[Company Information](index=1&type=section&id=Company%20Information) Provides essential identification details for CNT GROUP LIMITED, including its stock code and report type - Company Name: **CNT GROUP LIMITED 北海集團有限公司**[1](index=1&type=chunk) - Stock Code: **701**[1](index=1&type=chunk) - Announcement Type: **2023 Interim Results Announcement**[1](index=1&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Presents a concise overview of the Group's financial performance and position for the six months ended June 30, 2023 Financial Highlights for the Six Months Ended June 30, 2023 | Metric | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) (Restated) | Change % | | :--- | :--- | :--- | :--- | | **Results** | | | | | Revenue | 256,288 | 321,696 | -20.3 | | Gross Profit | 81,222 | 69,882 | 16.2 | | Gross Profit Margin | 31.7% | 21.7% | 46.1 | | Loss for the Period | (6,033) | (58,812) | -89.7 | | Loss attributable to: | | | | | Equity holders of the Company | (3,315) | (46,080) | -92.8 | | Non-controlling interests | (2,718) | (12,732) | -78.7 | | Loss per share (HK Cents) Basic and diluted | (0.17) | (2.42) | -93.0 | | **Financial Position** | June 30, 2023 (HK$ Thousand) | December 31, 2022 (HK$ Thousand) | Change % | | Cash and cash equivalents and pledged deposits | 361,951 | 429,076 | -15.6 | | Bank borrowings | 263,300 | 289,116 | -8.9 | | Net asset value per share (HK$) | 0.79 | 0.83 | -4.8 | | Debt to capital ratio | 19.1% | 19.9% | -4.0 | | Shareholders' funds per share (HK$) | 0.72 | 0.76 | -5.3 | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Presents the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2023, including statements of profit or loss, comprehensive income, and financial position - The condensed consolidated interim financial statements are unaudited but have been reviewed by the Board's Audit Committee[4](index=4&type=chunk) - The financial statements cover the six months ended June 30, 2023[5](index=5&type=chunk) - Comparative figures are presented alongside those for the corresponding period in 2022[4](index=4&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) Details the Group's revenue, costs, and expenses, showing a significant reduction in loss for the period, primarily due to a fair value gain on investment properties Key Data from Condensed Consolidated Statement of Profit or Loss | Metric | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) (Restated) | | :--- | :--- | :--- | | Revenue | 256,288 | 321,696 | | Cost of sales | (175,066) | (251,814) | | Gross Profit | 81,222 | 69,882 | | Other income and gains, net | 7,627 | 7,376 | | Selling and distribution expenses | (34,455) | (46,470) | | Administrative expenses | (56,171) | (70,110) | | Fair value gains/(losses) on investment properties, net | 12,834 | (5,198) | | Finance costs | (6,509) | (3,005) | | Loss before tax | (3,485) | (58,258) | | Loss for the period | (6,033) | (58,812) | | Loss attributable to owners of the parent | (3,315) | (46,080) | | Loss per share (HK Cents) Basic and diluted | (0.17) | (2.42) | - Loss for the period significantly narrowed by **89.7%**, primarily due to a fair value gain on investment properties, reversing a prior loss[2](index=2&type=chunk)[8](index=8&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Presents the total comprehensive loss for the period, influenced by exchange differences on overseas operations, with a significant year-on-year reduction in total comprehensive loss Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Loss for the period | (6,033) | (58,812) | | Exchange differences on translation of overseas operations | (42,278) | (41,020) | | Other comprehensive loss for the period | (36,723) | (41,020) | | Total comprehensive loss for the period | (42,756) | (99,832) | | Total comprehensive loss attributable to owners of the parent | (33,205) | (79,269) | - Exchange differences on overseas operations led to an increase in other comprehensive loss, but the total comprehensive loss for the period significantly narrowed year-on-year[9](index=9&type=chunk)[10](index=10&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Provides an overview of the Group's assets, liabilities, and equity as of June 30, 2023, indicating a decrease in total assets and equity while maintaining healthy net current assets Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2023 (HK$ Thousand) | December 31, 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Total non-current assets | 1,369,961 | 1,391,219 | | Total current assets | 757,978 | 910,288 | | Total current liabilities | 555,613 | 653,245 | | Net current assets | 202,365 | 257,043 | | Total equity | 1,507,567 | 1,587,173 | | Equity attributable to owners of the parent | 1,379,290 | 1,450,569 | - Investment property value increased, but overall total non-current assets and current assets decreased[11](index=11&type=chunk) - Both total equity and equity attributable to owners of the parent decreased[12](index=12&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements, including accounting policies, changes in standards, and segment information - The condensed consolidated interim financial statements are prepared in accordance with Hong Kong Accounting Standard ("HKAS") 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("Listing Rules")[14](index=14&type=chunk) - The unaudited condensed consolidated interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2022[14](index=14&type=chunk) [Basis of Preparation and Accounting Policies](index=6&type=section&id=1.1%20Basis%20of%20Preparation%20and%20Accounting%20Policies) Outlines the basis for preparing the interim financial statements, confirming consistency with prior annual financial statements except for newly adopted HKFRS - The accounting policies adopted in the preparation of the unaudited condensed consolidated interim financial statements are consistent with those applied in the Group's annual consolidated financial statements for the year ended December 31, 2022, except for the adoption of new and revised Hong Kong Financial Reporting Standards[15](index=15&type=chunk) [Changes in Accounting Policies and Disclosures](index=6&type=section&id=1.2%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) Details the adoption of new HKFRS standards and amendments, noting that most changes have no material impact on the Group's financial position or performance - HKFRS 17 and its amendments, along with amendments to HKAS 1, HKAS 8, and HKAS 12, have been adopted[16](index=16&type=chunk) - Amendments to HKAS 8 clarify the distinction between accounting estimates and changes in accounting policies, with no impact on the Group's financial position or performance[18](index=18&type=chunk) - Amendments to HKAS 12 regarding deferred tax have no impact on the Group, as relevant deferred tax assets and liabilities are already recognized[18](index=18&type=chunk) - Amendments to HKAS 12 concerning international tax reform have no impact on the Group, as it is not within the scope of the Pillar Two Model Rules[19](index=19&type=chunk) [Segment Information](index=8&type=section&id=2.%20Segment%20Information) Divides the Group's operations into four reportable segments: paints and coatings, property investment, hotel business, and others, providing detailed financial performance and position data for each - The Group's operations are classified into four reportable operating segments: paints and coatings, property investment, hotel business, and others[21](index=21&type=chunk) - Steel product trading, previously reported under the "Steel Product Trading" segment, has been reclassified to the "Others" segment[41](index=41&type=chunk) - The board of directors of China Paint decided to re-designate property investment as one of the China Paint Group's principal businesses[41](index=41&type=chunk) Operating Segment Revenue and Results (For the six months ended June 30, 2023) | Segment | Sales to external customers (HK$ Thousand) | Other income and gains (HK$ Thousand) | Segment results (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Paints and coatings | 233,886 | 3,595 | (15,251) | | Property investment | 17,599 | 12,834 | 28,167 | | Hotel business | 4,803 | – | (527) | | Others | – | 452 | (2,074) | | **Total** | **256,288** | **16,881** | **10,315** | Operating Segment Assets and Liabilities (As of June 30, 2023) | Segment | Segment assets (HK$ Thousand) | Segment liabilities (HK$ Thousand) | | :--- | :--- | :--- | | Paints and coatings | 718,173 | 498,564 | | Property investment | 905,591 | 111,334 | | Hotel business | 282,175 | 7,311 | | Others | 68,951 | 2,777 | | **Total** | **1,974,890** | **619,986** | [Disaggregated Revenue Information from Contracts with Customers](index=11&type=section&id=Disaggregated%20Revenue%20Information%20from%20Contracts%20with%20Customers) Presents a detailed breakdown of the Group's revenue from customer contracts by product/service category, geographical market, and timing of revenue recognition Disaggregation of Revenue from Contracts with Customers for H1 2023 | Product or service category | Revenue (HK$ Thousand) | | :--- | :--- | | Sales of industrial products | 233,886 | | Hotel operations | 4,803 | | **Total revenue from contracts with customers** | **238,689** | | **Geographical markets** | | | Hong Kong | 36,834 | | Mainland China | 201,855 | | **Total revenue