Financial Performance - Total revenue for the year ended December 31, 2023, was HKD 47,504,000, compared to HKD 29,479,000 in 2022, representing a 60.9% increase[2] - The company reported a loss of HKD 205,897,000 for the year 2023, compared to a loss of HKD 85,590,000 in 2022, indicating a significant increase in losses[4] - The gross profit for 2023 was HKD 29,035,000, up from HKD 22,701,000 in 2022, marking a 28% increase[2] - The basic and diluted loss per share for 2023 was HKD 3.39, compared to HKD 1.20 in 2022, indicating a worsening loss per share[16] - The loss attributable to owners of the company for the year was HKD 179,285,000, compared to HKD 63,405,000 in 2022[38] - The group reported a loss before tax of HKD 85,715,000 for the year ended December 31, 2023[30] - The company reported a total loss of HKD 179,285,000 for 2023, compared to a loss of HKD 63,405,000 in 2022, indicating a deterioration in financial performance[56] Revenue Sources - Rental income increased to HKD 31,665,000 in 2023 from HKD 28,137,000 in 2022, reflecting an 8.9% growth[2] - The automotive segment generated revenue of HKD 12,536,000 in 2023, with no revenue reported in the previous year[45] - Rental income from property investment increased to HKD 31,665,000 in 2023, up from HKD 28,137,000 in 2022, marking a growth of about 9.1%[45] - The automotive segment generated revenue of HKD 15.8 million in 2023, a significant increase from HKD 1.3 million in 2022[89] Assets and Liabilities - The company's total assets decreased to HKD 572,292,000 in 2023 from HKD 719,022,000 in 2022, a decline of 20.4%[6] - The total assets of the group as of December 31, 2023, were HKD 782,262,000, with current liabilities totaling HKD 391,336,000[32] - The company’s liabilities totaled HKD 417,256,000 in 2023, an increase from HKD 291,406,000 in 2022, reflecting a rise in financial obligations[50] - The company has a net current liability of HKD 261,461,000 as of December 31, 2023, compared to HKD 294,102,000 in 2022, showing an improvement in current liabilities[18] Financing and Debt - The company plans to seek better financing options or consider asset disposals to strengthen future liquidity and financial position[11] - The company has a loan of HKD 257,487,000 that can be renewed after October 18, 2024, contingent on meeting certain financial ratios[10] - The group has an available undrawn committed borrowing facility of HKD 45,000,000 as of December 31, 2023[21] - The group has a term bank loan of HKD 28,675,000, secured by investment properties valued at HKD 57,250,000 as of December 31, 2023[40] - As of December 31, 2023, the group's total debt and equity ratio increased to 186.9%, up from 95.4% in 2022, with total borrowings amounting to HKD 394.9 million[97] Cash Flow and Liquidity - As of December 31, 2023, the group's net current liabilities amounted to HKD 261,461,000, with a net operating cash outflow of HKD 4,418,000[20] - The company’s cash and cash equivalents stood at HKD 21,373,000 as of December 31, 2023[50] - As of December 31, 2023, the group had cash and cash equivalents of HKD 26.9 million, down from HKD 44.3 million as of December 31, 2022[73] Corporate Governance and Compliance - The audit committee reviewed the audited consolidated financial statements for the year ended December 31, 2023, discussing risk management and internal controls[143] - The company has maintained compliance with all corporate governance codes during the year ended December 31, 2023, despite some deviations noted[169] - The company emphasizes the importance of a robust corporate governance structure and will review its framework as necessary[170] Strategic Plans and Developments - The company plans to expand its property investment segment, which has shown promising rental income growth, particularly in Scotland[65] - CBL continues to explore potential business opportunities, including automotive-related businesses, to create long-term value for shareholders[108] - The company plans to acquire 51% of Wuhan Junyi Automobile Sales Service Co., Ltd. for RMB 10.2 million[137] - The company completed the acquisition of Wuhan Junyi on February 17, 2023, making it a subsidiary, with its financial statements consolidated into the group[166] - The total consideration for the acquisition was HKD 960 million[179] Financial Reporting and Standards - The group has adopted new Hong Kong Financial Reporting Standards effective from January 1, 2023, which did not have a significant impact on the financial position and performance[42] - The company will publish its annual report for the year ended December 31, 2023, at an appropriate time[145] - The company’s auditor, Deloitte, has agreed to the figures presented in the preliminary announcement for the year ended December 31, 2023[164]

Financial Performance - For the six months ended June 30, 2023, the company reported a loss attributable to owners of the company of HKD 117,400,000, compared to a loss of HKD 109,947,000 for the same period in 2022, representing an increase in loss of approximately 4.1%[9] - The company reported a mid-term revenue from continuing operations of HKD 14,339,000 and a mid-term loss of HKD 4,368,000 if the acquisition of Wuhan Junyi had been completed on January 1, 2023[33] - Other income and losses resulted in a net loss of HKD 117.5 million, compared to a net loss of HKD 90.9 million in 2022, primarily due to unrealized fair value losses on investments[69] - The group reported an unrealized loss of HKD 22.6 million on investment properties, compared to a gain of HKD 1.7 million in 2022[84] - The group's loss attributable to owners for the six months ended June 30, 2023, was HKD 117.4 million, compared to HKD 109.9 million in 2022, primarily due to unrealized losses on investments[93] Revenue and Income - For the six months ended June 30, 2023, the property investment segment recorded rental income of HKD 14 million, a decrease from HKD 14.6 million in 2022, primarily due to the negative impact of GBP depreciation on rental income from Scotland[62] - The automotive segment generated revenue of HKD 11.7 million in the first half of 2023, reflecting the financial contribution from the acquisition of Wuhan Junyi Automobile Sales Service Co., Ltd. in February 2023[63] - The group recorded a rental income of HKD 11 million from investment properties in Hong Kong and Scotland, down from HKD 13.5 million in 2022[84] Assets and Liabilities - The fair value of investment properties as of June 30, 2023, was HKD 468,390,000, down from HKD 579,155,000 as of January 1, 2022, reflecting a fair value loss of HKD 55,449,000[12] - As of June 30, 2023, the group's bank balance and cash amounted to HKD 27.2 million, down from HKD 42.8 million as of December 31, 2022[71] - The debt-to-equity ratio increased from 95.4% as of December 31, 2022, to 136.0% as of June 30, 2023, reflecting total borrowings of HKD 383.7 million and total equity of HKD 282.1 million[73] - As of June 30, 2023, the group's bank deposits and properties totaled HKD 470.4 million, a slight decrease from HKD 471.7 million as of December 31, 2022[78] Borrowings and Financial Costs - The company obtained a new loan of HKD 12,000,000 during the period, with an interest rate of 9%, maturing on April 17, 2025[29] - The group successfully secured borrowings of HKD 12 million and received an interest-free loan of HKD 11.6 million from an affiliate during the period[70] - Financial costs increased to HKD 7.7 million, up from HKD 6.5 million in 2022, mainly due to higher interest expenses on bank and other borrowings[90] Shareholder Information - The weighted average number of ordinary shares used to calculate diluted loss per share was 5,292,515,390 for both periods ended June 30, 2023, and June 30, 2022[9] - As of June 30, 2023, the total number of issued shares is 5,292,515,390, with major shareholders holding significant stakes, including 鼎珮投資集團有限公司 at 28.70%[143] - The company’s major shareholder, Ms. Mai Siu-Hin, directly holds approximately 22.94% of the issued share capital and indirectly holds about 5.76% through Maini Investments Limited, totaling approximately 28.7%[169] Corporate Governance - The company maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange during the reporting period[155] - The company has complied with the corporate governance code, ensuring the roles of chairman and CEO are separate[178] - The remuneration committee includes independent non-executive directors and is chaired by Mr. Du Zhenwei[187] Acquisitions and Business Development - The company acquired a subsidiary during the period, recognizing a right-of-use asset of HKD 5,712,000, compared to zero in 2022[14] - The acquisition of Wuhan Junyi was completed on February 17, 2023, and its financial statements have been consolidated with the group[53] - The company completed the acquisition of 武漢駿意 in February 2023, expanding its Maserati dealership network in China[129] - The group has opened a new Maserati 4S dealership in Wuhan, China, covering 47,000 square feet, enhancing its service offerings[107] - The group is actively seeking investment targets within the CDMO value chain, focusing on cell line development and media formulation[110] - The group plans to continue exploring potential business opportunities to deliver long-term value growth for shareholders amid economic uncertainties[111] Employee Information - As of June 30, 2023, the company employed a total of 34 staff in Hong Kong and mainland China, emphasizing the importance of employees for sustainable business development[126] Stock Options and Securities - The company reported a total of 60,000,000 unexercised stock options granted under the expired stock option plan as of June 30, 2023[147] - A total of 90,700,000 stock options were granted to the group's advisors, with 300,700,000 options remaining unexercised as of June 30, 2023[151] - The company did not purchase, sell, or redeem any of its listed securities during the six months ended June 30, 2023[154] Changes in Management - The company experienced a change in its board of directors, with Mr. Huang Ruishen resigning as an executive director effective July 27, 2023[150] - Mr. Ng Chiu-Wai resigned as an executive director on July 27, 2023, resulting in the expiration of 18,000,000 share options granted to him[174] - Dr. Shen Zhongping was appointed as an independent non-executive director and member of the audit, nomination, and remuneration committees effective May 24, 2023[183] Other Information - The company did not declare or propose any dividends for the periods ended June 30, 2023, and June 30, 2022[11] - The company did not declare an interim dividend for the six months ended June 30, 2023, compared to no dividend declared in 2022[137] - The company has successfully renewed its lending license in February 2023, ensuring adequate financial infrastructure for its financial services sector[131] - The interim financial statements have been reviewed but not audited, indicating ongoing financial oversight[197]

