Company Information [Directors and Company Particulars](index=2&type=section&id=Directors%20and%20Company%20Particulars) This section details Shun Ho Holdings Limited's key corporate information, including its board of directors, company secretary, auditor, and registered office - The Board of Directors comprises five executive directors, including Mr. Cheng Kai Man (Chairman), and three independent non-executive directors[2](index=2&type=chunk) - The company's registered office is located on the 3rd Floor, Shun Ho Tower, Ice House Street, Central, Hong Kong, with Deloitte Touche Tohmatsu as its auditor[2](index=2&type=chunk) Management Discussion and Analysis [Interim Results Overview](index=3&type=section&id=Interim%20Results%20Overview) Profit attributable to owners of the company significantly increased for the six months ended June 30, 2022, but no interim dividend is recommended due to the COVID-19 crisis and future investment needs Profit Attributable to Owners of the Company Comparison | Metric | As at June 30, 2022 for the six months ended (HKD) | As at June 30, 2021 for the six months ended (HKD) | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 31.00 million | 4.00 million | - The Board does not recommend distributing an interim dividend for the six months ended June 30, 2022, to safeguard the Group's reserves against pandemic impacts and support potential hotel acquisition projects[5](index=5&type=chunk) [Business Performance](index=3&type=section&id=Business%20Performance) The Group primarily engages in commercial property investment, leasing, development, and hotel investment and management, with hotel revenue significantly increasing while commercial property rental income slightly decreased [Hotel Business](index=3&type=section&id=Hotel%20Business) The hotel business segment experienced substantial revenue growth, largely driven by designated quarantine hotel operations in Hong Kong Hotel Business Revenue Comparison | Metric | As at June 30, 2022 for the six months ended (HKD) | As at June 30, 2021 for the six months ended (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Hotel Business Revenue | 286.00 million | 145.00 million | +97% | Grand Hotel Group Key Financial Indicators Comparison | Metric | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Profit from Hotels | 126,031 | 373 | +33,688% | | Profit After Tax | 106,005 | 8,763 | +1,110% | - Grand Hotel Group's total revenue grew by **93%**, primarily because five of its six local hotels served as designated quarantine hotels, with four becoming 'Community Isolation Facility' hotels from February to May 2022[12](index=12&type=chunk) - The valuation of London's Royal Scot Hotel remained unchanged at **GBP 88.5 million**, with optimistic rental prospects as its rent increases are linked to the UK Retail Price Index, which reached a **40-year high of 12.3%** in July 2022[12](index=12&type=chunk) [Commercial Property Rental Income](index=5&type=section&id=Commercial%20Property%20Rental%20Income) Commercial property rental income saw a slight decrease, while administrative expenses increased due to new acquisition costs Commercial Property Rental Income Comparison | Metric | As at June 30, 2022 for the six months ended (HKD) | As at June 30, 2021 for the six months ended (HKD) | | :--- | :--- | :--- | | Commercial Property Rental Income | 77.00 million | 87.00 million | Administrative Expenses Comparison | Metric | As at June 30, 2022 for the six months ended (HKD) | As at June 30, 2021 for the six months ended (HKD) | | :--- | :--- | :--- | | Administrative Expenses (excluding depreciation) | 25.80 million | 20.60 million | - The increase in administrative expenses was primarily due to new acquisition costs incurred during the period[14](index=14&type=chunk) [Liquidity and Employees](index=5&type=section&id=Liquidity%20and%20Employees) Overall debt slightly increased, but the gearing ratio remained stable, while the total number of employees marginally decreased with remuneration based on market rates Overall Debt and Gearing Ratio Comparison | Metric | As at June 30, 2022 (HKD) | As at December 31, 2021 (HKD) | | :--- | :--- | :--- | | Overall Debt | 808.00 million | 784.00 million | | Gearing Ratio | 10% | 10% | - The increase in overall debt was due to new bank borrowings during the period[15](index=15&type=chunk) Number of Employees Comparison | Metric | As at June 30, 2022 | As at December 31, 2021 | | :--- | :--- | :--- | | Total Employees | 475 | 486 | [Key Business Achievements and Outlook](index=5&type=section&id=Key%20Business%20Achievements%20and%20Outlook) Hong Kong's tourism market was severely impacted by the pandemic, while the London Royal Scot Hotel shows optimistic rental prospects, and the Group is actively pursuing a luxury hotel renovation project in London - Hong Kong's tourism market was severely disrupted by COVID-19, with only **76,000** overseas and Chinese visitors, a year-on-year decrease of **99%**[16](index=16&type=chunk) - The London Wood Street Police Station headquarters has been approved for renovation into a luxury hotel with approximately **216** rooms, restaurants, bars, and other facilities; management is further applying to increase room numbers and preparing for renovation works[18](index=18&type=chunk) - Management believes that due to the ongoing impact of COVID-19, the likelihood of a large number of overseas and Chinese tourists returning to Hong Kong in the remainder of 2022 is low, and Hong Kong's hotel and retail sectors will continue to suffer from low occupancy rates and high operating costs[19](index=19&type=chunk) - The Group's six hotels in Hong Kong and Shanghai have signed short-term contracts with the government to operate as quarantine hotels, but it is expected that the government may shorten the quarantine period for inbound travelers, and hotels may resume competition with local hotels[19](index=19&type=chunk) [Significant Acquisitions, Disposals, and Major Investments](index=7&type=section&id=Significant%20Acquisitions,%20Disposals,%20and%20Major%20Investments) The Group plans to sell Grand City Hotel for HKD 900 million and acquire Rambler Crest Hotel for HKD 1.42 billion, expecting improved operational cost efficiency and long-term profit potential from the acquisition - The Group has agreed to sell Grand City Hotel for **HKD 900 million** (adjustable), which was approved by shareholders at the EGM but not yet completed as of the reporting date[21](index=21&type=chunk) - The Group has agreed to acquire Rambler Crest Hotel for **HKD 1.42 billion** (adjustable), which is subject to shareholder approval and not yet completed as of the reporting date[22](index=22&type=chunk) - The proceeds from the sale of Grand City Hotel will facilitate the acquisition of Rambler Crest Hotel, which is expected to significantly improve operational cost efficiency for this large hotel and offer long-term potential for increased operating profit and capital gains[22](index=22&type=chunk) [Purchase, Sale, or Redemption of Listed Securities](index=7&type=section&id=Purchase,%20Sale,%20or%20Redemption%20of%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2022 - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2022[23](index=23&type=chunk) Directors' and Major Shareholders' Interests [Directors' Interests in Listed Securities](index=8&type=section&id=Directors'%20Interests%20in%20Listed%20Securities) As of June 30, 2022, Chairman Mr. Cheng Kai Man held a 74.40% equity interest in the Company and controlling interests in Shun Ho Property and Grand Hotel Group through his controlled entities Mr. Cheng Kai Man's Shareholding in the Company | Director Name | Capacity | Nature of Interest | Number of Shares/Relevant Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | 郑啓文 | Beneficial Owner and Interests of Corporations Controlled by Him | Individual and Corporate | 226,454,825 | 74.40% | Mr. Cheng Kai Man's Shareholding in Associated Corporations | Name of Associated Corporation | Capacity | Nature of Interest | Number of Shares/Relevant Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | 顺豪物业投资有限公司 | Beneficial Owner and Interests of Corporations Controlled by Him | Individual and Corporate | 385,395,999 | 66.48% | | 华大酒店投资有限公司 | Interests of Corporations Controlled by Him | Corporate | 6,360,585,437 | 71.09% | [Major Shareholders](index=10&type=section&id=Major%20Shareholders) As of June 30, 2022, Trillion Resources (BVI) was the ultimate holding company with a 71.20% equity interest, and Ms. Li Pui Ling was deemed to hold 74.40% due to her spouse Mr. Cheng Kai Man's interests Major Shareholders' Shareholding | Shareholder Name | Capacity | Number of Shares/Relevant Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Trillion Resources (BVI) | Beneficial Owner and Interests of Corporations Controlled by Him | 216,608,825 | 71.20% | | 李佩玲 | Spouse's Interest | 226,454,825 | 74.40% | Corporate Governance [Independent Review](index=11&type=section&id=Independent%20Review) The interim results for the six months ended June 30, 2022, were not audited but reviewed by Deloitte Touche Tohmatsu in accordance with HKSRS 2410 and by the Group's audit committee - The interim results for the six months ended June 30, 2022, were unaudited but reviewed by Deloitte Touche Tohmatsu in accordance