Core Viewpoint - Hainan Free Trade Port has successfully established a one-stop aircraft maintenance service model, attracting global airlines with its duty-free maintenance services and comprehensive support policies [2][5]. Group 1: Aircraft Maintenance Services - A total of 7 aircraft from Thailand have been serviced in Hainan Free Trade Port this year, surpassing the total number of Thai aircraft serviced in 2024 [2]. - The one-stop maintenance base has completed over 2,200 aircraft repairs and nearly 270 complete aircraft paint jobs since its inception in 2022, serving nearly 50 domestic and international airlines [4]. - The maintenance services include high-level inspections and specialized modification projects, with over 900 work cards prepared for each aircraft [3]. Group 2: Policy Advantages - Hainan's innovative duty-free maintenance service model allows for tax exemptions on aircraft and related parts temporarily entering the region for repairs, significantly reducing operational costs for airlines [5][6]. - Airlines can save 10% to 15% on maintenance costs due to the combination of duty-free policies and streamlined customs processes [6]. - The establishment of a "green channel" for aircraft and materials at Haikou Meilan Airport Customs facilitates quick customs clearance for incoming maintenance aircraft [6]. Group 3: Expansion and Future Prospects - Hainan's aviation maintenance industry is expected to grow due to increasing demand for maintenance services as global air traffic rises [7]. - A new composite materials processing center has been established to enhance local capabilities in repairing composite parts, filling a gap in the market [7][8]. - The center is equipped with advanced facilities to meet the repair needs of both narrow-body and wide-body aircraft [7].

Financial Performance - The company reported a revenue of HK$1.2 billion for the fiscal year, representing a 15% increase compared to the previous year[5]. - The company expects a revenue growth of 10-12% for the next fiscal year, driven by new product launches and market expansion strategies[5]. - For the year ended December 31, 2024, the Group's revenue from continuing operations amounted to HK$38,885,894,000, an increase of 4.46% from HK$37,226,295,000 in 2023[78]. - The profit attributable to owners from continuing operations was HK$304,386,000, significantly up from HK$17,733,000 in 2023, marking an increase of approximately 1615.5%[78]. - The Group recorded EBITDA from continuing operations of HK$1,629,069,000, compared to HK$1,274,210,000 in 2023, reflecting a growth of 27.9%[79]. - The net profit for the year was HK$348,307,000, significantly up from HK$79,194,000 in 2023, primarily driven by improved profitability in the concentrates business and better margins in freight logistics[96]. Market Expansion and Strategy - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share within the next two years[5]. - The Group aims to maximize shareholders' interests by expanding its global commercial network and seizing growth opportunities in Greater China and other regions[86]. - The company plans to enhance efficiency and leverage innovation to drive service excellence in the upcoming financial year 2025[115]. - The company plans to expand its African operations, particularly in logistics, and explore new minerals and energy trading[124]. - The Group's strategy includes learning from successful experiences in Singapore to contribute to economic growth and sustainable development in its operating regions[96]. Research and Development - Investment in R&D increased by 20%, focusing on innovative technologies and product enhancements[5]. - The company is exploring partnerships with technology firms to enhance its service offerings and drive digital transformation[5]. Corporate Governance and Management - Mr. Wang Kan resigned as CEO in June 2024 but retains other relevant positions on the Board of Directors and Board Committees[23]. - Mr. Zhao Quan has nearly 30 years of experience in airlines, finance, and airport investment, and remains an Executive Director[32]. - The company is under the substantial shareholding of HNA Trust Management, which influences its corporate governance[32]. - The company has a diverse board with independent non-executive directors contributing to its oversight[18]. - The Board currently consists of seven Directors, including four Executive Directors and three Independent Non-executive Directors[165]. - The company has revised its Board Diversity Policy in 2022 to achieve sustainable and balanced development[180]. - The Board has delegated various responsibilities to committees, including the Audit Committee, Remuneration Committee, and Nomination Committee, as detailed in the corporate governance report[196]. Financial Health and Debt Management - As of December 31, 2024, the Group had cash and cash equivalents of HK$2,271,537,000, an increase from HK$1,998,840,000 as of December 31, 2023[138]. - Total borrowings increased to HK$5,924,561,000 as of December 31, 2024, up from HK$5,646,278,000 in the previous year[138]. - The Group's overall strategy remains unchanged, focusing on optimizing the debt and equity balance to maximize returns to stakeholders[140]. - The consolidated net debt decreased to HK$1,655,867,000 from HK$2,528,508,000 year-over-year, indicating improved financial health[143]. - The Group's gearing ratio improved to 18.6% as of December 31, 2024, down from 27.1% in the previous year[143]. Employee and Talent Management - The total number of employees as of December 31, 2024, was 5,936, a decrease from 6,029 in the previous year[151]. - The Group's remuneration policies are designed to be fair and competitive, ensuring retention and attraction of talent[151]. - The company emphasizes hiring suitable talent to meet business needs rather than focusing solely on achieving a balanced gender ratio[183]. Logistics and Operations - The Group's logistics business established a subsidiary in Hainan Free Trade Port in November 2024 to provide logistics solutions for local companies[96]. - The logistics segment achieved a 17% revenue growth from HK$4,619,054,000 to HK$5,411,113,000 and a 31% increase in profit before tax from HK$218,436,000 to HK$286,333,000, driven by improved performance in logistics services, particularly freight logistics[116][119]. - The Group's freight logistics benefited from elevated ocean freight rates despite geopolitical tensions and the Red Sea crisis impacting the global economy[96]. - The company expanded its Bonded Logistics Centre in Serang, Indonesia, enhancing regional storage and distribution capabilities to support increasing demand for secure, efficient commodity handling[114][118]. Shareholder Returns - The company declared a dividend of HK$0.10 per share, reflecting a 5% increase from the last dividend payout[5]. - The Group's total capital, measured as total debt plus equity attributable to owners, was HK$8,901,645,000, down from HK$9,343,704,000[143].

