Company Overview - China Fortune Holdings Limited primarily sells and distributes mobile phones and digital products in the People's Republic of China (PRC) since its establishment in 1992[4]. - The Group acquired Zhuhai Reminda Telecom Equipment Company Limited in 2007, expanding its telecommunications equipment business[5]. - The Group's corporate culture emphasizes a blend of Western and Eastern management philosophies, aiming to become one of the largest wireless communication and data product service providers in the region[7]. - The Group has transitioned from being a subsidiary to an associate for Beijing Feiying, reflecting a strategic shift in its business model[6]. - The Group's business structure includes diversified operations in telecommunications, resources, and investments, showcasing its multi-faceted approach to growth[18]. - The Group was first listed on the GEM Board of The Stock Exchange of Hong Kong Limited in 2000 and successfully transferred to the Main Board in 2004, highlighting its growth trajectory[4]. - The Group's strong shareholder background and professional management team support its operational strategies and market positioning[4]. Financial Performance - The Group achieved a record annual sale of 2.1 million sets of mobile phones and a record net profit exceeding HK$60 million[21]. - For the year ended December 31, 2022, the Group's revenue increased by approximately 2% to HK$80.6 million compared to HK$79.2 million in 2021[57][71]. - The Group reported a loss of HK$20.4 million for 2022, compared to a loss of HK$14.3 million in 2021[57][60]. - Revenue from mobile phone trading business was HK$80.6 million in 2022, with contributions from Shanghai and Hong Kong at HK$41.1 million (51.0%) and HK$39.5 million (49.0%) respectively[72]. - Other income increased by HK$1.4 million or 134.1% to approximately HK$2.4 million in 2022, primarily due to HK$1.6 million from database traffic monetisation[81]. - The Group's gross profit margin was 0.4% in 2022, up from 0.2% in 2021, attributed to increased competition and consumer spending pullback[79][80]. - The Group reported a net loss of approximately HK$14.4 million for the year ended 31 December 2022, compared to a net loss of approximately HK$9.9 million in the previous year, representing an increase in losses of 45.5%[101]. - Basic loss per share increased to HK$7.83 cents in the current year from HK$5.65 cents in the previous year, reflecting a deterioration in per-share performance[102]. - Gross profit for the year ended 31 December 2022 was HK$300,000, with a gross margin of 0.4%, compared to a gross profit of HK$100,000 and a margin of 0.2% in the previous year, indicating a slight improvement in profitability despite ongoing challenges[84]. - Administrative expenses rose by HK$5.5 million or 36.0% to approximately HK$20.8 million for the year ended 31 December 2022, mainly driven by increased salaries and promotion expenses related to business development projects[91]. Market Trends and Challenges - The international political and economic environment in 2022 was complicated, but China's economy gradually emerged from the trough due to effective pandemic control policies[50]. - The mobile phone market in China is expected to continue declining due to international trade conflicts and economic uncertainties, although this decline may be partially offset by advancements in 5G and 6G technologies[148]. - The shift in customer focus from mobile phone functionality to shopping experience is expected to benefit large mobile telecommunication chain stores[56]. - The Group's performance was impacted by the COVID-19 pandemic and global economic recession, affecting consumer spending and mobile phone retail market[74][77]. - Economic activities in China continue to be affected by the COVID-19 pandemic, leading to concerns about the mobile phone market and lower average selling prices impacting gross profit[178][180]. Strategic Initiatives - In 2021, the Group entered the eco-friendly bag automatic bag taking machine market and database traffic monetization from mobile applications, indicating diversification in its product offerings[6]. - The Group aims to diversify its business by exploring opportunities in eco-friendly products and database traffic monetisation[63][64]. - The Group plans to strengthen relationships with leading manufacturers and customers to seek further cooperation opportunities in the mobile phone industry[58][61]. - The Group will continue to seek market opportunities and enhance revenue sources to generate satisfactory returns for shareholders in 2023[65][68]. - The Group plans to diversify trading markets, products, and distribution channels in 2023 following successful market expansion in Hong Kong in 2022[182]. - The company intends to diversify its trading markets, products, and distribution channels to continue growth in the mobile phone business[153]. Investments and Acquisitions - A HK$160 million syndicated loan was successfully arranged[37]. - The acquisition of 51% shareholdings of Synergy Pacific was completed[38]. - The Group obtained nationwide distributorship for Samsung mobile phones[23]. - The Group successfully obtained the Fulfillment Distributorship for all Nokia Stores in the PRC[24]. - Fortune Shanghai increased its share capital from US$6 million to US$25 million[33]. - A US$16 million syndicated loan was successfully arranged[32]. - The Group tapped into the used mobile phones and mobile