Business Operations - As of March 31, 2023, the company operates 28 service centers in Hong Kong, 3 in mainland China, and 6 in Singapore, with a retail network of 9 "be Beauty Shop" locations[13] - The company has opened several new stores, including Be Beauty Shop in Whampoa and Kwai Fong, and a new modern beauty center in Kwai Fong in December 2022[22] - The group operated a total of 46 stores in Hong Kong, a decrease of 2 stores from the previous year[28] - Revenue from Singapore operations was HKD 45.7 million, an increase from HKD 43.9 million in the previous year, with service revenue of HKD 37.7 million and prepaid beauty package sales of HKD 41.7 million[34] - The group’s main business involves providing beauty and wellness services and selling skincare and wellness products, which are highly competitive sectors[129] - For the fiscal year ending March 31, 2023, the group’s revenue and performance primarily came from beauty and wellness services in Hong Kong, mainland China, and Singapore[131] Financial Performance - The group's revenue for the fiscal year ended March 31, 2023, was approximately HKD 406.3 million, an increase of 14.3% compared to HKD 355.6 million for the fiscal year ended March 31, 2022[28] - The revenue from prepaid beauty packages was HKD 412.1 million, representing a 19.1% increase from HKD 346.1 million in the previous fiscal year[36] - Revenue from beauty and facial care services accounted for 67.6% of total revenue, with a total of HKD 274.6 million, up 14.0% from the previous year[35] - The net loss attributable to equity shareholders for the fiscal year 2023 was approximately HKD 20.6 million, a significant improvement from a net loss of HKD 68.8 million in the previous year[43] - The group maintained a strong financial position with cash and bank balances of approximately HKD 177.5 million, up from HKD 127.5 million in the previous fiscal year, with no bank borrowings[45] - The total deferred revenue at the end of the fiscal year was HKD 242.8 million, up from HKD 204.2 million at the beginning of the year[38] - The group’s revenue primarily comes from beauty and wellness services, contributing approximately 92% of the total revenue for the year ended March 31, 2023[186] Employee and Operational Efficiency - Employee benefits expenses increased by 9.6% to approximately HKD 274.9 million, accounting for 67.7% of total revenue, down from 70.5% in the previous year[39] - The group employed 876 staff as of March 31, 2023, a reduction from 904 staff in the previous year, with total employee benefits expenses increasing by 9.6% to HKD 274.9 million[51] - The group aims to enhance operational efficiency and maintain service quality in its beauty and wellness centers[32] - The company has implemented new operational strategies aimed at improving efficiency, which are expected to reduce costs by 10% over the next year[80] Corporate Governance - The management team emphasized the importance of maintaining strong corporate governance practices to enhance shareholder value[81] - The company has adhered to the corporate governance code, with minor deviations noted in specific areas[81] - The board consists of three executive directors and three independent non-executive directors, ensuring a balanced composition for effective oversight[83] - The board has established a clear division of responsibilities between management and the board, with management accountable for daily operations[90] - The company emphasizes the importance of corporate governance and compliance with statutory and regulatory requirements[88] Environmental and Social Responsibility - The company has been awarded the "Caring Company" logo by the Hong Kong Council of Social Service for 12 consecutive years as of February 2023[25] - The company has been recognized for its green initiatives, receiving the "Green Office" and "Healthy Workplace" labels for six consecutive years from the World Green Organization[25] - The company has implemented various environmental measures, including a "paperless office" initiative and the use of LED lighting in retail stores to save energy[55] - The company will issue a separate Environmental, Social, and Governance report in accordance with the Listing Rules[175] Market Strategy and Future Outlook - The company aims to expand its product sales through various brands, including "Malu Wilz," "Byotea," and its own brands like "p.e.n" and "FERRECARE," enhancing its customer base[12] - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 20% based on new product launches and market expansion strategies[80] - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share within the next two years[80] - A strategic acquisition of a local competitor is being considered to enhance the company's product offerings and customer base[80] Risk Management - The company faces risks from macroeconomic changes, regulatory updates, market competition, and rising operational costs in Hong Kong[61] - The company has adopted a corporate risk management framework to identify and manage significant risks to its business objectives[110] Shareholder Information - As of March 31, 2023, the company had 904,483,942 shares issued, with a market value of HKD 148 million[68] - The company did not declare an interim dividend for the fiscal year 2023, consistent with the previous fiscal year where the interim dividend was also zero[132] - The company did not declare a final dividend for the fiscal year 2023, mirroring the previous fiscal year where the final dividend was also zero[132] - Shareholders can request a special general meeting if they hold at least 10% of the company’s paid-up capital[124] Audit and Compliance - The independent auditor has audited the consolidated financial statements for the fiscal year ending March 31, 2023, and found them to be true and fair according to the Hong Kong Financial Reporting Standards[180] - The audit committee reviewed and approved the annual performance before it was approved by the board[173] - The external auditor's fees for audit services amounted to HKD 3,400,000, while non-audit services fees were HKD 300,000[105]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示概不會就因本公佈全部或任 何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 MODERN HEALTHCARE TECHNOLOGY HOLDINGS LIMITED （現代健康科技控股有限公司） （於開曼群島註冊成立的有限公司） （股份代號：919） 截至二零二三年三月三十一日止年度 全年業績公佈 現代健康科技控股有限公司（「本公司」）董事會（「董事會」）欣然宣佈本公司及其 附屬公司（統稱「本集團」）於截至二零二三年三月三十一日止年度（「二零二三年 財政年度」或「回顧年度」）的綜合業績連同截至二零二二年三月三十一日止年度 （「二零二二年財政年度」）之比較數字如下。截至二零二三年三月三十一日止年度 的綜合業績已由本公司審核委員會審閱。 綜合損益表 截至二零二三年三月三十一日止年度 二零二三年 二零二二年 附註 千港元 千港元 ...

Business Operations - The company operates 30 service centers in Hong Kong, 3 in mainland China, and 7 in Singapore as of March 31, 2022[14]. - The retail network under "be Beauty Shop" consists of 8 locations, focusing on high-quality skincare and wellness products[14]. - The company offers a diverse range of services, including beauty and facial care, body shaping, and wellness products[8]. - The group operated a total of 48 stores as of March 31, 2022, down from 51 stores in the previous year[26]. - The group plans to cautiously expand its business in Singapore, where revenue for the fiscal year was HKD 43.9 million, down from HKD 45.9 million in the previous year[31]. Financial Performance - The group's revenue for the fiscal year ended March 31, 2022, was approximately HKD 355.6 million, a decrease of 17.6% compared to HKD 431.5 million for the previous fiscal year[26]. - The operating loss for the fiscal year was HKD 72.3 million, compared to an operating profit of HKD 134 million in the previous fiscal year, reflecting a decline in operating margin by 51.4 percentage points[26]. - Revenue from beauty and health services in Hong Kong decreased by 18.8%, with service revenue of HKD 281 million and prepaid beauty package revenue of HKD 298.4 million, reflecting a decline of 21.7% and an increase of 21.0% respectively[28]. - Revenue from skincare and health product sales increased by 52.5% to HKD 30.1 million, compared to HKD 19.7 million in the previous fiscal year[32]. - The group reported a net revenue of HKD 346.1 million from the sale of new prepaid beauty packages, an increase of 18.5% from HKD 292.2 million in the previous fiscal year[33]. - The net loss attributable to equity shareholders for the fiscal year 2022 was approximately HKD 68,800,000, compared to a net profit of HKD 125,700,000 in the fiscal year 2021[41]. - The company’s basic and diluted loss per share was HKD 7.61, compared to earnings per share of HKD 13.90 in the previous year[195]. Employee and Operational Costs - Employee benefits expenses increased by approximately 38.7% from HKD 180,800,000 in the fiscal year 2021 to about HKD 250,800,000 in the fiscal year 2022, accounting for 70.5% of revenue[37]. - Rental costs and depreciation of leased properties amounted to approximately HKD 75,200,000, representing 21.1% of revenue, a slight decrease from 19.0% in the previous year[38]. - Other operating expenses totaled HKD 46,667,000 for the fiscal year 2022, compared to HKD 41,166,000 in the previous year[40]. Corporate Governance - The company emphasizes strong corporate governance principles to enhance shareholder value, adhering to the corporate governance code since April 1, 2012[79]. - The board consists of three executive directors and three independent non-executive directors, ensuring a balanced composition for effective oversight[81]. - The company has established a remuneration committee to review and determine the compensation for directors and senior management, ensuring competitive rewards to attract and retain key executives[94]. - The audit committee reviewed the group's financial reporting, risk management, and internal controls, holding four meetings during the review year[99]. Market and Industry Trends - The company closely monitors industry trends to acquire advanced beauty equipment for its services[9]. - The group faces risks from macroeconomic changes, regulatory updates, market competition, and rising operational costs in Hong Kong[60]. - The group expects the Hong Kong retail sector to continue recovering as long as the local pandemic remains stable, supported by government measures like the consumption voucher scheme[52]. Community and Environmental Initiatives - The company has received the "Green Office Award" from the World Green Organization for five consecutive years[22]. - The group has implemented various environmental measures, including promoting a "paperless office" and using LED lighting in retail stores to save energy[53]. - The company has a commitment to community welfare activities, with Dr. Zeng Yu actively participating in various initiatives[70]. Shareholder Information - As of March 31, 2022, the company had issued 904,483,942 ordinary shares with a market capitalization of HKD 121 million[67]. - The company did not declare an interim dividend for the fiscal year, consistent with the previous year where the interim dividend was also zero[130]. - Shareholders can request a special general meeting if they hold at least 10% of the company's paid-up capital[122]. Risk Management - The company has adopted a corporate risk management framework to identify and manage significant risks in daily operations[106]. - The board has reviewed the effectiveness of the risk management and internal control systems, deeming them adequate and effective[105]. Financial Reporting and Audit - KPMG has audited the financial statements for the fiscal year 2022 and is eligible for reappointment at the upcoming annual general meeting[164]. - The external auditor's fees for audit services amounted to HKD 3,000,000, while non-audit services totaled HKD 300,000[101].

[Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) This section outlines the company's business performance, financial position, corporate social responsibility practices, future outlook, and subsequent events during the 2021/22 interim period [Business Review](index=3&type=section&id=Business%20Review) The Group's beauty and spa service centers in Hong Kong, mainland China, and Singapore were continuously affected by the COVID-19 pandemic during the review period, leading to varied revenue impacts and a significant increase in skincare and health product sales [Hong Kong](index=3&type=section&id=Hong%20Kong) Hong Kong's business faced persistent COVID-19 challenges, resulting in low consumer confidence, fewer service centers, decreased service revenue, but a significant increase in prepaid beauty package income - Hong Kong's consumer confidence index remained low at **65.70 in Q2 2021**, significantly below the 2006-2021 average of 82.07[3](index=3&type=chunk) - The Group operates **30 beauty and spa service centers in Hong Kong**, with a total floor area of approximately **175,000 sq ft**, a **6.9% decrease** from the previous year[4](index=4&type=chunk) Hong Kong Business Revenue (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Service Revenue | 167,863 | 185,500 (Estimated) | | Prepaid Beauty Package Revenue | 198,204 | 127,626 (Estimated) | [Mainland China](index=3&type=section&id=Mainland%20China) Mainland China's business operates three service centers via two wholly foreign-owned enterprises in Shanghai and Guangzhou, experiencing a decline in both service and prepaid beauty package revenue during the review period - The Group operates **3 service centers in mainland China**, located in Shanghai and Guangzhou[6](index=6&type=chunk) Mainland China Business Revenue (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Service Revenue | 3,772 | 6,020 (Estimated) | | Prepaid Beauty Package Revenue | 5,077 | 6,274 (Estimated) | [Singapore](index=4&type=section&id=Singapore) Singapore's business operates nine beauty and wellness service centers, one fewer than last year, with total revenue and service revenue declining due to COVID-19 restrictions, yet prepaid beauty package income saw significant growth - The Group operates **9 beauty and wellness service centers in Singapore**, a **decrease of 1** from the previous year[7](index=7&type=chunk) Singapore Business Revenue (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Total Revenue | 19,477 | N/A | | Prepaid Beauty Package Revenue | 17,774 | 12,091 (Estimated) | | Revenue from Services Provided | 15,922 | 17,910 (Estimated) | - The revenue decrease was primarily due to reduced revenue recognized from deferred income, resulting from store closures in compliance with Singapore's COVID-19 circuit breaker measures last year[7](index=7&type=chunk) [Financial Review](index=4&type=section&id=Financial%20Review) The Group's total revenue decreased by **5.9% to HK$205,396 thousand** during the review period, primarily due to the pandemic, resulting in a net loss of **HK$4.63 cents per share** despite increased employee benefits, while capital expenditure significantly rose for network expansion and renovations, maintaining a robust financial position with no bank borrowings [Revenue](index=4&type=section&id=Revenue) The Group's total revenue decreased by **5.9% year-on-year to HK$205,396 thousand**, primarily due to economic downturns across multiple business segments, with beauty and wellness service revenue declining while skincare and health product sales surged by **103.2%** Revenue Breakdown (Six Months Ended September 30) | Sales Mix | 2021 (HK$ '000) | Percentage of Revenue | 2020 (HK$ '000) | Percentage of Revenue | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Beauty and Facial Treatments | 139,057 | 67.7% | 156,469 | 71.7% | –11.1% | | Slimming | 38,986 | 19.0% | 41,374 | 19.0% | –5.8% | | Spa Baths and Massages | 9,513 | 4.6% | 11,604 | 5.3% | –18.0% | | **Beauty and Wellness Services** | **187,556** | **91.3%** | **209,447** | **96.0%** | **–10.5%** | | Sales of Skincare and Health Products | 17,840 | 8.7% | 8,781 | 4.0% | +103.2% | | **Total** | **205,396** | **100%** | **218,228** | **100%** | **–5.9%** | - Product revenue significantly increased by **103.2% to HK$17,840 thousand**, primarily due to adjusting the product portfolio to meet customer demand[10](index=10&type=chunk) [Employee Benefit Expenses](index=4&type=section&id=Employee%20Benefit%20Expenses) Employee benefit expenses significantly increased by **67.8% to HK$148,561 thousand**, despite a **23.8% reduction in total staff**, reflecting the Group's investment in talent attraction and retention, and the implementation of a merit-based system to enhance service