Financial Performance - For the fiscal year ending December 31, 2024, CWT International Limited reported total revenue of HKD 38,885,894, an increase of 4.5% from HKD 37,226,295 in 2023[3] - Gross profit for the same period was HKD 1,811,079, up from HKD 1,646,236, reflecting a gross margin improvement[3] - The net profit from continuing operations was HKD 348,307, significantly higher than HKD 57,723 in the previous year, marking a year-over-year increase of 503%[3] - Basic and diluted earnings per share increased to HKD 2.67 from HKD 0.34, indicating strong profitability growth[5] - Other income increased to HKD 620,332 from HKD 505,175, showing a growth of 22.7%[3] - Net profit for the year was HKD 348,307,000, significantly up from HKD 79,194,000 in 2023, driven by improved profitability in commodity trading and logistics despite geopolitical tensions[46] Revenue Breakdown - Transportation services revenue rose to HKD 3,737,694,000, up 24.5% from HKD 3,000,945,000 in the previous year[15] - Logistics services revenue increased slightly to HKD 1,528,768,000 from HKD 1,467,851,000, reflecting a growth of 4.1%[15] - Commodity trading and related services generated HKD 32,108,541,000, a growth of 2.99% compared to HKD 31,175,669,000 in 2023[15] - Revenue from the Chinese market reached HKD 27,020,205,000, up 6.66% from HKD 25,335,560,000 in the previous year[17] Assets and Liabilities - Total assets as of December 31, 2024, were HKD 21,870,424, compared to HKD 19,122,248 in 2023, representing an increase of 14.3%[6] - Current liabilities rose to HKD 19,783,347 from HKD 16,717,618, reflecting a 12.3% increase[7] - Non-current liabilities decreased to HKD 2,943,245,000 from HKD 3,922,449,000, a reduction of 25%[8] - The company’s total liabilities increased to HKD 21,406,149 in 2024 from HKD 19,114,740 in 2023, reflecting a rise of 11.9%[25] - The company’s total liabilities reached HKD 22,726,592,000 in 2024, up from HKD 20,640,067,000 in 2023, an increase of 10.09%[28] Cash Flow and Capital Structure - Cash and cash equivalents increased to HKD 2,271,537 from HKD 1,998,840, reflecting a growth of 13.6%[6] - Total borrowings amounted to HKD 5,924,561,000, with HKD 5,136,740,000 due within one year, reflecting an increase from HKD 5,646,278,000 in the previous year[62] - The group's total debt was HKD 4,120,695,000, a decrease from HKD 4,672,423,000 as of December 31, 2023, excluding short-term trade financing[64] - The net debt ratio (net debt to total capital) improved to 18.6% from 27.1% year-over-year[64] - The group plans to optimize its capital structure through new share issuance and debt refinancing, maintaining its overall strategy unchanged compared to the previous year[63] Operational Highlights - The logistics division demonstrated resilience, with cost management and technology upgrades helping to alleviate cost pressures amid rising fuel costs[48] - The logistics division recorded a revenue increase of 17%, rising from HKD 4,619,054,000 to HKD 5,411,113,000, with a 31% increase in profit before tax from HKD 218,436,000 to HKD 286,333,000, driven by improved logistics services, particularly freight logistics[54] - The commodity trading segment's revenue increased by 3% from HKD 31,175,669,000 to HKD 32,108,541,000, while profit before tax surged 443% from HKD 17,206,000 to HKD 93,468,000, attributed to enhanced operational efficiency[55] Strategic Initiatives - The group plans to expand its network in Europe and add four new offices in Central Europe by mid-2025 to drive business growth[51] - The company plans to expand its logistics operations in Africa, focusing on improving logistics and operations in the region[56] - The company has established a subsidiary in Hainan Free Trade Port to provide logistics solutions for local businesses, aiming to capitalize on the development opportunities in the region[71] - A strategic cooperation agreement was signed with Access World Group to expand collaboration in the bulk commodity trade and logistics sector, coinciding with the 50th anniversary of diplomatic relations between China and Malaysia[71] Governance and Compliance - The company has complied with the corporate governance code, with a noted exception regarding the roles of the Chairman and CEO being held by the same individual until June 28, 2024[75][77] - The board believes that having the same person serve as both Chairman and CEO ensures effective strategic planning and decision-making[76] Workforce and Employee Count - The group has a total employee count of 5,936, down from 6,029 in the previous year, indicating a reduction in workforce[69] Market Outlook - The global economic growth rate is projected at 3.3% for 2025 and 2026, with inflation expected to decline to 4.2% in 2025 and 3.5% in 2026[70] - The group emphasizes the need to focus on core industries and enhance competitiveness while seeking opportunities in China and globally to mitigate risks[70]

[Corporate Information](index=5&type=section&id=Corporate%20Information) This chapter details CWT International Limited's corporate structure, including its board, key executives, and professional advisors - Mr. Wang Kan serves as the Company's Chairman, also chairing the Executive and Nomination Committees[6](index=6&type=chunk)[7](index=7&type=chunk) - The Company's ultimate controlling party is the 'HNA Group Bankruptcy Reorganization Special Service Trust', a trust registered in China[28](index=28&type=chunk)[31](index=31&type=chunk) - The Company's auditor is BDO Limited, Hong Kong[8](index=8&type=chunk) [Interim Financial Report](index=7&type=section&id=Interim%20Financial%20Report) This section presents the unaudited interim financial statements and related notes for the period ended June 30, 2024 [Report on Review of Interim Financial Report](index=7&type=section&id=Report%20on%20Review%20of%20Interim%20Financial%20Report) BDO Limited, Hong Kong, reviewed the interim financial report for the six months ended June 30, 2024, finding no material misstatements but not expressing an audit opinion, noting 2023 comparative data was unaudited - The auditor reviewed the 2024 interim financial report, concluding no material issues were found, but did not express an audit opinion[9](index=9&type=chunk)[10](index=10&type=chunk)[14](index=14&type=chunk) - The report explicitly states that the comparative financial statements for the corresponding period in 2023 were unaudited[16](index=16&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2024, group revenue grew by **26.9% to HKD 20.28 billion**, while profit for the period declined by **14.3% to HKD 136 million**, primarily due to increased finance costs and other net losses Key Financial Performance Indicators | Indicator | H1 2024 (Unaudited) | H1 2023 (Unaudited and Restated) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | 20,275,771 HKD Thousands | 15,970,654 HKD Thousands | +26.9% | | **Gross Profit** | 860,145 HKD Thousands | 876,085 HKD Thousands | -1.8% | | **Profit for the Period from Continuing Operations** | 136,447 HKD Thousands | 157,586 HKD Thousands | -13.4% | | **Profit for the Period** | 136,447 HKD Thousands | 159,243 HKD Thousands | -14.3% | | **Profit Attributable to Owners of the Company** | 120,860 HKD Thousands | 135,023 HKD Thousands | -10.5% | | **Basic Earnings Per Share (HK Cents)** | 1.06 | 1.17 | -9.4% | - Total other comprehensive expenses significantly increased to **HKD 85.97 million** from **HKD 15.55 million** in the prior period, mainly due to expanded exchange differences from translating overseas subsidiaries' financial statements[19](index=19&type=chunk) [Condensed Consolidated Statement of Financial Position](index=12&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, total assets reached **HKD 28.21 billion** (+10.9%), total liabilities **HKD 23.41 billion** (+13.4%), while net assets remained stable at **HKD 4.79 billion**, with net current assets decreasing due to faster growth in current liabilities Key Financial Position Indicators | Balance Sheet Item | June 30, 2024 (HKD Thousands) | December 31, 2023 (HKD Thousands) | Change | | :--- | :--- | :--- | :--- | | **Non-current Assets** | 5,964,665 | 6,315,981 | -5.6% | | **Current Assets** | 22,240,476 | 19,122,248 | +16.3% | | **Total Assets** | 28,205,141 | 25,438,229 | +10.9% | | **Current Liabilities** | 20,433,840 | 16,717,618 | +22.2% | | **Non-current Liabilities** | 2,978,207 | 3,922,449 | -24.1% | | **Total Liabilities** | 23,412,047 | 20,640,067 | +13.4% | | **Net Assets** | 4,793,094 | 4,798,162 | -0.1% | - Current liabilities significantly