Core Viewpoint - *ST Haiyue's stock will be delisted from the Shanghai Stock Exchange due to violations related to undisclosed non-operating fund occupation by its controlling shareholder and false reporting in financial statements [1][2]. Group 1: Delisting Announcement - The Shanghai Stock Exchange decided to terminate *ST Haiyue's stock listing, with the delisting effective from June 16, 2025, and the last trading day expected to be July 4, 2025 [1]. - The delisting period will last for 15 trading days, during which the stock will continue to trade on the risk warning board [1]. Group 2: Regulatory Violations - *ST Haiyue and its controlling shareholder were penalized by the Zhejiang Securities Regulatory Bureau for failing to disclose non-operating fund occupation and for false records in the 2022 semi-annual report [1][2]. - From 2021 to 2022, *ST Haiyue transferred funds to its controlling shareholder through prepayments to suppliers, amounting to 1.77 billion yuan in the first half of 2021, 3.77 billion yuan in 2021, and 6.88 billion yuan in 2022 [1][2]. Group 3: Financial Performance - For the fiscal year 2024, *ST Haiyue expects revenue between 1.5 billion yuan and 1.8 billion yuan, with a net loss attributable to the parent company estimated between 380 million yuan and 220 million yuan [2]. - The company's bulk trade business has declined due to the overall downturn in the traditional energy sector and risks associated with bulk trade operations [2]. - The price of lithium carbonate has decreased compared to the previous year, leading to inventory impairment provisions and asset impairment losses based on cautious principles [2].

Group 1 - The Hang Seng Index closed at 23,345.05 points, down 0.46% on May 16 [1] - Li Fung Group (00387.HK) closed at HKD 0.68 per share, up 15.25%, with a trading volume of 52,000 shares and a turnover of HKD 36,200 [1] - Over the past month, Li Fung Group has seen a cumulative decline of 14.49%, underperforming the Hang Seng Index which has increased by 16.92% year-to-date [1] Group 2 - For the fiscal year ending December 31, 2024, Li Fung Group reported total revenue of HKD 519 million, a year-on-year decrease of 20.09%, while net profit attributable to shareholders was HKD 19.36 million, an increase of 85.23% [1] - The company's gross margin stands at 24.71%, and its debt-to-asset ratio is 39.64% [1] - Currently, there are no institutional investment ratings for Li Fung Group [2] Group 3 - The average price-to-earnings (P/E) ratio for the industrial engineering sector is 14.62 times, with a median of 2.48 times; Li Fung Group's P/E ratio is 6.49 times, ranking 27th in the industry [2] - Other companies in the sector have significantly lower P/E ratios, such as Yili Holdings (00076.HK) at 0.3 times and China Aerospace Wanyuan (01185.HK) at 0.32 times [2] - Li Fung Group is primarily engaged in the business of machinery and equipment, including the sale and installation of metal processing machinery, measuring instruments, cutting tools, and electronic devices, with operations in China, Hong Kong, Singapore, Malaysia, and Indonesia [2]

Core Insights - The company achieved a net profit of 87.92 million yuan in 2024, representing a year-on-year growth of 23.91%, and plans to distribute a total cash dividend of 20.23 million yuan [1] - The company is accelerating its modern agriculture layout by launching comprehensive solutions for cost reduction and yield increase [1] Financial Performance - The company forecasts net profits for 2025-2027 to be 157 million yuan, 200 million yuan, and 259 million yuan respectively, with corresponding EPS of 0.54, 0.69, and 0.90 yuan [2] - In 2024, the company reported operating revenue of 1.235 billion yuan, a year-on-year increase of 17.79%, and a net profit attributable to shareholders of 93.59 million yuan, up 30.81% [2] - The company plans to distribute a cash dividend of 0.70 yuan per 10 shares (tax included), totaling 20.23 million yuan [2] Business Segments - The overseas additives business saw a revenue increase of 12.48%, while domestic additives revenue grew by 4.93% to 358.38 million yuan [3] - The modern agriculture segment achieved revenue of 206.61 million yuan in 2024, marking a significant year-on-year growth of 169.05% [3] - The company has successfully launched multiple new products in the modern agriculture sector, including five new nematode control products and four new bio-fertilizers [3]

Financial Performance - The group's revenue for 2024 was HKD 560,626,000, a decrease of 20.1% compared to HKD 701,552,000 in 2023[6] - Gross profit for 2024 was HKD 138,549,000, down 12.8% from HKD 158,865,000 in 2023, with a gross margin of 24.7% compared to 22.6% in the previous year[6] - Operating profit for 2024 was HKD 42,503,000, a slight increase of 0.7% from HKD 42,206,000 in 2023[14] - Profit attributable to owners for 2024 was HKD 20,909,000, an increase of 85.2% from HKD 11,288,000 in 2023[14] - Basic earnings per share for 2024 were HKD 0.0909, up 85.1% from HKD 0.0491 in 2023[15] - The group recorded a net financing expense of HKD 8,254,000 in 2024, a decrease of 34.6% from HKD 12,621,000 in 2023[11] - Other income and gains totaled HKD 18,669,000 in 2024, an increase of 120.6% from HKD 8,464,000 in 2023[7] - The net profit for the year was HKD 20,907,000, an increase of 77.8% compared to HKD 11,754,000 in 2023[199] - Basic earnings per share increased to HKD 0.0909 from HKD 0.0491, representing an increase of 84.5%[199] Dividends - The board proposed a final dividend of HKD 0.03 per share, totaling HKD 6,902,000, with total dividends for the year amounting to HKD 0.16 per share compared to HKD 0.045 per share in 2023[17] - The company plans to distribute a final dividend of HKD 0.03 per share, totaling HKD 6,902,000, alongside