skills Employee Benefit Expenses and Headcount (Six Months Ended September 30) | Indicator | 2021 (HK$ '000 / Headcount) | 2020 (HK$ '000 / Headcount) | Change | | :--- | :--- | :--- | :--- | | Employee Benefit Expenses | 148,561 | 88,540 | +67.8% | | Total Headcount | 801 | 1,051 | -23.8% | - The Group has implemented a merit-based system since 2010, providing comprehensive training to enhance employee customer service skills and awarding discretionary bonuses to outstanding staff[11](index=11&type=chunk) [Lease Costs and Depreciation Expenses for Leased Properties](index=5&type=section&id=Lease%20Costs%20and%20Depreciation%20Expenses%20for%20Leased%20Properties) Lease costs and depreciation expenses slightly decreased, while their proportion of revenue marginally increased, as the Group reduced its number of service centers and total floor area in Hong Kong and mainland China Lease Costs and Depreciation Expenses (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Lease Costs and Depreciation Expenses | 40,116 | 40,856 | -1.8% | | Percentage of Revenue | 19.5% | 18.7% | +0.8%p.p. | - As of September 30, 2021, the Group operated **33 service centers in mainland China and Hong Kong**, with a total floor area of **175,000 sq ft**, a **6.9% decrease** year-on-year, and **9 centers in Singapore** with approximately **19,000 sq ft**, a **decrease of 1** from the previous year[13](index=13&type=chunk) [Bank Charges, Advertising Expenses, and Building Management Fees](index=5&type=section&id=Bank%20Charges%2C%20Advertising%20Expenses%2C%20and%20Building%20Management%20Fees) Bank charges increased with prepaid beauty package sales, advertising expenses decreased while maintaining cost advantages, and building management fees slightly declined Bank Charges, Advertising Expenses, and Building Management Fees (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Bank Charges | 11,277 | 7,337 | +53.7% | | Advertising Expenses | 1,377 | 1,658 | -17.0% | | Building Management Fees | 5,720 | 5,931 | -3.6% | - Advertising expenses remained stable at **0.7% of revenue**, reflecting the Group's cost advantage after expanding its service center network[14](index=14&type=chunk) [Other Operating Expenses](index=5&type=section&id=Other%20Operating%20Expenses) Total other operating expenses decreased from **HK$24,671 thousand to HK$22,056 thousand**, with significant increases in cleaning, hygiene, and laundry expenses and utilities, offset by a substantial reduction in other miscellaneous expenses Other Operating Expenses Breakdown (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Audit Fees | 2,076 | 1,968 | | Administrative Expenses | 3,209 | 2,821 | | Cleaning, Hygiene and Laundry | 2,998 | 1,993 | | Consultancy Fees | 1,052 | 1,160 | | Government Rent and Rates | 1,461 | 1,805 | | Insurance | 1,504 | 1,289 | | Legal and Professional Fees | 1,522 | 1,856 | | Repair and Maintenance Expenses | 2,242 | 1,453 | | Utilities | 3,670 | 2,130 | | Other Expenses | 2,322 | 8,196 | | **Total** | **22,056** | **24,671** | [Net Loss / Profit](index=6&type=section&id=Net%20Loss%20%2F%20Profit) The Group transitioned from a profit in the prior period to a net loss of approximately **HK$41,623 thousand**, resulting in a **loss per share of HK$4.63 cents** Net Loss / Profit and Loss / Earnings Per Share (Six Months Ended September 30) | Indicator | 2021 (HK$ '000 / HK cents) | 2020 (HK$ '000 / HK cents) | | :--- | :--- | :--- | | Net Loss / Profit | (41,623) | 65,938 | | Loss / Earnings Per Share | (4.63) | 7.28 | [Capital Expenditure](index=6&type=section&id=Capital%20Expenditure) Total capital expenditure significantly increased to **HK$57,666 thousand**, primarily for leasehold improvements and the acquisition of property, plant, and equipment to support the expansion and integration of service and retail networks Total Capital Expenditure (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Total Capital Expenditure | 57,666 | 325 | +17643.4% | - Capital expenditure was primarily for leasehold improvements and the acquisition of property, plant, and equipment to expand and integrate service and retail networks across various regions[16](index=16&type=chunk) [Interim Dividend](index=6&type=section&id=Interim%20Dividend) The Board of Directors did not approve the payment of an interim dividend for the six months ended September 30, 2021 - The Board of Directors did not approve the payment of an interim dividend for the six months ended September 30, 2021 (2020: nil)[16](index=16&type=chunk) [Liquidity, Capital Structure, and Treasury Policy](index=6&type=section&id=Liquidity%2C%20Capital%20Structure%2C%20and%20Treasury%20Policy) The Group maintains a robust financial position with total equity of **HK$250,178 thousand**, cash and bank balances of **HK$184,468 thousand**, and no bank borrowings, with liquidity primarily sourced from prepaid beauty package sales and credit card advances Liquidity Position (As of September 30, 2021) | Indicator | 2021 (HK$ '000) | March 31, 2021 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Total Equity | 250,178 | 292,892 | -14.6% | | Cash and Bank Balances | 184,468 | 234,341 | -21.3% | | Bank Borrowings | Nil | Nil | N/A | - The Group's liquidity is primarily funded by revenue from prepaid beauty package sales and credit card advances received from banks[16](index=16&type=chunk) [Contingent Liabilities and Capital Commitments](index=6&type=section&id=Contingent%20Liabilities%20and%20Capital%20Commitments) As of September 30, 2021, the Group had capital commitments of **HK$19,243 thousand**, primarily for property acquisition and leasehold improvements, a significant increase from March 31, with the Board deeming no material contingent liabilities Capital Commitments (As of September 30, 2021) | Indicator | September 30, 2021 (HK$ '000) | March 31, 2021 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Capital Commitments | 19,243 | 330 | +5731.2% | - Capital commitments are primarily for the acquisition of properties and leasehold improvements[16](index=16&type=chunk) - The Board of Directors believes the Group had no material contingent liabilities as of September 30, 2021[16](index=16&type=chunk) [Pledge of Assets](index=6&type=section&id=Pledge%20of%20Assets) The Group pledged **HK$47,181 thousand** in bank deposits to secure bank facilities granted to certain of its subsidiaries Pledged Bank Deposits (As of September 30, 2021) | Indicator | September 30, 2021 (HK$ '000) | March 31, 2021 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Pledged Bank Deposits | 47,181 | 54,385 | -13.2% | - Bank deposits are pledged to secure bank facilities granted to certain subsidiaries of the Group[16](index=16&type=chunk) [Foreign Exchange Risk](index=6&type=section&id=Foreign%20Exchange%20Risk) The Group's transactions are primarily denominated in HKD, but as business expands into mainland China, Southeast Asia, and Australia, foreign currency exchange rates impact operating costs, prompting management to closely assess and hedge foreign exchange risks - The Group's transactions are primarily denominated in HKD, but as business expands into mainland China, Southeast Asia, and Australia, the exchange rates between HKD and foreign currencies impact operating costs[16](index=16&type=chunk) - Management will closely assess foreign exchange risks and take necessary measures to hedge them appropriately[16](index=16&type=chunk) [Human Resources and Training](index=7&type=section&id=Human%20Resources%20and%20Training) The Group's total employee benefit expenses significantly increased by **67.8% to HK$148,561 thousand**, despite a **23.8% reduction in headcount**, while regular training is provided to enhance service quality and professional skills, and remuneration policies are reviewed based on market conditions and employee performance Employee Benefit Expenses and Headcount (As of September 30, 2021) | Indicator | 2021 (HK$ '000 / Headcount) | 2020 (HK$ '000 / Headcount) | Change | | :--- | :--- | :--- | :--- | | Total Employee Benefit Expenses | 148,561 | 88,540 | +67.8% | | Total Headcount | 801 | 1,051 | -23.8% | - The Group regularly provides employee training covering safe application of the latest beauty technologies, service skill exchange, and service and product introductions[19](index=19&type=chunk) - Remuneration policies are regularly reviewed based on legal frameworks, market conditions, and the performance of the Group and individual employees, with the Remuneration Committee responsible for reviewing the remuneration policies and benefits of executive directors and senior management members[19](index=19&type=chunk) [Corporate Social Responsibility](index=7&type=section&id=Corporate%20Social%20Responsibility) The Group prioritizes service and product safety, maintaining stringent standards for product quality and advanced instrument safety, cultivates professionals through its International Academy of Beauty Experts, and implements policies to reduce utility consumption in service centers for environmental protection - The Group maintains strict product quality requirements, with internationally recognized product ingredients and packaging hygiene, and advanced instruments used in services passing multiple safety tests to meet international safety standards[20](index=20&type=chunk) - The Group established the International Academy of Beauty Experts in 2002 to cultivate skilled professionals and provide training or further education opportunities for employees[20](index=20&type=chunk) - The Group has formulated specific policies aimed at minimizing air conditioning usage and water consumption in service centers to support environmental protection[20](index=20&type=chunk) [Outlook](index=8&type=section&id=Outlook) Despite ongoing uncertainties from COVID-19 and consumer confidence, particularly potential new circuit breaker measures in Singapore, the Group will leverage its excellent services, brand recognition, and customer base to navigate economic headwinds, while Hong Kong's beauty industry "cooling-off period" policy aims to rebuild consumer trust and foster healthy development, leading the Group to maintain cautious optimism for future performance - The HKSAR Government launched a consumption voucher scheme to stimulate retail spending, but consumer confidence remains significantly below long-term average levels[21](index=21&type=chunk) - Singapore's infection rates surged after easing COVID-19 restrictions, potentially leading to new beauty salon circuit breaker measures that could impact second-half business[21](index=21&type=chunk) - The Group will continue to navigate economic headwinds by leveraging its excellent services, brand recognition, and solid customer base in Hong Kong, mainland China, and Singapore[21](index=21&type=chunk) - Hong Kong beauty salons introduced a "cooling-off period" policy, allowing customers to request refunds for unused services within five business days of purchase, aiming to rebuild consumer confidence and foster long-term healthy development of the beauty industry[21](index=21&type=chunk) - The Group successfully controlled operating costs, especially rental expenses, and focused on maintaining a robust cash position, remaining cautiously optimistic about future performance[22](index=22&type=chunk) [Subsequent Events](index=8&type=section&id=Subsequent%20Events) The emergence of the Omicron variant of COVID-19 at the end of the review period introduced new uncertainties, prompting the Group to closely monitor developments and respond swiftly to challenges - In November 2021, the Omicron variant of COVID-19 suddenly emerged, with its severity, ability to evade immunity, and transmissibility yet unknown[23](index=23&type=chunk) - The Group will closely monitor relevant developments and respond swiftly as necessary to address challenges posed by the new COVID-19 variant[23](index=23&type=chunk) [Company Information](index=9&type=section&id=Company%20Information) This section provides essential company information, including Board members, registered office, principal place of business, auditors, share registrar, principal bankers, stock code, and investor relations contact details - Board members include Chairman Dr. Tsang Yuk, Executive Directors Mr. Yip Kai Wing, Ms. Yeung Sze Man, and Independent Non-executive Directors Ms. Liu Mei Ling, Dr. Wong Man Yin, and Mr. Hong Po Kui[25](index=25&type=chunk) - The auditor is KPMG, and the stock code is **919**[25](index=25&type=chunk) [Corporate Governance and Other Information](index=10&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's corporate governance practices, including director and substantial shareholder equity disclosures, compliance with the Model Code for Securities Transactions, and the composition and responsibilities of Board committees, noting adherence to the Corporate Governance Code with deviations regarding the Chairman and Chief Executive Officer being the same person and the Chairman's absence from the general meeting [Directors' Rights to Acquire Shares or Debentures](index=10&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) During the review period, neither the company, its holding company, subsidiaries, nor fellow subsidiaries entered into any arrangements enabling directors, chief executives, or their spouses or minor children to acquire benefits by purchasing shares or debentures of the company or any other body corporate - During the review period, neither the Company, its holding company, subsidiaries, nor fellow subsidiaries entered into any arrangements enabling the Company's directors or chief executives, or their respective spouses or children under 18, to acquire benefits by purchasing shares or debentures of the Company or any other body corporate[30](index=30&type=chunk) [Directors' and Chief Executives' Interests and Short Positions in Shares, Underlying Shares, and Debentures](index=10&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%2C%20and%20Debentures) As of September 30, 2021, Dr. Tsang Yuk held a majority of the company's shares through a discretionary trust and spouse's interests, while Mr. Yip Kai Wing and Ms. Yeung Sze Man also held minor shareholdings Directors' and Chief Executives' Long Positions in Shares (As of September 30, 2021) | Name | Capacity in which interests are held | Number of Shares | Total Interests | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Dr. Tsang Yuk | Founder of a discretionary trust | 677,247,942 | 677,247,942 | 74.88% | | | Spouse's interests | 650,000 | 650,000 | 0.07% | | Mr. Yip Kai Wing | Beneficial owner | 185,000 | 185,000 | 0.02% | | Ms. Yeung Sze Man | Beneficial owner | 172,000 | 172,000 | 0.02% | - Dr. Tsang Yuk is the spouse of Dr. Lee Sau Yee and is deemed to have an interest in the shares that Dr. Lee Sau Yee is deemed or taken to have an interest in under the Securities and Futures Ordinance[31](index=31&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=11&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of September 30, 2021, Dr. Tsang Yuk and her spouse, Dr. Lee Sau Yee, held a majority of the company's shares through trusts and direct interests, while TMF (Cayman) Ltd., Kelday International Limited, Allied Chance Management Limited, Allied Wealth Limited, Silver Compass Holdings Corp., and Silver Hendon Enterprises Corp., as trustees or controlled corporations, also held substantial shareholdings Substantial Shareholders' and Other Persons' Long Positions in Shares (As of September 30, 2021) | Name / Company Name | Capacity in which interests are held | Number of Shares | Total Interests | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Dr. Tsang Yuk | Founder of a discretionary trust | 677,247,942 | 677,247,942 | 74.88% | | | Spouse's interests | 650,000 | 650,000 | 0.07% | | Dr. Lee Sau Yee | Beneficial owner | 650,000 | 650,000 | 0.07% | | | Spouse's interests | 677,247,942 | 677,247,942 | 74.88% | | TMF (Cayman) Ltd | Trustee (other than a passive trustee) | 677,247,942 | 677,247,942 | 74.88% | | Kelday International Limited | Nominee of another person (other than a passive trustee) | 677,247,942 | 677,247,942 | 74.88% | | Allied Chance Management Limited | Interest of a controlled corporation | 677,247,942 | 677,247,942 | 74.88% | | Allied Wealth Limited | Beneficial owner | 209,247,942 | 209,247,942 | 23.13% | | Silver Compass Holdings Corp | Beneficial owner | 367,200,000 | 367,200,000 | 40.60% | | Silver