Financial Performance - For the six months ended June 30, 2021, the group recorded revenue of HKD 263.4 million, an increase of 135.4% compared to HKD 111.9 million for the same period in 2020[7]. - The net loss for the period decreased by 14.8% to HKD 31.2 million, down from HKD 36.6 million in the previous year, primarily due to cost-saving measures and reduced losses in the securities investment sector[7]. - The toy division reported a revenue increase of 135.4% to HKD 263.4 million, recovering from the impact of COVID-19 in 2020, although it still recorded a loss of HKD 25.9 million[8]. - The securities investment segment achieved a profit of HKD 93,000 for the period, a significant improvement from a loss of HKD 3.2 million in the same period last year[9]. - The gross profit for the same period was HKD 6,184,000, recovering from a gross loss of HKD 8,547,000 in 2020[22]. - The company expects positive business performance in its toy division for the second half of the year, with increased orders and improved gross margins[20]. - The company reported a net loss of approximately HKD 31,223,000 for the six months ended June 30, 2021, compared to a net loss of HKD 36,579,000 for the same period in 2020, indicating a 14% improvement in losses year-over-year[40]. - The group reported a pre-tax loss of HKD 32,262,000 for the six months ended June 30, 2021, compared to a loss of HKD 35,972,000 in the same period of 2020, indicating an improvement in performance[57]. Assets and Liabilities - As of June 30, 2021, the group's current assets amounted to HKD 366.7 million, up from HKD 222.4 million at the end of 2020, with a current ratio of 0.66[11]. - The total loan amount as of June 30, 2021, was HKD 263.3 million, compared to HKD 232.9 million at the end of 2020[11]. - The group's equity attributable to owners decreased by 76.1% to HKD 9.06 million, primarily due to the losses recorded during the period[12]. - The capital debt ratio as of June 30, 2021, was approximately 98%, up from 90% at the end of 2020[12]. - Total liabilities as of June 30, 2021, amounted to HKD 556,767,000, compared to HKD 422,621,000 at the end of 2020, reflecting an increase in financial obligations[28]. - The company’s total liabilities exceeded its current assets, resulting in a net current liability of approximately HKD 190,100,000 as of June 30, 2021[40]. - The company has a total bank borrowings of HKD 263,301,000, which are due within the next twelve months, against cash reserves of HKD 46,760,000, indicating a liquidity challenge[40]. - Trade payables increased significantly to HKD 241,059,000 as of June 30, 2021, from HKD 140,590,000 as of December 31, 2020, marking a 71.5% increase[84]. Cash Flow and Investments - The net cash used in operating activities for the six months ended June 30, 2021, was HKD 28,266,000, an improvement from HKD 85,836,000 in the same period of 2020, representing a reduction of about 67%[35]. - The company’s investment activities generated a net cash inflow of HKD 1,101,000 for the six months ended June 30, 2021, compared to HKD 19,804,000 in the same period of 2020, reflecting a decrease of approximately 94%[35]. - The company plans to sell a subsidiary engaged in investment properties for approximately HKD 48,071,000 to improve liquidity[42]. - The company is implementing cost-saving measures to improve operational cash flow and meet working capital needs[42]. - The company is considering other necessary financing arrangements to increase equity and liquidity[42]. Workforce and Operations - Employee count increased to approximately 2,650 as of June 30, 2021, up from 2,298 a year earlier, indicating growth in workforce[19]. - The company plans to invest in production automation facilities to enhance efficiency and streamline departmental collaboration[20]. - Employee benefits expenses, including directors' remuneration, amounted to HKD 54,657,000, slightly up from HKD 54,411,000 in the previous year, showing a marginal increase of 0.5%[67]. Shareholder Information - Major shareholder Zhongce Group Limited held 651,995,472 shares, representing 17.80% of the issued share capital as of June 30, 2021[114]. - The issued and paid-up share capital remained at 3,661,865 thousand shares, valued at HKD 366,186 thousand as of June 30, 2021[88]. - The company did not declare or pay any dividends during the interim period[68]. Fair Value and Financial Instruments - The fair value of investment properties as of June 30, 2021, was HKD 59,608,000, down from HKD 106,702,000 at the end of 2020, representing a decrease of approximately 44.0%[73]. - The fair value measurement of financial instruments is based on observable market data where available, with a classification into three levels of input data[94]. - The company reported no significant changes in the fair value of financial assets and liabilities based on discounted cash flow analysis[97]. - The company has engaged third-party qualified valuers for fair value estimation when market observable data is not available[94]. Legal and Compliance - The company is currently investigating a lawsuit regarding a deposit of RMB 20,000,000 related to a land use change agreement[106].

