respectively. Administration costs amounted to HK$168 thousands, an increase of 7% above last year and these costs were at 4% of total costs.

Surplus in 2017 was HK$1,717 thousands which was 39% above last year.

Year to date cumulative reserved fund has reached HK$9,190 thousands since the foundation was setup. As establishing a chiropractic college would need capital of hundreds of millions of dollars, current reserved fund pool is far from sufficient to complete this mission. Thus, the foundation continues to focus on income generating activities.

2017 Income, Costs & Surplus Chart

Details of income, costs and surplus are listed below to provide transparency of fund allocation. Details of the annual audit report can be found in the website.

2016 Financial Highlights

2016 financial performance was soft as compared to 2015.

Total income amounted to HK$6,401 thousands, a drop of 9% as compared to last year. The main reason of this drop was because in 2015 there was a special one-off donation of HK$1,000 thousands from Mr. Leung Po Hong in the fund raising event. Out of this special donation, the overall foundation income increased 6% as compared to last year. Donation in 2016 amounted to HK$336 thousands which was below HK$568 thousand in last year.

Major income of clinical service amounted to HK$5,213 thousands, an increase of 10% as compared to last year when the clinic maintained fair consultation fees while the number of new consultation increased by more than one thousand. Clinical service income has maintained continuous growth over years. This indicated there was a strong need of chiropractic service from the society.

Income of fund raising activity amounted to HK$429 thousands which was significantly lower than last year of HK$1,263 thousands because only a single charity dinner event was held in 2016 and the high record income of fund raising activity in last year was mainly due to a one-off sizable donation. Income from seminars & courses amounted to HK$228 thousands which was also below last year of HK$458 thousands. This drop was due to the turnover of a chiropractic staff who was in charge of seminars & courses during the year. The foundation has expanded other revenue stream by making a term deposit in RMB in the year. Together with other miscellaneous income, total other activities income amounted to HK$197 thousands.

Total expenses amounted to HK$5,164 thousands, an increase of 8% over last year. Increased cost was mainly due to expanded clinical service. Clinical service cost amounted to HK$4,140 thousands, an increase of 16% compared to last year. During the year, the foundation has changed long term investment strategy that RMB deposit was converted back to Hong Kong dollar in order to purchase potential valuable Hong Kong stocks. Because of this strategy change, the foundation incurred total loss of HK$239 thousands under other activities. This loss consisted of 2 portions. One portion was related to a one-off foreign exchange loss for sale of RMB deposit upon maturity and the other portion was related to temporary loss on changes in fair value of financial assets when the foundation invested in potential valuable common stocks in Hong Kong Stock Exchange.

Scholarship expenditure, seminars & courses and fund raising costs amounted to HK$285 thousands, HK$199 thousands and HK$158 thousands respectively and these costs were all below last year level. Administration costs amounted to HK$143 thousands, an increase of 7% above last year.

Surplus in 2016 was HK$1,237 thousands which was 44% below last year.

Year to date cumulative reserved fund has reached HK$7,473 thousands since the foundation was setup. As establishing a chiropractic college would need capital of hundreds of millions of dollars, current reserved fund pool is far from sufficient to complete this mission. Thus, the foundation continues to focus on income generating activities.

2016 Income, Costs & Surplus Chart

Details of income, costs and surplus are listed below to provide transparency of fund allocation. Details of the annual audit report can be found in the website.

2015 Financial Highlights

It is the fourth year of the foundation, which continued to make good progress in raising income, increasing sponsorship and accumulating surplus.

Total income amounted to HK$7,022 thousands, an increase of 38% over last year. Major income of clinical service amounted to HK$4,733 thousands, an increase of 54% as compared to last year. This is the result of additional consultation income generated from a new chiropractor joining the clinical service. Another crucial fast growing income of fund raising activity amounted to HK$1,263 thousands which was more than double over last year. Only one single fund raising event of World Spine Day 2015 was held as the foundation allocated substantial resources to plan and organize this sizable event. Donation amounted to HK$568 thousands which was 52% below 2014. The reduction in donation was due to a one-off significant donation of HK$1million in 2014. Income from seminars & courses and other activities amounted to HK$458 thousands, a slight increase of 2% above last year.

Total expenses amounted to HK$4,797 thousands, an increase of 48% over last year. Increased costs were due to a variety of reasons, including expanded clinical service, larger scope of fund raising event and increased scholarship to more student chiropractors. Clinical service cost amounted to HK$3,557 thousands, an increase of 39% from last year. The foundation managed the clinic effectively that clinic income growth rate of 54% is higher than the respective cost increment rate of 39%. Fund raising cost amounted to HK$574 thousands, an increase of more than double over last year. Fund raising event margin in fact increased from 52% last year to 54% this year despite higher cost incurred this year. Scholarship expenditure amounted to HK$291 thousands, an increase of 90% over last year. The foundation granted another scholarship to the second candidate to start chiropractic study this year. Seminars & courses and other activities cost amounted to HK$240 thousands, an increase of 25% over last year. While higher total costs incurred, the foundation managed administration costs of HK$135 thousands effectively at 3% of total expenditure as compared to 5% last year.

Surplus in 2015 was HK$2,225 thousands which was 20% above last year.

Year to date cumulative reserved fund has reached HK$6,236 thousands since the foundation was setup. As establishing a chiropractic college would need capital of hundreds of millions of dollars, current reserved fund pool is far from sufficient to complete this mission. Thus, the foundation continues to focus on income generating activities.

2015 Income, Costs & Surplus Chart

Details of income, costs and surplus are listed below to provide transparency of fund allocation. Details of the annual audit report can be found in the website.

Finance

Fund of the foundation mainly comes from clinical service and donation received. Other fund sources include fund raising activities and seminar & course. The foundation aims to retain every single donated, raised and earned dollar as surplus after deducting necessary clinic’s operating, fund raising, seminar & course and administration costs. Scholarship expense is also deducted from the surplus if the right candidate is identified to receive the scholarship. The remaining surplus is saved as reserved capital to fulfill the mission of constructing the first chiropractic college in Hong Kong.

2014 Financial Highlights

The foundation made good progress to raise income and accumulate surplus.

Total fund income of HK$5,099 thousands was 58% above last year. Major fund source, clinical service, increased by 28% compared with last year and donation received was more than double the amount received in 2013. Increasing fund raising activities also contributed accelerating income to the foundation and have started to become growing essential fund source.

Total fund spent of HK$3,247 thousands was 32% above last year. The foundation managed costs effectively that income growth rate of 58% exceeded cost increase rate of 32%. The foundation has started to grant first scholarship of HK$154 thousands to an identified right candidate for taking overseas chiropractic study. This first scholarship covered full year tuition study.

Surplus in 2014 was HK$1,852 thousands which was significantly above 2013 surplus of HK$757 thousands.

Year to date cumulative reserved capital since fund inception reached HK$4,011 thousands. As establishing a chiropractic college would need capital of hundreds of millions of dollars, current reserved capital pool is far from sufficient to complete this mission. Thus, the foundation is focusing on income generating activities.

2014 Fund