City Coolxuan Company Limited (GEM: 08050) reported FY 2026 revenue of HK$29.46 million, down 26.00% from HK$39.55 million a year earlier, reflecting a sharp contraction in its short-messaging-service (SMS) operation alongside the first-time contribution from two new business lines.

\n\nGross profit edged up to HK$1.66 million (FY 2025: HK$0.74 million) on a markedly lower cost base, yet operating leverage remained limited. Administrative expenses climbed 24.08% to HK$13.31 million, offsetting the benefit of a HK$1.80 million reversal of trade-receivable impairments and a HK$1.10 million gain from the waiver of other payables.

\n\nLoss attributable to shareholders narrowed to HK$10.22 million from HK$13.41 million; basic loss per share improved to 3.77 HK cents (FY 2025: 4.94 HK cents). Finance costs rose to HK$0.49 million, reflecting higher shareholder-loan interest imputation.

\n\nSegment performance shifted markedly: • SMS fee income fell 65.77% to HK$12.09 million. • System development services were stable at HK$4.04 million (+1.25%). • Hardware sales increased 37.65% to HK$0.33 million. • Two new streams debuted—digital virtual products (HK$10.25 million) and sales of usage rights of a SaaS-enabled mobile app and integrated marketing system (HK$2.75 million).

\n\nBalance-sheet resilience improved after shareholders converted loans into capital. A HK$25.23 million deemed capital contribution lifted equity attributable to owners to HK$14.15 million (FY 2025: negative HK$1.33 million), trimming the Group’s net liabilities to HK$0.33 million from HK$14.95 million. Current assets totalled HK$21.19 million against current liabilities of HK$21.43 million, giving a year-end current ratio of 0.99 (FY 2025: 0.86). Cash and bank balances stood at HK$1.84 million.

\n\nOperating cash outflow reached HK$12.40 million. The Board highlighted planned cost-control measures and new interest-free shareholder loans of HK$18.87 million (granted on 1 April 2026) to underpin liquidity.

\n\nAuditors Prism Hong Kong Limited issued an unmodified opinion but drew attention to a material uncertainty related to going concern, citing the year’s net loss, cash outflow and net current liabilities.

\n\nNo dividend was declared for the year.

\n\nStrategic initiatives during the year included securing a global non-exclusive distribution right for “城市酷選APP”, a SaaS tool aimed at digitalising physical-store merchants, and expanding into digital product operations via a September 2025 contract with a mainland mobile television company. Management plans to leverage synergies between the new SaaS distribution, SMS services and digital-product operations while exploring opportunities in the United States, Southeast Asia and Dubai.

\n\nThe Board expects continued focus on cost control, shareholder funding support and development of SaaS-enabled local-life marketing solutions to be central to the Group’s path toward sustainable operations.