Company Overview - Henghe Group, established in 1975 in Hong Kong, is an investment holding company primarily engaged in jewelry design, production, and wholesale [3][4] - The company has diversified its operations into jewelry retail, real estate, and food and beverage distribution, expanding its influence in markets including mainland China, Europe, the UK, and the US [3][4] - Henghe Group is known for its high-quality products and innovative designs, offering a comprehensive service from research and development to production [3][4] Financial Performance - As of December 31, 2024, Henghe Group reported total revenue of 305 million yuan, representing a year-on-year growth of 64.51% [2] - The company recorded a net profit attributable to shareholders of -15.713 million yuan, with a year-on-year increase of 46.43% [2] - The gross profit margin stood at 18.89%, and the debt-to-asset ratio was 38.92% [2] Market Position and Valuation - Currently, there are no institutional investment ratings for Henghe Group [3] - The company's price-to-earnings (P/E) ratio is -0.45, ranking 118th in the textile and apparel industry, which has an average P/E ratio of -16.79 [3] - Comparatively, other companies in the industry have P/E ratios ranging from 0.33 to 3.66 [3] Industry Insights - The textile and apparel industry is characterized by a wide range of P/E ratios, indicating varying levels of market confidence and performance among different companies [3] - Henghe Group's historical success in the jewelry sector is attributed to its innovative production techniques and strong market presence [4] - The company is committed to maintaining high standards of quality and integrity, which has contributed to its reputation and success over the past four decades [4]

Market Overview - The A-share market continues to show strength, with the Shanghai Composite Index reaching a new nine-month high and the Shanghai 50 and CSI 300 also hitting year-to-date highs [1][2] - The overall market saw more declining stocks than advancing ones, with trading volume increasing [1] Financial Sector Performance - The financial sector, particularly brokerage stocks, led the market rally, with the sector index rising over 3% and achieving a year-to-date high, with half-day trading volume exceeding the previous day's total [5] - Major banks also performed well, with the four largest banks reaching historical highs, and the Industrial and Commercial Bank of China up over 22% year-to-date [7] - Hong Kong financial stocks followed suit, with significant gains in various indices, including a 75% increase in Zhongzhou Securities [7] ETF and Investment Outlook - Seven out of the top ten performing ETFs are related to the financial sector, with the Hong Kong Securities ETF rising over 7% to a historical high [9] - Goldman Sachs maintains an overweight recommendation for A-shares and Hong Kong stocks, projecting a target of 4600 points for the CSI 300, indicating over 10% upside potential [9] Pharmaceutical Sector Performance - The pharmaceutical sector remains strong, with the innovative drug index reaching a historical high, and stocks like Boteng Co. and Lianhuan Pharmaceutical hitting their daily limits [10] - The National Healthcare Security Administration announced plans for the adjustment of the national basic medical insurance drug list, which may benefit innovative drugs [12] - High valuations in the Chinese biotech sector compared to U.S. counterparts suggest a potential for capital re-evaluation, with a focus on innovative drugs [12]

Financial Performance - Revenue for the six months ended December 31, 2024, was HKD 329,326,000, a 64.5% increase from HKD 200,183,000 in the same period of 2023[4] - Gross profit for the same period was HKD 62,214,000, up 24.7% from HKD 49,888,000 year-on-year[4] - The net loss for the period was HKD 20,342,000, an improvement of 42.7% compared to a loss of HKD 35,589,000 in the previous year[4] - The group reported a loss before tax of HKD 19,962 thousand for the six months ended December 31, 2024, compared to a loss of HKD 35,503 thousand in the same period of 2023, indicating an improvement of approximately 43.8%[30] - The total comprehensive loss for the period was HKD 22,797,000, compared to a loss of HKD 31,179,000 in the previous period[12] - The group recorded a loss attributable to owners of HKD 16,968,000, an improvement from a loss of HKD 31,677,000 in the same period last year, with basic loss per share improving to HKD 2.48 from HKD 4.64[65] Cash Flow and Liquidity - Operating cash flow for the six months was HKD 137,546,000, a significant recovery from cash used of HKD 27,327,000 in the prior period[10] - The company’s cash and cash equivalents increased to HKD 59,387,000 from HKD 49,156,000 at the end of June 2024[10] - The company has unutilized bank credit facilities exceeding HKD 283,000,000 available for operational funding[15] - The company expects to sell completed properties for a total consideration of approximately HKD 60,200,000, which will help cover outstanding bank loan balances[15] Assets and Liabilities - Total assets as of December 31, 2024, were HKD 2,568,227,000, slightly down from HKD 2,595,092,000 as of June 30, 2024[7] - The company’s equity attributable to owners was HKD 1,797,506,000, a decrease from HKD 1,817,479,000 as of June 30, 2024[8] - The company’s current liabilities exceeded current assets by approximately HKD 372,518,000[14] - The total bank loans as of December 31, 2024, were HKD 879,727,000, with HKD 845,180,000 due within one year[46] - The bank loans were secured by various assets, including investment properties and development properties[47] Revenue Segmentation - Revenue from the jewelry business decreased to HKD 162,355 thousand in 2024 from HKD 187,901 thousand in 2023, representing a decline of approximately 13.5%[28] - Property sales contributed HKD 152,886,000 to revenue, with a total contracted sales amount of HKD 213,100,000 for the Heng Po project, of which HKD 152,886,000 has been recognized as revenue[69] - Rental income increased to HKD 12,996,000, up HKD 2,613,000 from HKD 10,383,000 in the previous year, primarily due to successful leasing at Heng Hui Center[69] Financial Management and Strategy - The company aims to enhance operational efficiency and implement cost control measures to improve cash flow from operating activities[15] - The group plans to enhance product development and adapt to changing consumer preferences, focusing on lightweight jewelry products[67] - The company has adopted a conservative strategy for financial risk management, with market risks kept at a minimum[85] Corporate Governance - The company has complied with all applicable corporate governance codes, except for the separation of roles between the Chairman and CEO, which is currently held by Chen Weili[93] - The audit committee consists of five independent non-executive directors who reviewed the unaudited consolidated interim financial statements for the six months ending December 31, 2024[97] Shareholder Information - The largest shareholder holds 74.12% of the company's issued share capital, totaling 506,339,522 shares[87] - Tamar Investments Group Limited holds 74.12% of the company's issued share capital, equating to 506,339,522 shares[91] - Zheng Xiaoyan owns 70% of Tamar Investments Group Limited, while Chen Weili holds 16% and Chen Huiqi and Chen Meiqi each hold 7%[89]