from contracts with customers** | **238,689** | | **Timing of revenue recognition** | | | Goods transferred at a point in time | 233,886 | | Services rendered over time | 4,803 | | **Total revenue from contracts with customers** | **238,689** | - Mainland China contributed the vast majority of revenue from customer contracts, primarily from industrial product sales[31](index=31&type=chunk) [Other Income and Gains, Net](index=14&type=section&id=Other%20Income%20and%20Gains%2C%20Net) Analyzes the Group's other income and net gains, including bank interest, government grants, and fair value adjustments, showing an overall increase in total other income Analysis of Other Income and Gains, Net | Item | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) (Restated) | | :--- | :--- | :--- | | Bank interest income | 3,580 | 1,988 | | Dividend income from financial assets at fair value through profit or loss held for trading | 8 | 132 | | Government grants | 520 | 1,313 | | Government subsidies | 2,415 | 1,364 | | Deferred income recognised | 145 | 155 | | Net gain on disposal of items of property, plant and equipment | 60 | 221 | | Net exchange differences | – | 206 | | Income refunded from early termination of lease agreements | – | 2,297 | | Net fair value losses on financial assets at fair value through profit or loss held for trading | (10) | (423) | | Net losses on trading of financial assets at fair value through profit or loss held for trading | (139) | (351) | | Others | 1,048 | 474 | | **Total** | **7,627** | **7,376** | - In the first half of 2023, the Group received government subsidies of **HK$2,415,000** from the PRC government for factory relocation and entrance modification[35](index=35&type=chunk)[44](index=44&type=chunk) - Government subsidies in the first half of 2022 primarily originated from the Hong Kong Government's "Employment Support Scheme" and "Hotel Industry Support Scheme" under the Anti-epidemic Fund[45](index=45&type=chunk) [Finance Costs](index=15&type=section&id=4.%20Finance%20Costs) Details the Group's finance costs, primarily comprising interest on bank borrowings and lease liabilities, showing a significant increase in 2023 Analysis of Finance Costs | Item | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Interest on bank borrowings | 6,284 | 2,920 | | Interest on lease liabilities | 225 | 85 | | **Total** | **6,509** | **3,005** | - Finance costs significantly increased by **116.6%** year-on-year, primarily due to higher interest on bank borrowings[47](index=47&type=chunk) [Loss Before Tax](index=15&type=section&id=5.%20Loss%20Before%20Tax) Refers to the calculation of loss before tax, with specific figures presented in the condensed consolidated statement of profit or loss - The calculation of loss before tax is presented in the condensed consolidated statement of profit or loss[48](index=48&type=chunk) [Income Tax Expense](index=16&type=section&id=6.%20Income%20Tax) Explains the Group's income tax provisions, noting no Hong Kong profits tax provision due to no taxable profits, while PRC subsidiaries pay corporate income tax at standard or preferential rates - No Hong Kong profits tax provision was made for the current period[80](index=80&type=chunk) - PRC subsidiaries are subject to a standard corporate income tax rate of **25%**, with high-tech enterprise-qualified subsidiaries enjoying a preferential rate of **15%**[80](index=80&type=chunk) [Loss Per Share Attributable to Ordinary Equity Holders of the Parent](index=16&type=section&id=7.%20Loss%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) Details the calculation of basic and diluted loss per share, showing a significant decrease due to reduced loss attributable to ordinary equity holders of the parent Loss Per Share Calculation | Metric | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the parent | 3,315 | 46,080 | | Weighted average number of ordinary shares in issue | 1,903,685,690 | 1,903,685,690 | | Basic and diluted loss per share (HK Cents) | (0.17) | (2.42) | - No diluted adjustment was made to the basic loss per share amount as unexercised share options had an anti-dilutive effect[81](index=81&type=chunk) [Dividends](index=16&type=section&id=8.%20Dividends) Reports the approval of the previous year's final dividend and the Board's decision not to declare an interim dividend for the current period - Shareholders approved a final dividend of **HK 2.0 cents** per share for the year ended December 31, 2022, totaling approximately **HK$38,074,000**[82](index=82&type=chunk) - The Board resolved not to declare an interim dividend for the six months ended June 30, 2023[82](index=82&type=chunk) [Property, Plant and Equipment](index=16&type=section&id=9.%20Property%2C%20Plant%20and%20Equipment) Provides details on the Group's capital expenditures and disposals of property, plant, and equipment, showing a significant reduction in acquisition costs for the period - For the six months ended June 30, 2023, the Group acquired items of property, plant and equipment at a cost of **HK$2,738,000**, a significant decrease from the prior period[83](index=83&type=chunk) - For the six months ended June 30, 2023, the Group disposed of items of property, plant and equipment with an aggregate net book value of **HK$847,000**[83](index=83&type=chunk) [Investment Properties](index=17&type=section&id=10.%20Investment%20Properties) Details changes in the carrying amount of investment properties, including fair value gains, transfers from owner-occupied properties, and exchange adjustments, leading to an increase in total carrying amount Changes in Carrying Amount of Investment Properties | Item | June 30, 2023 (HK$ Thousand) | December 31, 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Carrying amount at beginning of period/year | 729,079 | 601,378 | | Net fair value gains/(losses) | 12,834 | (15,391) | | Transfers from owner-occupied properties | 61,243 | 160,710 | | Exchange adjustments | (22,256) | (17,618) | | **Carrying amount at end of period/year** | **780,900** | **729,079** | - Investment property fair value shifted from loss to gain, with significant transfers from owner-occupied properties, leading to an increase in carrying amount[86](index=86&type=chunk) - Investment properties were revalued by independent professional qualified valuers using the income capitalization approach, market approach, and depreciated replacement cost approach[86](index=86&type=chunk) [Trade and Bills Receivables](index=17&type=section&id=11.%20Trade%20and%20Bills%20Receivables) Outlines the Group's credit policy and provides an aging analysis of trade and bills receivables, indicating a decrease in total receivables - The Group generally grants credit terms of one to three months to customers and closely monitors receivables to mitigate credit risk[125](index=125&type=chunk) Aging Analysis of Trade and Bills Receivables | Aging | June 30, 2023 (HK$ Thousand) | December 31, 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Within 3 months | 101,223 | 148,921 | | Over 3 months but within 6 months | 40,172 | 72,445 | | Over 6 months | 157,135 | 149,235 | | **Total** | **298,530** | **370,601** | - Total trade and bills receivables decreased, but receivables over six months increased[126](index=126&type=chunk) [Trade and Bills Payables](index=18&type=section&id=12.%20Trade%20and%20Bills%20Payables) Provides an aging analysis of trade and bills payables, showing a decrease in total payables and a reduction in bills payable pledged by time deposits Aging Analysis of Trade and Bills Payables | Aging | June 30, 2023 (HK$ Thousand) | December 31, 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Within 3 months | 88,656 | 122,567 | | Over 3 months but within 6 months | 50,934 | 76,699 | | Over 6 months | 77,465 | 61,512 | | **Total** | **217,055** | **260,778** | - Total trade and bills payables decreased, and the amount of bills payable pledged by time deposits also declined[128](index=128&type=chunk) [Share Option Scheme](index=18&type=section&id=13.%20Share%20Option%20Scheme) Details the Company's and China Paint's share option schemes, including the termination of the 2012 plan, adoption of a new 2022 plan, and vesting schedule for China Paint options - The Company's 2012 share option scheme was terminated, and a new scheme with a ten-year validity was adopted in 2022[129](index=129&type=chunk)[130](index=130&type=chunk) - On June 15, 2022, China Paint Group granted **80,000,000** share options to directors and employees under its share option scheme, with an exercise price of **HK$0.335** per share[132](index=132&type=chunk)[133](index=133&type=chunk) Vesting Schedule of China Paint Share Options (As of June 30, 2023) | Vesting Date | Vesting Percentage | | :--- | :--- | | Immediately vested on grant date | 50% | | June 14, 2023 | 20% | | June 14, 2024 | 10% | | June 14, 2025 | 10% | | June 14, 2026 | 10% | - Share option expenses for the six months ended June 30, 2023, were approximately **HK$1,224,000**, a significant decrease from the prior period[137](index=137&type=chunk) [Comparative Figures](index=20&type=section&id=14.