[Financial Statements](index=1&type=section&id=Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's loss for the period widened to **HKD 127.7 million**, driven by increased losses from continuing operations and fair value adjustments | Metric | For the six months ended June 30, 2023 (HKD thousands) | For the six months ended June 30, 2022 (HKD thousands) | | :--- | :--- | :--- | | Total Revenue | 25,737 | 14,560 | | Loss Before Tax | (128,025) | (105,633) | | Loss for the Period | (127,704) | (107,276) | | Loss for the Period Attributable to Owners of the Company | (117,400) | (109,947) | | Basic Loss Per Share (HK cents) | (2.22) | (2.08) | - Total comprehensive expense for the period slightly narrowed to **HKD 121.5 million** from **HKD 130.1 million** in the prior year, primarily due to exchange gains from translating overseas operations[27](index=27&type=chunk) [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets decreased to **HKD 692.2 million** from **HKD 782.3 million**, with total equity falling to **HKD 282.1 million**, primarily due to a decline in the fair value of an associate investment | Metric | As of June 30, 2023 (HKD thousands) | As of December 31, 2022 (HKD thousands) | | :--- | :--- | :--- | | Non-current Assets | 636,779 | 719,022 | | Current Assets | 55,418 | 63,240 | | **Total Assets** | **692,197** | **782,262** | | Current Liabilities | 377,155 | 357,342 | | Non-current Liabilities | 32,963 | 33,994 | | **Total Liabilities** | **410,118** | **391,336** | | **Total Equity** | **282,079** | **390,926** | | Net Current Liabilities | (321,737) | (294,102) | - Investment in an associate measured at fair value through profit or loss significantly decreased from **HKD 237.4 million** to **HKD 141.8 million**, primarily contributing to the decline in non-current assets and total equity[28](index=28&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [1. Basis of Preparation](index=6&type=section&id=1.%20Basis%20of%20Preparation) Despite **HKD 321.7 million** in net current liabilities as of June 30, 2023, the Board deems the going concern basis appropriate due to management's actions to mitigate liquidity pressure, including loan extensions and new financing - As of June 30, 2023, the Group's net current liabilities increased to **HKD 321.7 million** from **HKD 294.1 million** at the end of 2022[16](index=16&type=chunk) - To alleviate liquidity issues, the Group extended the maturity of **HKD 286.9 million** in borrowings from May to September 2023, with refinancing underway, and extended **HKD 28.59 million** in acceptance bills from March 2024 to March 2026[6](index=6&type=chunk)[7](index=7&type=chunk) - The Directors believe the Group has sufficient working capital to continue as a going concern, considering the financing and debt extension plans implemented[18](index=18&type=chunk) [2. Principal Accounting Policies](index=7&type=section&id=2.%20Principal%20Accounting%20Policies) Accounting policies for the period align with 2022 financial statements, with new HKFRS adoptions effective January 1, 2023, having no material impact, and new policies on business combinations and leases elaborated - The Group adopted several new and revised HKFRS, including standards on insurance contracts, accounting policy disclosures, and accounting estimate definitions, with no material impact on financial statements[20](index=20&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - The report details newly applied accounting policies, specifically the acquisition method for business combinations and the recognition and measurement of right-of-use assets and lease liabilities[23](index=23&type=chunk)[46](index=46&type=chunk)[53](index=53&type=chunk) [3. Segment Information](index=11&type=section&id=3.%20Segment%20Information) The Group's continuing operations are segmented into Automotive, Property Investment, and Financial Investment and Services, with total pre-tax loss of **HKD 128 million** primarily driven by a **HKD 96.4 million** fair value loss on an associate investment - The Group's continuing operations are categorized into three segments: (i) Automotive (car trading and after-sales services in Mainland China); (ii) Property Investment; and (iii) Financial Investment and Services[58](index=58&type=chunk)[77](index=77&type=chunk) Segment Revenue and Result (Continuing Operations) | Segment (Continuing Operations) | For the six months ended June 30, 2023 (HKD thousands) | For the six months ended June 30, 2022 (HKD thousands) | | :--- | :--- | :--- | | **Segment Revenue** | | | | Automotive | 11,731 | – | | Property Investment | 14,006 | 14,560 | | Financial Investment and Services | – | – | | **Total** | **25,737** | **14,560** | | **Segment Result (Loss/Profit)** | | | | Automotive | (3,640) | – | | Property Investment | (14,448) | 6,893 | | Financial Investment and Services | (167) | (170) | | **Total** | **(18,255)** | **6,723** | - The Group's total assets are primarily concentrated in the Property Investment segment (**HKD 485 million**), followed by the newly acquired Automotive segment (**HKD 20.27 million**)[82](index=82&type=chunk) [Key Financial Items Analysis](index=16&type=section&id=Key%20Financial%20Items%20Analysis) Financial performance was significantly impacted by non-cash items, with other gains and losses showing a net loss of **HKD 117.5 million**, primarily from fair value losses on an associate investment and investment properties Other Gains and Losses | Other Gains and Losses (HKD thousands) | For the six months ended June 30, 2023 | For the six months ended June 30, 2022 | | :--- | :--- | :--- | | Fair value loss on investment in an associate | (96,400) | (92,579) | | Fair value (loss)/gain on investment properties | (22,635) | 1,672 | | Fair value gain on other financial assets | 680 | – | | **Total** | **(117,482)** | **(90,909)** | Finance Costs | Finance Costs (HKD thousands) | For the six months ended June 30, 2023 | For the six months ended June 30, 2022 | | :--- | :--- | :--- | | Interest on bank and other borrowings | 5,589 | 3,874 | | Interest on acceptance bills | 1,091 | 1,664 | | Others | 1,011 | 915 | | **Total** | **7,691** | **6,453** | - Basic and diluted loss per share from continuing operations was **2.22 HK cents**, compared to **2.07 HK cents** in the prior period[12](index=12&type=chunk)[90](index=90&type=chunk) [Management Discussion and Analysis](index=22&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Review](index=22&type=section&id=Financial%20Review) In H1 2023, total revenue increased to **HKD 25.7 million** due to the automotive segment, but overall gross margin declined to **48.7%**, and loss attributable to owners widened to **HKD 117.4 million**, significantly increasing the debt-to-equity ratio to **136.0%** - The automotive segment contributed **HKD 11.7 million** in revenue, but its lower gross margin led to a decline in the Group's overall gross margin from **78.8%** to **48.7%**[98](index=98&type=chunk)[99](index=99&type=chunk) - Loss attributable to owners of the Company expanded to **HKD 117.4 million**, primarily due to unrealized fair value losses of **HKD 96.4 million** on an associate investment and **HKD 22.6 million** on investment properties[123](index=123&type=chunk) - The debt-to-equity ratio significantly increased from **95.4%** at the end of 2022 to **136.0%** as of June 30, 2023, mainly due to a reduction in total equity[125](index=125&type=chunk)[104](index=104&type=chunk) [Business Review](index=27&type=section&id=Business%20Review) All business segments progressed in H1, with property investments providing stable rental income, the automotive segment expanding its network in China, financial services maintaining prudence, and life science investments (CBL) achieving significant business development despite fair value decline - Automotive business: A **47,000 sq. ft.** Maserati 4S dealership opened in Wuhan, with successful marketing campaigns significantly increasing showroom traffic by over **50%**[136](index=136&type=chunk)[158](index=158&type=chunk) - Property investment: The investment property portfolio in Hong Kong and Scotland continued to generate rental income, totaling **HKD 14 million**[135](index=135&type=chunk) - Life science investment: The fair value of the investment in CBL decreased to **HKD 142 million**; however, CBL made business development progress, securing **USD 28.3 million** in outstanding contracts and expanding its service capabilities[123](index=123&type=chunk)[159](index=159&type=chunk) [Outlook](index=28&type=section&id=Outlook) The Group anticipates a challenging macroeconomic environment due to rising interest rates and geopolitical tensions, but will actively seek new business opportunities and CDMO value chain investments to create long-term shareholder value - The Group anticipates a challenging macroeconomic environment due to rising interest rates and geopolitical tensions, and will continue to explore business opportunities for shareholder value growth[161](index=161&type=chunk) - Leveraging its investment in CBL, the Group is actively seeking new investment targets within the CDMO value chain, such as cell line development[160](index=160&type=chunk) [Other Information](index=29&type=section&id=Other%20Information) [Dividends, Securities and Corporate Governance](index=28&type=section&id=Dividends%2C%20Securities%20and%20Corporate%20Governance) The Board did not declare an interim dividend for H1 2023, and no listed securities were transacted; the company largely complied with corporate governance codes, with a noted deviation where the Chairman and CEO roles are combined - The Board did not declare an interim dividend for the six months ended June 30, 2023[162](index=162&type=chunk)[91](index=91&type=chunk) - The company complied with the Corporate Governance Code, with a deviation from provision C.2.1 where the roles of Chairman and Chief Executive Officer are combined and held by Mr. Zhuang Tianlong[143](index=143&type=chunk)[163](index=163&type=chunk) - All Directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period[144](index=144&type=chunk) [Audit Committee and Review of Results](index=30&type=section&id=Audit%20Committee%20and%20Review%20of%20Results) The Group's interim results for H1 2023 were unaudited but reviewed by Deloitte Touche Tohmatsu in accordance with HKSRS 2410 and by the Audit Committee comprising independent non-executive directors - The Audit Committee comprises Mr. Kong Kai Chuen (Chairman), Mr. To Chun Wai, and Dr. Shum Chung Ping, all independent non-executive Directors[145](index=145&type=chunk) - These interim results are unaudited but have been reviewed by the Company's auditor, Deloitte Touche Tohmatsu, and the Audit Committee[146](index=146&type=chunk)