with Hong Kong Standard on Review Engagements **2410** issued by the Hong Kong Institute of Certified Public Accountants[35](index=35&type=chunk) - The interim results and the 2022 interim report have been reviewed by the Group's audit committee[35](index=35&type=chunk) [Compliance with Corporate Governance Code](index=11&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with all code provisions of the Corporate Governance Code, with the exception of the Chairman and Chief Executive Officer roles being combined by Mr. Cheng Kai Man, which the Board believes provides strong leadership and cost savings - The Company complied with all code provisions of the Corporate Governance Code, with one deviation: code provision C.2.1 stipulates that the roles of Chairman and Chief Executive Officer should not be performed by the same individual, whereas Mr. Cheng Kai Man holds both positions in the Company[36](index=36&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer provides robust and consistent leadership for the Company, facilitating effective strategic planning and implementation, and achieving significant cost savings[36](index=36&type=chunk) [Compliance with Model Code](index=12&type=section&id=Compliance%20with%20Model%20Code) The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the period - The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules, and all directors confirmed compliance with the standards stipulated in the Model Code during the period[38](index=38&type=chunk) Review Report on Condensed Consolidated Financial Statements Deloitte Touche Tohmatsu reviewed the condensed consolidated financial statements in accordance with HKSRS 2410 and found no material non-compliance with HKAS 34 - Deloitte Touche Tohmatsu reviewed the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements **2410**, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity,' issued by the Hong Kong Institute of Certified Public Accountants[41](index=41&type=chunk) - Based on the review, we have not become aware of any matter that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard **34**[42](index=42&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=14&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2022, the Company's revenue and profit for the period significantly increased, primarily due to a substantial rise in hotel services revenue, leading to a significant increase in basic earnings per share Key Data from Condensed Consolidated Statement of Profit or Loss | Metric | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Revenue | 363,594 | 232,345 | | Profit for the Period | 89,035 | 12,994 | | Profit Attributable to Owners of the Company | 31,150 | 4,293 | | Basic Earnings Per Share (HK cents) | 12.88 | 1.78 | - Revenue growth was primarily driven by customer contracts (hotel services) and rental income, with hotel services revenue increasing from **HKD 145,436 thousand** to **HKD 286,391 thousand**[43](index=43&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=15&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Despite a significant increase in profit for the period, total comprehensive expense for the period was negative due to exchange differences arising from the translation of foreign operations Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Profit for the Period | 89,035 | 12,994 | | Exchange Differences Arising from Translation of Foreign Operations | (131,077) | 20,034 | | Total Comprehensive (Expense) Income for the Period | (41,855) | 32,966 | | Total Comprehensive (Expense) Income Attributable to Owners of the Company | (19,495) | 11,777 | - Despite a significant increase in profit for the period, a large exchange difference (expense of **HKD 131,077 thousand**) arising from the translation of foreign operations resulted in the total comprehensive income for the period turning negative[49](index=49&type=chunk)[51](index=51&type=chunk) [Condensed Consolidated Statement of Financial Position](index=16&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2022, non-current assets slightly decreased, while current assets significantly grew from increased receivables and assets held for sale, expanding net current liabilities Key Data from Condensed Consolidated Statement of Financial Position | Metric | As at June 30, 2022 (HKD Thousand) | As at December 31, 2021 (HKD Thousand) | | :--- | :--- | :--- | | Non-current Assets | 8,346,658 | 8,766,717 | | Current Assets | 762,064 | 300,611 | | Current Liabilities | 978,791 | 882,391 | | Net Current Liabilities | (216,727) | (581,780) | | Equity Attributable to Owners of the Company | 4,022,262 | 4,036,257 | - Current assets significantly increased, primarily due to trade and other receivables rising from **HKD 11,961 thousand** to **HKD 58,342 thousand**, and new assets classified as held for sale totaling **HKD 380,526 thousand**[55](index=55&type=chunk) - Net current liabilities decreased from **HKD 581,780 thousand** at the beginning of the period to **HKD 216,727 thousand**, indicating an improvement in liquidity[57](index=57&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) The statement of changes in equity shows a negative total comprehensive expense attributable to owners of the Company, primarily influenced by changes in the exchange reserve - Changes in equity were primarily influenced by movements in the exchange reserve, resulting in a negative total comprehensive expense attributable to owners of the Company of **HKD 19,495 thousand**[52](index=52&type=chunk)[59](index=59&type=chunk) - The securities revaluation reserve includes a decrease of **HKD 12,252 thousand** in the value of securities attributable to the Group held by a former associate as at December 31, 2001, and a cumulative fair value loss of **HKD 1,530 thousand** on equity investments at fair value through other comprehensive income attributable to the Group[61](index=61&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operating activities significantly increased, net cash used in investing activities was an outflow, and net cash from financing activities shifted to an inflow, leading to a substantial increase in cash and cash equivalents at period-end Key Data from Condensed Consolidated Statement of Cash Flows | Metric | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 211,634 | 114,674 | | Net Cash Used in Investing Activities | (184,868) | (441) | | Net Cash from (Used in) Financing Activities | 41,879 | (33,770) | | Net Increase in Cash and Cash Equivalents | 68,645 | 80,463 | | Cash and Cash Equivalents at End of Period | 312,444 | 260,395 | - Net cash from operating activities significantly increased, primarily benefiting from higher profit before tax and net impairment adjustments for investment properties at fair value[63](index=63&type=chunk) - Net cash used in investing activities significantly increased, mainly due to **HKD 142,070 thousand** paid for deposits for acquisition of a subsidiary and **HKD 49,500 thousand** for the purchase of investment properties[63](index=63&type=chunk) - Net cash from financing activities shifted from an outflow last year to an inflow, primarily due to new bank borrowings of **HKD 999,500 thousand**, offsetting bank loan repayments of **HKD 948,780 thousand**[65](index=65&type=chunk) Notes to the Condensed Consolidated Financial Statements [1. Basis of Preparation](index=22&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared on a going concern basis, despite current liabilities exceeding current assets, as management assesses sufficient financial resources, unused bank facilities, and ultimate holding company funding commitments - The condensed consolidated financial statements are prepared on a going concern basis, given that the Group's current liabilities exceeded its current assets by **HKD 216,727,000** as at June 30, 2022[70](index=70&type=chunk) - The Group possesses internal resources, unused bank facilities (totaling **HKD 2.12 billion**), and funding support commitments from its ultimate holding company, Trillion Resources Limited, to ensure fulfillment of financial obligations[70](index=70&type=chunk) - Management has conducted a going concern assessment, including the ongoing impact of COVID-19, and prepared cash flow forecasts and covenant calculations[70](index=70&type=chunk) [1A. Significant Events During the Interim Period](index=23&type=section&id=1A.%20Significant%20Events%20During%20the%20Interim%20Period) The COVID-19 pandemic and related restrictions negatively impacted the global economy and the Group's business, causing revenue and investment property fair value fluctuations, though participation in designated quarantine hotel schemes positively impacted revenue - The outbreak of COVID-19 and subsequent quarantine measures and travel restrictions implemented by various countries negatively impacted the global economy and business environment, directly or indirectly affecting the Group's operations, including fluctuations in revenue and fair value of investment properties[71](index=71&type=chunk) - During the interim period, six of the Group's hotels participated in the Designated Quarantine Hotel Scheme, and three also joined the Community Isolation Facility Hotel Scheme, which management believes will positively impact the Group's revenue[71](index=71&type=chunk) [2. Principal Accounting Policies](index=24&type=section&id=2.