app market in the PRC[30]. Future Outlook - The Group expects a significant turnaround in the Chinese economy in 2023 as COVID-19 restrictions are loosened and economic activities resume[169][172]. - The demand for 5G-related equipment remains robust, with expectations that China will lead the market in 5G volume due to recent developments in the mobile phone supply chain[176][179]. - The Group anticipates that 5G technology will enhance customer experiences across various sectors, including smart homes and retail[177][180]. - The company remains optimistic about the long-term development of the environmental products and services sector in the PRC[192]. - The company plans to continue pursuing new opportunities and strategic cooperation to ensure stable growth and performance in the future[192]. Environmental Initiatives - The "Daizhangmen" business integrates IoT terminals to distribute environmentally friendly bags for free, aiming to monetize database traffic through offline advertising[183]. - In 2020, the PRC Environmental Protection Bureau announced a policy to ban non-degradable plastic bags by the end of 2025, reflecting the government's commitment to plastic pollution control[184]. - Since June 2022, the database traffic monetization business has rebounded and is growing steadily, with plans for national investment promotion in the second half of 2023[190]. - In 2023, the company aims to deepen market integration with various environmental friendly bag brand agents and manufacturers, enhancing competitiveness through a free product revenue model[191]. Financial Position - Cash and cash equivalents decreased significantly to approximately HK$6.2 million as at 31 December 2022 from approximately HK$31.5 million as at 31 December 2021, indicating a liquidity challenge[113]. - Trade and other receivables decreased by HK$6.5 million or 83.7% to approximately HK$1.3 million as at 31 December 2022, primarily due to the settlement of trade receivables[105]. - Trade and other payables decreased by approximately HK$5.3 million or 20.1% to approximately HK$21.1 million as at 31 December 2022, reflecting improved cash management[114]. - The Group's net current liabilities as of December 31, 2022, were approximately HK$15.5 million, compared to net current assets of HK$4.0 million as of December 31, 2021[120][124]. - The current ratio decreased to 0.37 times as of December 31, 2022, from 1.11 times as of December 31, 2021[120][124]. - The total number of employees decreased from 43 as of December 31, 2021, to 38 as of December 31, 2022[130][135]. - The Board did not recommend the payment of any dividend for the year, consistent with the previous year[139].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內 容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不 會就因本公佈全部或任何部份內容而產生或因倚賴該等內容而引致之 任何損失承擔任何責任。 China Fortune Holdings Limited 中國長遠控股有限公司* （於百慕達註冊成立之有限公司，以CFH Limited之名稱於香港進行業務） （股份代號：110） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 之 全 年 業 績 公 佈 中 國 長 遠 控 股 有 限 公 司（「本 公 司」）董 事 會（「董 事 會」）宣 佈 本 公 司 及 其 附 屬 公 司（統 稱 為「本 集 團」）截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 的 綜 合全年業績，連同比較數字如下： ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內 容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不 會就因本公佈全部或任何部份內容而產生或因倚賴該等內容而引致之 任何損失承擔任何責任。 China Fortune Holdings Limited 中國長遠控股有限公司* （於百慕達註冊成立之有限公司，以CFH Limited之名稱於香港進行業務） （股份代號：110） 截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 之 全 年 業 績 公 佈 中 國 長 遠 控 股 有 限 公 司（「本 公 司」）董 事 會（「董 事 會」）宣 佈 本 公 司 及 其 附 屬 公 司（統 稱 為「本 集 團」）截 至 二 零 二 二 年 十 二 月 三 十 一 日 止 年 度 的 綜 合全年業績，連同比較數字如下： ...

Financial Performance - The total revenue for the six months ended June 30, 2022, was HKD 28,100,000, a decrease of approximately HKD 25,600,000 or 47.7% compared to HKD 53,700,000 for the same period in 2021[9]. - Revenue from mobile phone and related accessories trade was HKD 28,100,000, with contributions from Shanghai and Hong Kong being HKD 22,800,000 and HKD 5,300,000, respectively, accounting for 81.1% and 18.9% of total revenue[9]. - The company's revenue for the six months ended June 30, 2022, was HKD 28,110,000, a decrease of 47.8% compared to HKD 53,706,000 for the same period in 2021[82]. - The gross profit for the same period was HKD 55,000, with a gross margin of 0.2%[82]. - The company reported a loss before tax of HKD 11,167,000, compared to a loss of HKD 4,791,000 in the previous year, indicating a significant increase in losses[82]. - The total comprehensive loss for the period was HKD 11,654,000, compared to HKD 5,084,000 in the previous year, representing an increase of 129.1%[83]. - For the six months ended June 30, 2022, the mobile phone segment reported revenue of HKD 28,110,000, a decrease of 47.8% compared to HKD 53,706,000 for the same period in 2021[117]. - The total reported segment loss for the mobile phone and mining segments was HKD 7,376,000, compared to a loss of HKD 1,183,000 in the previous year, indicating a significant increase in losses[103]. Expenses and Losses - The net loss attributable to the owners of the company for the six months ended June 30, 2022, was HKD 7,500,000, compared to a net loss of HKD 3,500,000 for the same period in 2021[19]. - Basic loss per share for the period was HKD 0.0406, compared to HKD 0.0210 for the same period last year[20]. - Administrative expenses increased by 150% to HKD 14,000,000, primarily due to the new mobile application business in China, which incurred approximately HKD 