Employee Training and Safety - Over 85% of existing employees received appropriate training during the reporting period, including all positions and genders[1] - All directors and employees underwent online anti-corruption training during the reporting period, enhancing internal awareness of anti-corruption[2] - The company has not experienced any work-related fatalities or injuries in the past three years, maintaining a safe working environment[6] - The company has not reported any work-related fatalities in the past three fiscal years, indicating a strong commitment to employee safety[61] - The company has implemented various pandemic control measures to enhance the safety of employees and customers[11] Environmental Sustainability - The company successfully reduced paper usage by 73% compared to 2021 due to effective implementation of environmental measures[24] - The company is committed to minimizing hazardous and non-hazardous waste levels, aiming to keep them close to 2022 levels[25] - The company continuously tracks and analyzes its carbon footprint to identify areas for reduction and provide transparency to stakeholders[20] - The company reported direct greenhouse gas emissions (Scope 1) of 16.99 tons of CO2 equivalent in 2022, a decrease of 41.5% from 28.81 tons in 2021[59] - Indirect greenhouse gas emissions (Scope 2) were 1.30 tons of CO2 equivalent in 2022, down 98.6% from 91.77 tons in 2021[59] - The greenhouse gas emissions density (Scope 1 and 2) improved to 0.62 tons of CO2 equivalent per HKD 1 million in revenue, compared to 2.08 tons in 2021, reflecting a significant reduction[59] - The total amount of hazardous waste generated was zero tons in 2022, compared to 2.55 tons in 2021, indicating effective waste management practices[59] - The company reported zero water consumption in 2022, a significant improvement from 153 cubic meters in 2021, demonstrating enhanced resource efficiency[59] - The company is focused on environmental protection by reducing resource consumption and waste[196] - The company ensures that all chemical by-products are processed by government-approved licensed partners to minimize environmental impact[198] Corporate Governance and Diversity - The company aims to adopt new regulations by December 31, 2024, ensuring no single gender on the board, promoting gender diversity[9] - The company emphasizes the importance of supply chain management and expects all suppliers to align with its core values in corporate social responsibility[14] Financial Performance and Investments - The acquisition of a Maserati dealership in Wuhan is expected to enhance the company's distribution network in China and contribute to revenue growth[46] - The company plans to expand its market presence through strategic investments, including the acquisition of VMS Auto Italia Fin Services Holdings Limited for HKD 960 million[47] - The group reported a gross profit margin increase of 40.2 percentage points, reaching 77.0% compared to 36.8% in 2021, primarily due to the real estate investment segment's gross profit margin rising by 81.2%[98] - The group announced the acquisition of 51% of Wuhan Junyi Automobile Sales Service Co., Ltd. for a total consideration of RMB 10.2 million, which was completed in February 2023[97] - The fair value loss of HKD 12,530,000 related to the investment in Chime Biologics was recognized in the consolidated income statement for the year ended December 31, 2022[76] - The group recorded a loss attributable to shareholders of HKD 63.4 million for the year, compared to a loss of HKD 7.1 million in 2021[136] - The group anticipates 2023 to be challenging due to rising interest rates and geopolitical tensions, but will focus on automotive-related businesses and property investments[128] Research and Development - CBL obtained its first commercial production registration certification for an anti-PD-1 antibody in July 2022, becoming one of the few CDMOs in China qualified for commercial antibody drug production[67] - CBL's Shanghai R&D center achieved a breakthrough by developing a cell line with productivity of 8-10 g/L, significantly higher than the industry average of 3-5 g/L, enhancing its capabilities in early drug development[150] - The new GMP-3 facility is expected to be operational in Q2 2023, allowing CBL to participate in early drug development with cost-effective solutions[151] - The second-phase drug production facility (DP-2) is expected to commence operations in Q1 2023, adding new filling formats to CBL's integrated manufacturing solutions[151] Financial Health and Risk Management - The group's cash and cash equivalents amounted to HKD 44.3 million as of December 31, 2022, compared to HKD 39.3 million as of December 31, 2021[120] - The group's debt-to-equity ratio increased from 78.4% as of December 31, 2021, to 95.4% as of December 31, 2022, due to unrealized losses on investment properties[120] - The group incurred finance costs of HKD 12.3 million in 2022, an increase from HKD 11.5 million in 2021, mainly due to increased interest expenses from Capella[134] - The company has experienced a significant increase in financial risk and uncertainty factors as detailed in the risk management report[194] - The company aims to balance financing activities' returns and risks amid recent market volatility, maintaining a cautious approach[45] - The group is cautiously conducting loan operations to avoid potential defaults and protect the overall interests of the company and its shareholders during the current market downturn[96] Future Outlook - Future business development and outlook discussions are included in the management discussion and analysis section[193] - The company continues to monitor the impact of COVID-19 on its operations and financial condition, while exploring potential business opportunities for long-term value growth[173] - The group plans to explore potential opportunities globally to create long-term synergies[128]

[Company Overview](index=1&type=section&id=Company%20Overview) Provides an overview of Auto Italia Holdings Limited, including its corporate structure, primary business activities, and a summary of its financial performance and position for the year ended December 31, 2022 [Company Information](index=1&type=section&id=Company%20Information) Auto Italia Holdings Limited is a Bermuda-incorporated public company listed on the HKEX, primarily engaged in investment holding, financing, and property investment, with its automotive business terminated in April 2021 - Company Type: A public company incorporated in Bermuda, with shares listed on The Stock Exchange of Hong Kong Limited[57](index=57&type=chunk) - Principal Activities: Investment holding, with its subsidiaries primarily providing financing and property investment[81](index=81&type=chunk) - Terminated Business: The Maserati car dealership was terminated on April 26, 2021, and the automotive business is treated as a discontinued operation[81](index=81&type=chunk) [Financial Statement Summary](index=1&type=section&id=Financial%20Statement%20Summary) This section provides a high-level overview of the Group's consolidated statements of profit or loss, comprehensive income, and financial position for the year ended December 31, 2022, reflecting financial performance and year-end status - Reporting Period: Audited consolidated results for the year ended December 31, 2022, with comparative figures for the year ended December 31, 2021[4](index=4&type=chunk) - Presentation Currency: The consolidated financial statements are presented in Hong Kong Dollars (HK$)[101](index=101&type=chunk) - Going Concern Basis: The Directors have assessed that the Group has sufficient financial resources to continue as a going concern and prepared the condensed consolidated financial statements on this basis[58](index=58&type=chunk)[62](index=62&type=chunk) [Consolidated Statement of Profit or Loss](index=1&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group reported a total revenue of HK$29.479 million for 2022, a significant decrease from 2021, resulting in a substantial loss of HK$85.59 million, primarily due to fair value losses on investment properties and associate investments Consolidated Statement of Profit or Loss Key Data (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Total Revenue | 29,479 | 79,337 | | Cost of Sales and Services | (6,778) | (50,176) | | Gross Profit | 22,701 | 29,161 | | Other Income | 558 | 2,509 | | Other Gains and Losses | (66,678) | 7,035 | | Finance Costs | (12,296) | (11,531) | | (Loss) Profit Before Tax | (86,134) | (4,137) | | (Loss) Profit for the Year | (85,590) | (6,282) | | Loss for the Year Attributable to Owners of the Company (Continuing Operations) | (62,716) | (385) | | Loss for the Year Attributable to Owners of the Company (Discontinued Operations) | (689) | (6,755) | Loss Per Share (HK cents) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Basic and Diluted Loss Per Share (Continuing and Discontinued Operations) | (1.20) | (0.13) | | Basic and Diluted Loss Per Share (Continuing Operations) | (1.19) | (0.01) | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's total comprehensive expense for 2022 significantly increased to HK$108.838 million, mainly driven by increased other comprehensive expenses from foreign currency translation differences of overseas operations Consolidated Statement of Comprehensive Income Key Data (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Loss for the Year | (85,590) | (6,282) | | Other Comprehensive Expense (Exchange differences on translation of overseas operations) | (23,248) | (2,464) | | Total Comprehensive Expense for the Year | (108,838) | (8,746) | | Total Comprehensive Expense for the Year Attributable to Owners of the Company | (74,309) | (9,509) | | Total Comprehensive (Expense) Income for the Year Attributable to Non-Controlling Interests | (34,529) | 763 | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2022, the Group's total assets less current liabilities significantly decreased to HK$424.92 million, with a net current liability of HK$294.102 million, indicating a deterioration in liquidity Consolidated Statement of Financial Position Key Data (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Total Non-Current Assets | 719,022 | 858,997 | | Total Current Assets | 63,240 | 43,314 | | Total Current Liabilities | 357,342 | 16,743 | | Net Current (Liabilities) Assets | (294,102) | 26,571 | | Total Assets Less Current Liabilities | 424,920 | 885,568 | | Total Equity | 390,926 | 495,052 | | Total Non-Current Liabilities | 33,994 | 390,516 | [Financial Review and Analysis](index=1&type=section&id=Financial%20Review%20and%20Analysis) This section analyzes the Group's financial performance and position for 2022, highlighting significant changes in operating results, asset values, liabilities, and liquidity [Operating Results](index=1&type=section&id=Operating%20Results) In 2022, the Group's operating performance significantly deteriorated with a substantial decline in total revenue, reduced gross profit, and a large net loss, primarily due to fair value losses and the termination of the automotive business [Revenue](index=21&type=section&id=Revenue) Total revenue for 2022 decreased by 62.86% to HK$29.479 million, primarily due to the significant reduction in revenue from the terminated automotive business, despite growth in property investment rental income Revenue Sources (HK$ thousand) | Revenue Source | 2022 | 2021 | | :------------ | :----- | :----- | | Property Investment Segment (Continuing Operations) | 28,137 | 23,337 | | Automotive Segment (Discontinued Operations) | 1,342 | 54,648 | | Financial Investment and Services Segment (Continuing Operations) | – | 1,352 | | **Total Revenue** | **29,479** | **79,337** | - Property Investment segment revenue increased by **HK$4.8 million**, mainly due to income generated by Capella after Dakota became a Group subsidiary[34](index=34&type=chunk) - The decrease in Automotive segment revenue was primarily due to the closure of the Maserati Hong Kong dealership in April 2021[5](index=5&type=chunk) - The Financial Investment and Services segment did not record any revenue as the Group cautiously conducted lending business during the market downturn to avoid potential loan defaults[35](index=35&type=chunk) [Cost of Sales and Gross Profit](index=22&type=section&id=Cost%20of%20Sales%20and%20Gross%20Profit) Gross profit decreased by HK$6.5 million to HK$22.7 million in 2022, but the gross profit margin significantly increased to 77.0%, mainly driven by higher margins in the property investment segment Cost of Sales and Gross Profit (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Gross Profit | 22,700 | 29,200 | | Gross Profit Margin | 77.0% | 36.8% | - The decrease in gross profit was primarily due to the closure of the Maserati Hong Kong dealership in April 