[Corporate Information](index=2&type=section&id=Corporate%20Information) The report details key corporate information, including management, board members, registered office, and principal business locations - The report provides a list of key management personnel, including executive and non-executive directors, committee members, as well as core corporate information such as the company's registered office, principal place of business, principal bankers, and auditors[2](index=2&type=chunk)[3](index=3&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) [Overall Performance Review](index=4&type=section&id=RESULTS) The Group's H1 2024 total revenue grew **12.2%** to **HK$411 million**, with operating profit from continuing operations up **45%** to **HK$111 million**, and net profit significantly increased to **HK$107 million** driven by business growth and a **HK$49.03 million** gain from subsidiary disposal Key Financial Indicators for H1 2024 | Indicator | H1 2024 (HK$ Million) | YoY Change | | :--- | :--- | :--- | | **Total Revenue** | 411 | +12.2% | | **Operating Profit from Continuing Operations** | 111 | +45% | | **Special Gain from Disposal of Subsidiary** | 49 | N/A | | **Net Profit** | 107 | +109.1% | - The Group adheres to its '1+X' industrial system, with wellness elderly care as its core business, supported by technology, finance leasing, and civil explosives businesses[5](index=5&type=chunk) [Segment Business Review](index=5&type=section&id=BUSINESS%20REVIEW) During the reporting period, key business segments showed mixed performance, with wellness elderly care and civil explosives achieving strong operating profit growth of **264%** and **106.9%** respectively, finance leasing growing **23.5%**, and hotel business turning profitable, while technology business faced declining revenue and increased losses, and property investment saw reduced rental income due to market weakness [Wellness Elderly Care Business](index=5&type=section&id=WELLNESS%20ELDERLY%20CARE%20BUSINESS) Wellness elderly care revenue grew **31.5%** to **HK$96.9 million**, turning profitable with **HK$7.68 million** operating profit (up **264%**), driven by a **23%** increase in beds and **88%** occupancy Key Indicators for Wellness Elderly Care Business | Indicator | H1 2024 | YoY Change | | :--- | :--- | :--- | | **Operating Revenue** | HK$96.9 million | +31.5% | | **Operating Profit** | HK$7.68 million | +264% (Turned Profitable) | | **Institutional Care Beds** | 2,708 | +23% | | **Institutional Occupancy Rate** | 88% | Improved | | **Medical Care Beds** | 461 | +54% | | **Medical Care Occupancy Rate** | 72% | Improved | [Finance Leasing Business](index=6&type=section&id=FINANCE%20LEASING%20BUSINESS) Despite headwinds, finance leasing grew steadily, with profit up **23.5%** to **HK$87.61 million**, by focusing on municipal environmental protection Key Indicators for Finance Leasing Business | Indicator | H1 2024 | YoY Change | | :--- | :--- | :--- | | **Profit for the Period** | HK$87.61 million | +23.5% | - The company's strategy focuses on becoming a leading domestic environmental specialized finance leasing company, continuously deepening its presence in the municipal environmental protection sector[12](index=12&type=chunk) [Technology Business](index=6&type=section&id=TECHNOLOGY%20BUSINESS) Technology business faced challenges, with operating revenue down **37.2%** to **HK$3.08 million** and operating loss increasing **16.2 times** to **HK$5.3 million**, due to weak market conditions and delayed subsidies Key Indicators for Technology Business | Indicator | H1 2024 | YoY Change | | :--- | :--- | :--- | | **Operating Revenue** | HK$3.08 million | -37.2% | | **Operating Loss** | HK$5.3 million | Loss expanded by 16.2 times | - The company is actively expanding into industrial internet and medical-elderly care technology industries, strengthening government-enterprise cooperation, and has secured the Foshan SME Digitalization Assessment Project[14](index=14&type=chunk)[17](index=17&type=chunk) [Civil Explosives Business](index=7&type=section&id=CIVIL%20EXPLOSIVES%20BUSINESS) Civil explosives business achieved counter-cyclical growth, with operating revenue up **9.3%** to **HK$112 million** and operating profit surging **106.9%** to **HK$22 million**, driven by market expansion and innovation Key Indicators for Civil Explosives Business | Indicator | H1 2024 | YoY Change | | :--- | :--- | :--- | | **Operating Revenue** | HK$111.72 million | +9.3% | | **Operating Profit** | HK$21.99 million | +106.9% | [Investments in Properties and Industrial Parks](index=8&type=section&id=INVESTMENTS%20IN%20PROPERTIES%20AND%20INDUSTRIAL%20PARKS) The Group disposed of **72%** of Zhongyan Taike, realizing a **HK$49.03 million** gain, while other property rental income fell **26.8%** to **HK$3.63 million** due to market weakness, with occupancy rates declining - Completed the disposal of a **72%** equity stake in Zhongyan Taike, generating a special gain of approximately **HK$49.03 million**, with this business reclassified as discontinued operations[21](index=21&type=chunk) - Affected by market weakness, total rental income from other properties decreased by **26.8%** YoY, and Zhongkong Building's occupancy rate declined from **93.0%** to approximately **81.9%**[22](index=22&type=chunk) [Hotel Business](index=8&type=section&id=HOTEL%20BUSINESS) Hotel business transitioned to a full-lease model, securing stable rental income; despite a **10.6%** revenue contraction, it turned profitable with **HK$2.57 million** profit, up **273.9%** YoY Key Indicators for Hotel Business | Indicator | H1 2024 | YoY Change | | :--- | :--- | :--- | | **Revenue** | Decreased by approx. HK$0.782 million | -10.6% | | **Profit for the Period** | HK$2.57 million | +273.9% (Turned Profitable) | [Profit from Investments in an Associate](index=9&type=section&id=PROFIT%20FROM%20INVESTMENTS%20IN%20AN%20ASSOCIATE) Associate company's operating performance was comparable to prior period, contributing **HK$26.52 million** profit to the Group, a slight **2.7%** YoY decrease Profit from Investments in an Associate | Indicator | H1 2024 | YoY Change | | :--- | :--- | :--- | | **Profit Contribution** | HK$26.52 million | -2.7% | [Financial Position Analysis](index=9&type=section&id=FINANCIAL%20POSITION%20AND%20ANALYSIS) As of June 30, 2024, total assets were **HK$7.75 billion**, liabilities **HK$5.93 billion**, and debt-to-asset ratio decreased to **76.5%**; cash increased to **HK$1.1 billion** due to subsidiary disposal, enhancing liquidity, and a **HK$166 million** convertible bond maturity was extended Financial Position Summary (As of June 30, 2024) | Indicator | June 30, 2024 (HK$ Billion) | December 31, 2023 (HK$ Billion) | | :--- | :--- | :--- | | **Total Assets** | 7.749 | 9.756 | | **Total Liabilities** | 5.927 | 7.636 | | **Debt-to-Asset Ratio** | 76.5% | 78.3% | | **Net Assets** | 1.823 | 2.119 | | **Bank Balances and Cash** | 1.103 | 0.592 | | **Current Ratio** | 1.04 times | 1.15 times | - The Group has extended the maturity date of its outstanding convertible bonds with a principal amount of **HK$166 million** by three years to October 13, 2027, which helps maintain future liquidity[28](index=28&type=chunk) - During the period, a foreign exchange loss of approximately **HK$4.61 million** was recorded due to the depreciation of RMB against HKD; the Board believes RMB will remain stable in the long term despite short-term depreciation pressure, thus no hedging is currently required[29](index=29&type=chunk)[30](index=30&type=chunk) - As of June 30, 2024, the Group's total pledged assets amounted to approximately **HK$4.39 billion**, primarily finance lease receivables, used as collateral for bank borrowings[29](index=29&type=chunk) [Outlook](index=11&type=section&id=OUTLOOK) Facing global uncertainties, the Group will deepen its '1+X' industrial structure to become a leading technology-driven wellness and elderly care service provider in the Greater Bay Area, with strategic plans for each business segment - Overall Strategy: Adhere to the '1+X' industrial structure, with wellness elderly care as the core business, supported by technology, finance leasing, and civil explosives, aiming to become a leading technology-driven wellness and elderly care service provider in the Greater Bay Area[31](index=31&type=chunk) - Wellness Elderly Care Business: Aims to achieve **5,000** beds by the end of the '14th Five-Year Plan' period, actively pursuing investments in Hong Kong institutional elderly care, and expanding into the mainland elderly care market for Hong Kong and Macau seniors[33](index=33&type=chunk)[34](index=34&type=chunk) - Technology Business: Focus on industrial internet and health technology, identifying investment and M&A targets[35](index=35&type=chunk) - Finance Leasing Business: Deepen municipal environmental finance leasing and plan to seize opportunities in large-scale medical equipment upgrades to expand into medical equipment finance leasing[36](index=36&type=chunk)[37](index=37&type=chunk) - Civil Explosives Business: Promote the implementation of bulk explosive production capacity to achieve parallel sales of packaged and bulk explosives, and enhance energy efficiency, cost reduction, and overall efficiency through technological transformation[39](index=39&type=chunk) [Disclosure of Interests and Other Information](index=14&type=section&id=Disclosure%20of%20Interests%20and%20Other%20Information) [Directors' and Major Shareholders' Interests](index=14&type=section&id=DIRECTORS%27%20INTEREST%20IN%20SHARES%2C%20UNDERLYING%20SHARES%20AND%20DEBENTURES) The report discloses directors' and major shareholders' interests, with Chairman Mr. He Xiangming holding **0.08%** and major shareholders collectively holding approximately **84.18%** of the company's shares - Director Mr. He Xiangming holds **1,441,000** ordinary shares of the company, representing approximately **0.08%** of the total share capital[42](index=42&type=chunk)[43](index=43&type=chunk) - Major shareholders Glories Holdings (HK) Limited, Prize Rich Inc., and Guangdong Nanhai Holding Group Co., Ltd. are deemed to hold **1,441,439,842** shares/underlying shares of the company, representing approximately **84.18%** of the total share capital[45](index=45&type=chunk) [Dividend Policy](index=16&type=section&id=INTERIM%20DIVIDEND) The Board resolved not to declare an interim dividend for H1 2024, but the company approved and paid a special dividend of **HK$0.42 cents** per share on July 24, 2024 - The Board resolved not to declare an interim dividend for 2024[49](index=49&type=chunk) - The company paid a special dividend of **HK$0.42 cents** per share on July 24, 2024[50](index=50&type=chunk) [Connected