increased, primarily driven by higher trade and other payables, loans and borrowings, and derivative financial liabilities[21](index=21&type=chunk) - Non-current liabilities significantly decreased, mainly due to the reclassification of certain loans and borrowings (promissory notes) to current liabilities[22](index=22&type=chunk)[92](index=92&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=16&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2024, net cash from operating activities significantly decreased to **HKD 400 million** from **HKD 1.40 billion** in the prior period, with net cash from investing activities at **HKD 167 million** and net cash used in financing activities at **HKD 408 million**, resulting in a **HKD 159 million** net increase in cash and cash equivalents Key Cash Flow Items | Cash Flow Item | H1 2024 (HKD Thousands) | H1 2023 (HKD Thousands) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | 399,933 | 1,395,322 | | **Net Cash from Investing Activities** | 167,019 | 265,614 | | **Net Cash Used in Financing Activities** | (408,398) | (1,016,677) | | **Net Increase in Cash and Cash Equivalents** | 158,554 | 644,259 | - Operating cash flow significantly declined, primarily as cash generated from operations decreased from **HKD 1.71 billion** to **HKD 656 million**[26](index=26&type=chunk) [Notes to the Unaudited Interim Financial Report](index=18&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This section details the financial statements' basis of preparation, accounting policies, and specific line items, including revenue segmentation, discontinued operations, loan and borrowing structures, and post-reporting period events [4. REVENUE AND SEGMENT REPORTING](index=21&type=section&id=4.%20REVENUE%20AND%20SEGMENT%20REPORTING) In H1 2024, total group revenue grew **26.9% to HKD 20.28 billion**, with commodity marketing as the largest contributor at **HKD 17 billion** (+32.2%), while financial services generated the highest pre-tax profit despite a **15.0%** decline, and commodity marketing's pre-tax profit sharply fell **56.2%** due to increased interest costs Revenue and Pre-tax Profit by Business Segment | Business Segment | H1 2024 Revenue (HKD Thousands) | H1 2023 Revenue (HKD Thousands) | H1 2024 Pre-tax Profit (HKD Thousands) | H1 2023 Pre-tax Profit (HKD Thousands) | | :--- | :--- | :--- | :--- | :--- | | **Logistics Services** | 2,587,470 | 2,383,562 | 107,329 | 97,350 | | **Commodity Marketing** | 17,000,820 | 12,862,945 | 19,312 | 44,089 | | **Engineering Services** | 322,283 | 358,715 | 15,025 | 15,846 | | **Financial Services** | 317,825 | 320,850 | 121,399 | 142,852 | - By geographical region, China was the largest revenue source, contributing **HKD 13.90 billion**, accounting for **68.6%** of total revenue[42](index=42&type=chunk) [10. DISCONTINUED OPERATION](index=31&type=section&id=10.%20DISCONTINUED%20OPERATION) The Group discontinued its structured trade services business, previously part of financial services, in 2023, leading to restatement of 2023 comparative financial data, with this discontinued operation contributing **HKD 1.66 million** in profit in H1 2023 - The Group discontinued its structured trade services business in 2023, which generated a profit of **HKD 1.66 million** in H1 2023[69](index=69&type=chunk)[73](index=73&type=chunk) [16. LOANS AND BORROWINGS](index=38&type=section&id=16.%20LOANS%20AND%20BORROWINGS) As of June 30, 2024, total loans and borrowings amounted to **HKD 5.47 billion**, with a **HKD 716 million** promissory note reclassified to current liabilities due to its February 2025 maturity, subsequently partially repaid and successfully renewed post-period end - A promissory note with a principal of **HKD 716 million**, originally a non-current liability, was reclassified to current liabilities as of June 30, 2024, due to its maturity on February 18, 2025[92](index=92&type=chunk)[93](index=93&type=chunk) - The Group's revolving short-term trade financing amounted to **HKD 3.25 billion**, supporting its commodity marketing business[92](index=92&type=chunk)[96](index=96&type=chunk) - As of the period end, assets valued at **HKD 5.41 billion** were pledged as collateral for loans and borrowings, including property, plant and equipment, bank deposits, trade receivables, and inventories[100](index=100&type=chunk) [22. EVENTS AFTER THE REPORTING PERIOD](index=50&type=section&id=22.%20EVENTS%20AFTER%20THE%20REPORTING%20PERIOD) A significant post-reporting event occurred on July 18, 2024, where the Group repaid **HKD 65.02 million** of promissory note principal and interest, successfully renewing the remaining **HKD 666 million** principal for four years until July 18, 2028, with an adjusted annual interest rate of **5.5%** - On July 18, 2024, the Company repaid part of its promissory notes and successfully renewed the remaining **HKD 666 million** principal until 2028, with the annual interest rate increasing from **5%** to **5.5%**[131](index=131&type=chunk)[132](index=132&type=chunk) [Management Discussion and Analysis](index=51&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's performance, a review of its business segments, and insights into liquidity, financial resources, and future strategies [OVERVIEW](index=51&type=section&id=OVERVIEW) In H1 2024, despite global economic challenges, group revenue grew to **HKD 20.28 billion**, though net profit declined to **HKD 136 million**, primarily due to increased interest costs in commodity marketing and volatility in soft commodities within logistics services, with company shares resuming trading on May 29, 2024 - The Company's shares, suspended from trading since April 3, 2023, resumed trading on May 29, 2024, after fulfilling all resumption guidance[133](index=133&type=chunk)[137](index=137&type=chunk) - The decline in net profit from continuing operations is primarily attributed to (i) increased interest costs in the commodity marketing segment due to extended delivery cycles from logistics disruptions, and (ii) high volatility and supply constraints in soft commodities like cocoa and coffee beans within the logistics services segment[135](index=135&type=chunk)[138](index=138&type=chunk) [BUSINESS REVIEW](index=51&type=section&id=BUSINESS%20REVIEW) This section reviews the performance of the four core business segments in H1 2024, highlighting growth in logistics services, a sharp profit decline in commodity marketing despite revenue growth, a profit decrease in financial services offset by client equity fund growth, and a decline in engineering services due to contract completions [Logistics Services](index=51&type=section&id=Logistics%20Services) The logistics services segment saw revenue grow **8.6%** and pre-tax profit increase **10.3%**, driven by strong warehousing and integrated logistics performance with full warehouse utilization and improved rates, offsetting higher freight costs from the Red Sea crisis and commodity logistics market volatility Logistics Services Performance | Indicator | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | 2,587,470 HKD Thousands | 2,383,562 HKD Thousands | +8.6% | | **Pre-tax Profit** | 107,329 HKD Thousands | 97,350 HKD Thousands | +10.3% | - Warehousing logistics business: Despite softening market rates, the Company's warehouses are currently fully utilized, with occupancy expected to remain stable over the next 12 months[140](index=140&type=chunk) - Freight logistics business: Q1 sea freight rates sharply increased due to the Red Sea crisis, impacting performance, with market recovery beginning in May, though future trends remain subject to geopolitical influences[142](index=142&type=chunk)[145](index=145&type=chunk) [Commodity Marketing](index=54&type=section&id=Commodity%20Marketing) The commodity marketing segment achieved significant growth in trading volume and revenue, with revenue surging **32.2%**, but pre-tax profit sharply declined **56.2%** year-on-year due to substantially increased interest costs from rising interest rates and extended financing cycles caused by logistics disruptions Commodity Marketing Performance | Indicator | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | 17,000,820 HKD Thousands | 12,862,945 HKD Thousands | +32.2% | | **Pre-tax Profit** | 19,312 HKD Thousands | 44,089 HKD Thousands | -56.2% | - The primary reasons for the profit decline were increased interest costs, specifically: (i) a **10.9%** rise in the average federal funds rate; and (ii) extended financing periods and higher transportation costs due to logistics disruptions prolonging metal delivery lead