2021[7](index=7&type=chunk) - The increase in gross profit margin was mainly due to an **81.2% increase** in the gross profit margin of the Property Investment segment, primarily from Capella's profit[7](index=7&type=chunk) [Other Income](index=22&type=section&id=Other%20Income) Other income for 2022 was HK$0.6 million, a net decrease of HK$1.9 million from 2021, primarily due to reduced non-recurring commission income Other Income (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Other Income | 600 | 2,500 | - The net decrease of **HK$1.9 million** was mainly due to a non-recurring commission income of **HK$1.6 million**[99](index=99&type=chunk) [Other Gains and Losses](index=22&type=section&id=Other%20Gains%20and%20Losses) The Group recorded a net loss of HK$66.7 million from other gains and losses in 2022, a significant shift from a net gain in 2021, mainly due to fair value losses on investment properties and associate investments Other Gains and Losses (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Net Loss from Other Gains and Losses | (66,700) | 7,000 | | Fair Value (Loss) Gain on Investment Properties | (55,449) | 1,238 | | Fair Value (Loss) Gain on Investments in Associates | (12,530) | 1,427 | [Selling and Distribution Costs and Administrative Expenses](index=22&type=section&id=Selling%20and%20Distribution%20Costs%20and%20Administrative%20Expenses) Selling and distribution costs and administrative expenses decreased by HK$5.7 million to HK$21.6 million in 2022, but their proportion to revenue increased to 73.2%, mainly due to reduced depreciation and staff costs, partially offset by increased share-based payments Selling and Distribution Costs and Administrative Expenses (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Selling and Distribution Costs and Administrative Expenses | 21,600 | 27,300 | | Percentage of Revenue | 73.2% | 34.4% | - The net decrease of **HK$5.7 million** was mainly due to reduced depreciation of right-of-use assets, staff-related costs in the automotive segment, and legal and professional fees, partially offset by an increase in share-based payments[138](index=138&type=chunk) [Other Expenses](index=22&type=section&id=Other%20Expenses) Other expenses in 2022 primarily consisted of legal and professional fees incurred due to the termination of the proposed acquisition of VMS Auto Italia Fin Services Holdings Limited - Other expenses refer to legal and professional fees incurred during the years ended December 31, 2022, and 2021, for the proposed acquisition of the entire issued share capital of VMS Auto Italia Fin Services Holdings Limited[40](index=40&type=chunk) - The acquisition was subsequently terminated on November 25, 2022, by a termination deed[118](index=118&type=chunk) [Finance Costs](index=23&type=section&id=Finance%20Costs) Finance costs increased to HK$12.3 million in 2022, primarily due to higher interest expenses from Capella's registered owner and loan arrangement fees, partially offset by reduced bond interest Finance Costs (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Interest on Bank and Other Borrowings | 8,056 | 5,903 | | Interest on Corporate Bonds | – | 1,775 | | Interest on Promissory Notes | 2,891 | 2,885 | | Interest on Loan from Non-Controlling Shareholder of a Subsidiary | 884 | 670 | | Loan Arrangement Fees | 465 | – | | **Total** | **12,296** | **11,233** | - Finance costs increased to **HK$12.3 million** (2021: HK$11.5 million), mainly due to increased interest expenses incurred by Capella's registered owner[141](index=141&type=chunk) - The increase in finance costs was partially offset by a **HK$1.8 million** decrease in bond interest expenses[141](index=141&type=chunk) [Taxation](index=15&type=section&id=Taxation) Taxation for continuing operations in 2022 resulted in a gain of HK$0.814 million, a shift from an expense of HK$2.139 million in 2021, mainly due to changes in deferred tax Taxation (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Current Tax (Hong Kong) | 83 | 162 | | Current Tax (Other Jurisdictions) | – | 215 | | Over-provision in Prior Years (Hong Kong) | (60) | (10) | | Deferred Tax | (837) | 1,772 | | **Taxation for Continuing Operations** | **(814)** | **2,139** | [Loss Per Share](index=16&type=section&id=Loss%20Per%20Share) Basic and diluted loss per share from continuing and discontinued operations significantly increased to HK$0.012 in 2022 from HK$0.0013 in 2021, with a similar trend for continuing operations Loss Per Share (HK cents) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Basic and Diluted Loss Per Share (Continuing and Discontinued Operations) | (1.20) | (0.13) | | Basic and Diluted Loss Per Share (Continuing Operations) | (1.19) | (0.01) | [Loss Attributable to Shareholders](index=23&type=section&id=Loss%20Attributable%20to%20Shareholders) Loss attributable to shareholders significantly increased to HK$63.405 million in 2022, primarily due to unrealized net fair value losses on investment properties and investments in associates measured at fair value Loss Attributable to Owners of the Company (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Loss Attributable to Owners of the Company | (63,405) | (7,140) | - The increase in loss was primarily due to unrealized net fair value losses on investment properties and unrealized fair value losses on investments in associates measured at fair value[142](index=142&type=chunk) [Financial Position](index=4&type=section&id=Financial%20Position) The Group's financial position significantly deteriorated in 2022, marked by a substantial increase in net current liabilities, a decrease in total equity, and a higher debt-to-equity ratio, driven by fair value losses on investment properties and increased borrowings [Investment Properties](index=17&type=section&id=Investment%20Properties) The carrying value of investment properties decreased to HK$470.211 million as of December 31, 2022, primarily due to a net fair value loss of HK$55.449 million and exchange adjustments Investment Properties Carrying Value (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Investment Properties Carrying Value | 470,211 | 579,155 | - Net fair value loss: **(HK$55,449) thousand** (2021: gain of HK$1,238 thousand)[44](index=44&type=chunk) - Exchange adjustments: **(HK$53,495) thousand** (2021: (HK$8,451) thousand)[44](index=44&type=chunk) [Rental and Other Receivables](index=17&type=section&id=Rental%20and%20Other%20Receivables) Total rental and other receivables increased to HK$13.873 million as of December 31, 2022, with HK$4.315 million classified as current assets, and no overdue rental receivables at year-end Rental and Other Receivables (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Rental Receivables | 11,938 | 14,827 | | Utilities and Lease Deposits | 130 | 123 | | Prepayments and Other Receivables | 1,805 | 549 | | Amount Classified as Current Assets | 4,315 | 2,551 | - As of December 31, 2022, there were no overdue rental receivables[43](index=43&type=chunk) [Trade and Other Payables](index=18&type=section&id=Trade%20and%20Other%20Payables) Total trade and other payables slightly increased to HK$17.143 million as of December 31, 2022, with increases in accrued expenses and rental income received in advance Trade and Other Payables (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Trade Payables | 48 | 10 | | Customer Deposits | – | 236 | | Accrued Expenses | 3,647 | 2,903 | | Rental Income Received in Advance | 5,517 | 5,114 | | Other Payables | 7,931 | 8,442 | | **Total** | **17,143** | **16,705** | - Other payables include refundable customer deposits of **HK$5.114 million** (2021: HK$7.281 million) related to the terminated automotive business[45](index=45&type=chunk) [Bank and Other Borrowings](index=19&type=section&id=Bank%20and%20Other%20Borrowings) Total bank and other borrowings slightly increased to HK$336.143 million as of December 31, 2022, with a significant portion secured and a substantial increase in current liabilities due within one year Bank and Other Borrowings (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Bank Borrowings | 30,586 | – | | Other Borrowings | 305,557 | 334,529 | | **Total** | **336,143** | **334,529** | | Secured | 331,094 | 334,529 | | Unsecured | 5,049 | – | | Repayable Within One Year (Other Borrowings) | 300,508 | – | | Repayable Within One Year (Bank Borrowings) | 1,911 | – | - Bank borrowings represent a new loan secured by an investment property in Hong Kong and pledged bank deposits, repayable over 3 years with an immediate repayment clause[146](index=146&type=chunk) - Other borrowings of **HK$300.5 million** and a loan from a non-controlling member of a subsidiary are due in May 2023[146](index=146&type=chunk) [Promissory Notes](index=20&type=section&id=Promissory%20Notes) The balance of promissory notes decreased to HK$27.5 million as of December 31, 2022, following a principal repayment of HK$17 million, with noteholders intending to extend the maturity date Promissory Notes Balance (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Promissory Notes Balance | 27,500 | 44,500 | - Unsecured promissory notes totaling **HK$53.5 million** were issued in March 2021 to acquire an additional **27.49% equity interest** in Dakota RE II, maturing in March 2024 and bearing interest at **8% per annum**[20](index=20&type=chunk) - During the year ended December 31, 2022, the Group early repaid **HK$17 million** of the principal amount[20](index=20&type=chunk) - The noteholders intend to extend the maturity date by another two years from March 2024 to March 2026[20](index=20&type=chunk)[85](index=85&type=chunk) [Loan from Non-Controlling Shareholder of a Subsidiary](index=20&type=section&id=Loan%20from%20Non-Controlling%20Shareholder%20of%20a%20Subsidiary) The loan from a non-controlling shareholder of a subsidiary slightly decreased to HK$9.105 million as of December 31, 2022, and the non-controlling shareholder agreed to extend its maturity by one year Loan from Non-Controlling Shareholder of a Subsidiary (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Loan from Non-Controlling Shareholder of a Subsidiary | 9,105 | 9,205 | - The loan is unsecured, due in May 2023, and bears interest at **10% per annum**[31](index=31&type=chunk) - The non-controlling shareholder of a subsidiary agreed to extend the loan by another year from May 2023 to May 2024[31](index=31&type=chunk)[83](index=83&type=chunk) [Liquidity and Financial Resources](index=6&type=section&id=Liquidity%20and%20Financial%20Resources) As of December 31, 2022, the Group faced liquidity challenges with net current liabilities of HK$294.102 million, and management is actively pursuing refinancing and increasing committed facilities to mitigate this - As of December 31, 2022, the Group had net current liabilities of **HK$294,102,000**[58](index=58&type=chunk) - Management is discussing the refinancing of other borrowings of **HK$300,508,000** with existing lenders and other financial institutions[82](index=82&type=chunk) - The Group has available undrawn committed other borrowing facilities of **HK$25 million**, further increased by **HK$30 million** to **HK$55 million** in March 2023[61](index=61&type=chunk) - The Group's debt-to-equity ratio increased from **78.4%** as of December 31, 2021, to **95.4%** as of December 31, 2022[145](index=145&type=chunk) [Cash Flow and Cash Equivalents](index=23&type=section&id=Cash%20Flow%20and%20Cash%20Equivalents) Cash and cash equivalents, including pledged bank deposits, increased to HK$44.3 million as of December 31, 2022, primarily