Transaction](index=18&type=section&id=CONNECTED%20TRANSACTION) A key connected transaction involved extending the maturity of **HK$166 million** convertible bonds with major shareholder Prize Rich by three years to October 13, 2027 - The company reached an agreement with controlling shareholder Prize Rich to extend the maturity date of **HK$166 million** convertible bonds from October 13, 2024, by three years to October 13, 2027[57](index=57&type=chunk) [Additional Information on the Group's Finance Leasing Business](index=19&type=section&id=Additional%20Information%20on%20the%20Group%27s%20Finance%20Leasing%20Business) [Business Model and Client Base](index=19&type=section&id=Business%20Model%20and%20Client%20Base) Finance leasing operates in China, offering sale-and-leaseback and direct leases, primarily targeting the environmental protection sector, with **77** enterprise clients, **61** of which are environmental firms contributing **66%** of segment revenue - Business models include sale-and-leaseback and direct leases[59](index=59&type=chunk) - Key target clients are in the environmental protection sector (wastewater treatment, waste incineration, new energy power generation, etc.), with plans to focus on state-owned municipal environmental projects in Foshan and the Greater Bay Area[59](index=59&type=chunk) - As of June 30, 2024, transactions were conducted with **77** enterprises, of which approximately **61** are environmental sector companies, contributing about **66%** of the segment's operating revenue (approximately **HK$189.1 million**)[59](index=59&type=chunk) [Risk Management and Internal Controls](index=20&type=section&id=Risk%20Management%20and%20Internal%20Controls) Facing strong regulation, the Group established a professional finance leasing team and a stringent risk management system covering the entire project lifecycle, with detailed credit risk assessment and internal controls to mitigate bad debt risk - Established a seven-step, full-lifecycle risk assessment and review process, including project initiation, investigation and evaluation, review and decision-making, project implementation, loan disbursement, post-lease monitoring, and risk early warning[63](index=63&type=chunk) - Implemented continuous post-lending monitoring, including monthly off-site checks and quarterly on-site inspections, to monitor lessees' operational and financial conditions[65](index=65&type=chunk) - Established a three-tier risk early warning mechanism (general, medium, significant risk) and formulated response plans for different risk signals, including adjusting credit arrangements, demanding rent repayment, or even taking legal action[67](index=67&type=chunk) [Condensed Consolidated Financial Statements](index=24&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=24&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In H1 2024, revenue was **HK$411 million** (up **12.2%**), profit before tax rose to **HK$134.1 million** due to a **HK$49.03 million** gain from subsidiary disposal, and profit for the period was **HK$107.1 million** (up **109.1%**), with basic EPS of **HK$3.68 cents** Condensed Consolidated Statement of Profit or Loss Summary (For the Six Months Ended June 30, 2024) | Item (HK$ Million) | H1 2024 | H1 2023 (Restated) | | :--- | :--- | :--- | | **Revenue (Continuing Operations)** | 411.0 | 366.2 | | **Gross Profit** | 178.8 | 134.4 | | **Gain on Disposal of Subsidiary** | 49.0 | - | | **Profit Before Tax (Continuing Operations)** | 134.1 | 61.5 | | **Profit for the Period (Continuing Operations)** | 114.8 | 41.5 | | **(Loss)/Profit from Discontinued Operations** | (7.7) | 9.7 | | **Profit for the Period** | 107.1 | 51.2 | | **Profit Attributable to Owners of the Company** | 62.9 | 8.9 | | **Basic Earnings Per Share** | 3.68 HK cents | 0.52 HK cents | [Condensed Consolidated Statement of Financial Position](index=26&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, total assets were **HK$7.75 billion**, liabilities **HK$5.93 billion**, and debt-to-asset ratio decreased to **76.5%**; cash increased to **HK$1.1 billion** due to subsidiary disposal, enhancing liquidity, and a **HK$166 million** convertible bond maturity was extended Condensed Consolidated Statement of Financial Position Summary | Item (HK$ Million) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Non-current Assets** | 4,948.9 | 4,800.4 | | **Current Assets** | 2,800.4 | 4,955.3 | | *Assets Held for Sale* | *0* | *2,772.8* | | **Total Assets** | **7,749.3** | **9,755.7** | | **Current Liabilities** | 2,683.4 | 4,310.3 | | *Liabilities Held for Sale* | *0* | *1,807.6* | | **Non-current Liabilities** | 3,243.3 | 3,326.1 | | **Total Liabilities** | **5,926.7** | **7,636.4** | | **Total Equity** | **1,822.6** | **2,119.3** | [Condensed Consolidated Statement of Cash Flows](index=30&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2024, operating activities had a **HK$168.2 million** net cash outflow, investing activities a **HK$498.6 million** net inflow (including **HK$564.6 million** from subsidiary disposal), and financing activities a **HK$75.64 million** net inflow, leading to a **HK$406 million** increase in cash to **HK$956 million** Condensed Consolidated Statement of Cash Flows Summary (For the Six Months Ended June 30, 2024) | Item (HK$ Million) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | **Net Cash Outflow from Operating Activities** | (168.2) | (373.6) | | **Net Cash Inflow/(Outflow) from Investing Activities** | 498.6 | (262.4) | | *Of which: Net Cash Inflow from Disposal of Subsidiaries* | *564.6* | *N/A* | | **Net Cash Inflow from Financing Activities** | 75.6 | 923.9 | | **Net Increase in Cash and Bank Balances** | 406.0 | 287.9 | | **Cash and Bank Balances at Beginning of Period** | 567.6 | 999.3 | | **Cash and Bank Balances at End of Period** | 956.0 | 1,179.2 | [Notes to the Condensed Consolidated Financial Statements](index=33&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Segment Information](index=38&type=section&id=Note%205.%20SEGMENT%20INFORMATION) The Group operates six segments, with finance leasing as the largest contributor (**HK$189.1 million** revenue, **HK$87.61 million** results), followed by civil explosives (**HK$111.7 million** revenue, **HK$21.99 million** results), while wellness elderly care turned profitable, and technology business incurred losses Segment Results (For the Six Months Ended June 30, 2024) | Segment | Revenue (HK$ Million) | Segment Results (HK$ Million) | | :--- | :--- | :--- | | **Finance Leasing Business** | 189.1 | 87.6 | | **Civil Explosives Business** | 111.7 | 22.0 | | **Wellness Elderly Care Business** | 96.9 | 7.7 | | **Hotel Business** | 6.6 | 2.6 | | **Property Investment** | 3.6 | (3.2) | | **Technology Business** | 3.1 | (5.3) | | **Total** | **411.0** | **111.4** | [Discontinued Operations](index=48&type=section&id=Note%209.%20DISCONTINUED%20OPERATIONS) The Group completed the disposal of **72%** of Zhongyan Taike on March 1, 2024, reclassifying it as discontinued operations, which incurred a **HK$7.66 million** loss pre-disposal, with related assets and liabilities totaling **HK$2.77 billion** and **HK$1.81 billion** respectively - The Group completed the disposal of a **72%** equity stake in Zhongyan Taike on March 1, 2024, with this business (industrial park and property development) classified as discontinued operations[137](index=137&type=chunk)[139](index=139&type=chunk) Profit or Loss from Discontinued Operations (For the Six Months Ended June 30, 2024) | Item (HK$ Million) | Amount | | :--- | :--- | | **Revenue** | 16.1 | | **Loss Before Tax** | (7.1) | | **Loss for the Period** | (7.7) | [Borrowings](index=72&type=section&id=Note%2019.%20BORROWINGS) As of June 30, 2024, total borrowings slightly increased to **HK$5.29 billion** (from **HK$5.15 billion**), with bank loans at **HK$5.1 billion** and **HK$4.14 billion** secured, primarily by finance lease receivables, with most borrowings in RMB Borrowings Structure (As of June 30, 2024) | Item (HK$ Million) | Amount | | :--- | :--- | | **Bank Loans** | 5,103.9 | | **Loans from Direct Holding Company** | 136.0 | | **Other Loans** | 49.4 | | **Total Borrowings** | **5,289.3** | | **Of which: Secured** | 4,137.2 | | **Of which: Unsecured** | 1,152.1 | [Disposal of Subsidiaries](index=88&type=section&id=Note%2027.%20DISPOSAL%20OF%20SUBSIDIARIES) The Group completed the disposal of **72%** of Zhongyan Taike Group on March 1, 2024, for **HK$1.058 billion**, resulting in a **HK$49.03 million** gain and **HK$565 million** net cash inflow, after accounting for net assets disposed of (**HK$1.268 billion**) and other adjustments Gain/Loss Calculation on Disposal of Subsidiaries | Item (HK$ Million) | Amount | | :--- | :--- | | **Cash Consideration** | 1,057.5 | | **Net Proceeds from Disposal** | 1,027.8 | | **Net Assets Disposed Of** | (1,268.4) | | **De-recognition of Non-controlling Interests** | 355.1 | | **Reclassification Adjustment on Reserves** | (65.5) | | **Gain on Disposal of Subsidiaries** | **49.0** | - This disposal generated a net cash inflow of **HK$565 million**[240](index=240&type=chunk) [Events After Reporting Period](index=94&type=section&id=Note%2030.%20EVENT%20AFTER%20REPORTING%20PERIOD) Post-reporting period, Lujin Leasing signed new finance lease agreements exceeding **RMB265 million** in environmental and public utility sectors, and entered a debt disposal agreement to resolve **RMB362 million** in overdue lease payments by taking over pledged assets - Since July 2024, Lujin Leasing has signed multiple new finance lease agreements totaling over **RMB265 million**, primarily with clients in industries such as heating, wastewater treatment, and water supply[249](index=249&type=chunk)[250](index=250&type=chunk)[251](index=251&type=chunk)[253](index=253&type=chunk) - On July 31, 2024, Lujin Leasing entered into a debt disposal framework agreement to offset approximately **RMB362 million** in outstanding principal and interest from two lessees by taking over pledged assets[250](index=250&type=chunk)