times[151](index=151&type=chunk) [Financial Services](index=54&type=section&id=Financial%20Services) Pre-tax profit from continuing operations in the financial services segment decreased **15.0%** to **HKD 121 million**, primarily due to weak US derivatives performance offsetting increased interest income from rising rates, though total client equity funds grew **17.5%**, and the Company is applying for ICE clearing membership to expand services - Pre-tax profit decreased **15.0%** to **HKD 121 million**, but total client equity funds increased by **17.5%**[153](index=153&type=chunk) - The Company is applying to become a clearing member of the Intercontinental Exchange (ICE), expected to be completed by end-2024, to enhance its service capabilities in global energy markets[156](index=156&type=chunk) [Engineering Services](index=55&type=section&id=Engineering%20Services) The engineering services segment experienced a **10.2%** decline in revenue and a **5.2%** decrease in pre-tax profit, mainly due to contract completions in 2023, yet the Company is confident in maintaining existing contracts and has restructured to expand into infrastructure and facilities management services despite market competition and labor shortages Engineering Services Performance | Indicator | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | 322,283 HKD Thousands | 358,715 HKD Thousands | -10.2% | | **Pre-tax Profit** | 15,025 HKD Thousands | 15,846 HKD Thousands | -5.2% | [LIQUIDITY, FINANCIAL RESOURCES AND FINANCING ACTIVITIES](index=56&type=section&id=LIQUIDITY%2C%20FINANCIAL%20RESOURCES%20AND%20FINANCING%20ACTIVITIES) As of June 30, 2024, the Group held **HKD 2.14 billion** in cash, with total debt (excluding revolving trade financing) at **HKD 4.41 billion**, and its net gearing ratio improved from **27.1%** to **22.6%**, while commodity price risk is hedged at approximately **100%** of inventory, and foreign exchange risk is managed via natural hedging with foreign currency borrowings Liquidity and Financial Resources | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Cash and Cash Equivalents** | 2,135,001 HKD Thousands | 1,998,840 HKD Thousands | | **Total Debt (excluding revolving trade financing)** | 4,406,928 HKD Thousands | 4,672,423 HKD Thousands | | **Net Debt** | 2,049,607 HKD Thousands | 2,528,508 HKD Thousands | | **Net Gearing Ratio (Net Debt/Total Capital)** | 22.6% | 27.1% | - The Group's hedging level is approximately **100%** of total commodity inventory to mitigate commodity price risk[166](index=166&type=chunk) [LOOKING FORWARD AND OUR STRATEGIES](index=58&type=section&id=LOOKING%20FORWARD%20AND%20OUR%20STRATEGIES) Looking forward, despite a cautiously optimistic global economic outlook, the Group will focus on enhancing core competencies, exploring opportunities in Hainan Free Trade Port and Southeast Asia through strategic partnerships and joint ventures to diversify risk and drive growth, as evidenced by recent agreements with Hainan Yangpu Holdings and Access World Group - The Company's strategic focus is to explore business opportunities in Hainan Free Trade Port and Southeast Asia to achieve risk diversification and business growth[171](index=171&type=chunk)[175](index=175&type=chunk) - The Company initiated strategic cooperation with Hainan Yangpu Holdings Investment Co., Ltd. in April 2024 and signed an MOU with global commodity logistics company Access World Group in May to expand its commodity marketing and logistics businesses[176](index=176&type=chunk) [Corporate Governance](index=60&type=section&id=Corporate%20Governance) This section covers the Group's interim dividend policy and compliance with corporate governance codes [Interim Dividend](index=60&type=section&id=Interim%20Dividend) The Board decided not to declare an interim dividend for the six months ended June 30, 2024, consistent with the prior year - The Board did not declare an interim dividend for 2024[180](index=180&type=chunk) [Compliance with Corporate Governance Code](index=63&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) During the reporting period, the Company largely complied with the Corporate Governance Code, with one deviation where the roles of Chairman and Chief Executive Officer were held by the same individual, Mr. Wang Kan, until June 28, 2024, a situation since rectified with the appointment of Mr. Shang Duoxu as the new CEO - The Company deviated from the Corporate Governance Code during the reporting period, as the roles of Chairman and Chief Executive Officer were held by the same person, violating Code Provision C.2.1[192](index=192&type=chunk) - This deviation ceased on June 28, 2024, when Mr. Wang Kan no longer served concurrently as Chief Executive Officer, and Mr. Shang Duoxu was appointed as the new Chief Executive Officer[193](index=193&type=chunk)[196](index=196&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 20,275,771, an increase of 27.4% compared to HKD 15,970,654 for the same period in 2023[1] - Gross profit for the same period was HKD 860,145, a slight decrease of 1.3% from HKD 876,085 in 2023[1] - Other income increased significantly to HKD 351,720, up 60.4% from HKD 219,100 in the previous year[1] - The net profit from continuing operations for the six months was HKD 136,447, down 13.4% from HKD 157,586 in 2023[2] - Basic and diluted earnings per share from continuing and discontinued operations were HKD 1.06, compared to HKD 1.18 in the prior year[3] - The report indicates a pre-tax profit for the reportable segments of HKD 262,429,000 for the six months ending June 30, 2024, compared to HKD 301,842,000 for the same period in 2023, reflecting a decrease of about 13%[20] - The total revenue for the reportable segments was HKD 20,228,398,000 for the six months ending June 30, 2024, compared to HKD 15,926,072,000 in 2023, indicating a significant increase of approximately 27.5%[19] - The net profit for the period was HKD 136,447,000, a decrease from HKD 159,243,000 in 2023, indicating a decline of about 14.3%[39] Assets and Liabilities - Total assets as of June 30, 2024, amounted to HKD 22,240,476, an increase from HKD 19,122,248 at the end of 2023[4] - Current liabilities increased to HKD 20,433,840 from HKD 16,717,618 in December 2023[5] - The net asset value as of June 30, 2024, was HKD 4,793,094, slightly down from HKD 4,798,162 at the end of 2023[6] - Trade receivables expected to be recovered within one year totaled HKD 3,606,276,000, compared to HKD 2,275,364,000 in the previous year, reflecting an increase of approximately 58.2%[34] - Trade payables and notes payable amounted to HKD 1,914,841,000, up from HKD 1,232,832,000 in December 2023, marking a significant increase of about 55.5%[36] - Other payables, deposits received, and payables totaled HKD 12,358,383,000, compared to HKD 10,504,049,000 in December 2023, representing an increase of approximately 17.6%[35] - Total debt as of June 30, 2024, was HKD 4,406,928,000, down from HKD 4,672,423,000 as of December 31, 2023[52] - The group's debt ratio (net debt to total capital) decreased to 22.6% as of June 30, 2024, compared to 27.1% as of December 31, 2023[52] Revenue Breakdown - Revenue from transportation services amounted to HKD 1,748,962,000, up from HKD 1,577,214,000, reflecting a year-on-year increase of about 10.9%[11] - Revenue from logistics services was HKD 761,617,000, compared to HKD 736,017,000 in the previous year, indicating a growth of approximately 3.5%[11] - Revenue from trading and related services surged to HKD 17,000,820,000, a substantial rise from HKD 12,862,945,000, marking an increase of around 32.5%[11] - Revenue generated from contracts with customers in mainland China was HKD 13,897,982,000, compared to HKD 10,881,421,000 in the previous year, showing a growth of approximately 27.7%[12] - The company reported a rental income of HKD 47,373,000, slightly up from HKD 44,582,000, reflecting an increase of about 6.4%[11] Expenses and Costs - The company reported a financing cost of HKD 306,603, which is an increase from HKD 247,288 in the previous year[1] - For the six months ending June 30, 2024, the interest expenses from continuing operations amounted to HKD 278,776,000, an increase of 24.1% compared to HKD 224,596,000 for the same period in 2023[23] - Employee costs, including directors' remuneration, totaled HKD 726,374,000 for the six months ended June 30, 2024, a decrease of 1.9% from HKD 740,524,000 in the same period of 2023[24] - The cost of goods sold for the six months ended June 30, 2024, was HKD 15,910,719,000, compared to HKD 13,586,612,000 for the same period