[Chairman's Report](index=5&type=section&id=Chairman%27s%20Report) [Operating Results and Outlook](index=5&type=section&id=Chairman%27s%20Report) In FY2020, the company's revenue and gross profit declined due to external factors, but administrative expenses were reduced, with a cautious outlook for toys and a focus on diversification - Company revenue and gross profit declined due to COVID-19, US-China trade tensions, and RMB appreciation[9](index=9&type=chunk) - Administrative expenses were successfully reduced by **HKD 15.6 million**, a **21.1% year-on-year decrease**[10](index=10&type=chunk) - The company is pursuing business diversification into higher-margin areas and sold an investment property in Suzhou for **RMB 40 million** in March 2021[11](index=11&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) [Business Overview](index=6&type=section&id=Business%20Overview) In FY2020, total revenue fell **43.9%** to **HKD 364.3 million** and gross profit by **75.3%** to **HKD 18.5 million**, mainly due to the toy segment, while net loss expanded to **HKD 95.8 million** Key Financial Indicators for FY2020 | Metric | FY2020 (HKD Million) | FY2019 (HKD Million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 364.3 | 649.5 | -43.9% | | Gross Profit | 18.5 | 74.9 | -75.3% | | Net Loss | 95.8 | 42.4 | +125.9% | | Securities Investment Loss | 2.9 | 10.7 | -72.9% | [Segment Business Discussion](index=6&type=section&id=Segment%20Discussion) Segment performance varied, with the toy division turning to loss due to reduced orders and rising costs, while securities investment loss narrowed, and the pharmaceutical and healthcare segment divested its R&D project [Toy Segment](index=6&type=section&id=Toy%20Segment) The toy segment's revenue decreased **43.9%** to **HKD 364.3 million** due to reduced orders amid COVID-19, with gross profit falling to **HKD 18.5 million**, resulting in a **HKD 61.6 million** loss from a prior year profit - Toy segment revenue decreased **43.9%** to **HKD 364.3 million**, primarily due to reduced orders caused by COVID-19[15](index=15&type=chunk) - Gross profit fell to **HKD 18.5 million** due to increased costs and price competition, resulting in a pre-tax segment loss of **HKD 61.6 million** (compared to a **HKD 13.1 million** profit in 2019)[15](index=15&type=chunk) [Securities Investment Segment](index=6&type=section&id=Securities%20Investment%20Segment) Amid volatile Hong Kong stock markets, the Group adopted a conservative investment strategy, reducing securities investment loss by **72.9%** to **HKD 2.9 million**, with portfolio value significantly shrinking to **HKD 1.7 million** by year-end - Securities investment segment loss decreased **72.9%** year-on-year to **HKD 2.9 million**[16](index=16&type=chunk) - Year-end securities portfolio value was **HKD 1.7 million**, a significant decrease from **HKD 6.9 million** at end-2019[16](index=16&type=chunk) [Pharmaceutical and Healthcare Segment](index=6&type=section&id=Pharmaceutical%20and%20Healthcare%20Segment) The Group sold its pharmaceutical R&D project for **HKD 8 million**, with net proceeds allocated to working capital and other business investments - The Group sold its pharmaceutical R&D project for **HKD 8 million**, with proceeds allocated to working capital and other investments[17](index=17&type=chunk) [Significant Investment Details](index=7&type=section&id=Significant%20Investment%20Details) By end-2020, the Group's significant investment portfolio value shrank to **HKD 1.761 million**, primarily China P&C Insurance, with fair value change loss narrowing from **HKD 10.689 million** to **HKD 2.929 million** Comparison of Significant Investment Portfolios (2020 vs 2019) | Item | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Total Market Value** | 1.761 million HKD | 6.891 million HKD | | **Major Holdings** | PICC Property and Casualty | Lianhe Medical, Pak Wing Group, China Xinhua News | | **Fair Value Change Loss** | 2.929 million HKD | 10.689 million HKD | [Financial Review](index=9&type=section&id=Financial%20Review) At FY2020 end, net current liabilities expanded to **HKD 200.2 million**, shareholders' equity decreased **68.5%** to **HKD 37.9 million**, and the gearing ratio rose to **90%**, yet management deems the financial position sound with liquidity measures in place - Year-end net current liabilities were **HKD 200.2 million**, a significant increase from **HKD 65.6 million** in 2019[24](index=24&type=chunk) - Shareholders' equity decreased **68.5%** to **HKD 37.9 million** due to operating losses during the year[24](index=24&type=chunk) - The gearing ratio increased from **71%** in 2019 to **90%**[24](index=24&type=chunk) [Environmental, Social and Governance Report](index=10&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) [Environmental](index=11&type=section&id=Environmental) The