a special dividend of HKD 0.10 per share and an interim dividend of HKD 0.03 per share, resulting in a total dividend of HKD 0.16 per share for the fiscal year ending December 31, 2024, compared to HKD 0.045 per share in 2023[48] Assets and Liabilities - Total assets decreased to HKD 737,318,000 in 2024 from HKD 820,783,000 in 2023, a decline of 10.1%[196] - Total liabilities decreased to HKD 292,270,000 in 2024 from HKD 342,641,000 in 2023, a reduction of 14.7%[197] - The group's cash and cash equivalents balance as of December 31, 2024, was HKD 26,048,000, down from HKD 29,795,000 in 2023[24] - The inventory balance as of December 31, 2024, was HKD 69,993,000, a decrease from HKD 80,209,000 in 2023, with inventory turnover days increasing from 54 to 61 days[24] - The accounts receivable balance as of December 31, 2024, was HKD 206,372,000, slightly down from HKD 209,795,000 in 2023, with accounts receivable turnover days improving from 135 to 125 days[25] Economic Environment - The Chinese economy faced challenges with a GDP growth rate of 5.0% in 2024, slightly down from 5.4% in 2023, while industrial value-added increased by 5.7%[18] - The group is facing challenges due to a weak economic environment in Europe, particularly in Germany, impacting the performance of its joint ventures[20] Strategic Initiatives - The group plans to expand its service team by hiring more engineers to enhance technical capabilities, anticipating revenue growth from after-sales services[21] - The company recognizes the risk of over-reliance on the Chinese market, with any adverse changes significantly impacting revenue, and aims to expand its business in Southeast Asia to mitigate this risk[52] - The company intends to enhance its product and service value to address competitive pressures, including increasing technical support and after-sales service for customers[52] - The company is exploring investment opportunities in manufacturing equipment in other countries, including Europe, to diversify its market risks[52] Sustainability and Environmental Management - The company emphasizes environmental management and aims to reduce its environmental impact through waste optimization and resource management[142] - The company has established a range of communication channels to engage with stakeholders and gather feedback on sustainability performance[135] - The company has set a mid-term target to reduce greenhouse gas emissions intensity by 10% from the 2021 baseline by 2030[175] - The company aims to reduce energy consumption intensity by 10% from the 2021 baseline by 2030, incorporating energy efficiency standards in office equipment procurement by 2023[175] - Water consumption and water density are targeted to decrease by 10% from the 2021 baseline by 2030[175] Governance and Compliance - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange rules and has complied with it for the year ending December 31, 2024[80] - The company confirmed that all independent non-executive directors are independent as per the relevant rules[84] - The audit committee has reviewed the accounting principles and practices adopted by the group and discussed risk management and internal control systems[82] - The board has established risk management systems to identify and manage significant risks that could adversely affect the company's performance[51] Employee and Labor Practices - The company has implemented a defined contribution retirement plan for eligible employees in Hong Kong since December 1, 2000, and complies with the national social insurance plan for employees in mainland China[145] - The company strictly prohibits forced labor and child labor, ensuring compliance with local labor laws and regulations[151] - Employee engagement initiatives included regular meetings and surveys to gather feedback, fostering a harmonious workplace culture[154] Audit and Financial Reporting - The independent auditor's report confirms that the consolidated financial statements reflect the company's financial position accurately as of December 31, 2024[178] - The consolidated financial statements have been audited by PwC[92] - The company reported a total audit fee of HKD 488,000 for the year, with an additional HKD 530,000 for interim performance announcement services[124]

Financial Performance - The group's revenue for the year ended December 31, 2024, was HKD 560,626,000, a decrease of 20.1% compared to HKD 701,552,000 in 2023[3] - Gross profit for 2024 was HKD 138,549,000, down 12.8% from HKD 158,865,000 in 2023, with a gross margin of 24.7% compared to 22.6% in the previous year[3] - Operating profit for 2024 was HKD 42,503,000, a slight increase of 0.7% from HKD 42,206,000 in 2023[11] - Profit attributable to owners of the company was HKD 20,909,000 in 2024, an increase of 85.2% from HKD 11,288,000 in 2023[11] - Basic earnings per share for 2024 were HKD 0.0909, up 85.1% from HKD 0.0491 in 2023[11] - The company reported a profit for the year of HKD 20,907,000, compared to HKD 11,754,000 in the previous year, representing an increase of approximately 78.5%[25] - The company reported a comprehensive income of HKD 5,203,000 for the year 2024, compared to HKD 12,258,000 in 2023[53] Income and Expenses - Other income and gains totaled HKD 18,669,000 in 2024, an increase of 120.6% from HKD 8,464,000 in 2023[5] - Financing expenses for 2024 were HKD 9,414,000, a decrease of 31.9% from HKD 13,821,000 in 2023, primarily due to improved cash flow[8] - Tax expenses for 2024 increased by 96.8% to HKD 3,769,000 from HKD 1,915,000 in 2023[10] - The net loss from fair value adjustments of investment properties was HKD 7,347,000 for the year ended December 31, 2024, compared to a loss of HKD 3,970,000 in 2023[34] Assets and Liabilities - Total assets decreased from HKD 