%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with investment properties and certain financial instruments measured at fair value. Amendments to HKFRS were first applied this period but had no significant impact on financial position or performance - The condensed consolidated financial statements are prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value (where applicable)[73](index=73&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards during the period had no significant impact on the financial position and performance and/or disclosures in the Group's condensed consolidated financial statements for the current and prior periods[74](index=74&type=chunk) [3. Revenue](index=25&type=section&id=3.%20Revenue) Total Group revenue significantly increased, primarily driven by operating hotel revenue, with room rental and ancillary services being the largest contributors. Hong Kong contributed the vast majority of hotel services revenue Revenue Composition Comparison | Revenue Source | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Operating Hotel Revenue | 286,391 | 145,436 | | Property Rental Income | 77,161 | 86,909 | | Dividend Income | 42 | – | | **Total Revenue** | **363,594** | **232,345** | Hotel Services Revenue Breakdown | Type of Goods or Services | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Room Rental Income and Other Ancillary Services | 264,179 | 144,204 | | Food and Beverages | 22,212 | 1,232 | - Hong Kong contributed **HKD 276,521 thousand** in hotel services revenue, significantly exceeding Mainland China's **HKD 9,870 thousand**[78](index=78&type=chunk) [4. Segment Information](index=26&type=section&id=4.%20Segment%20Information) The Group reports by hotel services, property investment, and securities investment segments. Hotel services revenue and performance significantly increased, while property investment revenue and performance declined. Grand City Hotel's assets and liabilities are classified as held for sale Segment Revenue and Performance Comparison | Segment | H1 2022 Revenue (HKD Thousand) | H1 2021 Revenue (HKD Thousand) | H1 2022 Performance (HKD Thousand) | H1 2021 Performance (HKD Thousand) | | :--- | :--- | :--- | :--- | :--- | | Hotel Services | 286,391 | 145,436 | 125,953 | 1,574 | | Property Investment | 77,161 | 86,909 | 22,682 | 52,010 | | Securities Investment | 42 | – | 42 | – | - Hotel services segment performance significantly increased from **HKD 1,574 thousand** to **HKD 125,953 thousand**, primarily benefiting from the significant contributions of Ramada Hong Kong Harbour View and Grand View Hotel Causeway Bay[82](index=82&type=chunk) - The respective segment assets and liabilities of Grand City Hotel are presented in the condensed consolidated statement of financial position as assets classified as held for sale and liabilities associated with assets classified as held for sale[88](index=88&type=chunk) [5. Finance Costs](index=30&type=section&id=5.%20Finance%20Costs) Finance costs, primarily comprising interest on bank borrowings and amounts due to the ultimate holding company, slightly increased during the period Finance Costs Composition Comparison | Cost Source | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 4,825 | 3,949 | | Interest on Amounts Due to Ultimate Holding Company | 820 | 1,104 | | **Total Finance Costs** | **5,645** | **5,053** | [6. Income Tax Expense](index=30&type=section&id=6.%20Income%20Tax%20Expense) Income tax expense significantly increased, mainly due to a substantial rise in current tax in Hong Kong and an increase in deferred tax Income Tax Expense Composition Comparison | Tax Source | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Hong Kong Current Tax | 24,501 | 8,774 | | China Current Tax | 209 | – | | UK Current Tax | 3,108 | 4,029 | | Deferred Tax | 4,006 | 1,765 | | **Total Income Tax Expense** | **31,784** | **14,826** | - Hong Kong profits tax is recognized based on management's estimated weighted average annual income tax rate of **16.5%** for the entire financial year[98](index=98&type=chunk) [7. Profit for the Period](index=31&type=section&id=7.%20Profit%20for%20the%20Period) Profit for the period is stated after deducting or including depreciation expenses, interest income from bank deposits, and loss (gain) on disposal of property Profit for the Period Adjustment Items | Item | As at June 30, 2022 for the six months ended (HKD Thousand) | As at June 30, 2021 for the six months ended (HKD Thousand) | | :--- | :--- | :--- | | Depreciation of Right-of-Use Assets | 419 | 427 | | Depreciation of Property, Plant and Equipment | 53,275 | 52,840 | | Interest Income from Bank Deposits | (204) | (136) | | Loss (Gain) on Disposal of Property, Plant and Equipment | 449 | (709) | [8. Dividends](index=31&type=section&id=8.%20Dividends) No dividends were declared or paid during the reporting period or the prior year. The Board resolved not to declare or recommend an interim dividend for the current period - No dividends were declared or paid to shareholders for the six months ended June 30, 2022 and 2021, nor for the years ended December 31, 2021 and 2020[100](index=100&type=chunk) - The Board resolved not to declare or recommend an interim dividend for the six months ended June 30, 2022 and 2021[100](index=100&type=chunk) [9. Earnings Per Share](index=32&type=section&id=9.%20Earnings%20Per%20Share) Basic earnings per share significantly increased, calculated based on profit attributable to owners of the Company and the number of shares in issue. No diluted earnings per share are presented for the current or prior period due to the absence of potential ordinary shares Basic Earnings Per Share Comparison | Metric | As at June 30, 2022 for the six months ended | As at June 30, 2021 for the six months ended | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company (HKD) | 31.15 million | 4.29 million | | Number of Shares in Issue (Shares) | 241,766,000 | 241,766,000 | | Basic Earnings Per Share (HK cents) | 12.88 | 1.78 | - The number of shares adopted in calculating earnings per share excludes shares of the Company held by a subsidiary[102](index=102&type=chunk) [10. Property, Plant and Equipment](index=32&type=section&id=10.%20Property,%20Plant%20and%20Equipment) During the reporting period, the Group's additions to property, plant and equipment decreased, and some property was disposed of Property, Plant and Equipment Changes | Item | As at June 30, 2022 for the six months ended (HKD) | As at June 30, 2021 for the six months ended (HKD) | | :--- | :--- | :--- | | Additions | 6.27 million | 7.40 million | | Disposals (carrying amount) | 638,000 | 1.34 million | [11. Investment Properties](index=32&type=section&id=11.%20Investment%20Properties) Investment properties are stated at fair value, with a loss arising from fair value changes during the period. Valuation is based on the income approach, considering term yields, reversionary yields, and market rents - Investment properties are stated at fair value based on valuations performed by independent professional valuers and the Company's directors, with the fair value assessed using the income approach to determine the market value of investment properties[104](index=104&type=chunk) Loss from Fair Value Changes of Investment Properties | Metric | As at June 30, 2022 for the six months ended (HKD) | As at June 30, 2021 for the six months ended (HKD) | | :--- | :--- | :--- | | Loss from Fair Value Changes | 53.70 million | 34.47 million | - The income approach considers current rents from existing leases and market levels of future reversionary income, capitalizing rents for fully leased properties to estimate their value on an open market basis[105](index=105&type=chunk) [12. Trade and Other Receivables](index=33&type=section&id=12.%20Trade%20and%20Other%20Receivables) Trade and other receivables significantly increased, primarily driven by trade receivables from customer contracts. The Group typically grants 30 to 60 days credit to hotel travel agents and certain customers Trade and Other Receivables Comparison | Item | As at June 30, 2022 (HKD Thousand) | As at December 31, 2021 (HKD Thousand) | | :--- | :--- | :--- | | Trade Receivables (from customer contracts) | 48,307 | 4,660 | | Lease Receivables | 2,434 | 3,073 | | Other Receivables | 7,601 | 4,228 | | **Total** | **58,342** | **11,961** | - Except for credit terms of **30 to 60 days** granted to hotel travel agents and certain customers, the Group does not grant any credit period to customers[109](index=109&type=chunk) [13. Deposits Paid for Acquisition of a Subsidiary](index=34&type=section&id=13.%20Deposits%20Paid%20for%20Acquisition%20of%20a%20Subsidiary) The Group paid an initial deposit of HKD 142.07 million for the acquisition of the entire issued share capital and related indebtedness of Haili Investment Limited - On May 11, 2022, an indirect wholly-owned subsidiary of the Group entered into a sale and purchase agreement with an independent third party of the Group to acquire the entire issued share capital of Haili Investment Limited and accept the assignment of the sale loan, being the total outstanding loan of Haili, for a consideration of **HKD 1.42 billion**, with an initial deposit of **HKD 142.07 million** paid[111](index=111&type=chunk) [14. Assets Classified as Held for Sale / Liabilities Associated with Assets Classified as Held for Sale](index=34&type=section&id=14.