8,400,000 in administrative expenses[15]. - Administrative expenses rose to HKD 14,028,000, up from HKD 5,637,000 in the previous year, reflecting a 148.5% increase[82]. - The company reported a net cash outflow from operating activities of HKD 10,574,000 for the six months ended June 30, 2022, compared to HKD 4,542,000 in the same period last year[92]. Assets and Liabilities - Cash and cash equivalents totaled HKD 16,000,000 as of June 30, 2022, down from HKD 31,500,000 as of December 31, 2021[24]. - As of June 30, 2022, the group's net asset value attributable to shareholders was HKD 44,100,000, down from HKD 53,900,000 as of December 31, 2021, representing a decrease of approximately 18.5%[28]. - The group's current liabilities net amount was approximately HKD 8,000,000 as of June 30, 2022, compared to HKD 4,000,000 as of December 31, 2021, indicating a significant increase in current liabilities[28]. - The current ratio decreased to 0.75 times as of June 30, 2022, from 1.11 times as of December 31, 2021, reflecting a decline in liquidity[28]. - The company reported a total of HKD 3,047,000 in financial assets measured at fair value as of June 30, 2022, compared to HKD 3,294,000 at the end of 2021, indicating a decline of approximately 7%[136]. - The company's total liabilities decreased to HKD 31,979,000 from HKD 36,168,000, a decline of 11.9%[86]. Market Conditions and Outlook - The mobile phone market in China is experiencing a slowdown, with expectations of continued decline in the coming years, although partially offset by the development of 5G and 6G technologies[39]. - The group anticipates continued challenges in the consumer and retail sectors due to the dual impact of the US-China trade war and the COVID-19 pandemic, leading to an uncertain outlook for the coming years[52]. - By the end of 2021, the number of mobile phone users in China reached approximately 1.63 billion, with significant growth in 5G users and network users, indicating substantial market opportunities[55]. Business Developments - The group has recognized a full impairment provision of HKD 174.6 million for mining rights and HKD 9 million for related plants and equipment due to the inability to clarify the status of mining license renewal with the Ministry of Natural Resources[47]. - The group did not make any significant investments or acquisitions during the six months ended June 30, 2022[32][31]. - The company plans to enhance its promotion of the "Bag Master" business, which integrates IoT technology to provide free delivery of eco-friendly bags and aims to monetize offline traffic through advertising partnerships[56]. - The company has installed eco-friendly bag dispensing machines in collaboration with various hospitals, supermarkets, and other venues, aiming to monetize database traffic and related services[58]. - The database monetization business has shown a rebound and steady growth since June 2022, indicating positive market trends[58]. - The company aims to integrate with multiple eco-friendly bag brands and manufacturers, enhancing its competitive edge through a free product revenue model[59]. - The company is optimistic about the development of the eco-friendly products and services sector in China, indicating a positive long-term outlook[59]. Shareholder Information - As of June 30, 2022, the company’s major shareholder, Mr. Liu Xiaoying, holds 63.40% of the issued shares, reflecting significant insider ownership[64]. - The average number of shares issued increased to 183,555,888 as of June 30, 2022, from 167,719,781 shares in the previous year, reflecting an increase of about 9%[122]. - The board of directors did not recommend any interim dividend for the six months ended June 30, 2022, consistent with the previous year[34]. - The board did not declare an interim dividend for the six months ended June 30, 2022, and June 30, 2021[142].

Financial Performance - The company recorded a revenue of HKD 3,125,000 from the sale of 51% equity in its subsidiary Chongqing Yuanjia during the year ended December 31, 2020[7]. - The company successfully settled debts amounting to HKD 8,960,000 through a tripartite settlement agreement in April 2020, resulting in full repayment of the debt[7]. - The financial statements for the year ended December 31, 2021, will include comparative figures from the previous year, allowing for better assessment of performance[8]. Auditor's Opinion - The auditor's report for the year ended December 31, 2021, included a qualified opinion due to insufficient audit evidence regarding loans and debts[6]. - The company aims to eliminate the qualified opinion from its financial statements for the year ending December 31, 2022, provided no other issues arise[10]. - The management and audit committee have acknowledged the reasons behind the auditor's qualified opinion and are working towards addressing the concerns raised[9]. - The company has taken steps to resolve issues related to loans and debts that were highlighted in the previous auditor's report[7]. - The company is committed to providing additional information regarding the auditor's qualified opinion to shareholders and potential investors[5]. Governance and Compliance - The board of directors includes three executive directors and three independent non-executive directors, ensuring a diverse governance structure[12]. - The company is focused on improving its financial reporting and compliance to enhance investor confidence and transparency[10].