in 2023, reflecting an increase of 17.0%[24] - The total tax expense for the six months ended June 30, 2024, was HKD 65,541,000, a decrease of 7.7% from HKD 70,786,000 in the same period of 2023[25] Operational Insights - The company plans to continue monitoring segment performance and resource allocation to enhance operational efficiency moving forward[19] - The logistics services segment is expected to see stable rental rates and potential increases in renewal prices, despite current market pressures[41] - The company anticipates strong performance in the second half of 2024, particularly in the food and beverage logistics sector, aligning with seasonal trends[41] - The chemical cluster in Singapore has rebounded due to increased production and regional demand, with expectations for continued growth driven by sustainability trends and capacity expansion[41] - The company is focusing on enhancing efficiency, optimizing capacity, and exploring new revenue channels in its chemical logistics operations[41] Corporate Governance and Future Outlook - The company has not applied any new accounting standards or interpretations that have not yet come into effect during the reporting period[10] - The interim financial report was authorized for publication on August 28, 2024, in accordance with the Hong Kong Listing Rules[8] - The company is exploring business opportunities in Hainan Free Trade Port and Southeast Asia, establishing strategic partnerships and joint ventures to assess potential investments[58] - The International Monetary Fund forecasts global economic growth of 3.2% in 2024 and 3.3% in 2025, indicating a cautious optimism for the future despite ongoing challenges[57] - The company is investing in digital transformation to automate processes and enhance customer experience, particularly in the retail market in Southeast Asia[47]

Financial Performance - The company reported a revenue of HK$1.2 billion for the fiscal year, representing a 15% increase year-over-year[1]. - The company reported a significant increase in revenue, achieving a total of $500 million for the fiscal year, representing a 20% year-over-year growth[10]. - For the year ended December 31, 2023, the Group's revenue was HK$37,226,295,000, a decrease of 3.8% from restated 2022 revenue of HK$38,689,030,000[69]. - The net profit for 2023 was HK$79,194,000, down 69.0% from HK$255,089,000 in 2022[86]. - The Group reported a net profit of HK$57,723,000 from continuing operations, a decline of 84.5% compared to HK$371,702,000 in 2022[86]. - EBITDA from continuing operations for 2023 was HK$1,274,210,000, down 12.9% from restated 2022 EBITDA of HK$1,462,903,000[70]. User Growth and Market Expansion - User data showed a growth of 25% in active users, reaching 2 million by the end of the year[1]. - User data showed a 15% increase in active users, reaching 2 million by the end of the fiscal year[10]. - The company is expanding its market presence in Southeast Asia, targeting a 20% market share by 2025[1]. - The company is expanding its market presence in Southeast Asia, targeting a 10% market share within the next two years[10]. Future Outlook and Guidance - The company provided a future outlook with a revenue guidance of HK$1.5 billion for the next fiscal year, indicating a projected growth of 25%[1]. - The company provided guidance for the next fiscal year, projecting revenue growth of 25% and aiming for $625 million[10]. - The global economic outlook for 2024 is projected at 3.1% growth, with the Group focusing on core industries and seeking growth opportunities in the PRC and other developing countries[74][75]. Strategic Initiatives - New product launches included a state-of-the-art logistics platform, expected to enhance operational efficiency by 30%[1]. - A strategic acquisition of a local logistics firm was completed, valued at HK$300 million, aimed at enhancing service capabilities[1]. - A strategic acquisition of a smaller tech firm was completed, enhancing the company's capabilities in artificial intelligence[10]. - The company plans to invest $100 million in infrastructure improvements over the next three years to enhance operational efficiency[10]. - The company announced a new partnership with a tech firm to integrate AI into its operations, projected to reduce costs by 15%[1]. Research and Development - Research and development expenses increased by 10%, totaling HK$150 million, focusing on innovative supply chain solutions[1]. - Research and development expenses increased by 30%, totaling $30 million, to support new technology initiatives[10]. Sustainability and Corporate Responsibility - The company is implementing sustainability initiatives, aiming for a 50% reduction in carbon emissions by 2030[1]. - The company emphasizes improving workflow quality and management efficiency in Hong Kong while fulfilling corporate social responsibility[150]. Financial Services and Performance - Financial services represented 12.65% of the total revenue for the year 2023[52]. - Financial services PBT improved by 88.4% from HK$102,360,000 in 2022 to HK$192,834,000 in 2023[115]. - The financial services and commodity marketing segments showed improved performance compared to 2022, helping to offset some negative impacts from freight logistics[86]. Logistics and Operations - Logistics services contributed 1.92% to the total turnover in 2023[52]. - The logistics group exceeded budget expectations and outperformed the previous year despite challenges in the shipping sector, including a threefold increase in container rates[90]. - Revenue from logistics services segment decreased significantly from HK$7,376,388,000 to HK$4,619,054,000, a drop of approximately 37.8%[105]. - Profit before tax (PBT) for logistics services fell over 65.5% from HK$632,809,000 to HK$218,436,000[105]. Corporate Governance - The board consists of eight directors, equally divided between four executive directors and four independent non-executive directors, ensuring a balanced composition[151]. - The company has complied with the corporate governance code, except for the deviation where the roles of chairman and CEO are held by the same individual, which the board believes ensures consistent leadership[144][145]. - The board diversity policy was revised in 2022 to achieve sustainable and balanced development, considering factors such as gender, age, and professional experience[164][165]. - The Company aims to provide sufficient notice and quality information for Board meetings to facilitate informed decision-making[186]. Employee and Workforce Management - The Group's employee count as of 31 December 2023 was 6,029, a slight decrease from 6,070 in the previous year[136][138]. - The gender ratio of the board is currently 7:1 (male to female), with the company prioritizing high-caliber candidates over achieving a balanced gender ratio[166]. - As of December 31, 2023, the gender ratio of the workforce was approximately 2:1, with over 84% of the workforce coming from the male-dominated logistics services industry[167].

Financial Performance - The total comprehensive income attributable to the company's owners for the year ended December 31, 2023, was HKD 60,400,000, compared to HKD 92,697,000 in 2022, representing a decrease of approximately 34.8%[2] - The basic and diluted earnings per share for the year ended December 31, 2023, were HKD 0.16, down from HKD 2.37 in 2022, indicating a significant decline of approximately 93.3%[3] - The total annual profit for the year ended December 31, 2023, was HKD 79,194,000, down from HKD 255,089,000 in 2022, reflecting a decrease of about 69.0%[14] - Total revenue for the group in 2023 was HKD 37,226,295, a decrease of 3.99% from HKD 38,689,030 in 2022[30] - The total revenue for the year ended December 31, 2023, was HKD 37,136,728, a decrease from HKD 38,538,993 in 2022, representing a decline of approximately 3.6%[54] - The net profit for the year was HKD 79,194,000, significantly down from HKD 255,089,000 in the previous year[113] - The net profit from continuing operations was HKD 57,723,000, down from HKD 371,702,000 in 2022[113] Asset and Liability Changes - Non-current assets decreased from HKD 6,666,101,000 in 2022 to HKD 6,315,981,000 in 2023, a reduction of about 5.2%[6] - Current assets also saw a decline from HKD 29,838,364,000 in 2022 to HKD 19,122,248,000 in 2023, a decrease of approximately 36.1%[6] - The company’s total liabilities decreased to HKD 25,438,229 in 2023 from HKD 36,504,465 in 2022, indicating a reduction of about 30.3%[69] - Total liabilities decreased from HKD 31,673,263 in 2022 to