[Performance Highlights](index=1&type=section&id=Performance%20Highlights) [Financial Highlights](index=2&type=section&id=Financial%20Highlights) In the first half of 2024, despite a 37.7% year-on-year decrease in revenue to HKD 255.25 million, profit attributable to owners of the company increased by 53.4% to HKD 8.43 million, driven by a shift to commission-based revenue, a significant gross profit margin increase from 16.6% to 26.3%, and an 86.7% rise in operating profit from trading business, with basic earnings per share growing 53.1% to 3.66 HK cents Key Financial Indicators for H1 2024 | Indicator | H1 2024 (HKD Thousands) | H1 2023 (HKD Thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 255,249 | 409,610 | -37.7% | | Gross Profit | 67,246 | 67,887 | -0.9% | | Gross Profit Margin | 26.3% | 16.6% | +9.7pp | | Operating Profit | 19,130 | 10,248 | +86.7% | | Profit Attributable to Owners of the Company | 8,430 | 5,496 | +53.4% | | Basic Earnings Per Share | 3.66 HK cents | 2.39 HK cents | +53.1% | - Revenue decreased but gross profit remained largely stable, primarily due to a shift in some new businesses to a commission-based revenue model, recognizing only net income as revenue, which significantly boosted the gross profit margin[3](index=3&type=chunk) [Interim Dividend](index=1&type=section&id=Interim%20Dividend) The Board resolved to declare an interim dividend of 3 HK cents per share for the six months ended June 30, 2024, representing a significant 200% increase from 1 HK cent per share in the prior year period - An interim dividend of **3 HK cents per share** was declared, a **200% year-on-year increase** (H1 2023: 1 HK cent)[2](index=2&type=chunk) - The dividend will be distributed on or about September 27, 2024, to shareholders on record as of September 10, 2024[2](index=2&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) [Revenue and Gross Profit](index=2&type=section&id=Revenue%20and%20Gross%20Profit) Revenue for the first half of 2024 was HKD 255.25 million, a 37.7% year-on-year decrease, yet gross profit remained stable at HKD 67.25 million, with the gross profit margin significantly improving from 16.6% to 26.3% due to a shift towards commission-based revenue Revenue and Gross Profit Performance | Indicator | H1 2024 (HKD Thousands) | H1 2023 (HKD Thousands) | | :--- | :--- | :--- | | Revenue | 255,249 | 409,610 | | Gross Profit | 67,246 | 67,887 | | Gross Profit Margin | 26.3% | 16.6% | [Other Income and Gains](index=2&type=section&id=Other%20Income%20and%20Gains) Total other income and gains significantly increased by 272.1% year-on-year to HKD 8.95 million, primarily due to the recognition of a HKD 6.4 million fair value gain on financial assets, which was absent in the prior year period - Total other income and gains amounted to **HKD 8.948 million**, representing a **272.1% year-on-year increase**[4](index=4&type=chunk) - The increase was primarily driven by a **HKD 6.4 million fair value gain** on a financial asset at fair value through profit or loss[4](index=4&type=chunk) [Operating Expenses](index=3&type=section&id=Operating%20Expenses) Operating expenses were well-controlled, with selling and distribution costs decreasing by 11.5% year-on-year to HKD 9.38 million, while administrative expenses remained largely stable at HKD 49.57 million Operating Expense Details | Item | H1 2024 (HKD Thousands) | H1 2023 (HKD Thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Selling and Distribution Costs | 9,383 | 10,607 | -11.5% | | Administrative Expenses | 49,570 | 49,437 | +0.3% | [Finance Costs - Net](index=3&type=section&id=Finance%20Costs%20-%20Net) Net finance costs decreased by 11.9% year-on-year to HKD 4.79 million, primarily due to a 96.6% increase in finance income and a 4.2% decrease in finance costs, while the Group's net gearing ratio improved from 28.7% to 19.5% - Net finance costs amounted to **HKD 4.79 million**, a **11.9% year-on-year decrease**[6](index=6&type=chunk) - The net gearing ratio decreased from **28.7%** at the end of 2023 to **19.5%** at the end of June 2024[6](index=6&type=chunk) [Share of Results of Associates](index=3&type=section&id=Share%20of%20Results%20of%20Associates) Share of results of associates shifted from a profit of HKD 0.95 million in the prior