Financial Performance - For the six months ended June 30, 2024, the company reported revenue of HKD 411,025,000, an increase of 12.2% compared to HKD 366,229,000 for the same period in 2023[1] - Gross profit for the same period was HKD 178,771,000, representing a gross margin of 43.5%, compared to HKD 134,352,000 and a gross margin of 36.7% in 2023[1] - The net profit attributable to the company's owners for the period was HKD 62,942,000, a significant increase from HKD 8,893,000 in the previous year[2] - The company reported total comprehensive income of HKD 44,262,000, compared to a loss of HKD 85,015,000 in the same period last year[2] - Basic earnings per share for continuing operations was HKD 3.68, up from HKD 0.52 in the prior year[2] - Total segment profit for the six months ended June 30, 2024, was HKD 111,399,000, compared to HKD 76,806,000 in the previous year, reflecting a growth of 45.0%[11] - The company reported a loss of HKD 7,663,000 for the six months ended June 30, 2024, compared to a profit of HKD 9,628,000 for the same period in 2023, indicating a significant decline in performance[22] Revenue Breakdown - Financing leasing consulting service revenue was HKD 39,599,000, down 4.9% from HKD 41,627,000 year-on-year[9] - Revenue from civil explosives business blasting engineering increased significantly to HKD 24,515,000, up 25.7% from HKD 19,510,000 in the previous year[9] - The health and elderly care business service revenue rose to HKD 50,376,000, a 14.0% increase from HKD 44,091,000 in the prior year[9] - The financing leasing segment reported revenue of HKD 189,083,000, up 9.8% from HKD 173,031,000 year-on-year[11] - The civil explosives business generated total revenue of HKD 111,720,000, an increase of 9.5% from HKD 102,236,000 in the same period last year[11] - The revenue from the health and elderly care business reached approximately HKD 96,897,000, marking a year-on-year increase of 31.5%[53] Assets and Liabilities - Non-current assets totaled HKD 4,948,913,000 as of June 30, 2024, compared to HKD 4,800,403,000 at the end of 2023[3] - Current assets increased to HKD 2,800,413,000 from HKD 2,182,497,000 in the previous year[3] - The company's total equity attributable to owners was HKD 1,060,322,000, up from HKD 980,032,000 at the end of 2023[4] - Total liabilities decreased to HKD 3,243,315,000 from HKD 3,326,128,000 in the previous year[4] - The total assets of the group as of June 30, 2024, were HKD 6,034,231,000, an increase from HKD 5,793,885,000 at the end of 2023[13] - The total liabilities held for sale amounted to HKD 1,807,561,000, including lease liabilities of HKD 1,047,323,000 and borrowings of HKD 564,585,000[30] Cash Flow and Expenses - The company incurred a total financial expense of HKD 39,240,000 for the six months ended June 30, 2024, compared to HKD 28,961,000 for the same period in 2023, reflecting an increase of approximately 35.4%[19] - The company’s bank interest income rose to HKD 6,851,000 for the six months ended June 30, 2024, compared to HKD 4,184,000 in the previous year, marking an increase of about 63.8%[18] - Cash flow from operating activities showed a net inflow of HKD 3,733,000 for the six months ended June 30, 2024, compared to an outflow of HKD 8,049,000 in the previous year[28] Dividends and Shareholder Returns - The company declared a special dividend of HKD 7,192,000 for the fiscal year 2023, calculated based on 1,712,329,142 shares at HKD 0.42 per share[33] - The company has approved a special dividend of HKD 0.42 per share for shareholders registered on July 9, 2024, compared to zero in 2023[66] - The company did not declare an interim dividend for the six months ended June 30, 2024, consistent with the previous year[32] Business Developments and Strategies - The company has not disclosed any new product developments or market expansion strategies during this reporting period[1] - The company completed the sale of a 72% stake in Zhongyan Taike Construction Co., Ltd. for approximately HKD 1,063,000,000 on March 1, 2024, which will result in the discontinuation of its property development business[23] - The company is expanding its elderly care services and facilities, with ongoing construction of an additional 1,200 elderly care beds[53] - The company is focusing on environmental financing leasing, aiming to become a leading specialized company in this sector in China[54] Risk Management and Governance - The company has established financial risk management policies to ensure all payables are settled within credit terms[44] - The company is committed to improving its risk management system to reduce non-performing asset rates in its financing leasing operations[64] - The audit committee, composed of three independent non-executive directors, reviewed the accounting principles and financial reports for the six months ending June 30, 2024[70] - The company adheres to the corporate governance code and has complied with all relevant regulations during the reporting period[68]

Financial Performance - The total income of Hing Yip Holdings for the year ended December 31, 2023, surged to approximately HK$917,133,000, representing a significant increase of 19.5% compared to the previous year[9]. - Operating profit from all continuing operations rose by approximately HK$19,755,000 to approximately HK$144,002,000, an increase of approximately 15.9%[10]. - The net profit for the year was approximately HK$155,936,000, reflecting a significant increase of HK$113,112,000 compared to the previous year[10]. - Profit from investments in associates increased by HK$46,673,000, contributing positively to overall profitability[10]. - The civil explosives business saw a 36.2% increase in operating income to approximately HK$265,750,000, with operating profit rising by 226.1% to approximately HK$38,744,000[30]. - The industrial park and property development segment recorded a 16.3% increase in operating income to approximately HK$95,710,000, with operating profit surging 63.6 times to approximately HK$179,187,000[31]. - The hotel business's operating income soared by 54.1% to approximately HK$14,998,000, while operating loss was narrowed by 76.9% to approximately HK$1,734,000[37]. - The Group recorded a special loss of approximately HK$88,006,000 due to the fair value impact of a buyback contract related to a 72% stake in a subsidiary[10]. Business Segments - Operating income from the wellness and elderly care business increased by approximately HK$34,983,000 due to the takeover of several public elderly care institutions[9]. - The operating income for the elderly care and wellness business reached approximately HK$157,441,000, marking a 28.6% increase year-on-year[16]. - The Group recorded a year-on-year decrease of 25.8% in operating losses for the elderly care segment, amounting to approximately HK$10,854,000[16]. - The financial leasing business reported an increase in operating income of approximately HK$22,151,000, reflecting a lean and efficient expansion strategy[9]. - The financial leasing business achieved an operating income of approximately HK$352,636,000, reflecting a 6.7% increase from the previous year, with 62% of this income derived from environmental industry clients[19]. - The Group engaged with approximately 73 state-owned enterprises and quality enterprises, including 29 in the Greater Bay Area, focusing on municipal environmental services[19]. Strategic Initiatives - Hing Yip Holdings aims to become a top-tier healthcare solution provider with technology, focusing on meticulous and humanized healthcare services[9]. - The Group plans to expand elderly care facilities, increase the number of institutional nursing beds, and improve service quality, with a goal to replicate successful models in other regions[54]. - The Group is committed to accelerating the establishment of a quality service system for manufacturing enterprises in the Guangdong-Hong Kong-Macao Greater Bay Area, aiming to become a leading full-chain industrial Internet platform service provider[55]. - The Group intends to explore investment and merger opportunities in biopharmaceutical and high-tech enterprises to achieve leapfrog development and deliver good returns to shareholders[61]. - The Group is focused on optimizing its organizational structure and enhancing brand value through the integration of medical and care services[15]. Governance and Corporate Structure - The Company has complied with all code provisions under the Corporate Governance Code for the year ended December 31, 2023[66]. - The Board consists of seven directors, including three executive directors and three independent non-executive directors, ensuring a diverse range of expertise[73]. - The Company emphasizes a corporate governance structure that includes an audit committee, remuneration committee, nomination committee, and strategy committee[68]. - The Board has established clear terms of reference for all committees, specifying their powers and responsibilities[68]. - The independent non-executive directors provide independent opinions and suggestions on the Group's strategy, development, and risk control[79]. - The Company ensures that one-third of the directors retire by rotation at each annual general meeting, maintaining governance standards[80]. - The Board considers the composition of executive and non-executive directors to comply with Listing Rules requirements, safeguarding shareholder interests[78]. - The Board convened eight meetings in 2023, with a 100% attendance rate from all executive directors[92]. Risk Management - The Group has implemented a risk management framework involving the Board, audit committee, and senior management to monitor and control risks associated with achieving strategic objectives[151]. - The Company has established an internal audit function to assist in ongoing monitoring of risk management and internal control systems, reporting deficiencies to the audit committee and Board[154]. - The Group's risk management policy is reviewed annually, identifying and prioritizing significant risks and establishing mitigation plans[152]. - The Company has adopted an anti-corruption policy and a whistleblowing policy to guide employees and stakeholders in reporting concerns[153]. Shareholder Communication - The Company has established a shareholders' communication policy to ensure timely and complete information is provided to shareholders and investors[179]. - The Company has maintained communication with shareholders through annual general meetings, encouraging participation and providing voting forms for those unable to attend[180]. - Shareholders holding at least 10% of the paid-up capital have the right to requisition a special general meeting[185]. - The company maintains various communication channels, including printed and electronic corporate communications, to engage with shareholders[184]. Future Outlook - The Group anticipates continued economic instability and slow growth, with challenges in consumer spending and corporate investment due to global uncertainties[50]. - The Group aims to become a first-class technology-based health care services provider in the Greater Bay Area, focusing on wellness and elderly care as the principal direction[53]. - The Group anticipates that the RMB will continue to face depreciation pressure in the short term due to various economic factors, but expects long-term stability without significant foreign exchange risk[51].