820,783,000 to HKD 737,318,000, a decline of approximately 10.1% year-over-year[16] - Non-current assets decreased from HKD 464,369,000 to HKD 400,969,000, a reduction of about 13.6%[16] - Current assets decreased from HKD 356,414,000 to HKD 336,349,000, a decline of approximately 5.6%[16] - Total liabilities decreased from HKD 342,641,000 to HKD 292,270,000, a reduction of about 14.7%[17] - The total equity decreased from HKD 478,142,000 to HKD 445,048,000, a decline of approximately 6.9%[17] - Total borrowings decreased to HKD 128,071,000 in 2024 from HKD 172,146,000 in 2023, reflecting a reduction of approximately 25.6%[60] Revenue Breakdown - Sales of goods decreased from HKD 626,121,000 to HKD 464,800,000, a decline of approximately 25.7%[27] - Commission income increased from HKD 68,509,000 to HKD 89,698,000, an increase of about 30.9%[27] - Service revenue for the year ended December 31, 2024, was HKD 6,128,000, a decrease from HKD 6,922,000 in 2023[28] - Approximately HKD 89,536,000 of revenue for the year ended December 31, 2024, came from one customer, accounting for over 10% of total revenue[28] Dividends and Retained Earnings - The company proposed a final dividend of HKD 0.03 per share, totaling HKD 6,902,000, with total dividends for the year amounting to HKD 0.16 per share compared to HKD 0.045 per share in 2023[13] - The company's retained earnings increased from HKD 177,167,000 to HKD 216,253,000, an increase of approximately 22.1%[17] Operational Efficiency - The average accounts receivable turnover days improved to 125 days in 2024 from 135 days in 2023, indicating better collection efficiency[62] - The net debt-to-equity ratio decreased to approximately 21.7% as of December 31, 2024, from 28.7% in 2023, due to reduced bank borrowings aimed at lowering financing costs[66] - The net profit margin for 2024 is approximately 5.4%, an increase from 3.9% in 2023, due to fair value gains on financial assets and improved operational cost efficiency[65] Future Outlook and Strategy - The group plans to expand its service team by hiring more engineers to enhance technical capabilities, anticipating revenue growth from after-sales services[67] - The Chinese government has set a GDP growth target of 5% for 2025, with a projected 30% increase in new energy vehicle sales to 16.5 million units[67] - The group is confident in its product and market despite challenges from the US-China tariff war and underperformance of joint ventures in Germany and China[67] Corporate Governance - The company's annual performance for the year ending December 31, 2024, has been reviewed by the audit committee and confirmed by the auditor, PwC, with no discrepancies noted in the financial statements[83] - The company plans to hold its 2025 Annual General Meeting on June 25, 2025, with further details to be announced[84] - The board of directors includes three executive directors: Mr. Li Siu Leung, Mr. Chan Cheng Huan, and Mr. Pan Yiu Ming, along with non-executive and independent directors[86]

[Management Discussion and Analysis](index=2&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Performance](index=3&type=section&id=Financial%20Performance) The Group's H1 2024 revenue decreased 37.7% to HKD 255 million due to a business model shift, yet gross profit remained stable at HKD 67.25 million with margin rising to 26.3%, and profit attributable to owners increased 53.4% to HKD 8.43 million Financial Performance Summary | Metric | H1 2024 (HKD) | H1 2023 (HKD) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 255,249,000 | 409,610,000 | -37.7% | | Gross Profit | 67,246,000 | 67,887,000 | -0.9% | | Gross Profit Margin | 26.3% | 16.6% | +9.7pp | | Profit Attributable to Owners | 8,430,000 | 5,496,000 | +53.4% | | Basic Earnings Per Share | 3.66 HK cents | 2.39 HK cents | +53.1% | - The inverse trend between revenue and gross profit margin is primarily due to a shift in most new businesses to a **commission-based revenue model**, where only **net income** is recognized as revenue, thereby boosting the **overall gross profit margin**[3](index=3&type=chunk) - Other income and gains surged by **272.1%** year-on-year to **HKD 8.95 million**, primarily driven by a **HKD 6.4 million** fair value gain on a financial asset[4](index=4&type=chunk) - Both sales and distribution costs and finance costs recorded a year-on-year decrease of over **11%**, indicating the Group's effective cost control[5](index=5&type=chunk) - Share of profits from associates turned from a **HKD 0.95 million** profit in the prior period to a **HKD 5.51 million** loss, mainly due to losses recorded by OPS-Ingersoll and Prima Power Suzhou[6](index=6&type=chunk) [Dividend Policy](index=5&type=section&id=Interim%20Dividend) The Board declared an interim dividend of HKD 3 cents per share for H1 2024, a 200% increase from HKD 1 cent in the prior period Interim Dividend | Item | 2024 Interim | 2023 Interim | | :--- | :--- | :--- | | Interim Dividend | HKD 3 cents per share | HKD 1 cent per share | [Business Review](index=5&type=section&id=Business%20Review) Despite challenging macroeconomic conditions and weak Chinese manufacturing, the Group's business benefited from the new energy vehicle sector, with improved machine tool and electronic equipment businesses, significant service revenue growth, and increased total order volume, though associate companies recorded losses - Chinese manufacturing faces challenges, with customers cautious about investing in new equipment; in **H1 2024**, the import value of both metal-cutting and sheet metal machine tools **decreased year-on-year**[10](index=10&type=chunk)[11](index=11&type=chunk) - The Group's business benefited from the **new energy vehicle manufacturing sector**, with **improvements** in machine tool business, electronic equipment