year to a loss of HKD 5.51 million, primarily due to losses recorded by OPS-Ingersoll Funkenerosion GmbH and Prima Power Sheet Metal Machinery (Suzhou) Co., Ltd - A post-tax loss of **HKD 5.511 million** from share of results of associates was recorded, compared to a profit of HKD 0.953 million in the prior year period[7](index=7&type=chunk) [Condensed Consolidated Interim Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) [Condensed Consolidated Interim Statement of Profit or Loss](index=5&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Profit%20or%20Loss) This section presents the unaudited condensed consolidated interim statement of profit or loss for the six months ended June 30, 2024, detailing revenue, costs, various gains and losses, and final profit Condensed Consolidated Interim Statement of Profit or Loss (Unaudited) | Item (HKD Thousands) | For the six months ended June 30, 2024 | For the six months ended June 30, 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 | [Condensed Consolidated Interim Statement of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) This section presents the unaudited condensed consolidated interim statement of comprehensive income for the six months ended June 30, 2024, reflecting changes in profit for the period and other comprehensive income, such as revaluation gains and currency translation differences Condensed Consolidated Interim Statement of Comprehensive Income (Unaudited) | Item (HKD Thousands) | For the six months ended June 30, 2024 | For the six months ended June 30, 2023 | | :--- | :--- | :--- | | Profit for the Period | 8,428 | 5,487 | | Other Comprehensive Loss After Tax | (4,556) | (4,716) | | Total Comprehensive Income for the Period | 3,872 | 771 | | Total Comprehensive Income Attributable to Owners of the Company | 3,874 | 564 | [Condensed Consolidated Interim Statement of Financial Position](index=7&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) This section presents the unaudited condensed consolidated interim statement of financial position as of June 30, 2024, showcasing the company's assets, liabilities, and equity at the end of the reporting period Statement of Financial Position Summary | Item (HKD Thousands) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 409,807 | 464,369 | | Current Assets | 362,747 | 356,414 | | **Total Assets** | **772,554** | **820,783** | | Current Liabilities | 268,547 | 312,392 | | Non-current Liabilities | 30,046 | 30,249 | | **Total Liabilities** | **298,593** | **342,641** | | **Total Equity** | **473,961** | **478,142** | [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=19&type=section&id=Business%20Review) Despite a weak overall economic outlook in China with manufacturing PMI mostly in contraction, the Group's business continued to benefit from the new energy vehicle manufacturing sector, with year-on-year improvements in both machine tool and electronic equipment businesses, a significant increase in service income, and satisfactory improvement in trading business with increased total orders in the first half - Despite challenges in China's manufacturing sector, the Group's business benefited from the new energy vehicle manufacturing segment, with improvements in both machine tool and electronic equipment businesses[40](index=40&type=chunk) - Total orders for the first half of 2024 amounted to **HKD 480 million**, an increase from HKD 408 million in the prior year period[40](index=40&type=chunk) [Investment Review](index=19&type=section&id=Investment%20Review) Affected by weak European economy and reduced orders from China, associates OPS Ingersoll Funkenerosion GmbH and Prima Power Sheet Metal Machinery (Suzhou) Co., Ltd. both recorded losses in the first half, though the former shows positive order trends and the latter's order situation is expected to improve within the year - Associate OPS Ingersoll Funkenerosion GmbH continued to record significant losses, but its order volume shows a positive trend[41](index=41&type=chunk) - Prima Power Sheet Metal Machinery (Suzhou) Co., Ltd. recorded a loss due to decreased sales, but order volume is expected to improve in the coming months[41](index=41&type=chunk) [Liquidity and Financial Resources](index=20&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's