Hendon Enterprises Corp | Beneficial owner | 100,800,000 | 100,800,000 | 11.14% | - Dr. Tsang Yuk is the spouse of Dr. Lee Sau Yee and is deemed to have an interest in the shares that Dr. Lee Sau Yee is deemed or taken to have an interest in under the Securities and Futures Ordinance[34](index=34&type=chunk) - The aforementioned **677,247,942 shares** are the same batch of shares held by a trust established by Dr. Tsang Yuk, with TMF (Cayman) Ltd. serving as the trustee of that trust[34](index=34&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=12&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the review period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the review period, the Company did not redeem, nor did the Company or any of its subsidiaries purchase or sell, any of the Company's listed securities[36](index=36&type=chunk) [Corporate Governance Practices](index=12&type=section&id=Corporate%20Governance%20Practices) The company adheres to sound corporate governance principles, adopting the Corporate Governance Code in Appendix 14 of the HKEX Listing Rules, and complied with its code provisions during the review period, except for deviations where the Chairman and Chief Executive Officer roles were combined and the Chairman was absent from the general meeting - The company adheres to sound corporate governance principles, emphasizing transparency, accountability, and independence[36](index=36&type=chunk) - The company has adopted the Corporate Governance Code set out in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[36](index=36&type=chunk) - During the review period, the company complied with the code provisions, except for the Chairman and Chief Executive Officer roles being combined and the Chairman's absence from the Annual General Meeting[36](index=36&type=chunk) [Chairman and Chief Executive Officer](index=12&type=section&id=Chairman%20and%20Chief%20Executive%20Officer) Dr. Tsang Yuk served as the company's Chairman and Chief Executive Officer during the review period, a deviation from code provision A.2.1, but the Board believes this structure does not impair the balance of power given collective decision-making and clear management responsibilities - Dr. Tsang Yuk served as the company's Chairman and Chief Executive Officer during the review period, deviating from code provision A.2.1 (which states that the roles of chairman and chief executive should be separate and not performed by the same individual)[36](index=36&type=chunk) - The Board believes that Board decisions are made collectively, and the responsibilities of Board management and the company's daily business management are clearly delineated with the support of senior management, ensuring the existing structure does not impair the balance of power and authority[36](index=36&type=chunk) [Non-compliance with Code Provision E.1.2](index=12&type=section&id=Non-compliance%20with%20Code%20Provision%20E.1.2) Board Chairman Dr. Tsang Yuk was unable to attend the company's Annual General Meeting on August 27, 2021, due to personal reasons, deviating from code provision E.1.2 (which states that the chairman of the board should attend general meetings) - Board Chairman Dr. Tsang Yuk was unable to attend the company's Annual General Meeting held on August 27, 2021, due to personal reasons, deviating from code provision E.1.2[36](index=36&type=chunk) [Model Code for Securities Transactions by Directors](index=13&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix 10 of the Listing Rules, and all directors confirmed compliance with the Model Code and the Code of Conduct for Securities Transactions by Directors during the review period, with no instances of non-compliance - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules[38](index=38&type=chunk) - Following specific enquiries with all directors, all directors confirmed that they complied with the required standards set out in the Model Code and the Code of Conduct for Securities Transactions by Directors during the review period, with no instances of non-compliance[38](index=38&type=chunk) [Board Committees](index=13&type=section&id=Board%20Committees) The Board established Remuneration, Nomination, and Audit Committees with terms of reference no less exacting than those in the Code, all empowered to appoint external advisors, with the Audit Committee comprising solely independent non-executive directors, and the Nomination and Remuneration Committees predominantly composed of independent non-executive directors to enhance independence and effectiveness - The Board has established a Remuneration Committee, a Nomination Committee, and an Audit Committee, with terms of reference no less exacting than those set out in the Code[38](index=38&type=chunk) - All committees are empowered to appoint external advisors or experts when necessary[38](index=38&type=chunk) - All Audit Committee members are independent non-executive directors, and the Nomination and Remuneration Committees are structured with a majority of independent non-executive directors to enhance independence and effectiveness[38](index=38&type=chunk) [Remuneration Committee](index=13&type=section&id=Remuneration%20Committee) The Remuneration Committee comprises Dr. Wong Man Yin (Chairman), Mr. Hong Po Kui, Ms. Liu Mei Ling (all independent non-executive directors), and Dr. Tsang Yuk (executive director), tasked with reviewing and determining remuneration, bonuses, and other terms for directors and senior management to attract, motivate, and retain key talent through competitive total rewards - The Remuneration Committee comprises Independent Non-executive Directors Dr. Wong Man Yin (Chairman), Mr. Hong Po Kui, Ms. Liu Mei Ling, and Executive Director Dr. Tsang Yuk[38](index=38&type=chunk) - The Remuneration Committee's responsibilities include reviewing and determining the terms of remuneration, bonuses, and other benefits payable to directors and senior management in accordance with established policies[38](index=38&type=chunk) - The Committee aims to attract, motivate, and retain key executives crucial to the Group's long-term success by offering competitive total rewards to employees who achieve their performance targets[38](index=38&type=chunk) [Nomination Committee](index=13&type=section&id=Nomination%20Committee) The Nomination Committee comprises Dr. Tsang Yuk (Chairman, Executive Director) and Ms. Liu Mei Ling, Dr. Wong Man Yin, Mr. Hong Po Kui (all independent non-executive directors), tasked with advising the Board on director appointments, Board composition assessment, independent non-executive director independence evaluation, and Board succession planning - The Nomination Committee comprises Executive Director Dr. Tsang Yuk (Chairman) and Independent Non-executive Directors Ms. Liu Mei Ling, Dr. Wong Man Yin, and Mr. Hong Po Kui[38](index=38&type=chunk) - The Nomination Committee's responsibilities include making recommendations to the Board on director appointments, assessment of Board composition, evaluation of the independence of independent non-executive directors, and Board succession planning[38](index=38&type=chunk) [Audit Committee](index=14&type=section&id=Audit%20Committee) The Audit Committee comprises Ms. Liu Mei Ling (Chairman), Dr. Wong Man Yin, and Mr. Hong Po Kui (all independent non-executive directors), with all members possessing the professional qualifications required by the Listing Rules, and is responsible for reviewing the Group's financial reporting, internal controls, and corporate governance matters, having reviewed and approved the interim report - The Audit Committee comprises Independent Non-executive Directors Ms. Liu Mei Ling (Chairman), Dr. Wong Man Yin, and Mr. Hong Po Kui[39](index=39&type=chunk) - The Audit Committee reviews the Group's financial reporting, internal controls, and corporate governance matters, and makes relevant recommendations to the Board[39](index=39&type=chunk) - All Audit Committee members possess the appropriate professional qualifications, accounting, or relevant financial management expertise as required by the Listing Rules[39](index=39&type=chunk) - The Audit Committee reviewed and approved the interim report for the review period prior to its approval by the Board[39](index=39&type=chunk) [Review Report](index=15&type=section&id=Review%20Report) KPMG has reviewed this interim financial report in accordance with Hong Kong Standard on Review Engagements 2410, and based on the review, the auditor noted no matters leading them to believe the interim financial report was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 - KPMG has reviewed this interim financial report in accordance with Hong Kong Standard on Review Engagements 2410[40](index=40&type=chunk)[42](index=42&type=chunk) - The auditor noted no matters that caused them to believe the interim financial report as of September 30, 2021, was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34, Interim Financial Reporting[41](index=41&type=chunk) - The scope of a review is substantially less than that of an audit, and accordingly, no audit opinion is expressed[42](index=42&type=chunk) [Consolidated Financial Statements](index=16&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's unaudited consolidated financial statements for the six months ended September 30, 2021, including the consolidated statement of profit or loss, statement of profit or loss and other comprehensive income, statement of financial position, statement of changes in equity, and condensed consolidated statement of cash flows, reflecting the Group's financial performance and position during the period [Consolidated Statement of Profit or Loss](index=16&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended September 30, 2021, the Group's revenue was **HK$205,396 thousand**, a **5.9% year-on-year decrease**, with the period's profit of **HK$65,938 thousand** turning into a loss of **HK$41,623 thousand**, resulting in a **basic loss per share of HK$4.63 cents** Key Data from Consolidated Statement of Profit or Loss (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Revenue | 205,396 | 218,228 | -5.9% | | Other Income | 3,526 | 48,689 | -92.8% | | Employee Benefit Expenses | (148,561) | (88,540) | +67.8% | | Operating (Loss) / Profit | (35,374) | 75,577 | N/A (Turned to loss) | | (Loss) / Profit for the Period | (41,623) | 65,938 | N/A (Turned to loss) | | Basic (Loss) / Earnings Per Share (HK cents) | (4.63) | 7.28 | N/A (Turned to loss) | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=17&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended September 30, 2021, the Group reported a loss for the period of **HK$41,623 thousand**, with other comprehensive income from exchange differences on translating foreign operations being a negative **HK$1,091 thousand**, resulting in a total comprehensive loss for the period of **HK$42,714 thousand** Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | (Loss) / Profit for the Period | (41,623) | 65,938 | | Exchange differences on translating foreign operations | (1,091) | 2,036 | | Other comprehensive income for the period | (1,091) | 2,036 | | Total comprehensive income for the period | (42,714) | 67,974 | [Consolidated Statement of Financial Position](index=18&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of September 30, 2021, the Group's total non-current assets were **HK$218,166 thousand**, total current assets were **HK$421,950 thousand**, and current liabilities were **HK$361,223 thousand**, resulting in net current assets of **HK$60,727 thousand**, total assets less current liabilities of **HK$278,893 thousand**, and net assets of **HK$250,178 thousand** Key Data from Consolidated Statement of Financial Position (As of September 30, 2021) | Indicator | September 30, 2021 (HK$ '000) | March 31, 2021 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 218,166 | 189,737 | +15.0% | | Current Assets | 421,950 | 479,305 | -11.9% | | Current Liabilities | 361,223 | 331,299 | +9.0% | | Net Current Assets | 60,727 | 148,006 | -59.0% | | Total Assets Less Current Liabilities | 278,893 | 337,743 | -17.4% | | Net Assets | 250,178 | 292,892 | -14.6% | | Total Equity | 250,178 | 292,892 | -14.6% | [Consolidated Statement of Changes in Equity](index=20&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended September 30, 2021, total equity attributable to equity holders of the Company decreased from **HK$289,367 thousand** at the beginning of the period to **HK$246,396 thousand** at the end, primarily due to a loss for the period of **HK$41,880 thousand** and a **HK$1,091 thousand** decrease in other comprehensive income from exchange differences on foreign operations Key Data from Consolidated Statement of Changes in Equity (Six Months Ended September 30) | Indicator | September 30, 2021 (HK$ '000) | April 1, 2021 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Total Equity Attributable to Equity Holders of the Company | 246,396 | 289,367 | -14.8% | | Loss for the period | (41,880) | N/A | N/A | | Exchange differences on translating foreign operations | (1,091) | N/A | N/A | [Condensed Consolidated Statement of Cash Flows](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended September 30, 2021, net cash generated from operating activities was **HK$45,342 thousand**, net cash used in investing activities was **HK$52,035 thousand**, and net cash used in financing activities was **HK$42,945 thousand**, resulting in a net decrease in cash and cash equivalents of **HK$49,638 thousand**, with cash and cash equivalents at period-end totaling **HK$179,031 thousand** Key Data from Condensed Consolidated Statement of Cash Flows (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Net cash generated from operating activities | 45,342 | 70,757 | | Net cash used in investing activities | (52,035) | (748) | | Net cash used in financing activities | (42,945) | (35,918) | | Net (decrease) / increase in cash and cash equivalents | (49,638) | 34,091 | | Cash and cash equivalents at end of period | 179,031 | 210,229 | - Expenditure on the purchase of property, plant, and equipment significantly increased to **HK$57,666 thousand**, which was the primary reason for the increase in cash outflow from investing activities[58](index=58&type=chunk) [Notes to the Unaudited Interim Financial Report](index=22&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This section provides detailed notes to the unaudited interim financial report, covering general company information, basis of financial report preparation, changes in accounting policies, segment information, details of various income and expenses, earnings per share calculation, balance sheet item changes, and related party transactions, offering supplementary explanations for understanding the financial statements [General Information](index=22&type=section&id=General%20Information) Modern Beauty Technology Holdings Limited is incorporated in the Cayman Islands, with its shares listed on the Main Board of the Hong Kong Stock Exchange, primarily engaged in providing beauty and wellness services and selling skincare and health products, with Dr. Tsang Yuk considered the ultimate controlling party - Modern Beauty Technology Holdings Limited is incorporated in the Cayman Islands, and its shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[61](index=61&type=chunk) - The Group's principal activities are the provision of beauty and wellness services and the sale of skincare and health products[61](index=61&type=chunk) - Dr. Tsang Yuk is regarded as the ultimate controlling party of the Company[61](index=61&type=chunk) [Basis of Preparation](index=22&type=section&id=Basis%20of%20Preparation) This interim financial report is prepared in accordance with the applicable disclosure provisions of the Hong Kong Stock Exchange Listing Rules and Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the HKICPA, authorized for issue on November 29, 2021, and, though unaudited, has been reviewed by KPMG - This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants[62](index=62&type=chunk) - The report was authorized for issue on November 29, 2021, is unaudited, but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[62](index=62&type=chunk) - The financial information, presented as comparative data, is extracted from the statutory annual consolidated financial statements for the year ended March 31, 2021, on which the auditor expressed an unmodified