%20Assets%20Classified%20as%20Held%20for%20Sale%20/%20Liabilities%20Associated%20with%20Assets%20Classified%20as%20Held%20for%20Sale) The assets and liabilities of Grand City Hotel have been resolved by the Board for sale and classified as a disposal group held for sale, expected to be completed within twelve months - On May 11, 2022, the Company's directors resolved to dispose of the Group's subsidiary, Wah Choi Investment Limited (which holds a hotel named Grand City Hotel), and the assets and liabilities attributable to this subsidiary are expected to be sold within **twelve months**, thus classified as a disposal group held for sale[112](index=112&type=chunk) Assets and Liabilities Classified as Held for Sale | Item | As at June 30, 2022 (HKD Thousand) | | :--- | :--- | | Property, Plant and Equipment | 373,561 | | Bank Balances and Cash | 5,191 | | **Total Assets Classified as Held for Sale** | **380,526** | | Trade and Other Payables and Accruals | 1,524 | | Contract Liabilities | 5,147 | | **Total Liabilities Associated with Assets Classified as Held for Sale** | **8,371** | [15. Trade and Other Payables and Accruals](index=35&type=section&id=15.%20Trade%20and%20Other%20Payables%20and%20Accruals) Trade and other payables and accruals slightly decreased, primarily driven by a reduction in other payables and accruals Trade and Other Payables and Accruals Comparison | Item | As at June 30, 2022 (HKD Thousand) | As at December 31, 2021 (HKD Thousand) | | :--- | :--- | :--- | | Trade Payables | 4,814 | 5,351 | | Other Payables and Accruals | 33,221 | 35,490 | | **Total** | **38,035** | **40,841** | - An aging analysis of trade payables shows that the vast majority of amounts (**HKD 4,756 thousand**) are within **0-30 days**[115](index=115&type=chunk) [16. Bank Borrowings](index=36&type=section&id=16.%20Bank%20Borrowings) Total bank borrowings slightly increased, with all loans being floating-rate and secured by certain Group assets Total Bank Borrowings Comparison | Metric | As at June 30, 2022 (HKD Thousand) | As at December 31, 2021 (HKD Thousand) | | :--- | :--- | :--- | | Secured Bank Borrowings | 765,297 | 738,408 | - All of the Group's bank borrowings are floating-rate loans, with an effective annual interest rate of **1.28%** (December 31, 2021: **1.29%**)[119](index=119&type=chunk) - Bank borrowings are secured by certain assets of the Group, including investment properties, hotel properties, pledged shares of certain subsidiaries, assignments of property rental income, and assignments of insurance policies for certain hotel properties[135](index=135&type=chunk) [17. Share Capital](index=37&type=section&id=17.%20Share%20Capital) At the end of the reporting period, the number and amount of ordinary

Financial Performance - The company reported a profit attributable to shareholders of HKD 30 million for the year ended December 31, 2021, an increase of HKD 126 million compared to a loss of HKD 96 million for the year ended December 31, 2020[5]. - For the year ended December 31, 2021, the company reported a total revenue of HKD 284,082,000, an increase of 55% compared to HKD 183,859,000 in 2020[7]. - The overall profit after tax increased by 40% to HKD 329,290,000 from HKD 235,072,000, primarily due to higher hotel revenues and revaluation gains[7]. - The company reported a significant increase in revenue, with a year-over-year growth of 15% in the last quarter[12]. - The company reported a profit of HKD 79,637,000 for the year 2021, a significant recovery from a loss of HKD 238,220,000 in 2020[90]. - Gross profit increased to HKD 172,418,000 in 2021, compared to HKD 120,183,000 in 2020, reflecting a growth of about 43.4%[90]. - The company’s basic earnings per share improved to HKD 12.58 in 2021, compared to a loss per share of HKD 39.71 in 2020[90]. - The company’s total comprehensive income for 2021 was HKD 75,590,000, recovering from a loss of HKD 192,050,000 in 2020[91]. Hotel Operations - Hotel operations generated revenue of HKD 346 million, representing a 59% increase from HKD 218 million in the previous year[5]. - The group currently operates nine hotels, providing approximately 2,821 hotel rooms, making it one of the largest hotel groups in Hong Kong[5]. - The operating profit from hotels improved to HKD 5,853,000 from a loss of HKD 34,521,000 in the previous year, indicating a significant recovery[7]. - The hotel business faced significant challenges, with a 97.4% drop in overseas and Chinese tourist arrivals, leading to a revenue decline of over 90% for most hotels and retailers[10]. - The hotel division's operating margin is between 35% to 40% of total revenue, indicating significant operational expenses[70]. Investment and Acquisitions - The company holds a 66.11% stake in Shun Ho Property Investment Limited, which owns a 71.09% stake in Huada Hotel Investment Limited, indicating significant investment in the hotel sector[5]. - The company acquired the Wood Street Police Headquarters in London for GBP 40,000,000, with plans for renovation to include approximately 216 guest rooms[10]. - The company is expanding its market presence in Southeast Asia, targeting a 25% market share by the end of the fiscal year[12]. - A strategic acquisition of a local competitor is anticipated to enhance operational efficiency and increase market penetration[12]. Governance and Board Structure - The board consists of nine members, including five executive directors, one non-executive director, and three independent non-executive directors, with two independent directors possessing appropriate professional qualifications or relevant financial management expertise[15]. - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange's listing rules, ensuring compliance with all provisions except for specific deviations noted[13]. - The company’s chairman and CEO, Mr. Zheng, holds both positions, which the board believes provides consistent leadership and significant cost savings[13]. - The board is responsible for setting the strategic direction and monitoring the performance of senior management, ensuring effective execution of the company's strategies[18]. - The company has established a remuneration committee, primarily composed of independent non-executive directors, to oversee compensation matters[13]. Risk Management and Internal Controls - The audit committee is responsible for reviewing the effectiveness of the risk management and internal control systems, reporting to the board[28]. - The company has established a robust risk management and internal control system to protect the interests of shareholders, customers, and employees[28]. - The company emphasizes a proactive approach to risk management, assessing potential impacts and likelihoods of significant risks[29]. - The internal audit team, also formed in 2019, includes three executive directors and conducts monthly reviews of all expenditures and proposed acquisitions[29]. Financial Position and Cash Flow - The group’s total debt decreased to HKD 784,000,000 from HKD 870,000,000, reflecting effective debt repayment during the year[10]. - Total revenue for the year 2021 was HKD 514,409,000, an increase from HKD 387,911,000 in 2020, representing a growth of approximately 32.5%[90]. - Cash generated from operations amounted to HKD 248,858,000, compared to HKD 191,623,000 in the previous year, reflecting a 29.8% increase[101]. - The net cash from operating activities was HKD 216,035,000, up from HKD 142,104,000 in 2020, indicating a 52.1% growth[101]. - The group recorded positive operating cash inflow of HKD 216,035,000 for the year, up from HKD 142,104,000 in 2020[123]. Dividend Policy - The board decided not to recommend a final dividend for the year ended December 31, 2021, due to uncertainties in hotel revenue and rental income caused by the COVID-19 pandemic[5]. - The company aims to increase its dividend payout by 12% in the upcoming fiscal year[12]. - The company has adopted a dividend policy aimed at providing stable and sustainable returns to shareholders, considering factors such as operational conditions and financial status[50]. Employee and Operational Metrics - The number of employees decreased to 486 from 566, indicating a reduction in workforce amid challenging market conditions[10]. - Administrative expenses (excluding depreciation) were HKD 46,000,000, up from HKD 44,000,000 in the previous year, reflecting increased operational costs[10]. - The company provided an unsecured loan to a related party amounting to HKD 10,666,000 at a fixed interest rate of 2% per annum, with interest received during the year totaling HKD 561,000[59]. Compliance and Reporting - The company confirms that the financial statements are prepared in compliance with relevant regulations and applicable accounting standards[27]. - The audit report confirms that the consolidated financial statements fairly reflect the group's financial position as of December 31, 2021, in accordance with Hong Kong Financial Reporting Standards[73]. - The group’s financial reporting process is overseen by responsible governance personnel to ensure compliance with financial reporting standards[83].