Company Overview - China Fortune Holdings Limited primarily sells and distributes mobile phones and digital products in the People's Republic of China (PRC) and was established in 1992[6]. - The Group acquired Zhuhai Reminda Telecom Equipment Company Limited in 2007, marking its entry into the telecommunications equipment market[7]. - The Group's corporate culture emphasizes a blend of Western and Eastern management philosophies, aiming to become one of the largest wireless communication and data product service providers in the region[9]. - The Group transitioned from accounting Beijing Feiying as a subsidiary to an associate in 2020, reflecting a strategic shift in its business focus[8]. - The Group's business structure includes diversified development through investments, mergers, and acquisitions in telecommunications and resource sectors[21]. - The Group was first listed on the GEM Board of the Stock Exchange of Hong Kong Limited on February 16, 2000, and transferred to the Main Board on January 26, 2004[6]. Financial Performance - The Group's financial summary and performance metrics are detailed in the annual report, providing insights into revenue and profit trends[5]. - The Group achieved a record annual sale of 2.1 million sets of mobile phones and a record net profit exceeding HK$60 million[24]. - For the year ended December 31, 2021, the Group's revenue decreased by approximately 2% to HK$79.2 million compared to HK$80.9 million in 2020[60][72]. - The loss for the year amounted to HK$14.3 million, an increase from a loss of HK$4.6 million in 2020[60][63]. - The Group's gross profit for the year ended 31 December 2021 was HK$0.1 million, with a gross profit margin of 0.2%, compared to HK$0.4 million and 0.5% for the year ended 31 December 2020[79]. - Other income increased by HK$0.2 million or 29.0% to approximately HK$1.0 million for the year ended 31 December 2021, driven by database traffic monetization from mobile applications[81]. - The net gain for the year ended 31 December 2021 was HK$0.2 million, a significant decrease from HK$11.0 million in 2020, primarily due to the absence of gains from deemed disposal and disposal of subsidiaries[82]. - The Group reported a loss attributable to owners of approximately HK$9.9 million for the year ended 31 December 2021, compared to a profit of approximately HK$0.2 million in the previous year[100]. - Basic loss per share was HK$5.65 cents in 2021, compared to basic earnings per share of HK$0.23 cents in 2020[101]. Business Developments - In 2021, the Group expanded into eco-friendly bag automatic bag taking machines and database traffic monetization from a mobile application business called Beijing Daizhangmen[8]. - The nationwide distributorship of Samsung mobile phones was newly obtained[26]. - The Fulfillment Distributorship for all Nokia Stores in the PRC was successfully obtained[27]. - The Group aims to support the plastic ban in China and enhance shareholder returns through new business initiatives[65][68]. - The Group plans to strengthen relationships with leading manufacturers and customers to explore further cooperation opportunities[61][64]. - The Group is actively exploring opportunities in eco-friendly bag automatic machines and database traffic monetization to align with environmental policies in China[191][194]. Market Conditions - The outlook for the mobile phone industry in China remains challenging, but there is significant potential for development[61][64]. - The mobile phone market in China is expected to continue declining due to international trade conflicts and the impact of COVID-19, although this decline may be partially offset by 5G and 6G developments[152]. - The company’s mobile phone business faces challenges due to intensified competition and uncertainties from the US-China trade war and COVID-19[154]. - Customers are shifting focus from mobile phone functionality to shopping experience, requiring integrated service platforms in the 5G era[155]. - The ongoing COVID-19 pandemic has led to a pessimistic outlook for the wholesale and retail markets, potentially lowering the Group's gross profit due to customers placing orders at lower average selling prices[190][193]. Legal and Regulatory Issues - The Group has been involved in mining operations since 2010, but faced regulatory challenges with expired mining permits[156]. - An impairment of HK$174.6 million was recognized for the mining rights and HK$9.0 million for related plant and equipment due to the inability to renew the mining operating permit[164]. - The Group obtained an arbitral award of HK$19.8 million against the Chongqing supplier, but enforcement was unsuccessful due to the supplier having no assets[172]. - A judgment of approximately HK$12.7 million was entered against the Guangzhou supplier, but the supplier had no remaining assets for enforcement proceedings[177]. - Management will continue to explore all possible means to recover the prepayments made to suppliers[179]. Future Outlook and Strategies - The Group will closely monitor changes in the economic environment and proactively seize opportunities in Hong Kong and ASEAN trading markets amid increasing global economic uncertainties[185][187]. - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[199]. - New product launches are expected to contribute an additional HKD 200 million in revenue, with a focus on enhancing user experience[199]. - The company is investing in new technology development, allocating HKD 50 million for R&D initiatives in the upcoming year[199]. - Market expansion plans include entering two new provinces in China, aiming for a 5% market share within the first year[199]. - The company is considering strategic acquisitions to enhance its service offerings, with a budget of HKD 300 million earmarked for potential deals[199]. - A new marketing strategy is being implemented, targeting a 15% increase in brand awareness over the next year[199]. - The company aims to improve operational efficiency, targeting a reduction in costs by 8% through process optimization[199].