financial position is robust, with the net gearing ratio significantly decreasing from 28.7% at the end of 2023 to 19.5%, primarily due to a reduction in short-term borrowings, while the company manages accounts receivable risk through strict credit control and deems impairment provisions adequate Key Financial Resources Indicators (June 30, 2024) | Indicator | June 30, 2024 (HKD Thousands) | December 31, 2023 (HKD Thousands) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 32,516 | 29,795 | | Inventories | 72,418 | 80,209 | | Accounts and Bills Receivable | 169,870 | 209,795 | | Short-term Borrowings | 130,314 | 172,146 | | Net Gearing Ratio | 19.5% | 28.7% | - The Group primarily funds its operations through internal resources and bank financing, with total bank facilities of approximately **HKD 302 million**, of which approximately **HKD 143 million** has been utilized[43](index=43&type=chunk) [Future Plans and Prospects](index=21&type=section&id=Future%20Plans%20and%20Prospects) The Group maintains a cautiously optimistic outlook for the second half, aiming to capitalize on opportunities in 'new quality productive forces' and high-end manufacturing, particularly in electric vehicles, lithium batteries, photovoltaic products ('new three'), smartphones, and electronic equipment, planning to drive growth through new products and expanded service teams, expecting increased orders in H2 - Business strategy will focus on high-end manufacturing, especially electric vehicles, lithium batteries, photovoltaic products ('new three'), and the smartphone industry, which are expected to generate significant business opportunities[44](index=44&type=chunk) - Plans include expanding the engineering team, enhancing parts delivery, and strengthening technical support to drive business advancement through value-added services[44](index=44&type=chunk) - A cautiously optimistic outlook is maintained for the second half, with expected order volume growth, and if associate businesses continue to improve, overall financial performance in 2024 may surpass that of 2023[44](index=44&type=chunk) [Other Disclosures](index=21&type=section&id=Other%20Disclosures) [Employees](index=21&type=section&id=Employees) As of June 30, 2024, the Group employed 231 staff, a slight increase from the end of 2023, with employees primarily located in mainland China (179) and Hong Kong (40), and the Group offers competitive remuneration packages - As of June 30, 2024, the Group's total number of employees was **231**, with **179** in mainland China and **40** in Hong Kong[45](index=45&type=chunk) [Exchange Rate Risk Management](index=22&type=section&id=Exchange%20Rate%20Risk%20Management) The Group's revenue and purchases are largely denominated in foreign currencies, exposing it to exchange rate risk, which is mitigated by using foreign currency income to pay overseas suppliers and entering into foreign currency forward contracts when necessary - As of June 30, 2024, the Group held outstanding foreign currency forward contracts to purchase **JPY 175 million** for **HKD 9.418 million**[48](index=48&type=chunk) [Corporate Governance](index=23&type=section&id=Corporate%20Governance) The company complied with most provisions of the Corporate Governance Code during the reporting period, with one deviation: the Chairman and Group Chief Executive Officer positions are held by the same individual, Mr. Li Sau Leung, though the Board believes the current structure ensures a balance of power and accountability - The Corporate Governance Code was complied with during the reporting period, except for Code Provision C.2.1[50](index=50&type=chunk) - The deviation is that the roles of Chairman and Group Chief Executive Officer are held by the same person, but the Board believes the current operational model ensures a balance of power and accountability[50](index=50&type=chunk)

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]

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。 （於百慕達註冊成立之有限公司） （股份代號：387） 截至二零二三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」）截至二零二三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 截至二零二三年六月三十日止六個月，董事會議決宣派中期股息每股1港仙（二零 二二年：無）。該股息將派付予於二零二三年九月十三日（「記錄日期」）名列本公司 股東名冊之股東。預期中期股息將於二零二三年九月二十九日（星期五）或前後分 派予股東。 ...