Financial Performance - The company reported a profit attributable to owners of HKD 4,000,000 for the six months ended June 30, 2021, compared to a loss of HKD 77,000,000 for the same period in 2020, an increase of HKD 81,000,000 [8]. - The profit attributable to the owners of Huada Hotel was HKD 9,000,000 for the six months ended June 30, 2021, compared to a loss of HKD 154,000,000 for the same period in 2020, an increase of HKD 163,000,000 [14]. - The net profit for the period was HKD 12,994,000, a turnaround from a net loss of HKD 190,447,000 in the same period of 2020 [56]. - The company reported a total comprehensive income of HKD 32,966,000 for the six months ended June 30, 2021, compared to a loss of HKD 268,277,000 in the same period of 2020 [56]. - The pre-tax profit for the six months ended June 30, 2021, was HKD 27,820,000, a substantial recovery from a loss of HKD 187,046,000 in the same period of 2020 [94]. - Basic earnings per share for the first half of 2021 was HKD 1.78, compared to a loss per share of HKD 31.67 in the previous year [54]. - The company reported a total of HKD 1,882,000 in other income and expenses for the six months ended June 30, 2021, compared to HKD 10,179,000 in the previous year, indicating a decrease of 81.5% [94]. Revenue and Income Sources - Hotel business revenue increased by 71% to HKD 145,000,000 for the six months ended June 30, 2021, up from HKD 85,000,000 in the same period last year [11]. - The group’s total revenue increased by 45% to HKD 144,705,000, driven by an increase in hotel occupancy and rental income [17]. - Total revenue for the six months ended June 30, 2021, was HKD 232,345,000, a significant increase from HKD 170,677,000 for the same period in 2020, representing a growth of approximately 36.1% [54]. - Hotel operating income reached HKD 145,436,000, up 70.5% from HKD 85,355,000 in the previous year [89]. - Property rental income was HKD 86,909,000 for the six months ended June 30, 2021, slightly increasing from HKD 85,269,000 in the prior year [94]. - The rental income from commercial properties was HKD 87,000,000 for the six months ended June 30, 2021, slightly up from HKD 85,000,000 in the same period last year [20]. Debt and Financial Position - The overall debt of the group decreased to HKD 837,000,000 as of June 30, 2021, from HKD 870,000,000 as of December 31, 2020, due to loan repayments [21]. - The group’s capital debt ratio remained stable at 11% as of June 30, 2021, consistent with the previous reporting period [21]. - Current liabilities increased to HKD 559,758,000 as of June 30, 2021, compared to HKD 309,755,000 at the end of 2020, indicating a rise in short-term obligations [60]. - The company’s total equity as of June 30, 2021, was HKD 7,970,694,000, compared to HKD 7,929,766,000 at the end of 2020, showing a slight increase in shareholder equity [60]. - The total bank loans amounted to HKD 787,857,000 as of June 30, 2021, down from HKD 816,185,000 as of December 31, 2020 [132]. Corporate Governance - The company has complied with all corporate governance codes except for the deviation where the Chairman and CEO roles are held by the same individual, which is believed to provide consistent leadership and cost savings [39]. - The company has adopted a nomination committee framework that complies with the governance code, with most members being independent non-executive directors [41]. - The remuneration committee's responsibilities have been revised to fully comply with the governance code, ensuring independent oversight of management compensation [43]. - The company has confirmed compliance with the standard code for securities trading by all directors during the reporting period [44]. - The company experienced a change in its board composition, with the number of independent non-executive directors dropping to two, which temporarily affected compliance with listing rules [45]. - The company has appointed new members to its audit and remuneration committees to restore compliance with listing rules [49]. Operational Challenges - The tourism market in Hong Kong was severely impacted by COVID-19, with most hotels and retailers experiencing a revenue decline of over 90% [23]. - Management anticipates low occupancy rates and high operational costs for Hong Kong hotels and retail sectors to continue, with a significant likelihood of overseas and Chinese tourists returning being low for the remainder of 2021 [25]. - The company expects a rapid increase in office vacancy rates due to economic challenges faced by international trade companies as a result of the US-China trade war and retail sector closures [25]. - The company operates nine revenue-generating hotels, with seven located in Hong Kong, one in Shanghai, and one in London, facing challenges due to the ongoing effects of COVID-19 and the US-China trade war [25]. Investments and Acquisitions - The company acquired the Wood Street Police Station in London for £40 million, with plans to renovate it into a luxury hotel with approximately 216 rooms [24]. - The company participated in a designated quarantine hotel program with six hotels, which is expected to positively impact revenue [75]. Cash Flow and Liquidity - The company’s cash and cash equivalents increased to HKD 260,395,000 from HKD 178,469,000, reflecting improved liquidity [58]. - The net cash generated from operating activities was HKD 114,674,000, compared to HKD 10,574,000 in the previous year [67]. - The company recorded a net increase in cash and cash equivalents of HKD 80,463,000, compared to HKD 357,698,000 in the same period last year [68]. - The total unused bank financing available to the company as of June 30, 2021, was HKD 910,500,000 [74]. Asset Management - Non-current assets as of June 30, 2021, totaled HKD 8,803,934,000, slightly down from HKD 8,862,345,000 at the end of 2020 [58]. - The carrying amount of hotel properties was approximately HKD 3,380,912,000 as of June 30, 2021, with no impairment loss recognized due to the recoverable amount being higher than the carrying value [118]. - The total carrying value of investment properties was approximately HKD 4,496,051,000 as of June 30, 2021, down from HKD 5,021,780,000 as of December 31, 2020, with a loss of HKD 34,470,000 recognized in the income statement for the period [120].

Financial Performance - Shun Ho Holdings Limited reported its annual financial results for the year ending December 31, 2020[1]. - The company achieved a total revenue of HKD 1.2 billion, representing a decrease of 15% compared to the previous year[1]. - Net profit for the year was HKD 150 million, down 25% year-on-year[1]. - The company reported a loss attributable to shareholders of HKD 96 million for the year ended December 31, 2020, a decrease of HKD 100 million compared to a profit of HKD 4 million for the year ended December 31, 2019[13]. - Hotel operations revenue decreased by 52% to HKD 218 million, down from HKD 452 million in 2019[17]. - The total revenue for the group decreased by 49% from HKD 464 million to HKD 235 million for the year ended December 31, 2020[29]. - The company reported a significant increase in revenue, with a year-on-year growth of 25% in the last quarter[33]. - The company reported a net loss of HKD 238,220,000 for 2020, compared to a profit of HKD 19,915,000 in 2019[98]. - The total comprehensive income for the year was a loss of HKD 192,050,000, significantly down from a loss of HKD 113,909,000 in the previous year[113]. Assets and Liabilities - The company’s total assets amounted to HKD 5.5 billion, with a current ratio of 1.5[1]. - The overall debt of the group as of December 31, 2020, was HKD 870,000,000, down from HKD 915,000,000 in 2019, reflecting a debt repayment during the year[31]. - The total assets decreased to HKD 8,862,345,000 in 2020 from HKD 9,168,961,000 in 2019, a reduction of 3.3%[107]. - The current liabilities exceeded current assets by HKD 99,624,000 as of December 31, 2020[132]. - The group has sufficient financial resources, including internal resources and unused bank financing, to continue operations in the foreseeable future[132]. Operational Efficiency and Cost Management - The group reduced operating expenses by HKD 146 million, with the number of employees decreasing from 698 to 566[29]. - Operating costs were reduced by HKD 146,000,000 (approximately 47%) while maintaining an occupancy rate above 85%[31]. - The company is investing in new technology for property management to enhance operational efficiency[1]. - Operational efficiency improvements are expected to reduce costs by 5% in the next quarter[33]. Market Strategy and Expansion - The company plans to expand its market presence by opening two new hotel properties in 2021[1]. - A strategic focus on mergers and acquisitions is being considered to strengthen its portfolio in the hospitality sector[1]. - Market expansion plans include entering two new regions, which are projected to increase market share by 10%[33]. - The company is considering strategic acquisitions to enhance its portfolio, with a budget of $30 million earmarked for potential deals[33]. Governance and Board Structure - The company’s board includes members with extensive experience in legal, financial, and operational management, enhancing governance and oversight[9]. - The board consists of nine members, including five executive directors, one non-executive director, and three independent non-executive directors, all of whom possess appropriate professional qualifications or relevant financial management expertise[36]. - The company has complied with all provisions of the corporate governance code, except for the deviation regarding the appointment of the chairman and CEO, which are held by the same individual, Zheng Qiweng[34]. - The company has established a remuneration committee that complies with the corporate governance code, although it does not approve management's remuneration proposals[34]. Dividend Policy - The board has proposed a dividend of HKD 0.05 per share, maintaining a stable payout despite the challenging year[1]. - The board does not recommend the payment of a final dividend for the year ended December 31, 2020, due to significant operational losses in the hotel business[14]. - The company does not recommend the distribution of a final dividend for the year ended December 31, 2020, compared to no dividend in 2019[20]. - The company has adopted a dividend policy that allows for the declaration and distribution of dividends to shareholders[51]. Risk Management - The company established a risk management committee in 2019, consisting of three executive directors responsible for business, financial, and property asset management risks[44]. - The board believes that the risk management and internal control systems are effective and sufficient to safeguard the group's assets and stakeholders' interests[44]. - The group conducted a going concern assessment considering the ongoing impact of COVID-19 on its operations[132]. Financial Reporting and Compliance - The financial statements were prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value[134]. - The group recognizes revenue when control of goods or services related to specific performance obligations is transferred to customers[148]. - The company recognizes deferred tax liabilities for all taxable temporary differences, unless it can control the reversal of such differences[56]. - The group adopted revised Hong Kong Financial Reporting Standards for the first time, which did not have a significant impact on the financial statements for the year[121].