funded by cash generated from operations and borrowings Cash and Cash Equivalents (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Cash and Cash Equivalents (including pledged bank deposits) | 44,300 | 39,300 | - The Group funds its operations and investments through cash generated from its businesses, as well as bank and other borrowings[121](index=121&type=chunk) - Cash and cash equivalents are denominated in **GBP (88.9%)**, **HK$ (8.6%)**, and **RMB (2.4%)**[122](index=122&type=chunk) [Pledge of Assets](index=25&type=section&id=Pledge%20of%20Assets) As of December 31, 2022, the Group had bank deposits and properties totaling HK$471.7 million pledged as collateral for related borrowings - As of December 31, 2022, certain bank deposits and properties totaling **HK$471.7 million** (2021: properties totaling HK$517.2 million) were pledged as collateral for related borrowings[149](index=149&type=chunk) [Capital Commitments, Contingent Liabilities](index=25&type=section&id=Capital%20Commitments%2C%20Contingent%20Liabilities) The Group had no capital commitments or significant contingent liabilities as of December 31, 2022, and December 31, 2021 - As of December 31, 2022, and December 31, 2021, the Group had no capital commitments or significant contingent liabilities[150](index=150&type=chunk) [Foreign Exchange Risk](index=25&type=section&id=Foreign%20Exchange%20Risk) In 2022, the Group recorded a negative exchange difference of approximately HK$14.9 million from foreign currency translation, managing this risk by matching debt currency with pledged assets and revenue - A negative exchange difference of approximately **HK$14.9 million** (2021: negative exchange difference of approximately HK$3 million) arose from the translation of foreign currency operations during the year[148](index=148&type=chunk) - The Group manages its foreign exchange risk by monitoring the matching of debt currency with (i) pledged assets; and (ii) debt-servicing income generated from business activities[128](index=128&type=chunk) - Loans secured by Scottish properties are denominated in GBP and repaid with GBP-denominated income from Scotland[128](index=128&type=chunk) [Business Review and Outlook](index=9&type=section&id=Business%20Review%20and%20Outlook) This section reviews the performance of the Group's operating segments, significant corporate actions, and outlines its strategic outlook amidst economic uncertainties [Operating Segments](index=9&type=section&id=Operating%20Segments) The Group's current operating segments include property investment, financial investment and services, life sciences investment, and a re-expanded automotive business through a new acquisition, despite the termination of its Hong Kong dealership in 2021 - The Group has two continuing operating segments: Property Investment and Financial Investment and Services[68](index=68&type=chunk)[106](index=106&type=chunk) - The Automotive operating segment was discontinued last year[91](index=91&type=chunk) [Property Investment Segment](index=26&type=section&id=Property%20Investment%20Segment) The Property Investment segment's revenue increased by 20.57% to HK$28.137 million in 2022, with the Group continuing to generate rental income from properties in Hong Kong and Scotland, and successfully extending a Hong Kong lease Property Investment Segment Revenue (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Property Investment Segment Revenue | 28,137 | 23,337 | - The Group continued to receive rental income of **HK$2.2 million** (Hong Kong) and **HK$25.9 million** (Scotland) respectively (2021: HK$2 million and HK$21.3 million respectively) from leasing investment properties[176](index=176&type=chunk) - The Group successfully extended the Hong Kong lease with its tenant for **2 years**, from June 1, 2023, to May 31, 2025, with a **3% increase** in rent[176](index=176&type=chunk) - As of December 31, 2022, approximately **94%** of Capella's net internal area was subject to multiple lease agreements, with total annual rent of approximately **£2.9 million** and a weighted average unexpired lease term of **5.84 years** before expiry[134](index=134&type=chunk) [Financial Investment and Services Segment](index=27&type=section&id=Financial%20Investment%20and%20Services%20Segment) The Financial Investment and Services segment recorded no revenue in 2022, reflecting a cautious strategy during market downturns to avoid potential loan defaults, while maintaining a valid money lender's license Financial Investment and Services Segment Revenue (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Financial Investment and Services Segment Revenue | – | 1,352 | - During the current market downturn, the Group cautiously conducted its lending business to avoid potential loan defaults and bad debts[35](index=35&type=chunk) - As of December 31, 2022, and 2021, the Group had no outstanding guaranteed loans to customers[35](index=35&type=chunk)[135](index=135&type=chunk) - The Group holds a valid money lender's license, which was successfully renewed in February 2023[156](index=156&type=chunk) [Life Sciences Investment Segment](index=23&type=section&id=Life%20Sciences%20Investment%20Segment) The Life Sciences Investment segment, through associate Chime Biologics Limited (CBL), achieved unaudited consolidated revenue of US$36.5 million in 2022, secured drug registration for commercial production, and developed high-productivity cell lines Chime Biologics Limited (CBL) Key Data | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Unaudited Consolidated Revenue | US$36.5 million | US$21.5 million | | Investment Fair Value | HK$237.4 million | HK$249.5 million | | Percentage of Group's Total Assets | 30.3% | 27.7% | - In July 2022, CBL obtained drug registration approval for the commercial production of its first anti-PD-1 antibody, making it one of the few CDMOs in China qualified for commercial antibody drug production[136](index=136&type=chunk) - In April 2022, CBL's Shanghai R&D center successfully developed cell lines with extremely high productivity (**8-10g/L**), significantly exceeding the industry average of **3-5g/L**[157](index=157&type=chunk) - The newly constructed Phase III Good Manufacturing Practice (GMP-3) facility was expected to be operational in Q2 2022, and the Phase II Drug Product (DP-2) facility is anticipated to commence operations in Q1 2023, expanding capacity and capabilities[178](index=178&type=chunk) [Automotive Segment](index=21&type=section&id=Automotive%20Segment) The Automotive segment's revenue significantly decreased to HK$1.3 million in 2022 due to the termination of the Maserati Hong Kong dealership in April 2021, but the Group announced the acquisition of a 51% stake in Wuhan Junyi to expand its Maserati 4S dealership network in China Automotive Segment Revenue (HK$ thousand) | Indicator | 2022 | 2021 | | :------------ | :----- | :----- | | Automotive Segment Revenue | 1,300 | 54,600 | - The decrease in revenue was primarily due to the closure of the Maserati Hong Kong dealership in April 2021[5](index=5&type=chunk) - On December 28, 2022, the Group announced an agreement with an independent third party to acquire a **51% equity stake** in Wuhan Junyi Auto Sales and Services Co., Ltd[5](index=5&type=chunk)[137](index=137&type=chunk) - Wuhan Junyi primarily operates Maserati 4S dealership businesses in China, with a dealership network covering Wuhan City[5](index=5&type=chunk)[159](index=159&type=chunk) [Significant Acquisitions and Disposals](index=28&type=section&id=Significant%20Acquisitions%20and%20Disposals) In 2022, the Group terminated a major acquisition of VMS Auto Italia Fin Services Holdings Limited but successfully acquired a 51% equity stake in Wuhan Junyi Auto Sales and Services Co., Ltd. to expand its automotive dealership network [Termination of Acquisition of VMS Auto Italia Fin Services Holdings Limited](index=28&type=section&id=Termination%20of%20Acquisition%20of%20VMS%20Auto%20Italia%20Fin%20Services%20Holdings%20Limited) The proposed HK$960 million acquisition of VMS Auto Italia Fin Services Holdings Limited, signed in November 2021, was terminated in November 2022 due to sensitive market sentiment and volatility, without a new listing application being submitted - On November 26, 2021, Racing Time Limited, an indirect wholly-owned subsidiary of the Company, entered into an agreement with VMS Holdings Limited to acquire the entire issued share capital of VMS Auto Italia Fin Services Holdings Limited for **HK$960 million**[182](index=182&type=chunk) - This acquisition constituted a very substantial acquisition and a reverse takeover, and the Company was deemed a new listing applicant under Rule 14.54 of the Listing Rules[183](index=183&type=chunk) - Considering recent sensitive market sentiment and market volatility at relevant critical junctures, the Company did not submit an updated new listing application, and the agreement was terminated on November 25, 2022[162](index=162&type=chunk) [Acquisition of Wuhan Junyi Auto Sales and Services Co., Ltd.](index=29&type=section&id=Acquisition%20of%20Wuhan%20Junyi%20Auto%20Sales%20and%20Services%20Co.%2C%20Ltd.) The Group acquired a 51% equity stake in Wuhan Junyi Auto Sales and Services Co., Ltd. for RMB10.2 million in December 2022, completed in February 2023, to expand its Maserati 4S dealership network in Wuhan, China - On December 28, 2022, Li Kuai Jun Investment Consulting (Shanghai) Co., Ltd., an indirect wholly-owned subsidiary of the Company, entered into an agreement with Yuntian (China) Investment Co., Ltd. to acquire a **51% equity stake** in Wuhan Junyi Auto Sales and Services Co., Ltd. for a consideration of **RMB10.2 million**[184](index=184&type=chunk) - Wuhan Junyi primarily engages in Maserati 4S dealership businesses for high-end brands in China, with a dealership network covering Wuhan City[184](index=184&type=chunk) - The acquisition of Wuhan Junyi was completed on February 17, 2023, and Wuhan Junyi has become a subsidiary of the Company[164](index=164&type=chunk) - This acquisition is a strategic investment for the Group, expanding its Maserati automotive dealership network in China[159](index=159&type=chunk) [Business Outlook](index=28&type=section&id=Business%20Outlook) Facing economic uncertainties from rising interest rates and geopolitical tensions, the Group will continue to prudently monitor the impact of COVID-19 and actively explore potential business opportunities to deliver long-term shareholder value - The macroeconomic environment remains challenging for the Group, primarily due to economic uncertainties arising from concerns over rising interest rates and geopolitical tensions[181](index=181&type=chunk) - The Group will continue to monitor the impact of COVID-19 on its business operations and financial position[181](index=181&type=chunk) - The Group will continue to explore potential business opportunities to deliver long-term value growth for shareholders[181](index=181&type=chunk) [Corporate Governance and Compliance](index=20&type=section&id=Corporate%20Governance%20and%20Compliance) The Group is committed to maintaining an effective corporate governance structure, complying with all code provisions in 2022, with the exception of the Chairman and CEO roles being combined, which the Board believes provides strong and consistent leadership [Dividends](index=20&type=section&id=Dividends) The Directors did not recommend or declare any final or interim dividends for the year ended December 31, 2022 - No dividends were paid or proposed for the ordinary