Financial Performance - Revenue for the six months ended December 31, 2024, was HKD 329,326,000, representing a 64.4% increase compared to HKD 200,183,000 for the same period in 2023[2] - Gross profit for the same period was HKD 62,214,000, up 24.7% from HKD 49,888,000 year-on-year[2] - The net loss for the period was HKD 20,342,000, an improvement of 42.7% compared to a loss of HKD 35,589,000 in the previous year[2] - The company's basic and diluted loss per share improved to HKD 2.48 from HKD 4.64 year-on-year[3] - The group reported a consolidated loss before tax of HKD 19,962,000 for the six months ended December 31, 2024, compared to a loss of HKD 35,503,000 in the same period of 2023[19] - The loss attributable to the company's owners was HKD 16,968,000, compared to a loss of HKD 31,677,000 in the previous year[37] - Basic loss per share for the six months ended December 31, 2024, was HKD 0.0248, compared to HKD 0.0464 for the same period in 2023[28] Assets and Liabilities - Total assets as of December 31, 2024, were HKD 2,568,227,000, a slight decrease from HKD 2,595,092,000 as of June 30, 2024[4] - Current liabilities exceeded current assets by HKD 372,518,000, indicating liquidity challenges[5] - Non-current assets totaled HKD 2,195,709,000, down from HKD 2,371,309,000 in the previous period[5] - The company has bank loans classified as current liabilities amounting to HKD 879,727,000[7] - The asset-liability ratio as of December 31, 2024, was 0.3306, down from 0.3619 as of June 30, 2024[48] Cash Flow and Financial Resources - The company reported cash and cash equivalents of HKD 59,387,000 as of December 31, 2024, compared to HKD 49,156,000 at the end of June 2024[4] - The group has unutilized bank credit facilities exceeding HKD 283,000,000 for operational funding purposes[5] - The group plans to utilize any surplus funds from loan repayments for additional operational funding[5] - The group expects to repay or renew bank loans classified as current liabilities on time, based on its strong compliance record[5] - Total borrowing costs decreased to HKD 27,868,000 from HKD 34,157,000 year-on-year[5] Revenue Breakdown - Revenue from the jewelry business for the six months ended December 31, 2024, was HKD 162,355,000, a decrease of 13.6% compared to HKD 187,901,000 in the same period of 2023[19] - Revenue from property investment and development for the same period was HKD 152,886,000, with no revenue reported in the previous year[21] - Property sales contributed HKD 152,886,000 to the revenue during the review period[37] - The group has rental income of HKD 12,996,000 for the six months ended December 31, 2024, compared to HKD 10,383,000 in the previous year[21] - Property sales and rental income amounted to approximately HKD 152,886,000 and HKD 12,996,000, respectively, representing a significant increase of HKD 155,499,000 compared to HKD 10,383,000 in the same period last year[41] Operational Strategies - The group aims to enhance operational efficiency and implement cost control measures to improve cash flow from operating activities[5] - The company aims to enhance competitive advantages through improved product sales strategies and R&D efforts focused on market-adaptive products[40] - The company plans to prioritize increasing occupancy rates and adopting flexible leasing strategies in response to the challenging real estate market[46] Staff and Governance - As of December 31, 2024, the group employed approximately 451 staff, a decrease from 465 staff as of June 30, 2024[55] - The company has complied with all applicable code provisions of the Corporate Governance Code during the six months ended December 31, 2024, with some deviations noted[60] - The audit committee consists of five independent non-executive directors who reviewed the unaudited consolidated interim financial statements for the six months ended December 31, 2024[63] Market Outlook - The company maintains a cautious optimism regarding the jewelry and property sectors despite ongoing challenges[46] - The group has adopted a conservative strategy for financial risk management, with market risk kept at a minimum level[57]

Financial Performance - For the fiscal year ended June 30, 2024, the Group's consolidated revenue decreased by approximately HK$95.2 million or 20.9% from HK$455.6 million to HK$360.4 million[19]. - The loss attributable to owners of the Company was HK$257.3 million, compared to a loss of HK$98.3 million in the previous year[19]. - The substantial decrease in gross profit of approximately HK$109.0 million was mainly due to a write-down of approximately HK$141.0 million for properties under development and properties for sale[19]. - The jewelry segment experienced a decline in revenue due to high inflation and interest rates reducing consumer confidence and purchasing power[19]. - The basic loss per share was HK$37.67 cents, compared to HK$14.39 cents in 2023[19]. - The overall weak economy has compounded the downward pressure on the Group's performance this year[19]. - The property segment faced challenges in purchasing power and the Hong Kong residential and commercial markets[19]. - The Group's operations necessitated a cautious approach to maintain sales momentum amid challenging economic conditions[19]. - The recognition of a loss of approximately HK$87.9 million arose from changes in the fair value of investment properties[19]. - Impairment losses in respect of goodwill, intangible assets, and right-of-use assets amounted to approximately HK$9.8 million[19]. Property Development and Investment - Rental income for the year amounted to approximately HK$22.3 million, an increase of HK$6.6 million from HK$15.7 million in 2023[22]. - The Group holds 75% interest in "One Continental," a 28-storey building with a