opinion[63](index=63&type=chunk) [Changes in Accounting Policies](index=23&type=section&id=Changes%20in%20Accounting%20Policies) The Group early adopted the amendments to HKFRS 16, relating to Covid-19-related rent concessions after June 30, 2021, from the year ended March 31, 2021, and did not apply any other new standards or interpretations not yet effective in the current accounting period - The Group early adopted the amendments to HKFRS 16, relating to Covid-19-related rent concessions after June 30, 2021, from the year ended March 31, 2021[66](index=66&type=chunk) - The Group has not applied any new standards or interpretations that are not yet effective in the current accounting period[66](index=66&type=chunk) [Segment Information](index=23&type=section&id=Segment%20Information) The Group has two reportable segments: beauty and wellness services, and sales of skincare and health products, with the former recording a loss and the latter a profit during the review period - The Group's reportable segments are the provision of beauty and wellness services and the sale of skincare and health products[66](index=66&type=chunk) Reportable Segment Revenue and (Loss) / Profit (Six Months Ended September 30) | Segment | 2021 Revenue (HK$ '000) | 2021 (Loss) / Profit (HK$ '000) | 2020 Revenue (HK$ '000) | 2020 Profit (HK$ '000) | | :--- | :--- | :--- | :--- | :--- | | Beauty and Wellness Services | 187,556 | (36,672) | 209,447 | 70,315 | | Skincare and Health Products | 17,840 | 9,829 | 8,781 | 5,417 | | **Total** | **205,396** | **(26,843)** | **218,228** | **75,732** | [Segment Information (Resource Allocation and Performance Assessment)](index=24&type=section&id=Segment%20Information%20(Resource%20Allocation%20and%20Performance%20Assessment)) This section presents the Group's two reportable segments (beauty and wellness services, skincare and health products) revenue, loss/profit, assets, and liabilities during the review period for top management's resource allocation and performance assessment Reportable Segment Assets and Liabilities (As of September 30, 2021) | Segment | September 30, 2021 Assets (HK$ '000) | September 30, 2021 Liabilities (HK$ '000) | September 30, 2020 Assets (HK$ '000) | September 30, 2020 Liabilities (HK$ '000) | | :--- | :--- | :--- | :--- | :--- | | Beauty and Wellness Services | 582,949 | (367,407) | 628,553 | (439,492) | | Skincare and Health Products | 16,029 | (16,465) | 14,050 | (11,468) | | **Total** | **598,978** | **(383,872)** | **642,603** | **(450,960)** | [Reconciliation of Reportable Segment Profit or Loss](index=24&type=section&id=Reconciliation%20of%20Reportable%20Segment%20Profit%20or%20Loss) This section provides a reconciliation of reportable segment loss/profit to consolidated loss/profit for the period, illustrating the impact of other income, interest income, fair value changes of investment properties, unallocated costs, and income tax expenses on the final consolidated loss Reconciliation of Reportable Segment (Loss) / Profit (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Reportable segment (loss) / profit | (26,843) | 75,732 | | Other income | 2,168 | 5,528 | | Interest income | 62 | 554 | | Fair value change of investment properties | (3,537) | (2,413) | | Net loss on disposal of a subsidiary | – | (591) | | Unallocated costs | (11,929) | (8,229) | | Income tax expense | (1,544) | (4,643) | | **Consolidated (loss) / profit for the period** | **(41,623)** | **65,938** | [Revenue](index=25&type=section&id=Revenue) The Group's primary revenue sources are beauty and wellness services and sales of skincare and health products, with total revenue of **HK$205,396 thousand** for the six months ended September 30, 2021, comprising **HK$187,556 thousand** from services and **HK$17,840 thousand** from product sales Revenue Categories (Six Months Ended September 30) | Revenue Category | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Revenue from provision of beauty and wellness services and recognized from expiry of prepaid beauty packages | 187,556 | 209,447 | | Sales of skincare and health products | 17,840 | 8,781 | | **Total** | **205,396** | **218,228** | [Other Income](index=25&type=section&id=Other%20Income) The Group's other income significantly decreased to **HK$3,526 thousand**, primarily due to a substantial decline in government subsidies and COVID-19-related rent concessions Other Income Breakdown (Six Months Ended September 30) | Category | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Government subsidies | 1,358 | 43,946 | | COVID-19 related rent concessions received | 77 | 3,180 | | Income from provision of domestic helper referral services | 1,054 | 773 | | Rental income | 777 | – | | Others | 260 | 790 | | **Total** | **3,526** | **48,689** | - The significant decrease in government subsidies and COVID-19-related rent concessions was the primary reason for the substantial reduction in other income[75](index=75&type=chunk) [Loss / Profit Before Taxation](index=26&type=section&id=Loss%20%2F%20Profit%20Before%20Taxation) For the six months ended September 30, 2021, the Group reported a loss before taxation of **HK$40,079 thousand**, compared to a profit of **HK$70,581 thousand** in the prior period, primarily influenced by increased directors' emoluments, depreciation expenses, and finance costs Components of (Loss) / Profit Before Taxation (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Directors' emoluments | 6,310 | 4,083 | | Depreciation – owned property, plant and equipment | 7,608 | 18,266 | | Depreciation – right-of-use assets | 39,269 | 40,320 | | Foreign exchange (gain) / loss, net | (16) | 115 | | Finance costs – interest on lease liabilities | 1,230 | 2,546 | - The Group transitioned from a profit to a loss before taxation, primarily influenced by factors such as increased directors' emoluments and depreciation expenses[44](index=44&type=chunk)[76](index=76&type=chunk) [Income Tax Expense](index=26&type=section&id=Income%20Tax%20Expense) For the six months ended September 30, 2021, the Group's income tax expense was **HK$1,544 thousand**, a significant reduction from the prior period, with decreases in both Hong Kong profits tax and overseas taxation, as well as deferred tax Income Tax Expense Breakdown (Six Months Ended September 30) | Category | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Current tax – Hong Kong profits tax | 381 | 670 | | Current tax – Overseas | 1,110 | 1,472 | | Deferred tax | 53 | 2,501 | | **Income tax expense** | **1,544** | **4,643** | - Hong Kong profits tax provision is based on an estimated annual effective tax rate of **16.5%**, with qualifying subsidiaries taxed at **8.25%** on the first **HK$2 million** of assessable profits under the two-tiered profits tax regime[77](index=77&type=chunk)[78](index=78&type=chunk) [Loss / Earnings Per Share](index=27&type=section&id=Loss%20%2F%20Earnings%20Per%20Share) For the six months ended September 30, 2021, basic loss per share was **HK$4.63 cents**, compared to earnings per share of **HK$7.28 cents** in the prior period, with diluted loss per share being the same as basic loss per share due to no potentially dilutive ordinary shares outstanding (Loss) / Earnings Per Share (Six Months Ended September 30) | Indicator | 2021 (HK cents) | 2020 (HK cents) | | :--- | :--- | :--- | | Basic (Loss) / Earnings Per Share | (4.63) | 7.28 | | Diluted (Loss) / Earnings Per Share | (4.63) | 7.28 | - Basic (loss) / earnings per share is calculated based on the loss attributable to ordinary equity holders of the Company of **HK$41,880 thousand** (2020: profit of HK$65,817 thousand) and the weighted average of **904,483,942 ordinary shares** in issue during the period[81](index=81&type=chunk) [Property, Plant and Equipment and Right-of-Use Assets](index=27&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Right-of-Use%20Assets) This section details changes in the Group's property, plant and equipment, and right-of-use assets, with **HK$18,574 thousand** in right-of-use asset additions and **HK$57,666 thousand** in property, plant, and equipment acquisitions recognized for the six months ended September 30, 2021 [Right-of-Use Assets](index=27&type=section&id=Right-of-Use%20Assets) For the six months ended September 30, 2021, the Group recognized additions to right-of-use assets of **HK$18,574 thousand**, and during the COVID-19 pandemic, received rent concessions, including **HK$77 thousand** for Singapore service centers Right-of-Use Asset Additions and Rent Concessions (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Additions to right-of-use assets | 18,574 | 97,335 | | COVID-19 related rent concessions (Singapore) | (77) | (2,094) | [Acquisitions](index=27&type=section&id=Acquisitions) For the six months ended September 30, 2021, the cost of property, plant, and equipment acquisitions was approximately **HK$57,666 thousand**, a significant increase from the prior period Cost of Property, Plant and Equipment Acquisitions (Six Months Ended September 30) | Indicator | 2021 (HK$ '000) | 2020 (HK$ '000) | Change | | :--- | :--- | :--- | :--- | | Cost of property, plant and equipment acquisitions | 57,666 | 325 | +17643.4% | [Trade and Other Receivables, Deposits and Prepayments](index=28&type=section&id=Trade%20and%20Other%20Receivables%2C%20Deposits%20and%20Prepayments) As of September 30, 2021, the Group's total trade and other receivables, deposits, and prepayments amounted to **HK$195,292 thousand**, including trade receivables (net of loss allowance) of **HK$17,538 thousand** and trade deposits retained by banks/credit card companies of **HK$133,959 thousand** Trade and Other Receivables (As of September 30, 2021) | Category | September 30, 2021 (HK$ '000) | March 31, 2021 (HK$ '000) | | :--- | :--- | :--- | | Non-current assets: Deposits and prepayments | 13,332 | 11,460 | | Current assets: Trade receivables, net of loss allowance | 17,538 | 14,394 | | Current assets: Trade deposits retained by banks/credit card companies | 133,959 | 134,040 | | Current assets: Rental and other deposits, prepayments and other receivables | 30,300 | 26,628 | | Current assets: Amounts due from related companies | 163 | 269 | | **Total** | **195,292** | **186,791** | Ageing Analysis of Trade Receivables (As of September 30, 2021) | Ageing | September 30, 2021 (HK$ '000) | March 31, 2021 (HK$ '000) | | :--- | :--- | :--- | | 0 to 30 days | 10,123 | 9,665 | | 31 to 60 days | 2,735 | 1,547 | | 61 to 90 days | 1,334 | 134 | | 91 to 180 days | 3,346 | 3,048 | | **Total** | **17,538** | **14,394** | - Trade deposits refer to receivables retained by banks/credit card companies in reserve accounts to secure the Group's service performance for customers paying with credit cards[86](index=86&type=chunk) [Cash and Bank Balances](index=29&type=section&id=Cash%20and%20Bank%20Balances) As of September 30, 2021, the Group's cash and bank balances were **HK$179,031 thousand**, a decrease from **HK$228,865 thousand** as of March 31, 2021 Cash and Bank Balances (As of September 30, 2021) | Category | September 30, 2021 (HK$ '000) | March 31, 2021 (HK$ '000) | | :--- | :--- | :--- | | Cash at bank and in hand | 179,031 | 165,223 | | Short-term bank deposits with original maturity of less than three months | – | 63,642 | | **Total** | **179,031** | **228,865** | [Trade and Other Payables, Deposits Received and Accrued Charges](index=29&type=section&id=Trade%20and%20Other%20Payables%2C%20Deposits%20Received%20and%20Accrued%20Charges) As of September 30, 2021, the Group's total trade and other payables, deposits received, and accrued charges amounted to **HK$74,708 thousand**, a slight increase from **HK$73,363 thousand** as of March 31, 2021 Trade and Other Payables (As of September 30, 2021) | Category | September 30, 2021 (HK$ '000) | March 31, 2021 (HK$ '000) | | :--- | :--- | :--- | | Trade payables | 546 | 525 | | Other payables, deposits received and accrued charges | 74,035 | 72,711 | | Amounts due to ultimate controlling party | 2 | 2 | | Amounts due to related companies | 125 | 125 | | **Total** | **74,708** | **73,363** | Ageing Analysis of Trade Payables (As of September 30, 2021) | Ageing | September 30, 2021 (HK$ '000) | March 31, 2021 (HK$ '000) | | :--- | :--- | :--- | | Within 90 days | 537 | 515 | | Over 90 days | 9 | 10 | | **Total** | **546** | **525** | [Deferred Income](index=30&type=section&id=Deferred%20Income) As of September 30, 2021, the Group's deferred income was **HK$217,138 thousand**, primarily derived from revenue from the sale of prepaid beauty packages [Ageing Analysis of Deferred Income](index=30&type=section&id=Ageing%20Analysis%20of%20Deferred%20Income) As of September 30, 2021, all deferred income totaling **HK$217,138 thousand** is due within one year Ageing Analysis of Deferred Income (As of September 30, 2021) | Ageing | September 30, 2021 (HK$ '000) | March 31, 2021 (HK$ '000) | | :--- | :--- | :--- | | Within 1 year | 217,138 | 183,446 | [Movements in Deferred Income](index=30&type=section&id=Movements%20in%20Deferred%20Income) For the six months ended September 30, 2021, the closing balance of deferred income was **HK$217,138 thousand**, with total revenue from prepaid beauty package sales amounting to **HK$221,055 thousand** and revenue recognized from beauty and wellness services being **HK$187,556 thousand** Movements in Deferred Income (Six Months Ended September 30) | Indicator | September 30, 2021 (HK$ '000) | March 31, 2021 (HK$ '000) | | :--- | :--- | :--- | | At beginning of period / year | 183,446 | 301,822 | | Total revenue from sales of prepaid beauty packages | 221,055 | 292,170 | | Revenue recognized from expiry of prepaid beauty packages | (187,556) | (411,713) | | Exchange differences | 193 | 1,167 | | **At end of period / year** | **217,138** | **183,446** | [Share Capital, Reserves and Dividends](index=31&type=section&id=Share%20Capital%2C%20Reserves%20and%20Dividends) This section discloses the Group's share capital structure, reserves, and dividend policy, with authorized share capital of **HK$1,000,000 thousand** and issued and fully paid share capital of **HK$90,448 thousand** as of September 30, 2021, and no interim dividend declared by the Board [Dividends](index=31&type=section&id=Dividends) The Board of Directors resolved not to declare an interim dividend for the six months ended September 30, 2021 - The Board of Directors resolved not to declare an interim dividend for the six months ended September 30, 2021 (2020: nil)[93](index=93&type=chunk) [Share Capital](index=31&type=section&id=Share%20Capital) As of September 30, 2021, the company's authorized share capital was **10,000,000,000 ordinary shares of HK$0.1 each**, totaling **HK$1,000,000 thousand**, with issued and fully paid share capital of **904,483,942 ordinary shares**, totaling **HK$90,448 thousand** Share Capital Structure (As of September 30, 2021) | Category | September 30, 2021 Number of Shares | September 30, 2021 Amount (HK$ '000) | March 31, 2021 Number of Shares | March 31, 2021 Amount (HK$ '000) | | :--- | :--- | :--- | :--- | :--- | | Authorized: Ordinary shares of HK$0.1 each | 10,000,000,000 | 1,000,000 | 10,000,000,000 | 1,000,000 | | Issued and fully paid: Ordinary shares of HK$0.1 each | 904,483,942 | 90,448 | 904,483,942 | 90,448 | - Holders of ordinary shares are entitled to receive dividends declared from time to time and have one vote per ordinary share at the Company's general meetings[94](index=94&type=chunk) [Commitments](index=31&type=section&id=Commitments) As of September 30, 2021, the Group had contracted but unprovided capital commitments of **HK$19,243 thousand**, primarily for the acquisition of plant and equipment, a significant increase from March 31, 2021 Capital Commitments (As of September 30, 2021) | Category | September 30, 2021 (HK$ '000) | March 31, 2021 (HK$ '000) | | :--- | :--- | :--- | | Contracted but not provided for: Acquisition of plant and equipment | 19,243 | 330 | [Contingent Liabilities](index=32&type=section&id=Contingent%20Liabilities) The Group received complaints and claims related to beauty services during its operations, but the directors believe that the losses or settlements from these complaints and claims do not have a material financial impact on the Group - The Group received complaints and claims in the course of its business relating to the provision of beauty services, involving breach of contract, advertising content, lease disputes, and