%20Comparative%20Figures) States that certain comparative figures have been reclassified due to changes in the designation of principal businesses to align with current period presentation and disclosure requirements - Certain comparative figures have been reclassified due to changes in the designation of principal businesses to conform with the current period's presentation and disclosure requirements[138](index=138&type=chunk) [Management Discussion and Analysis](index=21&type=section&id=Management%20Discussion%20and%20Analysis) Provides a comprehensive review of the Group's business operations, financial performance, and future outlook, covering key business segments and strategic initiatives - The Group recorded a loss attributable to shareholders of **HK$3,320,000** for the first six months of 2023, a significant reduction from the prior period[73](index=73&type=chunk) - Revenue was **HK$256,290,000**, a **20.3%** year-on-year decrease; gross profit was **HK$81,220,000**, a **16.2%** year-on-year increase[74](index=74&type=chunk) - Adjusted profit was approximately **HK$9,610,000**, compared to an adjusted loss of approximately **HK$27,430,000** for the first six months of 2022[74](index=74&type=chunk) [Interim Dividend](index=21&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2023 - The Board resolved not to declare an interim dividend for the six months ended June 30, 2023[72](index=72&type=chunk) [Business Review](index=21&type=section&id=Business%20Review) Reviews the performance of the Group's principal business segments, including property investment, hotel operations, paints and coatings, and other investments, highlighting key drivers and strategic adjustments - The Group primarily engages in property investment, hotel operations, and paints and coatings businesses[72](index=72&type=chunk) - Loss attributable to shareholders significantly narrowed, primarily influenced by net fair value gains on investment properties and losses from China Paint Group[73](index=73&type=chunk) - Revenue from the paints and coatings business accounted for **91.3%** of the Group's total revenue, but decreased year-on-year[74](index=74&type=chunk) [Investment Property Business](index=22&type=section&id=Investment%20Property%20Business) The investment property portfolio expanded to 18 properties, with increased total floor area and market value, driven by property reclassification and fair value gains - The investment property portfolio increased from 17 to **18** properties, with total floor area rising to **816,452 square feet**[123](index=123&type=chunk) - The total market value of investment properties was approximately **HK$780,900,000**, an increase of **7.1%** from the end of last year[123](index=123&type=chunk) - Average occupancy rate increased from **87.7%** to **93.2%**, with total rental income rising to approximately **HK$19,220,000**[75](index=75&type=chunk) - Segment profit significantly increased to approximately **HK$28,170,000**, primarily due to net fair value gains on investment properties of approximately **HK$12,830,000**[77](index=77&type=chunk) [Properties Under Development](index=23&type=section&id=Properties%20Under%20Development) The Group's redevelopment project on Au Tau land, including heritage conservation and new facilities, has received planning approval, with the Board exploring various development options - The Au Tau land redevelopment project, including the conservation of Poon Uk, construction of recreational facilities, and an elderly home, has been approved by the Town Planning Board[60](index=60&type=chunk) - The permit is valid for **four years**, until August 2026[60](index=60&type=chunk) - The Board initially believes that selling the redevelopment project to an independent third party would be in the best interests of the Company and its shareholders[60](index=60&type=chunk) [Hotel Business](index=24&type=section&id=Hotel%20Business) The hotel business, managed by an external operator, achieved a high occupancy rate of 98%, generating approximately HK$4.8 million in revenue, with a significantly narrowed segment loss - The hotel business is managed by an operator, with an average occupancy rate of approximately **98%**[61](index=61&type=chunk) - Total revenue was approximately **HK$4,800,000**, with a segment loss of approximately **HK$530,000**, significantly narrowed from the prior period[61](index=61&type=chunk) - The recovery of international tourism and easing of travel restrictions to Hong Kong are expected to benefit room occupancy and average room rates[61](index=61&type=chunk) [Paints and Coatings Business](index=25&type=section&id=Paints%20and%20Coatings%20Business) Revenue from paints and coatings significantly decreased due to the sluggish PRC property market and reduced industrial demand, yet gross profit improved due to lower raw material costs and business revitalization efforts - Total revenue from the paints and coatings business was approximately **HK$233,890,000**, a significant year-on-year decrease of **24.6%**[65](index=65&type=chunk) - The revenue decrease was primarily due to the sluggish Mainland China property market, tightened credit control policies, and reduced demand from industrial manufacturers[67](index=67&type=chunk)[68](index=68&type=chunk) - Raw material costs as a percentage of paint sales decreased by **8.0%** to **63.2%**, although raw material prices were not proportionally affected by falling crude oil prices[89](index=89&type=chunk) - Gross profit margin for paint sales significantly increased by **34.2%** to **27.1%**, with gross profit modestly growing by **1.4%** to **HK$870,000**, benefiting from business revitalization measures and cost savings[90](index=90&type=chunk) - Selling and distribution expenses decreased by **25.7%**, and administrative expenses decreased by **17.8%**, mainly due to reductions in transportation costs, advertising, entertainment expenses, and staff costs[91](index=91&type=chunk) [Other Businesses](index=28&type=section&id=Other%20Businesses) The Group's other businesses include equity investments in a cemetery project, financial asset investments in listed securities, and the discontinued steel product trading business due to its small scale and market volatility - The Group holds a **12.5%** equity interest in Profitable Industries Limited, which is engaged in a cemetery project in Sihui, Guangdong Province, Mainland China[93](index=93&type=chunk) - Financial assets at fair value through profit or loss (listed securities) recorded net realized losses of **HK$140,000** and net unrealized losses of **HK$10,000**, a significant reduction in losses compared to the prior period[95](index=95&type=chunk) - The steel product trading business ceased operations from the end of December 2022 due to its small scale and market volatility[96](index=96&type=chunk) [Financial Review](index=29&type=section&id=Financial%20Review) Reviews the Group's liquidity, financial position, and capital structure, encompassing cash flows, borrowings, key financial ratios, and employee information - Working capital is primarily sourced from internal financial resources and external bank borrowings[98](index=98&type=chunk) [Liquidity and Financial Resources](index=29&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's cash and cash equivalents and bank borrowings both decreased, with debt-to-capital and current ratios declining but remaining healthy Liquidity and Financial Indicators | Metric | June 30, 2023 | December 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | HK$320,980,000 | HK$386,870,000 | Decrease | | Bank borrowings | HK$263,300,000 | HK$289,120,000 | Decrease | | Debt to capital ratio | 19.1% | 19.9% | Decrease | | Current ratio | 1.36 times | 1.39 times | Decrease | | Inventory turnover days | 30 days | 48 days | Decrease | | Trade and bills receivables turnover days | 211 days | 225 days | Decrease | - Bank borrowings are primarily interest-bearing at floating rates, with **100%** repayable within one year[98](index=98&type=chunk) - The Group has not used hedging instruments for foreign currency risk but will closely monitor and arrange hedging measures as needed[98](index=98&type=chunk) [Equity, Net Asset Value and Shareholders' Funds](index=30&type=section&id=Equity%2C%20Net%20Asset%20Value%20and%20Shareholders%27%20Funds) The Group's shareholders' funds, net asset value per share, and shareholders' funds per share all decreased, with exchange rate fluctuations between HKD and RMB potentially impacting operating results Equity and Net Asset Value Indicators | Metric | June 30, 2023 | December 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Shareholders' funds | HK$1,379,290,000 | HK$1,450,570,000 | Decrease | | Shareholders' funds per share | HK$0.72 | HK$0.76 | Decrease | | Net asset value per share | HK$0.79 | HK$0.83 | Decrease | - Fluctuations in the foreign currency exchange rate between HKD and RMB may significantly impact the Group's operating results[102](index=102&type=chunk) [Contingent Liabilities and Pledge of Assets](index=30&type=section&id=Contingent%20Liabilities%20and%20Pledge%20of%20Assets) Portions of the Group's property, plant and equipment, investment properties, right-of-use assets, and cash deposits are pledged as collateral for bank borrowings, lease liabilities, and bills payable - Property, plant and equipment, investment properties, right-of-use assets, and cash deposits with an aggregate net book value of approximately **HK$741,220,000** are pledged as collateral for bank borrowings, lease liabilities, bills payable, and performance