gross floor area of approximately 86,970 sq.ft, and secured additional quality tenants in the first half of 2024[23]. - "Amber Place" residential development offers 42 units, with sales commencing in July 2024, and 29 units have entered into provisional sales agreements[23]. - The property market recovery is expected to be protracted due to high interest rates and current economic conditions, requiring stakeholders to prepare for a slow recovery phase[24]. - The management team will adopt a more cautious approach to investments and resource allocation, emphasizing thorough due diligence in the current uncertain environment[24]. Financial Position and Liquidity - As of 30 June 2024, the Group's gearing ratio was 0.3619, an increase from 0.3215 in 2023, indicating a rise in financial leverage[30]. - The cash and cash equivalents decreased to HK$49,156,000 (2023: HK$97,101,000), mainly due to finance costs and partial repayment of bank loans[31]. - Bank loans denominated in HK$ amounted to HK$1,024,440,000 (2023: HK$1,036,213,000), secured by various assets including property and equipment[33]. - The Group's total borrowings due to joint ventures and related companies were approximately HK$136,169,000 (2023: HK$122,007,000)[30]. - The Group has sufficient working capital to meet ongoing operational requirements despite the decrease in cash[31]. Corporate Governance and Management - The Company has adopted the Corporate Governance Code and complied with its provisions, except for deviations from C.2.1 and D.2.5[81]. - The Company does not have an internal audit function for the year ended 30 June 2024, but believes that the existing structure provides sufficient internal control and risk management[81]. - The Board comprises five Executive Directors and five Independent Non-executive Directors, with Independent Directors representing over one-third of the Board[82]. - The Company has complied with Listing Rules regarding the appointment of Independent Non-executive Directors, ensuring at least three are appointed and one possesses appropriate professional qualifications[84]. - The Company has established a Remuneration Committee with specific written terms of reference as required by the Code[99]. Share Options and Equity - The 2010 Share Option Scheme had 10,200,000 options outstanding as of June 30, 2024, following a share consolidation[38]. - The 2020 Share Option Scheme was adopted on December 22, 2020, following the expiration of the 2010 Share Option Scheme[37]. - As of June 30, 2024, a total of 13,200,000 share options (after Share Consolidation) have been granted to certain directors and employees at exercise prices of HK$1.38, HK$1.21, HK$2.45, HK$1.49, and HK$0.52[39]. - The total number of shares available for issue under the 2020 Share Option Scheme is 68,311,825 shares, representing 10% of the shares of the Company in issue as of September 25, 2024[57]. - The Company reported a net cash generated from investing activities of HK$5,757, a recovery from a cash outflow of HK$14,216 in 2023[186]. Risk Management and Compliance - The Group employs conservative strategies for financial risk management, keeping market risk at a minimum[60]. - The Company has implemented a Whistleblowing Policy to promote accountability and encourage reporting of misconduct[105]. - The Board has confirmed no significant weaknesses in the risk management and internal control systems as of June 30, 2024[104]. - The Group's risk management and internal control systems are evaluated on an ongoing basis, with systematic reviews based on risk assessments[104]. - The Company has adopted a policy to review its dividend policy periodically, ensuring it remains relevant to the business environment[115]. Environmental and Social Responsibility - The Group maintains high standards of operating practices and complies with stringent jewellery manufacturing standards as a certified member of the Responsible Jewellery Council[134]. - The Group has implemented several policies to encourage employees to save energy and paper, aiming to reduce resources and costs[133]. - The Group's environmental policies aim to promote resource saving and efficient energy use among employees[133]. - The management team actively participates in community service and holds various leadership roles in social organizations, reflecting the Group's commitment to corporate social responsibility[65]. - The Company has committed to fair employment practices and equal opportunities based on skills and abilities[112].

Financial Performance - The company reported total revenue of HKD 360,402,000 for the year ending June 30, 2024, a decrease of 20.9% from HKD 455,608,000 in the previous year[1]. - The gross loss for the year was HKD 42,757,000, compared to a gross profit of HKD 66,253,000 in the prior year[1]. - The company incurred a loss before tax of HKD 294,149,000, significantly higher than the loss of HKD 102,908,000 reported in the previous year, representing an increase of 186.5%[2]. - The net loss for the year was HKD 300,314,000, compared to a net loss of HKD 115,409,000 in the previous year, indicating a year-over-year increase of 160.5%[2]. - Total comprehensive loss for the year amounted to HKD 305,274,000, compared to HKD 146,771,000 in the previous year, reflecting an increase of 107.5%[4]. - The loss per share for the year was HKD 37.67, compared to HKD 14.39 in the previous year, indicating a significant increase in losses per share[4]. - The company reported a loss attributable to shareholders of approximately HKD 257,302,000 for the year ended June 30, 2024[7]. - The company faced significant challenges leading to a decline in revenue and net income, attributed to a weak macroeconomic environment and specific market dynamics affecting jewelry sales[38]. Assets and Liabilities - The company's non-current assets decreased to HKD 2,595,092,000 from HKD 2,697,577,000, a decline of 3.8%[5]. - Current assets also decreased to HKD 771,813,000 from HKD 1,027,066,000, representing a decrease of 25.0%[5]. - Total liabilities decreased to HKD 995,596,000 from HKD 1,022,162,000, a reduction of 2.6%[6]. - The company's net asset value decreased to HKD 1,980,659,000 from HKD 2,285,933,000, a decline of 13.3%[6]. - Current liabilities exceeded current assets by approximately HKD 223,783,000 as of June 30, 2024[7]. - The company has bank loans classified as current liabilities amounting to HKD 882,506,000, with cash and cash equivalents at HKD 49,156,000[7]. - The total assets of the company as of 2024 were HKD 3,366,905,000, a decrease from HKD 3,724,643,000 in 2023, representing