claims for personal injury caused by services provided[96](index=96&type=chunk) - The directors believe that the losses or settlements from these complaints and claims do not have a material financial impact on the Group[96](index=96&type=chunk) [Significant Related Party Transactions and Balances](index=32&type=section&id=Significant%20Related%20Party%20Transactions%20and%20Balances) This section discloses significant related party transactions and balances, including key management personnel emoluments, additions to right-of-use assets from related companies, and salaries and other benefits paid to related parties [Key Management Personnel Emoluments](index=32&type=section&id=Key%20Management%20Personnel%20Emoluments) For the six months ended September 30, 2021, total key management personnel emoluments were **HK$6,736 thousand**, an increase from the prior period, primarily due to growth in salaries and allowances Key Management Personnel Emoluments (Six Months Ended September 30) | Category | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Fees | 426 | 426 | | Salaries and allowances | 6,263 | 3,606 | | Contributions to retirement benefit schemes | 47 | 51 | | **Total** | **6,736** | **4,083** | [Significant Related Party Transactions](index=32&type=section&id=Significant%20Related%20Party%20Transactions) During the review period, the Group engaged in significant related party transactions, including additions to right-of-use assets from related companies (**HK$78,017 thousand in 2020, nil in 2021**) and salaries and other benefits paid to Related Party A (Dr. Tsang Yuk's spouse), Related Party B (Dr. Tsang Yuk's son), and Related Party C (Mr. Yip Kai Wing's spouse) Significant Related Party Transactions (Six Months Ended September 30) | Category | 2021 (HK$ '000) | 2020 (HK$ '000) | | :--- | :--- | :--- | | Additions to right-of-use assets from related companies | – | 78,017 | | Salaries and other benefits paid to related parties: | | | | – Related Party A (Spouse of Dr. Tsang Yuk) | 925 | 573 | | – Related Party B (Son of Dr. Tsang Yuk) | 1,120 | 878 | | – Related Party C (Spouse of Mr. Yip Kai Wing) | 272 | 134 | | **Total** | **2,317** | **1,585** | - Dr. Tsang Yuk is a shareholder of the related companies, and the Group entered into three-year lease agreements with these related companies[100](index=100&type=chunk) [Related Party Balances](index=33&type=section&id=Related%20Party%20Balances) Amounts due from/to related companies and the ultimate controlling party are unsecured, interest-free, and repayable/recoverable on demand, with Dr. Tsang Yuk being the ultimate controlling party of these related companies - Amounts due from/to related companies and the ultimate controlling party are unsecured, interest-free, and repayable/recoverable on demand[105](index=105&type=chunk) - Dr. Tsang Yuk is the ultimate controlling party of these related companies[105](index=105&type=chunk)

Company Overview - The company rebranded from "Modern Beauty Holdings Limited" to "Modern Healthcare Technology Holdings Limited" in June 2020[12]. - The company has been awarded the "Green Office Award" by the World Green Organization for four consecutive years[12]. - As of March 31, 2021, the company operates 30 service centers in Hong Kong, 3 in mainland China, and 10 in Singapore[9]. - The retail network operated under the "be Beauty Shop" brand consists of 8 stores[9]. - The company offers a range of services including beauty and facial care, aesthetic shaping services, and sales of skincare and wellness products[6]. - The company emphasizes the use of natural materials in its products and services, targeting the high-end beauty market[6]. - The company aims to expand its product sales business through a diverse range of high-quality skincare products[9]. - The company closely monitors industry trends and invests in advanced beauty equipment to stay competitive[9]. - The company provides a variety of weight control programs designed to stimulate metabolism and promote healthy dietary choices[9]. - The company has a strong focus on enhancing customer experience through luxurious spa treatments and personalized care[9]. Financial Performance - For the fiscal year ending March 31, 2021, the company's revenue was approximately HKD 431.5 million, a decrease of 17.4% compared to HKD 522.6 million for the previous fiscal year[16]. - The operating profit for the fiscal year was HKD 134 million, a significant improvement from an operating loss of HKD 17.3 million in the previous year, resulting in an operating margin of 31.1%[16]. - The total number of stores decreased from 55 to 51, reflecting a reduction of 4 stores year-over-year[18]. - Employee benefit expenses decreased by 42.0% to HKD 180.8 million, while rental costs dropped by 98.6% to HKD 0.6 million[18]. - The total customer count in Hong Kong increased slightly to approximately 426,000, up 0.5% from 424,000 in the previous year[20]. - Revenue from prepaid beauty packages was HKD 292.2 million, down 41.1% from HKD 496.3 million in the previous fiscal year[26]. - In mainland China, service revenue increased by 12.5% to HKD 12.5 million, and revenue from prepaid beauty packages rose by 24.7% to HKD 13.4 million[22]. - In Singapore, revenue decreased to HKD 45.9 million from HKD 57.6 million, with service revenue and prepaid package sales both declining[25]. - The net profit attributable to equity shareholders for the fiscal year 2021 was approximately HKD 125.7 million, a turnaround from a net loss of HKD 31.6 million in the previous year[36]. - The group maintained a strong financial position with cash and bank balances of approximately HKD 234.3 million, up from HKD 180 million in the previous year, with no bank borrowings[38]. Operational Efficiency - The company plans to continue enhancing operational efficiency and customer satisfaction while ensuring the safety and quality of services and products offered[21]. - The group operated 33 service centers in mainland China and Hong Kong, with a weighted average total floor area of 186,000 square feet, down 11.0% from the previous year[32]. - The group plans to continue reducing rental expenses and explore new rental models to optimize workflows and adapt to upcoming economic recovery[43]. - The group aims to expand its employment agency services, which have the potential to become a new growth driver in the future[43]. - The company has implemented various environmental measures in its operations, including promoting a "paperless office" and advancing electronic information management systems[44]. Corporate Governance - The company emphasizes the importance of transparency and accountability to enhance business understanding among investors and the public[47]. - The investor relations team organized various activities, including the annual general meeting, to improve communication with investors and ensure they receive the latest information about the company's developments[47]. - The company is committed to maintaining high levels of investor relations and continuously improving its investor relations system[46]. - The company recognizes the value of investor feedback in shaping its development strategy to enhance shareholder value[47]. - The company has a dedicated investor relations team responsible for establishing communication bridges with investors[47]. - The company emphasizes strong corporate governance principles to enhance shareholder value, focusing on transparency, accountability, and independence[53]. - The board consists of three executive directors and three independent non-executive directors, ensuring a balanced composition for effective oversight[53]. - The board held nine meetings during the review year, facilitating communication between the board and senior management[53]. - Independent non-executive directors provide diverse industry expertise, ensuring compliance with financial reporting standards and protecting shareholder interests[55]. - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange rules, ensuring adherence to best practices[53]. Risk Management - The company has adopted an enterprise risk management framework to identify, assess, and manage significant risks[72]. - The board has reviewed the effectiveness of the risk management and internal control systems, deeming them effective and adequate[70]. - The internal audit department has conducted at least one review of the risk management and internal control systems during the reporting year[70]. - The company’s internal control and risk management systems have been maintained appropriately throughout the reporting year[72]. - The group recognizes the impact of macroeconomic changes on its business, including risks related to consumer credit and regulatory changes in Hong Kong[44]. Revenue Recognition - Revenue is recognized when control of goods or services is transferred to customers, excluding VAT or other sales taxes[180]. - Revenue from the sale of skincare and wellness products is recognized upon delivery to customers[181]. - Revenue from prepaid beauty and wellness service packages is recognized when services are provided, with unused rights accounted for as deferred revenue[183]. - Rental income from operating leases is recognized evenly over the lease term, unless another basis better reflects the benefits derived from the leased asset[185]. - Interest income is recognized using the effective interest method, with no credit impairment for financial assets measured at amortized cost or fair value through other comprehensive income[186]. Audit and Compliance - The independent auditor, KPMG, audited the financial statements for the fiscal year 2021[91]. - The audit committee plays a crucial role in overseeing the financial reporting process and ensuring the integrity of the financial statements[110]. - The auditor's report indicates that reasonable assurance was obtained regarding the absence of material misstatements in the financial statements[110]. - The audit process involved identifying and assessing risks of material misstatement due to fraud or error, and designing appropriate audit procedures[111]. - The independent auditor's report was issued on June 28, 2021, confirming compliance with relevant professional ethical requirements[117].

[Management Discussion and Analysis](index=2&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Business Review](index=3&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's beauty, slimming, and healthcare service revenue declined in Hong Kong due to trade war and COVID-19, with mixed results in Mainland China and Singapore - Hong Kong retail sales plummeted by **30%** in the first nine months of 2020 compared to the same period in 2019[5](index=5&type=chunk) - The Group currently operates **34** beauty and spa service centers, with total floor area decreasing by **8.9%** compared to September 30, 2019[5](index=5&type=chunk) Regional Business Revenue Changes (Six Months Ended September 30, 2020) | Region | Service Revenue (HKD) | Year-on-Year Change | Prepaid Beauty Package Revenue (HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 185,502,000 | -22.6% | 127,658,000 | -46.8% | | Mainland China | 6,030,000 | -0.02% | 6,276,000 | +15.8% | | Singapore | 17,915,000 | -28.7% | 12,089,000 | -47.9% | [Financial Review](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) Group revenue decreased by **24.5%** to **HKD 218 million** due to economic recession, yet net profit surged to **HKD 65.938 million** with basic EPS at **HKD 0.0728**, despite no interim dividend Revenue Breakdown (Six Months Ended September 30) | Sales Mix | 2020 (HKD thousands) | 2020 (% of Revenue) | 2019 (HKD thousands) | 2019 (% of Revenue) | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Beauty and Facial Treatments | 156,469 | 71.7% | 204,860 | 70.9% | –23.6% | | Slimming | 41,374 | 19.0% | 50,981 | 17.6% | –18.8% | | Spa Baths and Massages | 11,604 | 5.3% | 15,079 | 5.2% | –23.0% | | Beauty and Healthcare Services (Total) | 209,447 | 96.0% | 270,920 | 93.7% | –22.7% | | Sale of Skincare and Healthcare Products | 8,781 | 4.0% | 18,301 | 6.3% | –52.0% | | **Total** | **218,228** | **100%** | **289,221** | **100%** | **–24.5%** | - Employee benefits expenses decreased by **46.1%** to **HKD 88.54 million**, and headcount decreased by **10.9%** to **1,051** employees, primarily due to cost-efficiency initiatives[13](index=13&type=chunk) - Net profit was approximately **HKD 65.938 million**, a significant increase from **HKD 5.474 million** in the same period last year[20](index=20&type=chunk) - Basic earnings per share were **HKD 0.0728**, compared to **HKD 0.0059** in the same period last year[18](index=18&type=chunk) - The Board did not approve the payment of an interim dividend for the six months ended September 30, 2020[20](index=20&type=chunk) [Liquidity, Capital Structure, and Treasury Policy](index=6&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B%E5%8F%8A%E8%B2%A1%E8%B3%87%E6%94%BF%E7%AD%96) The Group maintains a robust financial position with **HKD 220 million** in total equity and **HKD 210 million** in cash, no bank borrowings, and significantly reduced capital expenditure - As of September 30, 2020, total equity was **HKD 220.084 million**[21](index=21&type=chunk) - Cash and bank balances were **HKD 210.229 million**, an increase from March 31, 2020[21](index=21&type=chunk) - Total capital expenditure was approximately **HKD 0.325 million**, a significant decrease from **HKD 16.623 million** in the same period last year[21](index=21&type=chunk) - Pledged bank deposits amounted to **HKD 54.309 million**, securing bank credit for subsidiaries[21](index=21&type=chunk) - The Group has no material contingent liabilities[21](index=21&type=chunk) [Human Resources and Training](index=6&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E5%8F%8A%E5%9F%B9%E8%A8%93) Total employee benefits expenses decreased by **46.1%** for **1,051** employees, with ongoing professional training and a merit-based remuneration policy to attract and retain talent - Total employee benefits expenses were **HKD 88.54 million**, a **46.1%** decrease from the same period last year[21](index=21&type=chunk) - As of September 30, 2020, **1,051** employees were employed, including frontline service center staff in Hong Kong, Mainland China, and Singapore[21](index=21&type=chunk) - Regular training is provided to employees on the latest beauty technologies, service skills, and product knowledge[21](index=21&type=chunk) - Remuneration policies are regularly reviewed based on legal framework, market conditions, and employee performance[21](index=21&type=chunk) [Corporate Social Responsibility](index=6&type=section&id=%E4%BC%81%E6%A5%AD%E7%A4%BE%E6%9C%83%E8%B2%AC%E4%BB%BB) The Group prioritizes service and product safety, operates an academy for professional training, and implements environmental policies to reduce resource consumption in service centers - The Group maintains strict product quality standards, with internationally recognized product ingredients and packaging hygiene, and advanced equipment passing multiple safety tests[24](index=24&type=chunk) - The International Academy of Beauty Experts was established in **2002** to cultivate skilled professionals and offer training or further education opportunities to employees[25](index=25&type=chunk) - The Group has specific policies to minimize air conditioning and water usage in service centers, supporting environmental protection[25](index=25&type=chunk) [Outlook](index=7&type=section&id=%E5%B1%95%E6%9C%9B) Facing a challenging **2020**, the Group will enhance operational efficiency, reduce costs, cautiously expand its network, optimize product sourcing, and develop employment agency services as a new growth driver - **2020** presented significant challenges for the beauty industry due to a weak economic outlook, US-China trade friction, and the COVID-19 pandemic[25](index=25&type=chunk) - Stores in Hong Kong and Singapore were temporarily closed due to pandemic control measures, and the Group received government subsidies to mitigate anticipated losses[25](index=25&type=chunk) - The Group will focus on improving operational efficiency, reducing rental expenses, optimizing workflows, and adjusting business strategies to achieve a turnaround[25](index=25&type=chunk) - Developing employment agency services has the potential to become a new growth driver for the future[25](index=25&type=chunk) - Looking