Financial Performance - In 2022, the group's sales amounted to HKD 874,011,000, representing a 23.5% increase from HKD 707,752,000 in 2021[6] - The group's gross profit for 2022 was HKD 133,205,000, up 32.0% from HKD 100,918,000 in 2021, with a gross margin of 15.2% compared to 14.3% in the previous year[6] - The group's operating profit for 2022 was HKD 16,329,000, compared to an operating loss of HKD 9,332,000 in 2021[15] - The profit attributable to the company's owners for 2022 was HKD 8,317,000, a significant recovery from a loss of HKD 38,984,000 in 2021[14] - Basic earnings per share for 2022 were HKD 0.0361, compared to a loss per share of HKD 0.1694 in 2021[16] - The net profit margin improved to approximately 1.0% in 2022, compared to (5.5%) in 2021, mainly due to increased sales in the electric vehicle sector and the elimination of a financial impact from a subsidiary's dissolution[31] - The return on equity for the group was approximately 1.7% in 2022, up from (8.6%) in 2021, reflecting the rise in profit[32] Income and Expenses - Other income and gains totaled HKD 6,311,000 in 2022, a decrease of 38.3% from HKD 10,221,000 in 2021[7] - The group's financing expenses for 2022 were HKD 9,598,000, an increase of 144.7% from HKD 3,923,000 in 2021, primarily due to rising market interest rates[10] - The income tax expense for 2022 was HKD 3,355,000, down 27.5% from HKD 4,625,000 in 2021[12] Dividends - The proposed final dividend for the year ended December 31, 2022, is HKD 0.01 per share, totaling HKD 2,301,000, which, combined with a special dividend of HKD 0.08 per share paid on January 4, 2023, results in a total dividend of HKD 0.09 per share for the year, compared to HKD 0.05 per share in 2021[18] - The company reported a final dividend of HKD 0.01 per share, totaling HKD 2,301,000, and a special interim dividend of HKD 0.08 per share, resulting in a total dividend of HKD 0.09 per share for the year, compared to HKD 0.05 per share in the previous year[53] Assets and Liabilities - The group's cash balance as of December 31, 2022, was HKD 63,438,000, similar to HKD 65,522,000 in the previous year[28] - The group's inventory balance as of December 31, 2022, was HKD 92,890,000, down from HKD 111,908,000 in 2021, with inventory turnover days decreasing from 67 days to 46 days[28] - The accounts receivable balance as of December 31, 2022, was HKD 263,661,000, up from HKD 109,980,000 in 2021, with accounts receivable turnover days increasing from 57 days to 110 days[28] - The net asset liability ratio as of December 31, 2022, was approximately 33.5%, up from 26.4% in 2021, due to increased borrowing levels[29] - The net debt-to-equity ratio increased to approximately 33.5% as of December 31, 2022, compared to 26.4% in 2021, due to increased bank borrowings supporting sales growth[32] Market and Industry Outlook - The production of new energy vehicles in China increased by 90.5% in 2022, contributing to the success of the group's machine tool and electronic equipment division[21] - The group expects to focus on the new energy vehicle industry in 2023, supported by government initiatives including tax reductions for new energy vehicle purchases[24] - The GDP growth rate target set by the Chinese government for 2023 is 5%, with encouraging signs from the manufacturing PMI reaching 52.6% in February 2023[24] - The group anticipates improved financial performance in 2023 compared to 2022, with lower currency volatility expected to reduce foreign exchange risks[25] Employee and Workforce - The group employed 237 staff as of December 31, 2022, a decrease from 250 staff in 2021[38] - The company had a total of 237 employees as of December 31, 2022, with a gender distribution of 160 males and 77 females[165] - Employee turnover rates were 10.5% for males and 7.2% for females, with a notable 12.2% turnover rate in mainland China[166] - The average training hours for employees were 14.8 hours for males and 10.1 hours for females, with 72.8% of trained employees being female[173] - The company emphasizes employee growth and development through various internal training programs and encourages participation in external training and educational activities[172] Corporate Governance - The company confirmed compliance with the corporate governance code as of December 31, 2022[95] - The audit committee consists of three independent non-executive directors who reviewed the group's accounting principles and financial reporting[97] - The board of directors held a total of nine meetings and one annual general meeting during the fiscal year ending December 31, 2022[114] - The company has established a defined contribution retirement plan for eligible employees in Hong Kong, with a contribution rate of 5% of salary[101] - The company has arranged for directors' liability insurance to cover potential costs and liabilities arising from claims against directors[105] Risk