shares of the Company for the year ended December 31, 2022 (2021: nil)[21](index=21&type=chunk) - The Directors do not recommend the payment of a final dividend for the year ended December 31, 2022 (2021: nil)[187](index=187&type=chunk) - No interim dividends were paid for the year ended December 31, 2022 (2021: nil)[187](index=187&type=chunk) [Securities Transactions](index=30&type=section&id=Securities%20Transactions) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during 2022, and Directors confirmed compliance with the Model Code for securities transactions - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the year ended December 31, 2022[188](index=188&type=chunk) - The Company has adopted the Model Code as the standard for Directors' dealings in the Company's securities[191](index=191&type=chunk) - Following specific enquiries made by the Company to all Directors, they confirmed compliance with the standards set out in the Model Code during the year ended December 31, 2022[191](index=191&type=chunk) [Corporate Governance](index=30&type=section&id=Corporate%20Governance) The Company complied with all Corporate Governance Code provisions in 2022, except for the combined roles of Chairman and CEO, which the Board believes provides strong leadership without concentrating power - The Company complied with all Corporate Governance Code provisions for the year ended December 31, 2022, except for the deviation from Code Provision C.2.1, which stipulates that the roles of Chairman and Chief Executive Officer should be separate and not performed by the same individual[189](index=189&type=chunk) - Mr. Chong Tin Lung, Benny serves as both Executive Chairman and Chief Executive Officer, and the Board believes that combining these roles provides strong and consistent leadership for the Group, facilitating the implementation and execution of its business strategies[166](index=166&type=chunk) - Despite the combined roles of Executive Chairman and Chief Executive Officer, power and authority are not concentrated, as all major decisions are made after consulting the Board and appropriate Board committees[166](index=166&type=chunk) [Audit and Annual General Meeting](index=31&type=section&id=Audit%20and%20Annual%20General%20Meeting) The Audit Committee reviewed the Group's audited consolidated financial statements for 2022, and the upcoming Annual General Meeting is scheduled for May 24, 2023, with a book closure period for voting rights - The Audit Committee reviewed the Group's audited consolidated financial statements for the year ended December 31, 2022, including the accounting principles and practices adopted by the Group, and discussed risk management, internal controls, and financial reporting matters during the review[192](index=192&type=chunk) - The upcoming Annual General Meeting will be held on Wednesday, May 24, 2023[193](index=193&type=chunk) - To determine the eligibility of shareholders to attend and vote at the upcoming Annual General Meeting, the Company will suspend share transfer registration from Thursday, May 18, 2023, to Wednesday, May 24, 2023 (both dates inclusive)[193](index=193&type=chunk) - Deloitte Touche Tohmatsu, the Group's auditor, has agreed to the figures for the consolidated statement of financial position, consolidated statement of profit or loss, consolidated statement of profit or loss and other comprehensive income, and related notes for the year ended December 31, 2022, as presented in the preliminary announcement[201](index=201&type=chunk) [Notes and Glossary](index=6&type=section&id=Notes%20and%20Glossary) This section provides detailed notes to the consolidated financial statements and a glossary of key terms and abbreviations to ensure consistent understanding of the report content [Notes to the Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section includes detailed notes on general information, application of HKFRSs amendments, revenue recognition, segment information, other gains and losses, finance costs, taxation, loss per share, investment properties, receivables, payables, borrowings, promissory notes, and dividends - The Company's principal activity is investment holding, with its subsidiaries primarily providing financing and property investment[81](index=81&type=chunk) - The Group first adopted amendments to Hong Kong Financial Reporting Standards (HKFRSs) issued by the Hong Kong Institute of Certified Public Accountants, mandatory for annual periods beginning on or after January 1, 2022, which had no significant impact on the Group's financial position, performance, and/or disclosures in these consolidated financial statements for the current and prior years[64](index=64&type=chunk)[102](index=102&type=chunk) - The Group has two continuing operating segments: Property Investment; and Financial Investment and Services[68](index=68&type=chunk)[106](index=106&type=chunk) - The Automotive operating segment was discontinued last year[91](index=91&type=chunk) [Glossary](index=32&type=section&id=Glossary) This section defines key terms and abbreviations used throughout the report, ensuring clarity and consistent understanding for readers - Definitions are provided for terms such as "Acquisition", "Agreement", "Annual General Meeting", "Associate", "Audit Committee", "Board", "Capella", "Automotive Segment", "CBL", "Corporate Governance Code", "Chief Operating Decision Maker", "Company", "Connected Person", "Connected Transaction", "Consideration Shares", "Controlling Shareholder", "COVID-19", "Dealership Business", "Directors", "Expected Credit Loss", "Executive Chairman", "Executive Director", "Financial Investment and Services Segment", "GBP", "Group", "HKFRSs", "HK$", "Hong Kong", "Latest Practicable Date", "Life Sciences Investment Segment", "Independent Non-executive Director", "Listing Rules", "Maserati", "Model Code", "PRC", "Litigation", "Purchaser", "Property Investment Segment", "Shares", "Shareholder", "Stock Exchange", "Substantial Shareholder", "Subsidiary", "Target Company", "Vendor", "US$", and "%"[169](index=169&type=chunk)[195](index=195&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk)

Revenue and Income - Rental income from the property investment segment increased to HKD 14.6 million for the six months ended June 30, 2022, compared to HKD 8.1 million in 2021, primarily due to the income generated from the Capella Building investment[16]. - Revenue from the financial investment and services segment decreased to zero for the six months ended June 30, 2022, down from HKD 1.1 million in 2021, as receivables narrowed to zero[17]. - Other income for the six months ended June 30, 2022, was HKD 0.4 million, down from HKD 2.1 million in 2021, mainly due to a decrease in commission income following the termination of the Maserati dealership[20]. - Total group revenue for the six months ended June 30, 2022, was HKD 14,560,000, compared to HKD 9,168,000 for the same period in 2021, representing a year-over-year increase of 58.8%[140][142]. - The company’s property investment segment generated revenue of HKD 14,560,000 during the interim period, while the financial investment and services segment reported a loss of HKD 170,000[140]. Profit and Loss - Gross profit decreased by HKD 4.2 million to HKD 11.5 million, with a gross profit margin increase of 52.9 percentage points to 78.8% due to the termination of the Maserati dealership business[18]. - The net loss from other gains and losses was HKD 90.9 million, compared to a net gain of HKD 14.9 million in 2021, primarily due to unrealized fair value losses on an investment in an associate[21]. - Shareholders' loss attributable to the company was HKD 109.9 million for the six months ended June 30, 2022, compared to HKD 1.1 million in 2021, primarily due to unrealized fair value losses on investments[28]. - The company reported a loss attributable to owners of the company of HKD (107,276) thousand for the six months ended June 30, 2022, compared to a profit of HKD 4,833 thousand for the same period in 2021[104]. - The company reported a loss before tax of HKD 105,339,000 for the six months ended June 30, 2022, compared to a profit before tax of HKD 9,182,000 for the same period in 2021[140][142]. Expenses and Costs - Selling and distribution costs, along with administrative expenses, totaled HKD 11.4 million, down from HKD 23.1 million in 2021, representing 78.5% of revenue[22]. - Financial costs increased to HKD 6.5 million for the period, up from HKD 5.3 million in 2021, mainly due to increased interest expenses from the Capella investment[26]. - The company incurred a fair value loss of HKD 92,579,000 on investments in an associate during the reporting period[127]. - Interest expenses increased to HKD 3,874,000 from HKD 1,978,000 year-over-year[158]. Assets and Liabilities - As of June 30, 2022, the group's cash and bank balances were HKD 50.9 million, compared to HKD 39.3 million as of December 31, 2021[31]. - As of June 30, 2022, the total bank and other borrowings amounted to HKD 381.9 million, a decrease from HKD 388.2 million as of December 31, 2021[32]. - The company's equity attributable to owners decreased to HKD 274,344 thousand as of June 30, 2022, from HKD 391,662 thousand as of December 31, 2021[111]. - Total liabilities as of June 30, 2022, amounted to HKD 303,076,000, indicating a need for financial resource management[123]. - The total assets of the company as of June 30, 2022, amounted to HKD 770,417,000, with liabilities totaling HKD 402,019,000[146][148]. Cash Flow and Financing - The company’s operating cash flow for the six months ended June 30, 2022, was a net outflow of HKD 3,436,000, a significant decrease from HKD 46,800,000 in the previous year[118]. - The financing activities generated a net cash inflow of HKD 19,878,000 in the first half of 2022, compared to a net outflow of HKD 67,157,000 in the same period of 2021[121]. - The company plans to renew existing borrowings of HKD 302,996,000, which are due for repayment in May 2023, with sufficient collateral in the form of investment properties valued at HKD 468,015,000[123]. Investments and Acquisitions - The investment in Chime Biologics Limited (CBL) was valued at HKD 156,928,000 as of June 30, 2022, down from HKD 249,507,000 as of December 31, 2021, indicating a significant decline in market conditions affecting similar companies[178]. - The group is actively seeking investment targets within the CDMO value chain, including cell line development and culture medium formulation[53]. - The company is in the process of acquiring VMS Auto Italia Fin Services Holdings Limited, incurring legal and professional fees related to the acquisition[155]. Corporate Governance and Compliance - The company maintained compliance with the corporate governance code during the six months ending June 30, 2022, except for a deviation regarding the separation of roles between the chairman and CEO[84]. - The audit committee reviewed the unaudited condensed consolidated financial statements for the six months ending June 30, 2022[94]. - The company has adopted a standard code for directors' securities transactions, confirming compliance during the reporting period[85]. Share Capital and Dividends - The company did not declare an interim dividend for the six months ended June 30, 2022, consistent with the previous year[58]. - As of June 30, 2022, the company had a total issued share capital of 5,292,515,390 shares[69]. - The previous share option scheme adopted on May 28, 2012, expired on May 27, 2022, but options granted prior to its expiration remain valid[74].