ahead, the Group will proceed cautiously with new store openings, focus on enhancing the performance of its store network, and optimize its skincare product sourcing strategy[25](index=25&type=chunk) [Subsequent Events](index=7&type=section&id=%E5%BE%8C%E7%BA%8C%E4%BA%8B%E4%BB%B6) The Group will closely monitor the ongoing and uncertain COVID-19 pandemic's impact on operations and financial performance, making announcements as appropriate - The COVID-19 pandemic continues with uncertain developments, and its impact on the Group's operations and financial performance remains undetermined[25](index=25&type=chunk) - The Group will closely monitor the pandemic's development, further assess its impact, and make announcements as appropriate[25](index=25&type=chunk) [Company Information](index=8&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides essential company details, including board composition, key personnel, registered offices, auditor, stock code, and investor relations contacts - Board members include Dr. Tsang Yuk, Chairman, along with several executive and independent non-executive directors[26](index=26&type=chunk) - The auditor is KPMG[26](index=26&type=chunk) - The stock code is **919**[26](index=26&type=chunk) - The company website is www.modernhealthcaretech.com[26](index=26&type=chunk) [Corporate Governance and Other Information](index=9&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section details the Group's corporate governance practices, including directors' and major shareholders' interests, securities trading, and the structure and responsibilities of board committees [Directors' and Chief Executives' Interests and Short Positions in Shares, Underlying Shares, and Debentures](index=9&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E5%88%B8%E4%B8%AD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of September 30, 2020, Dr. Tsang Yuk held **74.88%** of the Company's issued share capital through a trust, with no short positions held by directors or chief executives Directors' and Chief Executives' Long Positions in Shares (As of September 30, 2020) | Name | Capacity in which Interests are Held | Share Interest | Total Interest | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Dr. Tsang Yuk | Founder of a discretionary trust | 677,247,942 | 677,247,942 | 74.88% | | Dr. Tsang Yuk | Spouse's interest | 650,000 | 650,000 | 0.07% | | Mr. Yip Kai Wing | Beneficial owner | 185,000 | 185,000 | 0.02% | | Ms. Yeung Sze Man | Beneficial owner | 172,000 | 172,000 | 0.02% | - Except as disclosed, no directors or chief executives held any interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations[31](index=31&type=chunk) [Substantial Shareholders' and Other Persons' Long Positions in the Company's Shares and Underlying Shares](index=10&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BA%BA%E5%A3%AB%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B8%AD%E7%9A%84%E5%A5%BD%E5%80%89) As of September 30, 2020, Dr. Tsang Yuk, her spouse, and controlled entities collectively held **74.88%** of the Company's issued share capital Substantial Shareholders' and Other Persons' Long Positions in Shares (As of September 30, 2020) | Name/Company Name | Capacity in which Interests are Held | Share Interest | Total Interest | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Dr. Tsang Yuk | Founder of a discretionary trust | 677,247,942 | 677,247,942 | 74.88% | | Dr. Lee Sau Yee | Beneficial owner | 650,000 | 650,000 | 0.07% | | TMF (Cayman) Ltd. | Trustee (other than a passive trustee) | 677,247,942 | 677,247,942 | 74.88% | | Kelday International Limited | Nominee of another person (other than a passive trustee) | 677,247,942 | 677,247,942 | 74.88% | | Allied Chance Management Limited | Interest in controlled corporation | 677,247,942 | 677,247,942 | 74.88% | | Allied Wealth Limited | Beneficial owner | 209,247,942 | 209,247,942 | 23.13% | | Silver Compass Holdings Corp. | Beneficial owner | 367,200,000 | 367,200,000 | 40.60% | | Silver Hendon Enterprises Corp. | Beneficial owner | 100,800,000 | 100,800,000 | 11.14% | - Dr. Tsang Yuk is the spouse of Dr. Lee Sau Yee and is deemed to have an interest in the shares that Dr. Lee Sau Yee is deemed or taken to have an interest in under the Securities and Futures Ordinance[35](index=35&type=chunk) [Purchase, Sale, or Redemption of the Company's Listed Securities](index=11&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the Company nor its subsidiaries redeemed, purchased, or sold any listed securities during the review period - Neither the Company nor any of its subsidiaries redeemed, purchased, or sold any of the Company's listed securities during the review period[39](index=39&type=chunk) [Corporate Governance Practices](index=11&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Company adheres to the Corporate Governance Code, with deviations in Chairman/CEO roles and AGM attendance mitigated by collective decision-making and clear duty segregation - The Company has adopted the Corporate Governance Code set out in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[39](index=39&type=chunk) - Dr. Tsang Yuk serves as both Chairman and Chief Executive Officer, deviating from Code Provision A.2.1[39](index=39&type=chunk) - Dr. Tsang Yuk, the Chairman of the Board, did not attend the Company's Annual General Meeting held on August 28, 2020, due to personal reasons, deviating from Code Provision E.1.2[39](index=39&type=chunk) [Standard Code for Securities Transactions by Directors](index=11&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) All directors confirmed compliance with the Standard Code for Securities Transactions by Directors of Listed Issuers during the review period, with no non-compliance - All directors confirmed compliance with the Standard Code for Securities Transactions by Directors of Listed Issuers during the review period, with no non-compliance identified[39](index=39&type=chunk) [Board Committees](index=11&type=section&id=%E8%91%A3%E4%BA%8B%E5%A7%94%E5%93%A1%E6%9C%83) The Board has established Remuneration, Nomination, and Audit Committees, all with robust terms of reference and a strong independent non-executive director presence to ensure independence and effectiveness - The Board has established Remuneration, Nomination, and Audit Committees[39](index=39&type=chunk) - All committees have the authority to appoint external advisors or experts[39](index=39&type=chunk) - All members of the Audit Committee are independent non-executive directors, and the Nomination and Remuneration Committees have a majority of independent non-executive directors[39](index=39&type=chunk) [Remuneration Committee](index=12&type=section&id=%E8%96%AA%E9%85%AC%E5%A7%94%E5%93%A1%E6%9C%83) Composed of three independent non-executive directors and one executive director, the Remuneration Committee reviews and determines compensation for directors and senior management - The Remuneration Committee comprises Dr. Wong Man Yin (Chairman, Independent Non-executive Director), Ms. Liu Mei Ling (Independent Non-executive Director), Mr. Hong Po Kui (Independent Non-executive Director), and Dr. Tsang Yuk (Executive Director)[41](index=41&type=chunk) - Its responsibilities include reviewing and determining the terms of remuneration packages, bonuses, and other benefits payable to directors and senior management in accordance with established policies[41](index=41&type=chunk) [Nomination Committee](index=12&type=section&id=%E6%8F%90%E5%90%8D%E5%A7%94%E5%93%A1%E6%9C%83) Composed of an executive director (Chairman) and three independent non-executive directors, the Nomination Committee advises the Board on director appointments, composition, independence, and succession - The Nomination Committee comprises Dr. Tsang Yuk (Chairman, Executive Director), Ms. Liu Mei Ling (Independent Non-executive Director), Dr. Wong Man Yin (Independent Non-executive Director), and Mr. Hong Po Kui (Independent Non-executive Director)[41](index=41&type=chunk) - Its responsibilities include making recommendations to the Board on director appointments, board composition assessment, independent non-executive director independence assessment, and board succession planning[41](index=41&type=chunk) [Audit Committee](index=12&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) Composed of three independent non-executive directors with professional qualifications, the Audit Committee reviews financial reporting, internal controls, and corporate governance, approving interim results - The Audit Committee comprises Ms. Liu Mei Ling (Chairman, Independent Non-executive Director), Dr. Wong Man Yin (Independent Non-executive Director), and Mr. Hong Po Kui (Independent Non-executive Director)[42](index=42&type=chunk) - All Audit Committee members possess the appropriate professional qualifications, accounting, or relevant financial management expertise as required by the Listing Rules[42](index=42&type=chunk) - The Audit Committee reviews the Group's financial reporting, internal controls, and corporate governance matters, and reviewed and approved the interim results prior to Board approval[42](index=42&type=chunk) [Review Report](index=13&type=section&id=%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) KPMG reviewed this interim financial report under HKSRE 2410, finding no material non-compliance with HKAS 34, despite a scope less than an audit - This interim financial report has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[44](index=44&type=chunk) - Based on the review, the auditor has not noted anything that causes them to believe the interim financial report is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[45](index=45&type=chunk) [Consolidated Statement of Profit or Loss](index=14&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) Profit for the period surged to **HKD 65,938 thousand** (2019: **HKD 5,474 thousand**), driven by increased other income and operating profit, despite a **24.5%** revenue decrease Key Data from Consolidated Statement of Profit or Loss (Six Months Ended September 30) | Indicator | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 218,228 | 289,221 | | Other Income | 48,689 | 3,675 | | Employee Benefits Expenses | (88,540) | (164,344) | | Depreciation and Amortization | (58,586) | (33,101) | | Operating Profit | 75,577 | 7,248 | | Profit Before Tax | 70,581 | 6,662 | | Income Tax Expense | (4,643) | (1,188) | | Profit for the Period | 65,938 | 5,474 | | Basic Earnings Per Share (HK cents) | 7.28 | 0.59 | | Diluted Earnings Per Share (HK cents) | 7.28 | 0.59 | - Profit for the period was **HKD 65,938 thousand**, a significant increase from **HKD 5,474 thousand** in the same period last year[48](index=48&type=chunk) - Operating profit was **HKD 75,577 thousand**, a substantial increase from **HKD 7,248 thousand** in the same period last year[48](index=48&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=15&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) Total comprehensive income for the period significantly increased to **HKD 67,974 thousand**, driven by higher profit and a positive exchange difference from foreign operations Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended September 30) | Indicator | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Profit for the Period | 65,938 | 5,474 | | Exchange Difference on Translation of Foreign Operations | 2,036 | (705) | | **Total Comprehensive Income for the Period** | **67,974** | **4,769** | - Total comprehensive income for the period was **HKD 67,974 thousand**, a significant increase from **HKD 4,769 thousand** in the same period last year[53](index=53&type=chunk) - Exchange difference on translation of foreign operations turned from a loss of **HKD 705 thousand** in 2019 to a gain of **HKD 2,036 thousand** in 2020[53](index=53&type=chunk) [Consolidated Statement of Financial Position](index=16&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of September 30, 2020, net assets increased to **HKD 220,084 thousand**, driven by higher property, plant, and equipment, significant cash growth, and improved net current assets Key Data from Consolidated Statement of Financial Position (As of September 30, 2020) | Indicator | September 30, 2020 (HKD thousands) | March 31, 2020 (HKD thousands) | | :--- | :--- | :--- | | Property, Plant and Equipment | 172,458 | 144,374 | | Investment Properties | 11,507 | 13,920 | | Cash and Bank Balances | 210,229 | 174,779 | | Trade and Other Receivables, Deposits and Prepayments | 183,353 | 188,081 | | Deferred Revenue (Current Liabilities) | 239,155 | 301,822 | | Lease Liabilities (Current) | 70,090 | 48,602 | | Lease Liabilities (Non-current) | 66,920 | 32,281 | | **Net Assets** | **220,084** | **152,110** | - Net assets increased to **HKD 220,084 thousand**, a significant growth from **HKD 152,110 thousand** as of March 31, 2020[63](index=63&type=chunk) - Net current assets increased from **HKD 10,127 thousand** as of March 31, 2020, to **HKD 83,875 thousand**[60](index=60&type=chunk) [Consolidated Statement of Changes in Equity](index=18&type=section&id=%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) Total equity increased from **HKD 152,110 thousand** to **HKD 220,084 thousand**, primarily due to **HKD 65,817 thousand** in profit and **HKD 2,036 thousand** in foreign exchange gains Key Data from Consolidated Statement of Changes in Equity (As of September 30, 2020) | Indicator | Share Capital (HKD thousands) | Share Premium (HKD thousands) | Merger Reserve (HKD thousands) | Exchange Reserve (HKD thousands) | Property Revaluation Reserve (HKD thousands) | Retained Earnings (HKD thousands) | Total (HKD thousands) | Non-controlling Interests (HKD thousands) | Total Equity (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at March 31, 2020 and April 1, 2020 | 90,448 | 318,791 | (373,253) | (3,618) | 3,552 | 110,873 | 146,793 | 5,317 | 152,110 | | Profit for the Period | – | – | – | – | – | 65,817 | 65,817 | 121 | 65,938 | | Exchange Difference on Translation of Foreign Operations | – | – | – | 2,036 | – | – | 2,036 | – | 2,036 | | **Balance at September 30, 2020** | **90,448** | **318,791** | **(373,253)** | **(1,582)** | **3,552** | **176,690** | **214,646** | **5,438** | **220,084** | - Total equity increased from **HKD 152,110 thousand** as of March 31, 2020, to **HKD 220,084 thousand** as of September 30, 2020[66](index=66&type=chunk) - Profit for the period attributable to equity holders of the Company was **HKD 65,817 thousand**[66](index=66&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=19&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) Net cash from operating activities increased to **HKD 70,757 thousand**, while net cash used in investing activities significantly decreased, resulting in **HKD 210,229 thousand** in cash and cash equivalents at period-end Key Data from Condensed Consolidated Statement of Cash Flows (Six Months Ended September 30) | Indicator | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Net Cash From Operating Activities | 70,757 | 43,810 | | Net Cash Used In Investing Activities | (748) | (16,454) | | Net Cash Used In Financing Activities | (35,918) | (25,926) | | Net Increase in Cash and Cash Equivalents | 34,091 | 1,430 | | Cash and Cash Equivalents at End of Period | 210,229 | 183,294 | - Net cash from operating activities was **HKD 70,757 thousand**, an increase from **HKD 43,810 thousand** in the same period last year[68](index=68&type=chunk) - Net cash used in investing activities significantly decreased to **HKD 748 thousand**, primarily due to reduced purchases of property, plant, and equipment[68](index=68&type=chunk) - Cash and cash equivalents at the end of the period were **HKD 210,229 thousand**[68](index=68&type=chunk) [Notes to the Unaudited Interim Financial Report](index=20&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E9%99%84%E8%A8%BB) This section provides detailed notes to the unaudited interim financial report, covering general information, basis of preparation, accounting policy changes, segment information, revenue, other income, profit before tax, income tax, earnings per share, property, plant and equipment, trade and other receivables, cash and bank balances, trade and other payables, deferred revenue, share capital, reserves and dividends, commitments, contingent liabilities, and significant related party transactions [1 General