Management - The company has established risk management systems to identify and manage significant risks that could adversely affect its performance[56] - The board is responsible for overseeing the company's risk management and internal control systems, ensuring they are effective in managing operational risks[139] - The internal audit department ensures the effectiveness of internal controls to protect shareholder investments and company assets[141] Environmental, Social, and Governance (ESG) - The company emphasizes its commitment to reducing environmental impact and promoting sustainable community development[164] - The board is responsible for managing environmental, social, and governance (ESG) matters, ensuring alignment with the company's strategy[155] - The company has identified 16 significant ESG issues, including energy efficiency and waste management, which will be detailed in the report[162] - The company aims to optimize waste, energy consumption, and natural resource management as part of its future development and sustainability plans[164] - Greenhouse gas emissions from electricity consumption decreased from 249 tons CO2 equivalent in 2021 to 211 tons in 2022, representing a reduction of approximately 15.3%[200] Compliance and Legal Matters - There were no significant violations of applicable laws and regulations that had a major impact on the group's business and operations during the fiscal year[64] - The company has not experienced any legal cases related to corruption in the fiscal years 2021 and 2022[189] - The company strictly adheres to local labor laws, prohibiting forced labor and child labor in its operations[175] Procurement and Supply Chain - The company has 116 suppliers located in mainland China, 44 in Hong Kong, and 41 outside of China[193] - The company emphasizes responsible procurement as an integral part of its procurement and supply chain management processes[191] - The company adheres to ISO 9001:2015 quality management system standards, covering various aspects including customer satisfaction monitoring[183]

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 任何部分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。 （於百慕達註冊成立之有限公司） （股份代號：387） 截至二零二二年十二月三十一日止年度 之業績公佈 力豐（集團）有限公司（「本公司」）董事（「董事」）會謹此提呈本公司及其附屬公司（統 稱「本集團」）截至二零二二年十二月三十一日止年度之綜合年度業績，連同截至 二零二一年十二月三十一日止年度之比較數字。本年度業績已由本公司之審核委 員會審閱。 財務表現 銷售 於二零二二年，儘管中國的經濟情況尤其因政府實施與2019冠狀病毒有關的嚴格 管制措施而顯得複雜，惟本集團的訂單及發票銷售額仍分別達致1,046,432,000港 元及874,011,000港元。此出色的業務表現乃由於年內新能源汽車製造發展蓬勃。 ...

Financial Performance - Total contract value signed in the first half of 2022 reached HKD 757,384,000, an increase of 62.2% compared to HKD 466,939,000 in the same period last year[19] - Sales revenue for the first half of 2022 was HKD 348,434,000, nearly unchanged from HKD 348,436,000 in the same period last year, impacted by lockdowns in Shanghai[5] - Gross profit for the first half of 2022 was HKD 47,859,000, a decrease of 6.6% from HKD 51,252,000 in the previous year, with a gross profit margin of 13.7% compared to 14.7% last year[5] - Other income and gains totaled HKD 7,405,000, up 40.5% from HKD 5,269,000 in the previous year, with service income increasing by 56.4% to HKD 6,987,000[6] - Net loss from derivative financial instruments was HKD 4,344,000, an increase of 569.3% from HKD 649,000 in the previous year, primarily due to significant currency exchange losses[8] - Financing costs, net of interest income, increased by 105.3% to HKD 2,946,000 compared to HKD 1,435,000 in the previous year[10] - Share of profit from associates after tax was HKD 2,369,000, a 52.1% increase from HKD 1,558,000 in the previous year, reflecting recovery in European and Chinese markets[13] - Loss attributable to owners of the company was HKD 5,686,000, a significant reduction of 81% from HKD 29,993,000 in the previous year[15] - Basic loss per share was HKD 0.0247, down 81.1% from HKD 0.1304 in the previous year[16] - The company expects significant improvement in revenue for the second half of 2022, driven by a recovery in deliveries and sales[20] Cash and Liquidity - As of June 30, 2022, cash and cash equivalents totaled HKD 51,823,000, down from HKD 65,522,000 on December 31, 2021[24] - The company's inventory balance as of June 30, 2022, was HKD 111,056,000, with inventory turnover days remaining stable at 67 days[24] - Accounts receivable as of June 30, 2022, amounted to HKD 162,483,000, with an increase in turnover days to 85 days from 57 days due to longer credit terms for customers[24] - The net debt-to-equity ratio increased to approximately 42.1% as of June 30, 2022, compared to 26.4% on December 31, 2021, due to higher borrowing levels[27] - The company reported a net financing cost of HKD 2,946 for the first half of 2022, compared to HKD 1,435 in the same period of 2021, reflecting an increase of about 105.5%[58] - The company's cash and cash equivalents as of June 30, 2022, were