Financial Performance - The total revenue for the six months ended June 30, 2021, was HKD 53.7 million, an increase of approximately HKD 32.3 million or 150.8% compared to HKD 21.4 million for the same period in 2020[6]. - Revenue from mobile phone trading contributed HKD 20.2 million, accounting for 94.3% of total revenue, while revenue from promoting mobile applications was HKD 1.2 million, representing 5.7% of total revenue[6]. - Gross profit decreased by 92.6% to approximately HKD 54,000, with a gross profit margin dropping from 3.4% to 0.1%[7]. - The net loss attributable to the owners of the company for the six months ended June 30, 2021, was HKD 3.5 million, compared to a loss of HKD 2.9 million for the same period in 2020[14]. - Basic loss per share for the reporting period was HKD 0.021, compared to HKD 0.0298 for the same period last year[15]. - The company reported a loss before tax of HKD 4,791,000 for the six months ended June 30, 2021, an improvement of 14.6% compared to a loss of HKD 5,615,000 in the prior year[57]. - Total comprehensive loss for the period was HKD 5,084,000, compared to a loss of HKD 2,815,000 in the same period last year, reflecting ongoing financial challenges[58]. Cash Flow and Liquidity - As of June 30, 2021, the total cash and cash equivalents amounted to HKD 37,400,000, an increase from HKD 30,100,000 as of December 31, 2020, with additional capital raised of approximately HKD 15,600,000 from a rights issue[19]. - Cash and cash equivalents increased to HKD 37,384,000 as of June 30, 2021, up from HKD 30,122,000 at the end of 2020, indicating improved liquidity[59]. - The net cash used in operating activities was HKD (4,542,000), compared to HKD (3,952,000) for the same period in 2020, indicating a decline in operational cash flow[63]. - The net cash generated from financing activities increased significantly to HKD 11,684,000 in 2021 from HKD 5,841,000 in 2020, reflecting improved financing conditions[63]. Expenses and Cost Management - Administrative expenses decreased by 33.2% to HKD 5.6 million from HKD 8.4 million in the previous year[11]. - Financing costs decreased to HKD 200,000 from HKD 500,000 in the previous year[12]. - The company reported a decrease in employee costs, totaling HKD 3,292,000 in 2021 compared to HKD 5,105,000 in 2020[79]. Shareholder Information - The board of directors did not recommend any interim dividend for the six months ended June 30, 2021, consistent with the previous year[27]. - The company raised approximately HKD 48,600,000 through a rights issue at a subscription price of HKD 0.53 per share, issuing 91,777,944 shares, completed on February 10, 2021[42]. - As of June 30, 2021, Mr. Liu Xiaoying held 116,345,481 shares, representing 63.40% of the company's issued share capital[45]. - The company has not issued any stock options under the stock option plan since its adoption on May 28, 2014, and no options were granted as of June 30, 2021[47]. Market and Industry Insights - The mobile phone market in China is experiencing a slowdown due to international trade conflicts and the COVID-19 pandemic, with expectations of continued decline in the coming years, although partially offset by 5G development[30]. - By the end of 2020, China had built approximately 1,000,000 5G base stations, with around 160,000,000 users utilizing applications based on 5G networks[29]. - The telecommunications industry in China saw fixed asset investment increase by over 15% year-on-year in 2020, with about one-third of total investment allocated to 5G technology[29]. - China's mobile phone market remains strong, with approximately 1.6 billion mobile phone users, reflecting significant opportunities in mobile applications and commerce[39]. - The company expects strong demand for 5G equipment as the technology matures, with an upward revision of short-term 5G forecasts[40]. Governance and Compliance - The company has established an audit committee in compliance with listing rules, enhancing governance and oversight[54]. - There were no reported violations of the securities trading code by employees during the reporting period, indicating adherence to compliance standards[55]. - The company complied with the corporate governance code, with Mr. Liu Xiaoying serving as both Chairman and CEO, which is a deviation from the code's recommendation[52]. Asset and Liability Management - Trade receivables and other receivables decreased by 68.7% to approximately HKD 1 million from HKD 3.3 million as of December 31, 2020[18]. - Trade payables and other payables decreased by 4.3% from approximately HKD 22,000,000 as of December 31, 2020, to approximately HKD 21,100,000 as of June 30, 2021, primarily due to a reduction in accrued expenses[20]. - The company's total assets less current liabilities stood at HKD 16,591,000, a significant increase from HKD 3,124,000 at the end of 2020, showing better financial health[59]. - The total liabilities for the mobile phone segment were HKD (6,044,000) and for the mining segment were HKD (15,492,000), resulting in total segment liabilities of HKD (21,536,000)[70]. Impairments and Legal Matters - The mining rights were fully impaired at HKD 174.6 million, along with related plant and equipment impairment of HKD 9 million, due to the inability to renew mining licenses[33]. - A total of HKD 33.7 million in prepayments to mobile phone suppliers was recognized as an impairment loss of HKD 24.9 million as of December 31, 2017[35]. - The arbitration ruling resulted in a recovery of HKD 10.2 million from a supplier, with a total claim of HKD 19.8 million against the Chongqing supplier[36]. - The Guangzhou supplier's total outstanding liabilities were approximately HKD 455 million, leading to a court-ordered liquidation[37].