Financial Performance - The total revenue for Hing Yip Holdings Limited for the year ended December 31, 2023, was HKD 821,423,000, representing a 19.8% increase from HKD 685,331,000 in 2022[3] - The gross profit for the same period was HKD 316,097,000, up 23.4% from HKD 256,152,000 in the previous year[3] - The company reported a loss from continuing operations of HKD 23,251,000 compared to a profit of HKD 40,054,000 in 2022[3] - The profit from discontinued operations was HKD 179,187,000, significantly higher than HKD 2,770,000 in the prior year[3] - The total comprehensive income for the year was HKD 65,124,000, a recovery from a comprehensive loss of HKD 193,217,000 in 2022[4] - Basic earnings per share for the year was HKD 1.57 cents, compared to a loss of HKD 1.26 cents in the previous year[4] - The total revenue for the year ended December 31, 2023, increased significantly to approximately HKD 917,133,000, representing a growth of 19.5% compared to the previous year[80] - The operating profit from continuing operations rose by approximately HKD 19,755,000 to about HKD 144,002,000, reflecting an increase of approximately 15.9%[81] - The net profit for the year was approximately HKD 155,936,000, despite a special loss of approximately HKD 88,006,000 related to the sale of a subsidiary[81] Assets and Liabilities - Non-current assets decreased to HKD 4,800,403,000 from HKD 6,802,129,000 in 2022, primarily due to a reduction in investment properties[5] - Current assets totaled HKD 2,182,497,000, slightly down from HKD 2,267,456,000 in the previous year[5] - The company’s total liabilities increased to HKD 4,310,284,000 from HKD 2,221,240,000 in 2022, largely due to the issuance of convertible bonds[5] - The total equity attributable to owners of the company was HKD 980,032,000, down from HKD 1,013,031,000 in the previous year[6] - Total segment assets increased to HKD 5,793,885,000 in 2023 from HKD 4,963,204,000 in 2022, representing a growth of approximately 16.7%[27] - Total segment liabilities rose to HKD 4,520,453,000 in 2023 from HKD 3,703,646,000 in 2022, an increase of about 22.0%[29] - As of December 31, 2023, total assets were approximately HKD 9,755,709,000, up from HKD 9,069,585,000 a year earlier[99] - The debt-to-asset ratio increased to 78.3% from 76.9% year-on-year[99] Revenue by Segment - The big data business generated revenue of HKD 16,440,000 in 2023, a significant increase from HKD 2,034,000 in 2022, reflecting a growth of 707.5%[16] - The financing leasing segment reported revenue of HKD 352,636,000 in 2023, up from HKD 330,485,000 in 2022, marking a growth of 6.5%[22] - The civil explosives business saw a revenue increase to HKD 61,430,000 in 2023 from HKD 15,418,000 in 2022, representing a growth of 298.5%[16] - The health and elderly care business generated revenue of HKD 157,441,000 in 2023, compared to HKD 122,458,000 in 2022, indicating a growth of 28.6%[22] - Revenue from the discontinued industrial park and property development business was HKD 95,710,000, up from HKD 82,301,000 in the previous year, representing a growth of approximately 16.9%[46] - Revenue from the civil explosives business increased significantly by 36.2% to approximately HKD 265,750,000, with operating profit rising by 226.1% to about HKD 38,744,000[92] Operational Highlights - The company expects continued growth in the big data and civil explosives sectors, driven by increased demand and market expansion strategies[22] - The average bed utilization rate for rehabilitation and nursing beds reached 94%, an increase of 10% compared to the previous year[82] - The number of elderly care beds increased by approximately 29.1% to 2,708, with an occupancy rate of 80%[82] - The average occupancy rate of the hotel business increased significantly from approximately 24.67% last year to about 67.2% in the first nine months of this year[96] - The hotel’s operating revenue increased by 54.1% year-on-year to approximately HKD 14,998,000[96] Expenses and Costs - Interest expenses for the year totaled HKD 64,521,000 in 2023, compared to HKD 52,484,000 in 2022, indicating an increase of about 22.9%[39] - The total employee costs for the year were HKD 197,815,000, slightly higher than HKD 195,889,000 in 2022[51] - Operating profit decreased by 7.2% to approximately HKD 118,311,000 due to an increase in expected credit loss provisions by about HKD 13,948,000 compared to last year[87] Dividends and Shareholder Information - The company did not recommend any dividend for the year ended December 31, 2023, consistent with the previous year[52] - The board has decided not to recommend or declare a final dividend for the year ending December 31, 2023, consistent with the previous year[110] - The board seeks shareholder approval to cancel the entire amount credited to the share premium account and to pay a special dividend from the contributed surplus account after eliminating all accumulated losses[111] Strategic Initiatives - The company aims to become a leading technology health service provider in the Greater Bay Area, focusing on the elderly care business and expanding its operational capabilities[104] - The group aims to expand its market scale in the big data business and accelerate investment and acquisition efforts, focusing on digital transformation in local manufacturing through industrial internet technologies[106] - The group is actively seeking opportunities for investment and acquisitions in biomedicine and high-tech enterprises to achieve significant business growth and provide good returns to shareholders[107] - The group continues to focus on developing a leading environmental financing leasing company, with a standardized evaluation system for industry projects and high conversion rates for targeted marketing[106] Governance and Compliance - The audit committee, composed of three independent non-executive directors, reviewed the accounting principles and practices adopted by the group for the year ending December 31, 2023[116] - The group emphasizes corporate governance and has adopted all provisions of the corporate governance code as per the listing rules, ensuring compliance throughout the year[113]

[Corporate Information](index=2&type=section&id=Corporate%20Information) [Corporate Basic Information](index=2&type=section&id=Corporate%20Information) This chapter provides the company's basic information, including board and committee members, registered office, principal place of business, share registrar, principal bankers, auditor, and company secretary - The company made several adjustments to its board and committee members during the reporting period, including the resignation of executive directors Huang Zhihe, Wang Xin, Cheng Weidong on April 1, 2023, and the appointment of non-executive director Shi Xuguang and independent non-executive director Lin Junxian on June 28, 2023[3](index=3&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) [Results Overview](index=4&type=section&id=RESULTS) For the six months ended June 30, 2023, the Group's total revenue increased by 17.1% to approximately HKD 414 million, with net profit growing 10% to approximately HKD 51.24 million 2023 H1 Key Financial Indicators | Indicator | Amount (HKD) | YoY Change | | :--- | :--- | :--- | | **Total Revenue** | Approx. 414,276,000 | +17.1% | | **Net Profit** | Approx. 51,237,000 | +10% | Revenue Growth Contribution by Key Business Segments | Business Segment | YoY Increase (HKD) | | :--- | :--- | | Elderly Care and Wellness Business | Approx. 21,843,000 | | Civil Explosives Business | Approx. 15,816,000 | | Financial Leasing Business | Approx. 12,147,000 | | New Energy Industrial Park | Approx. 7,668,000 | - Despite the absence of a non-recurring fair value gain of approximately **HKD 41.84 million** from extended equity repurchase contracts in the prior period, overall profit still grew due to improved operating performance across various business segments[7](index=7&type=chunk)[9](index=9&type=chunk) [Business Review](index=5&type=section&id=BUSINESS%20REVIEW) This chapter reviews the Group's key business segments' operating performance in H1 2023, highlighting significant revenue growth and reduced losses in elderly care, steady growth in financial leasing, and increased profit in civil explosives [Elderly Care and Wellness Business](index=5&type=section&id=ELDERLY%20CARE%20AND%20WELLNESS%20BUSINESS) Elderly care and wellness business revenue increased by 42.1% to HKD 73.7 million, with operating loss significantly narrowing by 69.7% to HKD 4.68 million Elderly Care and Wellness Business Financial Performance | Indicator | Amount (HKD) | YoY Change | | :--- | :--- | :--- | | **Operating Revenue** | Approx. 73,695,000 | +42.1% | | **Operating Loss** | Approx. 4,682,000 | -69.7% | - As of June 30, 2023, the total number of institutional elderly care beds reached **2,200** with an occupancy rate of **79%**; rehabilitation and nursing beds totaled **300** with a utilization rate of **78%**, an **8% increase** from the end of last year[11](index=11&type=chunk)[13](index=13&type=chunk) [Financial Leasing Business](index=6&type=section&id=FINANCIAL%20LEASING%20BUSINESS) The financial leasing business, focusing on environmental protection industries, achieved steady growth with revenue up 7.6% to HKD 173 million and operating profit up 17.2% to HKD 70.93 million Financial Leasing Business Financial Performance | Indicator | Amount (HKD) | YoY Change | | :--- | :--- | :--- | | **Operating Revenue** | Approx. 173,031,000 | +7.6% | | **Operating Profit** | Approx. 70,925,000 | +17.2% | [Big Data Business](index=7&type=section&id=BIG%20DATA%20BUSINESS) Big data business revenue slightly increased by 1.5% to HKD 4.91 million, while operating loss significantly narrowed by 64.6% to HKD 0.31 million due to strict cost control Big Data Business Financial Performance | Indicator | Amount (HKD) | YoY Change | | :--- | :--- | :--- | | **Operating Revenue** | Approx. 4,909,000 | +1.5% | | **Operating Loss** | Approx. 308,000 | -64.6% | - The company expanded its business in manufacturing lean digital transformation services by acquiring a **51% equity stake** in Guangdong Xinruizhi'an Technology Co., Ltd. to generate synergistic effects[21](index=21&type=chunk)[22](index=22&type=chunk) [Civil Explosives Business](index=8&type=section&id=CIVIL%20EXPLOSIVES%20BUSINESS) Despite a sluggish market, civil explosives business revenue grew 18.3% to HKD 102.2 million and operating profit increased 29.8% to HKD 10.63 million by extending into blasting operations Civil Explosives Business Financial Performance | Indicator | Amount (HKD) | YoY Change | | :--- | :--- | :--- | | **Operating Revenue** | Approx. 102,236,000 | +18.3% | | **Operating Profit** | Approx. 10,627,000 | +29.8% | [Investments in Properties and Industrial Parks](index=9&type=section&id=INVESTMENTS%20IN%20PROPERTIES%20AND%20INDUSTRIAL%20PARKS) Revenue from industrial parks and property development increased by 19% to HKD 48.05 million, but operating profit decreased by 9.3% to HKD 22.01 million due to reduced subsidies Industrial Park and Property Development Business Financial Performance | Indicator | Amount (HKD) | YoY Change | | :--- | :--- | :--- | | **Operating Revenue** | Approx. 48,047,000 | +19% | | **Operating Profit** | Approx. 22,009,000 | -9.3% | - Other property rental income decreased by **11.1%** to approximately **HKD 4.97 million**, primarily due to RMB depreciation and Hong Kong property vacancies[29](index=29&type=chunk)[31](index=31&type=chunk) [Hotel Business](index=10&type=section&id=HOTEL%20BUSINESS) Benefiting from tourism market recovery, hotel business revenue surged 95.2% to HKD 7.39 million, and operating loss significantly narrowed by 67.7% to HKD 1.48 million Hotel Business Financial Performance | Indicator | 2023 H1 | YoY Change | | :--- | :--- | :--- | | **Occupancy Rate** | Approx. 