a decline of 9.6%[18]. - Total liabilities decreased to HKD 1,386,246,000 in 2024 from HKD 1,438,710,000 in 2023, a reduction of 3.6%[18]. Revenue Breakdown - The jewelry business generated revenue of HKD 333,897,000 in 2024, down 23.2% from HKD 434,936,000 in 2023[17]. - Property investment and development revenue increased to HKD 22,320,000 in 2024 from HKD 15,659,000 in 2023, a growth of 42.5%[17]. - Revenue from Hong Kong, the registered location, was HKD 40,785,000 in 2024, up from HKD 39,502,000 in 2023, an increase of 3.2%[21]. - Revenue from North America decreased significantly to HKD 115,463,000 in 2024 from HKD 172,309,000 in 2023, a decline of 33.0%[21]. - The jewelry segment's revenue fell by approximately HKD 101 million or 23.2% to HKD 333.9 million, with a loss of HKD 23.7 million compared to a profit of HKD 2.7 million last year[40]. Cash Flow and Financing - The cash and cash equivalents at the end of 2024 were HKD 49,156,000, down from HKD 90,695,000 in 2023, a decrease of 45.8%[18]. - The company plans to sell remaining properties, expecting profits of HKD 60,000,000 and HKD 153,730,000 to cover bank loans classified as current and non-current liabilities respectively[7]. - The company anticipates that other bank loans classified as current liabilities can be repaid on time or renewed after maturity based on past performance[7]. - The company will consider selling listed equity investments and bonds to provide additional operating funds if necessary[7]. - The company has provided guarantees for bank loans to subsidiaries amounting to HKD 843,690,000 as of June 30, 2024[51]. - Bank loans amounted to HKD 1.024 billion, with interest rates ranging from 5.05% to 8.25%[36]. Operational Strategies - The company aims to enhance operations and implement cost control measures to improve cash flow from operating activities[7]. - The company plans to recognize expected revenue from contract liabilities within the next year, amounting to HKD 343,000,000[15]. - The company plans to adopt a more cautious approach in investment and resource allocation, focusing on risk assessment and strategic implementation to mitigate financial performance impacts[43]. Governance and Compliance - The auditor's report on the financial statements for the two years did not contain any reservations or emphasis of matter[9]. - The company has adopted new and revised Hong Kong Financial Reporting Standards effective from July 1, 2023, with no significant impact on its performance or financial position[10]. - The company has established an audit committee to oversee financial reporting and internal controls, composed of four independent non-executive directors[58]. - The company has not established an internal audit function for the year ending June 30, 2024, but believes that the current organizational structure and management oversight provide sufficient internal control and risk management[61]. - All directors confirmed compliance with the standard code of conduct for securities trading as per Appendix C3 of the Listing Rules for the year ending June 30, 2024[62]. Future Outlook - The market outlook remains bleak due to high interest rates impacting consumer spending and investment, potentially hindering economic recovery[42]. - The company will continue to strive to overcome future challenges and enhance business value[65].

Financial Performance - Revenue for the six months ended December 31, 2023, was HKD 200,183, a decrease of 25.7% compared to HKD 269,864 in the same period of 2022[4] - Gross profit for the same period was HKD 49,888, down 31.8% from HKD 73,049 in 2022[4] - The company reported a loss before tax of HKD 35,503, compared to a loss of HKD 7,640 in the previous year, indicating a significant decline in performance[4] - The net loss for the period was HKD 35,589, compared to a loss of HKD 7,659 in the prior year, reflecting a worsening financial situation[5] - Basic and diluted loss per share for the period was HKD 4.64, compared to HKD 0.92 in the same period last year[5] - The total comprehensive loss for the period was HKD 31,179,000, compared to a comprehensive loss of HKD 23,212,000 in the previous year, representing an increase of approximately 34%[13] - The jewelry segment's revenue fell by about HKD 74,336,000 or 28.3% to HKD 187,901,000, down from HKD 262,237,000 in the prior period, with a segment loss of HKD 8,804,000 compared to a profit of HKD 15,599,000 last year[66] Cash Flow and Liquidity - Cash and cash equivalents decreased to HKD 61,637 from HKD 90,695 at the end of June 2023, representing a decline of 32.1%[11] - The company experienced a net cash outflow from operating activities of HKD 27,327, compared to an outflow of HKD 5,149 in the previous year[11] - The group reported a net current liabilities of HKD 222,005,000 as of December 31, 2023, which raises concerns regarding liquidity[15] - The group has unutilized bank credit facilities exceeding HKD 350,000,000, which may support operational funding needs[15] - The group's cash and cash equivalents decreased to HKD 61,637,000 from HKD 97,101,000 as of June 30, 2023, mainly due to financial costs and partial repayment of bank loans[76] Assets and Liabilities - Total assets less current liabilities amounted to HKD 2,479,059, a decrease from HKD 2,702,481 as of June 30, 2023[8] - Non-current liabilities included bank loans of HKD 224,305, down from HKD 416,548 in the previous period[8] - The company’s total equity decreased to HKD 2,254,754 from HKD 2,285,933, indicating a slight reduction in shareholder value[8] - As of December 31, 2023, the total equity amounted to HKD 2,254,754,000, a decrease from HKD 2,446,366,000 as of December 31, 2022, reflecting a decline of approximately 7.8%[13] - The total bank loans amounted to HKD 1,045,997,000 as of December 31, 2023, with a repayment schedule including HKD 350,876,000 due within one year[45] Operational Segments - The group identified four operational segments: jewelry business, property investment and development, mining business, and investments[24] - The mining segment did not record any revenue during the review period due to minimal operational scale and no production activities[69] Corporate Governance and Management - The company has complied with all applicable corporate governance codes for the six months ending December 31, 2023, except for the separation of roles between the chairman and CEO[96] - The company has not established an internal audit function but believes its current organizational structure provides sufficient internal control and risk management[97] - The audit