guarantees[103](index=103&type=chunk) - The total outstanding secured bank borrowings amounted to approximately **HK$206,300,000**[103](index=103&type=chunk) [Employees](index=30&type=section&id=Employees) The Group's total number of employees decreased, leading to lower staff costs, while maintaining a comprehensive and competitive remuneration and benefits system - The Group had **551** employees, a decrease from the prior period[104](index=104&type=chunk) - Staff costs were approximately **HK$55,500,000**, a year-on-year decrease[104](index=104&type=chunk) - The Group maintains a comprehensive and competitive employee remuneration and benefits system, including a staff share option scheme[104](index=104&type=chunk) [Business Outlook](index=31&type=section&id=Business%20Outlook) Discusses the Group's business prospects within a gradually improving yet uncertain global economic environment, addressing challenges in the Chinese market and strategies for each business segment - Hong Kong's economy significantly improved in the first half of 2023, but the global business environment remains affected by geopolitical tensions, the Russia-Ukraine conflict, and global inflation[106](index=106&type=chunk)[112](index=112&type=chunk) - China Paint Group will continue to optimize business revitalization measures, focusing on enriching its product portfolio, enhancing operational efficiency, reducing costs, and implementing prudent risk management[107](index=107&type=chunk) [Paints and Coatings Business Outlook](index=31&type=section&id=Paints%20and%20Coatings%20Business%20Outlook) The paints and coatings business faces an uncertain outlook due to the sluggish PRC property market and declining investment, with China Paint Group strengthening its financial position by reducing short-term bank borrowings - China Paint Group's operating environment remains uncertain, affected by the sluggish Mainland China property sector and declining investment[113](index=113&type=chunk) - China Paint Group has reduced short-term bank borrowings by **10.6%** to **HK$212,040,000** to strengthen its financial position[113](index=113&type=chunk) [Investment Property Business Outlook](index=32&type=section&id=Investment%20Property%20Business%20Outlook) The property leasing market, particularly for office and residential properties, remains pessimistic in Mainland China, while Hong Kong office demand is expected to gradually improve - The office and residential property leasing market is pessimistic, affected by Mainland China's import contraction, slow export growth, and real estate debt crisis[115](index=115&type=chunk) - Demand for office space in Hong Kong continues to decline but is expected to gradually improve[115](index=115&type=chunk) - The Group will continuously review its investment property portfolio and prudently acquire new properties to generate recurring income and cash flow[115](index=115&type=chunk) [Hotel Business Outlook](index=32&type=section&id=Hotel%20Business%20Outlook) The Group's hotel business is anticipated to achieve a year-on-year recovery in 2023 due to an increase in visitor arrivals to Hong Kong - The Group's hotel business is expected to recover year-on-year in 2023 due to an increase in visitor arrivals to Hong Kong[116](index=116&type=chunk) [Material Investments and Share Dealings](index=32&type=section&id=Material%20Investments%20and%20Share%20Dealings) During the review period, the Group made no material investments, acquisitions, or disposals of subsidiaries, nor did it have plans for future capital asset additions or share dealings - No material investments were acquired, nor were there any other material acquisitions or disposals of subsidiaries during the review period[116](index=116&type=chunk) - The Board has not approved any other plans for material investments or additions of capital assets[116](index=116&type=chunk) - Neither the Company nor any of its subsidiaries bought or redeemed any shares of the Company[117](index=117&type=chunk) [Corporate Governance](index=33&type=section&id=Corporate%20Governance) Reaffirms the Company's commitment to sound corporate governance practices, adherence to the Corporate Governance Code, and directors' compliance with the Model Code for securities transactions - The Company is committed to establishing best corporate governance practices suitable for the Group's business, applying the principles and complying with the code provisions of the Corporate Governance Code set out in Appendix 14 Part 2 of the Listing Rules[119](index=119&type=chunk) - The Company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than those set out in the Model Code in Appendix 10 of the Listing Rules[120](index=120&type=chunk) - All directors confirmed compliance with the standards set out in the Model Code and the Company's own code for the six months ended June 30, 2023[120](index=120&type=chunk) - The Board of Directors comprises executive directors, non-executive directors, and independent non-executive directors[121](index=121&type=chunk)

[Supplemental Announcement Regarding the 2022 Annual Report](index=1&type=section&id=Supplemental%20Announcement%20Regarding%20the%202022%20Annual%20Report) This announcement supplements the 2022 Annual Report, detailing updates to share option schemes for Beihai Group and China Paint Group [Beihai Group Limited Share Option Scheme](index=1&type=section&id=Beihai%20Group%20Limited%20Share%20Option%20Scheme) This section details changes to Beihai Group's share option schemes, including the termination of the 2012 Scheme and adoption of the 2022 Scheme [2012 Scheme](index=1&type=section&id=2012%20Scheme) The 2012 Scheme, valid for ten years, was terminated by shareholders on June 2, 2022, preventing further option grants - The **2012 Scheme** was terminated on **June 2, 2022**, and no further options could be granted by year-end[2](index=2&type=chunk) [2022 Scheme](index=1&type=section&id=2022%20Scheme) The 2022 Scheme was adopted on June 2, 2022, with 190,368,569 options available for grant by year-end 2022 Scheme Details | Item | Details | | :--- | :--- | | Scheme Name | 2022 Scheme | | Adoption Date | June 2, 2022 | | Number of Options Available for Grant at 2022 Year-End | 190,368,569 options | [Beihai Remuneration Committee](index=2&type=section&id=Beihai%20Remuneration%20Committee) The Beihai Remuneration Committee reviewed and approved the remuneration policy and the adoption of the 2022 Scheme during the year - The **Beihai Remuneration Committee** reviewed and approved the remuneration policy and the adoption of the **2022 Scheme** during the 2022 financial year[6](index=6&type=chunk) [China Paint Group Limited Share Option Scheme](index=2&type=section&id=China%20Paint%20Group%20Limited%20Share%20Option%20Scheme) China Paint Group granted 80 million share options to directors and employees under its scheme, aiming to reward contributions without performance targets [China Paint Scheme Overview](index=2&type=section&id=China%20Paint%20Scheme%20Overview) The China Paint Scheme, adopted in 2020, had 100 million options available at the start of 2022, with 20 million remaining by year-end China Paint Scheme Option Availability | Item | Number of Options | | :--- | :--- | | Available for Grant as of January 1, 2022 | 100,000,000 options | | Available for Grant as of December 31, 2022 | 20,000,000 options | [Summary of Matters Reviewed by China Paint Remuneration Committee Regarding China Paint Scheme](index=2&type=section&id=Summary%20of%20Matters%20Reviewed%20by%20China%20Paint%20Remuneration%20Committee%20Regarding%20China%20Paint%20Scheme) The China Paint Remuneration Committee approved the grant of 80 million options, with 50% immediate vesting, to reward contributions and incentivize service without performance targets - For the year ended December 31, 2022, China Paint granted **80,000,000 share options** to three directors and five employees[8](index=8&type=chunk) - Of the 80 million options granted, **50% (40 million options)** vested and became immediately exercisable on the grant date of **June 15, 2022**[8](index=8&type=chunk) - The **China Paint Remuneration Committee** determined that the option grants aimed to reward and recognize grantees' contributions and incentivize continued service, thus **no performance targets** were attached[10](index=10&type=chunk)[13](index=13&type=chunk) - The options do not include a clawback mechanism, but granted options will **immediately lapse** if employment is terminated due to **serious misconduct**[11](index=11&type=chunk)[14](index=14&type=chunk) [Conclusion](index=4&type=section&id=Conclusion) This announcement provides supplementary information to the 2022 Annual Report, with all other content remaining unchanged - This announcement serves as supplementary information and does not affect other content in the **2022 Annual Report**, which otherwise remains unchanged[12](index=12&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任 何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 CNT GROUP LIMITED 北 海 集 團 有 限 公 司 （於百慕達註冊成立之有限公司） （股份代號：701） 截至二零二二年十二月三十一日止年度之 業績公佈 及 建議修訂現有公司細則 財務摘要 截至十二月三十一日止年度 二零二二年 二零二一年 變動 千港元 千港元 業績 （經重列） % 收入 665,591 885,473 -24.8 毛利 156,162 200,585 -22.1 毛利率 23.5% 22.7% 3.5 本年度虧損 (118,989) (35,428) 235.9 應佔虧損： 本公司股東 (94,081) (20,633) 356.0 非控股權益 (24,908) (14,795) 68.4 每股虧損（港仙） 基本及攤薄 (4.94) (1.08) 357.4 ...