Business Structure and Strategy - The Group's business structure includes telecommunications, resource exploration, and investment, focusing on diversified business development through mergers and acquisitions [22]. - The Group's corporate culture emphasizes a blend of Western and Eastern management philosophies, aiming to become a leading provider of wireless communication and data products in the region [9]. - The Group plans to strengthen its existing relationships with leading manufacturers to explore further cooperation opportunities in the mobile phone industry [65]. - The Group's franchise retail business in the PRC was commenced, expanding its market presence [51]. - The Group formed a joint venture with TeleChoice International Limited for the Nokia fulfillment business [32]. Financial Performance - The annual report provides a comprehensive overview of the Group's financial performance and strategic direction for future growth [4]. - The Group achieved a record annual sale of 2.1 million sets of mobile phones and a record net profit exceeding HK$60 million [26]. - For the year ended December 31, 2020, the Group's revenue decreased by approximately 25% to HK$80.9 million compared to HK$107.9 million for the year ended December 31, 2019 [62]. - The loss for the year amounted to HK$4.6 million, a significant improvement from the loss of HK$32.8 million for the year ended December 31, 2019 [62]. - The Group recorded total revenue of HK$80.9 million for the year ended 31 December 2020, a decrease of approximately HK$27.6 million or 25.4% compared to HK$108.5 million in 2019 [74]. - Revenue from mobile phone trading business contributed HK$79.7 million or 98.5% of total revenue, while revenue from the promotion of the mobile application was HK$1.2 million, representing 1.5% of total revenue [76]. - Gross profit decreased by 61.3% from HK$1.0 million in 2019 to HK$0.4 million in 2020, primarily due to reduced performance in mobile phone trading and application promotion [78]. - The gross profit margin fell from 0.9% in 2019 to 0.5% in 2020, attributed to increased bargaining power from telecommunications chain stores and underperformance in application promotion [84]. - Other income increased by HK$0.3 million or 56.1% to approximately HK$0.8 million in 2020, mainly due to higher interest income and miscellaneous income [85]. - The Group achieved a net gain of HK$11.0 million for the year ended 31 December 2020, a turnaround from a net loss of HK$12.2 million in 2019 [86]. Shareholder and Capital Management - The company has a strong shareholder background and a professional management team, established in Hong Kong in 1992 [6]. - A US$16 million syndicated loan was successfully arranged [28]. - Fortune Shanghai increased its share capital from US$6 million to US$25 million [29]. - The Company proposed a capital reorganisation on November 10, 2020, involving share consolidation and capital reduction [138]. - The Company proposed a rights issue on November 10, 2020, aiming to raise approximately HK$48.6 million by issuing 91,777,944 rights shares at a subscription price of HK$0.53 per share [140]. - The rights issue was completed on February 10, 2021, with net proceeds of approximately HK$15.6 million [141]. Market Challenges and Opportunities - The COVID-19 pandemic has adversely impacted the global wholesale and retail environment, affecting the Group's business operations [67]. - The mobile phone market in China is expected to face challenges, but the development potential remains enormous due to strong internal consumption [65]. - The mobile phone market in China is expected to continue declining in the coming years due to international trade conflicts and the impact of COVID-19, although this decline may be partially offset by 5G development [154]. - The company faces challenges in its mobile phone business due to intensified competition in the retail industry and uncertainties from the US-China trade war and COVID-19 outbreak [155]. - Customers are shifting focus from mobile phone functionality to shopping experience, requiring integrated service platforms rather than just sales [160]. Management Changes - The company has undergone significant management changes, with several directors resigning and new appointments made in September 2020 [14]. - Mr. Wang Yu, aged 55, joined the group in April 2006 and was appointed as Executive Director in November 2009 [199]. - Mr. Wang serves as the General Manager of a subsidiary, responsible for the company's mining business [199]. - Mr. Wang has over 10 years of experience in channel distribution management for computer products and mobile phones in local and multinational companies in China [199]. Mining Operations and Regulatory Challenges - The Group has been involved in mining operations but faced restrictions on exploitation activities due to permit limitations [161]. - The mining operating permit was renewed for exploration activities only, with no exploitation allowed, indicating ongoing regulatory challenges [162]. - The Group recognized a full impairment of HK$174.6 million for mining rights and HK$9.0 million for related plant and equipment due to the inability to renew the mining operating permit [167]. - The mining operating permit status was confirmed as "expired" by the Ministry of Natural Resources of the PRC, indicating it cannot be renewed [173]. - The Group's PRC lawyers have concluded that the mining operating permit will eventually be deregistered [173]. Employee and Operational Changes - As of December 31, 2020, the Group employed 15 employees, a decrease from 71 employees as of December 31, 2019 [134]. - Selling and distribution costs rose significantly to approximately HK$0.3 million in 2020 from HK$20,000 in 2019, primarily due to increased salaries and transportation expenses [87]. - Administrative expenses decreased by 10.3% to HK$15.5 million in 2020 compared to HK$17.3 million in the previous year, mainly due to lower depreciation and rental expenses [92]. Legal and Financial Recoveries - The Group obtained a final arbitral award of HK$19.8 million against the Chongqing supplier, with HK$10.2 million already repaid [175]. - A judgment of approximately HK$12.7 million was entered against the Guangzhou supplier, which has been enforced after the supplier withdrew their appeal [176]. - The total outstanding liability of the Guangzhou supplier to creditors is approximately HK$455 million [184].