Group is committed to sustainability, establishing an environmental management committee and upgrading ISO 14001, achieving a **10.78%** reduction in GHG emissions and **10.09%** in electricity consumption, and earning the 'Guangdong-Hong Kong Cleaner Production Partner' title Greenhouse Gas Emissions (Scope 1 & 2) | Metric | Unit | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Total GHG Emissions | tonnes CO2e | 6,345 | 7,112 | Waste Disposal Volume | Waste Type | 2020 Total Disposal Volume (tonnes) | 2019 Total Disposal Volume (tonnes) | | :--- | :--- | :--- | | Non-hazardous Waste | 28.70 tonnes | 32.90 tonnes | | Hazardous Waste | 28.36 tonnes | 27.16 tonnes | Energy Consumption | Energy Type | 2020 Total Consumption | 2019 Total Consumption | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Electricity | 7,480,942 kWh | 8,320,402 kWh | -10.09% | | Unleaded Gasoline | 19,800 liters | 61,350 liters | -67.73% | | Diesel | 15,500 liters | 4,100 liters | +278.05% | - The Group was awarded the 'Guangdong-Hong Kong Cleaner Production Partner (Manufacturing)' title, recognizing its efforts in cleaner production technologies and practices[55](index=55&type=chunk) [Social](index=17&type=section&id=Social) The Group prioritizes employees, ensuring a fair and safe work environment with ICTI and OHSAS 18001 certifications, implementing strict COVID-19 measures, providing **27 hours** of average annual training per employee, and strictly prohibiting child and forced labor - The Group is ICTI Care Foundation certified and has employment policies aligned with the National Labor Law, with no non-compliance cases reported during the period[59](index=59&type=chunk) - The Group is OHSAS 18001 certified, with no work-related fatalities in the past three years and **1,198 lost workdays** due to work injuries during the reporting period[67](index=67&type=chunk) - All employees participated in training during the reporting period, with an average of **27 training hours** per employee[69](index=69&type=chunk) - The Group strictly prohibits child and forced labor and avoids excessive overtime through stringent production schedules[76](index=76&type=chunk) [Operating Practices](index=22&type=section&id=Operating%20Practices) The Group manages its supplier-dependent operations through strict evaluations, prioritizing ISO-certified and local suppliers, adhering to C-TPAT, and ensuring product quality and safety with IETP and ISO 9001:2015 certifications, with no product recalls or corruption cases reported - The Group conducts annual supplier evaluations, prioritizing ISO 14001 and ISO 9001 certified suppliers, and adheres to C-TPAT security policies[78](index=78&type=chunk)[79](index=79&type=chunk)[82](index=82&type=chunk) - The Group is IETP and ISO 9001:2015 quality management system certified, ensuring toy products meet international safety standards, with no product recalls reported during the period[83](index=83&type=chunk)[84](index=84&type=chunk)[86](index=86&type=chunk) - The Group maintains a zero-tolerance stance on corruption, with internal controls and whistleblowing mechanisms in place, and no cases of bribery, extortion, fraud, or money laundering reported during the period[92](index=92&type=chunk) [Directors' Report](index=29&type=section&id=Directors%27%20Report) [Business and Financial Summary](index=29&type=section&id=Business%20and%20Financial%20Summary) This report summarizes the Group's business and financial status for the year ended December 31, 2020, with investment holding as its main business, no final dividend proposed, and top five clients accounting for most sales, with the largest client at **85.6%** - The Board does not recommend paying a final dividend for the year ended December 31, 2020[111](index=111&type=chunk) - During the year, the top five clients accounted for approximately **HKD 352 million** of total sales, with the largest client representing **85.6%**[118](index=118&type=chunk) - During the year, the top five suppliers accounted for approximately **HKD 63.6 million** of total purchases, with the largest supplier representing **7.4%**[118](index=118&type=chunk) [Shareholders' Equity and Public Float](index=32&type=section&id=Shareholders%27%20Equity%20and%20Public%20Float) As of December 31, 2020, major shareholders include China Strategic Group (17.80% indirect), Mr. Ji Xiang (13.57% indirect), and Mr. Shen Jia (10.92% beneficial), with the company confirming maintenance of at least **25%** public float Major Shareholder Holdings (December 31, 2020) | Shareholder Name | Number of Shares Held | Approx. % of Issued Share Capital | | :--- | :--- | :--- | | China Strategic Group Ltd. | 651,995,472 | 17.80% | | Mr. Ji Xiang | 496,976,000 | 13.57% | | Mr. Shen Jia | 400,000,000 | 