Financial Performance - Revenue for the six months ended June 30, 2022, was HKD 319,942,000, a decrease of 26.1% compared to HKD 432,665,000 for the same period in 2021[6]. - Gross profit for the same period was HKD 68,128,000, down 37.5% from HKD 109,006,000 in 2021[6]. - The net loss for the period was HKD 58,812,000, compared to a profit of HKD 198,000 in the previous year[8]. - The total comprehensive loss for the period was HKD 99,832,000, compared to a total comprehensive income of HKD 7,466,000 in 2021[8]. - For the six months ended June 30, 2022, the company reported a total comprehensive loss of HKD 99,832,000, compared to a loss of HKD 79,269,000 for the same period in 2021, reflecting an increase in losses of approximately 25.0%[14]. - The company reported a pre-tax loss of HKD 58,258,000 for the six months ended June 30, 2022, compared to a pre-tax profit of HKD 1,962,000 for the same period in 2021[37]. - The company reported a loss attributable to shareholders of HKD 46,080,000 for the first half of 2022, compared to a profit of HKD 4,290,000 in the same period of 2021, marking a significant decline[100]. Assets and Liabilities - Total assets as of June 30, 2022, were HKD 1,587,261,000, down from HKD 1,717,049,000 at the end of 2021[10]. - Current liabilities totaled HKD 631,030,000, a decrease from HKD 724,165,000 in the previous year[10]. - The company's equity attributable to owners of the parent was HKD 1,238,286,000, down from HKD 1,355,629,000 at the end of 2021[12]. - Total liabilities as of June 30, 2022, were HKD 668,828,000, compared to HKD 759,282,000 as of December 31, 2021, indicating a reduction of 11.9%[35]. - The group's total equity as of June 30, 2022, was HKD 1,428,660,000, down from HKD 1,546,000,000 as of December 31, 2021[135]. Cash Flow and Liquidity - The company reported a decrease in cash and cash equivalents to HKD 338,443,000 from HKD 455,165,000 in the previous year[10]. - The company's cash flow from operating activities showed a net outflow of HKD 74,916,000 for the six months ended June 30, 2022, compared to an outflow of HKD 69,489,000 in the previous year, indicating a decline of about 7.0%[18]. - The total cash and cash equivalents at the end of the period were HKD 338,443 thousand, down from HKD 387,976 thousand at the end of June 2021[20]. - The company experienced a decrease in cash and cash equivalents of HKD (108,637) thousand for the six months ended June 30, 2022, compared to a decrease of HKD (115,835) thousand in the same period of 2021[20]. - The company's cash and cash equivalents decreased by HKD 16,443,000 during the reporting period, reflecting challenges in liquidity management[18]. Revenue Streams - Sales of paint products amounted to HKD 310,152,000, down from HKD 403,797,000, representing a decline of 23.1% year-over-year[39]. - The hotel business generated revenue of HKD 1,027,000, which was not present in the previous year's report, indicating new revenue streams[39]. - The steel product trading segment generated revenue of HKD 636,000, significantly lower than HKD 13,063,000 in the previous year, marking a decrease of 95.1%[39]. - The rental income from investment properties was HKD 8,127,000, down from HKD 15,805,000, reflecting a decline of 48.6% year-over-year[39]. Operational Performance - The company’s operating profit before changes in working capital was reported at HKD (30,790,000) for the six months ended June 30, 2022, compared to HKD 6,273,000 in the previous year, indicating a deterioration in operational performance[18]. - The company experienced a significant decrease in trade receivables, which reduced by HKD 12,592,000 during the reporting period, compared to an increase of HKD 19,559,000 in the previous year[18]. - The average occupancy rate of investment properties decreased to 87.7% in the first half of 2022 from 96.7% in the same period of 2021[118]. Stock Options and Corporate Governance - The company has not granted any stock options under the 2012 plan as of June 30, 2022, and the 2012 plan has been terminated[70]. - A new stock option plan was adopted on June 2, 2022, which will remain effective for ten years, expiring on June 1, 2032[71]. - A total of 80,000,000 stock options were granted on June 15, 2022, with an exercise price of HKD 0.335 per share[72]. - The company has adhered to the corporate governance code as per the listing rules during the six months ending June 30, 2022[170]. Future Outlook - The group plans to launch new paint products with fireproof and antiviral technologies in the second half of 2022[142]. - The group aims to streamline its paint and coating product offerings and will temporarily cease production of several less popular products over the next two years[142]. - The office rental market in Hong Kong is expected to stabilize in the second half of 2022, with demand from small and medium enterprises improving as pandemic restrictions ease[145].

Financial Performance - In 2021, CNT Group's revenue from the paint and coating business increased by 17.6% to approximately HKD 838.07 million, compared to HKD 712.89 million in 2020[7]. - Total revenue for the year ended December 31, 2021, was HKD 881.02 million, reflecting a 12.7% increase from HKD 782.73 million in 2020[8]. - The group's gross profit decreased by 20.8% to HKD 195.44 million in 2021, down from HKD 247.00 million in 2020[8]. - The loss attributable to shareholders significantly reduced to HKD 20.63 million in 2021, compared to HKD 94.24 million in 2020[8]. - Revenue for the year was approximately HKD 881,020,000, representing a 12.7% increase from the previous year[66]. - Gross profit for the year was approximately HKD 196,130,000, a decrease of 20.8% compared to the previous year, with the gross margin declining from 31.7% to 22.3%[66]. Revenue Breakdown - The paint and coating segment generated revenue of approximately HKD 838,070,000, accounting for 95.1% of total revenue, with a 15.5% increase year-over-year[67]. - The property investment segment recorded revenue of approximately HKD 29,550,000, contributing 3.4% to total revenue, with a significant increase in segment profit to approximately HKD 45,390,000 from a loss of HKD 63,370,000 last year[68]. - The steel trading segment reported revenue of HKD 13,400,000, a decrease of 63.8% year-over-year, attributed to reduced demand and intense competition[71]. Market Conditions - The global economic growth is expected to slow to 4% in 2022 and further to 3.5% in 2023 due to ongoing challenges from the pandemic and geopolitical tensions[10]. - The anticipated economic growth for Hong Kong in 2022 is projected to be between 2.0% and 3.5%[6]. - The overall market for commercial properties in Hong Kong is expected to see a rental increase of 5% in 2022, following a 5.2% decline in 2021[1]. Investment Property Performance - The group's investment property revenue decreased by 6.4% to approximately HKD 29.55 million in 2021, down from HKD 31.57 million in 2020[7]. - The fair value gain from the investment property portfolio was approximately HKD 15.38 million in 2021, a significant improvement from a fair value loss of HKD 93.88 million in 2020[7]. - The total value of the group's investment properties as of December 31, 2021, was approximately HKD 601,380,000, a decrease of 28.4% from HKD 840,180,000 in 2020[39]. Operational Challenges - The company's sales cost as a percentage of revenue rose from 69.7% in 2020 to 80.2% in 2021, impacting profitability due to rising raw material prices[19]. - Revenue in Hong Kong decreased by approximately 1.5% for the year ended December 31, 2021, following a 9.4% decline in 2020, primarily due to project delays[27]. - The group faces financial risks due to interest rate fluctuations affecting interest-bearing financial assets and liabilities, primarily from bank deposits and floating-rate bank borrowings[87]. Corporate Governance - The board of directors is committed to good corporate governance practices, with regular meetings to discuss overall strategy and performance[105]. - All independent non-executive directors have confirmed their independence according to the listing rules, ensuring a diverse range of expertise on the board[102]. - The audit committee held two meetings during the year to review financial statements and the effectiveness of the group's risk management and internal control systems[114]. ESG and Sustainability - The company presented its ESG report for the year ending December 31, 2021, outlining policies and performance in environmental and social areas[140]. - The company emphasizes the importance of a robust ESG strategy to create investment value and long-term returns for stakeholders[154]. - The management team actively supported the company's sustainable development strategies and objectives, achieving certain results related to environmental and social key performance indicators[152]. Employee Welfare - The company has implemented a five-day workweek to promote work-life balance for employees[194]. - No layoffs occurred during the COVID-19 pandemic, and employee compensation and benefits remained unchanged[195]. - The company emphasizes continuous professional development and has a long-term training strategy for employees[199].