HKD 20,640,067 in 2023, representing a reduction of approximately 34%[70] - The company’s total assets in Singapore decreased from HKD 4,440,300 in 2022 to HKD 4,239,029 in 2023, a decline of approximately 5%[90] Revenue Breakdown - Revenue from transportation services decreased significantly to HKD 3,000,945, down 47.6% from HKD 5,737,638 in the previous year[30] - Logistics services revenue slightly increased to HKD 1,557,418, compared to HKD 1,543,084 in 2022, reflecting a growth of 0.9%[30] - Revenue from goods trading and related services rose to HKD 31,175,669, an increase of 4.3% from HKD 29,890,618 in 2022[30] - Revenue from the Chinese market was HKD 25,335,560, a slight decrease of 1.95% from HKD 25,841,494 in 2022[30] Operational Changes - The company has ceased operations related to certain structural trading services, which have been classified as discontinued operations[9] - The financial services segment has ceased operations for structured trade services, and the reported segment data excludes any amounts from discontinued operations[52] - The company decided to terminate its structured trade services due to ongoing disputes and legal challenges, reflecting a strategic shift[136] Cash Flow and Investments - Cash and cash equivalents increased from HKD 1,609,650,000 in 2022 to HKD 1,998,840,000 in 2023, an increase of about 24.1%[6] - The company reported a profit from joint ventures and associates amounting to HKD 634,532 in 2023, consistent with the previous year[54] - The capital expenditure for the year was HKD 4,619,054, compared to HKD 7,376,388 in 2022, showing a significant decrease of approximately 37.8%[69] Strategic Initiatives - The company has allocated resources based on the performance of reportable segments, focusing on sales and expenses generated by each segment[53] - The company is exploring business opportunities in Hainan Free Trade Port and Southeast Asian countries through strategic partnerships and joint ventures[180] - The company aims to enhance core competitiveness while promoting further collaboration among business segments[180] - The company is focusing on accelerating automation to reduce costs and improve efficiency while developing new cargo sources to diversify freight volumes and maintain market share[168] Market Outlook - The company anticipates a more optimistic outlook for the industry in 2024 due to continued economic liberalization in China[116] - The International Monetary Fund forecasts global economic growth rates of 3.1% for 2024 and 3.2% for 2025[154] Governance and Compliance - The company has complied with the corporate governance code, with some noted deviations[187] - The board believes that having the same person serve as both Chairman and CEO ensures effective strategic planning and decision-making[188] Shareholder Relations - The company expresses gratitude to shareholders, investors, customers, suppliers, and business partners for their support and trust[189] - The company did not recommend any dividend payments for the fiscal years ending December 31, 2022, and 2023[111][124] Challenges and Risks - The company faced challenges in the shipping market, with a significant decline from peak levels in 2022, leading to a drop in freight rates to pre-COVID-19 levels due to reduced demand and increased shipping capacity[167] - The company is committed to maintaining appropriate foreign currency borrowing levels to mitigate foreign exchange risks, primarily in Singapore dollars and US dollars[177]

Financial Performance - The company reported a consolidated profit of HK$XX million for the interim period, representing a YY% increase compared to the previous year[1]. - Revenue for the six months ended June 30, 2023, was HK$16,940,835, a decrease of 24.5% compared to HK$22,348,157 in the same period of 2022[21]. - Gross profit for the period was HK$882,017, down 5.3% from HK$931,102 in the previous year[21]. - Profit for the period attributable to owners of the Company was HK$135,023, an increase of 6.9% from HK$127,048 in 2022[27]. - Total comprehensive income for the period was HK$139,090, compared to HK$94,487 in the same period last year, representing a growth of 47.1%[27]. - The profit for the period ended June 30, 2023, was HK$135,023,000, contributing to a total comprehensive income of HK$115,369,000[38]. - The company reported a decrease in loans and borrowings to HK$1,492,553 from HK$1,554,779, a decline of about 4.00%[32]. - The company incurred finance costs totaling HK$247,288,000 for the six months ended June 30, 2023, compared to HK$164,823,000 in 2022, representing a significant increase[102]. Revenue Breakdown - For the six months ended June 30, 2023, total revenue was HK$16,940,835, a decrease of 24% from HK$22,348,157 in the same period of 2022[90]. - Freight services revenue was HK$1,577,214, down 53.0% from HK$3,357,929 in the previous year[67]. - Revenue from commodity trading and related services decreased by 20.3% to HK$13,833,091 from HK$17,396,028[67]. - Revenue from logistics services was HK$780,599, slightly down by 2.7% from HK$802,767[67]. - The Group's revenue from customers in the PRC was HK$11,738,582, a decline of 17.5% from HK$14,218,067[70]. - Revenue from Singapore dropped significantly by 69.9% to HK$1,384,686 from HK$4,590,332[70]. Assets and Liabilities - The total assets of the company increased to HK$HH billion, a growth of II% year-over-year[1]. - Cash and cash equivalents as of June 30, 2023, were HK$2,293,327, an increase from HK$1,691,622 at the end of 2022[30]. - Non-current assets increased to HK$6,666,101 from HK$6,442,535 at the end of 2022, reflecting a growth of 3.5%[30]. - Current liabilities increased to HK$27,522,902 from HK$20,540,552, indicating a rise of 34.0%[30]. - As of June 30, 2023, the company's net assets increased to HK$4,930,197, up from HK$4,831,202 as of December 31, 2022, representing a growth of approximately 2.05%[32]. - Total non-current liabilities decreased to HK$4,019,563 from HK$4,150,361, reflecting a reduction of about 3.16%[32]. - The company's equity attributable to owners rose to HK$4,749,972, compared to HK$4,630,000 at the end of 2022, marking an increase of approximately 2.58%[32]. Cash Flow and Financing - Cash generated from operations for the six months ended June 30, 2023, was HK$558,639,000, a decrease from HK$643,683,000 in the same period of 2022[43]. - Net cash generated from operating activities was HK$1,340,770,000, down from HK$1,698,045,000 year-over-year[43]. - The net increase in cash and cash equivalents for the period was HK$585,985,000, compared to a decrease of HK$16,007,000 in the previous year[45]. - The company reported a net cash used in financing activities of HK$1,016,677,000, compared to HK$324,075,000 in the previous year[43]. - As of June 30, 2023, total loans and borrowings amounted to HK$4,725,325,000, down from HK$5,742,652,000 as of December 31, 2022, indicating a reduction of approximately 17.7%[158]. Strategic Initiatives - The company provided a positive outlook for the next quarter, projecting a revenue growth of BB% driven by new product launches[1]. - Investment in R&D increased by CC%, focusing on innovative technologies and product enhancements[1]. - The company plans to expand its market presence in the Asia-Pacific region, targeting a market share increase of DD%[1]. - A strategic acquisition was announced, expected to enhance the company's capabilities and add EE million in annual revenue[1]. - The company is exploring partnerships with key industry players to leverage synergies and enhance competitive positioning[1]. - The company is focused on enhancing its market position through strategic initiatives, although specific new products or technologies were not detailed in the provided content[36]. Financial Management and Reporting - The interim financial report was authorized for issue on September 21, 2023, reflecting timely compliance with reporting standards[53]. - The Group has not applied any new standards or interpretations that are not yet effective for the current accounting period, indicating stability in accounting practices[61]. - The auditor's report for the year ended December 31, 2022, was qualified, indicating potential concerns regarding financial reporting[57]. - The company continues to monitor and adjust its financial strategies in response to market dynamics, focusing on risk management and asset valuation accuracy[180]. - The financial report indicates a comprehensive approach to fair value measurement, ensuring transparency and adherence to financial reporting standards[187].