10.92% | - The company confirmed maintaining a public float of not less than **25%** as of the reporting date[133](index=133&type=chunk) [Corporate Governance Report](index=35&type=section&id=Corporate%20Governance%20Report) [Board and Committees](index=35&type=section&id=Board%20and%20Committees) The company complied with corporate governance code provisions, with a seven-member board including independent non-executive directors, distinct roles for Chairman and CEO ensuring balanced power, and all three committees chaired by independent non-executive directors holding meetings as required - The roles of Chairman (Mr. Zhao Deyong) and CEO (Mr. Liu Michael Xiao Ming) are separated to ensure a balance of power[150](index=150&type=chunk) Board and General Meeting Attendance Record | Director Name | Board Meeting Attendance | AGM Attendance | | :--- | :--- | :--- | | Mr. Zhao Deyong | 3/3 | 1/1 | | Mr. Liu Michael Xiao Ming | 3/3 | 1/1 | | Mr. Luo Lianjun | 3/3 | 1/1 | | Mr. Lin Shaopeng | 3/3 | 1/1 | | Mr. Guo Jianxiong | 3/3 | 1/1 | | Mr. Wu Weixiong | 3/3 | 1/1 | | Ms. Shi Xiaolei | 3/3 | 1/1 | [Auditor's Remuneration and Internal Control](index=40&type=section&id=Auditor%27s%20Remuneration%20and%20Internal%20Control) The consolidated financial statements were audited by UHY CPA Limited for a total fee of **HKD 1.43 million**, with **HKD 1.28 million** for audit services, and the Board confirmed its responsibility for fair presentation, with internal controls reviewed by an independent firm and the Audit Committee Auditor's Remuneration | Service Type | Fee (HKD Thousand) | | :--- | :--- | | Audit Services Fee | 1,280 | | Non-audit Services Fee | 150 | | **Total** | **1,430** | - The Board is responsible for maintaining adequate internal control systems; an independent professional firm reviewed the internal control cycle for the year ended December 31, 2020, and the Audit Committee reviewed its report[163](index=163&type=chunk) [Shareholder Rights](index=42&type=section&id=Shareholder%20Rights) The company outlines shareholder rights, including the right for shareholders holding at least **10%** of paid-up capital to call an EGM, or **5%** of total voting rights (or 100 shareholders) to propose resolutions at an AGM, and procedures for director nominations and board inquiries - Shareholders holding not less than one-tenth of the company's paid-up capital have the right to request the Board to convene an extraordinary general meeting[166](index=166&type=chunk) - Shareholders holding not less than one-twentieth of the total voting rights or not less than one hundred shareholders may request the company in writing to propose a resolution at an annual general meeting[167](index=167&type=chunk)[168](index=168&type=chunk) - The report details the procedure for shareholders to nominate directors, requiring written notice to the company within a specified timeframe[170](index=170&type=chunk) [Independent Auditor's Report](index=43&type=section&id=Independent%20Auditor%27s%20Report) [Audit Opinion and Key Audit Matters](index=44&type=section&id=Audit%20Opinion%20and%20Key%20Audit%20Matters) UHY CPA Limited issued an unmodified audit opinion on the Group's consolidated financial statements, highlighting key audit matters including inventory impairment, investment property valuation, and the going concern assessment due to net current liabilities and annual loss - The auditor believes the consolidated financial statements fairly and accurately reflect the Group's financial position, performance, and cash flows in accordance with Hong Kong Financial Reporting Standards[175](index=175&type=chunk) - Key audit matters include: - **Inventory impairment assessment**: due to the significant amount of inventory and management judgment involved in the assessment - **Investment property valuation**: as the valuation involves significant unobservable inputs and assumptions - **Going concern assessment**: due to the Group's net current liabilities position and annual loss at year-end[180](index=180&type=chunk)[182](index=182&type=chunk)[185](index=185&type=chunk) [Consolidated Financial Statements](index=50&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss](index=51&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the year ended December 31, 2020, Group revenue decreased **43.9%** to **HKD 364 million**, gross profit fell from **HKD 74.94 million** to **HKD 18.52 million**, and annual loss expanded from **HKD 42.42 million** to **HKD 95.78 million**, with basic loss per share at **2.62 HK cents** Consolidated Statement of Profit or Loss Summary (Year Ended December 31) | Metric (HKD Thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 364,311 | 649,490 | | Gross Profit | 18,515 | 74,939 | | Loss Before Tax | (102,120) | (33,474) | | Loss for the Year | (95,779) | (42,422) | | Basic Loss Per Share | (2.62 HK cents) | (1.16 HK cents) | [Consolidated Statement of Financial Position](index=52&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2020, total assets were **HKD 485 million**, total liabilities **HKD 447 million**, and net assets **HKD 37.9 million**, a significant decrease from **HKD 120 million** last year, with net current liabilities expanding to **HKD 200 million** Consolidated Statement of Financial Position Summary (As of December 31) | Metric (HKD Thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Non-current Assets | 262,305 | 262,388 | | Current Assets | 222,383 | 333,364 | | **Total Assets** | **484,688** | **595,752** | | Current Liabilities | 422,621 | 399,013 | | Non-current Liabilities | 24,166 | 76,460 | | **Total Liabilities** | **446,787** | **475,473** | | **Net Assets** | **37,901** | **120,279** | [Consolidated Statement of Cash Flows](index=55&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In FY2020, net cash outflow from operating activities was **HKD 49.25 million**, primarily due to working capital changes, while investing activities generated **HKD 60.29 million** net inflow, and financing activities resulted in **HKD 46.93 million** net outflow, leading to a **HKD 35.89 million** net decrease in cash and cash equivalents Consolidated Statement of Cash Flows Summary (Year Ended December 31) | Metric (HKD Thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | (49,254) | 20,780 | | Net Cash from Investing Activities | 60,293 | (85,805) | | Net Cash from Financing Activities | (46,928) | 80,108 | | **Net Decrease in Cash and Cash Equivalents** | **(35,889)** | **15,083** | | Cash and Cash Equivalents at Beginning of Year | 89,280 | 75,489 | | **Cash and Cash Equivalents at End of Year** | **56,142** | **89,280** | [Notes to the Consolidated Financial Statements](index=57&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) [Basis of Preparation and Going Concern](index=60&type=section&id=3.%20Basis%20of%20Preparation%20and%20Significant%20Accounting%20Policies) Financial statements are prepared on a going concern basis despite a **HKD 95.78 million** loss and **HKD 200 million** net current liabilities in FY2020, as management has implemented measures like loan extensions, asset sales, and cost controls to improve liquidity - The Group had net current liabilities of approximately **HKD 200 million** and an annual loss of approximately **HKD 95.78 million** as of December 31, 2020, posing a challenge to its going concern ability[220](index=220&type=chunk) - Management has implemented several countermeasures, including: - Extending repayment periods for multiple loans to 2022 - Selling a subsidiary holding an investment property for **RMB 40 million** in March 2021 - Implementing aggressive cost-saving measures - Considering realizing other investments and seeking alternative financing arrangements[220](index=220&type=chunk)[223](index=223&type=chunk) [Revenue and Segment Information](index=93&type=section&id=5.%20Revenue%20and%20Segment%20Information) The Group's **HKD 364 million** total revenue in 2020 came entirely from the toy segment, which recorded a **HKD 61.65 million** pre-tax loss, while securities investment and pharmaceutical segments also incurred losses, with the US being the primary revenue source at **88.4%** Pre-tax (Loss) Profit by Segment (HKD Thousand) | Segment | 2020 | 2019 | | :--- | :--- | :--- | | Securities Investment | (2,876) | (10,690) | | Toy | (61,646) | 13,065 | | Pharmaceutical and Healthcare | (336) | (2,523) | Revenue by Geographical Region (HKD Thousand) | Region | 2020 | 2019 | | :--- | :--- | :--- | | USA | 322,188 | 621,695 | | Europe | 19,365 | 16,363 | | Hong Kong | 19,084 | 11,432 | | Korea | 3,674 | – | - Revenue from largest client A was **HKD 312 million**, accounting for the vast majority of toy segment revenue[344](index=344&type=chunk) [Events After Reporting Period](index=148&type=section&id=42.%20Events%20After%20Reporting%20Period) On March 15, 2021, the Group agreed to sell a subsidiary holding an investment property for **RMB 40 million** (approximately **HKD 47.53 million**) in cash to improve its liquidity - On March 15, 2021, the Group agreed to sell a subsidiary holding an investment property for **RMB 40 million**[491](index=491&type=chunk) [Five-Year Financial Summary](index=151&type=section&id=Five-Year%20Financial%20Summary) [Five-Year Financial Summary](index=151&type=section&id=Five-Year%20Financial%20Summary) Over the past five years, Group revenue significantly declined to **HKD 364 million** in 2020 after relative stability, with continuous annual losses since 2016, and total assets and equity showing a downward trend, with total equity falling to **HKD 37.9 million** in 2020 Five-Year Financial Data Summary (HKD Thousand) | Metric | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 364,311 | 649,490 | 636,882 | 589,933 | 236,174 | | Annual Loss | (95,779) | (42,422) | (153,625) | (77,733) | (227,296) | | Total Assets | 484,688 | 595,752 | 524,846 | 752,852 | 512,545 | | Total Liabilities | (446,787) | (475,473) | (360,509) | (419,684) | (256,981) | | Total Equity | 37,901 | 120,279 | 164,337 | 333,168 | 255,564 |