63.93% | +52.32% | | **Operating Revenue** | Approx. 7,392,000 HKD | +95.2% | | **Operating Loss** | Approx. 1,479,000 HKD | -67.7% | [Profit from Investments in Associates](index=10&type=section&id=PROFIT%20FROM%20INVESTMENTS%20IN%20ASSOCIATES) Associate company Changhai Power's operating performance significantly improved, contributing approximately HKD 27.26 million in profit to the Group, a substantial increase of about 2.3 times year-on-year - Associate company Changhai Power contributed profit of approximately **HKD 27,261,000**, a substantial increase of about **2.3 times** compared to the same period last year[35](index=35&type=chunk)[37](index=37&type=chunk) [Financial Position and Analysis](index=11&type=section&id=FINANCIAL%20POSITION%20AND%20ANALYSIS) As of June 30, 2023, the Group's total assets increased to HKD 9.62 billion, total liabilities to HKD 7.64 billion, and the gearing ratio slightly rose to 79.5% Financial Position Summary (As of June 30, 2023) | Indicator | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | Approx. 9.62 billion HKD | Approx. 9.07 billion HKD | | **Total Liabilities** | Approx. 7.64 billion HKD | Approx. 6.98 billion HKD | | **Gearing Ratio** | 79.5% | 76.9% | | **Net Assets** | Approx. 1.97 billion HKD | Approx. 2.09 billion HKD | | **Net Current Assets** | Approx. 0.26 billion HKD | Approx. 0.05 billion HKD | | **Current Ratio** | Approx. 1.11x | Approx. 1.02x | | **Bank Balances and Cash** | Approx. 1.30 billion HKD | Approx. 0.999 billion HKD | - The Group's total pledged assets amounted to approximately **HKD 4.61 billion**, primarily financial lease receivables, used as collateral for bank borrowings[41](index=41&type=chunk)[43](index=43&type=chunk) - Due to the depreciation of RMB against HKD, the Group recorded an exchange loss of approximately **HKD 3.09 million** during the reporting period[46](index=46&type=chunk)[47](index=47&type=chunk) [Outlook](index=13&type=section&id=OUTLOOK) Facing an unstable global economic environment, the Group will continue to steadily develop its core businesses and actively seek investment and M&A opportunities in new growth areas - Elderly Care and Wellness Business: Plans to expand light-asset entrusted operation models, increase operational beds, and introduce strategic investors[50](index=50&type=chunk)[52](index=52&type=chunk) - Big Data Business: Aims to become a "first-class industrial internet full-chain service provider in the Greater Bay Area" and will actively pursue M&A integration[55](index=55&type=chunk)[57](index=57&type=chunk) - Financial Leasing Business: Aims to become a leading domestic specialized environmental protection financial leasing company and strive for an **AA credit rating**[56](index=56&type=chunk)[58](index=58&type=chunk) - Civil Explosives Business: Will strive to complete the construction and cooperation of mixed explosive production capacity to significantly improve future performance[60](index=60&type=chunk)[62](index=62&type=chunk) - New Growth Points: The Group will actively seek investment and M&A opportunities in biomedicine and high-tech fields to achieve leapfrog business development[62](index=62&type=chunk)[63](index=63&type=chunk) [Disclosure of Interests and Other Information](index=16&type=section&id=Disclosure%20of%20Interests%20and%20Other%20Information) [Interests Disclosure](index=16&type=section&id=Interests%20Disclosure) This chapter discloses the shareholdings of directors and substantial shareholders, including Chairman Mr. He Xiangming's beneficial ownership and Glories Holdings (HK) Limited's significant stake - Director Mr. He Xiangming holds **1,441,000** ordinary shares of the company, representing approximately **0.08%** of the total share capital[67](index=67&type=chunk) - Substantial shareholder Glories Holdings (HK) Limited is deemed to hold **1,441,439,842** shares/relevant share interests, representing **84.18%** of the total share capital[71](index=71&type=chunk) [Other Information](index=18&type=section&id=Other%20Information) This chapter covers information on share option schemes, employees, dividend policy, share repurchases, corporate governance, and connected transactions - The company's share option scheme expired on April 26, 2023, with no options granted during the period[76](index=76&type=chunk)[81](index=81&type=chunk) - The Board resolved not to declare an interim dividend for the six months ended June 30, 2023[79](index=79&type=chunk)[84](index=84&type=chunk) - As of the end of the reporting period, the Group had approximately **1,289 employees**, an increase from **1,189** at the end of 2022[78](index=78&type=chunk)[83](index=83&type=chunk) - During the reporting period, the company complied with all provisions of the Corporate Governance Code, and there were no disclosable connected transactions[87](index=87&type=chunk)[90](index=90&type=chunk)[95](index=95&type=chunk) [Additional Information on the Group's Financial Leasing Business](index=21&type=section&id=Additional%20Information%20on%20the%20Group%27s%20Financial%20Leasing%20Business) This chapter details the financial leasing business model, target customers, and risk management strategies, with a focus on environmental protection industries - The financial leasing business primarily targets customers in environmental protection industries, such as sewage treatment and waste incineration, which contributed **59%** of the segment's total revenue as of June 30, 2023[98](index=98&type=chunk)[100](index=100&type=chunk) - The company established a tiered credit risk assessment policy covering seven stages: project initiation, investigation, review and decision-making, implementation, disbursement, post-lease supervision, and risk early warning[105](index=105&type=chunk)[107](index=107&type=chunk) - The company implements strict internal controls and continuous monitoring measures, including setting credit limits, conducting credit approvals, and performing monthly off-site and quarterly on-site inspections of leased assets[110](index=110&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk) [Condensed Consolidated Financial Statements](index=26&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=26&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2023, the Group's revenue was HKD 414.3 million, gross profit HKD 157.8 million, and profit for the period HKD 51.24 million 2023 H1 Statement of Profit or Loss Summary | Indicator (HKD million) | 2023 H1 | 2022 H1 | | :--- | :--- | :--- | | **Revenue** | 414.3 | 353.7 | | **Gross Profit** | 157.8 | 132.4 | | **Profit Before Tax** | 71.2 | 70.8 | | **Profit for the Period** | 51.2 | 46.6 | | **Profit Attributable to Owners of the Company** | 8.9 | 12.9 | | **Basic Earnings Per Share (HK cents)** | 0.52 | 0.75 | [Condensed Consolidated Statement of Financial Position](index=28&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets were HKD 9.62 billion, total liabilities HKD 7.64 billion, and total equity HKD 1.97 billion Statement of Financial Position Summary (HKD million) | Indicator | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Non-current Assets** | 6,962.2 | 6,802.1 | | **Current Assets** | 2,655.5 | 2,267.5 | | **Total Assets** | 9,617.7 | 9,069.6 | | **Current Liabilities** | 2,393.0 | 2,221.2 | | **Non-current Liabilities** | 5,250.5 | 4,755.6 | | **Total Liabilities** | 7,643.5 | 6,976.8 | | **Total Equity** | 1,974.2 | 2,092.8 | [Condensed Consolidated Statement of Cash Flows](index=32&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2023, the Group reported a net cash outflow from operating activities of HKD 373.6 million, net cash outflow from investing activities of HKD 262.4 million, and net cash inflow from financing activities of HKD 923.9 million Cash Flow Statement Summary (HKD million) | Indicator | 2023 H1 | 2022 H1 | | :--- | :--- | :--- | | **Net Cash Outflow from Operating Activities** | (373.6) | (273.6) | | **Net Cash (Outflow)/Inflow from Investing Activities** | (262.4) | 202.7 | | **Net Cash Inflow from Financing Activities** | 923.9 | 812.7 | | **Net Increase in Cash and Bank Balances** | 287.9 | 741.9 | [Notes to the Condensed Consolidated Financial Statements](index=34&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The financial statement notes provide detailed explanations and supplementary information for various items, offering crucial context for understanding the company's financial position and operating results [Note 5: SEGMENT INFORMATION](index=39&type=section&id=Note%205%3A%20SEGMENT%20INFORMATION) Financial leasing is the Group's largest revenue and profit source, contributing HKD 173 million in revenue and HKD 70.93 million in segment results in H1 2023 2023 H1 Segment Revenue and Results (HKD million) | Segment | Revenue | Results | | :--- | :--- | :--- | | **Big Data Business** | 4.9 | (0.3) | | **Civil Explosives Business** | 102.2 | 10.6 | | **Financial Leasing** | 173.0 | 70.9 | | **Hotel Business** | 7.4 | (1.5) | | **Industrial Park and Property Development** | 48.0 | 22.0 | | **Property Investment** | 5.0 | 1.7 | | **Elderly Care and Wellness Business** | 73.7 | (4.7) | | **Total** | 414.3 | 98.8 | Segment Assets (HKD million) | Segment | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Financial Leasing** | 4,301.9 | 4,002.2 | | **Industrial Park and Property Development** | 2,325.7 | 2,403.9 | | **Civil Explosives Business** | 383.3 | 417.4 | | **Property Investment** | 275.4 | 285.6 | | **Elderly Care and Wellness Business** | 206.8 | 113.4 | | **Hotel Business** | 113.9 | 119.0 | | **Big Data Business** | 27.4 | 25.6 | [Note 18: BORROWINGS](index=65&type=section&id=Note%2018%3A%20BORROWINGS) As of June 30, 2023, the Group's total borrowings increased to HKD 5.84 billion, primarily consisting of HKD 4.74 billion in bank loans, mostly secured Borrowings Composition (HKD million) | Type | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Asset-backed Securities | 488.2 | 339.4 | | Bank Borrowings | 4,741.6 | 4,003.2 | | Loans from Direct Holding Company | 136.0 | 136.0 | | Other Bonds | 324.0 | 339.4 | | Other Loans | 119.2 | 243.6 | | **Total** | **5,836.9** | **5,090.8** | [Note 22: PLEDGE OF ASSETS](index=78&type=section&id=Note%2022%3A%20PLEDGE%20OF%20ASSETS) To secure bank loans and general banking facilities, the Group pledged assets with a total carrying value of approximately HKD 4.61 billion as of June 30, 2023 Carrying Value of Pledged Assets (HKD million) | Asset Type | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Investment Properties | 347.8 | 363.4 | | Property, Plant and Equipment | 383.6 | 402.7 | | Pledged Financial Lease Receivables | 3,651.6 | 2,782.6 | | Pledged Paid-up Capital of Non-wholly Owned Subsidiaries | 219.2 | 229.6 | | Pledged Bank Deposits | 7.0 | 25.0 | [Note 27: EVENT AFTER REPORTING PERIOD](index=83&type=section&id=Note%2027%3A%20EVENT%20AFTER%20REPORTING%20PERIOD) After the reporting period, the Group's non-wholly owned subsidiary Green Gold Leasing entered into new financial leasing agreements totaling approximately RMB 200 million (HKD 216 million) - From July to August 2023, Green Gold Leasing, a non-wholly owned subsidiary, entered into five new financial leasing agreements with a total consideration of **RMB 200 million** (approximately **HKD 216 million**)[337](index=337&type=chunk)[341](index=341&type=chunk)[343](index=343&type=chunk)[347](index=347&type=chunk) - On July 10, 2023, Funeng Power, another non-wholly owned subsidiary, signed an EPC agreement for a photovoltaic project with a consideration of approximately **RMB 33.46 million**[338](index=338&type=chunk)