Financial Performance - Revenue for the six months ended June 30, 2021, was HKD 432,665,000, representing an increase of 47.3% compared to HKD 293,904,000 for the same period in 2020[14] - Gross profit for the same period was HKD 109,006,000, up 14.6% from HKD 95,085,000 in 2020[14] - The company reported a profit before tax of HKD 1,962,000, a significant recovery from a loss of HKD 67,480,000 in the previous year[14] - Net profit for the period was HKD 198,000, compared to a loss of HKD 68,675,000 in 2020, indicating a turnaround in performance[14] - The company reported a basic and diluted earnings per share of HKD 0.23, recovering from a loss per share of HKD 3.33 in the previous year[14] - Other comprehensive income for the period was HKD 7,268,000, compared to a loss of HKD 15,547,000 in 2020, reflecting improved performance in foreign exchange[16] - For the six months ended June 30, 2021, the total comprehensive income attributable to the owners of the parent was HKD 7,523,000, compared to HKD 21,650,000 for the same period in 2020, representing a decrease of approximately 65.2%[22] - The company reported a pre-tax profit of HKD 1,962,000 for the six months ended June 30, 2021, compared to a pre-tax loss of HKD 67,480,000 in the same period of 2020[46] - The group reported a pre-tax profit of HKD 4,292,000 for the six months ended June 30, 2021, compared to a loss of HKD 63,450,000 in the same period of 2020[63] - The company recorded a profit attributable to shareholders of HKD 4,290,000 for the first six months of 2021, compared to a loss of HKD 63,450,000 in the same period of 2020[101] Assets and Liabilities - The total assets as of June 30, 2021, were HKD 1,739,641,000, slightly down from HKD 1,773,577,000 at the end of 2020[18] - Current assets amounted to HKD 1,028,118,000, a decrease from HKD 1,090,790,000 at the end of 2020[18] - The company's total equity attributable to the owners of the parent was HKD 1,366,392,000, down from HKD 1,394,303,000 at the end of 2020[20] - The company's total equity as of June 30, 2021, was HKD 1,700,021,000, an increase from HKD 1,556,761,000 as of December 31, 2020, reflecting a growth of about 9.2%[22] - The company's total liabilities as of June 30, 2021, were not explicitly detailed but can be inferred from the equity and cash flow statements[22] - Total liabilities as of June 30, 2021, were HKD 647,280,000, down from HKD 663,078,000 at the end of 2020, reflecting a reduction of 2.4%[44] Cash Flow and Financing - The net cash used in operating activities for the six months ended June 30, 2021, was HKD 69,489,000, compared to HKD 29,624,000 for the same period in 2020, indicating a significant increase in cash outflow[29] - The company experienced a significant increase in interest paid, amounting to HKD 2,804,000 for the period, compared to HKD 3,786,000 in the previous year[29] - The company’s investment cash flow for the six months ended June 30, 2021, was a net outflow of HKD 11,545,000, contrasting with a net inflow of HKD 8,761,000 in the same period of 2020[29] - The total cash and cash equivalents at the end of the period were HKD 387,976 thousand, down from HKD 408,819 thousand at the end of June 2020, representing a decrease of about 5.3%[31] - The net cash outflow for cash and cash equivalents was HKD (115,835) thousand for the six months ended June 30, 2021, compared to HKD (52,586) thousand for the same period in 2020, reflecting a significant increase in cash outflow[31] - The total cash flow from financing activities included new bank loans of HKD 104,111 thousand and repayment of bank loans of HKD (96,255) thousand for the six months ended June 30, 2021[31] - The total bank borrowings as of June 30, 2021, were HKD 277,550,000, compared to HKD 269,690,000 as of December 31, 2020, with a debt-to-equity ratio of 17.8%[124] Revenue Segmentation - Sales of paint products accounted for HKD 403,797,000, a significant increase from HKD 267,220,000, reflecting a growth of 50.9%[47] - The paint and coating business accounted for 93.3% of total revenue in the first half of 2021, compared to 90.9% in the first half of 2020[102] - Revenue from sales to construction and renovation contractors in mainland China increased by 80.5% to HKD 172,860,000 in the first half of 2021, compared to HKD 95,780,000 in the same period of 2020[107] - Revenue from water-based paint and coating products rose by 61.3% to HKD 187,850,000, accounting for 46.5% of total revenue in the first half of 2021, up from 43.6% in the same period of 2020[108] - The revenue from the steel trading business for the first six months of 2021 was HKD 13,060,000, an increase of 16.2% compared to HKD 11,240,000 in the same period of 2020[119] Expenses and Costs - The cost of sold inventory increased to HKD 323,659,000 for the six months ended June 30, 2021, up 62.8% from HKD 198,819,000 in 2020[59] - Selling and distribution expenses rose by 22.2% to HKD 52,620,000, while administrative expenses increased by 3.9% to HKD 54,540,000 in the first half of 2021[112] - Raw material costs surged by 72.3% in the first half of 2021, outpacing overall revenue growth of 51.1%[110] - Gross profit increased by 16.5% to HKD 92,320,000 in the first half of 2021, despite a decline in gross margin from 29.7% to 22.9% due to rising raw material prices[111] Investment Properties - The total fair value of investment properties as of June 30, 2021, includes a net fair value gain of HKD 15,539,000 for the six months ended[77] - The carrying value of investment properties increased to HKD 857,886,000 from HKD 840,182,000 at the end of 2020, representing a growth of approximately 2.1%[68] - The average occupancy rate for investment properties reached 96.7% in the first half of 2021, up from 95.6% in the same period of 2020[115] - Fair value gains from investment properties amounted to HKD 15,540,000 in the first half of 2021, a significant recovery from a fair value loss of HKD 54,720,000 in the same period of 2020[115] Market Outlook and Strategy - The company anticipates that the paint and coatings industry will continue to develop steadily despite challenges such as rising raw material prices due to increased crude oil prices and strong manufacturing demand[133] - The company plans to enhance its production facilities and capacity for paint and coatings products to ensure reliable and high-quality supply[134] - The company will continue to explore opportunities for business development and acquisitions in the paint and coatings sector in mainland China[134] - The company remains cautiously optimistic about the stable growth of the real estate market in mainland China, despite a challenging economic environment[138] - The company plans to continue reviewing its investment property portfolio and is cautious in acquiring new properties that can generate stable income and capital appreciation potential[116]

Financial Performance - For the year ended December 31, 2020, the group's total revenue was approximately HKD 781.51 million, a slight decrease of 3.3% compared to HKD 809.54 million in 2019[10]. - The gross profit for the year increased to approximately HKD 260.10 million, representing an increase of 11.7% from HKD 234.09 million in 2019[10]. - The group recorded a loss attributable to shareholders of approximately HKD 94.24 million for the year, compared to a profit of HKD 234.79 million in 2019[10]. - In 2020, the total revenue of the company was stable, decreasing only by 0.1% compared to 2019, with industrial paint and general paint sales decreasing by 5.8% and 9.8% respectively, while construction paint sales increased by 10.4%[20]. - The company recorded a loss attributable to shareholders of approximately HKD 10.8 million, significantly reduced from a loss of about HKD 28.04 million in the previous year, indicating effective business revitalization measures[32]. - The company reported a loss attributable to shareholders of approximately HKD 94.24 million for the year, compared to a profit of HKD 234.79 million in the previous year[61]. - Revenue for the year was approximately HKD 781.51 million, a decrease of 3.3% compared to the previous year[61]. - Gross profit for the year was approximately HKD 247.69 million, an increase of 11.7%, with the gross margin rising from 27.4% in 2019 to 31.7% in 2020[61]. Revenue Breakdown - The paint and coating business generated revenue of approximately HKD 712.89 million, a slight decrease of 0.1% from HKD 713.33 million in 2019[8]. - The property investment business generated revenue of approximately HKD 31.57 million, up from HKD 22.52 million in 2019[8]. - The steel trading business saw a significant revenue decline of 48.6% compared to the previous year due to intense competition and a weak domestic economy[8]. - Revenue from construction paint products in mainland China grew by 14.7% in 2020, despite the construction industry's growth rate declining to 3.5% from 5.6% in 2019[17]. - Revenue from industrial manufacturers decreased significantly by 21.6% in 2020, primarily due to negative growth in the general manufacturing sector[19]. - Revenue from Hong Kong property and infrastructure contractors decreased by 32.0% in 2020, attributed to delays in material delivery and project disruptions caused by the COVID-19 pandemic[28]. - The paint and coating products segment generated revenue of approximately HKD 712.89 million, accounting for 91.2% of total revenue, with a slight decrease of 0.1% year-on-year[64]. - The property investment segment recorded revenue of approximately HKD 31.57 million, accounting for 4.0% of total revenue, with a significant loss of approximately HKD 63.37 million compared to a profit of HKD 267.43 million in the previous year[65]. - The steel products trading segment generated revenue of HKD 37.05 million, a decrease of 48.6% year-on-year, primarily due to reduced demand and economic weakness in mainland China[66]. Market Outlook - The group anticipates a GDP growth rate of 8.1% for mainland China and 3.7% for Hong Kong in the post-COVID-19 period[11]. - The demand for paint and coating products is expected to grow steadily, particularly in the manufacturing and construction sectors, as well as in the real estate industry in mainland China[11]. - The company remains cautiously optimistic about the stable development of the real estate market in mainland China, despite strict government policies[58]. Operational Strategies - The company plans to continue enhancing internal controls and risk management systems while improving production efficiency to navigate the challenging business environment[11]. - The board will continuously review the investment property portfolio and consider opportunities for acquiring suitable investment properties to generate recurring income[12]. - The company plans to enhance production capacity at its Shenzhen and Zhongshan facilities to better serve existing and potential customers in the Greater Bay Area[35]. - The company will actively seek opportunities for business development and acquisitions in the paint industry in mainland China[56]. - The company aims to balance short-term capital needs with long-term financing strength through strategic property holdings and potential sales of investment properties[40]. Corporate Governance - The company has adhered to corporate governance codes and principles throughout the year ended December 31, 2020[93]. - The board consists of 6 independent non-executive directors, with 3 possessing appropriate professional accounting or financial management qualifications[95]. - The board regularly holds meetings to discuss overall strategy, operational and financial performance, and other important matters[98]. - The company has adopted a board diversity policy to enhance the efficiency of the board[100]. - The audit committee held two meetings during the year to review the financial statements and the effectiveness of the group's risk management and internal control systems[106]. - The company has established a risk management and internal control system aimed at enhancing operational efficiency and ensuring the accuracy of financial reporting[111]. - The company has a policy for disclosing inside information to comply with listing rules and securities regulations[114]. Environmental and Social Responsibility - The company has implemented a comprehensive environmental policy focusing on reducing emissions and improving energy efficiency, aiming to balance operational efficiency with environmental protection[146]. - The company has established measures to save energy, including encouraging employees to use energy-efficient appliances and reduce air conditioning usage, contributing to overall energy efficiency[152]. - The company has maintained compliance with environmental protection laws in both mainland China and Hong Kong, ensuring adherence to regulations[147]. - The company encourages employees to conserve water and has implemented measures to reduce unnecessary water usage, reflecting its commitment to environmental sustainability[154]. - The company has committed to community service and environmental protection, aligning its business goals with stakeholder expectations[141]. - The company emphasizes its commitment to reducing negative environmental impacts through resource conservation measures, including employee education on environmental protection[157]. Employee Welfare - Employee compensation is competitive, regularly reviewed to meet market standards, with benefits including medical insurance and paid leave[162]. - The company maintains a five-day workweek to promote work-life balance and has not laid off employees during the COVID-19 pandemic, keeping compensation stable[164]. - Health and safety measures are prioritized, including comprehensive precautions against COVID-19, such as providing masks and hand sanitizers[168].