Financial Performance - The total revenue for the six months ended June 30, 2020, was HKD 21,400,000, a decrease of approximately HKD 39,500,000 or 64.8% compared to HKD 60,900,000 for the same period in 2019[5] - The company's revenue for the six months ended June 30, 2020, was HKD 21,414,000, a decrease of 64.8% compared to HKD 60,867,000 for the same period in 2019[55] - Revenue from mobile application promotion was HKD 1,200,000, accounting for 5.7% of total revenue, while revenue from mobile phone trading contributed HKD 20,200,000 or 94.3%[5] - Gross profit increased by HKD 100,000 or 32.1% to HKD 700,000, with a gross profit margin rising from 0.9% to 3.4%[6] - Gross profit for the same period was HKD 728,000, representing a gross margin of approximately 3.4%[55] - The company reported a loss before tax of HKD 5,615,000, an improvement from a loss of HKD 8,592,000 in the previous year, indicating a reduction in losses by 34.5%[55] - The loss attributable to the owners of the company was HKD 2,878,000, compared to HKD 6,384,000 in the prior year, reflecting a 54.9% decrease in losses[55] - The group reported a loss of HKD 2,878,000 for the six months ended June 30, 2020, compared to a loss of HKD 6,384,000 for the same period in 2019, indicating an improvement in performance[81] - Total comprehensive income for the period was HKD (2,815,000), significantly better than HKD (8,753,000) in the previous year, indicating a 67.8% reduction in comprehensive loss[56] Cash Flow and Liquidity - Cash and cash equivalents totaled HKD 19,700,000 as of June 30, 2020, compared to HKD 18,200,000 at the end of 2019[18] - Cash and cash equivalents increased to HKD 19,721,000 as of June 30, 2020, from HKD 12,487,000 at the end of June 2019, marking a 58.5% increase[60] - Operating cash flow for the six months ended June 30, 2020, was HKD (3,952,000), an improvement from HKD (11,962,000) in the same period of 2019, showing a 66.9% reduction in cash outflow[60] - The company’s financing activities generated a net cash inflow of HKD 5,841,000 for the period, contrasting with a net outflow of HKD (2,165,000) in the previous year[60] Assets and Liabilities - Trade receivables increased by 117.3% to approximately HKD 35,900,000, primarily due to sales of approximately HKD 20,200,000 recorded near the reporting date[17] - The company's current liabilities net amount was HKD (19,896,000) as of June 30, 2020, worsening from HKD (6,917,000) in December 2019[57] - The company’s total assets as of June 30, 2020, were reported at HKD 73,098,000, including cash and cash equivalents of HKD 7,908,000[71] - The company reported total liabilities of HKD 104,944,000, with segment liabilities of HKD 73,471,000 and related party payables to Mr. Liu amounting to HKD 25,799,000[71] - The group’s total liabilities to related parties decreased to HKD 35,161,000 as of June 30, 2020, from HKD 37,020,000 as of December 31, 2019, showing a reduction of approximately 5%[86] Shareholder Information - The group has a significant shareholding structure, with Mr. Liu Xiaoying holding 20.52% of the issued shares and 48.85% in total through trusts[42] - As of June 30, 2020, major shareholders included Liu Xiaoying with a 20.52% stake and Li Wei with a 20.52% stake, collectively holding 48.85% of the issued share capital[47] Market Conditions and Outlook - The mobile phone market in China is experiencing a decline due to international trade conflicts and the impact of COVID-19, with expectations of continued decline in the coming year[29] - The group anticipates continued pressure on the consumer and retail sectors due to the dual impact of the US-China trade war and the COVID-19 pandemic, leading to an uncertain outlook for the coming years[37] - China has approximately 1.6 billion mobile phone users, with significant growth in 4G and 5G users, indicating substantial opportunities in mobile applications and commerce[37] Corporate Governance - The company has established an audit committee consisting of three members to oversee financial reporting and compliance[51] - The company has adhered to the corporate governance code, with some deviations noted regarding the roles of the chairman and CEO[49] - No violations of the securities trading code were reported among employees during the reporting period[53] Employee and Operational Information - The group employed a total of 50 employees as of June 30, 2020, down from 71 employees as of December 31, 2019[26] - The group’s employee costs increased to HKD 5,105,000 for the six months ended June 30, 2020, compared to HKD 4,508,000 in the same period of 2019, representing an increase of approximately 13.2%[80] Legal and Regulatory Matters - The group has initiated legal proceedings in Guangzhou to recover HKD 14,800,000 from a supplier, resulting in a judgment of approximately HKD 12,700,000, which is now enforceable[35] - The group has no contingent liabilities or guarantees as of June 30, 2020[23] Investments and Acquisitions - The group has not made any significant acquisitions or disposals of subsidiaries or associates during the six months ended June 30, 2020[24] - The group has not made any significant investments during the six months ended June 30, 2020[25] - The group has a capital expenditure of HKD 200,000 related to leasehold improvements as of June 30, 2020, unchanged from December 31, 2019[22] Financial Instruments and Fair Value - The fair value of financial assets measured at fair value through profit or loss included listed equity investments of HKD 921,000 as of June 30, 2020[91] - The fair value of Level 3 financial instruments decreased from HKD 5,350,000 at the beginning of the year to HKD 4,831,000 by June 30, 2020, reflecting a fair value change of HKD 221,000[93] - The carrying amount of financial instruments measured at amortized cost was similar to their fair value as of June 30, 2020, due to their short-term nature[94]