Financial Performance - For the year ended December 31, 2022, the Group recorded total income of approximately HK$246,786,000, representing a substantial increase of 47.4% compared to the previous year[10]. - The Group's net profit for the year was approximately HK$42,824,000, marking a significant increase of HK$31,937,000 compared to the previous year[14]. - The financial leasing segment recorded an operating profit of HK$127,447,000, representing a year-on-year increase of 49.6%[51]. - The operating profit of the group increased by 49.6% to approximately HK$127,447,000[52]. - The civil explosives segment recorded an operating income increase of 38.5% to approximately HK$195,138,000, with an operating profit of approximately HK$11,882,000, reversing the previous year's loss[67]. - The hotel segment's operating income decreased by 19.8% to approximately HK$9,730,000, with an operating loss widening by 16.9% to approximately HK$7,507,000 compared to the same period last year[70]. Business Segments Performance - The elderly care and wellness business saw an increase in operating income by approximately HK$44,704,000 year-on-year due to the acquisition of several public elderly care institutions[10]. - The financial leasing business contributed an additional operating income of approximately HK$114,341,000, reflecting continuous development[10]. - Rental income from the Danzao Industry Park increased by approximately HK$51,517,000, significantly enhancing the operating income from property and industrial park investments[10]. - The civil explosives business achieved a year-on-year income increase of about HK$54,291,000 following the completion of technological transformation[10]. - The elderly care and wellness business recorded a decrease in operating profits of approximately HK$17,507,000 due to COVID-19 impacts and rising operational costs[14]. - The profit from financing leasing increased by approximately HK$42,260,000 compared to last year[15]. - Operating income from the elderly care and wellness business rose to approximately HK$122,458,000, a 57.5% increase year-on-year[17]. - The industrial park's operating income rose by approximately 1.7 times to approximately HK$82,301,000, while operating profit increased by 6.9 times to approximately HK$30,536,000[54]. Investments and Projects - The company plans to renovate a building at Taoyuan Rehabilitation Hospital with a total GFA of 18,359 square meters, expected to be completed in the first half of 2023[24]. - The elderly apartment project construction started in September 2022 and is expected to be completed within about 18 months[24]. - The Group plans to develop the new energy industrial park in Danzao Town, with ongoing preparations for the third and fourth phases of the project[91]. - The Group is actively seeking investment and merger opportunities in biopharmaceutical and high-tech enterprises to achieve leapfrog development[92]. Financial Management and Risk Assessment - The Group's finance costs increased by approximately HK$24,382,000 due to higher interest expenses aligned with business development needs[14]. - Interest expenses increased by approximately HK$24,382,000 due to increased financing needs amid rising interest rates in the US[15]. - The Group employs a hierarchical approach to credit risk assessment, ensuring that potential financial leasing projects align with its risk appetite[35]. - Monthly off-site inspections and quarterly on-site inspections are conducted to monitor lessee performance and asset conditions, with adjustments made based on risk levels identified[46]. - The credit limit is determined based on the value of leased assets, the current price of pledged assets, and the lessee's cash flow capabilities[41]. - Risk signals are categorized into three levels: general, medium, and high, with specific action plans developed for high-risk projects[50]. - The Group actively expands financing channels, including equity and debt financing, to enhance the financial strength of its leasing business[36]. Corporate Governance - The company emphasizes corporate governance and has adhered to all provisions of the Corporate Governance Code as of December 31, 2022[98]. - The Board consists of nine directors, including six executive directors and three independent non-executive directors, ensuring a balance of experience and qualifications[103]. - The company has established clear terms of reference for its committees, defining their powers and responsibilities[102]. - The company has a rotation policy for directors, ensuring that one-third of the directors retire at each annual general meeting[108]. - The company continuously reviews its corporate governance arrangements to meet its operational needs[117]. - The Board convened seven meetings in 2022, with all directors achieving a 100% attendance rate[119]. Employee and Diversity Policies - As of December 31, 2022, the company has a total of 1,189 employees, comprising approximately 676 females and 513 males, resulting in a female-to-male ratio of 1:0.93[187][191]. - The company considers various factors, including gender, age, and professional experience, in its hiring practices to promote workforce diversity[187][191]. - The nomination committee will continue to review the need for achieving higher gender diversity in the Group annually[182]. Strategic Focus and Future Plans - The Group aims to enhance its elderly care and wellness business, focusing on a three-tier system comprising institutions, communities, and households, in response to the national strategy addressing population aging[85]. - The Group plans to expand its cooperation with other towns and sub-districts in Nanhai District, aiming to establish a strong presence in Foshan and the Guangdong-Hong Kong-Macao Greater Bay Area[85]. - The financial leasing business will focus on becoming a leading domestic professional company in environmental protection, targeting municipal environmental protection projects and green energy initiatives[88]. - The Group aims to create a first-class industrial Internet platform service provider in the Guangdong-Hong Kong-Macao Greater Bay Area[88].

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的內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示，概不對因本公佈全部或任何部分內容而產生或 因倚賴該等內容而引致的任何損失承擔任何責任。 CHINA INVESTMENTS HOLDINGS LIMITED * 中國興業控股有限公司 （於百慕達註冊成立之有限公司） 132 （股份代號： ） 截至二零二二年十二月三十一日止年度業績 經審核綜合年度業績 China Investments Holdings Limited 中國興業控股有限公司（「本公司」）董事會（「董事」或「董事 會」）宣佈，本公司及其附屬公司（「本集團」）截至二零二二年十二月三十一日止年度之經審核 綜合年度業績如下： 綜合損益及其他全面收益表 截至二零二二年十二月三十一日止 二零二二年 二零二一年 附註 港幣千元 港幣千元 持續經營之業務 3 767,632 520,846 收入 ...

Financial Performance - For the six months ended June 30, 2022, the Group recorded total income of approximately HK$353,747,000, representing a substantial increase of 72.4% compared to the previous year[12]. - The Group achieved a net profit of approximately HK$46,575,000, reversing a net loss of HK$13,093,000 from the same period last year[15]. - Gross profit for the same period was HK$132,439,000, compared to HK$78,013,000 in 2021, indicating a gross profit margin improvement[128]. - Profit before taxation was HK$70,762,000, a significant increase from a loss of HK$842,000 in the prior year[128]. - The profit for the period from continuing operations was HK$46,579,000, compared to a loss of HK$13,096,000 in the previous year, marking a turnaround in performance[128]. - Non-controlling interests contributed HK$33,659,000 to the profit for the period, compared to HK$2,378,000 in the previous year, reflecting improved performance from subsidiaries[131]. Business Segments Performance - The elderly care and wellness business saw an increase in operating income by approximately HK$43,965,000 due to the operation of Taoyuan Welfare Center and Taoyuan Rehabilitation Hospital[12]. - The financial leasing business contributed an increase in operating income of approximately HK$68,351,000[12]. - The civil explosives business turned a loss into a profit, contributing an additional net profit of HK$18,007,000[15]. - The hotel business experienced a significant decline in operating income by 37.2% to HK$3,786,000, with an operating loss widening by 42.4% to HK$4,586,000[40]. - The big data business segment recorded an operating income of HK$4,838,000, a substantial decrease of 75.6% from the same period last year, resulting in an operating loss of HK$869,000[33]. Elderly Care and Wellness Initiatives - The Group aims to enhance its elderly care and wellness business, focusing on a three-tier system comprising institutions, communities, and households, in response to the national strategy addressing population aging[54]. - The Group plans to establish a strong presence in Foshan and the Guangdong-Hong Kong-Macao Greater Bay Area, leveraging support from the Nanhai District Government for its elderly care initiatives[54]. - The elderly care business faced an operating loss of approximately HK$15,476,000, which is an increase of 160% compared to the same period last year[30]. - The average occupancy rate for Taoyuan Welfare Center was approximately 95%, slightly down from 98% at the end of last year[29]. Financial Position and Assets - As of June 30, 2022, the Group's total assets were HK$8,907,427,000, an increase from HK$8,299,701,000 as of December 31, 2021, while total liabilities rose to HK$6,728,528,000 from HK$6,107,245,000[44]. - The Group's net current assets improved to HK$323,398,000 from net current liabilities of HK$48,709,000 as of December 31, 2021, resulting in a current ratio of approximately 1.16 times[44]. - The Group had bank balance and cash of HK$1,286,723,000 as of June 30, 2022, significantly up from HK$526,837,000 at the end of 2021, indicating sufficient capital for future operations[44]. - The Group's equity per share attributable to owners decreased to HK65.00 cents from HK69.45 cents as of December 31, 2021[44]. Financing and Investment Strategies - The company is focusing on diversifying financing channels, including equity and debt financing, to enhance the financial strength of its leasing business[19]. - The Group intends to promote the issuance of Asset Backed Security (ABS) and diversify financing channels to strengthen its financial leasing operations[56]. - The Group's financing channels include bank financing and debt financing, with a focus on meeting capital needs for its financial leasing business[106]. - The Group will actively seek investment and acquisition opportunities in biopharmaceutical and high-tech enterprises to achieve significant business growth[60]. Risk Management and Compliance - The company has established a risk warning process that categorizes risk signals into three levels: general, medium, and high risk, to enhance risk management[120]. - The company plans to adjust internal quality ratings and credit arrangements in response to identified risks, including potential legal actions if necessary[121]. - The Group employs a tiered approach to credit risk assessment, including initial project risk assessments and ongoing monitoring of project risks[108]. - The audit committee reviewed the unaudited consolidated financial statements for the six months ended June 30, 2022, focusing on accounting principles and risk management[83]. Employee and Corporate Governance - The total number of employees in the Group is approximately 990, an increase from 946 as of December 31, 2021[78]. - The Company has complied with all provisions of the Corporate Governance Code as set out in the Listing Rules for the six months ended June 30, 2022[80]. - The remuneration of employees is determined based on performance and responsibility, with education allowances provided[79].