Revenue and Profitability - Revenue for the six months ended June 30, 2020, was HKD 293,904,000, a decrease of 19.6% compared to HKD 365,202,000 in the same period of 2019[6] - The company reported a loss before tax of HKD 67,480,000, compared to a profit of HKD 429,034,000 in the previous year[6] - Net loss attributable to equity holders of the parent was HKD 63,450,000, compared to a profit of HKD 440,062,000 in the same period of 2019[6] - Basic and diluted loss per share was HKD 3.33, compared to earnings per share of HKD 23.12 in 2019[6] - The company reported a pre-tax loss of HKD 58,716 for the six months ended June 30, 2020, compared to a profit of HKD 429,034 in the same period of 2019[184] - The group reported a loss attributable to equity holders of the parent of HKD 63,450,000 for the six months ended June 30, 2020, compared to a profit of HKD 440,062,000 for the same period in 2019[195] Assets and Liabilities - Total assets as of June 30, 2020, were HKD 1,689,372,000, down from HKD 1,814,260,000 at the end of 2019[10] - Current assets decreased to HKD 873,282,000 from HKD 934,140,000 in the previous year[10] - The company’s cash and cash equivalents were HKD 408,819,000, down from HKD 465,374,000 at the end of 2019[10] - Total liabilities of the company as of June 30, 2020, were HKD 1,662,004,000, compared to HKD 1,651,068,000 as of January 1, 2020, showing an increase of about 0.7%[14] - Total liabilities as of June 30, 2020, were HKD 493,406, compared to HKD 511,563 as of December 31, 2019, indicating a reduction in liabilities[180] Equity and Comprehensive Income - Total equity decreased to HKD 1,662,004,000 from HKD 1,786,800,000 at the end of 2019[12] - As of June 30, 2020, the total equity attributable to the owners of the parent company was HKD 1,537,052,000, a decrease from HKD 1,651,068,000 as of January 1, 2020, representing a decline of approximately 6.9%[14] - The company reported a total comprehensive income of HKD 438,746,000 for the six months ended June 30, 2020, compared to HKD 426,660,000 for the same period in 2019, indicating a year-over-year increase of about 2.5%[14] - The company’s total comprehensive income for the period included a loss of HKD 12,563,000 from other comprehensive income, reflecting challenges in the market[14] Cash Flow and Investments - Operating cash flow before changes in working capital for the six months ended June 30, 2020, was HKD 3,708,000, compared to a loss of HKD 41,328,000 in the same period of 2019[167] - Net cash used in operating activities for the six months ended June 30, 2020, was HKD (29,624,000), a decrease from HKD 21,210,000 in 2019[167] - Net cash flow from investing activities for the six months ended June 30, 2020, was HKD 8,761,000, significantly lower than HKD 325,540,000 in the previous year[169] - The company’s investment in properties, plant, and equipment resulted in cash outflows of HKD 6,821,000 for the six months ended June 30, 2020[169] Dividends and Share Structure - The company declared and paid a final dividend of HKD 2,500,000 for the year 2019, consistent with the previous year's dividend[14] - The group did not declare an interim dividend for the six months ended June 30, 2020, compared to no dividend declared for the same period in 2019[199] - The company’s total issued shares remained at 190,369,000 as of June 30, 2020, unchanged from the previous reporting period[14] - The group’s average number of ordinary shares issued was 1,903,685,690 for both periods, indicating no change in share structure[195] Market and Operational Performance - Sales of paint products amounted to HKD 267,220, down from HKD 305,877, representing a decline of 12.6%[184] - Rental income from investment properties increased to HKD 15,444, up 67.5% from HKD 9,218 in the previous year[184] - The cost of sold inventory for the six months ended June 30, 2020, was HKD 198,819,000, down from HKD 274,847,000 in 2019, representing a decrease of approximately 27.6%[193] - The group incurred impairment losses on property, plant, and equipment amounting to HKD 5,011,000 for the six months ended June 30, 2020, compared to no impairment in the same period of 2019[200] Compliance and Regulatory Matters - The financial statements were prepared in accordance with Hong Kong Financial Reporting Standards, ensuring compliance with relevant regulations[171] - The group’s tax expense for the period was nil due to no taxable profits generated in Hong Kong, while the applicable tax rate in mainland China was 25%[194]

Financial Performance - CNT Group Limited's revenue for the year ended December 31, 2019, was approximately HKD 807.92 million, a slight decrease of 2.9% compared to HKD 831.36 million in 2018[9]. - The gross profit for the group increased to approximately HKD 43.23 million, a rise of 24.2% compared to the previous year's gross profit[9]. - The group's net profit attributable to shareholders for 2019 was approximately HKD 234.79 million, a turnaround from a loss of HKD 25.09 million in 2018[9]. - The overall revenue of the company increased by 15.6% in HKD terms, and by 20.2% in local currency terms for the year ending December 31, 2019[19]. - The classified profit for the year was approximately HKD 267,430,000, significantly up from HKD 106,990,000 in the previous year, primarily due to the sale of a subsidiary holding the Sai Kung property[35]. - The group recorded a profit attributable to shareholders of approximately HKD 234,790,000, compared to a loss of approximately HKD 25,090,000 in the previous year[61]. - Total revenue for the year was approximately HKD 807,920,000, a decrease of 2.9% compared to last year[61]. - Gross profit for the year was approximately HKD 221,680,000, an increase of 24.2%, with a gross margin rising from 21.5% in 2018 to 27.4% in 2019[61]. - Operating profit for the year was HKD 230.650 million, compared to an operating loss of HKD 75.564 million in the previous year[196]. - The net profit for the year was HKD 227.903 million, a significant recovery from a loss of HKD 60.288 million in 2018[196]. Revenue Breakdown - The revenue from the paint and coating business, operated by the subsidiary China Paint Group Limited, was approximately HKD 713.33 million, representing a 15.6% increase from HKD 617.25 million in 2018[8]. - The industrial paint and coating products accounted for 41.0% of total revenue in 2019, down from 46.2% in 2018[15]. - The property investment business contributed approximately HKD 22.52 million in revenue, slightly up from HKD 22.37 million in 2018[8]. - The steel trading business experienced a significant revenue decline of 62.5% compared to the previous year due to a challenging market environment[8]. - The paint products segment generated revenue of approximately HKD 713,330,000, accounting for 88.3% of total revenue, with a year-on-year increase of 15.6%[64]. - The property investment segment recorded revenue of approximately HKD 22,520,000, with a significant increase in segment profit to approximately HKD 267,430,000 from HKD 106,990,000 last year[65]. - The steel trading segment reported revenue of HKD 72,080,000, a decrease of 62.5% year-on-year, but achieved a segment profit of approximately HKD 6,730,000 compared to a loss of HKD 6,670,000 last year[66]. Market and Sales Performance - The Chinese market accounted for 89.5% of the total revenue of China Paint Group in 2019, down from 92.4% in 2018[15]. - In 2019, the total sales volume of paint and coatings in China increased by 38.3%, compared to a decline of 9.5% in 2018[16]. - Sales revenue of industrial paint and coatings, construction paint and coatings, and general paint and coatings increased by 2.5%, 43.5%, and 1.5% respectively for the year ending December 31, 2019[19]. - Sales to the Central China region increased by 38.6% due to the company becoming a registered supplier for property developers[22]. - Sales to Hong Kong customers increased significantly by 60.4%, driven by an improved product mix and expanded distribution network[25]. Investment and Property Management - The investment property portfolio held by the company as of December 31, 2019, consisted of 14 properties, with a total floor area of 264,180 square feet, compared to 367,187 square feet in 2018[32]. - The total market value of the investment properties as of December 31, 2019, was approximately HKD 851,340,000, an increase of 6.4% from HKD 799,980,000 in 2018[36]. - The average occupancy rate decreased to 76.9% in 2019 from 80.3% in 2018, mainly due to the termination of lease agreements without renewals[36]. - Rental income for 2019 was approximately HKD 27,800,000, slightly down from HKD 28,040,000 in 2018[36]. - The company completed the sale of the Sai Kung property and the acquisition of the Wanchai property on May 31, 2019, recording a sale gain of approximately HKD 490,410,000[39]. - The company plans to enhance its commercial and residential property portfolio to increase recurring income and cash flow for long-term investment purposes[39]. - The company has proposed to build a columbarium in Yuen Long, Hong Kong, with a maximum of 20,000 niches, subject to various planning conditions[40]. Corporate Governance - The board of directors is committed to best corporate governance practices and has established a nomination committee to enhance governance[94]. - The board held regular meetings to discuss overall strategy, operational performance, and financial matters, with attendance records documented[102]. - The group has implemented measures to ensure compliance with corporate governance codes, although some exceptions exist regarding the appointment of