business, and service income compared to the prior period[11](index=11&type=chunk) Total Order Volume | Item | H1 2024 (HKD) | H1 2023 (HKD) | | :--- | :--- | :--- | | Total Order Volume | 480,038,000 | 407,502,000 | - Invested associate companies faced difficulties, with OPS-Ingersoll Funkenerosion GmbH continuing to record **significant losses**, and Prima Power Sheet Metal Equipment (Suzhou) Co Ltd also **incurring losses** due to reduced orders[12](index=12&type=chunk) [Liquidity and Financial Resources](index=6&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's financial position is robust, successfully reducing its net gearing ratio from 28.7% at end-2023 to 19.5% by lowering borrowings; cash balance slightly increased, but inventory and trade receivables turnover days rose, with ample bank facilities available for operations Key Financial Metrics | Metric | June 30, 2024 (HKD) | December 31, 2023 (HKD) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 32,516,000 | 29,795,000 | | Inventories | 72,418,000 | 80,209,000 | | Trade and Bills Receivables | 169,870,000 | 209,795,000 | | Short-term Borrowings | 130,314,000 | 172,146,000 | | Net Gearing Ratio | 19.5% | 28.7% | - Inventory turnover days increased from **54** to **70** days, and trade receivables turnover days increased from **109** to **121** days, primarily due to changes in the trade portfolio[13](index=13&type=chunk) - As of June 30, 2024, the Group had total bank facilities of approximately **HKD 302 million**, of which approximately **HKD 143 million** was utilized[14](index=14&type=chunk) [Future Plans and Prospects](index=7&type=section&id=Future%20Plans%20and%20Prospects) The Group maintains a cautiously optimistic outlook for H2 2024, focusing on high-end manufacturing and seizing opportunities from China's 'new quality productive forces' and 'new three' industries (EVs, lithium batteries, PV products), while planning to introduce new products and invest in service teams to drive growth - The Group's business strategy will focus on **high-end manufacturing**, particularly aligning with China's new economic growth drivers: '**new quality productive forces**' and the '**new three**' industries[15](index=15&type=chunk) - Growth in the smartphone and electronic equipment manufacturing industries will also present **business opportunities** for the Group[16](index=16&type=chunk) - Plans include **upgrading value-added services** by expanding the engineering team, enhancing parts delivery and technical support, with an **expected increase in order volume** in the second half of the year[16](index=16&type=chunk) [Other Corporate Matters](index=8&type=section&id=Other%20Corporate%20Matters) This section covers employee status, share option scheme, asset pledges, capital expenditure, exchange rate risk management, and related party transactions; employee count slightly increased to 231, the share option scheme expired in May 2023, and a significant related party transaction involving the sale of a residential property to the Chairman was disclosed, with proceeds used for working capital and special dividends - As of June 30, 2024, the Group had **231** employees, a slight increase from **226** at the end of 2023[17](index=17&type=chunk) - The Company's share option scheme expired on **May 14, 2023**, with no share option activities during the period[18](index=18&type=chunk) - The Group pledged assets with a total book value of approximately **HKD 149 million** to secure bank financing[19](index=19&type=chunk) - A significant related party transaction was disclosed: the sale of a residential property to Mr Li Sau Leung, the Chairman and Chief Executive Officer, for **HKD 53 million**, with net proceeds used for general working capital and special dividend distribution[24](index=24&type=chunk) - Regarding corporate governance, the report noted that the roles of Chairman and Chief Executive Officer are held by the **same individual** (Mr Li Sau Leung), but the Board believes the current structure ensures a **balance of power and accountability**[30](index=30&type=chunk) [Condensed Consolidated Interim Financial Statements](index=13&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) [Condensed Consolidated Interim Statement of Financial Position](index=13&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's total assets decreased to HKD 773 million from HKD 821 million at end-2023; total liabilities decreased from HKD 343 million to HKD 299 million due to reduced borrowings, while total equity slightly decreased to HKD 474 million, with HKD 53 million in assets classified as held for sale Condensed Consolidated Interim Statement of Financial Position | Item | June 30, 2024 (HKD Thousand) | December 31, 2023 (HKD Thousand) | | :--- | :--- | :--- | | **Total Assets** | **772,554** | **820,783** | | Non-current Assets | 409,807 | 464,369 | | Current Assets | 362,747 | 356,414 | | *Of which: Assets Classified as Held for Sale* | *53,000* | *–* | | **Total Liabilities** | **298,593** | **342,641** | | Non-current Liabilities | 30,046 | 30,249 | | Current Liabilities | 268,547 | 312,392 | | **Total Equity** | **473,961** | **478,142** | [Condensed Consolidated Interim Statement of Profit or Loss](index=15&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Profit%20or%20Loss) In H1 2024, the Group's revenue was HKD 255 million, a 37.7% year-on-year decrease; however, due to business model changes and cost control, gross profit remained stable at HKD 67.25 million, operating profit increased 86.7% to HKD 19.13 million, and profit for the period reached HKD 8.43 million, up 53.4% year-on-year Condensed Consolidated Interim Statement of Profit or Loss | Metric (HKD Thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 255,249 | 409,610 | | Gross Profit | 67,246 | 67,887 | | Operating Profit | 19,130 | 10,248 | | Profit Before Income Tax | 8,829 | 5,767 | | Profit for the Period | 8,428 | 5,487 | | Profit Attributable to Owners of the Company | 8,430 | 5,496 | | Basic Earnings Per Share (HK cents) | 3.66 | 2.39 | [Condensed Consolidated Interim Statement of Comprehensive Income](index=17&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the period was HKD 3.87 million, a significant improvement from HKD 0.77 million in the prior period, primarily due to increased profit for the period, despite expanded other comprehensive losses from currency translation differences Condensed Consolidated Interim Statement of Comprehensive Income | Metric (HKD Thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit for the Period | 8,428 | 5,487 | | Other Comprehensive Loss After Tax | (4,556) | (4,716) | | *Of which: Currency Translation Differences* | *(5,192)* | *(4,732)* | | **Total Comprehensive Income for the Period** | **3,872** | **771** | [Condensed Consolidated Interim Statement of Changes in Equity](index=18&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2024, total equity slightly decreased from HKD 478 million at the beginning of the year to HKD 474 million, as the HKD 3.87 million total comprehensive income for the period was offset by HKD 8.05 million in dividend payments - The change in total equity was primarily influenced by two factors: the **HKD 3.87 million** total comprehensive income recorded during the period (positive impact), and **HKD 8.05 million** in dividends paid to shareholders (negative impact)[38](index=38&type=chunk) [Condensed Consolidated Interim Statement of Cash Flows](index=20&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) In H1 2024, net cash generated from operating activities significantly increased to HKD 46.66 million year-on-year; net cash outflow from financing activities substantially decreased to HKD 41.92 million, mainly due to reduced loan repayments, resulting in an increased cash and cash equivalents balance of HKD 32.52 million at period-end Condensed Consolidated Interim Statement of Cash Flows | Metric (HKD Thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 46,664 | 20,390 | | Net Cash (Used in)/Generated from Investing Activities | (1,374) | 3,677 | | Net Cash Used in Financing Activities | (41,916) | (71,454) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 3,374 | (47,387) | | Cash and Cash Equivalents at End of Period | 32,516 | 13,609 | [Notes to the Condensed Consolidated Interim Financial Information](index=20&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) [Note 6: Segment Information](index=26&type=section&id=Note%206%3A%20Segment%20Information) By geographical segment, Mainland China was the Group's primary revenue source, contributing HKD 243 million or 95% of total revenue; by revenue type, sales of goods remained the largest but significantly decreased year-on-year, while the new commission income model contributed HKD 28.68 million, and service income also grew significantly Revenue by Region | Region | H1 2024 Revenue (HKD Thousand) | H1 2023 Revenue (HKD Thousand) | | :--- | :--- | :--- | | Mainland China | 242,606 | 360,188 | | Hong Kong | 6,157 | 33,614 | | Others | 6,486 | 15,808 | | **Total** | **255,249** | **409,610** | Revenue by Type | Revenue Type | H1 2024 Revenue (HKD Thousand) | H1 2023 Revenue (HKD Thousand) | | :--- | :--- | :--- | | Sales of Goods | 215,160 | 406,608 | | Commission Income | 28,677 | – | | Service Income | 11,412 | 3,002 | | **Total** | **255,249** | **409,610** | - Commission income is a **new revenue model** since H2 2023, derived from providing **technical support and agency services** to business partners[58](index=58&type=chunk) [Note 9: Trade and Bills Receivables](index=32&type=section&id=Note%209%3A%20Trade%20and%20Bills%20Receivables) As of June 30, 2024, total trade and bills receivables decreased to HKD 170 million from HKD 210 million at end-2023; receivables aged within three months from invoice date constituted the majority, though the proportion of 7-12 month old receivables increased Aging Analysis of Trade and Bills Receivables | Aging Analysis (by invoice date) | June 30, 2024 (HKD Thousand) | December 31, 2023 (HKD Thousand) | | :--- | :--- | :--- | | Within 3 months | 101,728 | 177,823 | | 4 to 6 months | 4,131 | 7,443 | | 7 to 12 months | 60,576 | 14,564 | | Over 12 months | 7,365 | 15,883 | | **Gross amount before impairment allowance** | **173,800** | **215,713** | [Note 11: Assets Classified as Held for Sale](index=34&type=section&id=Note%2011%3A%20Assets%20Classified%20as%20Held%20for%20Sale) In May 2024, the Group agreed to sell a residential property valued at HKD 53 million to Mr Li Sau Leung, a Company Director; consequently, this right-of-use asset was reclassified as 'assets classified as held for sale' in the June 30, 2024 statement of financial position, with the transaction completed on July 15, 2024 - A residential property and parking space valued at **HKD 53 million** were classified as assets held for sale due to the signing of a sale agreement[73](index=73&type=chunk) [Note 13: Borrowings](index=35&type=section&id=Note%2013%3A%20Borrowings) The Group's total borrowings decreased by approximately 24% from HKD 172 million at end-2023 to HKD 130 million, with all borrowings being short-term and due within one year, including trust receipt loans and bank term loans, reflecting the Group's deleveraging efforts Borrowings Breakdown | Borrowing Type | June 30, 2024 (HKD Thousand) | December 31, 2023 (HKD Thousand) | | :--- | :--- | :--- | | Trust Receipt Loans | 68,471 | 80,300 | | Bank Term Loans | 61,843 | 91,846 | | **Total Borrowings** | **130,314** | **172,146** | [Note 17: Dividends](index=39&type=section&id=Note%2017%3A%20Dividends) The