committee, composed of five independent non-executive directors, has reviewed the unaudited consolidated interim financial statements for the six months ending December 31, 2023[101] - The company has appointed Chen Meiqi as an executive director effective February 8, 2024[101] Future Outlook - The management remains optimistic about a gradual recovery as interest rates ease, which is expected to encourage consumer spending[70] - The property market is anticipated to gradually recover, with increased demand for retail and commercial spaces as economic stability and consumer confidence improve[73] Shareholder Information - The total equity held by directors and senior management in the company amounted to 509,609,522 shares, representing 74.60% of the issued share capital[90] - The major shareholder, Ms. Zheng Xiaoyan, provided a loan of RMB 4,000,000 (approximately HKD 4,384,000) as of December 31, 2023[82] - The company has a significant ownership structure with Zheng Xiaoyan holding 70% and Chen Weili holding 16% of the shares[92] Employee Information - The group employed approximately 478 employees as of December 31, 2023, a decrease from 502 employees as of June 30, 2023[83] - Employee benefits expenses for key management personnel amounted to HKD 4,102,000 for the six months ended December 31, 2023, compared to HKD 4,231,000 for the same period in 2022[63]

Financial Performance - Revenue for the six months ended December 31, 2023, was HKD 200,183,000, a decrease of 25.7% compared to HKD 269,864,000 in the same period of 2022[2] - Gross profit for the same period was HKD 49,888,000, down 31.8% from HKD 73,049,000 year-on-year[2] - The company reported a loss before tax of HKD 35,503,000, compared to a loss of HKD 7,640,000 in the previous year, indicating a significant increase in losses[2] - Total comprehensive loss for the period was HKD 31,179,000, compared to a loss of HKD 23,212,000 in the same period last year[3] - Basic and diluted loss per share was HKD 4.64, compared to HKD 0.92 in the previous year, reflecting a substantial decline in earnings[3] - The group reported a loss before tax of HKD 35,503,000 for the six months ended December 31, 2023, compared to a loss of HKD 7,640,000 in 2022[22] - The loss attributable to the company's owners for the six months ended December 31, 2023, was HKD 31,677,000, compared to a loss of HKD 6,261,000 in the previous year[37] - Basic loss per share for the six months ended December 31, 2023, was HKD 0.0464, compared to HKD 0.0092 for the same period in 2022[37] Assets and Liabilities - The company had total assets of HKD 2,701,064,000 as of December 31, 2023, compared to HKD 2,697,577,000 as of June 30, 2023[4] - Current liabilities exceeded current assets by HKD 222,005,000, indicating a negative net working capital position[5] - The company reported bank loans of HKD 1,045,997,000, with approximately HKD 695,121,000 due within one year[7] - The company’s equity attributable to owners was HKD 2,052,450,000, a decrease from HKD 2,079,737,000 as of June 30, 2023[5] - The company's investment properties had a carrying amount of HKD 2,078,220,000 as of December 31, 2023, compared to HKD 2,078,100,000 as of June 30, 2023[30] - The carrying amount of development properties increased to HKD 668,039,000 as of December 31, 2023, from HKD 657,777,000 as of June 30, 2023[31] Revenue Segments - Revenue from the jewelry business for the six months ended December 31, 2023, was HKD 187,901,000, a decrease of 28.3% compared to HKD 262,237,000 in 2022[18] - Jewelry segment revenue decreased by approximately HKD 74,336,000 or 28.3% to HKD 187,901,000 for the six months ended December 31, 2023, compared to HKD 262,237,000 in the previous period[40] - The jewelry business recorded a segment loss of HKD 8,804,000, down from a profit of HKD 15,599,000 in the prior period[40] - The decline in jewelry sales was attributed to a weak macroeconomic environment and high inventory levels among overseas retailers, impacting the company's performance[38] Expenses and Financial Costs - Interest expenses on bank loans increased to HKD 33,083,000 in 2023 from HKD 18,886,000 in 2022, representing a 75.5% increase[21] - The group’s financial costs totaled HKD 25,122,000 for the six months ended December 31, 2023, compared to HKD 15,799,000 in 2022, representing a 58.8% increase[21] - The increase in financial costs due to rising interest rates in Hong Kong amounted to approximately HKD 9,323,000, compared to HKD 15,799,000 in the previous period[37] - The cost of goods sold for the period was HKD 150,295,000, down from HKD 196,815,000 in the previous year, indicating a reduction of 23.6%[22] - The group incurred unallocated expenses of HKD 1,080,000 in 2023, compared to HKD 1,400,000 in 2022, reflecting a decrease of 22.9%[18] - Depreciation expenses for property, plant, and equipment were HKD 2,286,000 in 2023, up from HKD 1,967,000 in 2022, marking a 16.2% increase[22] Cash Flow and Capital Management - As of December 31, 2023, the company's cash and cash equivalents decreased to HKD 61,637,000 from HKD 97,101,000 as of June 30, 2023[49] - The company's net debt ratio was 0.3305 as of December 31, 2023, compared to 0.3215 on June 30, 2023[49] - The group has not changed its capital structure as of December 31, 2023, and management does not foresee any need for changes under current financial conditions[53] Corporate Governance and Risk Management - The company has complied with all applicable code provisions of the Corporate Governance Code during the reporting period, with some deviations noted[58] - The board has not established an internal audit function, believing that the current organizational structure provides sufficient internal control and risk management[60] - The audit committee, composed of five independent non-executive directors, has reviewed the unaudited consolidated interim financial statements for the six months ending December 31, 2023[62] - The group has maintained a conservative approach to financial risk management, with market risks kept at a minimum level[56] - The group has entered into forward foreign exchange contracts to mitigate exchange rate risks related to GBP fluctuations[56] Employee and Operational Management - The group employed approximately 478 employees as of December 31, 2023, down from 502 employees as of June 30, 2023[54] - The company is focused on optimizing operational processes and implementing cost management measures to enhance overall efficiency and profitability[44] - The company has not recorded any revenue from its mining segment during the