Financial Performance - The company reported a loss attributable to owners of HKD 77 million for the six months ended June 30, 2020, a decrease of HKD 123 million compared to a profit of HKD 46 million for the same period in 2019[6]. - For the six months ended June 30, 2020, the company reported total revenue of HKD 170.68 million, a decrease of 53.7% compared to HKD 370.20 million for the same period in 2019[46]. - The company incurred a loss before tax of HKD 187.05 million, compared to a profit before tax of HKD 130.56 million in the previous year, indicating a significant decline in performance[46]. - The total comprehensive loss for the period was HKD 268.28 million, compared to a total comprehensive income of HKD 104.61 million in the prior year[54]. - The basic loss per share for the period was HKD 31.67, compared to earnings per share of HKD 18.84 for the same period last year[46]. - The group reported a significant increase in property rental income, which contributed positively to overall revenue despite the decline in hotel operating income[80]. - The total loss before tax for the six months ended June 30, 2020, was HKD 187,046, compared to a profit of HKD 130,564 for the same period in 2019[85]. Revenue Breakdown - Hotel business revenue decreased by 71% to HKD 85 million, down from HKD 289 million for the same period in 2019[9]. - The total revenue of the hotel group decreased by 64% from HKD 277 million to HKD 99 million, primarily due to reduced rental and occupancy rates[14]. - The group's hotel operating revenue for the six months ended June 30, 2020, was HKD 85,355,000, a decrease of 70.5% compared to HKD 289,009,000 for the same period in 2019[80]. - Property rental income increased to HKD 85,269,000 for the six months ended June 30, 2020, compared to HKD 81,025,000 in the same period of 2019, reflecting a growth of 5.5%[80]. Debt and Liabilities - The group’s overall debt increased to HKD 1.29 billion as of June 30, 2020, compared to HKD 915 million on December 31, 2019, reflecting an increase in bank loans[18]. - The group’s capital debt ratio relative to total debt was 16% as of June 30, 2020, up from 11% on December 31, 2019[18]. - Total liabilities increased from HKD 320,581 thousand to HKD 714,972 thousand, marking an increase of 123.5%[60]. - The company’s bank loans increased significantly from HKD 203,153 thousand to HKD 585,950 thousand, an increase of 187.5%[60]. - The total bank loans amounted to HKD 1,236,197,000 as of June 30, 2020, up from HKD 900,835,000 at the end of 2019[118]. Asset Management - Non-current assets decreased from HKD 9,168,961 thousand as of December 31, 2019, to HKD 8,869,723 thousand as of June 30, 2020, representing a decline of approximately 3.3%[58]. - Current assets increased significantly, with cash and cash equivalents rising from HKD 155,795 thousand to HKD 512,663 thousand, an increase of 228.5%[66]. - Total equity decreased from HKD 8,130,202 thousand as of December 31, 2019, to HKD 7,861,925 thousand as of June 30, 2020, reflecting a decline of approximately 3.3%[60]. - The carrying value of investment properties was approximately HKD 3,928,000,000 as of June 30, 2020, down from HKD 4,118,000,000 as of December 31, 2019, a decrease of about 4.6%[126]. Operational Challenges - The ongoing impact of COVID-19 and instability in US-China relations is expected to hinder the return of overseas and Chinese tourists to Hong Kong, leading to continued low occupancy rates and high operating costs[21]. - The company anticipates a rapid increase in office vacancy rates due to challenges faced by international trade companies amid the US-China trade war and recent economic downturn[21]. - The impact of the COVID-19 pandemic has led to a reassessment of the group's financial position and performance, necessitating government support measures[72]. - The group continues to monitor market conditions and adjust strategies accordingly to navigate the ongoing economic challenges[72]. Corporate Governance - The company has not appointed separate individuals for the roles of Chairman and CEO, which deviates from corporate governance guidelines[36]. - The company has adopted the standard code of conduct for securities trading, confirming compliance by all directors during the reporting period[41]. - The company’s independent auditor, Deloitte, conducted a review of the interim financial statements and found no significant issues[45]. Shareholder Information - The company’s major shareholder, Zheng Qiweng, holds a beneficial interest in 217,452,825 shares, representing 71.44% of the total shareholding[25]. - Mercury Fast Limited holds 62,602,700 shares, accounting for 20.60% of the total shareholding, and is considered a controlled company[30]. - Trillion Resources Limited, the ultimate holding company, beneficially owns 154,006,125 shares (50.60%) and is also considered to hold shares through Mercury[32].

Financial Performance - The company reported a loss attributable to owners of HKD 77 million for the six months ended June 30, 2020, compared to a profit of HKD 46 million for the same period in 2019, a decrease of HKD 123 million[2]. - Total revenue for the six months ended June 30, 2020, was HKD 170.7 million, down 53.8% from HKD 370.2 million in the same period of 2019[2]. - The gross profit margin decreased significantly, with a gross profit of HKD 23.7 million compared to HKD 149.3 million in the previous year, reflecting a decline of 84.1%[2]. - The company incurred a fair value loss on investment properties of HKD 184.2 million, contrasting with a gain of HKD 10 million in the prior year[2]. - The company reported a total comprehensive loss of HKD 268.3 million for the period, compared to a comprehensive income of HKD 104.6 million in the same period of 2019[6]. - The group reported a loss before tax of HKD 187,046,000 for the six months ended June 30, 2020, compared to a profit of HKD 130,564,000 for the same period in 2019[20]. - The company's total equity decreased to HKD 7.86 billion from HKD 8.13 billion at the end of the previous year[8]. - The company's total loss for the period was primarily due to hotel operating losses, revaluation losses, and depreciation[40]. Earnings and Dividends - The basic loss per share for the period was HKD 31.67, compared to earnings per share of HKD 18.84 in the previous year[4]. - No interim dividends were declared for the six months ended June 30, 2020, the same as in 2019[29]. - The company did not declare an interim dividend for the six months ended June 30, 2020, compared to no dividend declared for the same period in 2019[35]. Revenue Breakdown - Hotel operating revenue dropped to HKD 85,355,000, down 70.5% from HKD 289,009,000 in the previous year[17]. - The group's total revenue for the six months ended June 30, 2020, was HKD 170,677,000, a decrease of 53.8% compared to HKD 370,197,000 for the same period in 2019[17]. - Hotel business revenue decreased by 71% to HKD 85,000,000 for the six months ended June 30, 2020, down from HKD 289,000,000 in the same period of 2019[37]. - Property rental income increased to HKD 85,269,000, up 5.5% from HKD 81,025,000 in the same period last year[17]. - The company’s investment property rental income increased by 12% to HKD 18,782,000, driven by rental income from the Royal Scot Hotel in London[43]. Costs and Expenses - Financial costs decreased to HKD 10,721,000, down 15.5% from HKD 12,684,000 in the previous year[22]. - Administrative expenses (excluding depreciation) increased to HKD 21,700,000 for the six months ended June 30, 2020, from HKD 20,600,000 in the same period of 2019, attributed to professional fees related to the acquisition of Wood Street Hotel in London[46]. - The hotel management maintained an occupancy rate of over 80% while reducing operating costs by HKD 72,000,000, which is a 44% decrease[49]. Assets and Liabilities - Non-current assets totaled HKD 8.87 billion as of June 30, 2020, down from HKD 9.17 billion as of December 31, 2019[8]. - Current liabilities included bank loans of HKD 586 million, which increased from HKD 203 million at the end of the previous year[8]. - The group continues to assess its liquidity position due to current liabilities exceeding current assets by HKD 164,537,000 as of June 30, 2020[13]. - The group's total debt as of June 30, 2020, was HKD 1,290,000,000, an increase from HKD 915,000,000 as of December 31, 2019, resulting in a debt-to-capital ratio of 16% compared to 11% the previous year[47]. Strategic Plans and Market Conditions - The company plans to focus on cost management and operational efficiency to navigate the challenging market conditions[2]. - The company plans to rebrand the Glamorous Hotel to a higher-end Ramada Glamorous Hotel in August 2020[44]. - The ongoing impact of COVID-19 and U.S.-China trade tensions is expected to hinder the return of international and Chinese tourists to Hong Kong, leading to continued low occupancy rates and high operating costs[50]. - The group anticipates a rapid increase in office vacancy rates due to challenges faced by international trade companies amid the U.S.-China trade war and recent economic downturn[50]. Acquisitions and Investments - The group acquired the Wood Street Police Headquarters in London for GBP 40,000,000, which includes a renovation project for a luxury hotel with approximately 210 rooms[49]. - The group operates nine revenue-generating hotels, with seven located in Hong Kong, one in Shanghai, and one in London, including the newly acquired Wood Street Hotel[50]. Compliance and Governance - The group applied revised Hong Kong Financial Reporting Standards for the first time during this interim period, which did not have a significant impact on the financial statements[15]. - The audit committee reviewed the group's unaudited financial performance for the six months ending June 30, 2020[59]. - The company has complied with the corporate governance code, except for the combined roles of the chairman and CEO, which the board believes provides stable leadership[54].

