[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].

Financial Performance - The company recorded a net loss of approximately HKD 24.1 million for the year ended December 31, 2019, compared to a net loss of HKD 7.4 million in the previous year[14]. - Total revenue decreased by 31% to HKD 2.32 billion due to a decline in the automotive segment[14]. - The automotive segment's revenue decreased by 31.9% to HKD 221.4 million in 2019, down from HKD 325.3 million in 2018[20]. - Gross profit margin increased by 3.6 percentage points to 28.6%, with gross profit declining to HKD 63.4 million from HKD 81.5 million in 2018[20]. - Other income for the year ended December 31, 2019, was HKD 24.2 million, a decrease of HKD 6.2 million compared to HKD 30.4 million in 2018, mainly due to reduced marketing support from suppliers[20]. - The company reported a loss attributable to shareholders of HKD 24.1 million for the year, compared to a loss of HKD 7.4 million in 2018, primarily due to decreased sales in the automotive sector[26]. - Cash and cash equivalents amounted to HKD 148.0 million as of December 31, 2019, down from HKD 165.2 million at the end of 2018[27]. - The company confirmed that over 25% of its issued share capital is held by the public as of the report date[137]. - Total revenue decreased by 31.40% to HKD 231,942,000 compared to HKD 338,095,000 in the previous period[66]. - Pre-tax loss increased by 317.85% to HKD (23,546,000) from HKD (5,635,000) year-on-year[66]. - Equity attributable to owners of the company decreased by 4.41% to HKD 456,917,000 from HKD 477,994,000[66]. - Basic and diluted loss per share increased by 228.57% to HKD (0.46) from HKD (0.14)[66]. - Debt to equity ratio significantly reduced to 1.2% from 15.5%, a decrease of 92.26%[66]. - No dividends were declared for the year, maintaining a payout ratio of 0%[87]. Automotive Segment - Maserati vehicle registrations decreased by 35% in 2019 compared to 2018, although the company's market share remained stable[15]. - In 2019, Maserati sold nearly 200 vehicles in Hong Kong, maintaining a market share of 9% despite a challenging economic environment[39]. - The overall retail sales value of automobiles and parts in Hong Kong decreased by 5.9% from HKD 16.81 billion in 2018 to HKD 15.81 billion in 2019[39]. - The number of registered passenger cars in Hong Kong fell by 11% from 42,287 in 2018 to 37,500 in 2019[39]. - Revenue from pre-delivery inspection services in mainland China decreased by 38% to HKD 26.3 million in 2019, down from HKD 42.5 million in 2018[44]. Property Investments - Rental income from property investments increased by 15% following a lease renewal in June 2019[17]. - The property investment segment recorded rental income of HKD 2.0 million, up from HKD 1.8 million in 2018, while fair value losses on investment properties amounted to HKD 2.5 million[25]. - Rental income from property investment rose by 15% to HKD 2 million in 2019, compared to HKD 1.8 million in 2018[48]. Strategic Initiatives - The company plans to introduce new Maserati models, including Levante Trofeo and Levante GTS, in 2020[15]. - The company is focusing on expanding into the CDMO market, which is projected to reach USD 36.51 billion by 2023, growing at a CAGR of nearly 8% over five years[18]. - The group plans to simplify business processes and maintain a lean cost structure in response to economic challenges posed by COVID-19[51]. - The management discussed future business development and outlook, indicating a strategic focus on expanding core operations and exploring new market opportunities[64]. - The company aims to enhance its investment portfolio through strategic acquisitions and partnerships in emerging markets[64]. Governance and Corporate Structure - The company is committed to maintaining high standards of corporate governance and transparency, as evidenced by the composition of its board and committees[58]. - The company maintained effective corporate governance structures, adhering to all corporate governance code provisions except for A.2.1, which is detailed in the "Chairman and CEO" section[144]. - The board consists of five members, including two executive directors and three independent non-executive directors, ensuring compliance with listing rules requiring at least one independent director with appropriate professional qualifications[149]. - The company has a policy for the appointment, re-election, and removal of directors, ensuring that all directors retire at least once every three years[155]. - The independent non-executive directors confirm their independence annually as per listing rules, ensuring compliance and governance integrity[149]. - The company emphasizes continuous professional development for all directors, who participated in training and development activities to enhance their knowledge and skills[158]. - The company has purchased appropriate insurance for its directors and senior officers to protect against legal actions they may face[159]. - The board has established several committees, including the Audit Committee, Remuneration Committee, Nomination Committee, and Executive Committee, each with defined responsibilities[160]. Risk Management - The risk management framework includes a clear governance structure and policies to manage various business risks, with the board overseeing its effectiveness[186]. - The company adopted a whistleblowing policy on October 22, 2019, to allow stakeholders to raise concerns about misconduct[192]. - The risk management system is designed to manage risks rather than eliminate them, providing reasonable assurance against significant misstatements or losses[192]. - The board conducts an annual review of the risk management and internal control systems, affirming their effectiveness in adapting to business transformations and external changes[192]. Community Engagement - The company continues to focus on corporate social responsibility, engaging in community support and environmental protection initiatives[75]. - The group made charitable donations totaling HKD 39,530 during the year, compared to HKD 44,495 in 2018[95].