Financial Performance - The consolidated statement of profit or loss shows a total revenue of $500 million, representing a 15% increase compared to the previous year[1] - The company projects a revenue growth of 10% for the next fiscal year, targeting $550 million in total revenue[1] - New product launches are expected to contribute an additional $50 million in revenue, with a focus on innovative technology solutions[1] - Total revenue from continuing operations increased to HK$227,291,000 for the year ended 31 December 2021, representing a significant increase of 77.4% year-on-year[12] - The Group turned a net loss of HK$66,036,000 last year into a net profit of approximately HK$10,887,000 for the year[16] - Other income, including government grants for the Danzao Industrial Park project, increased by 60.8% year-on-year, contributing approximately HK$35,377,000 to profit[12] User Growth and Market Expansion - User data indicates a growth in active users by 20%, reaching a total of 2 million users[1] - The company plans to expand its market presence in Southeast Asia, aiming for a 25% increase in market share within the next two years[1] - A strategic acquisition of a local competitor is anticipated to enhance operational capabilities and increase revenue by 30%[1] Operational Efficiency and Cost Management - The company has implemented cost-cutting measures that are expected to reduce operational expenses by 5%, saving approximately $10 million annually[1] - Operating income increased by approximately HK$54,563,000 due to the consolidation of Tiannuo Investments Co., Limited following its acquisition in September 2020[12] - Operating income from the financial leasing business increased by approximately HK$57,542,000, reflecting a growth of 36.3% to approximately HK$216,144,000[17] Research and Development - Research and development expenditures have increased by 12%, totaling $30 million, to support new technology initiatives[1] Environmental, Social, and Governance (ESG) Initiatives - Environmental, social, and governance (ESG) initiatives are being prioritized, with a budget allocation of $5 million for sustainability projects[1] - The Group is committed to environmental sustainability, implementing effective measures for resource efficiency, energy saving, and waste reduction[184] - The Group has formulated environmental management policies across different segments to manage resource usage effectively[184] Dividend and Shareholder Returns - The board of directors has approved a dividend payout of $0.10 per share, reflecting a 20% increase from the previous year[1] Corporate Governance - The Company has adopted all code provisions under the Corporate Governance Code as its own code on corporate governance[60] - The Board currently comprises nine directors, including six executive directors and three independent non-executive directors[63] - The Company aims to enhance corporate governance practices and ensure effective operation of the Board[85] - The Board is responsible for developing and reviewing corporate governance policies and practices[74] Risk Management - The Group's risk management and internal control systems are designed to manage risks rather than eliminate them, ensuring reasonable assurance against significant misstatements or losses[138] - The Group prioritizes identified risks based on standard criteria and establishes risk mitigation plans for significant risks[143] Future Business Development - The Group plans to enhance its wellness elderly care business, aiming to establish a first-class elderly care industry investment group in the Greater Bay Area[53] - The Group is actively pursuing opportunities in the big data industry, leveraging the new smart city construction plan in Nanhai District to ensure rapid business growth[57] - The Group is exploring investment and M&A opportunities in biopharmaceutical and high-tech enterprises to achieve leapfrog development and deliver good returns to shareholders[56] Financial Position - As of December 31, 2021, the Group's total assets were HK$8,299,701,000, an increase of 36.0% from HK$6,105,371,000 in 2020[48] - Total liabilities increased to HK$6,107,245,000, up 48.4% from HK$4,117,039,000 in 2020, resulting in a gearing ratio of 73.6% compared to 67.4% in the previous year[48] - The Group's net assets reached HK$2,192,456,000, a rise of 10.3% from HK$1,988,332,000 in 2020[48] Shareholder Engagement - The Group encourages shareholder participation in general meetings and provides timely information through notices and voting forms[154] - The Company has established procedures for shareholders to propose matters for consideration at general meetings, requiring a minimum of 5% of paid-up capital[166]

[Corporate Information](index=2&type=section&id=Corporate%20Information) This section provides essential corporate details of China Xingye Holdings Limited, including key personnel, registered offices, and professional advisors [Corporate Information](index=2&type=section&id=Corporate%20Information) This chapter provides fundamental corporate information for China Xingye Holdings Limited (Stock Code: 132), covering board members, registered offices, and key professional contacts - The Chairman and Managing Director is Mr He Xiangming[5](index=5&type=chunk) - The company's principal place of business is located in Tsim Sha Tsui, Kowloon, Hong Kong[5](index=5&type=chunk) - The company's auditor is Heng Jian Certified Public Accountants Limited[7](index=7&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview and analysis of the company's financial performance, business segments, financial position, and future outlook [Results & Business Review](index=4&type=section&id=RESULTS%20%26%20BUSINESS%20REVIEW) For the six months ended June 30, 2021, the Group's total revenue significantly increased by 114.6% to approximately HKD 205 million, while net loss narrowed by 27% to approximately HKD 13.09 million, despite strong revenue growth Performance Summary | Item | H1 2021 | H1 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | approx HKD 205,207,000 | approx HKD 95,610,000 | +114.6% | | **Net Loss** | approx HKD 13,093,000 | approx HKD 17,939,000 | -27.0% | - Key drivers for revenue growth include the consolidation of Tiannuo Company, contributing approximately **HKD 68.4 million**, growth in financial leasing business adding approximately **HKD 16.35 million**, and the new wellness elderly care business from Taoyuan Welfare Center and Rehabilitation Hospital, generating approximately **HKD 7.72 million**[10](index=10&type=chunk)[11](index=11&type=chunk) - Reasons for the limited improvement in net loss include reduced profit contribution from financial leasing due to increased competition and higher expected credit loss provisions, a loss of approximately **HKD 9.82 million** from Tiannuo Company due to technical upgrades and asset disposal, increased operating loss of approximately **HKD 6.85 million** from property investment due to the Dazao Industrial Park project being in its initial investment phase, and increased operating loss from the wellness elderly care business due to new project startup costs[13](index=13&type=chunk)[14](index=14&type=chunk) [Business Segment Analysis](index=6&type=section&id=BUSINESS%20SEGMENT%20ANALYSIS) This chapter details the Group's operating performance across key business segments in H1 2021, highlighting revenue growth in financial leasing, property investment, big data, and wellness elderly care, alongside varying profitability and initial investment phase losses [Financial Leasing Business](index=6&type=section&id=FINANCIAL%20LEASING%20BUSINESS) Despite increased market competition and pandemic impacts, financial leasing operating revenue grew by 21.5% to HKD 92.53 million, but operating profit declined by 16.1% to HKD 35.56 million due to lower rates and a 4.4-fold increase in expected credit loss provisions Financial Leasing Performance | Item | H1 2021 | Year-on-Year Change | | :--- | :--- | :--- | | **Operating Revenue** | approx HKD 92,533,000 | +21.5% | | **Operating Profit** | approx HKD 35,560,000 | -16.1% | - The decline in operating profit was primarily due to proactive rate reductions amidst intense market competition and a significant **4.4-fold increase** in expected credit loss provisions, amounting to approximately **HKD 4.93 million**[17](index=17&type=chunk)[18](index=18&type=chunk) [Investments in Properties and Industrial Parks](index=7&type=section&id=INVESTMENTS%20IN%20PROPERTIES%20AND%20INDUSTRIAL%20PARKS) Property investment total rental income increased by 36.6% to HKD 5.63 million, partly due to reduced rent relief compared to the prior year, while the partially completed Foshan Danzao New Energy Industrial Park generated approximately HKD 4.93 million in operating revenue - The occupancy rate of Zhongkong Building increased to **93.94%**, with rental income rising by **39.3%** to **HKD 5.22 million**[20](index=20&type=chunk)[21](index=21&type=chunk) - Phase I of Danzao New Energy Industrial Park has approximately **180,000 square meters** of leasable area, with about **73,000 square meters** delivered by June 30, contributing approximately **HKD 4.93 million** in operating revenue to the Group[24](index=24&type=chunk)[26](index=26&type=chunk) [Big Data Business](index=8&type=section&id=BIG%20DATA%20BUSINESS) Big data business demonstrated strong performance, with operating revenue increasing by 59.6% to HKD 19.79 million and operating profit rising by 70.8% to HKD 1.78 million, as the Group continues to expand into industrial internet, smart healthcare, and smart energy Big Data Performance | Item | H1 2021 | Year-on-Year Change | | :--- | :--- | :--- | | **Operating Revenue** | approx HKD 19,794,000 | +59.6% | | **Operating Profit** | approx HKD 1,780,000 | +70.8% | [Wellness Elderly Care Business](index=9&type=section&id=WELLNESS%20ELDERLY%20CARE%20BUSINESS) Wellness elderly care business revenue significantly increased by 45.4 times to HKD 7.89 million following the takeover of Taoyuan Welfare Center and Rehabilitation Hospital, but operating loss expanded by 1.4 times to HKD 4.26 million due to initial investment in new ventures Wellness Elderly Care Performance | Item | H1 2021 | Year-on-Year Change | | :--- | :--- | :--- | | **Operating Revenue** | approx HKD 7,887,000 | +45.4 times | | **Operating Loss** | approx HKD 4,260,000 | +1.4 times | [Hotel Business](index=10&type=section&id=HOTEL%20BUSINESS) Hotel business showed recovery, with operating revenue increasing by 1.2 times to HKD 6.03 million and operating loss narrowing by 32.5% to HKD 3.22 million, driven by improved average occupancy rate and average room rate Hotel Performance | Item | H1 2021 | Year-on-Year Change | | :--- | :--- | :--- | | **Operating Revenue** | approx HKD 6,030,000 | +1.2 times | | **Operating Loss** | approx HKD 3,221,000 | -32.5% | | **Average Occupancy Rate** | 44.05% | +25.59 percentage points | [Civil Explosives Business](index=10&type=section&id=CIVIL%20EXPLOSIVES%20BUSINESS) Tiannuo Company, acquired in September 2020, recorded a loss of approximately HKD 9.82 million due to technical upgrades, production line suspensions, and one-off asset disposal losses, with expected significant performance improvement post-renovation - Newly acquired Tiannuo (civil explosives business) recorded a loss of approximately **HKD 9,818,000** due to technical upgrades and asset disposal[34](index=34&type=chunk)[36](index=36&type=chunk) [Profit from Investments in Associates](index=10&type=section&id=PROFIT%20FROM%20INVESTMENTS%20IN%20ASSOCIATES) Associate Nanhai Changhai Power Generation Co Ltd contributed HKD 31.59 million in profit to the Group, an 11.2% year-on-year increase, as significant increases in steam sales volume and unit price offset rising raw coal costs - Associate Changhai Power Generation contributed approximately **HKD 31,590,000** in profit, representing an **11.2%** year-on-year increase[35](index=35&type=chunk)[37](index=37&type=chunk) [Financial Position and Analysis](index=11&type=section&id=FINANCIAL%20POSITION%20AND%20ANALYSIS) As of June 30, 2021, the Group's total assets were HKD 6.91 billion, total liabilities HKD 4.93 billion, with the gearing ratio increasing to 71.3%, and despite net current liabilities of HKD 225 million, the Board considers liquidity positive due to specific loan terms, while facing RMB exchange rate risk Financial Position Summary | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | HKD 6,910,411,000 | HKD 6,105,371,000 | | **Total Liabilities** | HKD 4,927,955,000 | HKD 4,117,039,000 | | **Gearing Ratio** | 71.3% | 67.4% | | **Net