review period due to minimal operational scale and no production activities[43] - The group has adopted a new share option scheme since December 22, 2020, with 12,200,000 shares remaining unexercised under the previous scheme as of December 31, 2023[55] - The company has adopted a share option plan to attract and retain qualified employees, including directors[54] Dividend Policy - The company did not recommend any interim dividend for the six months ended December 31, 2023[27] - The company does not recommend any interim dividend for the six months ended December 31, 2023, consistent with the previous year[47] Property Development - The company holds a 90% interest in a site in Kowloon, which has been developed into a 25-story residential project with a total floor area of approximately 29,147 square feet, named "Hengpo," and obtained an occupancy permit in July 2023[41] - Rental income from properties increased by HKD 4,988,000 to HKD 10,383,000, compared to HKD 5,395,000 in the same period last year, due to more units being leased at the Henghui Center[40] - The company remains cautiously optimistic about the gradual recovery of the property market, despite challenges such as high interest rates and geopolitical tensions[46]

Financial Performance - For the fiscal year ended June 30, 2023, the Group's consolidated revenue decreased by approximately HK$148.3 million or 24.56% from HK$603.9 million to HK$455.6 million[20]. - The loss attributable to owners of the Company was HK$98.3 million, compared to a profit of HK$12.1 million in the previous year[22]. - The substantial decrease in gross profit of approximately HK$78.9 million was mainly due to a write-down of approximately HK$49.9 million for properties under development[22]. - The Group recognized a loss of approximately HK$27.8 million from the change in fair value of investment properties, compared to a gain of approximately HK$98.5 million in the previous fiscal year[22]. - Finance costs increased by approximately HK$29.1 million, as a significant portion was not capitalized as part of property development costs but recorded directly as expenses[22]. - Basic loss per share was HK14.39 cents, compared to basic earnings per share of HK1.78 cents in 2022[22]. Jewellery Segment - The Group specializes in manufacturing fine jewellery in precious metals set with various gemstones, targeting the middle to upper segments of the market[14]. - The Group's revenue from the jewellery segment decreased by approximately HK$157.3 million or 26.6% from HK$592.2 million last year to HK$434.9 million for the year ended June 30, 2023[27]. - The jewellery segment recorded a profit of approximately HK$2.7 million for the year ended June 30, 2023, down from approximately HK$35.6 million last year, primarily due to decreased revenue and unavoidable fixed operating expenses[27]. Property Segment - Revenue from rental income in the property segment amounted to approximately HK$15.7 million, an increase of HK$7.4 million from HK$8.3 million in 2022[32]. - The Group currently holds 75% interest in "One Continental," a 28-storey premium office and retail building with a gross floor area of approximately 86,970 sq.ft[33]. - The Group owns 90% interest in a site developed into a 25-storey residential project named "Amber Place," with a gross floor area of approximately 29,147 sq.ft, and obtained the occupation permit in July 2023[34]. - The Group's focus in the first half of 2023 was on securing high-quality tenants, resulting in consistent rental income and enhanced real estate portfolio value[46]. Market Outlook - The Group expects a continuous challenging macro backdrop in the second half of 2023, with a modest recovery anticipated in 2024[44]. - The real estate market in Hong Kong faced challenges due to rising interest rates and a slower economic recovery in China, impacting the residential, investment, and land sectors[46]. - The Group plans to adopt a prudent approach in real estate business development and financial positions to provide stable returns to shareholders[46]. Financial Position - As of June 30, 2023, the Group's gearing ratio was 0.3215, an increase from 0.2903 in 2022, indicating a rise in financial leverage[65]. - Cash and cash equivalents decreased to HK$97,101,000 as of June 30, 2023, down from HK$144,008,000 in 2022, primarily due to increased financial and construction costs[66]. - Bank loans denominated in HK$ and US$ amounted to approximately HK$1,058,377,000 as of June 30, 2023, compared to HK$1,027,421,000 in 2022[65]. - The Group's other borrowings, including amounts due to joint ventures and related companies, were approximately HK$122,007,000 as of June 30, 2023, compared to HK$117,216,000 in 2022[65]. Share Option Schemes - The 2010 Share Option Scheme had 12,200,000 options valid and outstanding as of June 30, 2023, following a share consolidation[89]. - The total number of shares available for issue under the 2020 Share Option Scheme is 68,311,825 shares, representing 10% of the shares of the Company in issue as of September 26, 2023[113]. - The 2020 Share Option Scheme is valid for ten years from December 22, 2020, and aims to incentivize eligible persons to enhance the Company's value[106][107]. - No share options have been granted under the 2020 Share Option Scheme since its adoption[111]. Corporate Governance - The Company has adopted the Corporate Governance Code and complied with it during the year ended June 30, 2023, with some deviations explained[175]. - The roles of the Chairman and the Chief Executive Officer are not separated, which is a deviation from Code provision C.2.1[177]. - The Company does not have an internal audit function as of June 30, 2023, but believes its current organizational structure provides sufficient internal control and risk management[178]. - The Board comprises four Executive Directors and five Non-executive Directors, including four Independent Non-executive Directors, meeting the requirement of at least one-third representation[186][198]. Management and Leadership - The Chairman has been with the Group since 2000 and has been instrumental in strategizing its direction[129]. - The Managing Director has over 50 years of experience in the jewellery industry and is responsible for daily operations and strategic planning[135]. - The Group's management team includes individuals with diverse backgrounds in various industries, enhancing strategic decision-making capabilities[145]. - The Group aims to leverage the extensive experience of its directors to navigate market challenges and seize growth opportunities[145].