[Financial Performance](index=1&type=section&id=Financial%20Performance) This section provides a comprehensive overview of the Group's financial results, including detailed income statements, balance sheets, and explanatory notes [Consolidated Financial Statements](index=1&type=section&id=Consolidated%20Financial%20Statements) For the six months ended June 30, 2023, the Group's revenue decreased by 24.2% year-on-year to HK$16.94 billion, primarily due to reduced commodity trading volumes and prices, while profit attributable to owners increased by 6.3% to HK$135 million [Consolidated Income Statement](index=1&type=section&id=Consolidated%20Income%20Statement) This statement details the Group's revenue, gross profit, and net profit for the six months ended June 30, 2023, highlighting changes from the prior year Key Income Statement Figures (Six Months Ended June 30) | Financial Metric | 2023 (HK$ '000) | 2022 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Revenue | 16,940,835 | 22,348,157 | -24.2% | | Gross Profit | 882,017 | 931,102 | -5.3% | | Profit Before Tax | 230,029 | 242,347 | -5.1% | | Profit for the Period | 159,243 | 172,208 | -7.5% | | Profit Attributable to Owners | 135,023 | 127,048 | +6.3% | | Basic and Diluted EPS (HK Cents) | 1.18 | 1.11 | +6.3% | [Consolidated Balance Sheet](index=4&type=section&id=Consolidated%20Balance%20Sheet) This statement presents the Group's assets, liabilities, and equity as of June 30, 2023, compared to December 31, 2022 Key Balance Sheet Figures | Financial Metric | As of June 30, 2023 (HK$ '000) | As of Dec 31, 2022 (HK$ '000) | | :--- | :--- | :--- | | Non-current Assets | 6,442,535 | 6,666,101 | | Current Assets | 23,047,777 | 29,838,364 | | **Total Assets** | **29,490,312** | **36,504,465** | | Current Liabilities | 20,540,552 | 27,522,902 | | Non-current Liabilities | 4,019,563 | 4,150,361 | | **Total Liabilities** | **24,560,115** | **31,673,263** | | **Net Assets** | **4,930,197** | **4,831,202** | | Equity Attributable to Owners | 4,749,972 | 4,630,000 | [Notes to the Financial Statements](index=7&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed breakdowns of the financial statements, including revenue by segment and geography, and updates on key balance sheet items and legal matters [Revenue and Segment Information](index=9&type=section&id=Revenue%20and%20Segment%20Information) This section details the Group's revenue breakdown by major product and service lines, customer location, and reportable segment performance for the six months ended June 30 Revenue by Major Product and Service Line (Six Months Ended June 30) | Service Line | 2023 (HK$ '000) | 2022 (HK$ '000) | | :--- | :--- | :--- | | Transportation services | 1,577,214 | 3,357,929 | | Logistics services | 780,599 | 802,767 | | Commodity trading and related services | 13,833,091 | 17,396,028 | | Equipment and facilities maintenance services | 352,326 | 312,188 | | Brokerage services | 320,885 | 315,631 | | Others | 76,720 | 163,614 | | **Total** | **16,940,835** | **22,348,157** | Revenue by Customer Location (Six Months Ended June 30) | Region | 2023 (HK$ '000) | 2022 (HK$ '000) | | :--- | :--- | :--- | | China | 11,738,582 | 14,218,067 | | Singapore | 1,384,686 | 4,590,332 | | South Korea | 806,008 | 651,438 | | Other Asia Pacific | 1,877,094 | 1,497,324 | | Europe | 863,374 | 1,007,878 | | Others | 271,091 | 381,118 | | **Total** | **16,940,835** | **22,348,157** | Reportable Segment Performance (Six Months Ended June 30, 2023) | Segment | External Revenue (HK$ '000) | Pre-tax Profit/(Loss) (HK$ '000) | | :--- | :--- | :--- | | Logistics Services | 2,428,144 | 98,844 | | Commodity Trading | 12,862,945 | 44,089 | | Engineering Services | 358,715 | 15,846 | | Financial Services | 1,291,031 | 144,503 | [Key Balance Sheet Items](index=15&type=section&id=Key%20Balance%20Sheet%20Items) This section provides insights into significant changes in trade receivables and payables, including post-period settlements, and an update on a legal case involving a subsidiary - Trade receivables decreased significantly to **HK$5.70 billion** from **HK$12.39 billion**[61](index=61&type=chunk)[62](index=62&type=chunk) - A major portion of trade receivables, **HK$4.09 billion (US$522.2 million)** related to 140 commodity trading transactions, was fully settled on August 29, 2023[61](index=61&type=chunk)[62](index=62&type=chunk) - Trade and other payables decreased to **HK$16.34 billion** from **HK$22.27 billion**[64](index=64&type=chunk)[65](index=65&type=chunk) - A balance of **HK$4.09 billion (US$522.2 million)** related to 140 commodity trading transactions was also fully settled on August 29, 2023[64](index=64&type=chunk)[65](index=65&type=chunk) - A legal case against subsidiary SSPL, for which a provision was made, concluded in August 2023 with an out-of-court settlement[67](index=67&type=chunk)[68](index=68&type=chunk) - An additional provision of **HK$125.1 million** was made in the previous year to reflect the agreed settlement amount for the SSPL legal case[69](index=69&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the Group's operational performance across its key business segments, including strategic initiatives and financial highlights [Overall Performance Review](index=18&type=section&id=Overall%20Performance%20Review) Despite a 24.2% revenue decrease to HK$16.9 billion due to lower commodity volumes and prices, the Group maintained resilience with a pre-tax profit of HK$230 million, a mere 5.08% decline from H1 2022 - The Group's diversified business strategy proved effective, as improved performance in financial services and commodity trading mitigated the negative impact from freight logistics services[72](index=72&type=chunk) H1 2023 Performance Summary | Metric | H1 2023 (HK$ '000) | H1 2022 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Revenue | 16,940,835 | 22,348,157 | -24.2% | | Profit Before Tax | 230,029 | 242,347 | -5.08% | [Logistics Services](index=18&type=section&id=Logistics%20Services) The Logistics Services segment's revenue and pre-tax profit fell by 43.7% and 64.1% respectively, primarily due to a sharp decline in freight logistics, while warehousing and commodity logistics showed resilience Logistics Services Performance (H1 2023 vs H1 2022) | Metric | H1 2023 (HK$ '000) | H1 2022 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,428,144 | 4,314,203 | -43.7% | | Pre-tax Profit | 98,844 | 275,160 | -64.1% | - Warehousing & Integrated Logistics: Warehouses are at full operation, with contracts being renewed at higher market rates[75](index=75&type=chunk) - The business is focusing on digitalization and automation to enhance productivity for chemical industry clients[75](index=75&type=chunk) - Freight Logistics: This sub-segment faced a complete market reversal from the previous two years, with freight rates falling below pre-pandemic levels due to reduced demand and expanded shipping capacity[79](index=79&type=chunk)[80](index=80&type=chunk) - The Group is implementing strategic changes, including strengthening freight hubs and global client relationships, to counter the downturn[80](index=80&type=chunk) - Commodity Logistics: This business showed strong performance, recording a **7.0% increase in revenue** and a **6.0% increase in EBITDA** compared to the same period last year, driven by strong performance in soft commodity warehousing and logistics services[81](index=81&type=chunk) [Commodity Trading](index=21&type=section&id=Commodity%20Trading) This segment's revenue slightly decreased by 6.9% to HK$12.86 billion, but it successfully turned a pre-tax loss of HK$13.7 million in H1 2022 into a pre-tax profit of HK$44.1 million in H1 2023 Commodity Trading Performance (H1 2023 vs H1 2022) | Metric | H1 2023 (HK$ '000) | H1 2022 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Revenue | 12,862,945 | 13,817,001 | -6.9% | | Pre-tax Profit/(Loss) | 44,089 | (13,695) | Turnaround to Profit | - The business expanded its product portfolio by commencing energy products trading[84](index=84&type=chunk) - Strategic initiatives include expanding sourcing operations in Africa and developing new product lines in refined metals (aluminum) and energy products with the support of key trading partners[85](index=85&type=chunk)[93](index=93&type=chunk) [Engineering Services](index=23&type=section&id=Engineering%20Services) Engineering Services demonstrated strong performance with an 11.3% increase in revenue to HK$358.7 million and a 31.0% rise in pre-tax profit to HK$15.8 million, driven by securing higher-value contracts Engineering Services Performance (H1 2023 vs H1 2022) | Metric | H1 2023 (HK$ '000) | H1 2022 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Revenue | 358,715 | 322,295 | +11.3% | | Pre-tax Profit | 15,846 | 12,093 | +31.0% | - The business successfully re-secured a significant contract with Changi Airport Group and renewed multiple other contracts due to excellent operational performance[98](index=98&type=chunk) [Financial Services](index=22&type=section&id=Financial%20Services) The Financial Services segment saw a strategic shift, resulting in a 66.9% revenue decrease but a significant 161.4% increase in pre-tax profit to HK$144.5 