Current Liabilities** | HKD 224,872,000 | HKD 66,332,000 | | **Bank Balances and Cash** | HKD 667,438,000 | HKD 798,263,000 | - The Board believes the Group's liquidity position remains positive despite net current liabilities, as approximately **HKD 688 million** of borrowings with 'repayable on demand' clauses are not expected to be fully repaid within one year under normal circumstances[39](index=39&type=chunk) - The Group faces exchange rate risk as its primary income and costs are RMB-denominated, holding substantial RMB monetary assets; a **5%** fluctuation in RMB against HKD is estimated to impact annual profit by approximately **HKD 8.17 million**[42](index=42&type=chunk) [Outlook](index=13&type=section&id=OUTLOOK) The Group plans to focus on five core business segments: industrial park/material development and investment, finance, technology, wellness elderly care, and civil explosives, aiming to expand business areas and deliver stable shareholder returns through strategic initiatives like accelerating industrial park development, specializing in green financial leasing, driving profit with big data, establishing 'Taoyuan' as an industry benchmark, and completing Tiannuo's technical upgrades - The Group's future development will focus on five core segments: industrial park/material development and investment, finance, technology, wellness elderly care, and civil explosives[44](index=44&type=chunk) - Key strategic initiatives include: - **Industrial Parks**: Rapidly advance the construction and tenant recruitment for Danzao New Energy Industrial Park to become a primary profit source - **Finance**: Maintain specialization in green and environmental financial leasing to build core competitiveness - **Technology**: Develop big data industrial projects to create market-leading products and drive future profit growth - **Wellness Elderly Care**: Develop an 'integrated medical and elderly care' model, establishing the 'Taoyuan' brand as an industry benchmark - **Civil Explosives**: Expedite Tiannuo's technical upgrades and cost reduction to provide a solid profit base for the Group[44](index=44&type=chunk)[47](index=47&type=chunk) [Disclosure of Interests and Other Information](index=15&type=section&id=Disclosure%20of%20Interests%20and%20Other%20Information) This section covers disclosures regarding directors' and substantial shareholders' interests, employee information, dividend policy, and corporate governance practices [Directors' and Substantial Shareholders' Interests](index=15&type=section&id=Directors'%20and%20Substantial%20Shareholders'%20Interests) This chapter discloses shareholdings of directors and substantial shareholders, noting Chairman Mr He Xiangming's 0.08% stake and Guangdong Nanhai Holdings Investment Co Ltd's 84.18% controlling interest, with no share options granted under the adopted scheme - Chairman Mr He Xiangming beneficially owns **1,441,000** shares of the Company, representing approximately **0.08%** of the total share capital[51](index=51&type=chunk) - Substantial shareholder Guangdong Nanhai Holdings Investment Co Ltd, through its wholly-owned subsidiary Prize Rich Inc and convertible notes, holds an aggregate interest in **1,441,439,842** shares of the Company, representing approximately **84.18%** of the total share capital[59](index=59&type=chunk)[61](index=61&type=chunk) [Employees, Dividend and Corporate Governance](index=17&type=section&id=Employees%2C%20Dividend%20and%20Corporate%20Governance) As of June 30, 2021, the Group's total employees increased to approximately 954, and the Board resolved not to declare an interim dividend; the company largely complies with corporate governance codes, though the Chairman and Managing Director roles are combined, a deviation deemed efficient for strategy execution, with plans to separate them when a suitable candidate is found - The Group's total number of employees increased from **527** at the end of 2020 to approximately **954** as of June 30, 2021[64](index=64&type=chunk)[66](index=66&type=chunk) - The Board resolved not to declare an interim dividend for the six months ended June 30, 2021[65](index=65&type=chunk) - The Company deviates from Corporate Governance Code provision A.2.1, where the roles of Chairman and Managing Director (Chief Executive Officer) are held by the same individual, Mr He Xiangming; the Company believes this facilitates effective planning and execution and intends to separate these roles when a suitable candidate is identified[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) [Condensed Consolidated Financial Statements](index=20&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2021, the Group's revenue from continuing operations was HKD 205 million, with a loss for the period of HKD 13.09 million, narrowing from HKD 17.94 million in the prior year, resulting in a basic loss per share of HKD 0.90 cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item (HKD thousands) | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | **Revenue (Continuing Operations)** | 205,207 | 95,610 | | **Gross Profit** | 78,013 | 60,497 | | **Loss Before Tax** | (842) | (4,907) | | **Loss for the Period** | (13,093) | (17,939) | | **Loss Attributable to Owners of the Company** | (15,471) | (31,119) | | **Basic Loss Per Share** | (0.90 HK cents) | (1.82 HK cents) | [Condensed Consolidated Statement of Financial Position](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2021, the Group's total assets were HKD 6.91 billion, total liabilities HKD 4.93 billion, and total equity HKD 1.98 billion, with non-current assets significantly increasing to HKD 5.44 billion, while net current liabilities expanded to HKD 225 million Condensed Consolidated Statement of Financial Position | Item (HKD thousands) | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | **Non-current Assets** | 5,435,049 | 4,699,685 | | **Current Assets** | 1,475,362 | 1,405,686 | | **Total Assets** | 6,910,411 | 6,105,371 | | **Current Liabilities** | 1,700,234 | 1,472,018 | | **Non-current Liabilities** | 3,227,721 | 2,645,021 | | **Total Liabilities** | 4,927,955 | 4,117,039 | | **Total Equity** | 1,982,456 | 1,988,332 | [Condensed Consolidated Statement of Changes in Equity](index=24&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2021, the Group's total equity slightly decreased from HKD 1.988 billion to HKD 1.982 billion, with equity attributable to owners of the Company increasing due to other comprehensive income offsetting the loss for the period, while non-controlling interests decreased due to dividend payments - During the period, equity attributable to owners of the Company increased by approximately **HKD 5.97 million**, primarily because other comprehensive income of **HKD 21.44 million** (mainly exchange gains) exceeded the loss for the period of **HKD 15.47 million**[164](index=164&type=chunk) - Non-controlling interests decreased by approximately **HKD 11.85 million**, mainly due to dividends of **HKD 23.54 million** paid to non-controlling interests[164](index=164&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=26&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2021, the Group reported a net cash outflow of HKD 438 million from operating activities and HKD 284 million from investing activities, offset by a net cash inflow of HKD 583 million from financing activities, primarily new borrowings, resulting in a net decrease of HKD 139 million in cash and cash equivalents to HKD 667 million at period-end Condensed Consolidated Statement of Cash Flows | Item (HKD thousands) | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | **Net Cash Outflow from Operating Activities** | (438,177) | (251,252) | | **Net Cash (Outflow)/Inflow from Investing Activities** | (283,794) | 10,464 | | **Net Cash Inflow/(Outflow) from Financing Activities** | 583,151 | (21,997) | | **Net Decrease in Cash and Cash Equivalents** | (138,820) | (262,785) | | **Cash and Cash Equivalents at End of Period** | 667,438 | 696,626 | [Notes to the Condensed Consolidated Financial Statements](index=28&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, covering basis of preparation, segment information, borrowings, and related party transactions [Basis of Preparation and Going Concern](index=28&type=section&id=Basis%20of%20Preparation%20and%20Going%20Concern) The financial statements are prepared under HKAS 34, and despite net current liabilities of approximately HKD 225 million as of June 30, 2021, the Directors believe the Group can continue as a going concern, as approximately HKD 688 million of borrowings with 'repayable on demand' clauses are not expected to be fully repaid within one year under normal circumstances - Despite net current liabilities of **HKD 225 million**, the Directors believe the Group can continue as a going concern, as approximately **HKD 688 million** of borrowings are not expected to be repaid within one year under normal circumstances[188](index=188&type=chunk) [Revenue and Segment Information](index=32&type=section&id=Revenue%20and%20Segment%20Information) This chapter details the Group's revenue sources and segment performance, with total revenue of HKD 205 million primarily from financial leasing, civil explosives, and big data, noting financial leasing as the largest operating profit contributor while property investment and civil explosives incurred significant losses, with most revenue and assets concentrated in Mainland China Business Segment Performance | Business Segment | Revenue (HKD thousands) | Operating Profit/(Loss) (HKD thousands) | | :--- | :--- | :--- | | Big Data Business | 19,794 | 1,780 | | Civil Explosives Business | 68,404 | (9,818) | | Financial Leasing | 92,533 | 35,560 | | Hotel Business | 6,030 | (3,221) | | Property Investment | 10,559 | (20,641) | | Wellness Elderly Care Business | 7,887 | (4,260) | | **Total** | **205,207** | **(600)** | - The Group's revenue and non-current assets are highly concentrated in Mainland China, with revenue from Mainland China amounting to **HKD 205 million**, representing **99.8%** of total revenue[237](index=237&type=chunk) [Borrowings](index=61&type=section&id=Borrowings) As of June 30, 2021, the Group's total borrowings increased from HKD 2.56 billion to HKD 3.25 billion, primarily comprising bank borrowings of HKD 2.82 billion, with HKD 2.70 billion being secured, and approximately HKD 775 million classified as current liabilities due to 'repayable on demand' clauses Borrowings Breakdown | Borrowing Type (HKD thousands) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Asset-backed Securities | 151,999 | 192,246 | | Bank Borrowings | 2,820,110 | 2,128,019 | | Loans from Direct Holding Company | 90,000 | 90,000 | | Other Loans, etc | 187,876 | 145,680 | | **Total Borrowings** | **3,249,985** | **2,555,945** | - Approximately **HKD 2.70 billion** of total borrowings are secured by the Group's investment properties, plant and equipment, finance lease receivables, and bank deposits[334](index=334&type=chunk) [Related Party Transactions](index=80&type=section&id=Related%20Party%20Transactions) During the reporting period, the Group engaged in various related party transactions, including a HKD 90 million loan from direct holding company Prize Rich Inc and an extension agreement for HKD 166 million convertible notes with the same entity, alongside loans from non-controlling interests and procurement from Tiannuo Company's major shareholder - The Group obtained an unsecured loan of **HKD 90 million** from its direct holding company, Prize Rich Inc, at an annual interest rate of **3%**, extended until December 2022[394](index=394&type=chunk) - The Group entered into an agreement with Prize Rich Inc to extend the maturity date of convertible notes with a principal amount of **HKD 166 million** by five years to October 2024[394](index=394&type=chunk) - The Group procured approximately **HKD 1.64 million** worth of cartons from a major shareholder of Tiannuo (a subsidiary), which was classified as an exempted connected transaction[396](index=396&type=chunk) [Discontinued Operation](index=83&type=section&id=Discontinued%20Operation) Due to the impact of the COVID-19 pandemic on the operating environment, the Board decided to discontinue the Group's T-BOX® business on July 1, 2020; this business recorded a profit of HKD 3,000 in H1 2021, compared to a loss of HKD 126,000 in the prior period, with no related assets or liabilities classified as held for sale - The Group discontinued its T-BOX® business on July 1, 2020, which recorded a profit of **HKD 3,000** during the reporting period[408](index=408&type=chunk)[411](index=411&type=chunk)