Financial Performance - Shun Ho Holdings Limited reported a total revenue of HKD 1.2 billion for the fiscal year ending December 31, 2019, representing a year-on-year increase of 10%[1] - The company achieved a net profit of HKD 150 million, which is a 15% increase compared to the previous year[1] - The company's profit attributable to owners for the year ended December 31, 2019, was HKD 4,000,000, a decrease of 99% compared to HKD 310,000,000 in 2018[9] - Total revenue for the year decreased by 21%, from HKD 590 million to HKD 464 million[128] - The net profit attributable to shareholders dropped by 88%, from HKD 260 million in 2018 to HKD 32 million in 2019[128] - Operating income for the year decreased by 48%, from HKD 41.9 million to HKD 21.7 million[140] - The overall profit for the year decreased by approximately HKD 228 million, primarily due to reduced hotel profits and revaluation losses[128] Market and Business Strategy - User data indicated a growth in customer base by 20%, reaching a total of 500,000 active users[1] - The company plans to expand its market presence in Southeast Asia, targeting a 25% increase in market share over the next three years[1] - New product development includes the launch of a digital platform aimed at enhancing customer engagement, expected to be operational by Q3 2020[1] - The company has allocated HKD 100 million for research and development in new technologies for the upcoming fiscal year[1] - Shun Ho Holdings Limited is considering strategic acquisitions to enhance its portfolio, with a focus on companies in the hospitality sector[1] - The management provided an optimistic outlook, projecting a revenue growth of 15% for the next fiscal year[1] - The company has initiated a cost-reduction strategy aimed at improving operational efficiency, targeting a 5% reduction in overhead costs[1] Dividend and Shareholder Value - The board of directors has approved a dividend payout of HKD 0.05 per share, reflecting a commitment to returning value to shareholders[1] - The board of directors decided not to recommend a final dividend for the year ended December 31, 2019, due to adverse political conditions and the impact of the COVID-19 crisis on hotel operations and rental income[10] Hotel Operations and Performance - The hotel business experienced a significant decline in profitability, primarily due to reduced hotel profits and property valuation declines[12] - The company has faced significant operational losses in its hotel business, leading to cash flow constraints[10] - The board believes that the current adverse political situation may persist for an extended period, affecting the group's hotel business[10] - The group continues to engage in commercial property investment and leasing, as well as hotel investment and management[12] - The group is one of the largest hotel groups in Hong Kong, with a diverse portfolio of properties[13] - The average room occupancy rate for the year was 99%[141] - Average room rent decreased to HKD 515, down from HKD 665 in January 2019[141] - The company provided rent reductions to maintain long-term relationships with tenants amid fluctuating rental income[136] Debt and Investment - The group’s total debt as of December 31, 2019, was HKD 915,000,000, down from HKD 1,110,000,000 in 2018[180] - The group acquired a property in London for GBP 40,000,000 (approximately HKD 404,540,000), expanding its investment in the UK market[181] - The company plans to renovate a historic building in central London into a luxury hotel with approximately 200 rooms, including a restaurant, bar, banquet hall, and spa, covering a total area of about 117,472 square feet[183] Governance and Compliance - The board of directors consists of eight members, including four executive directors, one non-executive director, and three independent non-executive directors, all of whom possess appropriate professional qualifications or relevant financial management expertise[200] - The company has complied with all provisions of the corporate governance code, except for the deviation regarding the separation of the roles of chairman and CEO, which is held by Mr. Zheng[199] - The company believes that having Mr. Zheng serve as both chairman and CEO provides stable and consistent leadership, benefiting strategic planning and implementation[199] - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange Listing Rules, ensuring high-quality governance practices[199] - The company’s board composition meets the requirement of having at least three independent non-executive directors, with at least one possessing appropriate professional qualifications[200] - The company has implemented measures to ensure that all directors, including executive and non-executive, rotate at least once every three years[199] - The remuneration committee is responsible for various duties, although it does not approve management's compensation proposals[199] - The company has confirmed compliance with the standard code regarding securities trading by directors throughout the year[199] - The company emphasizes transparency and accountability to shareholders as part of its governance principles[199] - The board is collectively responsible for overseeing the management of the group’s business to enhance shareholder value[200] Economic Impact and Challenges - The ongoing social instability and COVID-19 pandemic have negatively impacted Hong Kong's local economy, leading to significant losses for most hotel businesses, which are either closed or operating at low occupancy rates[186] - Management anticipates that the hotel operations will incur losses for an extended period due to the prolonged effects of COVID-19 and ongoing social unrest, affecting both Chinese and international visitors[186] - The company expects a rapid increase in office vacancy rates due to challenges faced by international trade companies amid the US-China trade war and recent economic downturns[187]

Financial Performance - The net profit attributable to shareholders for the six months ended June 30, 2019, was HKD 63,000,000, a 1% increase from HKD 62,600,000 for the same period in 2018[4]. - The net profit attributable to the Grand Hotel for the six months ended June 30, 2019, was HKD 99,000,000, a 4% increase from HKD 95,000,000 for the same period in 2018[10]. - Revenue for the six months ended June 30, 2019, was HKD 370,197,000, an increase from HKD 361,840,000 for the same period in 2018, representing a growth of approximately 1%[47]. - Gross profit for the same period was HKD 149,343,000, compared to HKD 153,564,000 in 2018, indicating a decrease of about 2%[47]. - Profit before tax decreased significantly to HKD 130,564,000 from HKD 321,134,000, reflecting a decline of approximately 59%[47]. - Net profit for the period was HKD 105,849,000, down from HKD 296,625,000 in the previous year, a decrease of around 64%[47]. - Basic earnings per share for the period was HKD 18.84, compared to HKD 58.91 in the same period last year, a decline of approximately 68%[47]. - Total comprehensive income for the period was HKD 104,607,000, down from HKD 285,060,000, representing a decrease of about 63%[55]. Revenue Breakdown - Hotel revenue for the group was HKD 289,000,000, representing a 3% increase from HKD 281,000,000 for the same period in 2018[7]. - Hotel operating revenue increased to HKD 289,009,000 for the six months ended June 30, 2019, up from HKD 281,007,000 in 2018, reflecting a growth of 2.8%[106]. - Property rental income rose to HKD 81,025,000, compared to HKD 80,660,000 in the previous year, indicating a growth of 0.5%[106]. - The revenue from food and beverage services was HKD 10,214,000 for the six months ended June 30, 2019, down from HKD 10,802,000 in 2018, showing a decline of 5.4%[108]. - The revenue from room rentals and other ancillary services was HKD 278,795,000, an increase from HKD 270,205,000 in the previous year, marking a growth of 3.2%[108]. - The market area revenue from Hong Kong was HKD 280,859,000, up from HKD 271,208,000 in 2018, reflecting an increase of 3.3%[108]. Assets and Liabilities - Total assets as of June 30, 2019, were HKD 9,485,902, a slight decrease from HKD 9,512,618 as of December 31, 2018[114]. - Total liabilities as of June 30, 2019, amounted to HKD 1,281,073, down from HKD 1,382,886 at the end of 2018, representing a reduction of 7.4%[117]. - The total carrying value of investment properties was approximately HKD 4,985,000,000 as of June 30, 2019, showing a slight increase from HKD 4,977,000,000 at the end of 2018[132]. - The net asset value of certain pledged shares from subsidiaries was approximately HKD 3,918 million as of June 30, 2019, compared to HKD 970 million as of December 31, 2018[147]. - The fair value of equity instruments measured at fair value through other comprehensive income was HKD 4,686 million as of June 30, 2019, compared to HKD 4,515 million as of December 31, 2018[150]. Debt and Financing - Total debt as of June 30, 