Board resolved to declare an interim dividend of HKD 3 cents per share for H1 2024, significantly higher than HKD 1 cent in H1 2023; this dividend was declared after the reporting period and thus not recognized as a liability in this financial statement - The Board declared an interim dividend of **HKD 3 cents** per share for 2024, compared to **HKD 1 cent** per share in the prior period[83](index=83&type=chunk) [Note 19: Related Party Transactions](index=40&type=section&id=Note%2019%3A%20Related%20Party%20Transactions) This section discloses significant related party transactions, including total key management personnel compensation of HKD 4.17 million, purchases of HKD 2.47 million in goods from associate Prima Power (Suzhou), and an unsecured loan of HKD 17.75 million outstanding to associate OPS-Ingersoll Holding GmbH at period-end Key Management Personnel Compensation | Key Management Personnel Compensation (HKD Thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Salaries and Other Short-term Benefits | 4,133 | 3,278 | | Pension Costs | 36 | 45 | | **Total** | **4,169** | **3,323** | - The loan provided to associate OPS-Ingersoll Holding GmbH is unsecured, carries an annual interest rate of **6%**, and had a carrying amount of **HKD 17.75 million** at period-end[87](index=87&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不負 責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公佈全部或 任何部份內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 （股份代號：387） （於百慕達註冊成立之有限公司） 截至二零二四年六月三十日止六個月之 中期業績公佈 力 豐（集 團）有 限 公 司（「本 公 司」）董 事 會（「董 事」或「董 事 會」）謹 此 提 呈 本 公 司 及 其 附 屬 公 司（統 稱「本 集 團」）截 至 二 零 二 四 年 六 月 三 十 日 止 六 個 月 之 未 經 審 核 簡 明 綜 合中期業績，連同未經審核之比較數字及選定說明附註，此乃根據香港會計師公 會頒佈之香港會計準則第34號「中 期 財 務 報 告」編 製 而 成，並 已 由 本 公 司 審 核 委 員 會審閱。 中期股息 截至二零二四年六月三十日止六個月，董事會議決宣派中期股息每股3港仙（二零 二三年：1港 仙）。該 股 息 將 派 付 予 於 二 零 二 四 年 九 月 十 日（「記 錄 日 期」）名 列 本 公 司 股 東 名 冊 之 股 東。預 期 中 期 股 息 ...

Financial Performance - In 2023, the group's revenue was HKD 701,552,000, a decrease of 19.7% compared to HKD 874,011,000 in 2022[6] - The group's gross profit increased by 19.3% to HKD 158,865,000, with a gross margin of 22.6% in 2023, up from 15.2% in 2022[6] - Other income and gains totaled HKD 8,464,000 in 2023, a 34.1% increase from HKD 6,311,000 in 2022[7] - The group recorded a net financing expense of HKD 12,621,000 in 2023, an increase of 45.6% from HKD 8,671,000 in 2022[13] - The attributable profit to the company's owners was HKD 11,288,000 in 2023, a growth of 35.7% from HKD 8,317,000 in 2022[17] - The operating profit for the group was HKD 42,206,000 in 2023, a significant increase of 158.5% from HKD 16,329,000 in 2022[17] - Basic earnings per share rose to HKD 0.0491 in 2023, a 36.0% increase from HKD 0.0361 in 2022[18] - The income tax expense decreased by 42.9% to HKD 1,915,000 in 2023 from HKD 3,355,000 in 2022[16] - The net profit margin for the group in 2023 was approximately 3.9%, an increase from 0.5% in 2022, driven by significant sales orders from electric vehicle manufacturers[32] - The return on equity for the group in 2023 was approximately 2.5%, compared to 1.7% in 2022, reflecting the increase in profit[32] Dividends and Shareholder Returns - The board proposed a final dividend of HKD 0.035 per share, totaling HKD 8,053,000, with a total dividend of HKD 0.045 per share for the year[20] - The company proposed a final dividend of HKD 0.035 per share, totaling HKD 8,053,000, with a total dividend of HKD 0.045 per share for the year, down from HKD 0.090 per share in the previous year[55] - The company's dividend policy aims to enhance transparency and facilitate informed investment decisions, with no predetermined payout ratio; dividends are subject to the board's discretion based on various factors[123] - Past dividend distribution records cannot be used as a benchmark for future dividend levels, and future dividends will comply with the board's decisions and applicable laws[124] Operational Metrics - The total order volume for the group in 2023 was HKD 843,939,000, down 19.4% from HKD 1,046,432,000 in 2022[23] - The group recognized a loss of HKD 15,916,000 from associates in 2023, compared to a profit of HKD 3,885,000 in 2022[14] - The group incurred a loss of HKD 8.6 million due to the poor business performance of its associate company, which it holds a 30% stake in[24] - The group employed 226 staff as of December 31, 2023, a decrease from 237 staff in 2022[39] Cash and Assets - As of December 31, 2023, the group's cash balance was HKD 29,795,000, down from HKD 63,438,000 on December 31, 2022[29] - The group's inventory balance as of December 31, 2023, was HKD 80,209,000, compared to HKD 92,890,000 on December 31, 2022[29] - The net asset liability ratio as of December 31, 2023, was approximately 28.7%, down from 33.5% on December 31, 2022[30] - As of December 31, 2023, the total value of assets pledged for bank financing was approximately HKD 148,961,000, down from HKD 320,633,000 in 2022[38] Future Outlook and Strategy - The group expects China's GDP growth target for 2024 to be set at 5%, focusing on stimulating domestic consumption, including new energy vehicles[26] - The group believes that its business performance in 2024 will exceed that of 2023, despite potential global economic instability[26] - The group plans to continue launching new products to expand its product portfolio and market coverage in response to advancements in manufacturing technology in China[26] - The company aims to expand its business in Southeast Asia to mitigate risks associated with over-reliance on the Chinese market[61] - The company will explore investment opportunities in manufacturing equipment in other countries, including Europe, to diversify market risks[61] Risk Management and Compliance - The company has established risk