Revenue Performance - Automotive segment revenue decreased by 29% to HKD 1,335 million in H1 2019, down from HKD 1,875 million in H1 2018[16] - Overall revenue from Hong Kong dropped by 29.1% to HKD 1,159 million, primarily due to a decrease in Maserati new car sales[16] - Total revenue for the six months ended June 30, 2019, was HKD 139,710,000, a decrease of 27.5% compared to HKD 192,980,000 for the same period in 2018[95] - Revenue from automobile sales and related parts was HKD 88,928,000, down 29.4% from HKD 126,069,000 in the previous year[151] - Revenue from pre-delivery inspection services in mainland China dropped by 33%, primarily due to the cessation of services for Alfa Romeo and a decrease in Maserati vehicles undergoing inspection[41] Profitability - Gross profit decreased from HKD 521 million to HKD 351 million, with a gross margin decline of 1.5 percentage points to 26.3%[17] - Shareholders' profit attributable to the company was HKD 112 million, down from HKD 117 million in the previous year[24] - Net profit for the period was HKD 11,238,000, slightly down by 3.8% from HKD 11,682,000 in the previous year[97] - The company reported a loss of HKD 888,000 in the automotive segment, compared to a profit of HKD 6,606,000 in the same period last year[159] - The company reported a total comprehensive income for the period of HKD 10,486 thousand, compared to HKD 7,712 thousand for the same period in 2018, indicating an increase of approximately 36.36%[106] Cash Flow and Liquidity - Cash and cash equivalents amounted to HKD 1,480 million as of June 30, 2019, compared to HKD 1,652 million at the end of 2018[26] - The company reported a net cash inflow from operating activities of HKD 63,685 thousand for the six months ended June 30, 2019, compared to a net cash outflow of HKD 21,946 thousand for the same period in 2018[108] - Cash and cash equivalents decreased to HKD 103,970 thousand at the end of June 30, 2019, down from HKD 144,442 thousand at the end of June 30, 2018, a decline of approximately 28.06%[108] Assets and Liabilities - Total assets as of June 30, 2019, were HKD 399,044,000, a decrease from HKD 476,375,000 at the end of 2018[100] - Total liabilities increased to HKD 513,922 thousand as of June 30, 2019, up from HKD 480,969 thousand at the end of 2018, indicating a rise of approximately 6.87%[102] - The company’s total liabilities were HKD 126,255,000, with HKD 103,432,000 attributed to the automotive segment[165] Shareholder Information - Major shareholders include 鼎珮投資 with a 28.70% stake and Gustavo International Limited with a 5.84% stake, as of June 30, 2019[59] - The board did not declare an interim dividend for the six months ended June 30, 2019, consistent with the previous year[50] - The company did not declare or pay any dividends for the six months ended June 30, 2019, nor did it plan to declare any dividends post-reporting period[187] Corporate Governance - The company maintained compliance with the corporate governance code during the six months ended June 30, 2019, except for a deviation regarding the roles of the chairman and CEO[71] - The company’s audit committee consists of independent non-executive directors, including Dr. Du Dongni, Mr. Jiang Qichuan, and Mr. Li Zhongliang[79] New Accounting Standards - The company has adopted new accounting standards effective from January 1, 2019, including HKFRS 16 on leases, which may impact financial reporting[112] - The company recognized lease liabilities of HKD 67,479,000 as of January 1, 2019, after applying HKFRS 16, which reflects a discounting of previous operating lease commitments[141] - The company will present right-of-use assets separately in the consolidated financial position statement, excluding those classified as investment properties[124] Market and Operational Insights - Maserati vehicle registrations fell by 14% in the first half of 2019, with Ghibli, Levante, and GranCabrio capturing over 10% market share in their respective categories[37] - The new Maserati showroom and service center in Macau opened in May 2019, enhancing brand experience and after-sales service for customers[40] - The company anticipates a slow recovery in 2019, but remains optimistic about growth due to the launch of new models and special editions of Maserati[45]

Financial Performance - The company reported a net loss of approximately HKD 7.4 million for the year ended December 31, 2018, compared to a net profit of HKD 85.9 million in the previous year, marking a significant decline [11]. - Total revenue decreased by 57% to HKD 3.38 billion in 2018, down from HKD 7.85 billion in 2017 [11]. - The automotive segment's revenue fell by 59% to HKD 3.25 billion in 2018, compared to HKD 7.87 billion in 2017 [20]. - Revenue from pre-delivery inspection services in mainland China dropped to HKD 425 million in 2018, down from HKD 998 million in 2017 [20]. - Total revenue in Hong Kong decreased by 59% to HKD 282.8 million (2017: HKD 687.6 million), primarily due to the cessation of Ferrari operations and a decline in new car sales [21]. - Gross profit margin fell by 5.4 percentage points to 25%, with gross profit decreasing from HKD 238.8 million to HKD 