Financial Performance - For the six months ended June 30, 2020, the group recorded revenue of HKD 111.9 million, a decrease of 32.4% compared to HKD 165.4 million for the same period in 2019, primarily due to the impact of COVID-19 [9] - The net loss for the group decreased by 9.6% to HKD 36.6 million from HKD 40.5 million in the same period last year, attributed to active cost-saving measures and reduced losses in the securities investment sector [9] - The toy division reported a loss of HKD 29.3 million for the period, a significant decline from a profit of HKD 13.1 million in the same period of 2019, mainly due to production halts caused by COVID-19 [10] - The securities investment sector improved its losses by 68.0%, with losses decreasing from HKD 9.9 million to HKD 3.1 million compared to the same period in 2019 [11] - Revenue for the six months ended June 30, 2020, was HKD 111,870,000, a decline of 32.4% from HKD 165,402,000 in the same period of 2019 [20] - The gross loss for the period was HKD 8,547,000, compared to a gross profit of HKD 11,714,000 in the prior year [20] - The net loss for the period was HKD 36,579,000, slightly improved from a net loss of HKD 40,502,000 in the previous year [23] - The company reported a loss of approximately HKD 36,579,000 for the six months ended June 30, 2020, compared to a loss of HKD 40,502,000 for the same period in 2019, representing a 4.7% improvement in losses year-over-year [39] - The company reported a pre-tax loss of HKD 35,972,000 for the six months ended June 30, 2020, compared to a pre-tax loss of HKD 38,366,000 for the same period in 2019, indicating a slight improvement [55] - The company’s toy segment reported a pre-tax loss of HKD 29,348,000 for the six months ended June 30, 2020, compared to a loss of HKD 13,065,000 in the same period of 2019 [55] - The company reported a loss attributable to owners of HKD 36,579,000 for the six months ended June 30, 2020, compared to a loss of HKD 40,502,000 in the same period of 2019, showing an improvement of approximately 10% [67] Assets and Liabilities - As of June 30, 2020, the group's current assets were HKD 263.98 million, down from HKD 333.36 million as of December 31, 2019, with cash and cash equivalents at HKD 24.67 million [16] - The group's current ratio was maintained at 0.64 as of June 30, 2020, compared to 0.84 as of December 31, 2019 [16] - The total amount of loans was HKD 260.1 million as of June 30, 2020, compared to HKD 254.4 million as of December 31, 2019 [16] - The company's attributable equity decreased by 33% to HKD 80,598,000 as of June 30, 2020, compared to HKD 120,279,000 as of December 31, 2019, primarily due to losses recorded during the period [17] - The capital-to-debt ratio increased to approximately 82% as of June 30, 2020, up from 71% as of December 31, 2019 [17] - The total liabilities as of June 30, 2020, amounted to HKD 413,376,000, compared to HKD 399,013,000 as of December 31, 2019 [25] - The company's cash and cash equivalents decreased to HKD 24,666,000 from HKD 89,280,000 as of December 31, 2019 [25] - As of June 30, 2020, the company's total equity was HKD 80,598,000, a decrease from HKD 164,337,000 as of January 1, 2020, indicating a decline of 51% [29] - The company has a net current liability of approximately HKD 149,394,000 as of June 30, 2020, with bank balances and cash of HKD 24,666,000 and pledged bank deposits of HKD 34,752,000 against loans of HKD 260,098,000 due within the next twelve months [39] - The total cost of inventory recognized as an expense was HKD 119,743,000, down from HKD 155,764,000 in the previous year, reflecting a decrease of approximately 23% [64] - The company’s total assets as of June 30, 2020, included issued share capital of HKD 366,186,000 and share premium of HKD 942,400,000 [29] - As of June 30, 2020, total assets amounted to HKD 524,071,000, a decrease from HKD 595,752,000 as of December 31, 2019, representing a decline of approximately 12% [56] - Reportable segment assets for the toy division were HKD 370,517,000, down from HKD 436,890,000 in the previous year, indicating a decrease of about 15% [56] Cash Flow and Investments - The net cash outflow from operating activities for the six months ended June 30, 2020, was HKD 85,836,000, an improvement from HKD 102,859,000 in the same period of 2019, reflecting a 16.6% reduction in cash burn [32] - The company