HKD 51,823, down from HKD 65,522 as of December 31, 2021, indicating a decrease of approximately 20.9%[54] Assets and Liabilities - Total assets as of June 30, 2022, amounted to HKD 965,164, an increase from HKD 885,323 as of December 31, 2021, representing a growth of approximately 9.0%[52] - The company's total liabilities increased to HKD 557,014 as of June 30, 2022, compared to HKD 418,578 as of December 31, 2021, reflecting a rise of about 33.1%[56] - The total equity attributable to the owners of the company decreased to HKD 408,150 as of June 30, 2022, from HKD 466,745 as of December 31, 2021, a decline of about 12.5%[56] - The company’s total liabilities increased, leading to a higher debt-to-equity ratio compared to the previous reporting period[69] Operational Highlights - The value of unfinished orders as of July 31, 2022, was HKD 759,099,000, while the invoiced sales for the first half of 2022 amounted to HKD 348,434,000[20] - The company reported an order volume of HKD 757,384,000 for the first half of 2022, indicating strong performance despite earlier lockdowns[28] - The overall sales volume of new energy vehicles in China is expected to increase by 56% in 2022, benefiting the company's business[28] - The company plans to focus on expanding its market presence and enhancing its product offerings in the upcoming quarters[71] - The company has invested in new technologies and product development to drive future growth and improve operational efficiency[71] Shareholder and Governance - The board decided not to declare any interim dividend for the first half of 2022, but plans to propose a special cash dividend of HKD 0.08 per share pending shareholder approval[17] - As of June 30, 2022, the major shareholder, Mr. Li, held 144,529,982 shares, representing 74.41% of the company[42] - The company has complied with the corporate governance code as of June 30, 2022, ensuring a balance of power and responsibilities within the board[46] - The audit committee reviewed the accounting principles and practices adopted by the group, discussing internal controls and financial reporting matters[50] Financial Risks and Management - The group faced various financial risks, including market risk, credit risk, and liquidity risk, with no significant changes in risk management policies since year-end[84][85] - The company has established foreign currency hedging strategies to mitigate exchange rate risks associated with its sales and purchases[37] Investment and Capital Expenditures - Capital expenditures for the first six months of 2022 totaled HKD 996,000, down from HKD 1,177,000 in the same period of 2021[35] - The company reported a depreciation expense of HKD 4,561,000 for property, plant, and equipment for the six months ended June 30, 2022, compared to HKD 4,737,000 in 2021[110] - The investment in associates showed a slight increase, reaching HKD 62,072,000 as of June 30, 2022, compared to HKD 61,930,000 in the previous year[118] Other Financial Information - The company recorded a loss attributable to owners of the company from continuing operations of HKD 5,686,000 for the six months ended June 30, 2022, compared to a loss of HKD 29,993,000 in the same period of 2021, showing a significant reduction in losses[136] - The company incurred a loss of HKD 13,216,000 due to currency exchange differences during the reporting period[69] - The company provided a loan to OPS-Ingersoll Holding GmbH with a principal value of HKD 16,450,000 as of June 30, 2022, down from HKD 17,717,000 as of December 31, 2021[145] - Interest received from OPS for the period amounted to HKD 458,000, compared to HKD 399,000 in the previous year[145] - A loss provision of HKD 160,000 has been recognized for the loan, consistent with the previous year[145] - The company agreed to sell 649,921 equity securities for a cash consideration of EUR 16,248,025, equivalent to approximately HKD 131,776,358, with the transaction expected to complete in October 2022[146]

Financial Performance - The total value of contracts signed in 2021 was HKD 887,485,000, an increase of 35.1% compared to HKD 657,013,000 in 2020[10] - The sales revenue for 2021 was HKD 707,752,000, up 14.5% from HKD 617,937,000 in 2020[10] - The gross profit for 2021 was HKD 100,918,000, an increase of 8.6% from HKD 92,934,000 in 2020, with a gross margin of 14.3% compared to 15.0% in 2020[10] - Other income and gains totaled HKD 10,221,000 in 2021, a decrease of 56.7% from HKD 23,599,000 in 2020[11] - The operating loss for the trading business in 2021 was HKD 9,332,000, compared to an operating profit of HKD 9,175,000 in 2020[19] - The company reported a loss attributable to owners of HKD 38,984,000 in 2021, compared to a profit of HKD 4,451,000 in 2020[18] - The basic loss per share for 2021 was HKD 0.1694, compared to a basic earnings per share of HKD 0.0193 in 2020[20] - The administrative expenses for 2021 were HKD 