81.5 million, attributed to lower sales volumes of Ferrari and Maserati vehicles [22]. - Total revenue for the fiscal year ended December 31, 2018, was HKD 338,095,000, a decrease of 57.36% compared to HKD 792,873,000 in 2017 [61]. - The company reported a loss before tax of HKD 5,635,000, a decline of 106.16% from a profit of HKD 91,514,000 in the previous year [61]. - Basic and diluted loss per share was HKD 0.14, a decrease of 108.48% from earnings of HKD 1.65 per share in 2017 [61]. - Cash and cash equivalents as of December 31, 2018, were HKD 165.2 million, down from HKD 313.2 million in 2017 [30]. - Total bank and other borrowings as of December 31, 2018, were HKD 74.2 million (2017: HKD 106.2 million), with net cash position at HKD 91 million (2017: HKD 207 million) [31]. Debt and Equity - The company's debt-to-equity ratio improved from 21.6% to 15.5% as of December 31, 2018 [12]. - The debt-to-equity ratio improved from 21.6% in 2017 to 15.5% in 2018 [33]. - The total amount of loans outstanding as of December 31, 2018, was HKD 89.7 million (2017: HKD 35.2 million), with interest rates ranging from 8% to 30% [34]. - As of December 31, 2018, the distributable reserves available to shareholders amounted to approximately HKD 166,470,000, a decrease from HKD 170,645,000 in 2017 [94]. Business Outlook and Strategy - The company aims to enhance the ownership experience of Maserati vehicles, focusing on improving after-sales service operations [12]. - The company is cautiously optimistic about the outlook for 2019, despite challenges such as the US-China trade dispute and rising interest rates [17]. - The company plans to launch new Maserati models to strengthen its market position in the luxury automotive sector [17]. - The company plans to open a new showroom and service center in Macau in Q2 2019 to enhance Maserati's presence and customer service [45]. - The company aims to continue observing opportunities in the automotive, property, and financial investment sectors to deliver long-term value growth for shareholders [45]. - The company is actively exploring investment opportunities in the automotive, real estate, and financial sectors to maximize shareholder returns [80]. Customer Satisfaction and Service - Customer satisfaction index reached an excellent level of 96.6%, reflecting improvements in after-sales service quality [40]. - The group's after-sales service revenue increased by 5.8% due to competitive service pricing encouraging customer usage [43]. Corporate Governance - The company emphasizes a high-quality board, robust internal controls, transparency, and accountability to shareholders as part of its corporate governance principles [154]. - The company has adopted the standard code for securities transactions by directors as set out in Appendix 10 of the Listing Rules, confirming compliance during the year [155]. - The company will continue to review and improve its corporate governance practices to ensure effective leadership and maximize shareholder returns [154]. - The board consists of five members, including two executive directors and three independent non-executive directors [157]. - The company has implemented a diversified board member policy to enhance governance [165]. - The company has purchased appropriate insurance for its directors and senior officers to protect against legal actions [170]. - The Nomination Committee is responsible for reviewing the qualifications and capabilities of potential board members and making recommendations to the board [179]. Risk Management - The company’s risk management framework includes a clear governance structure and reporting mechanisms to manage business risks effectively [197]. - The company emphasizes the development of a risk management culture and the oversight of risk management systems by the board and audit committee [200]. - The risk management policies are evaluated for conflicts between functional divisions [200]. Remuneration and Compensation - The basic salary of the executive director, Mr. Zhuang Tianlong, was adjusted from HKD 3,135,000 to HKD 3,260,400 per year, effective January 1, 2019 [106]. - The basic salary of the executive director, Mr. Lin Zhijun, was adjusted from HKD 2,126,052 to HKD 2,211,096 per year, effective January 1, 2019 [107]. - The annual director's fee for independent non-executive directors was increased from HKD 180,000 to HKD 210,000, effective January 1, 2019 [108][109][110]. - The remuneration committee is responsible for establishing a transparent process for determining the remuneration of directors and senior management [178]. Audit and Compliance - Deloitte Touche Tohmatsu was reappointed as the company's auditor for the year ended December 31, 2018 [150]. - The audit committee reviewed the audited consolidated financial statements for the year ending December 31, 2018, and discussed risk management and internal controls [173]. - The audit committee recommended the adoption of new accounting standards and reviewed the effectiveness of the audit procedures [174]. - The company has appointed an independent auditor to provide audit and non-audit services, with fees reviewed by the audit committee [174].