reported a net cash inflow from investing activities of HKD 19,804,000 for the six months ended June 30, 2020, compared to a net cash outflow of HKD 29,399,000 in the same period of 2019 [32] - The company is negotiating with lenders to extend the maturity of existing loans, with an agreement to extend the due date to May 11, 2021 [41] - The company is implementing cost-saving measures to improve operational cash flow and meet working capital needs [41] - The company is considering liquidating certain investment properties and/or listed securities to strengthen cash flow if necessary [41] - The company recognized rental income of HKD 156,000 from a related party during the six months ended June 30, 2020, consistent with the previous year [97] Corporate Governance and Compliance - Major shareholders include Zhongce Group Limited with a 17.80% stake and Mr. Ji with a 13.57% stake as of June 30, 2020 [107] - The company maintained compliance with all applicable corporate governance code provisions during the six months ended June 30, 2020 [110] - The company has adopted a set of self-regulatory guidelines for directors' securities transactions, which are not less stringent than the standard guidelines outlined in the listing rules [111] - The audit committee has reviewed the accounting principles and policies adopted by the company, confirming that the unaudited condensed consolidated results for the six months ended June 30, 2020, were prepared in accordance with applicable accounting standards [113] - During the six months ended June 30, 2020, the company or any of its subsidiaries did not purchase, sell, or redeem any of the company's listed shares [114] Employee and Operational Expenses - Employee benefits expenses totaled HKD 54,411,000, down from HKD 59,728,000 in the previous year, indicating a decrease of about 9% [64] - Total short-term employee benefits for key management personnel decreased to HKD 2,042,000 in 2020 from HKD 3,424,000 in 2019 [99] - The company recognized government subsidies of HKD 84,000 related to COVID-19, which were part of the employment support scheme provided by the Hong Kong government [58] Investment Properties and Securities - The fair value of the group's securities portfolio decreased to HKD 3.5 million as of June 30, 2020, down from HKD 6.9 million at the end of 2019 [11] - The fair value of financial assets measured at fair value through profit or loss was approximately HKD 3,537,000 as of June 30, 2020, down from HKD 6,891,000 as of December 31, 2019 [95] - The company’s investment properties are held for rental income or capital appreciation, with valuations conducted by independent valuers [70] - The company’s investment properties in Suzhou were valued using the depreciated replacement cost method and direct comparison method, reflecting a strategic approach to property valuation [71]

Winshine Science Company Limited (於百慕達註冊成立之有限公司) 瀛晟科學有限公 司* 股份代號: 209 2019 年 報 僅供識別 2019 Stock Code: 209 (Incorporated in Bermuda with limited liability) Winshine Science Company Limited 瀛晟科學有限公 司* For identification purpose only Annual Report Winshine Science Company Limited 於本年報內，除文義另有所指外，下列簡稱具有以下涵義： | 「董事會」 | 指 | 本公司之董事會 | | --- | --- | --- | | 「本公司」 | 指 | 瀛晟科學有限公司* | | 「董事」 | 指 | 本公司之董事 | | 「本集團」 | 指 | 本公司及其附屬公司 | | 「上市規則」 | 指 | 聯交所證券上市規則 | | 「中國」 | 指 | 中華人民共和國，就本報告而言，不包括香港、澳門及台 | | | | 灣 | | 「證券及期貨條例」 ...

Financial Performance - The company recorded revenue of HKD 165.4 million for the six months ended June 30, 2019, a decrease of 42.2% compared to HKD 286.3 million for the same period in 2018[9]. - The net loss increased by 221.4% to HKD 40.7 million, up from a loss of HKD 12.6 million in the previous year, primarily due to reduced revenue and gross profit[9]. - The toy division's revenue decreased by 42% to HKD 165.4 million, with a gross margin decline from 11.0% to 7.1%, resulting in a division loss of HKD 13.1 million compared to a profit of HKD 4.6 million in 2018[10]. - The securities investment division reported a loss of HKD 9.9 million, a significant increase of 369.6% compared to a profit of HKD 3.7 million in the same period last year[11]. - The company reported a pre-tax loss of HKD 38,366,000 for the six months ended June 30, 2019, compared to a loss of HKD 11,971,000 in the previous year[29]. - The group reported a loss of approximately HKD 40,502,000 for the six months ended June 30, 2019[49]. - The group reported a total loss before tax of HKD 38,366,000 for the six months ended June 30, 2019, compared to a profit of HKD 11,971,000 for the same period in 2018[102]. - The company reported a loss attributable to owners of the company of HKD 40,502,000 for the six months ended June 30, 2019, compared to a loss of HKD 12,601,000 in 2018, representing a substantial increase in losses[115]. Assets and Liabilities - The company's current assets as of June 30, 2019, were HKD 328.44 million, an increase from HKD 265.84 million at the end of 2018[16]. - The total amount of loans increased to HKD 283.82 million from HKD 160.44 million at the end of 2018[16]. - The company's attributable equity decreased by 24.1% to HKD 124,728,000 as of June 30, 2019, compared to HKD 164,337,000 on December 31, 2018, primarily due to losses incurred during the period[17]. - The capital-to-debt ratio increased to approximately 77.8% as of June 30, 2019, up from 61.0% on December 31, 2018, indicating a higher level of debt relative to equity[17]. - Total liabilities increased to HKD 438,121,000 from HKD 336,203,000, reflecting a rise of approximately 30.3%[34]. - The total assets of the group as of June 30, 2019, amounted to HKD 592,790,000, an increase from HKD 524,846,000 as of December 31, 2018[103]. - The total liabilities of the group as of June 30, 2019, were HKD 468,062,000, compared to HKD 360,509,000 as of December 31, 2018[103]. Cash Flow and Investments - The company reported a net cash outflow from operating activities of HKD 102,859,000 for the six months ended June 30, 2019, compared to HKD 46,012,000 for the same period in 2018[41]. - The company’s investment activities resulted in a net cash outflow of HKD 29,399,000 for the period, compared to a net cash inflow of HKD 17,033,000 in the previous year[41]. - The company has entered into a deferral agreement with bondholders to extend the repayment of HKD 45,000,000 loan to September 30, 2020[52]. - The group has implemented cost-saving measures to improve cash flow and meet operational funding needs[50]. Research and Development - Research and development expenses in the pharmaceutical and healthcare division amounted to approximately HKD 1.2 million, up from HKD 0.9 million in 2018, with no revenue recorded as the projects are still in the preliminary stage[14]. - The group incurred research and development expenses of HKD 1,185,000 for the six months ended June 30, 2019, compared to HKD 856,000 for the same period in 2018[102]. Corporate Governance and Compliance - The company failed to comply with financial reporting rules due to delays in providing necessary information for the audit of the financial statements for the year ended December 31, 2018[160]. - The company appointed a new auditor, Dahua Ma Shiyun CPA Limited, effective June 6, 2019, after the previous auditor declined the appointment[162]. - The company experienced a decrease in the number of independent non-executive directors, falling below the minimum required by listing rules[159]. - The company has complied with all applicable corporate governance code provisions, except for certain deviations explained in the report[158]. Shareholder Information - Major shareholders include Mr. Xing with 651,995,472 shares, representing 17.81% of the issued share capital, and Mr. Ji with 496,976,000 shares, representing 13.57%[156]. - The total number of shares issued and fully paid remained at 3,661,865 as of June 30, 2019, consistent with the previous year[134]. - The total number of stock options outstanding as of June 30, 2019, was 197,500, down from 209,320 at the beginning of the year, with 11,820 options expired during the period[137]. Lease and Asset Management - The company adopted HKFRS 16 "Leases" on January 1, 2019, resulting in the recognition of additional lease liabilities and corresponding right-of-use assets amounting to HKD 7,191,000[81]. - The company entered into a new three-year lease agreement for a factory, recognizing a right-of-use asset and lease liability of HKD 1,461,000[116]. - The company recognizes refundable lease deposits at fair value under HKFRS 9, with adjustments treated as additional lease payments[67]. Employee Compensation - The total employee cost, including director remuneration, decreased by 38.1% to HKD 59,728,000 for the six months ended June 30, 2019, down from HKD 96,488,000 in the previous year[24]. - Total compensation for directors and key management personnel rose to HKD 3,451,000 in 2019, up from HKD 2,698,000 in 2018, marking an increase of 28%[149]. - The average number of ordinary shares used for calculating basic and diluted loss per share remained constant at 3,661,865 shares for both periods[115].

僅供識別 2018 年 報 股份代號: (於百慕達註冊成立之有限公司) 目錄 | 簡稱 | 2 | | --- | --- | | 公司資料 | 3 | | 主席報告 | 4 | | 管理層討論及分析 | 5 | | 環境、社會及管治報告 | 11 | | 董事履歷 | 24 | | 董事會報告 | 27 | | 企業管治報告 | 34 | | 獨立核數師報告 | 44 | | 綜合損益表 | 51 | | 綜合損益及其他全面收益表 | 52 | | 綜合財務狀況表 | 53 | | 綜合權益變動表 | 55 | | 綜合現金流量表 | 56 | | 綜合財務報表附註 | 58 | | 五年財務概要 | 158 | 1 二零一八年年報 簡稱 於本年報內，除文義另有所指外，下列簡稱具有以下涵義： | 「董事會」 | 指 | 本公司之董事會 | | --- | --- | --- | | 「本公司」 | 指 | 瀛晟科學有限公司* | | 「董事」 | 指 | 本公司之董事 | | 「本集團」 | 指 | 本公司及其附屬公司 | | 「上市規則」 | 指 | 聯交所證券上市規則 | | 「中國」 | 指 | 中華 ...