96,607,000, an increase of 5.7% from HKD 91,423,000 in 2020[13] - The income tax expense for 2021 was HKD 4,625,000, an increase of 11.9% from HKD 4,132,000 in 2020[16] - The total comprehensive income attributable to the owners of the company for 2021 was HKD 19,330,000, a decrease of 40.1% from HKD 32,248,000 in 2020, primarily due to losses recorded in 2021[21] Dividends - The company proposed a final dividend of HKD 0.025 per ordinary share, totaling HKD 5,752,000, which, combined with a special dividend paid in September 2021, results in a total dividend of HKD 0.050 per share for the year, down from HKD 0.060 in 2020[22] - The company’s dividend policy does not set a predetermined payout ratio, and dividends are subject to the board's discretion based on various financial factors[141] Orders and Inventory - The order value for the group in 2021 was HKD 887,485,000, representing a 35.1% increase from HKD 657,013,000 in 2020, despite global supply chain issues affecting delivery times[24] - As of February 2022, the value of uncompleted orders was HKD 830,509,000, a significant increase of 268.6% from HKD 225,334,000 in February 2021[25] - Inventory as of December 31, 2021, was HKD 111,908,000, an increase from HKD 76,798,000 in 2020, with inventory turnover days rising to 67 days from 53 days[31] Financing and Debt - The net financing expenses for 2021 were HKD 2,973,000, down 35.1% from HKD 4,576,000 in 2020[14] - The net debt-to-equity ratio as of December 31, 2021, was approximately 26.4%, up from 12.5% in 2020, reflecting increased borrowing levels[32] - The total asset value pledged for bank financing was approximately HKD 259,520,000 as of December 31, 2021, down from HKD 274,183,000 on December 31, 2020[41] Operational Outlook - The company plans to strengthen its sales team in 2022, focusing on the automotive manufacturing sector to capture new customer segments[28] - The company maintains a cautiously optimistic outlook for 2022, despite uncertainties in the global political and economic landscape[29] - The group plans to implement a gradual business development plan to enhance future sales revenue[35] Market and Competition - The company faces intense competition in the Chinese production equipment and tools market, dealing with pricing competition and challenges in customer acquisition costs and contract payment terms[63] - The group is heavily reliant on the Chinese market, and any adverse changes in this market could severely impact performance[3] - The group is developing markets in Taiwan and Indonesia to diversify risks associated with over-reliance on China[3] Employee and Governance - The group employed 250 staff as of December 31, 2021, a decrease from 262 staff in 2020, with a competitive compensation scheme in place[42] - The company has complied with the corporate governance code as of December 31, 2021, except for specific provisions[104] - The board consists of six members, with a significant representation of independent directors to enhance governance[140] - The company has established a mandatory provident fund plan for Hong Kong employees, with both employer and employee contributions at 5% of total salary, capped at HKD 1,500 per month[110] Risk Management - The company has established risk management systems and processes to identify and manage significant risks that could adversely affect its performance[60] - The Board is responsible for overseeing the company's risk management and internal control systems, ensuring they are effective in identifying and mitigating risks[156] Environmental and Social Responsibility - The group has implemented various green office measures to promote environmental awareness and reduce waste[7] - The company is committed to protecting human rights and complying with all relevant labor laws, with zero tolerance for forced labor or child labor[193] Safety and Training - The company reported zero occupational accidents and no reported occupational diseases in 2021, maintaining a safe working environment[181] - The company has established a comprehensive safety training program for new employees and those in high-risk environments[181]

Financial Performance - Total contracts signed in the first half of 2021 amounted to HKD 466,939,000, a 71.9% increase compared to HKD 271,691,000 in the same period last year[5] - Sales revenue for the first half of 2021 was HKD 348,436,000, up 19.4% from HKD 291,756,000 in the previous year[5] - Gross profit for the first half of 2021 reached HKD 51,252,000, a 13.5% increase from HKD 45,167,000 year-on-year, with a gross margin of 14.7% compared to 15.5% in the prior year[5] - The company reported a loss attributable to owners of HKD 29,993,000 for the first half of 2021, a significant increase of 299.1% from a loss of HKD 7,516,000 in the previous year[16] - The total comprehensive income attributable to owners for the first half of 2021 was HKD 