Information](index=20&type=section&id=1%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Modern Healthcare Technology Holdings Limited, listed on the Stock Exchange (Stock Code: **919**), primarily offers beauty and healthcare services and products, with Dr. Tsang Yuk as the ultimate controlling party - The Company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited under stock code **919**[71](index=71&type=chunk) - The Group's principal activities are the provision of beauty and healthcare services and the sale of skincare and healthcare products[71](index=71&type=chunk) - Dr. Tsang Yuk is the ultimate controlling party of the Company[71](index=71&type=chunk) [2 Basis of Preparation](index=20&type=section&id=2%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) This unaudited interim financial report, authorized on November 27, 2020, is prepared under Listing Rules and HKAS 34, reviewed by KPMG, with comparative data from unqualified annual statements - This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and in compliance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the HKICPA[72](index=72&type=chunk) - This interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[72](index=72&type=chunk) - The statutory financial statements for the year ended March 31, 2020, received an unqualified opinion from the auditor[73](index=73&type=chunk) [3 Changes in Accounting Policies](index=21&type=section&id=3%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95) The Group early adopted amendments to HKFRS 3 (Definition of a Business) and HKFRS 16 (Covid-19 Related Rent Concessions) from the year ended March 31, 2020 - The Group early adopted amendments to HKFRS 3, Definition of a Business, and HKFRS 16, Covid-19 Related Rent Concessions, from the year ended March 31, 2020[75](index=75&type=chunk) [4 Segment Information](index=21&type=section&id=4%20%E5%88%86%E9%A1%9E%E8%B3%87%E6%96%99) The Group operates in two reportable segments: beauty and healthcare services, and skincare and healthcare products, with segment profit excluding certain corporate items - The Group's two reportable segments are beauty and healthcare services, and skincare and healthcare products[75](index=75&type=chunk) - Segment profit excludes other income, interest income, fair value changes of investment properties, unallocated costs, and income tax expense[76](index=76&type=chunk) [4(a) Reportable Segment Information](index=22&type=section&id=4(a)%20%E6%9C%9F%E5%85%A7%EF%BC%8C%E6%9C%89%E9%97%9C%E6%9C%AC%E9%9B%86%E5%9C%98%E5%8F%AF%E5%91%88%E5%A0%B1%E5%88%86%E9%A1%9E%E4%B9%8B%E8%B3%87%E6%96%99%E5%91%88%E4%BA%A4%E4%BA%88%E6%9C%AC%E9%9B%86%E5%9C%98%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E7%AE%A1%E7%90%86%E5%B1%A4%EF%BC%8C%E4%BB%A5%E4%BE%9B%E8%B3%87%E6%BA%90%E5%88%86%E9%85%8D%E5%8F%8A%E5%88%86%E9%A1%9E%E8%A1%A8%E7%8F%BE%E8%A9%95%E4%BC%B0%E4%B9%8B%E7%94%A8%EF%BC%8C%E8%A9%B2%E7%AD%89%E8%B3%87%E6%96%99%E5%88%97%E8%BC%89%E5%A6%82%E4%B8%8B%E3%80%82) For the six months ended September 30, 2020, beauty and healthcare services generated **HKD 209,447 thousand** in revenue and **HKD 70,315 thousand** in segment profit Reportable Segment Revenue and Profit (Six Months Ended September 30) | Segment | 2020 Revenue (HKD thousands) | 2019 Revenue (HKD thousands) | 2020 Segment Profit (HKD thousands) | 2019 Segment Profit (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Beauty and Healthcare Services | 209,447 | 270,920 | 70,315 | 7,201 | | Skincare and Healthcare Products | 8,781 | 18,301 | 5,417 | 9,211 | | **Total** | **218,228** | **289,221** | **75,732** | **16,412** | [4(b) Reconciliation of Reportable Segment Profit or Loss](index=22&type=section&id=4(b)%20%E5%8F%AF%E5%91%88%E5%A0%B1%E5%88%86%E9%A1%9E%E6%BA%A2%E5%88%A9%E6%88%96%E虧%E6%90%8D%E7%9A%84%E5%B0%8D%E8%B3%AC) This section reconciles reportable segment profit to consolidated profit for the period, detailing the impact of other income, fair value changes, unallocated costs, and income tax Reconciliation of Reportable Segment Profit to Consolidated Profit (Six Months Ended September 30) | Indicator | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Reportable Segment Profit | 75,732 | 16,412 | | Other Income | 5,528 | 3,675 | | Interest Income | 554 | 656 | | Fair Value Change of Investment Properties | (2,413) | 178 | | Net Loss on Disposal of a Subsidiary | (591) | – | | Unallocated Costs | (8,229) | (14,259) | | Income Tax Expense | (4,643) | (1,188) | | **Consolidated Profit for the Period** | **65,938** | **5,474** | [5 Revenue](index=23&type=section&id=5%20%E6%94%B6%E7%9B%8A) Total revenue for the six months ended September 30, 2020, was **HKD 218,228 thousand**, mainly from beauty and healthcare services and product sales Revenue Categories (Six Months Ended September 30) | Revenue Category | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Revenue from providing beauty and healthcare services and recognized from expired prepaid beauty packages | 209,447 | 270,920 | | Sale of skincare and healthcare products | 8,781 | 18,301 | | **Total** | **218,228** | **289,221** | [6 Other Income](index=23&type=section&id=6%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income surged to **HKD 48,689 thousand** (2019: **HKD 3,675 thousand**), mainly driven by **HKD 43,946 thousand** in government subsidies and **HKD 3,180 thousand** in COVID-19 rent concessions Other Income Details (Six Months Ended September 30) | Income Category | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Government Subsidies | 43,946 | – | | COVID-19 Related Rent Concessions Received | 3,180 | – | | Income from Providing Domestic Helper Placement Services | 773 | 2,462 | | Net Gain on Disposal of Property, Plant and Equipment | – | 500 | | Rental Income | – | 423 | | Others | 790 | 290 | | **Total** | **48,689** | **3,675** | - Government subsidies amounted to **HKD 43,946 thousand**, primarily for financial support to businesses during the COVID-19 pandemic[84](index=84&type=chunk) [7 Profit Before Tax](index=24&type=section&id=7%20%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before tax is calculated after deducting directors' emoluments, depreciation, amortization, foreign exchange losses, and lease liability interest, with some items decreasing and others increasing Deductions from Profit Before Tax (Six Months Ended September 30) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Directors' Emoluments | 4,083 | 6,196 | | Depreciation – Owned Property, Plant and Equipment | 18,266 | 11,022 | | Depreciation – Right-of-Use Assets | 40,320 | 22,079 | | Foreign Exchange Loss, Net | 115 | 49 | | Finance Costs – Interest on Lease Liabilities | 2,546 | 1,420 | [8 Income Tax Expense](index=24&type=section&id=8%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense was **HKD 4,643 thousand**, including Hong Kong profits tax at **16.5%** (or **8.25%** for the first **HKD 2 million** of assessable profits), overseas tax, and deferred tax Income Tax Expense Details (Six Months Ended September 30) | Tax Category | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Current Tax – Hong Kong Profits Tax | 670 | 875 | | Current Tax – Overseas | 1,472 | 1,042 | | Deferred Tax | 2,501 | (729) | | **Income Tax Expense** | **4,643** | **1,188** | - Hong Kong profits tax provision is calculated at an estimated annual effective rate of **16.5%**, with the first **HKD 2 million** of assessable profits for qualifying corporations under the two-tiered profits tax regime taxed at **8.25%**[87](index=87&type=chunk)[88](index=88&type=chunk) [9 Earnings Per Share](index=25&type=section&id=9%20%E6%AF%8F%E8%82%A1%E7%87%9F%E5%88%A9) Basic earnings per share were **HKD 0.0728** (2019: **HKD 0.0059**), based on **HKD 65,817 thousand** profit and **904,483,942** weighted average shares, with diluted EPS being identical - Basic earnings per share were **HKD 0.0728**, compared to **HKD 0.0059** in the same period last year[91](index=91&type=chunk) - Profit attributable to ordinary equity holders of the Company was **HKD 65,817 thousand**[91](index=91&type=chunk) - Diluted earnings per share were the same as basic earnings per share due to the absence of potentially dilutive ordinary shares[91](index=91&type=chunk) [10 Property, Plant and Equipment and Right-of-Use Assets](index=25&type=section&id=10%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99%E5%8F%8A%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) This section details changes in right-of-use assets and property, plant, and equipment, noting a significant increase in the former due to new leases and a decrease in acquisition costs for the latter [10(a) Right-of-Use Assets](index=25&type=section&id=10(a)%20%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) For the six months ended September 30, 2020, the Group recognized **HKD 97,335 thousand** in right-of-use asset additions and received **HKD 3,180 thousand** in COVID-19 rent concessions - Additions to right-of-use assets amounted to **HKD 97,335 thousand**, a significant increase from **HKD 10,088 thousand** in the same period last year[92](index=92&type=chunk) - COVID-19 related rent concessions of **HKD 3,180 thousand** were received[92](index=92&type=chunk) COVID-19 Rent Concessions by Region (Six Months Ended September 30, 2020) | Region | COVID-19 Rent Concessions (HKD thousands) | | :--- | :--- | | Hong Kong Service Centers | (827) | | Mainland China Service Centers | (259) | | Singapore Service Centers | (2,094) | [10(b) Acquisitions](index=25&type=section&id=10(b)%20%E6%94%B6%E8%B3%BC%E4%BA%8B%E9%A0%85) For the six months ended September 30, 2020, property, plant, and equipment acquisitions cost approximately **HKD 325 thousand**, a significant decrease from the prior year - The cost of property, plant, and equipment acquisitions was approximately **HKD 325 thousand**, a significant decrease from **HKD 16,623 thousand** in the same period last year[93](index=93&type=chunk) [11 Trade and Other Receivables, Deposits and Prepayments](index=26&type=section&id=11%20%E6%87%89%E6%94%B6%E8%B3%AC%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E3%80%81%E6%8C%89%E9%87%91%E5%8F%8A%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85) As of September 30, 2020, total trade and other receivables, deposits, and prepayments were **HKD 199,188 thousand**, with trade receivables decreasing and trade deposits remaining stable Trade and Other Receivables, Deposits and Prepayments (As of September 30, 2020) | Item | September 30, 2020 (HKD thousands) | March 31, 2020 (HKD thousands) | | :--- | :--- | :--- | | Non-current Assets: Deposits and Prepayments | 15,835 | 10,264 | | Current Assets: Trade Receivables, Net of Loss Allowance for Expected Credit Losses | 15,861 | 21,929 | | Current Assets: Trade Deposits Retained by Banks/Credit Card Companies | 133,854 | 133,490 | | Current Assets: Rental and Other Deposits, Prepayments and Other Receivables | 33,165 | 32,599 | | Current Assets: Amounts Due from Related Companies | 473 | 63 | | **Total** | **199,188** | **198,345** | Ageing Analysis of Trade Receivables (As of September 30, 2020) | Ageing | September 30, 2020 (HKD thousands) | March 31, 2020 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 Days | 9,261 | 9,504 | | 31 to 60 Days | 487 | 3,395 | | 61 to 90 Days | 1,956 | 3,693 | | 91 to 180 Days | 4,157 | 5,337 | | **Total** | **15,861** | **21,929** | - Credit periods granted by banks/credit card companies for credit card payments typically range from **7 to 180 days**[97](index=97&type=chunk) [12 Cash and Bank Balances](index=27&type=section&id=12%20%E7%8F%BE%E9%87%91%E5%8F%8A%E9%8A%80%E8%A1%8C%E7%B5%90%E9%A4%98) As of September 30, 2020, cash and bank balances increased to **HKD 210,229 thousand**, primarily consisting of cash at bank and in hand and short-term bank deposits Cash and Bank Balances (As of September 30, 2020) | Item | September 30, 2020 (HKD thousands) | March 31, 2020 (HKD thousands) | | :--- | :--- | :--- | | Cash at Bank and in Hand | 146,730 | 111,169 | | Short-term Bank Deposits with Original Maturity of Less Than Three Months | 63,499 | 63,610 | | **Total** | **210,229** | **174,779** | [13 Trade and Other Payables, Deposits Received and Accrued Charges](index=27&type=section&id=13%20%E6%87%89%E4%BB%98%E8%B3%87%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E3%80%81%E5%B7%B2%E6%94%B6%E6%8C%89%E9%87%91%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) As of September 30, 2020, total trade and other payables, deposits received, and accrued charges slightly decreased to **HKD 78,059 thousand**, with trade payables increasing and other payables decreasing Trade and Other Payables, Deposits Received and Accrued Charges (As of September 30, 2020) | Item | September 30, 2020 (HKD thousands) | March 31, 2020 (HKD thousands) | | :--- | :--- | :--- | | Trade Payables | 743 | 442 | | Other Payables, Deposits Received and Accrued Charges | 77,189 | 79,171 | | Amounts Due to Ultimate Controlling Party | 2 | 2 | | Amounts Due to Related Companies | 125 | 87 | | **Total** | **78,059** | **79,702** | Ageing Analysis of Trade Payables (As of September 30, 2020) | Ageing | September 30, 2020 (HKD thousands) | March 31, 2020 (HKD thousands) | | :--- | :--- | :--- | | Within 90 Days | 520 | 442 | | Over 90 Days | 223 | – | | **Total** | **743** | **442** | [14 Deferred Revenue](index=28&type=section&id=14%20%E9%81%9E%E5%BB%B6%E6%94%B6%E7%9B%8A) As of September 30, 2020, deferred revenue decreased to **HKD 239,155 thousand**, reflecting recognized revenue from expired prepaid beauty packages and new sales [14(a) Ageing Analysis of Deferred Revenue](index=28&type=section&id=14(a)%20%E9%81%9E%E5%BB%B6%E6%94%B6%E7%9B%8A%E5%9F%BA%E6%96%BC%E7%99%BC%E7%A5%A8%E6%97%A5%E6%9C%9F%E7%9A%84%E8%B3%AC%E9%BD%A1%E5%88%86%E6%9E%90%E5%A6%82%E4%B8%8B%EF%BC%9A) As of September 30, 2020, all deferred revenue, totaling **HKD 239,155 thousand**, was due within one year Ageing Analysis of Deferred Revenue (As of September 30, 2020) | Ageing | September 30, 2020 (HKD thousands) | March 31, 2020 (HKD thousands) | | :--- | :--- | :--- | | Within 1 Year | 239,155 | 301,822 | [14(b) Movement in Deferred Revenue](index=28&type=section&id=14(b)%20%E9%81%9E%E5%BB%B6%E6%94%B6%E7%9B%8A%E7%9A%84%E8%AE%8A%E5%8B%95%E6%83%85%E6%B3%81%EF%BC%9A) Deferred revenue began at **HKD 301,822 thousand**, increased by **HKD 146,023 thousand** from new sales, and decreased by **HKD 209,447 thousand** from recognized revenue, ending at **HKD 239,155 thousand** Movement in Deferred Revenue (As of September 30, 2020) | Item | September 30, 2020 (HKD thousands) | March 31, 2020 (HKD thousands) | | :--- | :--- | :--- | | At Beginning of Period/Year | 301,822 | 297,621 | | Total Revenue from Sale of Prepaid Beauty Packages | 146,023 | 496,257 | | Revenue from Providing Beauty and Healthcare Services and Recognized from Expired Prepaid Beauty Packages | (209,447) | (492,327) | | Exchange Differences | 757 | 271 | | **At End of Period/Year** | **239,155** | **301,822** | [15 Share Capital, Reserves and Dividends](index=28&type=section&id=15%20%E8%82%A1%E6%9C%AC%E3%80%81%E5%84%B2%E5%82%99%E5%8F%8A%E8%82%A1%E6%81%AF) This section details the Group's dividend policy and share capital structure, noting no interim dividend, with **HKD 90,448 thousand** in issued capital and equal rights for ordinary shareholders [15(a) Dividends](index=28&type=section&id=15(a)%20%E8%82%A1%E6%81%AF) The Board resolved not to declare an interim dividend for the six months ended September 30, 2020 - The Board resolved not to declare an interim dividend for the six months ended September 30, 2020[102](index=102&type=chunk) [15(b) Share Capital](index=28&type=section&id=15(b)%20%E8%82%A1%E6%9C%AC) The Company's authorized share capital is **HKD 1,000,000 thousand**, with **HKD 90,448 thousand** issued and fully paid, granting equal rights to ordinary shareholders Authorized and Issued Share Capital (As of September 30, 2020) | Item | September 30, 2020 Number of Shares | Amount (HKD thousands) | March 31, 2020 Number of Shares | Amount (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Authorized: Ordinary Shares of HKD 0.1 Each | 10,000,000,000 | 1,000,000 | 10,000,000,000 | 1,000,000 | | Issued and Fully Paid: Ordinary Shares of HKD 0.1 Each | 904,483,942 | 90,448 | 904,483,942 | 90,448 | - Ordinary shareholders are entitled to receive dividends declared from time to time, and have one vote per ordinary share at general meetings, with all ordinary shares