management systems to identify and manage significant risks that could adversely affect performance[58] - The company has established a disaster recovery plan that includes cybersecurity and disaster recovery elements to ensure business continuity[62] - The company has not encountered any legal cases related to corruption in the fiscal years 2022 and 2023[182] - The company adheres to local labor laws and regulations, ensuring compliance with employment standards[160] Environmental and Social Responsibility - The company is committed to reducing environmental impact and enhancing sustainability measures[159] - The company actively participates in community charitable activities, reinforcing its commitment to social responsibility[197] - The company has adopted a green office policy across all its offices in Hong Kong, China, Taiwan, Singapore, and other locations[187] - The company aims to reduce greenhouse gas emissions intensity by 10% by 2030, using 2021 as the baseline year[196] - The company is committed to achieving zero plastic bottle consumption by 2025 through continued reduction of single-use plastic products[196] Corporate Governance - The company has maintained compliance with the corporate governance code as of December 31, 2023, ensuring effective management and accountability[106] - The audit committee consists of three independent non-executive directors who reviewed the accounting principles and financial reporting matters for the year ending December 31, 2023[94] - The board consists of six members, including three independent non-executive directors, ensuring critical oversight of management processes[120] - The company has adopted a board diversity policy since September 1, 2013, considering factors such as age, cultural background, and professional experience[119] Employee Management - The company has implemented a performance appraisal system for all employees based on position, capability, attitude, and performance[160] - The company provides competitive compensation and performance-based bonuses to retain employees[171] - The company emphasizes employee feedback and has established various communication channels for concerns and suggestions[173] - The employee turnover rate for males is 8.0% and for females is 3.1%[161] Audit and Financial Reporting - The financial statements for the year ending December 31, 2023, were audited by PwC, who are eligible and willing to be reappointed[104] - The independent auditor's report confirms that the consolidated financial statements accurately reflect the company's financial position as of December 31, 2023[200] - The audit committee is responsible for monitoring risk management and internal controls, ensuring accurate financial reporting, and reviewing the nature and scope of audits[129]

Financial Performance - The company's revenue for 2023 was HKD 701,552,000, a decrease of 19.7% compared to HKD 874,011,000 in 2022[4] - Gross profit for 2023 was HKD 158,865,000, an increase of 19.3% from HKD 133,205,000 in 2022, resulting in a gross margin of 22.6% compared to 15.2% in the previous year[4] - Operating profit for 2023 was HKD 42,206,000, a significant increase of 158.5% from HKD 16,329,000 in 2022, driven by substantial sales orders from new energy vehicle manufacturers[12] - The company's profit for the year ended December 31, 2023, was HKD 11,754,000, an increase of 43.5% compared to HKD 8,188,000 in 2022[18] - Basic earnings per share for 2023 were HKD 0.0491, an increase of 36.0% from HKD 0.0361 in 2022[12] - Total comprehensive income for the year was HKD 12,854,000, down 53.2% from HKD 27,303,000 in the previous year[18] Income and Expenses - Other income and gains totaled HKD 8,464,000 in 2023, up 34.1% from HKD 6,311,000 in 2022[6] - The company reported a net financing expense of HKD 12,621,000 in 2023, an increase of 45.6% from HKD 8,671,000 in 2022, primarily due to a significant rise in market interest rates[9] - Administrative expenses increased by 2.6% to HKD 100,112,000 in 2023, compared to HKD 97,584,000 in 2022[8] - The share of losses from associates was HKD 15,916,000 in 2023, compared to a profit of HKD 3,885,000 in 2022, attributed to operational losses from OPS Ingersoll Funkenerosion GmbH[10] Assets and Liabilities - The company's total assets decreased to HKD 820,783,000 from HKD 997,527,000, representing a decline of 17.7%[20] - Current assets fell significantly from HKD 524,564,000 in 2022 to HKD 356,414,000 in 2023, a decrease of 32%[20] - The company's total liabilities decreased to HKD 342,641,000 from HKD 527,637,000, a reduction of 35%[22] - The total accounts receivable and notes receivable as of December 31, 2023, amounted to HKD 215,713,000, down from HKD 267,130,000 in 2022, reflecting a decrease of approximately 19.2%[63] - Accounts payable and notes payable decreased significantly to HKD 78,770,000 in 2023 from HKD 163,706,000 in 2022, a reduction of about 51.9%[71] Equity and Dividends - The company's equity increased to HKD 478,142,000 from HKD 469,890,000, reflecting a growth of 1.1%[22] - The company proposed a final dividend of HKD 0.035 per share, totaling HKD 8,053,000, which, combined with an interim dividend, results in a total dividend of HKD 0.045 per share for the year[15] - The retained earnings rose to HKD 177,167,000 from HKD 169,117,000, an increase of 4.1%[22] Market and Economic Conditions - The overall economic growth in China for 2023 was 5.2%, with industrial value-added growth at 4.6% and export growth at only 0.6%[75] - The manufacturing PMI for China showed a quarterly trend with values of 51.53% in Q1, 49.00% in Q2, 49.73% in Q3, and 49.30% in Q4, indicating a challenging environment for the manufacturing sector[75] - The company faced significant challenges in the manufacturing sector due to