48,002,000, compared to a total comprehensive loss of HKD 15,499,000 in the same period last year[18] - The company reported a total comprehensive loss of HKD 47,046,000 for the period, compared to a loss of HKD 16,637,000 in the previous year[62] - The company’s basic loss per share was HKD (13.04) for the six months ended June 30, 2021, compared to HKD (3.27) in the same period of 2020[59] Income and Expenses - Other income and gains totaled HKD 5,269,000, a decrease of 32.6% from HKD 7,823,000 in the same period last year[6] - Financing costs for the first half of 2021 were HKD 1,903,000, a 45.4% reduction from HKD 3,487,000 in the previous year due to decreased bank borrowings and lower market interest rates[11] - The company recorded a net financing cost of HKD 1,435,000, an improvement from HKD 2,763,000 in the previous year[57] - The company incurred a cash outflow of HKD 5,052,000 for interest payments during the period, compared to HKD 23,167,000 in the prior year, showing a reduction in financing costs[74] - Employee benefits expenses decreased to HKD 29,039 from HKD 32,553 in the previous year[132] Assets and Liabilities - The net asset-to-liability ratio at the end of June 2021 was approximately 8.7%, down from 12.5% at the end of December 2020[12] - The total assets as of June 30, 2021, were HKD 890,864,000, an increase from HKD 846,529,000 as of December 31, 2020[53] - The company’s total liabilities stood at HKD 389,603,000, slightly up from HKD 384,261,000 at the end of 2020[55] - The net debt-to-equity ratio decreased to approximately 8.7% as of June 30, 2021, down from 12.5% at the end of 2020, due to reduced borrowing levels and increased equity from financial asset appreciation[25] - The company has a total of HKD 464,134,000 in current assets as of June 30, 2021, compared to HKD 419,425,000 at the end of 2020[53] Cash Flow - As of June 30, 2021, the company's cash balance was HKD 100,697,000, up from HKD 92,591,000 on December 31, 2020, indicating improved cash flow[24] - For the six months ended June 30, 2021, the company reported a net cash outflow from operating activities of HKD 8,163,000, compared to HKD 23,760,000 for the same period in 2020, indicating a significant improvement[74] - The company recorded a net cash inflow from investing activities of HKD 23,249,000, a decrease from HKD 82,126,000 in the previous year, primarily due to reduced asset sales[74] - The total cash and cash equivalents at the end of the period stood at HKD 100,697,000, up from HKD 58,135,000 at the end of June 2020, reflecting a strong liquidity position[74] Market and Economic Context - China's GDP grew by 12.7% in the first half of 2021, with industrial production increasing by 15.9% and export value rising by 28.1% compared to the same period in 2020[21] - The automotive manufacturing sector grew by 26.4%, producing 12.8 million vehicles, while mobile phone manufacturing increased by 13.7%, computer manufacturing rose by 43.9%, and integrated circuit board manufacturing surged by 48.1% in the first half of 2021[21] Future Outlook and Plans - The company anticipates that the upward trend in order value will continue into the second half of 2021, potentially reaching the highest total order volume since 2012[28] - The company plans to enhance marketing efforts by participating in multiple exhibitions and restructuring the sales organization to increase the number of managers and frontline staff[28] - The company plans to monitor market conditions for further investments in manufacturing equipment suppliers with the remaining HKD 14,518,000 from the sale proceeds[40] Shareholder Information - A special interim dividend of HKD 0.025 per ordinary share was declared, resulting from the sale of property valued at HKD 29.5 million[20] - Peak Power Technology Limited controls 62.8% of the company, with the remaining 37.2% held by the public[150] - The company has not received any notifications regarding major shareholders holding 5% or more of the issued share capital as of June 30, 2021[47] Investments and Capital Expenditures - Capital expenditures for the first six months of 2021 totaled HKD 1,177,000, significantly higher than HKD 66,000 in the same period of 2020, primarily for plant and equipment[35] - The company has authorized capital commitments for the acquisition of property and equipment amounting to HKD 2,116 as of June 30, 2021[148] Risks and Compliance - The group faced various financial risks, including market risk, credit risk, and liquidity risk, with no significant changes in risk management policies since year-end[88][89] - The group did not have any revenue from a single customer accounting for 10% or more of total revenue during the periods ended June 30, 2021, and June 30, 2020[104] - The company has not adopted any new accounting standards that would have a significant impact on its financial position as of June 30, 2021[82]