million, driven by the derivatives business Financial Services Performance (H1 2023 vs H1 2022) | Metric | H1 2023 (HK$ '000) | H1 2022 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,291,031 | 3,894,658 | -66.9% | | Pre-tax Profit | 144,503 | 55,289 | +161.4% | - The significant increase in pre-tax profit was driven by the strong performance of the derivatives business in Asia, following a strategic reallocation of resources away from lower-margin trade services[97](index=97&type=chunk) - The segment is actively expanding its geographical presence, with significant progress in establishing a presence in Dubai and Vietnam[94](index=94&type=chunk) - It is also pursuing direct clearing memberships with major global exchanges[94](index=94&type=chunk) - Investment in digitalization continues, aiming to enhance automation and improve the client onboarding and trading experience, with a retail initiative in Indonesia showing promising early results[95](index=95&type=chunk) [Liquidity and Financial Resources](index=24&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2023, the Group held HK$2.29 billion in cash and cash equivalents, with total loans and borrowings at HK$4.91 billion, a decrease from year-end 2022 Liquidity Position | Item | June 30, 2023 (HK$ '000) | Dec 31, 2022 (HK$ '000) | | :--- | :--- | :--- | | Cash and cash equivalents | 2,293,327 | 1,691,622 | | Loans and borrowings | 4,905,293 | 5,732,096 | | - Repayable within one year | 3,412,740 | 4,177,317 | [Corporate and Shareholder Information](index=24&type=section&id=Corporate%20and%20Shareholder%20Information) This section covers corporate governance practices, dividend policy, share trading status, and the Group's future strategic outlook [Dividends and Share Repurchases](index=25&type=section&id=Dividends%20and%20Share%20Repurchases) The Board of Directors did not declare an interim dividend for the six months ended June 30, 2023, and no share repurchases were made during the period - The Board has not declared an interim dividend for the six months ended June 30, 2023 (H1 2022: Nil)[108](index=108&type=chunk) - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[109](index=109&type=chunk) [Corporate Governance](index=25&type=section&id=Corporate%20Governance) The company complied with the Corporate Governance Code during the reporting period, with a noted deviation regarding the combined roles of Chairman and CEO, which the Board believes ensures consistent leadership - The company deviated from code provision C.2.1 of the Corporate Governance Code, as the roles of Chairman and Chief Executive Officer are held by the same individual, Mr. Wang Kan[110](index=110&type=chunk) - The Board believes this combined role is beneficial for consistent leadership and effective strategic planning, and that a balance of power is maintained through the experienced Board and a sufficient number of Independent Non-executive Directors[1](index=1&type=chunk) [Future Outlook and Strategy](index=24&type=section&id=Future%20Outlook%20and%20Strategy) The Group anticipates a challenging global economic environment but will focus on strengthening its core competitiveness and exploring opportunities in developing countries, particularly in China's Hainan Free Trade Port and Southeast Asia - The Group's strategy is to continue strengthening core competitiveness while seeking business opportunities in developing countries to diversify risk[105](index=105&type=chunk) - A key focus is exploring opportunities in the Hainan Free Trade Port and Southeast Asian countries through strategic cooperation and joint ventures[105](index=105&type=chunk)[107](index=107&type=chunk) [Share Trading Status](index=26&type=section&id=Share%20Trading%20Status) Trading in the company's shares on the Hong Kong Stock Exchange has been suspended since April 3, 2023, and will remain suspended until further notice - Trading in the Company's shares has been suspended on The Stock Exchange of Hong Kong Limited since 9:00 a.m. on April 3, 2023, and will remain suspended until further notice[4](index=4&type=chunk)

Financial Performance - CWT International Limited reported a revenue of HK$ 1.2 billion for the fiscal year, representing a 15% increase compared to the previous year[1]. - The company achieved a net profit of HK$ 150 million, which is a 20% increase year-over-year[1]. - The company reported a significant increase in revenue, achieving a total of $1.2 billion for the fiscal year, representing a 15% year-over-year growth[1]. - For the year ended December 31, 2022, the Group's revenue decreased by 20.8% to HK$43,899,455,000 from HK$55,448,828,000 in 2021[68]. - Profit attributable to owners for 2022 was HK$153,213,000, down from HK$208,905,000 in 2021, representing a decline of approximately 26.6%[68]. - EBITDA for the year ended December 31, 2022, was HK$1,351,937,000, a decrease from HK$1,418,107,000 in 2021, reflecting a decline of about 4.7%[72]. - The Group's profit before taxation, excluding COVID-19 relief, decreased by 15.2% to HK$362,417,000 for the year ended December 31, 2022[85]. - Net profit fell by 11.8% to HK$255,089,000, attributed to adverse commodity trading market disruptions and oversupply in the copper concentrate market[89]. User Growth and Market Expansion - User data showed a growth in active users by 25%, reaching a total of 500,000 users[1]. - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share by 2025[1]. - The company is expanding its market presence in Southeast Asia, targeting a 20% market share by 2025[5]. - The Group continues to explore market expansion opportunities in the Asia Pacific region, which contributed 12.28% of revenue[55]. Strategic Initiatives - CWT International Limited is investing HK$ 200 million in new product development, focusing on technology enhancements[1]. - CWT International Limited is considering strategic acquisitions to enhance its service offerings, with a budget of HK$ 300 million allocated for potential mergers[1]. - A strategic acquisition was completed, enhancing the company's technology capabilities and expected to generate an additional $50 million in annual revenue[6]. - The company plans to implement new operational strategies aimed at improving efficiency by 15% over the next year[8]. - The company plans to establish new revenue pillars focusing on asset management, equities, and green energy products, while exploring geographical expansion[116]. Financial Services and Risk Management - Total customer assets under management in the financial services segment increased by approximately 30% year-to-date, contributing to higher trading volumes and increased interest income[115]. - Financial services revenue fell by 62.9% to HK$5,844,957,000 for the year ended December 31, 2022, with a pre-tax loss reduced by 79.9% to HK$12,142,000[118]. - The company is focusing on improving risk management and control to mitigate existing and new risks[66]. - The company anticipates continued high market volatility, which is expected to increase trading activity in the derivatives business[117]. Corporate Governance and Management - The company has implemented a new corporate governance strategy aimed at improving operational efficiency, expected to reduce costs by 5%[1]. - The Company has complied with the corporate governance code provisions for the financial year ended December 31, 2022, with a noted deviation regarding the roles of chairman and CEO[141]. - The Board consists of seven directors, including four executive directors and three independent non-executive directors, ensuring a balance of skills and experience[150]. - The Company aims to maximize shareholder interests while fulfilling corporate social responsibility and improving management efficiency in Hong Kong[149]. - The Board will continuously review targets and timelines for achieving gender diversity based on the Group's actual situation and needs[174]. Operational Challenges and Market Conditions - The adverse impact of global supply chain disruptions and high inflation contributed to the weaker performance, particularly in the commodity marketing business[72]. - The logistics services in Singapore faced challenges due to geopolitical issues, COVID-19, and global supply chain disruptions, leading to a slowdown in external demand since August 2022[90]. - Ocean freight rates experienced a significant decline starting in Q3 2022, with expectations for a challenging year in 2023 due to decreased market demand[100]. - The commodity logistics business showed resilience, with year-on-year revenue and profit increases, reflecting the ability to adapt to evolving market conditions[102]. Employee and Board Diversity - The group had a total of 6,070 employees as of December 31, 2022, a slight decrease from 6,074 employees in the previous year[132]. - The gender ratio of the Board is 6:1 (male to female), and the workforce gender ratio is approximately 2.5:1[166][167]. - The Company appointed a female Director in July 2022 to comply with gender diversity requirements[166]. - Following the resignation of a female Director on August 7, 2023, the Company currently does not meet the gender diversity requirement set out in Rule 13.92 of the Listing Rules[168].