[Financial Statements](index=3&type=section&id=Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended December 31, 2022, the Group's performance shifted from profit to loss, with total revenue decreasing by 19.6% to HK$270 million Consolidated Statement of Profit or Loss and Other Comprehensive Income (Selected Items) | Indicator | For the six months ended December 31, 2022 (HK$'000) | For the six months ended December 31, 2021 (HK$'000) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 269,864 | 335,607 | -19.6% | | Gross Profit | 73,049 | 84,239 | -13.3% | | (Loss) / Profit before Income Tax | (7,640) | 17,011 | Shift from Profit to Loss | | (Loss) / Profit for the Period | (7,659) | 17,094 | Shift from Profit to Loss | | (Loss) / Profit attributable to Owners of the Company | (6,261) | 15,855 | Shift from Profit to Loss | | Basic (Loss) / Earnings per Share (HK cents) | (0.92) | 2.32 | Shift from Profit to Loss | [Consolidated Statement of Financial Position](index=5&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2022, the Group's total assets and net assets slightly decreased, recording net current liabilities of HK$122 million primarily due to reclassified bank loans Consolidated Statement of Financial Position (Selected Items) | Indicator | As at December 31, 2022 (HK$'000) | As at June 30, 2022 (HK$'000) | | :--- | :--- | :--- | | Non-current Assets | 2,733,981 | 2,755,018 | | Current Assets | 1,141,315 | 1,110,006 | | Current Liabilities | (1,263,720) | (1,063,782) | | **Net Current (Liabilities) / Assets** | **(122,405)** | **46,224** | | Non-current Liabilities | (202,084) | (354,876) | | **Net Assets** | **2,409,492** | **2,446,366** | [Consolidated Statement of Cash Flows](index=7&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Cash flow from operating activities significantly improved, with net outflow narrowing to HK$5.15 million, though financing cash inflow decreased, leading to a period-end cash balance of HK$139 million Consolidated Statement of Cash Flows (Selected Items) | Indicator | For the six months ended December 31, 2022 (HK$'000) | For the six months ended December 31, 2021 (HK$'000) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (5,149) | (258,137) | | Net Cash Used in Investing Activities | (13,693) | (36,171) | | Net Cash From Financing Activities | 13,126 | 167,509 | | Decrease in Cash and Cash Equivalents | (5,716) | (126,799) | | Cash and Cash Equivalents at End of Period | 138,848 | 213,185 | [Consolidated Statement of Changes in Equity](index=8&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity decreased from HK$2.446 billion to HK$2.409 billion as of December 31, 2022, primarily due to a total comprehensive loss and final dividend distribution - Total equity decreased by **HK$36.874 million** during the period, primarily comprising two components[13](index=13&type=chunk) - Transactions with owners: Distribution of **HK$13.662 million** as final dividend for 2022[13](index=13&type=chunk) - Total comprehensive income: Recording a total comprehensive loss of **HK$23.212 million**, which includes a loss for the period of **HK$7.659 million** and other comprehensive loss of **HK$15.553 million** (mainly exchange differences)[13](index=13&type=chunk) [Notes to the Financial Statements](index=9&type=section&id=Notes%20to%20the%20Financial%20Statements) [Note 1 Basis of Preparation](index=9&type=section&id=Note%201%20Basis%20of%20Preparation) Financial statements are prepared on a going concern basis, as the Board believes sufficient working capital exists despite net current liabilities and a period loss, supported by unutilized bank credit facilities - Management confirms that despite net current liabilities of **HK$122 million**, the going concern basis for financial statement preparation is appropriate, supported by over **HK$400 million** in unutilized bank credit facilities and good banking relationships[15](index=15&type=chunk) [Note 3 Segment Information](index=11&type=section&id=Note%203%20Segment%20Information) The Group operates in Jewellery, Property Investment and Development, Mining, and Investment segments, with Jewellery revenue and profit significantly declining, while Property segment loss expanded due to increased finance costs Segment Revenue and Results | Segment (For the six months ended December 31) | Revenue (HK$'000) | Segment Results (HK$'000) | | :--- | :--- | :--- | | **2022** | | | | Jewellery Business | 262,237 | 15,599 | | Property Investment and Development | 5,395 | (17,100) | | Mining Business | – | (3,399) | | Investment | 2,232 | 311 | | **2021** | | | | Jewellery Business | 329,943 | 30,344 | | Property Investment and Development | 3,875 | (2,609) | | Mining Business | – | (4,947) | | Investment | 1,789 | (2,679) | [Note 4 & 5 Revenue and Finance Costs](index=11&type=section&id=Note%204%20%26%205%20Revenue%20and%20Finance%20Costs) Total revenue decreased primarily due to a 20.5% reduction in Jewellery sales, while finance costs surged to HK$15.80 million as borrowing costs were no longer capitalized after property development completion - Sales of goods, primarily Jewellery, decreased from **HK$330 million** to **HK$262 million**, accounting for the main decline in total revenue[25](index=25&type=chunk) - Finance costs significantly increased, mainly due to total borrowing costs rising from **HK$7.87 million** to **HK$19.90 million**, coupled with a reduction in capitalized interest amounts[27](index=27&type=chunk) [Note 8 & 9 Dividends and EPS](index=14&type=section&id=Note%208%20%26%209%20Dividends%20and%20EPS) The Board does not recommend an interim dividend, and basic loss per share was 0.92 HK cents due to the shift from profit to loss, compared to earnings per share of 2.32 HK cents in the prior period - The Board does not recommend an interim dividend (2021 corresponding period: nil)[34](index=34&type=chunk) Basic (Loss) / Earnings Per Share | Indicator | For the six months ended December 31, 2022 | For the six months ended December 31, 2021 | | :--- | :--- | :--- | | (Loss) / Profit attributable to owners (HK$'000) | (6,261) | 15,855 | | Weighted average number of ordinary shares | 683,118,258 | 683,118,258 | | Basic (Loss) / Earnings per share (HK cents) | (0.92) | 2.32 | [Note 10, 14, 17 Key Assets and Liabilities](index=15&type=section&id=Note%2010%2C%2014%2C%2017%20Key%20Assets%20and%20Liabilities) The Group's core assets, investment properties (HK$2.11 billion) and properties under development (HK$697 million), are pledged for bank loans totaling HK$1.04 billion, with a significant portion classified as current liabilities due to demand clauses - Investment properties