Revenue and Profitability - The total revenue for the six months ended June 30, 2019, was HKD 60,900,000, an increase of approximately HKD 21,400,000 or 1.5 times compared to HKD 39,500,000 for the same period in 2018[6] - Revenue from Zhejiang contributed HKD 55,800,000, accounting for 91.6% of total revenue, while revenue from Shanghai contributed HKD 5,100,000 or 8.4%[6] - Gross profit for the period was HKD 600,000, with a gross margin decrease from 1.4% in 2018 to 0.9% in 2019 due to increased bargaining power of telecom chain stores and mobile operators[7] - Other income for the six months ended June 30, 2019, was approximately HKD 300,000, a decrease of HKD 100,000 from HKD 400,000 in the same period of 2018[8] - The net loss attributable to the owners of the company for the period was HKD 6,400,000, compared to a loss of HKD 17,600,000 in the same period of 2018[14] - Basic loss per share was HKD 0.70, improved from HKD 1.92 in the previous corresponding period[15] - The net loss for the six months ended June 30, 2019, was HKD 8,687,000, a significant improvement from a net loss of HKD 19,266,000 in the prior year, representing a reduction of 54.9%[49][51] - The company reported a total comprehensive loss of HKD 8,753,000 for the period, compared to HKD 18,561,000 in the previous year, showing a 52.9% improvement[51] Assets and Liabilities - Total assets as of June 30, 2019, were HKD 57,488,000, down from HKD 72,811,000 at the end of 2018, reflecting a decrease of 21.1%[52] - Current liabilities decreased to HKD 51,657,000 from HKD 60,243,000, indicating a reduction of 14.3%[52] - The group's current assets net value decreased from approximately HKD 12.6 million on December 31, 2018, to approximately HKD 5.8 million on June 30, 2019[22] - The group's debt-to-equity ratio increased from 0.43 on December 31, 2018, to 0.52 on June 30, 2019[22] - The company's total liabilities as of June 30, 2019, were HKD 17,695,000, a slight increase from HKD 17,566,000 as of December 31, 2018, reflecting a stable liability position[53] Cash Flow and Financial Position - Cash and cash equivalents totaled HKD 12,500,000 as of June 30, 2019, down from HKD 26,600,000 as of December 31, 2018[20] - The net cash used in operating activities for the six months ended June 30, 2019, was HKD (11,962,000), compared to HKD (8,324,000) for the same period in 2018, indicating a worsening cash flow situation[55] - The company's cash and cash equivalents decreased to HKD 12,487,000 as of June 30, 2019, down from HKD 26,563,000 at the beginning of the year, reflecting a net decrease of HKD 13,567,000[55] - The company reported a net cash inflow from investing activities of HKD 560,000 for the six months ended June 30, 2019, compared to HKD 91,000 in the same period of 2018, indicating a positive trend in investment cash flow[55] - The company's financing activities resulted in a net cash outflow of HKD (2,165,000) for the six months ended June 30, 2019, compared to a net inflow of HKD 4,240,000 in the same period of 2018, indicating a shift in financing strategy[55] Employee and Administrative Expenses - Administrative expenses increased to HKD 9,200,000 for the six months ended June 30, 2019, from HKD 6,700,000 in the previous year, primarily due to depreciation and employee costs[11] - The group employed a total of 33 employees as of June 30, 2019, compared to 25 employees on December 31, 2018[26] - The group’s employee costs rose to HKD 4,508,000 for the six months ended June 30, 2019, compared to HKD 3,534,000 for the same period in 2018, reflecting a 27.6% increase[84] Market and Business Environment - The mobile phone market in China is experiencing intensified competition, with major manufacturers reducing distribution layers to enhance profitability[27] - The group has faced challenges in its mobile phone business due to the ongoing US-China trade tensions and the evolving business model in the retail sector[28] - The group anticipates that uncertainties in the Chinese economy, particularly due to ongoing US-China trade conflicts, will continue to impact consumer and retail businesses[33] Segment Performance - For the six months ended June 30, 2019, the mobile phone business reported revenue of HKD 60,867,000, an increase from HKD 39,479,000 for the same period in 2018, representing a growth of 54%[80] - The total reported segment loss for the mobile phone business was HKD 2,623,000, while the mining business reported a loss of HKD 901,000, leading to a combined segment loss of HKD 3,524,000[74] - Total reported segment assets amounted to HKD 60,107,000, with the mobile phone business contributing HKD 56,496,000 and the mining business contributing HKD 3,611,000[75] Legal and Compliance - The company has maintained compliance with the corporate governance code, although the roles of Chairman and CEO are held by the same individual[45] - The audit committee has reviewed and approved the interim results, ensuring adherence to financial reporting standards[46] Shareholder Information - As of June 30, 2019, the chairman holds 20.52% of the company's issued shares, with a total beneficial ownership of 48.85%[36] - The average number of shares issued remained constant at 917,779,442 for both periods, indicating no dilution in share capital[85] - The company did not declare an interim dividend for the six months ended June 30, 2019, and June 30, 2018[104] Financial Instruments and Valuation - The fair value of financial assets measured at fair value through profit or loss amounted to HKD 5,886,000, with HKD 536,000 classified under Level 1 and HKD 5,350,000 under Level 3[101] - The fair value of Level 3 financial assets decreased from HKD 5,350,000 at the beginning of the period to HKD 5,051,000 at the end of the period, reflecting a fair value change of (HKD 251,000) and foreign exchange adjustments of (HKD 48,000)[101] - The company adopted HKFRS 9 for the first time, which impacted the valuation of financial assets[101]