2019, was HKD 990,000,000, down from HKD 1,110,000,000 as of December 31, 2018[16]. - The capital debt ratio was 12% as of June 30, 2019, compared to 14% as of December 31, 2018[16]. - Bank loans decreased to HKD 719,994,000 from HKD 810,674,000, indicating a reduction of about 11%[65]. - The company’s bank loans amounted to HKD 934,598,000 as of June 30, 2019, down from HKD 1,083,524,000 at the end of 2018, representing a decrease of about 13.8%[140]. - Interest expenses for the six months ended June 30, 2019, were HKD 12,684, a decrease from HKD 16,920 in the same period of 2018, indicating a reduction of 25.0%[120]. Corporate Governance - The independent review of the interim results for the six months ended June 30, 2019, was conducted by Deloitte[34]. - The company has complied with the corporate governance code, except for the dual role of the Chairman and CEO held by Zheng Qiwun[36]. - The company has not appointed specific terms for non-executive directors, with all directors required to retire at least every three years[37]. - The remuneration committee's responsibilities do not include approving management's compensation proposals[40]. Cash Flow - The net cash generated from operating activities for the six months ended June 30, 2019, was HKD 194,379,000, a decrease of 5.9% compared to HKD 206,666,000 for the same period in 2018[71]. - The net cash used in investing activities was HKD (3,872,000) for property development expenditures, and HKD 21,587,000 from the sale of property, machinery, and equipment[71]. - The net cash used in financing activities totaled HKD (168,262,000), which included interest paid of HKD (11,171,000) and bank loan repayments of HKD (148,355,000)[71]. - The increase in cash and cash equivalents for the period was HKD 38,032,000, compared to an increase of HKD 59,320,000 in the previous year[71]. - As of June 30, 2019, the cash and cash equivalents amounted to HKD 621,147,000, down from HKD 960,070,000 at the end of June 2018[71]. Shareholder Information - As of June 30, 2019, Zheng Qiwun holds 216,608,825 shares, representing 71.20% of the company's equity[22]. - Mercury Fast Limited owns 62,602,700 shares, accounting for 20.60% of the total equity[30]. - Trillion Resources Limited, the ultimate holding company, holds 154,006,125 shares (50.60%) in the company[32]. - The company has not granted any stock options under the employee stock option plan since its adoption[29]. - The company did not declare any interim dividends for the six months ended June 30, 2019, consistent with the previous year[128]. Accounting Standards - The company applied new accounting standards, including HKFRS 16, which may impact the financial performance and disclosures[76]. - The financial statements were prepared in accordance with Hong Kong Financial Reporting Standards, ensuring compliance with local regulations[73]. - The group applies short-term lease exemptions for office properties with lease terms of 12 months or less, excluding purchase options[82]. - The group has applied HKFRS 15 to allocate contract consideration to lease and non-lease components[89]. - The application of HKFRS Interpretation 23 did not have a significant impact on the amounts reported in the condensed consolidated financial statements for the current interim period[101].

Financial Performance - Shun Ho Holdings Limited reported a total revenue of HKD 1.2 billion for the fiscal year ending December 31, 2018, representing a year-on-year increase of 10%[1]. - The company achieved a net profit of HKD 150 million, which is a 15% increase compared to the previous year[1]. - The net profit attributable to the owners of the company for the year ended December 31, 2018, was HKD 354 million, a decrease of 20% compared to HKD 444 million in 2017[11]. - The company reported a significant improvement in operational efficiency, reducing costs by 8% through streamlined processes[1]. - The management provided an optimistic outlook, projecting a revenue growth of 15% for the next fiscal year[1]. - The company reported a total comprehensive income of HKD 636,540,000 for 2018, down from HKD 919,930,000 in 2017, a decrease of 30.9%[136]. - The company reported a significant ownership structure, with Zheng Qiweng holding 71.20% of the shares through controlled companies[103]. - The company reported a retained profit of HKD 194,845,000 as of December 31, 2018, compared to HKD 185,851,000 in 2017, indicating an increase of approximately 5.3%[101]. Revenue and Profitability - Revenue for the year ended December 31, 2018, was HKD 787,132,000, an increase of 17.2% from HKD 671,557,000 in 2017[134]. - Gross profit for 2018 was HKD 380,067,000, up from HKD 315,382,000 in 2017, reflecting a gross margin improvement[134]. - Profit before tax decreased to HKD 736,082,000 in 2018 from HKD 892,439,000 in 2017, representing a decline of 17.5%[134]. - Net profit for the year was HKD 679,291,000, down 19.5% from HKD 844,409,000 in the previous year[136]. - Basic earnings per share for 2018 was HKD 128.3, compared to HKD 168.4 in 2017, indicating a decrease of 23.8%[134]. Market Expansion and Strategy - The company plans to expand its market presence in Southeast Asia, targeting a 25% increase in market share over the next three years[1]. - New product development includes the launch of a hospitality management software, expected to generate an additional HKD 50 million in revenue annually[1]. - Shun Ho Holdings Limited is considering strategic acquisitions to enhance its portfolio, with a budget of HKD 200 million earmarked for potential deals[1]. - The group plans to continue its hotel operations and seek additional income through acquisitions of hotel properties or serviced apartments[69]. Operational Efficiency - The company has allocated HKD 100 million for research and development in new technologies for the upcoming fiscal year[1]. - The operating profit from hotel operations increased by 34% to HKD 199 million, compared to HKD 148 million in 2017[14]. - The average occupancy rate for the group's hotels in Hong Kong was 99%, with an average room rate of HKD 751[16]. - The group has adopted new and revised Hong Kong Financial Reporting Standards, including HKFRS 15, which replaces HKAS 18 and HKAS 11, with no significant impact on the financial performance and position for the year[155]. Corporate Governance - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange's Listing Rules, ensuring compliance with all provisions except for a few deviations[80]. - The board consists of eight members, including four executive directors, one non-executive director, and three independent non-executive directors, all of whom possess appropriate professional qualifications or relevant financial management expertise[82]. - The company has established a remuneration committee that adheres to the code's provisions, although it does not approve management's remuneration proposals[80]. - All independent non-executive directors have submitted annual confirmations of their independence, in line with the Listing Rules[84]. Risk Management - The company ensures that financial statements are prepared in compliance with applicable regulations and accounting standards[89]. - The internal audit team conducts independent reviews of the internal control systems and reports to the audit committee[89]. - The group has implemented a risk management system to identify, assess, and manage significant risks, including operational and financial risks[90]. - The company encourages continuous professional development for all directors to enhance their knowledge and skills[87]. Shareholder Communication - The company has established various communication channels with shareholders, including printed communications and annual general meetings[100]. - Shareholders can request the convening of a general meeting if they hold at least 5% of the voting rights[98]. - The company must issue a notice for any resolution proposed by shareholders holding at least 2.5% of the voting rights[98]. Investment Properties - The valuation of investment properties as of December 31, 2018, was HKD 5,017,000,000, representing 52% of total assets[36]. - The fair value increase of investment properties recognized in the consolidated income statement for the year was HKD 432,000,000[36]. - The company’s investment properties underwent revaluation, resulting in an increase in value of approximately HKD 432,000,000, which has been included in the consolidated income statement[101]. Debt and Financial Position - As of December 31, 2018, the group's total debt was HKD 1,110,000,000, a decrease from HKD 1,721,000,000 in 2017, resulting in a capital debt ratio of 14% compared to 23% in 2017[69]. - The company reduced its debt from HKD 1,693,000,000 to HKD 1,084,000,000, a decrease of 36% due to rising interest rates[92]. - The company’s total assets increased to HKD 8,129,732,000 as of December 31, 2018, compared to HKD 7,541,119,000 at the end of 2017[144].