non-executive directors[94]. - The group has a clear separation of roles between the chairman and the managing director to ensure effective governance[95]. - The board of directors has adopted a diversity policy to enhance board efficiency, considering factors such as gender, age, cultural background, and professional experience[105]. - The audit committee held two meetings during the year, with all members attending both sessions, ensuring thorough review of financial statements and compliance[112]. - The remuneration committee approved a discretionary bonus for an executive director after reviewing the remuneration policy and performance[113]. - The nomination committee was established on July 11, 2019, and recommended the appointment of two independent non-executive directors, considering diversity criteria[116]. - Each director is required to undergo training to understand their responsibilities and the company's operations, with various training categories attended throughout the year[108]. - The company emphasizes the importance of independent directors, with the audit committee primarily composed of independent non-executive directors[111]. Environmental and Social Responsibility - The group has established a comprehensive environmental policy aimed at reducing emissions and improving energy efficiency[146]. - The management has implemented various energy-saving measures to minimize energy consumption and reduce greenhouse gas emissions[147]. - The group strictly complies with environmental protection laws and regulations in both mainland China and Hong Kong[147]. - The group emphasizes the importance of resource management and promotes a culture of resource conservation among employees[149]. - The group has developed a risk management system to address environmental, social, and governance risks[140]. - The importance matrix highlights key areas of focus, including labor rights, community service, and environmental protection[144]. - The group implemented energy-saving measures, focusing on reducing electricity consumption from office lighting and appliances[150]. - The company aims to enhance employee environmental awareness and reduce carbon emissions as part of its sustainable development strategy[174]. - The company is committed to community contributions and has been actively involved in charitable activities to promote sustainable community development[174]. Risk Management - The group faces increasing competition in its core markets of Hong Kong and mainland China, which poses a market risk of losing market share[85]. - Operational risks are managed through standard operating procedures and regular assessments by management to identify and mitigate risks[86]. - The board is responsible for maintaining an effective risk management and internal control system to enhance operational efficiency and ensure the accuracy of financial statements[117]. - The external auditor's fees for 2019 amounted to HKD 6,301,000, with HKD 4,790,000 for audit services and HKD 1,511,000 for non-audit services[124]. - The internal audit system monitors the overall financial status and aims to prevent significant asset losses or misappropriations[118]. Employee Management - The number of employees decreased to 817 from 886 in the previous year, with total employee costs of approximately HKD 153,030,000 compared to HKD 166,440,000 last year[80]. - The group maintains a five-day workweek to enhance work-life balance for employees, fostering a supportive work environment[160]. - The group emphasizes employee health and safety, implementing comprehensive measures to prevent illness and injury in the workplace[164]. - The group encourages continuous learning and development for employees, ensuring they possess the necessary skills and knowledge[163]. - The group has not reported any significant violations related to employment, health, safety, or labor standards during the reporting period[164].

Financial Performance - Revenue for the six months ended June 30, 2019, was HKD 365,202,000, an increase of 20.5% compared to HKD 302,907,000 in the same period of 2018[9] - Gross profit for the same period was HKD 90,355,000, up 28.9% from HKD 70,098,000 year-on-year[9] - The net profit for the six months ended June 30, 2019, was HKD 428,083,000, a significant recovery from a loss of HKD 4,303,000 in the previous year[9] - Basic and diluted earnings per share increased to HKD 23.12 compared to HKD 0.74 in the same period of 2018[9] - Other income and gains surged to HKD 494,709,000 compared to HKD 5,626,000 in the same period last year[9] - The company reported a profit of HKD 440,062,000 for the six months ended June 30, 2019, compared to a loss of HKD 11,979,000 in the previous period[17] - The total comprehensive income for the period was HKD 426,660,000, a significant recovery from a loss of HKD 12,086,000 in the prior period[17] - The company reported a pre-tax profit of HKD 429,034,000 for the six months ended June 30, 2019, compared to a pre-tax loss of HKD 3,468,000 in the same period last year[60] - The pre-tax profit for the group for the six months ended June 30, 2019, was HKD 440,062,000, a significant increase from HKD 14,045,000 in the same period of 2018[73] Assets and Liabilities - Total non-current assets as of June 30, 2019, amounted to HKD 1,457,982,000, an increase from HKD 1,343,677,000 at the end of 2018[13] - Cash and cash equivalents increased to HKD 568,106,000 from HKD 295,866,000 at the end of 2018[13] - The total liabilities decreased to HKD 491,652,000 from HKD 627,236,000 in the previous year[13] - As of June 30, 2019, the total equity of the company reached HKD 2,043,708,000, an increase from HKD 1,636,085,000 as of December 31, 2018, representing a growth of approximately 25%[15] - Non-current liabilities decreased from HKD 33,866,000 to HKD 24,284,000, a reduction of about 28.5%[15] - The company's reserves increased significantly from HKD 1,300,346,000 to HKD 1,720,055,000, marking an increase of approximately 32.2%[15] - The total assets as of June 30, 2019, amounted to HKD 2,559,644,000, up from HKD 2,297,187,000 at the end of 2018, reflecting a growth of 11.4%[58] - The total liabilities as of June 30, 2019, were HKD 515,936,000, a decrease from HKD 661,102,000 at the end of 2018, indicating a reduction of 21.9%[58] Cash Flow - Operating cash flow for the six months ended June 30, 2019, was HKD 21,210 thousand, a significant improvement from a cash outflow of HKD 126,594 thousand in the same period of 2018[26] - Net cash flow from investing activities was HKD 325,540 thousand for the six months ended June 30, 2019, compared to a cash outflow of HKD 98,116 thousand in the previous year[28] - The company reported a net cash flow from financing activities of HKD (74,584) thousand for the six months ended June 30, 2019, down from HKD 80,420 thousand in 2018[28] - The company experienced a net increase in cash and cash equivalents of HKD 272,166 thousand for the six months ended June 30, 2019, compared to a decrease of HKD 144,290 thousand in the same period of 2018[28] - The company had a total of HKD 197,983 thousand in cash and bank balances as of June 30, 2019, compared to HKD 178,649 thousand in the previous year[28] Investment and Acquisitions - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[8] - The company completed the acquisition of 50% of the equity of North Sea Tinplate Co., Ltd. for HKD 1.00 on July 24, 2019, making it a wholly-owned subsidiary[116] - The company plans to acquire all issued shares of Xunma International Investment Limited for HKD 183,000,000, subject to certain adjustments[117] - The group acquired investment properties worth HKD 530,000,000 through the acquisition of a subsidiary during the reporting period[77] - The group plans to enhance its commercial and residential property portfolio to increase recurring income and cash flow for long-term investment purposes[137] Dividends and Shareholder Information - The company declared a final dividend of HKD 19,037,000 for the year ended December 31, 2018[17] - The group did not declare an interim dividend for the six months ended June 30, 2019, compared to no interim dividend declared for the same period in 2018[75] - The company has decided not to declare an interim dividend for the six months ending June 30, 2019, consistent with the previous year[167] - As of June 30, 2019, the company’s director holds 498,053,620 shares, representing 26.16% of the total issued shares[169] Market and Industry Insights - The average growth rate of the paint and coating industry in mainland China for the first half of 2019 was 5.8%, down from 6.1% in the same period of 2018[122] - Total sales volume of paint and coating products in mainland China increased by 14.4% in the first half of 2019 compared to the same period in 2018[122] - The company aims to benefit from the Guangdong-Hong Kong-Macao Greater Bay Area initiative, targeting key cities like Shenzhen and Zhongshan for business development[165] Compliance and Governance - The company has complied with the corporate governance code as per the listing rules, with the exception of certain provisions regarding the appointment of non-executive directors[177] - A nomination committee was established on July 11, 2019, chaired by Mr. Hu Kuangzu, with members including Mr. Zhuang Zhikun and Mr. Zhang Xiaojing[177] - The company has adopted a code of conduct for directors' securities transactions, confirming compliance with the required standards[178] - Ongoing derivative litigation against certain directors of the company is still in progress, with the company listed as a nominal defendant[179]