with a carrying value of **HK$2.11 billion** and properties under development of **HK$697 million** are pledged as security for bank borrowings[36](index=36&type=chunk)[40](index=40&type=chunk) - Total bank loans amount to **HK$1.041 billion**, of which **HK$732 million** is classified as current liabilities due to "on demand" repayment clauses, despite repayment schedules extending beyond one year[45](index=45&type=chunk) [Management Discussion and Analysis](index=25&type=section&id=Management%20Discussion%20and%20Analysis) [Operating Results and Business Review](index=25&type=section&id=Operating%20Results%20and%20Business%20Review) The Group shifted from profit to loss in H1 FY2022/23, recording a HK$6.26 million loss attributable to owners, primarily due to declining Jewellery business, increased finance costs, and exchange losses - The shift from profit to loss during the period was primarily attributable to[62](index=62&type=chunk) - A decrease in revenue and gross profit by **HK$65.74 million** and **HK$11.19 million**, respectively[62](index=62&type=chunk) - An increase in finance costs by **HK$13.45 million** due to interest no longer being capitalized after the completion of 'The Henley'[62](index=62&type=chunk) - Recording an exchange loss of **HK$3.12 million** (compared to a gain of **HK$1.01 million** in the prior period)[62](index=62&type=chunk) [Jewellery Business](index=25&type=section&id=Jewellery%20Business) The Jewellery business experienced weak demand due to global macroeconomic factors, resulting in a 20.5% revenue decrease to HK$262 million and segment profit nearly halving to HK$15.60 million - Due to global economic slowdown and rising inflation weakening market demand, Jewellery business revenue decreased by **20.5%** from **HK$330 million** to **HK$262 million**[63](index=63&type=chunk) - Jewellery business segment profit was **HK$15.60 million**, a decrease of approximately **48.6%** from **HK$30.34 million** in the prior year[63](index=63&type=chunk) [Property Investment and Development](index=25&type=section&id=Property%20Investment%20and%20Development) The property segment performed strongly, with rental revenue increasing by 39.2% to HK$5.40 million due to 'The Henley' completion, and other residential projects progressing well for future growth - Rental income increased to **HK$5.40 million** (a **39.2%** year-on-year increase), primarily due to the completion of 'The Henley' in Wan Chai and the commencement of rental income generation[64](index=64&type=chunk) - The Group is advancing multiple property projects, including the completed 'The Henley' in Wan Chai, the Cheung Sha Wan project expected to be completed in Q2 2023, and the planned redevelopment of a luxury residential project on Boundary Street[66](index=66&type=chunk) [Mining Business](index=26&type=section&id=Mining%20Business) The mining business remains largely stagnant with minimal operations, focusing solely on exploration in the Yuanling mining area, generating no revenue or significant capital investment - The operations of Hong Zhuang Gold Mine are minimal, with the Group focusing on exploration work in the Yuanling mining area, and no production activities or revenue generated during the period[67](index=67&type=chunk) [Business Outlook](index=27&type=section&id=Business%20Outlook) The Group maintains a cautious outlook on global economic recovery, anticipating continued challenges for the Jewellery business, while cautiously optimistic about the property market's recovery driven by cross-border travel and efforts to enhance rental returns - The Group anticipates a moderate global economic recovery, but uncertainties such as the Russia-Ukraine conflict, high inflation, and the Sino-US trade war will continue to pressure the Jewellery business[69](index=69&type=chunk) - With the fading of the pandemic and the resumption of cross-border travel, the Hong Kong property market is expected to gradually recover, and the Group will continue to seek quality tenants for sustainable rental returns[69](index=69&type=chunk) [Liquidity, Financial Resources and Gearing](index=27&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Gearing) As of December 31, 2022, the Group's gearing ratio slightly increased to 29.68%, with cash and cash equivalents at HK$139 million and total bank loans of HK$1.04 billion, while the Board considers working capital ample Liquidity and Financial Resources | Indicator | As at December 31, 2022 | As at June 30, 2022 | | :--- | :--- | :--- | | Gearing Ratio | 0.2968 | 0.2903 | | Cash and Cash Equivalents (HK$'000) | 138,848 | 144,008 | | Bank Loans (HK$'000) | 1,040,952 | 1,027,421 | - The majority of the Group's bank loans are denominated in Hong Kong Dollars and US Dollars, with interest rates linked to HIBOR, Prime Rate, or US Prime Rate[74](index=74&type=chunk)[76](index=76&type=chunk) [Other Information](index=29&type=section&id=Other%20Information) [Directors' and Shareholders' Interests](index=30&type=section&id=Directors%27%20and%20Shareholders%27%20Interests) The report details directors' and major shareholders' interests, with controlling shareholder Tamar Investments Group Limited holding 74.12% of issued share capital, and several directors holding interests via personal shares or share options - The controlling shareholder, Tamar Investments Group Limited, holds **506,339,522 shares**, representing **74.12%** of the company's issued share capital[83](index=83&type=chunk)[86](index=86&type=chunk) - Several directors hold relevant share interests granted under the share option scheme, with Mr. Chan Wai Lap, Ms. Chan Wai Ki, and Mr. Wong Kwan Ting each holding **3,000,000 shares** of relevant interests[83](index=83&type=chunk)[84](index=84&type=chunk) [Corporate Governance](index=32&type=section&id=Corporate%20Governance) The company largely complied with corporate governance codes, with two deviations: unsegregated Chairman and CEO roles, and no independent internal audit function, which the Board deems sufficient - Deviation from Code Provision C.2.1: The roles of Chairman (Mr. Chan Wai Lap) and Chief Executive Officer are not segregated, but the Board believes the current structure, with responsibilities shared by the Chairman and Managing Director (Ms. Cheng Siu Yin), ensures sufficient balance of power[87](index=87&type=chunk) - Deviation from Code Provision D.2.5: The company has not established an internal audit function, but the Board believes the existing organizational structure and close monitoring by management provide adequate internal controls, and the need for such a function will be reviewed annually[88](index=88&type=chunk)