having equal rights to the Company's residual assets[104](index=104&type=chunk) [16 Commitments](index=29&type=section&id=16%20%E6%89%BF%E6%93%94) As of September 30, 2020, contracted but unprovided capital commitments for plant and equipment acquisitions increased to **HKD 437 thousand** Capital Commitments (As of September 30, 2020) | Item | September 30, 2020 (HKD thousands) | March 31, 2020 (HKD thousands) | | :--- | :--- | :--- | | Contracted but Not Provided For: Acquisition of Plant and Equipment | 437 | 130 | [17 Contingent Liabilities](index=29&type=section&id=17%20%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) The Board believes that complaints and claims related to beauty services will not have a material financial impact on the Group - The Board believes that losses or settlements from complaints and claims related to beauty services will not have a material financial impact on the Group[106](index=106&type=chunk) [18 Significant Related Party Transactions and Balances](index=29&type=section&id=18%20%E9%87%8D%E5%A4%A7%E9%97%9C%E9%80%A3%E6%96%B9%E4%BA%A4%E6%98%93%E5%8F%8A%E7%B5%90%E9%A4%98) This section details significant related party transactions and balances, including key management emoluments, rental expenses, right-of-use assets, and salaries, with Dr. Tsang Yuk as the ultimate controlling party [18(a) Key Management Personnel Emoluments](index=29&type=section&id=18(a)%20%E4%B8%BB%E8%A6%81%E7%AE%A1%E7%90%86%E4%BA%BA%E5%93%A1%E9%85%AC%E9%87%91) For the six months ended September 30, 2020, key management personnel emoluments decreased to **HKD 4,083 thousand**, including fees, salaries, and retirement contributions Key Management Personnel Emoluments (Six Months Ended September 30) | Item | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Fees | 426 | 558 | | Salaries and Allowances | 3,606 | 5,584 | | Retirement Benefit Scheme Contributions | 51 | 54 | | **Total** | **4,083** | **6,196** | [18(b) Significant Related Party Transactions](index=30&type=section&id=18(b)%20%E9%87%8D%E5%A4%A7%E9%97%9C%E9%80%A3%E6%96%B9%E4%BA%A4%E6%98%93) The Group paid no rental expenses to related companies this period, but held **HKD 78,017 thousand** in right-of-use assets from them, and paid **HKD 1,585 thousand** in salaries and benefits to related parties - Rental expenses paid to related companies were **nil** this period, compared to **HKD 16,883 thousand** in the same period last year[110](index=110&type=chunk) - The carrying value of right-of-use assets from related companies was **HKD 78,017 thousand**[110](index=110&type=chunk) - Rental income received from related companies was **nil** this period, compared to **HKD 423 thousand** in the same period last year[112](index=112&type=chunk) Salaries and Other Benefits Paid to Related Parties (Six Months Ended September 30) | Related Party | 2020 (HKD thousands) | 2019 (HKD thousands) | | :--- | :--- | :--- | | Related Party A (Dr. Tsang's Spouse) | 573 | 866 | | Related Party B (Dr. Tsang's Son) | 878 | 1,109 | | Related Party C (Mr. Yip Kai Wing's Spouse) | 134 | 331 | | **Total** | **1,585** | **2,306** | [18(c) Related Party Balances](index=31&type=section&id=18(c)%20%E9%97%9C%E9%80%A3%E6%96%B9%E7%B5%90%E9%A4%98) Amounts due from/to related companies and the ultimate controlling party are unsecured, interest-free, and repayable/recoverable on demand, with Dr. Tsang Yuk as the ultimate controlling party - Amounts due from/to related companies and the ultimate controlling party are unsecured, interest-free, and repayable/recoverable on demand[116](index=116&type=chunk) - Dr. Tsang Yuk is the ultimate controlling party of these related companies[116](index=116&type=chunk)

Business Expansion and Services - The company opened new stores in various locations, including a new beauty center in Sheung Shui Plaza and a new Be Beauty Shop in Lai Chi Kok in May 2019[17]. - As of March 31, 2020, the company operated 32 service centers in Hong Kong, 3 in mainland China, and 10 in Singapore, reflecting its market expansion strategy[14]. - The company aims to expand its product sales through partnerships with various skincare brands, including Malu Wilz and BeYu, to reach a broader customer base[14]. - The company has launched a series of weight control courses designed to stimulate metabolism and promote healthy eating choices among customers[14]. - The company continues to innovate in its service offerings, including aesthetic shaping services and advanced spa treatments, to meet evolving customer demands[14]. Financial Performance - The company's revenue for the fiscal year ending March 31, 2020, was approximately HKD 522.6 million, a decrease of 9.3% compared to HKD 576.0 million for the previous fiscal year[23]. - The operating loss for the fiscal year was HKD 17.3 million, compared to an operating loss of HKD 2.2 million in the previous fiscal year, resulting in an operating loss margin of -3.3%[24]. - Revenue from beauty and facial care services was HKD 372.1 million, accounting for 71.2% of total revenue, a decrease of 18.0% from the previous fiscal year[31]. - Revenue from body slimming services increased by 46.5% to HKD 94.5 million, representing 18.1% of total revenue[31]. - The net loss attributable to equity shareholders for the fiscal year 2020 was approximately HKD 31.6 million, compared to HKD 13.3 million in 2019[40]. Cost Management - Employee benefits expenses decreased by 2.3% to HKD 311.7 million, while rental costs and depreciation of leased properties decreased by 61.7% to HKD 43.8 million[24]. - Rental costs and depreciation for leased properties amounted to approximately HKD 92.2 million, representing 17.7% of revenue, down from 19.9% in 2019[36]. - The company aims to reduce rental costs to a more reasonable level through negotiations with landlords due to the uncertain global and local business environment[47]. Corporate Governance - The company emphasizes the importance of timely and transparent communication with investors to ensure they understand the company's current and future developments[51]. - The company is committed to enhancing business transparency and accountability through continuous and sincere communication with investors and the public[52]. - The board consists of three executive directors and three independent non-executive directors, ensuring a balanced composition for effective oversight[60]. - The company has adhered to the corporate governance code since April 2012, with no significant non-compliance issues reported during the review period[60]. - The company is committed to maintaining high standards of corporate governance to protect shareholder interests[66]. Risk Management and Compliance - The company has implemented policies to review compliance with statutory and regulatory requirements[70]. - The audit committee is responsible for overseeing the adequacy and effectiveness of risk management and internal control systems[81]. - The company recognizes the impact of COVID-19 on retail and service industries in Hong Kong and Singapore, leading to temporary store closures during specified periods[47]. - The group faces significant pressure from competition, both from large and small regional competitors, impacting pricing and service aspects[48]. Shareholder Information - The company did not recommend any dividend distribution for the fiscal year 2020, consistent with the previous year[41]. - The company has maintained a sufficient public float of at least 25% of its issued shares as of the report date[106]. - The company confirmed compliance with the disclosure requirements under Chapter 14A of the Listing Rules[105]. Internal Controls and Auditing - The audit committee held two meetings during the review year to oversee financial reporting, risk management, and internal controls[77]. - The company has established an internal audit department that reviews risk management and internal control systems at least once a year[80]. - The group’s financial reporting process is overseen by the audit committee to ensure compliance with accounting standards[130]. Asset Management - The company reported a loss of HKD 31,590,000 for the year 2020 compared to a loss of HKD 13,289,000 in 2019, indicating a worsening financial performance[151]. - Non-current assets increased to HKD 174,834,000 in 2020 from HKD 123,238,000 in 2019, representing a significant increase of approximately 42%[144]. - The company's net asset value decreased to HKD 152,110,000 in 2020 from HKD 186,896,000 in 2019, a decline of approximately 18.6%[145]. Lease Agreements - The total rental payments under the 2020 master lease agreement are confirmed as HKD 115,200,000, HKD 7,100,000, and HKD 3,600,000 for the fiscal years ending March 31, 2021, 2022, and 2023 respectively[102]. - The company must obtain confirmation from an independent property valuer regarding the market rent for the new leases before entering into agreements[102]. - The company adopted HKFRS 16 on April 1, 2019, resulting in a capitalization of operating leases, with a total lease liability recognized at HKD 89,429,000[167].

Revenue Performance - The group's revenue for the six months ended September 30, 2019, increased by 1.3% to HKD 289,221,000 compared to the same period last year[9]. - Service revenue in Hong Kong was HKD 239,779,000, an increase of 3.6% year-on-year, while revenue from prepaid beauty packages was HKD 239,810,000, up 1.4%[5]. - In mainland China, service revenue decreased by 31.6% to HKD 6,031,000, and revenue from prepaid beauty packages fell by 24.1% to HKD 5,418,000[6]. - The Singapore operations generated revenue of HKD 27,808,000, with prepaid beauty package sales at HKD 23,182,000, down 17.5% year-on-year[7]. - The revenue from skincare and wellness product sales increased by 13.6% to HKD 18,301,000, attributed to adjustments in the product mix[11]. - The revenue from ladies' beauty and facial services increased by 10.4% to HKD 199,417,000, while men's services saw a significant decline of 78.8% to HKD 5,443,000[10]. - Revenue for the six months ended September 30, 2019, was HKD 289,221,000, a slight increase from HKD 285,606,000 in 2018, representing a growth of approximately 0.57%[40]. - Total revenue for the period reached HKD 289,221,000, compared to HKD 285,606,000 in the previous year, marking a 2.3% increase[89]. - Revenue from beauty and wellness services was HKD 270,920,000, slightly up from HKD 269,499,000 year-on-year[89]. Profitability and Financial Performance - The group reported a net profit of approximately HKD 5,474,000 for the six months ended September 30, 2019, compared to a net loss of HKD 10,555,000 in the same period last year[14]. - Basic earnings per share were HKD 0.59, a significant improvement from a loss per share of HKD 1.16 in the previous year[14]. - Operating profit for the period was HKD 7,248,000, compared to an operating loss of HKD 12,687,000 in the previous year, indicating a significant turnaround[40]. - Profit before tax was HKD 6,662,000, recovering from a loss of HKD 12,472,000 in the same period last year[40]. - The total comprehensive income for the period was HKD 4,769,000, compared to a loss of HKD 8,862,000 in the previous year, showing a positive shift[44]. - The company reported a profit of HKD 5,317,000 for the six months ended September 30, 2019, compared to a loss for the same period in the previous year[55]. - Reported profit for the period was HKD 16,412,000, a significant increase from HKD 228,000 in the previous year[86]. - The company reported a comprehensive profit of HKD 5,474,000, recovering from a loss of HKD 10,555,000 in the previous year[86]. Cost Management - Employee benefit expenses accounted for 56.8% of revenue, down from 58.1% in the previous year, reflecting cost efficiency efforts[12]. - Rental costs and depreciation of right-of-use assets were approximately HKD 46,021,000, representing 15.9% of revenue, a decrease from 21.6% the previous year[13]. - Employee benefits expenses, including director remuneration, totaled HKD 164,344,000, a decrease of 1.0% from HKD 165,974,000 in the previous year[14]. - Advertising expenses increased to HKD 3,001,000, representing 1.0% of total revenue, up from 0.6% in the previous year[14]. - The total remuneration for key management personnel was HKD 6,196,000, slightly down from HKD 6,200,000 in the previous year[116]. Shareholder Structure and Governance - The company reported a total equity of 677,247,942 shares, representing approximately 74.88% of the issued share capital as of September 30, 2019[20]. - The company has a significant shareholder structure, with major stakeholders including Dr. Zeng Yu holding 677,247,942 shares and Dr. Li Shouyi holding 650,000 shares, both representing 74.88% and 0.07% of the total issued shares respectively[26]. - The company has established a trust managed by TMF (Cayman) Ltd., which holds shares on behalf of Dr. Zeng Yu, further consolidating his control over the company[24]. - The company has a diversified shareholder base, with other significant holdings including Allied Wealth Limited with 209,247,942 shares (23.13%) and Silver Compass Holdings Corp. with 367,200,000 shares (40.60%)[28]. - The company’s governance structure ensures that no single individual holds concentrated power, promoting a balanced decision-making process within the board[29]. - The company’s independent non-executive directors include Dr. Huang Wenxian and Ms. Liao Meiling, contributing to the governance and oversight of the company[20]. - The company has adopted corporate governance principles emphasizing transparency, accountability, and independence to enhance shareholder value[31]. - The chairman and CEO roles are held by the same individual, which deviates from the governance code, but the board believes decisions are made collectively[31]. Financial Position and Assets - Total assets as of September 30, 2019, amounted to HKD 462,029,000, a slight increase from HKD 456,259,000 as of March 31, 2019[47]. - Non-current assets increased to HKD 193,325,000 from HKD 123,238,000, reflecting a growth of approximately 56.8%[47]. - Current liabilities decreased to HKD 432,441,000 from HKD 392,143,000, indicating a rise of about 10.3%[47]. - The company generated net cash from operating activities of HKD 43,810,000 for the six months ended September 30, 2019, compared to a cash outflow of HKD 3,095,000 in the previous year[59]. - Cash and bank balances increased to HKD 183,294,000 from HKD 182,766,000, indicating a stable liquidity position[102]. Accounting Standards and Compliance - The company adopted the revised retrospective approach for the first application of HKFRS 16 on April 1, 2019, which affected the financial statements[40]. - The new Hong Kong Financial Reporting Standard 16 (Leases) has been adopted, which introduces a single accounting model for lessees, requiring the recognition of right-of-use assets and lease liabilities for all leases, except for short-term leases and low-value assets[66]. - The group has chosen to apply the modified retrospective approach for the initial application of HKFRS 16, adjusting the opening equity balance as of April 1, 2019, without restating comparative information[68]. - The independent review report by KPMG confirms that the interim financial information has been reviewed in accordance with the relevant standards[65]. - The report includes a summary of consolidated financial statements and selected explanatory notes, which are crucial for understanding the group's financial position and performance changes since the last annual financial statements[65]. Related Party Transactions - The company has engaged in significant related party transactions, including rental agreements for office spaces and retail locations, with monthly rents mutually agreed upon[122]. - Related party A is the spouse of director Dr. Zeng, while related party B is Dr. Zeng's son, indicating potential familial ties in business dealings[123][124].

BEAUTY ANNUAL REPORT 年報 2018/19 D B BEAUTY S HOLDINGS LIMITED 現代美容控股有限公司 Stock Code 股份代號：919 致臻 III . ben pen GOLDEN CANTAR GOLDEN CANTAR GOLDEN CAVEAR bea I SON LePit.co. 50cm 1,691.62 + outes collect Ulting Soun ell #11] | B " | B 30ml 1.04%.02 目錄 公司簡介 2 公司資料 5 里程碑及重要事件 6 管理層討論及分析 10 投資者關係及財務日誌 17 董事及高級管理層簡歷 18 企業管治報告 21 董事會報告 31 獨立核數師報告 42 綜合損益表 48 綜合損益及其他全面收益表 49 綜合財務狀況表 50 綜合權益變動表 52 綜合現金流量表 53 財務報表附註 55 本集團所持物業 111 五年財務概要 112 002 現代美容控股有限公司 公司 簡介 003 2018/19 年報 公司 簡介 現代美容控股有限公司（「本公司」） 及其附屬公司（「本集團」或「現代 ...