Financial Performance - The company reported a consolidated loss attributable to shareholders of approximately HKD 7.1 million for the year ended December 31, 2021, a significant decrease from a consolidated loss of approximately HKD 89 million for the year ended December 31, 2020[9]. - Total revenue for the fiscal year ended December 31, 2021, was HKD 79,337,000, a decrease of 36.98% compared to HKD 125,901,000 in 2020[78]. - The pre-tax loss improved significantly to HKD 4,137,000, a 95.44% reduction from a loss of HKD 90,698,000 in the previous year[78]. - Basic and diluted loss per share improved to HKD 0.13 from HKD 1.70, marking a 92.35% reduction in loss[78]. - The equity attributable to the owners of the company decreased by 2.82% to HKD 391,662,000 from HKD 403,034,000[78]. - Cash and cash equivalents were HKD 39.3 million as of December 31, 2021, down from HKD 72.5 million at the end of 2020[29]. - Total bank and other borrowings, including bonds and acceptances, increased to HKD 388.2 million from HKD 72.8 million in 2020, resulting in a debt-to-equity ratio of 78.4%[30]. - The debt-to-equity ratio rose significantly to 78.4% from 18.1%, an increase of 333.15%[78]. - The company did not declare any dividends for the year, maintaining a dividend payout ratio of 0%[78]. Revenue Segments - Rental income from the property investment segment increased to HKD 23.3 million for the year ended December 31, 2021, up HKD 21.4 million from HKD 1.9 million in 2020, primarily due to the acquisition of Dakota RE II Limited[15]. - Revenue from the financial investment and services segment decreased to HKD 1.4 million for the year ended December 31, 2021, down HKD 1.8 million from HKD 3.2 million in 2020[16]. - Automotive segment revenue decreased by 54.8% to HKD 54.6 million for the year ended December 31, 2021, compared to HKD 120.9 million in 2020, and was classified as discontinued operations[17]. - The financial investment and services segment recorded revenue of HKD 1.4 million for 2021, down from HKD 3.2 million in 2020[51]. Acquisitions and Investments - A significant acquisition agreement was established on November 26, 2021, involving the purchase of VMS Auto Italia Fin Services Holdings Limited, which is expected to expand the company's operational and asset scale[11]. - The company entered into a significant acquisition agreement on November 26, 2021, to acquire VMS Auto Italia Fin Services Holdings Limited for HKD 960 million, to be settled by issuing 6,956,521,739 new shares at HKD 0.138 per share[59]. - The target company and its subsidiaries will become wholly owned subsidiaries of the company upon completion of the acquisition[59]. - The company is actively exploring investment opportunities in the contract development and manufacturing organization (CDMO) value chain within the life sciences and healthcare sectors[10]. - The company has established a life sciences investment division to focus on opportunities in the life sciences and healthcare industries[10]. - The company is focused on expanding its healthcare investment portfolio, particularly in pharmaceuticals, diagnostics, and medical devices[65]. Cost Management and Operational Efficiency - The company aims to continue reducing operating costs and identifying potential business opportunities to create greater value for shareholders in the long term[13]. - Total sales and distribution costs and administrative expenses amounted to HKD 27.3 million, a decrease of HKD 91.2 million, representing 34.4% of revenue compared to 94.1% in 2020[23]. - Financial costs decreased to HKD 11.5 million from HKD 13.6 million, mainly due to a reduction in bond principal from HKD 60 million to zero[24]. - Total compensation expenses for 2021 amounted to HKD 12.3 million, a decrease from HKD 52.7 million in 2020, attributed to cost optimization and a reversal of share-based payment expenses of HKD 3.6 million[43]. Corporate Governance and Compliance - The company is committed to ensuring compliance with listing rules and maintaining transparency in its financial reporting and corporate governance practices[67]. - The company has adopted the standard code for securities transactions by directors as per the listing rules, confirming compliance for the reporting period[166]. - The company has established various committees, including the audit committee, remuneration committee, nomination committee, and executive committee, each with sufficient resources to fulfill their responsibilities[182]. - The company ensures that all directors participate in continuous professional development to update their knowledge and skills related to their duties[180]. - The company has purchased appropriate insurance for its directors and senior officers to protect against legal actions they may face[181]. - The company’s governance structure includes a majority of independent non-executive directors, ensuring a balance of power and authority[176]. Challenges and Future Outlook - The ongoing impact of COVID-19 and geopolitical tensions are expected to pose challenges to the macro environment, affecting the company's operations[13]. - The company will continue to monitor the impact of COVID-19 on its operations and financial condition, while exploring potential business opportunities[58]. - Employee activities were suspended in 2021 due to the COVID-19 pandemic[82]. Community Engagement and Social Responsibility - The company received the "Caring Company" logo from the Hong Kong Council of Social Service for its contributions to community care and social responsibility[91]. - The company made charitable donations totaling HKD 2,000 during the year, a significant decrease from HKD 20,620 in 2020[111]. Share Capital and Stock Options - The company’s total issued share capital was 5,292,515,390 shares as of December 31, 2021[127]. - The stock option plan allows for a maximum of 339,777,839 shares to be issued, representing 6.42% of the company's issued share capital as of December 31, 2021[148]. - The company issued a total of 1,064,660,000 stock options, with 505,700,000 options remaining unexercised as of December 31, 2021[153]. - The stock option plan has been effective since May 28, 2012, and is set to last for ten years[150].

Financial Performance - Total revenue for the six months ended June 30, 2021, was HKD 60,594,000, compared to HKD 58,794,000 for the same period in 2020, representing an increase of 3%[100]. - Gross profit for the six months ended June 30, 2021, was HKD 15,686,000, a decrease from HKD 27,597,000 in 2020, indicating a decline of 43%[100]. - The company reported a profit before tax of HKD 4,965,000 for the six months ended June 30, 2021, compared to a loss of HKD 9,663,000 in the same period of 2020[100]. - The net profit attributable to owners for the six months ended June 30, 2021, was HKD 4,833,000, compared to a loss of HKD 8,052,000 in 2020[100]. - Total comprehensive income for the period was HKD 6,447,000, a substantial improvement from a loss of HKD 14,201,000 in the prior year[115]. - The company reported a profit of HKD 4,833,000 for the six months ended June 30, 2021, compared to a loss of HKD 8,052,000 in the same period of 2020, marking a significant turnaround[112]. - The company recognized a foreign exchange gain of HKD 1,614,000 from overseas operations, compared to a loss of HKD 6,149,000 in the previous period[115]. - The company reported a current tax expense of HKD 132,000 for the six months ended June 30, 2021, compared to HKD 17,000 in the same period of 2020[169]. Segment Performance - The property investment segment recorded rental income of HKD 8.1 million for the six months ended June 30, 2021, compared to HKD 1 million in 2020, an increase of HKD 7.1 million[10]. - The automotive segment's revenue decreased by 7.8% to HKD 51.4 million for the first half of 2021, down from HKD 55.8 million in 2020[12]. - The financial investment and services segment generated a profit of HKD 458,000, while the property investment segment contributed HKD 15,365,000, totaling HKD 15,823,000 in profit[154]. Expenses and Costs - Gross profit fell to HKD 15.7 million, a decrease of HKD 11.9 million from HKD 27.6 million in 2020, with a gross margin decline of 21 percentage points to 25.9%[13]. - Total sales and distribution costs and administrative expenses amounted to HKD 23.1 million, a decrease of HKD 14.3 million from HKD 37.4 million in 2020, representing 38.2% of revenue[16]. - Financial costs decreased to HKD 5.3 million for the period, down from HKD 7.8 million in 2020, primarily due to a reduction in bond principal[20]. - Administrative expenses increased to HKD 15,252,000 for the six months ended June 30, 2021, from HKD 15,837,000 in 2020, showing a decrease of 4%[100]. - Interest expenses for the six months ended June 30, 2021, totaled HKD 5,016,000, a decrease from HKD 6,976,000 in the same period of 2020[168]. Cash Flow and Assets - As of June 30, 2021, the company's cash and bank balances were HKD 59.2 million, down from HKD 72.5 million as of December 31, 2020[21]. - The company reported a net current asset value of HKD 32,662,000, down from HKD 41,827,000 in the previous period[125]. - The company’s total assets as of June 30, 2021, were HKD 910,892,000, significantly higher than HKD 404,086,000 as of December 31, 2020[125]. - The company’s investment properties increased to HKD 600,506,000 from HKD 55,200,000, indicating a strong growth in asset value[125]. - Cash and cash equivalents at the end of the period stood at HKD 59,224,000, an increase from HKD 48,350,000 at the end of the previous period[136]. Debt and Liabilities - As of June 30, 2021, the group's total bank and other borrowings amounted to HKD 4,201 million, a significant increase from HKD 728 million as of December 31, 2020, resulting in a debt-to-equity ratio of 81.5%, up from 18.1%[22]. - Total liabilities as of June 30, 2021, were HKD 445,095,000, with classified liabilities from the property investment segment at HKD 355,916,000[161]. - The group incurred capital expenditures of HKD 146,000 on property, plant, and equipment for the six months ended June 30, 2021, down from HKD 3,432,000 in 2020[184]. Shareholder Information - Major shareholders include 鼎珮投資集團有限公司 and 麥少嫻女士, holding approximately 28.70% of the issued share capital[62]. - Gustavo International Limited and Maini Investments Limited each hold approximately 5.76% of the issued share capital[62]. - The total issued share capital as of June 30, 2021, was 5,292,515,390 shares[61]. - The group did not declare or pay any dividends for the six months ended June 30, 2021, and has no plans to declare any dividends post-reporting period[181]. Corporate Governance and Management - The company maintained compliance with the corporate governance code during the reporting period, except for a deviation regarding the separation of roles between the Chairman and CEO[74]. - The company appointed Mr. Lian Zhenhao as an executive director effective June 13, 2021, while Mr. Lin Zhiren resigned from the same position[78]. - The board will continue to explore potential business opportunities to ensure long-term value growth for shareholders[46]. Market and Economic Conditions - The macroeconomic environment remains challenging due to the ongoing impact of COVID-19, and the company will continue to monitor its effects on operations and financial status[46]. - The company received government subsidies related to COVID-19 amounting to HKD 54,000 in the previous interim period[165].