the impact of U.S. decoupling policies and a slow global economic recovery[75] Future Outlook and Plans - The company plans to continue launching new products to expand its product portfolio and market coverage, focusing on the evolving landscape of China's manufacturing industry[88] - The Chinese government has set a GDP growth target of 5% for 2024, with a focus on stimulating domestic consumption, particularly in the new energy vehicle sector[86] Compliance and Governance - The audit committee reviewed the group's annual performance for the year ending December 31, 2023, ensuring compliance with accounting principles and risk management[104] - The company has complied with the corporate governance code as of December 31, 2023[99] - The board of directors consists of experienced individuals, ensuring a balance of responsibilities despite the chairman also serving as the CEO[101]

Financial Performance - For the first half of 2023, the company's revenue was HKD 409,610,000, an increase of 17.6% compared to HKD 348,434,000 in the same period last year[4] - Gross profit for the first half of 2023 was HKD 67,887,000, up 41.8% from HKD 47,859,000 year-on-year, with a gross profit margin of 16.6% compared to 13.7% in the previous year[4] - The attributable profit for the first half of 2023 was HKD 5,496,000, compared to a loss of HKD 5,686,000 in the same period last year[16] - The operating profit from trading business was HKD 10,248,000, a turnaround from an operating loss of HKD 5,103,000 in the previous year[17] - Revenue for the six months ended June 30, 2023, was HKD 409,610,000, representing a 17.6% increase from HKD 348,434,000 in the same period of 2022[48] - Operating profit for the period was HKD 10,248,000, a significant recovery from an operating loss of HKD 5,103,000 in the previous year[48] - Net profit for the period was HKD 5,487,000, compared to a net loss of HKD 5,804,000 in the same period last year[51] - Total comprehensive income for the period was HKD 771,000, a recovery from a comprehensive loss of HKD 52,843,000 in the previous year[51] Income and Expenses - Other income and gains decreased by 67.5% to HKD 2,405,000 from HKD 7,405,000 in the previous year[6] - The company reported a net financing cost of HKD 5,434,000, an increase of 84.5% from HKD 2,946,000 year-on-year, primarily due to rising market interest rates[12] - The company incurred interest payments of HKD 5,845 thousand, up from HKD 3,532 thousand in the previous year[55] - The company recognized a foreign exchange loss of HKD 4,732,000 during the period, compared to a loss of HKD 14,000,000 in the previous year[51] - The company reported a net foreign exchange loss of HKD 2,146,000 for the first half of 2023, compared to HKD 2,540,000 in the same period of 2022[99] Dividends and Shareholder Information - The company declared an interim dividend of HKD 0.01 per share for the first half of 2023, compared to no dividend in the same period last year[20] - As of June 30, 2023, the total number of shares held by Mr. Li Siu Leung is 171,205,982 shares, representing 74.41% of the company[36] - The company had no outstanding share options as of June 30, 2023, thus no diluted earnings per share were reported[106] Assets and Liabilities - The company's total assets as of June 30, 2023, are HKD 862,907,000, a decrease from HKD 997,527,000 as of December 31, 2022[45] - Total liabilities decreased to HKD 394,547,000 from HKD 527,637,000 as of December 31, 2022[47] - The company's net asset liability ratio at the end of June 2023 was approximately 32.8%, down from 33.5% at the end of December 2022[13] - Short-term borrowings decreased to HKD 179,911,000 as of June 30, 2023, down from HKD 231,948,000 as of December 31, 2022, reflecting efforts to reduce the debt-to-equity ratio[25] - The total borrowings as of June 30, 2023, were HKD 179,911,000, down 22% from HKD 231,948,000 at the beginning of the year[97] Cash Flow and Capital Expenditure - As of June 30, 2023, cash and cash equivalents amounted to HKD 13,609,000, a decrease from HKD 63,438,000 as of December 31, 2022, primarily due to increased repayment of bank loans[24] - Operating cash flow generated was HKD 26,712 thousand, compared to a cash outflow of HKD 35,570 thousand in the previous year, resulting in a net cash inflow of HKD 20,390 thousand for the period[55] - The total cash and cash equivalents at the end of the period decreased to HKD 13,609 thousand from HKD 51,823 thousand in the previous year, reflecting a net decrease of HKD 47,387 thousand[55] - Total capital expenditure for the first six months of 2023 was HKD 1,019,000, slightly up from HKD 996,000 in the same period of 2022[32] Market and Business Outlook - The company anticipates a positive business outlook for the second half of 2023, particularly in the new energy vehicle market[26] - The sales team is focusing on attracting more customers in promising markets such as new energy vehicles and aerospace[26] - The automotive production in China for the first half of 2023 was 13 million vehicles, a year-on-year increase of 9.3%, with 3.8 million of those being new energy vehicles, representing a growth of 42.4%[21] Governance and Compliance - The company has complied with the corporate governance code as of June 30, 2023[41] - There were no major shareholders holding 5% or more of the company's issued share capital as of June 30, 2023[40] Inventory and Receivables - Inventory balance increased to HKD 128,921,000 as of June 30, 2023, compared to HKD 92,890,000 as of December 31, 2022, with inventory turnover days rising from 46 to 69 days[24] - Accounts receivable decreased to HKD 210,446,000 as of June 30, 2023, from HKD 263,661,000 as of December 31, 2022, with accounts receivable turnover days improving from 110 to 94 days[24]