Financial Performance - Total revenue for the year was HKD 1,259 million, down from HKD 2,320 million in the previous year, resulting in a loss of HKD 890 million[11]. - Total revenue for 2020 was HKD 125,901,000, a decrease of 45.72% compared to HKD 231,942,000 in 2019[90]. - The company reported a pre-tax loss of HKD 90,698,000, which is a significant increase of 285.19% from a loss of HKD 23,546,000 in the previous year[90]. - Shareholders' loss attributable to the company was HKD 89 million in 2020, compared to HKD 24.1 million in 2019, mainly due to decreased automotive sales and increased impairments[32]. - Net loss from other gains and losses was HKD 214 million in 2020, compared to a gain of HKD 6 million in 2019, mainly due to property and goodwill impairments[21]. - Other income decreased to HKD 133 million in 2020 from HKD 242 million in 2019, primarily due to reduced sales support from suppliers[20]. Debt and Equity - The debt-to-equity ratio remained stable at 18.1%, indicating a solid overall financial position for the company[11]. - As of December 31, 2020, the group's total bank and other borrowings and corporate bonds amounted to HKD 72.8 million, up from HKD 5.3 million in 2019, resulting in a debt-to-equity ratio increase from 1.2% in 2019 to 18.1% in 2020[37]. - Bank and other borrowings increased to HKD 72,811,000, a rise of 1267.86% from HKD 5,323,000 in 2019[90]. - The debt-to-equity ratio surged to 18.1%, up from 1.2% in the previous year, marking an increase of 1408.33%[90]. Investments and Acquisitions - The company invested in Chime Biologics Limited (CBL), a contract development and manufacturing organization (CDMO), tapping into the rapidly growing CDMO market projected to grow by USD 36.51 billion from 2019 to 2023[12]. - The newly established life sciences investment division aims to explore opportunities in the CDMO value chain and other areas such as drug development and medical devices[12]. - The group acquired a 27.49% stake in Dakota RE II Limited, increasing its ownership to 54.98% after the completion of the acquisition on March 25, 2021[44]. - The acquisition of Dakota RE II Limited, completed in March 2021, will integrate its financial performance into the group's results, providing greater potential returns[69]. Operational Performance - The automotive segment revenue decreased by 45.4% to HKD 1,209 million in 2020, down from HKD 2,214 million in 2019, primarily due to reduced Maserati new car sales amid COVID-19 impacts[18]. - Gross profit margin increased by 2.3 percentage points to 30.9%, with after-sales service revenue accounting for 42.0% of total automotive segment revenue in 2020, up from 39.3% in 2019[19]. - The group implemented cost optimization and restructuring plans since Q1 2020 to manage operational costs amid the COVID-19 crisis[55]. - The productivity and efficiency of the workshop improved by over 23% and 25%, respectively, despite the challenging economic environment[56]. Market Conditions - The Hong Kong economy contracted by 6.1% in 2020, marking the largest annual decline in history, with retail sales down 24.3% year-on-year[52]. - The global economy is projected to contract by 3.5% in 2020 due to the adverse effects of COVID-19, continuing to challenge economic recovery[69]. - Maserati's vehicle deliveries in 2020 dropped approximately 40% compared to the previous year due to the COVID-19 pandemic, maintaining a market share of 9%[56]. Community and Environmental Engagement - The company is committed to environmental protection by reducing resource consumption and waste[95]. - The company actively participates in community charitable activities, contributing to social welfare and stakeholder value[96]. - The group made charitable donations totaling HKD 20,620 during the year, a decrease from HKD 39,530 in 2019[123]. - The company continues to contribute to the community through various charitable organizations focused on the elderly, youth, and disadvantaged groups[122]. Governance and Management - The company emphasizes high-quality governance, robust internal controls, transparency, and accountability to shareholders[186]. - The board consists of seven members, including four executive directors and three independent non-executive directors[184]. - The Audit Committee consists of independent non-executive directors, including Mr. Jiang Qichuan as the chairman, who has appropriate financial qualifications and experience[200]. - Continuous professional development activities are undertaken by all directors to update their knowledge and skills[196].

Financial Performance - Total revenue for the six months ended June 30, 2020, was HKD 58,794,000, a decrease of 58% compared to HKD 139,710,000 for the same period in 2019[96]. - The company reported a loss of HKD 8,052,000 for the six months ended June 30, 2020, compared to a profit of HKD 11,238,000 in the prior year[96]. - Basic and diluted loss per share was HKD 0.15, compared to earnings of HKD 0.22 per share in the same period last year[96]. - Gross profit for the same period was HKD 27,597,000, down 33% from HKD 41,329,000 in 2019[96]. - The group reported a total comprehensive loss of HKD 1,694,000 for the six months ended June 30, 2020, compared to a profit of HKD 5,094,000 for the same period in 2019[129]. - The company incurred a financial cost of HKD 7,069,000 for the six months ended June 30, 2020, compared to HKD 1,148,000 in the same period of 2019[129]. - The company recognized a loss of HKD 500 million from the fair value of investment properties for the six months ended June 30, 2020, compared to a gain of HKD 1,400 million in 2019[6]. - The company’s accumulated losses increased to HKD 108,010,000 as of June 30, 2020, compared to HKD 76,155,000 at the same time in 2019[106]. Revenue Breakdown - Automotive segment revenue decreased by 58.2% to HKD 55.8 million in the first half of 2020, compared to HKD 133.5 million in 2019[10]. - Overall revenue from Hong Kong dropped by 53.8% to HKD 53.5 million, primarily due to a decrease in Maserati new car sales[10]. - The financial investment and services segment generated revenue of HKD 2,005,000, down from HKD 5,261,000 in the previous year, reflecting a decline of 62%[129]. - Total revenue for the automotive segment was HKD 55,773,000 for the six months ended June 30, 2020, a decrease of 58% compared to HKD 133,518,000 for the same period in 2019[124]. Cost Management - Total sales and distribution costs and administrative expenses amounted to HKD 33 million, down from HKD 55.1 million in 2019, representing 59.1% of revenue[15]. - Financial costs decreased to HKD 0.8 million from HKD 2.4 million in 2019, including lease liabilities interest of HKD 0.7 million[15]. - Other income for the six months ended June 30, 2020, was HKD 7.2 million, down from HKD 20.4 million in 2019, mainly due to reduced sales and marketing support from suppliers[12]. - The group’s major management personnel compensation for the six months ended June 30, 2020, was HKD 3,583,000, compared to HKD 4,096,000 for the same period in 2019[176]. Operational Efficiency - The operational efficiency in the workshop improved, with the average processing time reduced from 5.92 days in 2019 to 2.89 days in the first half of 2020[38]. - The average service volume for Maserati's after-sales service decreased by 12% in the first half of 2020 compared to the entire year of 2019[38]. - The group launched new service promotions during the COVID-19 pandemic, including same-day vehicle pickup and antibacterial coating services[39]. - The group achieved a 47% increase in extended warranty service sales compared to the previous year[39]. Cash Flow and Financing - Cash flow was supported by operating cash and bond issuance, with net bank borrowings repaid amounting to HKD 3.5 million and net bond repayments of HKD 41.6 million[20]. - As of June 30, 2020, the group's cash and cash equivalents amounted to HKD 92.4 million, down from HKD 148 million as of December 31, 2019[21]. - The total bank and other borrowings increased to HKD 131.8 million as of June 30, 2020, from HKD 5.3 million as of December 31, 2019, resulting in a debt-to-equity ratio of 29.7%[23]. - The company raised HKD 180,582,000 through bank and other borrowings during the financing activities, compared to HKD 42,671,000 in the previous year[109]. Market Impact - Maserati's vehicle deliveries dropped by 70% in the first half of 2020 due to the COVID-19 pandemic, leading to a market share decline from 12% to 7%[35]. - The company noted that the COVID-19 pandemic and related travel restrictions negatively impacted its operations, leading to a decline in revenue and an increase in government subsidies related to the pandemic[112]. - The company anticipates a slow recovery in the economic environment for 2020, affecting retail across all automotive brands, while new Maserati models and special editions are expected to launch shortly[50]. Corporate Governance - The board did not declare an interim dividend for the six months ended June 30, 2020, consistent with the previous year[53]. - The company maintained compliance with the corporate governance code during the reporting period, except for a deviation regarding the roles of the chairman and CEO[70]. - The board of directors included four executive directors and three independent non-executive directors as of June 30, 2020[76]. - Changes in the board included the appointment of two executive directors and the resignation of one independent non-executive director during the reporting period[74]. Investments and Future Plans - The company invested HKD 320 million in Chime Biologics Limited, acquiring 51,847,997 Series A preferred shares, which became an associate company[19]. - The company is exploring various business opportunities, including in the life sciences and healthcare sectors, to enhance long-term shareholder value[50]. - The investment in an associate, Chime Biologics Limited, was completed for USD 32 million, indicating a strategic move into biopharmaceuticals[154]. - The new management team in the life sciences division has over 40 years of combined experience in product development and commercialization[49].